EXECUTION VERSION

 
 
 
 
CREDIT AGREEMENT
 
 
dated as of
 
 
March 31, 2010
 
 
among
 
 
AUDIOVOX CORPORATION,
 
 
The Other Loan Parties Party Hereto
 
 
The Lenders Party Hereto
 
 
and
 
 
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
 
___________________________
 
J.P. MORGAN SECURITIES INC.,
as Sole Bookrunner and Sole Lead Arranger
 
 
 

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Table of Contents
 

   
Page
Article I Definitions
6
Section 1.01.
Defined Terms
6
Section 1.02.
Classification of Loans and Borrowings
26
Section 1.03.
Terms Generally
26
Section 1.04.
Accounting Terms; GAAP
27
Article II The Credits
27
Section 2.01.
Revolving Commitments
27
Section 2.02.
Loans and Borrowings
27
Section 2.03.
Requests for Revolving Borrowings
28
Section 2.04.
Protective Advances
28
Section 2.05.
Swingline Loans and Overadvances
29
Section 2.06.
Letters of Credit
30
Section 2.07.
Funding of Borrowings
33
Section 2.08.
Interest Elections
34
Section 2.09.
Termination and Reduction of Revolving Commitments; Increase in Revolving
Commitments
35
Section 2.10.
Repayment and Amortization of Loans; Evidence of Debt
36
Section 2.11.
Prepayment of Loans
37
Section 2.12.
Fees
38
Section 2.13.
Interest
38
Section 2.14.
Alternate Rate of Interest
39
Section 2.15.
Increased Costs
40
Section 2.16.
Break Funding Payments
41
Section 2.17.
Taxes
41
Section 2.18.
Payments Generally; Allocation of Proceeds; Sharing of Set-offs
44
Section 2.19.
Mitigation Obligations; Replacement of Lenders
46
Section 2.20.
Defaulting Lenders
47
Section 2.21.
Returned Payments
49
Article III Representations and Warranties
49
Section 3.01.
Organization; Powers
49
Section 3.02.
Authorization; Enforceability
49
Section 3.03.
Governmental Approvals; No Conflicts
49
Section 3.04.
Financial Condition; No Material Adverse Effect
50
Section 3.05.
Properties
50
Section 3.06.
Litigation and Environmental Matters
50
Section 3.07.
Compliance with Laws and Agreements
51
Section 3.08.
Investment Company Status
51
Section 3.09.
Taxes
51
Section 3.10.
ERISA
51
Section 3.11.
Disclosure
51
Section 3.12.
Solvency
51

 
 
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Section 3.13.
Capitalization and Subsidiaries
52
Section 3.14.
Security Interest in Collateral
52
Article IV Conditions
 
52
Section 4.01.
Effective Date
52
Section 4.02.
Each Credit Event
54
Article V Affirmative Covenants
55
Section 5.01.
Financial Statements; Borrowing Base and Other Information
55
Section 5.02.
Notices of Material Events
58
Section 5.03.
Existence; Conduct of Business
58
Section 5.04.
Payment of Obligations
59
Section 5.05.
Books and Records; Inspection Rights
59
Section 5.06.
Compliance with Laws
59
Section 5.07.
Use of Proceeds
59
Section 5.08.
Insurance
59
Section 5.09.
Depository Banks
59
Section 5.10.
Additional Collateral; Further Assurances
60
Article VI Negative Covenants
60
Section 6.01.
Indebtedness
60
Section 6.02.
Liens
62
Section 6.03.
Fundamental Changes
63
Section 6.04.
Swap Agreements
64
Section 6.05.
Restricted Payments; Certain Payments of Indebtedness
64
Section 6.06.
Transactions with Affiliates
64
Section 6.07.
Restrictive Agreements
65
Section 6.08.
Consolidated Net Worth
65
Article VII Events of Default
65
Article VIII The Administrative Agent
68
Article IX Miscellaneous
70
Section 9.01.
Notices
70
Section 9.02.
Waivers; Amendments
71
Section 9.03.
Expenses; Indemnity; Damage Waiver
72
Section 9.04.
Successors and Assigns
74
Section 9.05.
Survival
77
Section 9.06.
Counterparts; Integration; Effectiveness
77
Section 9.07.
Severability
77
Section 9.08.
Right of Setoff
77
Section 9.09.
Governing Law; Jurisdiction; Consent to Service of Process
78
Section 9.10.
WAIVER OF JURY TRIAL
78
Section 9.11.
Headings
78
Section 9.12.
Confidentiality
79

 

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Section 9.13.
Several Obligations; Nonreliance; Violation of Law
79
Section 9.14.
USA PATRIOT Act
80
Section 9.15.
Disclosure
80
Section 9.16.
Appointment for Perfection
80
Section 9.17.
Interest Rate Limitation
80
Article X Loan Guaranty
80
Section 10.01.
Guaranty
80
Section 10.02.
Guaranty of Payment
81
Section 10.03.
No Discharge or Diminishment of Loan Guaranty
81
Section 10.04.
Defenses Waived
81
Section 10.05.
Rights of Subrogation
82
Section 10.06.
Reinstatement; Stay of Acceleration
82
Section 10.07.
Information
82
Section 10.08.
Taxes
82
Section 10.09.
Maximum Liability
82
Section 10.10.
Contribution
83
Section 10.11.
Liability Cumulative
83

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SCHEDULES:

Commitment Schedule
Schedule 1.01 -- Existing Letters of Credit
Schedule 3.06 -- Disclosed Matters
Schedule 3.13 -- Capitalization and Subsidiaries
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.07 -- Existing Restrictions

EXHIBITS:

Exhibit A -- Form of Assignment and Assumption
 
Exhibit B -- Form of Opinion of Borrower’s Counsel

Exhibit C -- Form of Borrowing Base Certificate
 
Exhibit D -- Form of Compliance Certificate

 
Exhibit E -- Joinder Agreement

 
Exhibit F -- Form of U.S. Tax Compliance Certificate

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CREDIT AGREEMENT dated as of March 31, 2010 (as it may be amended or modified
from time to time, this “Agreement”), among AUDIOVOX CORPORATION, a Delaware
corporation, the other Loan Parties party hereto, the Lenders party hereto, and
JPMORGAN CHASE BANK, N.A., as Administrative Agent.
 
The parties hereto agree as follows:
 
 
ARTICLE I                      
 
Definitions
SECTION 1.01. Defined Terms
 
.  As used in this Agreement, the following terms have the meanings specified
below:
 
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan bears, or the Loans comprising such Borrowing bear, interest at a rate
determined by reference to the Alternate Base Rate.
 
“Account” has the meaning assigned to such term in the Security Agreement.
 
“Account Debtor” means any Person obligated on an Account.
 
“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
 
“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as
administrative agent for the Lenders hereunder.
 
“Administrative Agent’s Account” means an account designated by the
Administrative Agent in a notice to the Borrower.
 
“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.
 
“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
 
“Aggregate Credit Exposure” means, at any time, the aggregate Credit Exposure of
all the Lenders.
 
“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate for a one
month Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%, provided that, for the avoidance of
doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing
on the Reuters Screen LIBOR01 Page (or on any successor or substitute page) at
approximately 11:00 a.m. London time on such day (without any rounding).  Any
change in the Alternate Base Rate due to a change in the Prime Rate, the Federal
Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and
including the effective date of such change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate, respectively.
 

 

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“Applicable Percentage” means, with respect to any Lender, (a) with respect to
Revolving Loans, LC Exposure, Swingline Loans or Overadvances, a percentage
equal to a fraction the numerator of which is such Lender’s Revolving Commitment
and the denominator of which is the aggregate Revolving Commitment of all
Lenders (if the Revolving Commitments have terminated or expired, the Applicable
Percentages shall be determined based upon such Lender’s share of the aggregate
Revolving Exposures at that time); provided that, in the case of Section 2.20
when a Defaulting Lender shall exist, any such Defaulting Lender’s Revolving
Commitment shall be disregarded in the calculation, and (b) with respect to
Protective Advances or with respect to the Aggregate Credit Exposure, a
percentage based upon its share of the Aggregate Credit Exposure and the unused
Revolving Commitments; provided that in the case of Section 2.20 when a
Defaulting Lender shall exist, any such Defaulting Lender’s Revolving Commitment
shall be disregarded in the calculation.
 
“Applicable Rate” means, for any day, with respect to any ABR Loan or Eurodollar
Revolving Loan, or with respect to the commitment fees payable hereunder, as the
case may be, the applicable rate per annum set forth below under the caption
“ABR Spread”, “Eurodollar Spread” or “Commitment Fee Rate”, as the case may be,
based upon average Availability (as determined by the Administrative Agent) for
the Borrower’s most recently completed fiscal quarter, provided that the first
such adjustment shall be made in respect of the Borrower’s second full fiscal
quarter ending after the Effective Date and, until such adjustment is made, the
“Applicable Rate” shall be the applicable rate per annum set forth below in
Category 2:
 
Average Availability
 
ABR Spread
 
Eurodollar
 Spread
 
Commitment Fee Rate
 
Category 1
≤ $7,500,000
4.50%
5.50%
0.50%
Category 2
> $7,500,000 but
≤ $10,000,000
4.00%
5.00%
0.50%
Category 3
> $10,000,000
3.50%
4.50%
0.50%

For purposes of the foregoing, (a) the Applicable Rate shall be determined as of
the end of each fiscal quarter of the Borrower (commencing as of the end of the
second full fiscal quarter ended after the Effective Date) based upon the
average Availability for such fiscal quarter (the “Average Availability”) and
(b) each change in the Applicable Rate as determined by the Administrative Agent
pursuant to clause (a) shall be effective on the first day of the next
succeeding fiscal quarter of the Borrower (with such change to be effective
until the next successive change) and the Administrative Agent shall promptly
notify the Borrower and the Lenders of the determination of the Average
Availability for the applicable fiscal quarter, provided that the Average
Availability shall be deemed to be in Category 1 (A) at any time that an Event
of Default has occurred and is continuing or (B) at the option of the
Administrative Agent or at the request of the Required Lenders if the Borrower
fails to deliver a Borrowing Base Certificate required to be delivered pursuant
to Section 5.01, during the period from the expiration of the time for delivery
thereof until such Borrowing Base Certificate is delivered.
 
“Approved Fund” has the meaning assigned to such term in Section 9.04.
 

 

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“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.
 
“Availability” means, at any time, an amount equal to (a) the lesser of the
Revolving Commitment and the Borrowing Base minus (b) the Revolving Exposure of
all Lenders; provided, that solely for purposes of determining the satisfaction
of the requirement under Section 4.01(l), “Availability” shall include
Suppressed Availability plus 100% of cash and Permitted Investments in accounts
with the Administrative Agent or its Affiliates at such time.
 
“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Revolving Commitments.
 
“Available Revolving Commitment” means, at any time, the Revolving Commitment
then in effect minus the Revolving Exposure of all Lenders at such time.
 
“Banking Services” means each and any of the following bank services provided to
any Loan Party by any Lender or any of its Affiliates: (a) credit cards for
commercial customers (including, without limitation, “commercial credit cards”
and purchasing cards), (b) stored value cards and (c) treasury management
services (including, without limitation, controlled disbursement, automated
clearinghouse transactions, return items, overdrafts and interstate depository
network services).
 
“Banking Services Obligations” of the Loan Parties means any and all obligations
of the Loan Parties, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with Banking
Services.
 
“Banking Services Reserves” means all Reserves which the Administrative Agent
from time to time establishes in its Permitted Discretion for Banking Services
then provided or outstanding Banking Services Obligations.
 
“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.
 
“Borrower” means Audiovox Corporation, a Delaware corporation.
 
“Borrowing” means (a) Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect, (b) a Swingline Loan, (c) a Protective
Advance and (d) an Overadvance.
 
“Borrowing Base” means, at any time, the sum of (a) 85% of the Loan Parties’
Eligible Accounts at such time minus (b) Reserves.  The Administrative Agent
may, in its Permitted Discretion, reduce the advance rate set forth above and
adjust Reserves.
 
“Borrowing Base Certificate” means a certificate, signed and certified as
accurate and complete by a Financial Officer of the Borrower, in substantially
the form of Exhibit C or another form which is acceptable to the Administrative
Agent in its sole discretion.
 

 

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“Borrowing Request” means a request by the Borrower for a Revolving Borrowing in
accordance with Section 2.02.
 
“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
 
“Canadian Dollars” means dollars in the lawful currency of Canada.
 
“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
 
“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of Equity
Interests representing more than 30% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of the Borrower;
provided that, with respect to the Equity Interests owned by or for the benefit
of John J. Shalam, any transfer of such Equity Interests whether occasioned by
gift, death or otherwise, to a family member(s) or trust established for the
benefit of John J. Shalam and/or his family member(s) shall not be deemed a
Change in Control; or (b) occupation of a majority of the seats (other than
vacant seats) on the board of directors of the Borrower by Persons who were
neither (i) nominated by the board of directors of the Borrower nor (ii)
appointed by directors so nominated.
 
“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 2.15(b), by any lending office of such Lender or by such
Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
 
“Charges” has the meaning assigned to such term in Section 9.17.
 
“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans, Swingline
Loans, Protective Advances or Overadvances.
 
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
 
“Collateral” means any and all property owned, leased or operated by a Person
covered by the Collateral Documents and any and all other property of any Loan
Party, now existing or hereafter acquired, that may at any time be or become
subject to a security interest or Lien in favor of the Administrative Agent, for
the benefit of the Secured Parties, to secure the Secured Obligations.
 

 

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“Collateral Documents” means, collectively, the Security Agreement and any other
documents granting a Lien upon the Collateral as security for payment of the
Secured Obligations.
 
“Commercial LC Exposure” means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding commercial Letters of Credit at such time plus
(b) the aggregate amount of all LC Disbursements relating to commercial Letters
of Credit that have not yet been reimbursed by or on behalf of the Borrower at
such time.  The Commercial LC Exposure of any Revolving Lender at any time shall
be its Applicable Percentage of the total Commercial LC Exposure at such time.
 
“Commitment Schedule” means the Schedule attached hereto identified as such.
 
“Consolidated Net Worth” means, at any date, all amounts that would, in
conformity with GAAP, be included on a consolidated balance sheet of the
Borrower and its Subsidiaries under stockholders’ equity at such date.
 
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or
otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.
 
“Credit Exposure” means, as to any Lender at any time, the sum of (a) such
Lender’s Revolving Exposure at such time, plus (b) an amount equal to its
Applicable Percentage, if any, of the aggregate principal amount of Protective
Advances outstanding at such time.
 
“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.
 
“Defaulting Lender” means any Lender, as determined by the Administrative Agent,
that has (a) failed to fund any portion of its Loans or participations in
Letters of Credit or Swingline Loans within three Business Days of the date
required to be funded by it hereunder, (b) notified the Borrower, the
Administrative Agent, the Issuing Bank, the Swingline Lender or any Lender in
writing that it does not intend to comply with any of its funding obligations
under this Agreement or has made a public statement to the effect that it does
not intend to comply with its funding obligations under this Agreement or under
other agreements in which it commits to extend credit, (c) failed, within three
Business Days after request by the Administrative Agent, to confirm that it will
comply with the terms of this Agreement relating to its obligations to fund
prospective Loans and participations in then outstanding Letters of Credit and
Swingline Loans, (d) otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within
three Business Days of the date when due, unless the subject of a good faith
dispute, or (e) (i) become or is insolvent or has a parent company that has
become or is insolvent or (ii) become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee or custodian appointed
for it, or has taken any action in furtherance of, or indicating its consent to,
approval of or acquiescence in any such proceeding or appointment or has a
parent company that has become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee or custodian appointed
for it, or has taken any action in furtherance of, or indicating its consent to,
approval of or acquiescence in any such proceeding or appointment.
 
“Dilution Factors” shall mean, without duplication, with respect to any period,
the aggregate amount of all deductions, credit memos, returns, adjustments,
allowances, bad debt write-offs and other non-cash credits which are recorded to
reduce accounts receivable in a manner consistent with current and historical
accounting practices of the Borrower.
 

 

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“Dilution Ratio” shall mean, at any date, the amount (expressed as a
percentage), if positive, equal to (a)(i) the aggregate amount of the applicable
Dilution Factors for the twelve (12) most recently ended fiscal months divided
by (ii) total gross sales for the twelve (12) most recently ended fiscal months
minus (b) 5%.
 
“Dilution Reserve” shall mean, at any date, the applicable Dilution Ratio
multiplied by the Eligible Accounts on such date.
 
“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
 
“Document” has the meaning assigned to such term in the Security Agreement.
 
“dollars” or “$” refers to lawful money of the United States of America.
 
“Dollar Equivalent” means, with regard to any amount denominated in Canadian
Dollars, the amount of dollars which is the equivalent to such amount expressed
in Canadian Dollars at the applicable quoted spot selling rate posted by Reuters
on its website at the relevant time.
 
“Effective Date” means the date on which the conditions specified in Section
4.01 are satisfied (or waived in accordance with Section 9.02).
 
“Eligible Accounts” means, at any time, the Accounts of the Loan Parties which
the Administrative Agent determines in its Permitted Discretion are eligible as
the basis for the extension of Revolving Loans, Swingline Loans and the issuance
of Letters of Credit hereunder.  Without limiting the Administrative Agent’s
discretion provided herein, Eligible Accounts shall not include any Account:
 
(a) which is not subject to a first priority perfected security interest in
favor of the Administrative Agent;
 
(b) which is subject to any Lien other than (i) a Lien in favor of the
Administrative Agent and (ii) a Permitted Encumbrance which does not have
priority over the Lien in favor of the Administrative Agent;
 
(c) with respect to which (i) the scheduled due date is more than 90 days after
the original invoice date, (ii) is unpaid more than 90 days after the date of
the original invoice therefor or more than 60 days after the original due date,
or (iii) which has been written off the books of the applicable Loan Party or
otherwise designated as uncollectible;
 
(d) which is owing by an Account Debtor for which more than 50% of the aggregate
amount of Accounts owing from such Account Debtor and its Affiliates are
ineligible pursuant to clause (c) above;
 
(e) which is owing by an Account Debtor to the extent the aggregate amount of
Accounts owing from such Account Debtor and its Affiliates to the applicable
Loan Party exceeds 25% (or 30% in the case of each of Wal-Mart Stores, Inc. and
its Affiliates, Best Buy Co., Inc. and its Affiliates and Target Corporation and
its Affiliates) of the aggregate amount of Eligible Accounts of such Loan Party;
 

 

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(f) with respect to which any covenant, representation, or warranty contained in
this Agreement or in the Security Agreement has been breached or is not true;
 
(g) which (i) does not arise from the sale of goods or performance of services
in the ordinary course of business, (ii) is not evidenced by an invoice or other
documentation satisfactory to the Administrative Agent which has been sent to
the Account Debtor, (iii) represents a progress billing, (iv) is contingent upon
the applicable Loan Party’s completion of any further performance, (v)
represents a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on
approval, consignment, cash-on-delivery or any other repurchase or return basis
or (vi) relates to payments of interest;
 
(h) for which the goods giving rise to such Account have not been shipped to the
Account Debtor or for which the services giving rise to such Account have not
been performed by the applicable Loan Party or if such Account was invoiced more
than once;
 
(i) with respect to which any check or other instrument of payment has been
returned uncollected for any reason;
 
(j) which is owed by an Account Debtor which has (i) applied for, suffered, or
consented to the appointment of any receiver, custodian, trustee, or liquidator
of its assets, (ii) has had possession of all or a material part of its property
taken by any receiver, custodian, trustee or liquidator, (iii) filed, or had
filed against it, any request or petition for liquidation, reorganization,
arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or
voluntary or involuntary case under any state or federal bankruptcy laws (other
than post-petition accounts payable of an Account Debtor that is a
debtor-in-possession under the Bankruptcy Code and reasonably acceptable to the
Administrative Agent), (iv) has admitted in writing its inability, or is
generally unable to, pay its debts as they become due, (v) become insolvent, or
(vi) ceased operation of its business;
 
(k) which is owed by any Account Debtor which has sold all or a substantially
all of its assets;
 
(l) which is owed by an Account Debtor which (i) does not maintain its chief
executive office in the U.S. or Canada or (ii) is not organized under applicable
law of the U.S., any state of the U.S., Canada, or any province of Canada
unless, in either case, such Account is backed by a Letter of Credit acceptable
to the Administrative Agent which is in the possession of, has been assigned to
and is directly drawable by the Administrative Agent;
 
(m) which is owed in any currency other than dollars, other than Accounts owed
in Canadian Dollars not in excess of the Dollar Equivalent of $5,000,000 in the
aggregate at any time;
 
(n) which is owed by (i) the government (or any department, agency, public
corporation, or instrumentality thereof) of any country other than the U.S.
unless such Account is backed by a Letter of Credit acceptable to the
Administrative Agent which is in the possession of, has been assigned to and is
directly drawable by the Administrative Agent, or (ii) the government of the
U.S. (or any department, agency, public corporation, or instrumentality thereof)
unless the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. §
3727 et seq. and 41 U.S.C. § 15 et seq.), and any other steps necessary to
perfect the Lien of the Administrative Agent in such Account have been complied
with to the Administrative Agent’s satisfaction;
 

 

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(o) which is owed by any Affiliate, employee, officer, director, agent or
stockholder of any Loan Party;
 
(p) which, for any Account Debtor, exceeds a credit limit determined by the
Administrative Agent, to the extent of such excess;
 
(q) which is owed by an Account Debtor or any Affiliate of such Account Debtor
to which any Loan Party is indebted, but only to the extent of such indebtedness
or is subject to any security, deposit, progress payment, retainage or other
similar advance made by or for the benefit of an Account Debtor, in each case to
the extent thereof;
 
(r) which is subject to any counterclaim, deduction, defense, setoff or dispute
but only to the extent of any such counterclaim, deduction, defense, setoff or
dispute;
 
(s) which is evidenced by any promissory note, chattel paper, or instrument;
 
(t) which is owed by an Account Debtor located in any jurisdiction which
requires filing of a “Notice of Business Activities Report” or other similar
report in order to permit the applicable Loan Party to seek judicial enforcement
in such jurisdiction of payment of such Account, unless such Loan Party has
filed such report or qualified to do business in such jurisdiction;
 
(u) with respect to which the applicable Loan Party has made any agreement with
the Account Debtor for any reduction thereof, other than discounts and
adjustments given in the ordinary course of business, or any Account which was
partially paid and the applicable Loan Party created a new receivable for the
unpaid portion of such Account;
 
(v) which does not comply in all material respects with the requirements of all
applicable laws and regulations, whether Federal, state or local, including
without limitation the Federal Consumer Credit Protection Act, the Federal Truth
in Lending Act and Regulation Z of the Board;
 
(w) which is for goods that have been sold under a purchase order or pursuant to
the terms of a contract or other agreement or understanding (written or oral)
that indicates or purports that any Person other than the applicable Loan Party
has or has had an ownership interest in such goods, or which indicates any party
other than the applicable Loan Party as payee or remittance party;
 
(x) which was created on cash on delivery terms;
 
(y) which the Administrative Agent determines in its Permitted Discretion may
not be paid by reason of the Account Debtor’s inability to pay or which the
Administrative Agent otherwise determines is unacceptable for any reason
whatsoever; or
 
(z) which was acquired or originated by any Person acquired after the Effective
Date (until such time as diligence in respect of such Person and such Accounts
satisfactory to the Administrative Agent, in its Permitted Discretion, has been
completed).
 

 

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In the event that an Account which was previously an Eligible Account ceases to
be an Eligible Account hereunder, the Borrower shall exclude such account from
the next Borrowing Base Certificate submitted to the Administrative Agent.  In
determining the amount of an Eligible Account, the face amount of an Account
may, in the Administrative Agent’s Permitted Discretion, be reduced by, without
duplication, to the extent not reflected in such face amount, (i) the amount of
all accrued and actual discounts, claims, credits or credits pending,
promotional program allowances, price adjustments, finance charges or other
allowances (including any amount that the applicable Loan Party may be obligated
to rebate to an Account Debtor pursuant to the terms of any agreement or
understanding (written or oral)) and (ii) the aggregate amount of all cash
received in respect of such Account but not yet applied by the applicable Loan
Party to reduce the amount of such Account.  Standards of eligibility may be
made more restrictive from time to time solely by the Administrative Agent in
the exercise of its Permitted Discretion.
 
“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.
 
“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
 
“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
 
“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with any Loan Party, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under Section
414 of the Code.
 
“ERISA Event” means (a) any “reportable event,” as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of a Prohibited Transaction; (c) any failure by any Pension
Plan to satisfy the minimum funding standards (within the meaning of Sections
412 or 430 of the Code or Section 302 of ERISA), whether or not waived; (d) the
filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Pension Plan, the failure to make by its due date a required installment under
Section 430(j) of the Code with respect to any Pension Plan or the failure by
any Loan Party or any of its ERISA Affiliates to make any required contribution
to a Multiemployer Plan; (e) the incurrence by any Loan Party or any of its
ERISA Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Pension Plan, including but not limited to the imposition of
any Lien in favor of the PBGC or any Pension Plan; (f) a determination that any
Pension Plan is, or is expected to be, in “at risk” status (within the meaning
of Section 430 of the Code or Section 303 of ERISA); (g) the receipt by any Loan
Party or any ERISA Affiliate from the PBGC or a plan administrator of any notice
relating to an intention to terminate any Pension Plan to appoint a trustee to
administer any Pension Plan under Section 4042 of ERISA; (h) the incurrence by
any Loan Party or any of its ERISA Affiliates of any liability with respect to
the withdrawal or partial withdrawal from any Pension Plan or Multiemployer
Plan; or (i) the receipt by any Loan Party or any ERISA Affiliate of any notice,
or the receipt by any Multiemployer Plan from any Loan Party or any ERISA
Affiliate of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent, in
reorganization or in endangered or critical status, within the meaning of
Section 432 of the Code or Section 305 or Title IV of ERISA.
 

 

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“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.
 
“Event of Default” has the meaning assigned to such term in Article VII.
 
“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of any Loan Party hereunder or any other Loan
Document, (a) any Other Connection Taxes, (b) U.S. federal withholding Tax
imposed by a Requirement of Law in effect at the time a Foreign Lender (other
than an assignee under Section 2.19(b)) becomes a party hereto (or designates a
new lending office), with respect to any payment made by or on account of any
obligation of the Borrower to such Foreign Lender, except to the extent that
such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts with respect to such withholding Tax under clause (a) of Section 2.17,
or (c) Taxes attributable to a Lender’s failure to comply with Section 2.17(h).
 
“Existing Letters of Credit” means the letters of credit set forth on Schedule
1.01, which letters of credit have been issued by the Issuing Bank.
 
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
 
“Fee Receiver” means any Person that receives, or through a participating
interest participates in, any payments of fees under Section 2.12 (other than
commitment fees).
 
“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.
 
“Foreign Benefit Arrangement” means any employee benefit arrangement mandated by
non-US law that is maintained or contributed to by any Loan Party or any ERISA
Affiliate.
 
“Foreign Lender” means (1) any Lender or Issuing Bank that is not a “United
States person” as defined by section 7701(a)(30) of the Code (“US Person”), or
(2) any Lender that is a partnership or other entity treated as a partnership
for United States federal income tax purposes which is a US Person, but only to
the extent the beneficial owners (including indirect partners if its direct
partners are partnerships or other entities treated as partnerships for United
States federal income tax purposes are US Persons) are not US Persons.
 
“Foreign Plan” means each employee benefit plan (within the meaning of Section
3(3) of ERISA, whether or not subject to ERISA) that is not subject to US law
and is maintained or contributed to by any Loan Party or any ERISA Affiliates.
 
“Funding Account” has the meaning assigned to such term in Section 4.01(h).
 

 

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“GAAP” means generally accepted accounting principles in the United States of
America.
 
“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
 
“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
 
“Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.
 
“Hazardous Materials”  means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.
 
“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others,
(h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty, (j) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances, (k) obligations
under any liquidated earn-out and (l) any other Off-Balance Sheet
Liability.  The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor.
 
“Indemnified Taxes” means Taxes other than Excluded Taxes.
 

 

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“Interest Election Request” means a request by the Borrower to convert or
continue a Revolving Borrowing in accordance with Section 2.07.
 
“Interest Payment Date” means (a) with respect to any ABR Loan (other than a
Swingline Loan), the first day of each calendar month and the Maturity Date and
(b) with respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such Interest Period
and the Maturity Date.
 
“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect; provided, that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the case of a Eurodollar
Borrowing only, such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar
Borrowing that commences on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the last calendar
month of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period.  For purposes hereof, the date of a
Borrowing initially shall be the date on which such Borrowing is made and, in
the case of a Revolving Borrowing, thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.
 
“Inventory” has the meaning assigned to such term in the Security Agreement.
 
“Invision” means Invision Automotive Systems Inc.
 
“Issuing Bank” means JPMCB, in its capacity as the issuer of Letters of Credit
hereunder, and its successors in such capacity as provided in Section
2.06(i).  The Issuing Bank may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case
the term “Issuing Bank” shall include any such Affiliate with respect to Letters
of Credit issued by such Affiliate.
 
“Joinder Agreement” has the meaning assigned to such term in Section 5.10(a)
 
“JPMCB” means JPMorgan Chase Bank, N.A., a national banking association, in its
individual capacity, and its successors.
 
“LC Collateral Account” has the meaning assigned to such term in Section
2.06(j).
 
“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter
of Credit.
 
“LC Exposure” means, at any time, the sum of the Commercial LC Exposure and the
Standby LC Exposure.  The LC Exposure of any Revolving Lender at any time shall
be its Applicable Percentage of the total LC Exposure at such time.
 

 

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“Lenders” means the Persons listed on the Commitment Schedule and any other
Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption.  Unless the context otherwise requires, the
term “Lenders” includes the Swingline Lender.
 
“Letter of Credit” means any letter of credit issued pursuant to this Agreement.
 
“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any successor
or substitute page of such service, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on
such page of such service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period.  In the event that such rate is not available at such time for
any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for
such Interest Period shall be the rate at which dollar deposits of $5,000,000
and for a maturity comparable to such Interest Period are offered by the
principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
 
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
 
“Loan Documents” means this Agreement, any promissory notes issued pursuant to
this Agreement, any Letter of Credit applications, the Collateral Documents and
all other agreements, instruments, documents and certificates identified in
Section 4.01 executed and delivered to, or in favor of, the Administrative Agent
or any Lenders and including all other pledges, powers of attorney, consents,
assignments, contracts, notices, letter of credit agreements and all other
written matter whether heretofore, now or hereafter executed by or on behalf of
any Loan Party, or any employee of any Loan Party, and delivered to the
Administrative Agent or any Lender in connection with the Agreement or the
transactions contemplated thereby.  Any reference in the Agreement or any other
Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to the Agreement or such Loan Document as
the same may be in effect at any and all times such reference becomes operative.
 
“Loan Guarantor” means each Loan Party.
 
“Loan Guaranty” means Article X of this Agreement.
 
“Loan Parties” means the Borrower, the Borrower’s domestic Subsidiaries and any
other Person who becomes a party to this Agreement pursuant to a Joinder
Agreement and their successors and assigns; provided that Invision shall not be
a Loan Party until required to become a Loan Party pursuant to Section 5.10.
 

 

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“Loans” means the loans and advances made by the Lenders pursuant to this
Agreement, including Swingline Loans, Overadvances and Protective Advances.
 
“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, or financial condition, of the Borrower and its Subsidiaries
taken as a whole, (b) the ability of any Loan Party to perform any of its
obligations under the Loan Documents to which it is a party, (c) the Collateral,
or the Administrative Agent’s Liens (on behalf of the Secured Parties) on the
Collateral or the priority of such Liens, or (d) the rights of or benefits
available to the Administrative Agent, the Issuing Bank or the Lenders under the
Loan Documents.
 
“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of the Borrower and its Subsidiaries in an aggregate principal amount
exceeding $15,000,000.  For purposes of determining Material Indebtedness, the
“obligations” of the Borrower or any Subsidiary in respect of any Swap Agreement
at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Borrower or such Subsidiary would be required to pay if
such Swap Agreement were terminated at such time.
 
“Maturity Date” means March 31, 2013 or any earlier date on which the Revolving
Commitments are reduced to zero or otherwise terminated pursuant to the terms
hereof.
 
“Maximum Liability” has the meaning assigned to such term in Section 10.09.
 
“Maximum Rate” has the meaning assigned to such term in Section 9.17.
 
 “Multiemployer Plan” means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
 
“Net Proceeds” means, with respect to any event, (a) the cash proceeds received
in respect of such event including (i) any cash received in respect of any
non-cash proceeds (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or purchase
price adjustment receivable or otherwise, but excluding any interest payments),
but only as and when received, (ii) in the case of a casualty, insurance
proceeds and (iii) in the case of a condemnation or similar event, condemnation
awards and similar payments, net of (b) the sum of (i) all reasonable fees and
out-of-pocket expenses paid to third parties (other than Affiliates) in
connection with such event, (ii) in the case of a sale, transfer or other
disposition of an asset (including pursuant to a sale and leaseback transaction
or a casualty or a condemnation or similar proceeding), the amount of all
payments required to be made as a result of such event to repay Indebtedness
(other than Loans) secured by such asset or otherwise subject to mandatory
prepayment as a result of such event and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) and the amount of any reserves established
to fund contingent liabilities reasonably estimated to be payable, in each case
during the year that such event occurred or the next succeeding year and that
are directly attributable to such event (as determined reasonably and in good
faith by a Financial Officer).
 
“Non-Consenting Lender” has the meaning assigned to such term in Section
9.02(d).
 
“Non-Paying Guarantor” has the meaning assigned to such term in Section 10.10.
 

 

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“North American Subsidiary” means any Subsidiary that is organized under the
laws of any jurisdiction within the United States of America or Canada.
 
“Obligated Party” has the meaning assigned to such term in Section 10.02.
 
“Obligations” means all unpaid principal of and accrued and unpaid interest on
the Loans, all LC Exposure, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Loan Parties to the
Lenders or to any Lender, the Administrative Agent, the  Issuing Bank or any
indemnified party arising under the Loan Documents.
 
“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) any indebtedness, liability or obligation under any so-called
“synthetic lease” transaction entered into by such Person, or (c) any
indebtedness, liability or obligation arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheets of
such Person (other than operating leases).
 
“Other Connection Taxes” means with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of any Loan Party hereunder or under any other Loan
Document, Taxes imposed as a result of a present or former connection between
such recipient and the jurisdiction imposing such Tax (other than connections
arising from such recipient having executed, delivered, or become a party to,
performed its obligations or received payments under, received or perfected a
security interest under, sale or assignment of an interest in any Loan or Loan
Document, engaged in any other transaction pursuant to, or enforced, any Loan
Documents).
 
“Other Taxes” means all present or future stamp, court or documentary Taxes and
any other excise, property, intangible, recording, filing or similar Taxes which
arise from any payment made under, from the execution, delivery, performance,
enforcement or registration of, or from the receipt or perfection of a security
interest under, or otherwise with respect to, any Loan Document.
 
“Overadvance” has the meaning assigned to such term in Section 2.05(b).
 
“Participant” has the meaning set forth in Section 9.04.
 
“Paying Guarantor” has the meaning assigned to such term in Section 10.10.
 
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.
 
“Pension Plan” means a Plan (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Sections 412 or 430 of the Code or Section
302 of ERISA, and in respect of which any Loan Party or any ERISA Affiliate is
(or, if such plan were terminated, would under Section 4062 of ERISA be deemed
to be) an “employer” as defined in Section 3(5) of ERISA.
 
“Permitted Acquisition” means any acquisition by any Loan Party, whether by
purchase, merger or otherwise, of all or substantially all of the assets of,
100% of the Equity Interests of, or a business line or unit or a division of,
any Person; provided, that:
 

 

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(a) such acquisition shall be consummated in all material respects in accordance
with all applicable laws and in conformity with all applicable governmental
authorizations;
 
(b) in the case of the acquisition of Equity Interests, (i) 100% of the Equity
Interests acquired or otherwise issued by such Person or any newly formed
Subsidiary of any Loan Party in connection with such acquisition shall be
directly and beneficially owned by a Loan Party and (ii) the Person whose Equity
Interests are acquired shall become a Subsidiary and a Guarantor and shall
otherwise comply with the requirements of Section 5.10;
 
(c) in the case of any acquisition of $5,000,000 or more (whether paid in cash,
securities, the assumption of debt or otherwise), the Borrower shall have
delivered to the Administrative Agent at least five Business Days prior to such
proposed acquisition, a reasonably detailed description of such acquisition,
including the aggregate consideration for such acquisition, and any other
information reasonably required to demonstrate such compliance;
 
(d) such acquisition shall be consensual;
 
(e) each Person (or, as applicable, the assets) so acquired shall be in (or with
respect to assets, useful for engaging in) the same or reasonably related line
of business as conducted by the Borrower and its Subsidiaries on the Effective
Date; and
 
(f) if the assets acquired are to be included in the Borrowing Base, the
Borrower shall have delivered all information reasonably requested by the
Administrative Agent in its Permitted Discretion and the Administrative Agent
shall have received acceptable field examinations to include the acquired
accounts within the Borrowing Base.
 
“Permitted Discretion” means a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured asset-based lender)
business judgment.
 
 “Permitted Encumbrances” means:
 
(a) Liens imposed by law for taxes that are not yet due or are being contested
in compliance with Section 5.04;
 
(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 45 days or are being
contested in compliance with Section 5.04;
 
(c) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
laws or regulations;
 
(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;
 
(e) judgment liens in respect of judgments that do not constitute an Event of
Default under clause (k) of Article VII; and
 

 

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(f) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of the Borrower or any Subsidiary;
 
provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.
 
“Permitted Fee Receiver” means any Fee Receiver that, with respect to any fees
paid under Section 2.12 (other than commitment fees), delivers to the Borrower
and the Administrative Agent, on or prior to the date on which such Person
becomes a party hereto (and from time to time thereafter upon the request of the
Borrower and the Administrative Agent, unless such Lender or Issuing Bank
becomes legally unable to do so solely as a result of a Change in Law after
becoming a party hereto), accurate and duly completed copies (in such number as
requested) of one or more of Internal Revenue Service Forms W-9, W-8ECI, W-8EXP,
W-8BEN or W-8IMY (together with, if applicable, one of the aforementioned forms
duly completed from each direct or indirect beneficial owner of such Lender or
Issuing Bank) or any successor thereto that entitle such Lender or Issuing Bank
to a complete exemption from U.S. withholding tax on such payments (provided
that, in the case of the Internal Revenue Service Form W-8BEN, a Lender or
Issuing Bank providing such form shall qualify as a Permitted Fee Receiver only
if such form establishes such exemption on the basis of the “business profits”
or “other income” articles of a tax treaty to which the United States is a party
and provides a U.S. taxpayer identification number), in each case together with
such supplementary documentation as may be prescribed by applicable law to
permit the Borrower or the Administrative Agent to determine whether such Lender
or Issuing Bank is entitled to such complete exemption.
 
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
 
“Plan” means any employee benefit plan as defined in Section 3(3) of ERISA,
including any employee welfare benefit plan (as defined in Section 3(1) of
ERISA), any employee pension benefit plan (as defined in Section 3(2) of ERISA),
and any plan which is both an employee welfare benefit plan and any employee
pension benefit plan, and in respect of which any Loan Party or any ERISA
Affiliate is an “employer” as defined in Section 3(5) of ERISA.
 
 “Prepayment Event” means:
 
(a) any sale, transfer or other disposition (including pursuant to a sale and
leaseback transaction) of any property or asset of any Loan Party, other than
sales, transfers and dispositions of (i) inventory in the ordinary course of
business and (ii) used, obsolete, worn out or surplus equipment or property in
the ordinary course of business; or
 
(b) any casualty or other insured damage to, or any taking under power of
eminent domain or by condemnation or similar proceeding of, any property or
asset of any Loan Party with a fair value immediately prior to such event equal
to or greater than $2,500,000; or
 
(c) the issuance by the Borrower of any Equity Interests, or the receipt by the
Borrower of any capital contribution, other than any Equity Interests issued (i)
to finance and issued concurrently with a Permitted Acquisition and (ii) to any
of its officers, directors, employees or consultants pursuant to any employee
benefit plan, stock purchase plan or employment agreement approved by the Board
of Directors of the Borrower in the ordinary course of business; or
 

 

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(d) the incurrence by any Loan Party of any Indebtedness, other than
Indebtedness permitted under Section 6.01 or otherwise permitted by the Required
Lenders pursuant to Section 9.02.
 
“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMCB as its prime rate at its offices at 270 Park Avenue in New York
City; each change in the Prime Rate shall be effective from and including the
date such change is publicly announced as being effective.
 
“Prohibited Transaction” has the meaning assigned to such term in Section 406 of
ERISA and Section 4975(f)(3) of the Code.
 
“Projections” has the meaning assigned to such term in Section 5.01(e).
 
“Protective Advance” has the meaning assigned to such term in Section 2.04.
 
“Register” has the meaning set forth in Section 9.04.
 
“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.
 
“Report” means reports prepared by the Administrative Agent or another Person
showing the results of field examinations or audits pertaining to any Loan
Party’s assets from information furnished by or on behalf of any Loan Party,
after the Administrative Agent has exercised its rights of inspection pursuant
to this Agreement, which Reports may be distributed to the Lenders by the
Administrative Agent.
 
“Required Lenders” means, at any time, Lenders having Credit Exposure and unused
Revolving Commitments representing more than 50% of the sum of the total Credit
Exposure and unused Revolving Commitments at such time; provided that, as long
as there are only two or fewer Lenders, Required Lenders shall mean both
Lenders.
 
“Requirement of Law” means, as to any Person, the Certificate of Incorporation
and By-Laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a court
or other 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.
 
“Reserves” means any and all reserves which the Administrative Agent deems
necessary, in its Permitted Discretion, to maintain (including, without
limitation, reserves for accrued and unpaid interest on the Secured Obligations,
Banking Services Reserves, Dilution Reserves, reserves for Swap Obligations,
reserves for contingent liabilities of any Loan Party, reserves for uninsured
losses of any Loan Party, reserves for uninsured, underinsured, un-indemnified
or under-indemnified liabilities or potential liabilities with respect to any
litigation and reserves for taxes, fees, assessments, and other governmental
charges) with respect to the Collateral or any Loan Party.
 
“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Borrower or any North American Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such Equity Interests in the Borrower or any option, warrant
or other right to acquire any such Equity Interests in the Borrower.
 

 

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“Revolving Commitment” means, with respect to each Lender, the commitment, if
any, of such Lender to make Revolving Loans and to acquire participations in
Letters of Credit, Overadvances, Protective Advances and Swingline Loans
hereunder, expressed as an amount representing the maximum possible aggregate
amount of such Lender’s Revolving Exposure hereunder, as such commitment may be
reduced or increased from time to time pursuant to (a) Section 2.09 and (b)
assignments by or to such Lender pursuant to Section 9.04.  The initial amount
of each Lender’s Revolving Commitment is set forth on the Commitment Schedule,
or in the Assignment and Assumption pursuant to which such Lender shall have
assumed its Revolving Commitment, as applicable.  The initial aggregate amount
of the Lenders’ Revolving Commitments is $15,000,000.
 
“Revolving Exposure” means, with respect to any Lender at any time, the sum of
(without duplication) (a) the outstanding principal amount of such Lender’s
Revolving Loans and its LC Exposure, plus (b) an amount equal to its Applicable
Percentage of the aggregate principal amount of Swingline Loans at such time,
plus (c) an amount equal to its Applicable Percentage of the aggregate principal
amount of Overadvances outstanding at such time, plus (d) an amount equal to its
Applicable Percentage of the aggregate principal amount of Protective Advances
outstanding at such time.
 
“Revolving Loan” means a Loan made pursuant to Section 2.01.
 
 “SEC” means the Securities and Exchange Commission or any Governmental
Authority succeeding to any of its principal functions.
 
“Secured Obligations” means all Obligations, together with all (i) Banking
Services Obligations and (ii) Swap Obligations owing to one or more Lenders or
their respective Affiliates; provided that at or prior to the time that any
transaction relating to such Swap Obligation is executed, the Lender party
thereto (other than JPMCB) shall have delivered written notice to the
Administrative Agent that such a transaction has been entered into and that it
constitutes a Secured Obligation entitled to the benefits of the Collateral
Documents.
 
“Secured Parties” has the meaning assigned to such term in the Security
Agreement.
 
“Security Agreement” means that certain Pledge and Security Agreement, dated as
of the date hereof, between the Loan Parties and the Administrative Agent, for
the benefit of the Secured Parties, and any other pledge or security agreement
entered into, after the date of this Agreement by any other Loan Party (as
required by this Agreement or any other Loan Document), or any other Person, as
the same may be amended, restated or otherwise modified from time to time.
 
“Settlement” has the meaning assigned to such term in Section 2.05(d).
 
“Settlement Date” has the meaning assigned to such term in Section 2.05(d).
 
“Standby LC Exposure” means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding standby Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements relating to standby Letters of Credit
that have not yet been reimbursed by or on behalf of the Borrower at such
time.  The Standby LC Exposure of any Revolving Lender at any time shall be its
Applicable Percentage of the total Standby LC Exposure at such time.
 
“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve
percentages shall include those imposed pursuant to such
Regulation D.  Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation.  The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
 

 

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“Subordinated Indebtedness” of a Person means any Indebtedness of such Person
the payment of which is subordinated to payment of the Secured Obligations to
the reasonable satisfaction of the Administrative Agent.
 
“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
 
“Subsidiary” means any direct or indirect subsidiary of the Borrower or a Loan
Party, as applicable.
 
“SunTrust Credit Agreement” means the Loan Agreement, dated as of February 2,
2010, by and between Invision Automotive Systems Inc. and SunTrust Bank, and to
which Audiovox Corporation is a party as to certain matters, as it may be
amended, restated or modified from time to time.
 
“Suppressed Availability” means, at any time, the excess of the Borrowing Base
over the Revolving Commitment at such time.
 
“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Borrower or the
Subsidiaries shall be a Swap Agreement.
 
“Swap Obligations” of a Person means any and all obligations of such Person,
whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under (a) any and all Swap Agreements, and
(b) any and all cancellations, buy backs, reversals, terminations or assignments
of any Swap Agreement transaction.
 
“Swingline Exposure” means, at any time, the sum of the aggregate undrawn amount
of all outstanding Swingline Loans at such time.  The Swingline Exposure of any
Revolving Lender at any time shall be its Applicable Percentage of the total
Swingline Exposure at such time.
 
“Swingline Lender” means JPMCB in its capacity as lender of Swingline Loans
hereunder.
 
“Swingline Loan” has the meaning assigned to such term in Section 2.05(a).
 

 

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“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
 
“Transactions” means the execution, delivery and performance by the Loan Parties
of this Agreement, the borrowing of Loans and other credit extensions, the use
of the proceeds thereof and the issuance of Letters of Credit hereunder.
 
“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate, the Alternate Base Rate.
 
“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.
 
“Unliquidated Obligations” means, at any time, any Secured Obligations (or
portion thereof) that are contingent in nature or unliquidated at such time,
including any Secured Obligation that is: (i) an obligation to reimburse a bank
for drawings not yet made under a letter of credit issued by it; (ii) any other
obligation (including any guarantee) that is contingent in nature at such time;
or (iii) an obligation to provide collateral to secure any of the foregoing
types of obligations.
 
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
 
SECTION 1.02. Classification of Loans and Borrowings
 
.  For purposes of this Agreement, Loans may be classified and referred to by
Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by
Class and Type (e.g., a “Eurodollar Revolving Loan”).  Borrowings also may be
classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type
(e.g., a “Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar
Revolving Borrowing”).
 
SECTION 1.03. Terms Generally
 
.  The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined.  Whenever the context may require, any
pronoun shall include the corresponding mascu­line, feminine and neuter
forms.  The words “include”, “includes” and “including” shall be deemed to be
followed by the phrase “without limitation”.  The word “will” shall be construed
to have the same meaning and effect as the word “shall”.  Unless the context
requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
 

 

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SECTION 1.04. Accounting Terms; GAAP
 
.  Except as otherwise expressly provided herein, all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; provided that, if the Borrower notifies the Administrative Agent
that the Borrower requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Borrower that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith. Notwithstanding any other provision contained herein, all terms of an
accounting or financial nature used herein shall be construed, and all
computations of amounts and ratios referred to herein shall be made, without
giving effect to any election under Statement of Financial Accounting Standards
159 (or any other Financial Accounting Standard having a similar result or
effect) to value any Indebtedness or other liabilities of Holdings, the Borrower
or any Subsidiary at “fair value”, as defined therein.
 
 
ARTICLE II                      
 
The Credits
SECTION 2.01. Revolving Commitments
 
.  Subject to the terms and conditions set forth herein, each Lender agrees to
make Revolving Loans to the Borrower from time to time during the Availability
Period in an aggregate principal amount that will not result in (i) such
Lender’s Revolving Exposure exceeding such Lender’s Revolving Commitment or
(ii) the total Revolving Exposures exceeding the lesser of (x) the sum of the
total Revolving Commitments or (y) the Borrowing Base, subject to the
Administrative Agent’s authority, in its sole discretion, to make Protective
Advances and Overadvances pursuant to the terms of Section 2.04 and Section
2.05.  Within the foregoing limits and subject to the terms and conditions set
forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.
 
SECTION 2.02. Loans and Borrowings
 
.  (a)  Each Loan (other than a Swingline Loan) shall be made as part of a
Borrowing consisting of Loans of the same Class and Type made by the Lenders
ratably in accordance with their respective Revolving Commitments of the
applicable Class.  Any Protective Advance, any Overadvance and any Swingline
Loan shall be made in accordance with the procedures set forth in Section 2.04
and 2.05.
 
(b) Subject to Section 2.14, each Revolving Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith, provided that all Borrowings made on the Effective Date
must be made as ABR Borrowings but may be converted into Eurodollar Borrowings
in accordance with Section 2.08. Each Swingline Loan shall be an ABR Loan.  Each
Lender at its option may make any Eurodollar Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan; provided that any
exercise of such option shall not affect the obligation of the Borrower to repay
such Loan in accordance with the terms of this Agreement.
 
(c) At the commencement of each Interest Period for any Eurodollar Revolving
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $100,000 and not less than $500,000.  ABR Revolving Borrowings may
be in any amount.  Borrowings of more than one Type and Class may be outstanding
at the same time; provided that there shall not at any time be more than a total
of six Eurodollar Borrowings outstanding.
 

 

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(d) Notwithstanding any other provision of this Agreement, the Borrower shall
not be entitled to request, or to elect to convert or continue, any Borrowing if
the Interest Period requested with respect thereto would end after the Maturity
Date.
 
SECTION 2.03. Requests for Revolving Borrowings
 
.  To request a Revolving Borrowing, the Borrower shall notify the
Administrative Agent of such request either in writing (delivered by hand or
facsimile) in a form approved by the Administrative Agent and signed by the
Borrower or by telephone (a) in the case of a Eurodollar Borrowing, not later
than 2:00 p.m., New York City time, three Business Days before the date of the
proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 2:00
p.m., New York City time, on the date of the proposed Borrowing; provided that
any such notice of an ABR Revolving Borrowing to finance the reimbursement of an
LC Disbursement as contemplated by Section 2.06(e) may be given not later than
10:00 a.m., New York City time, on the date of the proposed Borrowing.  Each
such telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or facsimile to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by
the Borrower.  Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.01:
 
(i) the aggregate amount of the requested Borrowing and a breakdown of the
separate wires comprising such Borrowing;
 
(ii) the date of such Borrowing, which shall be a Business Day;
 
(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and
 
(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period.”
 
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing.  If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Borrower shall be deemed to have selected an Interest Period of one month’s
duration.  Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.
 
SECTION 2.04. Protective Advances
 
.  (a)  Subject to the limitations set forth below, the Administrative Agent is
authorized by the Borrower and the Lenders, from time to time in the
Administrative Agent’s sole discretion (but shall have absolutely no obligation
to), to make Loans to the Borrower, on behalf of all Lenders, which the
Administrative Agent, in its Permitted Discretion, deems necessary or desirable
(i) to preserve or protect the Collateral, or any portion thereof, (ii) to
enhance the likelihood of, or maximize the amount of, repayment of the Loans and
other Obligations, or (iii) to pay any other amount chargeable to or required to
be paid by the Borrower pursuant to the terms of this Agreement, including
payments of reimbursable expenses (including costs, fees, and expenses as
described in Section 9.03) and other sums payable under the Loan Documents (any
of such Loans are herein referred to as “Protective Advances”); provided that,
the aggregate amount of Protective Advances outstanding at any time shall not at
any time exceed 10% of the total Revolving Commitment (less the aggregate amount
of Overadvances made pursuant to Section 2.05(b)); provided further that, the
aggregate amount of outstanding Protective Advances plus the aggregate Revolving
Exposure shall not exceed the aggregate Revolving Commitments.  Protective
Advances may be made even if the conditions precedent set forth in Section 4.02
have not been satisfied.  The Protective Advances shall be secured by the Liens
in favor of the Administrative Agent in and to the Collateral and shall
constitute Obligations hereunder.  All Protective Advances shall be ABR
Borrowings.  The Administrative Agent’s authorization to make Protective
Advances may be revoked at any time by the Required Lenders.  Any such
revocation must be in writing and shall become effective prospectively upon the
Administrative Agent’s receipt thereof.  At any time that there is sufficient
Availability and the conditions precedent set forth in Section 4.02 have been
satisfied, the Administrative Agent may request the Lenders to make a Revolving
Loan to repay a Protective Advance.  At any other time the Administrative Agent
may require the Lenders to fund their risk participations described in Section
2.04(b).
 

 

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(b) Upon the making of a Protective Advance by the Administrative Agent (whether
before or after the occurrence of a Default), each Lender shall be deemed,
without further action by any party hereto, to have unconditionally and
irrevocably purchased from the Administrative Agent without recourse or
warranty, an undivided interest and participation in such Protective Advance in
proportion to its Applicable Percentage.  From and after the date, if any, on
which any Lender is required to fund its participation in any Protective Advance
purchased hereunder, the Administrative Agent shall promptly distribute to such
Lender, such Lender’s Applicable Percentage of all payments of principal and
interest and all proceeds of Collateral received by the Administrative Agent in
respect of such Protective Advance.
 
SECTION 2.05. Swingline Loans and Overadvances
 
.  (a)  The Administrative Agent, the Swingline Lender and the Lenders agree
that in order to facilitate the administration of this Agreement and the other
Loan Documents, promptly after the Borrower requests an ABR Borrowing, the
Swingline Lender may elect to have the terms of this Section 2.05(a) apply to
such Borrowing Request by advancing, on behalf of the Lenders and in the amount
requested, same day funds to the Borrower, on the applicable Borrowing date to
the Funding Account(s) (each such Loan made solely by the Swingline Lender
pursuant to this Section 2.05(a) is referred to in this Agreement as a
“Swingline Loan”), with settlement among them as to the Swingline Loans to take
place on a periodic basis as set forth in Section 2.05(d).  Each Swingline Loan
shall be subject to all the terms and conditions applicable to other ABR Loans
funded by the Lenders, except that all payments thereon shall be payable to the
Swingline Lender solely for its own account.  The aggregate amount of Swingline
Loans outstanding at any time shall not exceed $1,500,000.  The Swingline Lender
shall not make any Swingline Loan if the requested Swingline Loan exceeds
Availability (before giving effect to such Swingline Loan).  All Swingline Loans
shall be ABR Borrowings.
 
(b)           Any provision of this Agreement to the contrary notwithstanding,
at the request of the Borrower, the Administrative Agent may in its sole
discretion (but with absolutely no obligation), make Revolving Loans to the
Borrower, on behalf of the Lenders, in amounts that exceed Availability (any
such excess Revolving Loans are herein referred to collectively as
“Overadvances”); provided that, no Overadvance shall result in a Default due to
the Borrower’s failure to comply with Section 2.01 for so long as such
Overadvance remains outstanding in accordance with the terms of this paragraph,
but solely with respect to the amount of such Overadvance.  In addition,
Overadvances may be made even if the condition precedent set forth in Section
4.02(c) has not been satisfied.  All Overadvances shall constitute ABR
Borrowings.  The authority of the Administrative Agent to make Overadvances is
limited to an aggregate amount not to exceed 10% of the total Revolving
Commitment at any time (less the aggregate amount of Protective Advances made
pursuant to Section 2.04(a)), no Overadvance may remain outstanding for more
than thirty days and no Overadvance shall cause any Lender’s Revolving Exposure
to exceed its Revolving Commitment; provided that, the Required Lenders may at
any time revoke the Administrative Agent’s authorization to make
Overadvances.  Any such revocation must be in writing and shall become effective
prospectively upon the Administrative Agent’s receipt thereof.
 
(c)           Upon the making of a Swingline Loan or an Overadvance (whether
before or after the occurrence of a Default and regardless of whether a
Settlement has been requested with respect to such Swingline Loan or
Overadvance), each Lender shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably purchased from the Swingline
Lender without recourse or warranty, an undivided interest and participation in
such Swingline Loan or Overadvance in proportion to its Applicable Percentage of
the Revolving Commitment.  The Swingline Lender may, at any time, require the
Lenders to fund their participations.  From and after the date, if any, on which
any Lender is required to fund its participation in any Swingline Loan or
Overadvance purchased hereunder, the Administrative Agent shall promptly
distribute to such Lender, such Lender’s Applicable Percentage of all payments
of principal and interest and all proceeds of Collateral received by the
Administrative Agent in respect of such Loan.
 

 

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(d)           The Administrative Agent, on behalf of the Swingline Lender, shall
request settlement (a “Settlement”) with the Lenders on at least a weekly basis
or on any date that the Administrative Agent elects, by notifying the Lenders of
such requested Settlement by facsimile, telephone, or e-mail no later than 12:00
noon New York City time on the date of such requested Settlement (the
“Settlement Date”).  Each Lender (other than the Swingline Lender, in the case
of the Swingline Loans) shall transfer the amount of such Lender’s Applicable
Percentage of the outstanding principal amount of the applicable Loan with
respect to which Settlement is requested to the Administrative Agent, to such
account of the Administrative Agent as the Administrative Agent may designate,
not later than 2:00 p.m., New York City time, on such Settlement
Date.  Settlements may occur during the existence of a Default and whether or
not the applicable conditions precedent set forth in Section 4.02 have then been
satisfied.  Such amounts transferred to the Administrative Agent shall be
applied against the amounts of the Swingline Lender’s Swingline Loans and,
together with Swingline Lender’s Applicable Percentage of such Swingline Loan,
shall constitute Revolving Loans of such Lenders, respectively.  If any such
amount is not transferred to the Administrative Agent by any Lender on such
Settlement Date, the Swingline Lender shall be entitled to recover such amount
on demand from such Lender together with interest thereon as specified in
Section 2.07.
 
SECTION 2.06. Letters of Credit
 
.  (a)  General.  On and after the Effective Date, each Existing Letter of
Credit will constitute a Letter of Credit under this Agreement and for purposes
hereof will be deemed to have been issued on the Effective Date.  Subject to the
terms and conditions set forth herein, the Borrower may request the issuance of
Letters of Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
during the Availability Period.  In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrower to,
or entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
 
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or facsimile (or transmit by electronic communication, if arrangements for doing
so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (prior to 10:00 a.m., New York City time, at least three
Business Days prior to the requested date of issuance, amendment, renewal or
extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall be
a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit.  If requested by the Issuing Bank, the Borrower also shall submit a
letter of credit application on the Issuing Bank’s standard form in connection
with any request for a Letter of Credit.  A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit the Borrower shall be deemed to represent and
warrant that), after giving effect to such issuance, amendment, renewal or
extension (i) the LC Exposure shall not exceed $15,000,000, (ii) the Standby LC
Exposure shall not exceed $5,000,000, (iii) the Commercial LC Exposure shall not
exceed $10,000,000 and (iv) the total Revolving Exposures shall not exceed the
lesser of the total Revolving Commitments and the Borrowing Base.
 
(c) Expiration Date.  Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five Business Days prior to the Maturity Date.
 

 

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(d) Participations.  By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action
on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants
to each Lender, and each Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit.  In consideration and in furtherance of the foregoing, each Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent,
for the account of the Issuing Bank, such Lender’s Applicable Percentage of each
LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower on
the date due as provided in paragraph (e) of this Section, or of any
reimbursement payment required to be refunded to the Borrower for any
reason.  Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Revolving Commitments, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever.
 
(e) Reimbursement.  If the Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement
by paying to the Administrative Agent an amount equal to such LC Disbursement
not later than 12:00 noon, New York City time, on the date that such LC
Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such
notice has not been received by the Borrower prior to such time on such date,
then not later than 12:00 noon, New York City time, on (i) the Business Day that
the Borrower receives such notice, if such notice is received prior to 10:00
a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that
the Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.03 or 2.05 that such payment be financed
with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and,
to the extent so financed, the Borrower’s obligation to make such payment shall
be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline
Loan.  If the Borrower fails to make such payment when due, the Administrative
Agent shall notify each Lender of the applicable LC Disbursement, the payment
then due from the Borrower in respect thereof and such Lender’s Applicable
Percentage thereof.  Promptly following receipt of such notice, each Lender
shall pay to the Administrative Agent its Applicable Percentage of the payment
then due from the Borrower, in the same manner as provided in Section 2.07 with
respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to the Issuing Bank the amounts so received by it from
the Lenders.  Promptly following receipt by the Administrative Agent of any
payment from the Borrower pursuant to this paragraph, the Administrative Agent
shall distribute such payment to the Issuing Bank or, to the extent that Lenders
have made payments pursuant to this paragraph to reimburse the Issuing Bank,
then to such Lenders and the Issuing Bank as their interests may appear.  Any
payment made by a Lender pursuant to this paragraph to reimburse the Issuing
Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a
Swingline Loan as contemplated above) shall not constitute a Loan and shall not
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(f) Obligations Absolute.  The Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower’s obligations
hereunder.  Neither the Administrative Agent, the Lenders nor the Issuing Bank,
nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the Issuing Bank; provided that the foregoing shall not be
construed to excuse the Issuing Bank from liability to the Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank’s
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof.  The parties
hereto expressly agree that, in the absence of gross negligence or willful
misconduct on the part of the Issuing Bank (as finally determined by a court of
competent jurisdiction), the Issuing Bank shall be deemed to have exercised care
in each such determination.  In furtherance of the foregoing and without
limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
 
(g) Disbursement Procedures.  The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit.  The Issuing Bank shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by facsimile) of
such demand for payment and whether the Issuing Bank has made or will make an LC
Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse the
Issuing Bank and the Lenders with respect to any such LC Disbursement.
 
(h) Interim Interest.  If the Issuing Bank shall make any LC Disbursement, then,
unless the Borrower shall reimburse such LC Disbursement in full on the date
such LC Disbursement is made, the unpaid amount thereof shall bear interest, for
each day from and including the date such LC Disbursement is made to but
excluding the date that the Borrower reimburses such LC Disbursement, at the
rate per annum then applicable to ABR Revolving Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.13(d) shall apply.  Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment.
 

 

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(i) Replacement of the Issuing Bank.  The Issuing Bank may be replaced at any
time by written agreement among the Borrower, the Administrative Agent, the
replaced Issuing Bank and the successor Issuing Bank.  The Administrative Agent
shall notify the Lenders of any such replacement of the Issuing Bank.  At the
time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.12(b).  From and after the effective date of any such replacement, (i)
the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require.  After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters
of Credit.
 
(j) Cash Collateralization.  If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required  Lenders (or, if the maturity of the Loans
has been accelerated, Lenders with LC Exposure representing greater than 50% of
the total LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph, the Borrower shall deposit in an account with the Administrative
Agent, in the name of the Administrative Agent and for the benefit of the
Lenders (the “LC Collateral Account”), an amount in cash equal to 105% of the LC
Exposure as of such date plus accrued and unpaid interest thereon; provided that
the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the Borrower described in clause (h) or (i) of Article
VII.  Such deposit shall be held by the Administrative Agent as collateral for
the payment and performance of the Secured Obligations.  The Administrative
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account and the Borrower hereby grants the
Administrative Agent a security interest in the LC Collateral Account.  Other
than any interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the Administrative Agent and
at the Borrower’s risk and expense, such deposits shall not bear
interest.  Interest or profits, if any, on such investments shall accumulate in
such account.  Moneys in such account shall be applied by the Administrative
Agent to reimburse the Issuing Bank for LC Disbursements for which it has not
been reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrower for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated (but
subject to the consent of Lenders with LC Exposure representing greater than 50%
of the total LC Exposure), be applied to satisfy other Secured Obligations.  If
the Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower within three Business
Days after all such Defaults have been cured or waived.
 
SECTION 2.07. Funding of Borrowings
 
.  (a)  Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 3:00
p.m., New York City time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders in an amount
equal to such Lender’s Applicable Percentage; provided, that Swingline Loans
shall be made as provided in Section 2.05.  The Administrative Agent will make
such Loans available to the Borrower by promptly crediting the amounts so
received, in like funds, to the Funding Account(s); provided, further, that ABR
Revolving Loans made to finance the reimbursement of (i) an LC Disbursement as
provided in Section 2.06(e) shall be remitted by the Administrative Agent to the
Issuing Bank and (ii) a Protective Advance or an Overadvance shall be retained
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(b) Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount.  In such event, if a Lender has not in fact made its share of the
applicable Borrowing available to the Administrative Agent, then the applicable
Lender and the Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to
but excluding the date of payment to the Administrative Agent, at (i) in the
case of such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation or (ii) in the case of the Borrower, the interest rate
applicable to ABR Loans.  If such Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender’s Loan included in such
Borrowing.
 
SECTION 2.08. Interest Elections
 
.  (a)  Each Revolving Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Eurodollar Revolving
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request.  Thereafter, the Borrower may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a Eurodollar
Revolving Borrowing, may elect Interest Periods therefor, all as provided in
this Section.  The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.  This Section shall not apply to Swingline Loans,
Overadvances or Protective Advances, which may not be converted or continued.
 
(b) To make an election pursuant to this Section, the Borrower shall notify the
Administrative Agent of such election by telephone by the time that a Borrowing
Request would be required under Section 2.03 if the Borrower were requesting a
Revolving Borrowing of the Type resulting from such election to be made on the
effective date of such election.  Each such telephonic Interest Election Request
shall be irrevocable and shall be confirmed promptly by hand delivery or
facsimile to the Administrative Agent of a written Interest Election Request in
a form approved by the Administrative Agent and signed by the Borrower.
 
(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:
 
(i) the Borrower and the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to clauses
(iii) and (iv) below shall be specified for each resulting Borrowing);
 
(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;
 
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and
 

 

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(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period
to be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.
 
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.
 
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.
 
(e) If the Borrower fails to deliver a timely Interest Election Request with
respect to a Eurodollar Revolving Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing.  Notwithstanding any contrary provision hereof, if a Default
has occurred and is continuing and the Administrative Agent, at the request of
the Required Lenders, so notifies the Borrower, then, so long as a Default is
continuing (i) no outstanding Revolving Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Revolving Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
 
SECTION 2.09. Termination and Reduction of Revolving Commitments; Increase in
Revolving Commitments
 
.  (a)  Unless previously terminated, the Revolving Commitments shall terminate
on the Maturity Date.
 
(b) The Borrower may at any time terminate the Revolving Commitments upon (i)
the payment in full of all outstanding Loans, together with accrued and unpaid
interest thereon and on any Letters of Credit, (ii) the cancellation and return
of all outstanding Letters of Credit (or alternatively, with respect to each
such Letter of Credit, the furnishing to the Administrative Agent of a cash
deposit (or at the discretion of the Administrative Agent a back up standby
letter of credit satisfactory to the Administrative Agent) equal to 105% of the
LC Exposure as of such date), (iii) the payment in full of the accrued and
unpaid fees and (iv) the payment in full of all reimbursable expenses and other
Obligations together with accrued and unpaid interest thereon.
 
(c)           The Borrower may from time to time reduce the Revolving
Commitments; provided that (i) each reduction of the Revolving Commitments shall
be in an amount that is an integral multiple of $1,000,000 and not less than
$5,000,000 and (ii) the Borrower shall not reduce the Revolving Commitments if,
after giving effect to any concurrent prepayment of the Revolving Loans in
accordance with Section 2.10, the sum of the Revolving Exposures would exceed
the lesser of the total Revolving Commitments and the Borrowing Base.
 
(d)           The Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Revolving Commitments under paragraph (b) or (c) of
this Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof.  Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof.  Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Revolving Commitments delivered by the Borrower may state
that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied.  Any termination or reduction of the Revolving
Commitments shall be permanent.  Each reduction of the Revolving Commitments
shall be made ratably among the Lenders in accordance with their respective
Revolving Commitments.
 

 

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(e)           The Borrower shall have the right to increase the Revolving
Commitment by up to $20,000,000 in the aggregate by obtaining additional
Revolving Commitments, either from one or more of the Lenders or other lending
institutions provided that (i) any such request for an increase shall be in a
minimum amount of $5,000,000, (ii) the Borrower may make a maximum of three such
requests, (iii) the Administrative Agent has approved the identity of any such
new Lender, such approval not to be unreasonably withheld, (iv) any such new
Lender assumes all of the rights and obligations of a “Lender” hereunder, and
(v) the procedure described in Section 2.09(f) have been satisfied.
 
(f)           Any amendment hereto for such an increase or addition shall be in
form and substance satisfactory to the Administrative Agent and shall only
require the written signatures of the Administrative Agent, the Borrower and the
Lender(s) being added or increasing their Revolving Commitment.  As a condition
precedent to such an increase, the Borrower shall deliver to the Administrative
Agent a certificate of each Loan Party (in sufficient copies for each Lender)
signed by an authorized officer of such Loan Party (i) certifying and attaching
the resolutions adopted by such Loan Party approving or consenting to such
increase, and (ii) in the case of the Borrower, certifying that, before and
after giving effect to such increase, (A) the representations and warranties
contained in Article III and the other Loan Documents are true and correct,
except to the extent that such representations and warranties specifically refer
to an earlier date, in which case they are true and correct as of such earlier
date, and (B) no Default exists.
 
(g)           Within a reasonable time after the effective date of any increase,
the Administrative Agent shall, and is hereby authorized and directed to, revise
the Commitment Schedule to reflect such increase and shall distribute such
revised Commitment Schedule to each of the Lenders and the Borrower, whereupon
such revised Commitment Schedule shall replace the old Commitment Schedule and
become part of this Agreement.  On the Business Day following any such increase,
all outstanding Alternate Base Rate Loans shall be reallocated among the Lenders
(including any newly added Lenders) in accordance with the Lenders’ respective
revised Applicable Percentages.  Eurodollar Loans shall not be reallocated among
the Lenders prior to the expiration of the applicable Interest Period in effect
at the time of any such increase.
 
SECTION 2.10. Repayment and Amortization of Loans; Evidence of Debt
 
.  (a)  The Borrower hereby unconditionally promises to pay (i) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Revolving Loan on the Maturity Date, (ii) to the Administrative
Agent the then unpaid amount of each Protective Advance on the earlier of the
Maturity Date and demand by the Administrative Agent and (iii) to the
Administrative Agent the then unpaid principal amount of each Overadvance on the
earlier of the Maturity Date and demand by the Administrative Agent.
 
(b) [Reserved]
 
(c) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.
 
(d) The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Class and Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.
 

 

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(e) The entries made in the accounts maintained pursuant to paragraph (c) or (d)
of this Section shall be prima facie evidence of the existence and amounts of
the obligations recorded therein; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.
 
(f) Any Lender may request that Loans made by it be evidenced by a promissory
note.  In such event, the Borrower shall prepare, execute and deliver to such
Lender a promissory note payable to the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns) and in a form
approved by the Administrative Agent.  Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
 
SECTION 2.11. Prepayment of Loans
 
.  (a)  The Borrower shall have the right at any time and from time to time to
prepay any Borrowing in whole or in part, subject to prior notice in accordance
with paragraph (e) of this Section.
 
(b) Except for Overadvances permitted under Section 2.05, in the event and on
such occasion that the total Revolving Exposure exceeds the lesser of (A) the
aggregate Revolving Commitments or (B) the Borrowing Base, the Borrower shall
first, prepay the Revolving Loans and/or Swingline Loans and, second, after all
outstanding Loans have been prepaid, cash collateralize outstanding LC Exposure,
in an aggregate amount equal to such excess.
 
(c) In the event and on each occasion that any Net Proceeds are received by or
on behalf of any Loan Party in respect of any Prepayment Event, the Borrower
shall, immediately after such Net Proceeds are received by any Loan Party,
prepay the Obligations as set forth in Section 2.11(d) below in an aggregate
amount equal to 100% of such Net Proceeds.
 
(d) All such amounts pursuant to Section 2.11(c) shall be applied, first to
prepay any Protective Advances and Overadvances that may be outstanding, pro
rata, and second to prepay the Revolving Loans (including Swing Line Loans)
without a corresponding reduction in the Revolving Commitment.
 
(e) The Borrower shall notify the Administrative Agent (and, in the case of
prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by
facsimile) of any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Revolving Borrowing, not later than 10:00 a.m., New York City time,
three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Revolving Borrowing, not later than 10:00 a.m., New York
City time, one Business Day before the date of prepayment.  Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid; provided that, if a
notice of prepayment is given in connection with a conditional notice of
termination of the Revolving Commitments as contemplated by Section 2.09, then
such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.09.  Promptly following receipt of any such
notice relating to a Revolving Borrowing, the Administrative Agent shall advise
the Lenders of the contents thereof.  Each partial prepayment of any Revolving
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Revolving Borrowing of the same Type as provided in Section
2.02.  Each prepayment of a Revolving Borrowing shall be applied ratably to the
Revolving Loans included in the prepaid Borrowing.  Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.13.
 

 

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SECTION 2.12. Fees
 
.  (a)  The Borrower agrees to pay to the Administrative Agent for the account
of each Lender a commitment fee, which shall accrue at the Applicable Rate on
the average daily amount of the Available Revolving Commitment of such Lender
during the period from and including the Effective Date to but excluding the
date on which the Lenders’ Revolving Commitments terminate.  Accrued commitment
fees shall be payable in arrears on the first day of each calendar month and on
the date on which the Revolving Commitments terminate, commencing on the first
such date to occur after the date hereof.  All commitment fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed.
 
(b) The Borrower agrees to pay (i) to the Administrative Agent for the account
of each Lender a participation fee with respect to its participations in Letters
of Credit, which shall accrue at (A) in the case of standby Letters of Credit,
the same Applicable Rate used to determine the interest rate applicable to
Eurodollar Revolving Loans and (B) in the case of trade Letters of Credit, 50%
of the Applicable Rate used to determine the interest rate applicable to
Eurodollar Revolving Loans, in each case on the average daily amount of such
Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed
LC Disbursements) in respect of standby Letters of Credit or trade Letters of
Credit, as applicable, during the period from and including the Effective Date
to but excluding the later of the date on which such Lender’s Revolving
Commitment terminates and the date on which such Lender ceases to have any LC
Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the
rate of 0.25% per annum on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date of termination of the Revolving Commitments and the date on
which there ceases to be any LC Exposure, as well as the Issuing Bank’s standard
fees with respect to the issuance, amendment, renewal or extension of any Letter
of Credit or processing of drawings thereunder.  Participation fees and fronting
fees accrued through and including the last day of each calendar month shall be
payable on the first day of each calendar month following such last day,
commencing on the first such date to occur after the Effective Date; provided
that all such fees shall be payable on the date on which the Revolving
Commitments terminate and any such fees accruing after the date on which the
Revolving Commitments terminate shall be payable on demand.  Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable within
10 days after demand.  All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed.
 
(c) The Borrower agrees to pay to the Administrative Agent, for its own account,
fees payable in the amounts and at the times separately agreed upon between the
Borrower and the Administrative Agent.
 
(d) All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Administrative Agent (or to the Issuing Bank, in the
case of fees payable to it) for distribution, in the case of commitment fees and
participation fees, to the Lenders.  Fees paid shall not be refundable under any
circumstances.
 
SECTION 2.13. Interest
 
.  (a)  The Loans comprising each ABR Borrowing (including each Swingline Loan)
shall bear interest at the Alternate Base Rate plus the Applicable Rate.
 
(b) The Loans comprising each Eurodollar Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate.
 

 

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(c) Each Protective Advance and each Overadvance shall bear interest at the
Alternate Base Rate plus the Applicable Rate for Revolving Loans plus 2%.
 
(d) Notwithstanding the foregoing, during the occurrence and continuance of a
Default, the Administrative Agent or the Required Lenders may, at their option,
by notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 9.02 requiring the
consent of “each Lender affected thereby” for reductions in interest rates),
declare that (i) all Loans shall bear interest at 2% plus the rate otherwise
applicable to such Loans as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount outstanding hereunder, such amount shall
accrue at 2% plus the rate applicable to ABR Loans, as provided in paragraph (a)
of this Section.
 
(e) Accrued interest on each Loan (for ABR Loans, accrued through the last day
of the prior calendar month) shall be payable in arrears on each Interest
Payment Date for such Loan and upon termination of the Revolving Commitments;
provided that (i) interest accrued pursuant to paragraph (d) of this Section
shall be payable on demand, (ii) in the event of any repayment or prepayment of
any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of
the Availability Period), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii)
in the event of any conversion of any Eurodollar Loan prior to the end of the
current Interest Period therefor, accrued interest on such Loan shall be payable
on the effective date of such conversion.
 
(f) All interest hereunder shall be computed on the basis of a year of 360 days,
except that interest computed by reference to the Alternate Base Rate at times
when the Alternate Base Rate is based on the Prime Rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and in each case shall
be payable for the actual number of days elapsed.  The applicable Alternate Base
Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.
 
(g) In the event that any Borrowing Base Certificate or related information
delivered pursuant to Section 5.01 is inaccurate (regardless of whether this
Agreement or the Revolving Commitments are in effect when such inaccuracy is
discovered), and such inaccuracy, if corrected, would have led to the
application of a higher Applicable Rate for any period than the Applicable Rate
actually used to determine interest rates for such period, then (i) the Borrower
shall promptly deliver to the Administrative Agent a corrected Borrowing Base
Certificate for such period, (b) the Applicable Rate for such period shall be
retroactively determined based on the average Availability as set forth in the
corrected Borrowing Base Certificate and (c) the Borrower shall promptly pay to
the Administrative Agent (for the account of the Lenders during such period or
their successors and assigns) the accrued additional interest owing as a result
of such increased Applicable Rate for such period.  This Section 2.13(g) shall
not limit the rights of the Administrative Agent under this Section 2.13 or
Article VII, and shall survive the termination of this Agreement.
 
SECTION 2.14. Alternate Rate of Interest
 
.  If prior to the commencement of any Interest Period for a Eurodollar
Borrowing:
 
(a) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such
Interest Period; or
 

 

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(b) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such Borrowing for
such Interest Period;
 
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or facsimile as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective, and (ii) if any Borrowing Request requests a Eurodollar Revolving
Borrowing, such Borrowing shall be made as an ABR Borrowing.
 
SECTION 2.15. Increased Costs
 
.  (a)  If any Change in Law shall:
 
(i) subject any Lender or the Issuing Bank to any (or any increase in any) Other
Connection Taxes with respect to this Agreement or any other Loan Document, any
Letter of Credit, or any participation in a Letter of Credit or any Loan made or
Letter of Credit issued by it, except (i) any such Taxes imposed on or measured
by its net income or profits (however denominated) or franchise taxes imposed in
lieu of net income or profits taxes or (ii) any such Taxes that are Indemnified
Taxes and that are covered by Section 2.17;
 
(ii) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate) or the Issuing Bank; or
 
(iii) impose on any Lender or the Issuing Bank or the London interbank market
any other condition affecting this Agreement or Eurodollar Loans made by such
Lender or any Letter of Credit or participation therein;
 
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.
 
(b) If any Lender or the Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender’s or the Issuing Bank’s capital or on the capital of
such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company could have achieved but for such Change in Law (taking
into consideration such Lender’s or the Issuing Bank’s policies and the policies
of such Lender’s or the Issuing Bank’s holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company for any such reduction suffered.
 

 

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(c) A certificate of a Lender or the Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Bank or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error.  The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.
 
(d) Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s or the Issuing Bank’s right to demand such compensation; provided that
the Borrower shall not be required to compensate a Lender or the Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 270 days prior to the date that such Lender or the Issuing Bank, as the
case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the Issuing Bank’s
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
 
SECTION 2.16. Break Funding Payments
 
.  In the event of (a) the payment of any principal of any Eurodollar Loan other
than on the last day of an Interest Period applicable thereto (including as a
result of an Event of Default), (b) the conversion of any Eurodollar Loan other
than on the last day of the Interest Period applicable thereto, (c) the failure
to borrow, convert, continue or prepay any Eurodollar Loan on the date specified
in any notice delivered pursuant hereto (regardless of whether such notice may
be revoked under Section 2.09(d) and is revoked in accordance therewith), or
(d) the assignment of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto as a result of a request by the Borrower
pursuant to Section 2.19, then, in any such event, the Borrower shall compensate
each Lender for the loss, cost and expense attributable to such event.  In the
case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be
deemed to include an amount determined by such Lender to be the excess, if any,
of (i) the amount of interest which would have accrued on the principal amount
of such Loan had such event not occurred, at the Adjusted LIBO Rate that would
have been applicable to such Loan, for the period from the date of such event to
the last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such
Lender would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market.  A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error.  The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
 
SECTION 2.17. Taxes
 
.  (a)  Any and all payments by or on account of any obligation of any Loan
Party hereunder or under any other Loan Document shall be made free and clear of
and without reduction or withholding for any Indemnified Taxes or Other Taxes,
provided that if any applicable law (as determined in the good faith discretion
of an applicable Withholding Agent (as defined below)) requires the deduction or
withholding of any Indemnified Tax or Other Tax from any such payment
(including, for the avoidance of doubt, any such deduction or withholding
required to be made by the applicable Loan Party or the Administrative Agent,
or, in the case of any Lender that is treated as a partnership for U.S. federal
income tax purposes, by such Lender for the account of any of its direct or
indirect beneficial owners), the applicable Loan Party, the Administrative
Agent, the Lender or the applicable direct or indirect beneficial owner of a
Lender that is treated as a partnership for U.S. federal income tax purposes
(any such person a “Withholding Agent”) shall make such deductions and timely
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law and, if such Tax is an Indemnified Tax or Other
Tax, then the sum payable by the applicable Loan Party shall be increased as
necessary so that after making all required deductions (including withholding or
deductions applicable to additional sums payable under this Section) the
Administrative Agent, Lender, the Issuing Bank or its beneficial owner, as the
case may be, receives an amount equal to the sum it would have received had no
such deductions been made.
 

 

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(b) Without limiting the provisions of paragraph (a) above, the Borrower shall
timely pay, or at the option of the Administrative Agent timely reimburse it for
the payment of any Other Taxes to the relevant Governmental Authority in
accordance with applicable law.
 
(c) The Borrower shall indemnify the Administrative Agent, each Lender and the
Issuing Bank, within 10 days after demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
payable by the Administrative Agent, such Lender (or its beneficial owner) or
the Issuing Bank, as the case may be, and any reasonable expenses (including,
for the avoidance of doubt, any penalties and interest) arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the amount of such payment or liability
delivered to the Borrower by a Lender or the Issuing Bank (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest
error.
 
(d) Each Lender and the Issuing Bank shall indemnify the Borrower and the
Administrative Agent, within 10 days after written demand therefor, against any
and all Taxes and any and all related losses, claims, liabilities, penalties,
interest and reasonable expenses (including the fees, charges and disbursements
of any counsel for the Borrower or the Administrative Agent) incurred by or
asserted against the Borrower or the Administrative Agent by any Governmental
Authority as a result of the failure by such Lender or the Issuing Bank, as the
case may be, to deliver, or as a result of the inaccuracy, inadequacy or
deficiency of, any documentation required to be delivered to the Borrower or the
Administrative Agent pursuant to Section 2.17(f).  Each Lender and the Issuing
Bank hereby authorizes the Administrative Agent to set off and apply any and all
amounts at any time owing to such Lender or the Issuing Bank, as the case may
be, under this Agreement or any other Loan Document against any amount due to
the Administrative Agent under this Section 2.17(d).
 
(e) Each Lender shall indemnify the Administrative Agent within 10 days after
demand therefor, for the full amount of any Excluded Taxes attributable to such
Lender that are payable or paid by the Administrative Agent, and reasonable
expenses arising therefrom or with respect thereto, whether or not such Excluded
Taxes were correctly or legally imposed or asserted by the relevant Governmental
Authority, but only to the extent that the Administrative Agent has not already
been reimbursed by any Loan Party with respect thereto.  A certificate as to the
amount of such payment or liability delivered to any Lender by the
Administrative Agent shall be conclusive absent manifest error
 
(f) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by a Loan Party to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
 
(g) Each Fee Receiver hereby represents that it is a Permitted Fee Receiver and
agrees to update Internal Revenue Service Form W-9 (or its successor form) or
applicable Internal Revenue Service Form W-8 (or its successor form) upon any
change in such Person’s circumstances or if such form expires or becomes
inaccurate or obsolete, and to promptly notify the Borrower and the
Administrative Agent if such Person becomes legally ineligible to provide such
form.
 

 

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(h) Any Foreign Lender that is entitled to an exemption from or reduction of any
applicable withholding tax with respect to payments hereunder or under any other
Loan Document shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times reasonably requested by the Borrower or the
Administrative Agent, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate of withholding.  In addition, any Lender, if
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, in the case of any
withholding tax other than the U.S. federal withholding tax, the completion,
execution and submission of such forms shall not be required if in the Foreign
Lender’s judgment such completion, execution or submission would subject such
Foreign Lender to any material unreimbursed cost or expense or would materially
prejudice the legal or commercial position of such Foreign Lender.
 
Without limiting the generality of the foregoing, any Foreign Lender shall, to
the extent it is legally entitled to do so, deliver to the Borrower and the
Administrative Agent or, in the case of a Participant to the Administrative
Agent and the Lender from which the related participation shall have been
purchased, (in such number of copies as shall be requested by the recipient) on
or prior to the date on which such Foreign Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the request of the Borrower or
the Administrative Agent), whichever of the following is applicable:
 
(i) duly completed copies of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States of
America is a party,
 
(ii) duly completed copies of Internal Revenue Service Form W-8ECI,
 
(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit F to the effect that such Foreign Lender is
not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a
“10 percent shareholder” of the Borrower within the meaning of section
881(c)(3)(B) of the Code, (C) a “controlled foreign corporation” described in
section 881(c)(3)(C) of the Code and (D) the interest payment in question are
not effectively connected with the United States trade or business conducted by
such Lender (a “U.S. Tax Compliance Certificate”) and (y) duly completed copies
of  Internal Revenue Service Form W-8BEN,
 
(iv) to the extent a Foreign Lender is not the beneficial owner (for example,
where the Foreign Lender is a partnership or participating Lender granting a
typical participation), an Internal Revenue Service Form W-8IMY, accompanied by
a Form W-8ECI, W-8BEN, U.S. Tax Compliance Certificate, Form W-9, and/or other
certification documents from each beneficial owner, as applicable; provided
that, if the Foreign Lender is a partnership (and not a participating Lender)
and one or more beneficial owners of such Foreign Lender are claiming the
portfolio interest exemption, such Foreign Lender may provide a U.S. Tax
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(v) any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in United States federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
applicable law to permit the Borrower to determine the withholding or deduction
required to be made.
 
Each Lender agrees that if any form or certification it previously delivered by
it expires or becomes obsolete or inaccurate in any respect, it shall update
such form or certification or promptly notify Borrower and the Administrative
Agent in writing of its legal inability to do so.
 
(i) If the Administrative Agent, a Lender or the Issuing Bank determines, in its
sole discretion, that it has received a refund of any Indemnified Taxes or Other
Taxes as to which it has been indemnified pursuant to this Section (including
additional amounts paid by any Loan Party pursuant to this Section), it shall
pay to the indemnifying party an amount equal to such refund (but only to the
extent of indemnity payments made under this Section with respect to the
Indemnified Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses (including any Taxes) of the Administrative Agent, such
Lender or the Issuing Bank, as the case may be, and without interest (other than
any interest paid by the relevant Governmental Authority with respect to such
refund), provided that such indemnifying party, upon the request of the
Administrative Agent, such Lender or the Issuing Bank, agrees to repay the
amount paid over pursuant to this Section 2.17(i) (plus any penalties, interest
or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent, such Lender or the Issuing Bank in the event the
Administrative Agent, such Lender or the Issuing Bank is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (i), in no event will any Issuing Bank or Lender be required
to pay any amount to any Loan Party the payment of which would place the Issuing
Bank or such Lender in a less favorable net after-Tax position than the Issuing
Bank or such Lender would have been in if the indemnification payments or
additional amounts giving rise to such refund had never been paid. This
paragraph shall not be construed to require the Administrative Agent, the
Issuing Bank or any Lender to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the Borrower or
any other Person.
 
(j) The agreements in this Section shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
 
SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of Set-offs
 
.  (a)  The Borrower shall make each payment required to be made by them
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or
otherwise) prior to 2:00 p.m., New York City time, on the date when due, in
immediately available funds, without set-off or counterclaim.  Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon.  All such payments
shall be made to the Administrative Agent at the Administrative Agent’s Account,
except payments to be made directly to the Issuing Bank or Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.15,
2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto.  The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof.  If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension.  All payments
hereunder shall be made in dollars.
 

 

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(b) Any proceeds of Collateral received by the Administrative Agent (i) not
constituting either (A) a specific payment of principal, interest, fees or other
sum payable under the Loan Documents (which shall be applied as specified by the
Borrower) or (B) a mandatory prepayment (which shall be applied in accordance
with Section 2.11) or (ii) after an Event of Default has occurred and is
continuing and the Administrative Agent so elects or the Required Lenders so
direct, such funds shall be applied ratably first, to pay any fees, indemnities,
or expense reimbursements including amounts then due to the Administrative Agent
and the Issuing Bank from the Borrower (other than Banking Services Obligations
or Swap Obligations), second, to pay any fees or expense reimbursements then due
to the Lenders from the Borrower (other than Banking Services Obligations or
Swap Obligations), third, to pay interest due in respect of the Overadvances and
Protective Advances, fourth, to pay the principal of the Overadvances and
Protective Advances, fifth, to pay interest then due and payable on the Loans
(other than the Overadvances and Protective Advances) ratably, sixth, to prepay
principal on the Loans (other than the Overadvances and Protective Advances),
unreimbursed LC Disbursements and, to the extent Reserves are not established
for Banking Services Obligations and Swap Obligations, to payment of any amounts
owing with respect to Banking Services Obligations and Swap Obligations,
ratably, seventh, to pay an amount to the Administrative Agent equal to one
hundred five percent (105%) of the aggregate undrawn face amount of all
outstanding Letters of Credit and the aggregate amount of any unpaid LC
Disbursements, to be held as cash collateral for such Obligations, eighth, to
the extent Reserves are established for Banking Services Obligations and Swap
Obligations, to payment of any amounts owing with respect to Banking Services
Obligations and Swap Obligations, and ninth, to the payment of any other Secured
Obligation due to the Administrative Agent or any Lender by the Borrower.
Notwithstanding anything to the contrary contained in this Agreement, unless so
directed by the Borrower, or unless a Default is in existence, neither the
Administrative Agent nor any Lender shall apply any payment which it receives to
any Eurodollar Loan of a Class, except (a) on the expiration date of the
Interest Period applicable to any such Eurodollar Loan or (b) in the event, and
only to the extent, that there are no outstanding ABR Loans of the same Class
and, in any such event, the Borrower shall pay the break funding payment
required in accordance with Section 2.16. The Administrative Agent and the
Lenders shall have the continuing and exclusive right to apply and reverse and
reapply any and all such proceeds and payments to any portion of the Secured
Obligations.
 
(c) At the election of the Administrative Agent, all payments of principal,
interest, LC Disbursements, fees, premiums, reimbursable expenses (including,
without limitation, all reimbursement for fees and expenses pursuant to Section
9.03), and other sums payable under the Loan Documents, may be paid from the
proceeds of Borrowings made hereunder whether made following a request by the
Borrower pursuant to Section 2.03 or a deemed request as provided in this
Section or may be deducted from any deposit account of the Borrower maintained
with the Administrative Agent.  The Borrower hereby irrevocably authorizes (i)
the Administrative Agent to make a Borrowing for the purpose of paying each
payment of principal, interest and fees as it becomes due hereunder or any other
amount due under the Loan Documents and agrees that all such amounts charged
shall constitute Loans (including Swingline Loans and Overadvances, but such a
Borrowing may only constitute a Protective Advance if it is to reimburse costs,
fees and expenses as described in Section 9.03) and that all such Borrowings
shall be deemed to have been requested pursuant to Sections 2.03, 2.04 or 2.05,
as applicable and (ii) the Administrative Agent to charge any deposit account of
the Borrower maintained with the Administrative Agent for each payment of
principal, interest and fees as it becomes due hereunder or any other amount due
under the Loan Documents.
 

 

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(d) If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or participations in LC Disbursements resulting in such Lender
receiving payment of a greater proportion of the aggregate amount of its Loans
and participations in LC Disbursements and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the Loans
and participations in LC Disbursements of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and participations in LC Disbursements; provided that (i)
if any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this paragraph shall apply).  The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
 
(e) Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Administrative Agent for
the account of the Lenders or the Issuing Bank hereunder that the Borrower will
not make such payment, the Administrative Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or the Issuing Bank, as the case may
be, the amount due.  In such event, if the Borrower has not in fact made such
payment, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or Issuing Bank with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
 
(f) If any Lender shall fail to make any payment required to be made by it
hereunder, then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations hereunder until all such unsatisfied obligations are fully paid.
 
SECTION 2.19. Mitigation Obligations; Replacement of Lenders
 
.
 
(a) If any Lender requests compensation under Section 2.15, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender  (and the
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment);
 

 

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(b) If any Lender requests compensation under Section 2.15, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, or if any
Lender becomes a Defaulting Lender, then the Borrower may, at their sole expense
and effort, upon notice to such Lender and the Administrative Agent, require
such Lender to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in Section 9.04), all its interests,
rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent (and if a Revolving Commitment is
being assigned, the Issuing Bank), which consent shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements and
Swingline Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.15 or payments required to be made
pursuant to Section 2.17, such assignment will result in a reduction in such
compensation or payments.  A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.
 
SECTION 2.20. Defaulting Lenders
 
.  Notwithstanding any provision of this Agreement to the contrary, if any
Lender becomes a Defaulting Lender, then the following provisions shall apply
for so long as such Lender is a Defaulting Lender.
 
(a) fees shall cease to accrue on the unfunded portion of the Revolving
Commitment of such Defaulting Lender pursuant to Section 2.12(a);
 
(b) the Revolving Commitment and Revolving Credit Exposure of such Defaulting
Lender shall not be included in determining whether all Lenders or the Required
Lenders have taken or may take any action hereunder (including any consent to
any amendment or waiver pursuant to Section 9.02), provided that any waiver,
amendment or modification requiring the consent of all Lenders or each affected
Lender which affects such Defaulting Lender differently than other affected
Lenders shall require the consent of such Defaulting Lender;
 
(c) if any Swingline Exposure or LC Exposure exists at the time a Lender becomes
a Defaulting Lender then:
 
(i) all or any part of such Swingline Exposure and LC Exposure shall be
reallocated among the non-Defaulting Lenders in accordance with their respective
Applicable Percentages but only to the extent (x) the sum of all non-Defaulting
Lenders’ Revolving Credit Exposures plus such Defaulting Lender’s Swingline
Exposure and LC Exposure does not exceed the total of all non-Defaulting
Lenders’ Revolving Commitments and (y) the conditions set forth in Section 4.02
are satisfied at such time; and
 
(ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrower shall within one Business Day following
notice by the Administrative Agent (x) first, prepay such Swingline Exposure and
(y) second, cash collateralize such Defaulting Lender’s LC Exposure (after
giving effect to any partial reallocation pursuant to clause (i) above) in
accordance with the procedures set forth in Section 2.06(j) for so long as such
LC Exposure is outstanding;
 

 

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(iii) if the Borrower cash collateralizes any portion of such Defaulting
Lender’s LC Exposure pursuant to Section 2.20(c), the Borrower shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b)
with respect to such Defaulting Lender’s LC Exposure during the period such
Defaulting Lender’s LC Exposure is cash collateralized;
 
(iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to
Section 2.20(c), then the fees payable to the Lenders pursuant to Section
2.12(a) and Section 2.12(b) shall be adjusted in accordance with such
non-Defaulting Lenders’ Applicable Percentages; or
 
(v) if any Defaulting Lender’s LC Exposure is neither cash collateralized nor
reallocated pursuant to Section 2.20(c), then, without prejudice to any rights
or remedies of the Issuing Bank or any Lender hereunder, all letter of credit
fees payable under Section 2.12(b) with respect to such Defaulting Lender’s LC
Exposure shall be payable to the Issuing Bank until such LC Exposure is cash
collateralized and/or reallocated;
 
(d) so long as any Lender is a Defaulting Lender, the Swingline Lender shall not
be required to fund any Swingline Loan and the Issuing Bank shall not be
required to issue, amend or increase any Letter of Credit, unless it is
satisfied that the related exposure will be 100% covered by the Revolving
Commitments of the non-Defaulting Lenders and/or cash collateral will be
provided by the Borrower in accordance with Section 2.20(c), and participating
interests in any such newly issued or increased Letter of Credit or newly made
Swingline Loan shall be allocated among non-Defaulting Lenders in a manner
consistent with Section 2.20(c)(i) (and Defaulting Lenders shall not participate
therein); and
 
(e) any amount payable to such Defaulting Lender hereunder (whether on account
of principal, interest, fees or otherwise and including any amount that would
otherwise be payable to such Defaulting Lender pursuant to Section 2.18(d) but
excluding Section 2.19(b)) shall, in lieu of being distributed to such
Defaulting Lender, be retained by the Administrative Agent in a segregated
account and, subject to any applicable requirements of law, be applied at such
time or times as may be determined by the Administrative Agent (i) first, to the
payment of any amounts owing by such Defaulting Lender to the Administrative
Agent hereunder, (ii) second, pro rata, to the payment of any amounts owing by
such Defaulting Lender to the Issuing Bank or Swingline Lender hereunder, (iii)
third, if so determined by the Administrative Agent or requested by an Issuing
Bank or Swingline Lender, to be held in such account as cash collateral for
future funding obligations of the Defaulting Lender of any participating
interest in any Swingline Loan or Letter of Credit, (iv) fourth, to the funding
of any Loan in respect of which such Defaulting Lender has failed to fund its
portion thereof as required by this Agreement, as determined by the
Administrative Agent, (v) fifth, if so determined by the Administrative Agent
and the Borrower, held in such account as cash collateral for future funding
obligations of the Defaulting Lender of any Loans under this Agreement, (vi)
sixth, to the payment of any amounts owing to the Lenders or an Issuing Bank or
Swingline Lender as a result of any judgment of a court of competent
jurisdiction obtained by any Lender or such Issuing Bank or Swingline Lender
against such Defaulting Lender as a result of such Defaulting Lender’s breach of
its obligations under this Agreement, (vii) seventh, to the payment of any
amounts owing to the Borrower as a result of any judgment of a court of
competent jurisdiction obtained by the Borrower against such Defaulting Lender
as a result of such Defaulting Lender’s breach of its obligations under this
Agreement, and (viii) eighth, to such Defaulting Lender or as otherwise directed
by a court of competent jurisdiction; provided that if such payment is (x) a
prepayment of the principal amount of any Loans or reimbursement obligations in
respect of LC Disbursements for which a Defaulting Lender has funded its
participation obligations and (y) made at a time when the conditions set forth
in Section 4.02 are satisfied, such payment shall be applied solely to prepay
the Loans of, and reimbursement obligations owed to, all non-Defaulting Lenders
pro rata prior to being applied to the prepayment of any Loans, or reimbursement
obligations owed to, any Defaulting Lender.
 

 

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In the event that the Administrative Agent, the Borrower, the Issuing Bank and
the Swingline Lender each agrees that a Defaulting Lender has adequately
remedied all matters that caused such Lender to be a Defaulting Lender, then the
Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect
the inclusion of such Lender’s Revolving Commitment and on such date such Lender
shall purchase at par such of the Loans of the other Lenders (other than
Swingline Loans) as the Administrative shall determine may be necessary in order
for such Lender to hold such Loans in accordance with its Applicable Percentage.
 
SECTION 2.21. Returned Payments
 
.  If after receipt of any payment which is applied to the payment of all or any
part of the Obligations, the Administrative Agent or any Lender is for any
reason compelled to surrender such payment or proceeds to any Person because
such payment or application of proceeds is invalidated, declared fraudulent, set
aside, determined to be void or voidable as a preference, impermissible setoff,
or a diversion of trust funds, or for any other reason, then the Obligations or
part thereof intended to be satisfied shall be revived and continued and this
Agreement shall continue in full force as if such payment or proceeds had not
been received by the Administrative Agent or such Lender.  The provisions of
this Section 2.21 shall be and remain effective notwithstanding any contrary
action which may have been taken by the Administrative Agent or any Lender in
reliance upon such payment or application of proceeds.  The provisions of this
Section 2.21 shall survive the termination of this Agreement.
 
 
ARTICLE III                                
 
Representations and Warranties
Each Loan Party represents and warrants to the Lenders that:
 
SECTION 3.01. Organization; Powers
 
.  Each of the Loan Parties and each of its Subsidiaries is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.
 
SECTION 3.02. Authorization; Enforceability
 
.  The Transactions are within each Loan Party’s organizational powers and have
been duly authorized by all necessary organizational actions and, if required,
actions by equity holders.  The Loan Documents to which each Loan Party is a
party have been duly executed and delivered by such Loan Party and constitute a
legal, valid and binding obligation of such Loan Party, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.
 
SECTION 3.03. Governmental Approvals; No Conflicts
 
.  The Transactions (a) do not require any consent or approval of, registration
or filing with, or any other action by, any Governmental Authority, except such
as have been obtained or made and are in full force and effect and except for
filings necessary to perfect Liens created pursuant to the Loan Documents, (b)
will not violate any Requirement of Law applicable to any Loan Party or any of
its Subsidiaries, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon any Loan Party or any of
its Subsidiaries or its assets, or give rise to a right thereunder to require
any payment to be made by any Loan Party or any of its Subsidiaries, and (d)
will not result in the creation or imposition of any Lien on any asset of any
Loan Party or any of its Subsidiaries, except Liens created pursuant to the Loan
Documents.
 

 

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SECTION 3.04. Financial Condition; No Material Adverse Effect
 
.  (a)  The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, stockholders equity and cash flows as of
and for the fiscal year ended February 28, 2009, audited by Grant Thornton LLP,
independent public accountants, certified by its chief financial officer.  Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as of such dates and for such periods in accordance
with GAAP.  As of the Effective Date, there are no liabilities of the Borrower
or any of its Subsidiaries, fixed or contingent, which are material in relation
to the consolidated financial condition of the Borrower and its Subsidiaries
that are not reflected in such financial statements or in the notes thereto,
other than liabilities arising in the ordinary course of business since February
28, 2009.
 
(b) No event, change or condition has occurred that has had, or could reasonably
be expected to have, a Material Adverse Effect, since February 28, 2009.
 
SECTION 3.05. Properties
 
.  (a)  As of the date of this Agreement, each of such leases and subleases on
each parcel of real property leased by each Loan Party is valid and enforceable
in accordance with its terms and is in full force and effect, and no material
default by any party to any such lease or sublease exists.  Each of the Loan
Parties and its North American Subsidiaries has good title to, or valid
leasehold interests in, all its real and personal property, free of all Liens
other than those permitted by Section 6.02, except for such defects in title as
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
 
(b) Each Loan Party and its North American Subsidiaries owns, or is licensed or
has the right to use, all trademarks, trade names, copyrights, patents and other
intellectual property necessary to its business as currently conducted, except
where any such failure to own or have such right to use could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect
and the use thereof by the Loan Parties and its North American Subsidiaries does
not infringe in any material respect upon the rights of any other Person, and
the Loan Parties’ rights thereto are not subject to any licensing agreement or
similar arrangement.
 
SECTION 3.06. Litigation and Environmental Matters
 
.  (a)  There are no actions, suits or proceedings by or before any arbitrator
or Governmental Authority pending against or, to the knowledge of any Loan
Party, threatened against or affecting the Loan Parties or any of their
Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect (other
than the Disclosed Matters) or (ii) that involve this Agreement or the
Transactions.
 
(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, (i) no Loan Party nor any of its
Subsidiaries has received written notice of any claim with respect to any
Environmental Liability or knows of any basis for any Environmental Liability
and (ii) no Loan Party nor any of its Subsidiaries (1) has failed to comply with
any Environmental Law or to obtain, maintain or comply with any permit, license
or other approval required under any Environmental Law or (2) has become subject
to any Environmental Liability.
 
(c) Since the date of this Agreement, there has been no change in the status of
the Disclosed Matters that, individually or in the aggregate, has resulted in,
or could reasonably be expected to increase the likelihood of, a Material
Adverse Effect.
 

 

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SECTION 3.07. Compliance with Laws and Agreements
 
.  Each Loan Party and its Subsidiaries is in compliance with all Requirements
of Law applicable to it or its property and all indentures, agreements and other
instruments binding upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.  No Default has occurred and is continuing.
 
SECTION 3.08. Investment Company Status
 
.  No Loan Party nor any of its Subsidiaries is an “investment company” as
defined in, or subject to regulation under, the Investment Company Act of 1940.
 
SECTION 3.09. Taxes
 
.  Each Loan Party and its Subsidiaries has timely filed or caused to be filed
all Tax returns and reports required to have been filed and has paid or caused
to be paid all Taxes required to have been paid by it, except (a) Taxes that are
being contested in good faith by appropriate proceedings and for which such Loan
Party or such Subsidiary, as applicable, has set aside on its books adequate
reserves or (b) to the extent that the failure to do so could not be expected to
result in a Material Adverse Effect.  No tax liens have been filed and no claims
have been asserted in writing with respect to any such taxes.
 
SECTION 3.10. ERISA
 
(a) .  Except as would not be expected, individually or in the aggregate, to
result in a Material Adverse Effect, (i) no ERISA Event has occurred or is
reasonably expected to occur and (ii) each Foreign Plan and Foreign Benefit
Arrangement is in material compliance with all provisions of applicable law and
regulations thereunder, including funding requirements, if any.
 
SECTION 3.11. Disclosure
 
.  Each Loan Party has disclosed to the Lenders all agreements, instruments and
corporate or other restrictions to which it or any of its North American
Subsidiaries is subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect.  None of the reports, financial statements, certificates or
other information furnished by or on behalf of any Loan Party to the
Administrative Agent or any Lender in connection with the negotiation of this
Agreement or any other Loan Document or delivered pursuant to the terms hereof
or thereof (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect to
projected financial information, the Loan Parties represent only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time delivered and, if such projected financial information
was delivered prior to the Effective Date, as of the Effective Date (it being
understood that no assurance has been made or will be given that such
projections will be achieved).
 
SECTION 3.12. Solvency
 
.  (a)  Immediately after the consummation of the Transactions to occur on the
Effective Date, (i) the fair value of the assets of each Loan Party, at a fair
valuation, will exceed its debts and liabilities, subordinated, contingent or
otherwise; (ii) the present fair saleable value of the property of each Loan
Party will be greater than the amount that will be required to pay the probable
liability of its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured;
(iii) each Loan Party will be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (iv) each Loan Party will not have unreasonably small
capital with which to conduct the business in which it is engaged as such
business is now conducted and is proposed to be conducted after the Effective
Date.
 

 

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(b) No Loan Party intends to, or will permit any of its Subsidiaries to, and no
Loan Party believes that it or any of its Subsidiaries will, incur debts beyond
its ability to pay such debts as they mature, taking into account the timing of
and amounts of cash to be received by it or any such Subsidiary and the timing
of the amounts of cash to be payable on or in respect of its Indebtedness or the
Indebtedness of any such Subsidiary.
 
SECTION 3.13. Capitalization and Subsidiaries
 
.  Schedule 3.13 sets forth, as of the date of this Agreement, (a) a correct and
complete list of the name and relationship to the Borrower of each and all of
the Borrower’s Subsidiaries, (b) a true and complete listing of each class of
each of the Borrower’s authorized Equity Interests, of which all of such issued
shares are validly issued, outstanding, fully paid and non-assessable, and owned
beneficially and of record by the Persons identified on Schedule 3.13, and (c)
the type of entity of the Borrower and each of its Subsidiaries.  All of the
issued and outstanding Equity Interests owned by any Loan Party have been (to
the extent such concepts are relevant with respect to such ownership interests)
duly authorized and issued and are fully paid and non-assessable.
 
SECTION 3.14. Security Interest in Collateral
 
.  The provisions of this Agreement and the other Loan Documents create legal
and valid Liens on all the Collateral in favor of the Administrative Agent, for
the benefit of the Secured Parties, and such Liens constitute perfected and
continuing Liens on the Collateral, securing the Secured Obligations,
enforceable against the applicable Loan Party and all third parties, and having
priority over all other Liens on the Collateral except in the case of (a)
Permitted Encumbrances, to the extent any such Permitted Encumbrances would have
priority over the Liens in favor of the Administrative Agent pursuant to any
applicable law and (b) Liens perfected only by possession (including possession
of any certificate of title) to the extent the Administrative Agent has not
obtained or does not maintain possession of such Collateral.
 
 
ARTICLE IV                                
 
Conditions
SECTION 4.01. Effective Date
 
.  The obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit hereunder shall not become effective until the date on which
each of the following conditions is satisfied (or waived in accordance with
Section 9.02):
 
(a) Credit Agreement and Loan Documents.  The Administrative Agent (or its
counsel) shall have received (i) from each party hereto either (A) a counterpart
of this Agreement signed on behalf of such party or (B) written evidence
satisfactory to the Administrative Agent (which may include facsimile
transmission of a signed signature page of this Agreement) that such party has
signed a counterpart of this Agreement and (ii) duly executed copies of the Loan
Documents and such other certificates, documents, instruments and agreements as
the Administrative Agent shall reasonably request in connection with the
transactions contemplated by this Agreement and the other Loan Documents,
including any promissory notes requested by a Lender pursuant to Section 2.10
payable to the order of each such requesting Lender, a written opinion of the
Loan Parties’ counsel, addressed to the Administrative Agent, the Issuing Bank
and the Lenders in substantially the form of Exhibit B and such other local
counsel opinions as may be requested by the Administrative Agent.
 

 

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(b) Financial Statements and Projections.  The Lenders shall have received (i)
the financial statements referred to in Section 3.04(a), and such financial
statements shall be satisfactory to the Administrative Agent and (ii)
satisfactory projections through 2012.
 
(c) Closing Certificates; Certified Certificate of Incorporation; Good Standing
Certificates.  The Administrative Agent shall have received (i) a certificate of
each Loan Party, dated the Effective Date and executed by its Secretary or
Assistant Secretary, which shall (A) certify the resolutions of its Board of
Directors, members or other body authorizing the execution, delivery and
performance of the Loan Documents to which it is a party, (B) identify by name
and title and bear the signatures of the Financial Officers and any other
officers of such Loan Party authorized to sign the Loan Documents to which it is
a party, and (C) contain appropriate attachments, including the certificate or
articles of incorporation or organization of each Loan Party certified by the
relevant authority of the jurisdiction of organization of such Loan Party and a
true and correct copy of its by-laws or operating, management or partnership
agreement, and (ii) a long form good standing certificate for each Loan Party
from its jurisdiction of organization.
 
(d) No Default Certificate.  The Administrative Agent shall have received a
certificate, signed by the chief financial officer of the Borrower, on the
initial Borrowing date (i) stating that no Default has occurred and is
continuing, (ii) stating that the representations and warranties contained in
Article III are true and correct as of such date, and (iii) certifying any other
factual matters as may be reasonably requested by the Administrative Agent.
 
(e) Fees.  The Lenders and the Administrative Agent shall have received all fees
required to be paid, and all expenses for which invoices have been presented
(including the reasonable fees and expenses of legal counsel), on or before the
Effective Date.  All such amounts will be paid with proceeds of Loans made on
the Effective Date and will be reflected in the funding instructions given by
the Borrower to the Administrative Agent on or before the Effective Date.
 
(f) Lien Searches.  The Administrative Agent shall have received the results of
a recent lien search in each of the jurisdictions of organization of each of the
Loan Parties, and such search shall reveal no liens on any of the assets of the
Loan Parties except for liens permitted by Section 6.02 or discharged on or
prior to the Effective Date pursuant to a pay-off letter or other documentation
satisfactory to the Administrative Agent.
 
(g) Pay-Off Letter.  The Administrative Agent shall have received satisfactory
pay-off letters for all existing Indebtedness to be repaid from the proceeds the
initial Borrowing, confirming that all Liens upon any of the property of the
Loan Parties constituting Collateral will be terminated concurrently with such
payment and all letters of credit issued or guaranteed as part of such
Indebtedness shall have been cash collateralized or supported by a Letter of
Credit.
 
(h) Funding Account.  The Administrative Agent shall have received a notice
setting forth the deposit account of the Borrower (the “Funding Account”) to
which the Lender is authorized by the Borrower to transfer the proceeds of any
Borrowings requested or authorized pursuant to this Agreement.
 
(i) Customer List.  The Administrative Agent shall have received a true and
complete list of customers of each Loan Party.
 

 

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(j) Solvency.  The Administrative Agent shall have received a solvency
certificate from a Financial Officer of the Borrower.
 
(k) Borrowing Base Certificate.  The Administrative Agent shall have received a
Borrowing Base Certificate which calculates the Borrowing Base as of the end of
the month immediately preceding the Effective Date.
 
(l) Closing Availability.  After giving effect to all Borrowings to be made on
the Effective Date and the issuance of any Letters of Credit on the Effective
Date and payment of all fees and expenses due hereunder, and with all of the
Loan Parties’ indebtedness, liabilities, and obligations current, the Borrower’s
Availability shall not be less than $30,000,000.
 
(m) Filings, Registrations and Recordings.  Each document (including any Uniform
Commercial Code financing statement) required by the Collateral Documents or
under law or reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the Administrative Agent,
for the benefit of the Secured Parties, a perfected Lien on the Collateral
described therein, prior and superior in right to any other Person (other than
with respect to Liens expressly permitted by Section 6.02), shall be in proper
form for filing, registration or recordation.
 
(n) Insurance.  The Administrative Agent shall have received evidence of
insurance coverage in form, scope, and substance reasonably satisfactory to the
Administrative Agent and otherwise in compliance with the terms of Section 5.08
and Section 4.6 of the Security Agreement.
 
(o) Letter of Credit Application.  The Administrative Agent shall have received
a properly completed letter of credit application if the issuance of a Letter of
Credit will be required on the Effective Date.  The Borrower shall have executed
the Issuing Bank’s master agreement for the issuance of commercial Letters of
Credit.
 
(p) Other Documents.  The Administrative Agent shall have received such other
documents as the Administrative Agent, the Issuing Bank, any Lender or their
respective counsel may have reasonably requested.
 
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and
binding.  Notwithstanding the foregoing, the obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 2:00 p.m., New York City time, on March
31, 2010 (and, in the event such conditions are not so satisfied or waived, the
Revolving Commitments shall terminate at such time).
 
SECTION 4.02. Each Credit Event
 
.  The obligation of each Lender to make a Loan on the occasion of any
Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter
of Credit, is subject to the satisfaction of the following conditions:
 
(a) The representations and warranties of the Loan Parties set forth in this
Agreement shall be true and correct on and as of the date of such Borrowing or
the date of issuance, amendment, renewal or extension of such Letter of Credit,
as applicable.
 

 

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(b) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.
 
(c) After giving effect to any Borrowing or the issuance of any Letter of
Credit, Availability is not less than zero.
 
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a), (b)
and (c) of this Section.
 
 
ARTICLE V                      
 
Affirmative Covenants
Until the Revolving Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees, expenses and other amounts
payable under any Loan Document shall have been paid in full and all Letters of
Credit shall have expired or terminated and all LC Disbursements shall have been
reimbursed, each Loan Party executing this Agreement covenants and agrees,
jointly and severally with all of the Loan Parties, with the Lenders that:
 
SECTION 5.01. Financial Statements; Borrowing Base and Other Information
 
.  The Borrower will furnish to the Administrative Agent and each Lender:
 
(a) as soon as available and in any event on or before the date on which such
financial statements are required to be filed with the SEC, but in no event
later than 95 days after the end of each fiscal year of the Borrower, its
audited consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on by Grant Thornton LLP or other independent public accountants of
recognized national standing acceptable to the Required Lenders (without a
“going concern” or like qualification or exception and without any qualification
or exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, accompanied by any management letter prepared by said accountants;
 
(b) as soon as available and in any event on or before the date on which such
financial statements are required to be filed with the SEC, but in no event
later than 50 days after the end of each of the first three fiscal quarters of
each fiscal year of the Borrower, its consolidated and consolidating balance
sheets and related statements of operations, stockholders’ equity and cash flows
as of the end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;
 

 

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(c) concurrently with any delivery of financial statements under clause (a) or
(b)  above, a certificate of a Financial Officer of the Borrower in
substantially the form of Exhibit D (i) certifying, in the case of the financial
statements delivered under clause (b), as presenting fairly in all material
respects the financial condition and results of operations of the Borrower and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes, (ii) certifying as to whether a Default has occurred and,
if a Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto and (iii) stating whether any
change in GAAP or in the application thereof has occurred since the date of the
audited financial statements referred to in Section 3.04 and, if any such change
has occurred, specifying the effect of such change on the financial statements
accompanying such certificate;
 
(d) concurrently with any delivery of financial statements under clause
(a) above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines) (it being
understood that the first such certificate shall be required to be delivered
with respect to the fiscal year ended February 28, 2011);
 
(e) as soon as available, but in any event not more than 60 days after the end
of each fiscal year of the Borrower, a copy of the plan and forecast (including
a projected consolidated and consolidating balance sheet, income statement and
funds flow statement) of the Borrower for each month of the upcoming fiscal year
(the “Projections”) in form reasonably satisfactory to the Administrative Agent;
 
(f) as soon as available but in any event within 20 days of the end of each
calendar month, a Borrowing Base Certificate (with any amount owed in Canadian
Dollars expressed in the Dollar Equivalent) and supporting information in
connection therewith, together with any additional reports with respect to the
Borrowing Base as the Administrative Agent may reasonably request;
 
(g) as soon as available but in any event within 20 days of the end of each
calendar month and at such other times as may be requested by the Administrative
Agent, as of the period then ended, all delivered electronically in a text
formatted file acceptable to the Administrative Agent a detailed aging of the
Loan Parties’ Accounts;
 
(h) as soon as available but in any event within 20 days of the end of each
fiscal quarter, a schedule and aging of the Loan Parties’ accounts payable,
delivered electronically in a text formatted file acceptable to the
Administrative Agent;
 
(i) promptly upon the Administrative Agent’s request:
 
(i) copies of invoices in connection with the invoices issued by the Loan
Parties in connection with any Accounts, credit memos, shipping and delivery
documents, and other information related thereto;
 
(ii) a schedule detailing the balance of all intercompany accounts of the Loan
Parties;
 

 

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(iii) the Loan Parties’ sales journal, cash receipts journal (identifying trade
and non-trade cash receipts) and debit memo/credit memo journal;
 
(iv) a reconciliation of the loan balance per the Loan Parties’ general ledger
to the loan balance under this Agreement;
 
(v) a worksheet of calculations prepared by the Borrower to determine Eligible
Accounts, such worksheets detailing the Accounts excluded from Eligible Accounts
and the reason for such exclusion;
 
(vi) a reconciliation of the Loan Parties’ Accounts between the amounts shown in
the applicable Loan Party’s general ledger and financial statements and the
reports delivered pursuant to clauses (g) and (i)(v) above;
 
(vii) a summary of the Loan Parties’ Accounts specifying the name, address, and
balance due for each Account Debtor, delivered electronically in a text
formatted file acceptable to the Administrative Agent; and
 
(viii) a schedule and aging of the Loan Parties’ accounts payable, delivered
electronically in a text formatted file acceptable to the Administrative Agent
for each calendar month;
 
(j) within 20 days of each May 31, and at such other times as may be reasonably
requested by the Administrative Agent, an updated customer list for the Borrower
and its North American Subsidiaries, which list shall state the customer’s name,
mailing address and phone number and shall be certified as true and correct by a
Financial Officer of the Borrower;
 
(k) promptly after the same become publicly available, copies (which may be
delivered electronically) of all periodic and other reports, proxy statements
and other materials filed by the Borrower or any Subsidiary with the Securities
and Exchange Commission, or any Governmental Authority succeeding to any or all
of the functions of said Commission, or with any national securities exchange,
or distributed by the Borrower to its shareholders generally, as the case may
be;
 
(l) within 20 days of the first Business Day of each May, a short-form
certificate of good standing for each Loan Party from the appropriate
governmental officer in its jurisdiction of incorporation, formation, or
organization;
 
(m) promptly following receipt thereof, copies of any documents described in
Sections 101(k) or 101(l) of ERISA that any Loan Party or any ERISA Affiliate
may request with respect to any Multiemployer Plan; provided, that if any Loan
Party or any of its ERISA Affiliates have not requested such documents or
notices from the administrator or sponsor of the applicable Multiemployer Plan,
then, upon reasonable request of the Administrative Agent, any Loan Party and/or
their ERISA Affiliates shall promptly make a request for such documents or
notices from such administrator or sponsor and Borrower shall provide copies of
such documents and notices promptly after receipt thereof; and
 
(n) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of this Agreement, as the
Administrative Agent or any Lender may reasonably request.
 

 

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SECTION 5.02. Notices of Material Events
 
.  The Borrower will furnish to the Administrative Agent and each Lender written
notice of the following events and circumstances promptly after any Financial
Officer becomes aware of any such event or circumstance:
 
(a) the occurrence of any Default;
 
(b) receipt of any notice of any governmental investigation or any litigation or
proceeding commenced or threatened against any Loan Party that (i) seeks damages
in excess of $5,000,000 and is not fully covered by insurance as to which the
relevant insurance company has not disputed coverage, (ii) seeks injunctive
relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its
assets, (iv) alleges criminal misconduct by any Loan Party, (v) alleges the
material violation of any law regarding, or seeks remedies in connection with,
any Environmental Laws, (vi) contests any tax, fee, assessment, or other
governmental charge in excess of $5,000,000, or (vii) involves any product
recall having an aggregate value in excess of $5,000,000;
 
(c) any Lien (other than Permitted Encumbrances) or claim made or asserted
against any of the Collateral;
 
(d) any loss, damage, or destruction to the Collateral in the amount of
$5,000,000 or more, whether or not covered by insurance;
 
(e) any and all default notices received under or with respect to any leased
location or public warehouse where Collateral is located;
 
(f) the fact that a Loan Party has entered into a Swap Agreement or an amendment
to a Swap Agreement, together with copies of all agreements evidencing such Swap
Agreement or amendments thereto;
 
(g) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, would reasonably be expected to result in
liability of Borrower and its Subsidiaries in an aggregate amount exceeding
$5,000,000; and
 
(h) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.
 
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
 
SECTION 5.03. Existence; Conduct of Business
 
.  Each Loan Party will, and will cause each North American Subsidiary to, (a)
do or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence and, except where any of the following
could not reasonably be expected to result in a Material Adverse Effect, the
rights, qualifications, licenses, permits, franchises, governmental
authorizations, intellectual property rights, licenses and permits used or
useful in the conduct of its business, and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted;
provided that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 6.03 and (b) carry on and
conduct its business in substantially the same manner and in substantially the
same fields of enterprise as it is presently conducted.
 

 

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SECTION 5.04. Payment of Obligations
 
.  Each Loan Party will, and will cause each  Subsidiary to, pay or discharge
all Material Indebtedness and all other material liabilities and obligations,
including Taxes, before the same shall become delinquent or in default, except
where (a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) such Loan Party or such Subsidiary has set aside on
its books adequate reserves with respect thereto in accordance with GAAP and (c)
the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
 
SECTION 5.05. Books and Records; Inspection Rights
 
.  Each Loan Party will, and will cause each North American Subsidiary to, (i)
keep proper books of record and account in which full, true and correct entries
are made of all financial transactions in relation to its business and
activities and (ii) permit any representatives designated by the Administrative
Agent or any Lender (including employees of the Administrative Agent, any Lender
or any consultants, accountants and lawyers retained by the Administrative
Agent), upon reasonable prior notice, to visit and inspect its properties
(including ongoing field examinations conducted in the Permitted Discretion of
the Administrative Agent to ensure the adequacy of the Collateral supporting the
Borrowing Base and related reporting and control systems), to examine and make
extracts from its books and records and to discuss its affairs, finances and
condition with its officers and independent accountants, all at the sole expense
of such Loan Party and at such reasonable times during normal business hours but
not more than once per calendar year; provided, however, that there shall be no
limitation on the number or frequency of field examinations or on the Loan
Parties’ obligation to reimburse the Administrative Agent for the costs of any
such field examination if an Event of Default shall have occurred and be
continuing.  The Loan Parties acknowledge that the Administrative Agent, after
exercising its rights of inspection, may prepare and distribute to the Lenders
certain Reports pertaining to the Loan Parties’ assets for internal use by the
Administrative Agent and the Lenders.
 
SECTION 5.06. Compliance with Laws
 
.  Each Loan Party will, and will cause each Subsidiary to, comply with all
Requirements of Law applicable to it or its property, except where the failure
to do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
 
SECTION 5.07. Use of Proceeds
 
.  The proceeds of the Loans will be used only for general corporate purposes of
the Borrower and its domestic Subsidiaries in the ordinary course of
business.  No part of the proceeds of any Loan and no Letter of Credit will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations T, U and X.
 
SECTION 5.08. Insurance
 
.  Each Loan Party will, and will cause each North American Subsidiary to,
maintain with financially sound and reputable carriers having a financial
strength rating of at least A+ by A.M. Best Company (a) insurance in such
amounts (with no greater risk retention) and against such risks (including loss
or damage by fire and loss in transit; theft, burglary, pilferage, larceny,
embezzlement, and other criminal activities; business interruption; and general
liability) and such other hazards, as is customarily maintained by companies of
established repute engaged in the same or similar businesses operating in the
same or similar locations and (b) all insurance required pursuant to the
Collateral Documents.  The Borrower will furnish to the Lenders, upon request of
the Administrative Agent, information in reasonable detail as to the insurance
so maintained.
 
SECTION 5.09. Depository Banks
 
.  The Borrower and its North American Subsidiaries will maintain the
Administrative Agent as its principal depository bank, including for the
maintenance of operating, administrative, cash management, collection activity,
and other deposit accounts for the conduct of its business.
 

 

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SECTION 5.10. Additional Collateral; Further Assurances
 
.  (a)  Subject to applicable law, the Borrower and each Subsidiary that is a
Loan Party shall cause each of its domestic Subsidiaries formed or acquired
after the date of this Agreement in accordance with the terms of this Agreement
to become a Loan Party by executing the Joinder Agreement set forth as Exhibit E
hereto (the “Joinder Agreement”) as soon as reasonably practicable and in any
event not later than thirty days after the date of formation or acquisition.
Upon execution and delivery thereof, each such Person (i) shall automatically
become a Loan Guarantor hereunder and thereupon shall have all of the rights,
benefits, duties, and obligations in such capacity under the Loan Documents and
(ii) will grant Liens to the Administrative Agent, for the benefit of the
Secured Parties, in any property of such Loan Party which constitutes
Collateral.
 
(b) Without limiting the foregoing, each Loan Party will, and will cause each
Subsidiary to, execute and deliver, or cause to be executed and delivered, to
the Administrative Agent such documents, agreements and instruments, and will
take or cause to be taken such further actions (including the filing and
recording of financing statements and other documents and such other actions or
deliveries of the type required by Section 4.01, as applicable), which may be
required by law or which the Administrative Agent may, from time to time,
reasonably request to carry out the terms and conditions of this Agreement and
the other Loan Documents and to ensure perfection and priority of the Liens
created or intended to be created by the Collateral Documents, all at the
expense of the Loan Parties.
 
(c) Anything contained in this Agreement to the contrary notwithstanding,
Invision shall not be required to become a Loan Party for so long as doing so
would result in a breach of the SunTrust Credit Agreement.  At any time that (i)
Invision is able to become a Loan Party without breaching the SunTrust Credit
Agreement and (ii) Invision is a domestic Subsidiary, the Borrower shall cause
Invision to become a Loan Party in accordance with Section 5.10(a), mutatis
mutandis.
 
 
ARTICLE VI                                
 
Negative Covenants
Until the Revolving Commitments have expired or terminated and the principal of
and interest on each Loan and all fees, expenses and other amounts payable under
any Loan Document have been paid in full and all Letters of Credit have expired
or terminated and all LC Disbursements shall have been reimbursed, the Loan
Parties covenant and agree, jointly and severally, with the Lenders that:
 
SECTION 6.01. Indebtedness
 
.  No Loan Party will, nor will it permit any North American Subsidiary to,
create, incur or suffer to exist any Indebtedness, except:
 
(a) the Secured Obligations;
 
(b) Indebtedness existing on the date hereof and set forth in Schedule 6.01 and
extensions, renewals and replacements of any such Indebtedness in accordance
with clause (f) hereof;
 
(c) Indebtedness of the Borrower to any Subsidiary and of any North American
Subsidiary to the Borrower or any other Subsidiary, provided that Indebtedness
of the Borrower to any Subsidiary and Indebtedness of any North American
Subsidiary that is a Loan Party to any Subsidiary that is not a Loan Party shall
be subordinated to the Secured Obligations on terms reasonably satisfactory to
the Administrative Agent;
 

 

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(d) Guarantees by the Borrower of Indebtedness of any Subsidiary and by any
North American Subsidiary of Indebtedness of the Borrower or any other
Subsidiary, provided that (i) the Indebtedness so Guaranteed is permitted by
this Section 6.01 and (ii) Guarantees permitted under this clause (d) shall be
subordinated to the Secured Obligations of the applicable Subsidiary on the same
terms as the Indebtedness so Guaranteed is subordinated to the Secured
Obligations;
 
(e) Indebtedness of the Borrower or any North American Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or capital
assets (whether or not constituting purchase money Indebtedness), including
Capital Lease Obligations and any Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets prior to
the acquisition thereof, and extensions, renewals and replacements of any such
Indebtedness in accordance with clause (f) hereof; provided that (i) such
Indebtedness is incurred prior to or within 180 days after such acquisition or
the completion of such construction or improvement and (ii) the aggregate
principal amount of Indebtedness permitted by this clause (e) shall not exceed
$15,000,000 at any time outstanding;
 
(f) Indebtedness which represents an extension, refinancing, or renewal of any
of the Indebtedness described in clauses (b), (e), (i) and (j) hereof; provided
that, (i) the principal amount of such Indebtedness is not increased, (ii) any
Liens securing such Indebtedness are not extended to any additional property of
any Loan Party, (iii) no Loan Party that is not originally obligated with
respect to repayment of such Indebtedness is required to become obligated with
respect thereto, (iv) such extension, refinancing or renewal does not result in
a shortening of the average weighted maturity of the Indebtedness so extended,
refinanced or renewed, (v) the terms of any such extension, refinancing, or
renewal taken as a whole, are not materially less favorable to the Loan Parties
than the terms of the Indebtedness being refinanced, renewed, or extended and
interest rate, premiums and fees applicable to such extension, refinance or
renewal, taken as a whole, do not exceed the then applicable market interest
rates, premiums and fees for similar Indebtedness; and (vi) if the Indebtedness
that is refinanced, renewed or extended was subordinated in right of payment to
the Secured Obligations, then the terms and conditions of the refinancing,
renewal, or extension Indebtedness must include subordination terms and
conditions that, taken as whole, are not materially less favorable to the
Administrative Agent and the Lenders as those that were applicable to the
refinanced, renewed, or extended Indebtedness;
 
(g) Indebtedness owed to any person providing workers’ compensation, health,
disability or other employee benefits or property, casualty or liability
insurance, pursuant to reimbursement or indemnification obligations to such
person, in each case incurred in the ordinary course of business;
 
(h) Indebtedness of the Borrower or any North American Subsidiary in respect of
performance bonds, bid bonds, appeal bonds, surety bonds and similar
obligations, in each case provided in the ordinary course of business;
 
(i) Indebtedness of any Person that becomes a North American Subsidiary after
the date hereof; provided that (i) such Indebtedness exists at the time such
Person becomes a North American Subsidiary and is not created in contemplation
of or in connection with such Person becoming a North American Subsidiary and
(ii) the aggregate principal amount of Indebtedness permitted by this clause (i)
shall not exceed $25,000,000 at any time outstanding;
 

 

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(j) other Indebtedness in an aggregate principal amount not exceeding $5,000,000
at any time outstanding;
 
(k) Indebtedness in respect of Swap Agreements to the extent such Swap
Agreements are permitted under Section 6.04;
 
(l) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business, provided that such Indebtedness is
extinguished within 3 Business Days of its incurrence; and
 
(m) unsecured Indebtedness of the Borrower arising from Guarantees of any
Subsidiary’s leases of real property.
 
SECTION 6.02. Liens
 
.  No Loan Party will, nor will it permit any North American Subsidiary to,
create, incur, assume or permit to exist any Lien on any property or asset now
owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except:
 
(a) Liens created pursuant to any Loan Document;
 
(b) Permitted Encumbrances;
 
(c) any Lien on any property or asset of the Borrower or any North American
Subsidiary existing on the date hereof and set forth in Schedule 6.02; provided
that (i) such Lien shall not apply to any other property or asset of the
Borrower or North American Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the date hereof and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;
 
(d) Liens on fixed or capital assets acquired, constructed or improved by the
Borrower or any North American Subsidiary; provided that (i) such security
interests secure Indebtedness permitted by clause (e) of Section 6.01, (ii) such
security interests and the Indebtedness secured thereby are incurred prior to or
within 180 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the
cost of acquiring, constructing or improving such fixed or capital assets and
(iv) such security interests shall not apply to any other property or assets of
the Borrower or any North American Subsidiary;
 
(e) any Lien existing on any property or asset (other than Accounts and
Inventory) prior to the acquisition thereof by the Borrower or any North
American Subsidiary or existing on any property or asset (other than Accounts
and Inventory) of any Person that becomes a Loan Party after the date hereof
prior to the time such Person becomes a Loan Party; provided that (i) such Lien
is not created in contemplation of or in connection with such acquisition or
such Person becoming a Loan Party, as the case may be, (ii) such Lien shall not
apply to any other property or assets of the Loan Party and (iii) such Lien
shall secure only those obligations which it secures on the date of such
acquisition or the date such Person becomes a Loan Party, as the case may be and
extensions, renewals and replacements thereof that do not increase the
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(f) Liens of a collecting bank arising in the ordinary course of business under
Section 4-208 of the Uniform Commercial Code in effect in the relevant
jurisdiction covering only the items being collected upon;
 
(g) Liens arising out of sale and leaseback transactions;
 
(h) Liens granted by a Subsidiary that is not a Loan Party in favor of the
Borrower or another Loan Party in respect of Indebtedness owed by such
Subsidiary;
 
(i) Liens arising from precautionary UCC financing statements made in respect of
any lease permitted by this Agreement;
 
(j) Liens in favor of collecting banks having a right of setoff, revocation,
refund or chargeback with respect to money or instruments of the Borrower or any
of its North American Subsidiaries on deposit with or in possession of such
banks in the ordinary course of business, other than relating to Indebtedness;
 
(k) Liens arising out of any conditional sale, title retention, consignment or
other similar arrangements for the sale of goods entered into by Borrower or any
of its North American Subsidiaries in the ordinary course of business to the
extent such Liens do not attach to any assets other than the goods subject to
such arrangements;
 
(l) Liens (i) incurred in the ordinary course of business in connection with the
purchase or shipping of goods or assets, which Liens are in the favor of the
seller or shipper of such goods or assets and only attach to such goods or
assets (or the proceeds thereof), and (ii) in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; and
 
(m) other Liens on assets not included in the Collateral securing Indebtedness
or other obligations not to exceed $10,000,000 at any time outstanding.
 
Notwithstanding the foregoing, none of the Liens permitted pursuant to this
Section 6.02 may at any time attach to any Loan Party’s (1) Accounts, other than
those permitted under clause (a) of the definition of Permitted Encumbrance and
clause (a) above and (2) Inventory, other than those permitted under clauses (a)
and (b) of the definition of Permitted Encumbrance and clause (a) above.
 
SECTION 6.03. Fundamental Changes
 
.  (a)  No Loan Party will, nor will it permit any North American Subsidiary to,
merge into or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or liquidate or dissolve, except that, if at
the time thereof and immediately after giving effect thereto no Event of Default
shall have occurred and be continuing (i) any North American Subsidiary of the
Borrower may merge into the Borrower in a transaction in which the Borrower is
the surviving corporation, (ii) any Loan Party (other than the Borrower) may
merge into any Loan Party in a transaction in which the surviving entity is a
Loan Party, (iii) any North American Subsidiary that is not a Loan Party may
liquidate or dissolve if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the Borrower and is not
materially disadvantageous to the Lenders and (iv) any Loan Party may make
Permitted Acquisitions if, after giving pro forma effect thereto, no Default or
Event of Default shall have occurred and be continuing.
 

 

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(b) No Loan Party will, nor will it permit any of its North American
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Loan Parties and their North American
Subsidiaries on the date of execution of this Agreement or any business
reasonably related or incidental thereto or that is a reasonable extension or
expansion thereof.
 
SECTION 6.04. Swap Agreements
 
.  No Loan Party will, nor will it permit any North American Subsidiary to,
enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge
or mitigate risks to which the Borrower or any North American Subsidiary has
actual exposure (other than those in respect of Equity Interests of the Borrower
or any of its Subsidiaries), and (b) Swap Agreements entered into in order to
effectively cap, collar or exchange interest rates (from fixed to floating
rates, from one floating rate to another floating rate or otherwise) with
respect to any interest-bearing liability or investment of the Borrower or any
North American Subsidiary.
 
SECTION 6.05. Restricted Payments; Certain Payments of Indebtedness
 
.  (a)  No Loan Party will, nor will it permit any North American Subsidiary to,
declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, or incur any obligation (contingent or otherwise) to do so, except (i)
the Borrower may declare and pay dividends with respect to its common stock (A)
in an amount not to exceed $10,000,000 in the aggregate in any fiscal year and
(B) payable solely in additional shares of its common stock, and, with respect
to its preferred stock, payable solely in additional shares of such preferred
stock or in shares of its common stock, (ii) North American Subsidiaries may
declare and pay dividends ratably with respect to their Equity Interests, and
(iii) the Borrower may make Restricted Payments pursuant to and in accordance
with stock option plans or other benefit plans for management or employees of
the Borrower and its Subsidiaries.
 
(b) No Loan Party will, nor will it permit any North American Subsidiary to,
make or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash, securities or other property) of or in respect of
principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Indebtedness,
except:
 
(i) payment of Indebtedness created under the Loan Documents;
 
(ii) payment of regularly scheduled interest and principal payments as and when
due in respect of any Indebtedness, other than payments in respect of the
Subordinated Indebtedness prohibited by the subordination provisions thereof;
 
(iii) refinancings of Indebtedness to the extent permitted by Section 6.01; and
 
(iv) payment of secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness.
 
SECTION 6.06. Transactions with Affiliates
 
.  No Loan Party will, nor will it permit any North American Subsidiary to,
sell, lease or otherwise transfer any property or assets to, or purchase, lease
or otherwise acquire any property or assets from, or otherwise engage in any
other transactions with, any of its Affiliates, except (a) transactions that
(i) are in the ordinary course of business and (ii) are at prices and on terms
and conditions not less favorable to the Borrower or such Subsidiary than could
be obtained on an arm’s-length basis from unrelated third parties or supported
by a transfer pricing study prepared by an independent third party,
(b) transactions between or among the Borrower and any Subsidiary that is a Loan
Party not involving any other Affiliate, (c) any Indebtedness permitted under
Section 6.01(c), (d) any Restricted Payment permitted by Section 6.05, (e) loans
or advances made by a Loan Party to its employees on an arms-length basis in the
ordinary course of business consistent with past practices for travel and
entertainment expenses, relocation costs and similar purposes, (f) the payment
of reasonable fees to directors of the Borrower or any Subsidiary who are not
employees of the Borrower or Subsidiary, and compensation and employee benefit
arrangements paid to, and indemnities provided for the benefit of, directors,
officers or employees of the Borrower or the Subsidiaries in the ordinary course
of business, (g) any issuances of securities or other payments, awards or grants
in cash, securities or otherwise pursuant to, or the funding of, employment
agreements, stock options and stock ownership plans approved by the Borrower’s
board of directors, (h) investments by the Borrower and the North American
Subsidiaries in Equity Interests in their respective Subsidiaries, (i) loans or
advances made by the Borrower to any Subsidiary and made by any North American
Subsidiary to the Borrower or any other Subsidiary, (j) Guarantees constituting
Indebtedness permitted by Section 6.01 and (k) investments of any Person
existing at the time such Person becomes a Subsidiary of the Borrower or
consolidates or merges with the Borrower or any of the Subsidiaries so long as
such investments were not made in contemplation of such Person becoming a
Subsidiary or of such merger.
 

 

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SECTION 6.07. Restrictive Agreements
 
.  No Loan Party will, nor will it permit any North American Subsidiary to,
directly or indirectly, enter into, incur or permit to exist any agreement or
other arrangement that prohibits, restricts or imposes any condition upon (a)
the ability of such Loan Party or any of its North American Subsidiaries to
create, incur or permit to exist any Lien upon any of its property or assets, or
(b) the ability of any North American Subsidiary to pay dividends or other
distributions with respect to any shares of its capital stock or to make or
repay loans or advances to the Borrower or any other Subsidiary or to Guarantee
Indebtedness of the Borrower or any other Subsidiary; provided that (i) the
foregoing shall not apply to restrictions and conditions imposed by law or by
any Loan Document, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof identified on Schedule 6.07 (but shall
apply to any extension or renewal of, or any amendment or modification expanding
the scope of, any such restriction or condition), (iii) the foregoing shall not
apply to customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, (v) clause (a)
of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof and (vi) the foregoing shall not
apply to agreements containing restrictions applicable to any joint venture that
is a Subsidiary existing at the time of the acquisition thereof, (vii) the
foregoing shall not apply to any agreement creating a Lien permitted pursuant to
Section 6.02(c), (d), (e) and (m), to the extent such agreements relate only to
Liens on the property or revenues subject to the aforementioned provisions,
(viii) the foregoing shall not apply to (A) agreements containing customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of the Borrower or any of its Subsidiaries entered into in
the ordinary course of business, (B) agreements containing customary provisions
restricting assignment of any contract entered into by the Borrower or any of
its Subsidiaries in the ordinary course of business and (C) agreements
containing customary provisions restricting the assignment of licensing
agreements entered into by the Borrower or any of its Subsidiaries in the
ordinary course of business and (ix) the foregoing shall not apply to any
agreement or instrument governing Indebtedness permitted pursuant to Section
6.01(i), which encumbrance or restriction is not applicable to any Person or the
properties or assets of any Person, other than the Person or the properties or
assets of the Person acquired and so long as the respective encumbrances or
restrictions were not created (or made more restrictive) in connection with or
in anticipation of such transaction.
 
SECTION 6.08. Consolidated Net Worth
 
.   The Borrower shall not permit its Consolidated Net Worth at any time to be
less than $300,000,000.
 
 
ARTICLE VII                                
 
Events of Default
If any of the following events (“Events of Default”) shall occur:
 
(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
 
(b) the Borrower shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in clause (a) of this Article)
payable under this Agreement or under any other Loan Document, when and as the
same shall become due and payable, and such failure shall continue unremedied
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(c) any representation or warranty made or deemed made by or on behalf of any
Loan Party or any Subsidiary in or in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, shall prove to have been materially incorrect when made
or deemed made;
 
(d) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02(a), 5.03 (with respect to a Loan Party’s
existence) or 5.07 or in Article VI;
 
(e) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement (other than those which constitute a
default under another Section of this Article), and such failure shall continue
unremedied for a period of (i) 5 Business Days after the earlier of any Loan
Party’s knowledge of such breach or notice thereof from the Administrative Agent
(which notice will be given at the request of any Lender) if such breach relates
to terms or provisions of Section 5.01, 5.02 (other than Section 5.02(a)), 5.03
through 5.06, 5.08 or 5.09 of this Agreement or (ii) 15 days after the earlier
of any Loan Party’s knowledge of such breach or notice thereof from the
Administrative Agent (which notice will be given at the request of any Lender)
if such breach relates to terms or provisions of any other Section of this
Agreement;
 
(f) any Loan Party or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable;
 
(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;
 
(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of a Loan Party or any Subsidiary of any Loan Party or its debts, or of
a substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any Loan Party or any Subsidiary of any Loan
Party or for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for 60 days or an order or
decree approving or ordering any of the foregoing shall be entered;
 
(i) any Loan Party or any Subsidiary of any Loan Party shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Article, (iii) apply for
or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for such Loan Party or Subsidiary of any Loan
Party or for a substantial part of its assets, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors or (vi) take any
action for the purpose of effecting any of the foregoing;
 

 

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(j) any Loan Party or any Subsidiary of any Loan Party shall become unable,
admit in writing its inability or fail generally to pay its debts as they become
due;
 
(k) one or more judgments for the payment of money in an aggregate amount in
excess of $15,000,000 shall be rendered against any Loan Party, any Subsidiary
of any Loan Party or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of any Loan Party or any Subsidiary
of any Loan Party to enforce any such judgment or any Loan Party or any
Subsidiary of any Loan Party shall fail within 30 days to discharge one or more
non-monetary judgments or orders which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, which judgments or
orders, in any such case, are not stayed on appeal or otherwise being
appropriately contested in good faith by proper proceedings diligently pursued;
 
(l) (i) an ERISA Event shall have occurred, (ii) any Loan Party or any of their
respective ERISA Affiliates shall have been notified by the sponsor of a
Multiemployer Plan that it has incurred or will be assessed Withdrawal Liability
to such Multiemployer Plan and such entity does not have reasonable grounds for
contesting such Withdrawal Liability or is not contesting such Withdrawal
Liability in a timely and appropriate manner; or (iii) any other event or
condition shall occur or exist with respect to a Plan, Foreign Plan or Foreign
Benefit Arrangement; and in each case in clauses (i) through (iii) above, such
event or condition, together with all other such events or conditions, if any,
could, in the opinion of the Required Lenders, reasonably be expected to result
in a Material Adverse Effect;
 
(m) a Change in Control shall occur;
 
(n) the occurrence of any “default”, as defined in any Loan Document (other than
this Agreement) or the breach of any of the terms or provisions of any Loan
Document (other than this Agreement), which default or breach continues beyond
any period of grace therein provided;
 
(o) the Loan Guaranty shall fail to remain in full force or effect or any action
shall be taken to discontinue or to assert the invalidity or unenforceability of
the Loan Guaranty, or any Loan Guarantor shall fail to comply with any of the
terms or provisions of the Loan Guaranty to which it is a party, or any Loan
Guarantor shall deny that it has any further liability under the Loan Guaranty
to which it is a party, or shall give notice to such effect;
 
(p) any Collateral Document shall for any reason fail to create a valid and
perfected first priority security interest in any Collateral purported to be
covered thereby, except as permitted by the terms of any Collateral Document, or
any Collateral Document shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Collateral Document, or any Loan Party shall fail to
comply with any of the terms or provisions of any Collateral Document; or
 
(q) any material provision of any Loan Document for any reason ceases to be
valid, binding and enforceable in accordance with its terms (or any Loan Party
shall challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction based on any such assertion, that
any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms);
 

 

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then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times:  (i) terminate
the Revolving Commitments, and thereupon the Revolving Commitments shall
terminate immediately, and (ii) declare the Loans then out­standing to be due
and payable in whole (or in part, in which case any principal not so declared to
be due and payable may thereafter be declared to be due and payable), and
thereupon the principal of the Loans so declared to be due and payable, together
with accrued interest thereon and all fees and other obligations of the Borrower
accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; and in case of any event with respect to the
Borrower described in clause (h) or (i) of this Article, the Revolving
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.  Upon the occurrence and the
continuance of an Event of Default, the Administrative Agent may, and at the
request of the Required Lenders shall, exercise any rights and remedies provided
to the Administrative Agent under the Loan Documents or at law or equity,
including all remedies provided under the UCC.
 
 
ARTICLE VIII                                
 
The Administrative Agent
Each of the Lenders and the Issuing Bank hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf, including execution of the other Loan
Documents, and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto.
 
The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Loan Parties or any Subsidiary of a Loan Party
or other Affiliate thereof as if it were not the Administrative Agent hereunder.
 
The Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents.  Without limiting the generality of
the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) the Administrative Agent shall not have any duty to take
any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing as directed by
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02), and (c)
except as expressly set forth in the Loan Documents, the Administrative Agent
shall not have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to any Loan Party or any of its Subsidiaries
that is communicated to or obtained by the bank serving as Administrative Agent
or any of its Affiliates in any capacity.  The Administrative Agent shall not be
liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
9.02) or in the absence of its own gross negligence or willful misconduct.  The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by the
Borrower or a Lender, and the Administrative Agent shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or in
connection with any Loan Document, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, (v) the creation,
perfection or priority of Liens on the Collateral or the existence of the
Collateral, or (vi) the satisfaction of any condition set forth in Article IV or
elsewhere in any Loan Document, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent.
 

 

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The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person.  The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon.  The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
 
The Administrative Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent.  The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties.  The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
 
Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Lenders, the Issuing Bank and the Borrower.  Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor.  If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative Agent which shall be a commercial bank
or an Affiliate of any such commercial bank.  Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder.  The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor.  After the Administrative Agent’s resignation hereunder, the
provisions of this Article, Section 2.17(d) and Section 9.03 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while it was acting as Administrative Agent.
 
Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.  Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or
related agreement or any document furnished hereunder or thereunder.
 
Each Lender hereby agrees that (a) it has requested a copy of each Report
prepared by or on behalf of the Administrative Agent; (b) the Administrative
Agent (i) makes no representation or warranty, express or implied, as to the
completeness or accuracy of any Report or any of the information contained
therein or any inaccuracy or omission contained in or relating to a Report and
(ii) shall not be liable for any information contained in any Report; (c) the
Reports are not comprehensive audits or examinations, and that any Person
performing any field examination will inspect only specific information
regarding the Loan Parties and will rely significantly upon the Loan Parties’
books and records, as well as on representations of the Loan Parties’ personnel
and that the Administrative Agent undertakes no obligation to update, correct or
supplement the Reports; (d) it will keep all Reports confidential and strictly
for its internal use, not share the Report with any Loan Party or any other
Person except as otherwise permitted pursuant to this Agreement; and (e) without
limiting the generality of any other indemnification provision contained in this
Agreement, it will pay and protect, and indemnify, defend, and hold the
Administrative Agent and any such other Person preparing a Report harmless from
and against, the claims, actions, proceedings, damages, costs, expenses, and
other amounts (including reasonable attorney fees) incurred by as the direct or
indirect result of any third parties who might obtain all or part of any Report
through the indemnifying Lender.
 

 

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ARTICLE IX                                
 
Miscellaneous
SECTION 9.01. Notices
 
.  (a)  Except in the case of notices and other communications expressly
permitted to be given by telephone (and subject to paragraph (b) below), all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by facsimile, as follows:
 
(i) if to any Loan Party, to the Borrower at:
 
Audiovox Corporation
 
180 Marcus Boulevard
 
Hauppauge, New York 11788
 
Attention:
 
Charles M. Stoehr, Sr. VP/CFO
 
Facsimile No: (631) 231-1370
 
With a copy to:
 
Robert S. Levy, General Counsel
Levy, Stopol & Camelo, LLP
1425 RXR Plaza
Uniondale, NY 11556-1425
Facsimile No. (516) 802-7008

(ii) if to the Administrative Agent, the Issuing Bank or the Swingline Lender,
to JPMorgan Chase Bank, N.A. at:
 
JPMorgan Chase Bank, N.A.
 
270 Park Avenue – 44th Floor
 
New York, NY 10017
 
Attention: Robert Kaulius
 
Facsimile No: (646) 534-2288
 
(iii) if to any other Lender, to it at its address or facsimile number set forth
in its Administrative Questionnaire.
 
All such notices and other communications (i) sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received or (ii) sent by facsimile shall be deemed to have been given
when sent, provided that if not given during normal business hours for the
recipient, shall be deemed to have been given at the opening of business on the
next Business Day for the recipient.
 
(b) Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications (including e-mail and internet or
intranet websites) pursuant to procedures approved by the Administrative Agent;
provided that the foregoing shall not apply to notices pursuant to Article II
unless otherwise agreed by the Administrative Agent and the applicable
Lender.  The Administrative Agent or the Borrower (on behalf of the Loan
Parties) may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.  All such notices and other
communications (i) sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if not given during the normal business
hours of the recipient, such notice or communication shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient, and (ii) posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail address
as described in the foregoing clause (b)(i) of notification that such notice or
communication is available and identifying the website address therefor.
 

 

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(c) Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other parties hereto.
 
SECTION 9.02. Waivers; Amendments
 
.  (a)  No failure or delay by the Administrative Agent, the Issuing Bank or any
Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.  The rights and remedies of
the Administrative Agent, the Issuing Bank and the Lenders hereunder and under
any other Loan Document are cumulative and are not exclusive of any rights or
remedies that they would otherwise have.  No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.  Without limiting the generality
of the foregoing, the making of a Loan or issuance of a Letter of Credit shall
not be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.
 
(b) Neither this Agreement nor any other Loan Document nor any provision hereof
or thereof may be waived, amended or modified except (i) in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrower and the Required Lenders or, (ii) in the case of any other Loan
Document, pursuant to an agreement or agreements in writing entered into by the
Administrative Agent and the Loan Party or Loan Parties that are parties
thereto, with the consent of the Required Lenders; provided that no such
agreement shall (i) increase the Revolving Commitment of any Lender without the
written consent of such Lender (provided that the Administrative Agent may make
Protective Advances as set forth in Section 2.04), (ii) reduce or forgive the
principal amount of any Loan or LC Disbursement or reduce the rate of interest
thereon, or reduce or forgive any interest or fees payable hereunder, without
the written consent of each Lender directly affected thereby, (iii) postpone any
scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any date for the payment of any interest, fees or other
Obligations payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Revolving
Commitment, without the written consent of each Lender directly affected
thereby, (iv) change Section 2.18(b) or (d) in a manner that would alter the
manner in which payments are shared, without the written consent of each Lender,
(v) increase the advance rates set forth in the definition of Borrowing Base or
add new categories of eligible assets, without the written consent of each
Lender, (vi) change any of the provisions of this Section or the definition of
“Required Lenders” or any other provision of any Loan Document specifying the
number or percentage of Lenders (or Lenders of any Class) required to waive,
amend or modify any rights thereunder or make any determination or grant any
consent thereunder, without the written consent of each Lender, (vii) release
any Loan Guarantor from its obligation under its Loan Guaranty (except as
otherwise permitted herein or in the other Loan Documents), without the written
consent of each Lender, or (viii) except as provided in clauses (d) and (e) of
this Section or in any Collateral Document, release all or substantially all of
the Collateral, without the written consent of each Lender; provided further
that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent, the Issuing Bank or the Swingline Lender
hereunder without the prior written consent of the Administrative Agent, the
Issuing Bank or the Swingline Lender, as the case may be (it being understood
that any change to Section 2.20 shall require the consent of the Administrative
Agent, the Swingline Lender and the Issuing Bank).  The Administrative Agent may
also amend the Commitment Schedule to reflect assignments entered into pursuant
to Section 9.04.
 

 

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(c) The Lenders hereby irrevocably authorize the Administrative Agent, at its
option and in its sole discretion, to release any Liens granted to the
Administrative Agent by the Loan Parties on any Collateral (i) upon the
termination of the all Revolving Commitments, payment and satisfaction in full
in cash of all Secured Obligations (other than Unliquidated  Obligations), and
the cash collateralization of all Unliquidated Obligations in a manner
satisfactory to each affected Lender, (ii) constituting property being sold or
disposed of if the Loan Party disposing of such property certifies to the
Administrative Agent that the sale or disposition is made in compliance with the
terms of this Agreement (and the Administrative Agent may rely conclusively on
any such certificate, without further inquiry), (iii) constituting property
leased to a Loan Party under a lease which has expired or been terminated in a
transaction permitted under this Agreement, or (iv) as required to effect any
sale or other disposition of such Collateral in connection with any exercise of
remedies of the Administrative Agent and the Lenders pursuant to Article
VII.  Except as provided in the preceding sentence, the Administrative Agent
will not release any Liens on Collateral without the prior written authorization
of the Required Lenders; provided that, the Administrative Agent may in its
discretion, release its Liens on Collateral valued in the aggregate not in
excess of $10,000,000 during any calendar year without the prior written
authorization of the Required Lenders.  Any such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of the Loan Parties in respect
of) all interests retained by the Loan Parties, including the proceeds of any
sale, all of which shall continue to constitute part of the Collateral.
 
(d)           If, in connection with any proposed amendment, waiver or
consent  requiring the consent of “each Lender” or “each Lender affected
thereby,” the consent of the Required Lenders is obtained, but the consent of
other necessary Lenders is not obtained (any such Lender whose consent is
necessary but not obtained being referred to herein as a “Non-Consenting
Lender”), then the Borrower may elect to replace a Non-Consenting Lender as a
Lender party to this Agreement, provided that, concurrently with such
replacement, (i) another bank or other entity which is reasonably satisfactory
to the Borrower and the Administrative Agent shall agree, as of such date, to
purchase for cash the Loans and other Obligations due to the Non-Consenting
Lender pursuant to an Assignment and Assumption and to become a Lender for all
purposes under this Agreement and to assume all obligations of the
Non-Consenting Lender to be terminated as of such date and to comply with the
requirements of clause (b) of Section 9.04, and (ii) the Borrower shall pay to
such Non-Consenting Lender in same day funds on the day of such replacement (1)
all interest, fees and other amounts then accrued but unpaid to such
Non-Consenting Lender by the Borrower hereunder to and including the date of
termination, including without limitation payments due to such Non-Consenting
Lender under Sections 2.15 and 2.17, and (2) an amount, if any, equal to the
payment which would have been due to such Lender on the day of such replacement
under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on
such date rather than sold to the replacement Lender.
 
SECTION 9.03. Expenses; Indemnity; Damage Waiver
 
.  (a)  The Borrower shall pay (i) all reasonable out-of-pocket expenses
incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent, in connection with the syndication and distribution (including, without
limitation, via the internet or through a service such as Intralinks) of the
credit facilities provided for herein, the preparation and administration of the
Loan Documents or any amendments, modifications or waivers of the provisions of
the Loan Documents (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket expenses incurred by the Administrative Agent, the
Issuing Bank or any Lender, including the fees, charges and disbursements of any
counsel for the Administrative Agent, the Issuing Bank or any Lender, in
connection with the enforcement, collection or protection of its rights in
connection with the Loan Documents, including its rights under this Section, or
in connection with the Loans made or Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.
Expenses being reimbursed by the Borrower under this Section include, without
limiting the generality of the foregoing, costs and expenses incurred in
connection with:
 

 

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(i) insurance reviews;
 
(ii) field examinations and the preparation of Reports based on the fees charged
by a third party retained by the Administrative Agent or the internally
allocated fees for each Person employed by the Administrative Agent with respect
to each field examination;
 
(iii) taxes, fees and other charges for (A) lien searches and (B) filing
financing statements and continuations, and other actions to perfect, protect,
and continue the Administrative Agent’s Liens;
 
(iv) sums paid or incurred to take any action required of any Loan Party under
the Loan Documents that such Loan Party fails to pay or take; and
 
(v) forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining the accounts and lock boxes, and costs and expenses
of preserving and protecting the Collateral.
 
All of the foregoing costs and expenses may be charged to the Borrower as
Revolving Loans or to another deposit account, all as described in Section
2.18(c).
 
(b) The Borrower shall, jointly and severally, indemnify the Administrative
Agent, the Issuing Bank and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
penalties, incremental taxes, liabilities and related expenses, including the
fees, charges and disbursements of any counsel for any Indemnitee, incurred by
or asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of the Loan Documents or any agreement
or instrument contemplated thereby, the performance by the parties hereto of
their respective obligations thereunder or the consummation of the Transactions
or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit
or the use of the proceeds therefrom (including any refusal by the Issuing Bank
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by the Borrower or
any of its Subsidiaries, or any Environmental Liability related in any way to
the Borrower or any of its Subsidiaries, (iv) the failure of the Borrower to
deliver to the Administrative Agent the required receipts or other required
documentary evidence with respect to a payment made by the Borrower for Taxes
pursuant to Section 2.17 or (v) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, penalties,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
 
(c) To the extent that the Borrower fails to pay any amount required to be paid
by it to the Administrative Agent, the Issuing Bank or the Swingline Lender
under paragraph (a) or (b) of this Section, each Lender severally agrees to pay
to the Administrative Agent, the Issuing Bank or the Swingline Lender, as the
case may be, such Lender’s Applicable Percentage (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, penalty, liability or related expense, as the case may be, was
incurred by or asserted against the Administrative Agent, the Issuing Bank or
the Swingline Lender in its capacity as such.
 

 

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(d) To the extent permitted by applicable law, no Loan Party shall assert, and
each hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.
 
(e) All amounts due under this Section shall be payable promptly after written
demand therefor.
 
SECTION 9.04. Successors and Assigns
 
.  (a)  The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section.  Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
 
(b) (i)  Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Revolving
Commitment and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of:
 
(A) the Borrower, provided that no consent of the Borrower shall be required for
an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an
Event of Default has occurred and is continuing, any other assignee;
 
(B) the Administrative Agent; and
 
(C) the Issuing Bank.
 
(ii) Assignments shall be subject to the following additional conditions:
 
(A) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender’s
Revolving Commitment or Loans of any Class, the amount of the Revolving
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Borrower and the Administrative Agent otherwise
consent, provided that no such consent of the Borrower shall be required if an
Event of Default has occurred and is continuing;
 

 

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(B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;
 
(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500; and
 
(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more Credit Contacts to whom all syndicate-level information
(which may contain material non-public information about the Borrower, the Loan
Parties and their Related Parties or their respective securities) will be made
available and who may receive such information in accordance with the assignee’s
compliance procedures and applicable laws, including Federal and state
securities laws.
 
For the purposes of this Section 9.04(b), the term “Approved Fund” has the
following meaning:
 
“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.
 
(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
of this Section, from and after the effective date specified in each Assignment
and Assumption the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of
Sections 2.15, 2.16, 2.17 and 9.03).  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
Section 9.04 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.
 
(iv) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Revolving Commitment of, and principal amount
of the Loans and LC Disbursements owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Issuing Bank and the
Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.
 

 

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(v) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register; provided that if
either the assigning Lender or the assignee shall have failed to make any
payment required to be made by it pursuant to Section 2.05, 2.06(d) or (e),
2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have no obligation
to accept such Assignment and Assumption and record the information therein in
the Register unless and until such payment shall have been made in full,
together with all accrued interest thereon.  No assignment shall be effective
for purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
 
(c) (i)  Any Lender may, without the consent of the Borrower, the Administrative
Agent, the Issuing Bank or the Swingline Lender, sell participations to one or
more banks or other entities (a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a portion
of its Revolving Commitment and the Loans owing to it); provided that (A) such
Lender’s obligations under this Agreement shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (C) the Borrower, the Administrative Agent,
the Issuing Bank 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.  Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such
Participant.  Subject to paragraph (c)(ii) of this Section, the Borrower agrees
that each Participant shall be entitled to the benefits of Sections 2.15, 2.16
and 2.17 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to paragraph (b) of this Section.  To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.18(c) as though it were a Lender. Each Lender that sells a
participation shall, acting solely for this purpose as an agent of the Borrower,
maintain a register on which it enters the name and address of each Participant
and the principal amounts (and stated interest) of each participant’s interest
in the Loans or other obligations under this Agreement (the “Participant
Register”).  The entries in the Participant Register shall be conclusive absent
manifest error, and such Lender shall treat each person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary.
 
(ii) A Participant shall not be entitled to receive any greater payment under
Section 2.15 or 2.17 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent.  A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.17(a) as
though it were a Lender.
 
(d) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
 

 

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SECTION 9.05. Survival
 
.  All covenants, agreements, representations and warranties made by the Loan
Parties in the Loan Documents and in the certificates or other
instruments  delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent, the Issuing Bank or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstand­ing and unpaid or any Letter of Credit is outstanding and
so long as the Revolving Commitments have not expired or terminated.  The
provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Revolving Commitments or the
termination of this Agreement or any provision hereof.
 
SECTION 9.06. Counterparts; Integration; Effectiveness
 
.  This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract.  This
Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating to
the subject matter hereof.  Except as provided in Section 4.01, this Agreement
shall become effective when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.  Delivery of an
executed counterpart of a signature page of this Agreement by facsimile shall be
effective as delivery of a manually executed counterpart of this Agreement.
 
SECTION 9.07. Severability
 
.  Any provision of any Loan Document held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
thereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
 
SECTION 9.08. Right of Setoff
 
.  If an Event of Default shall have occurred and be continuing, each Lender and
each of its Affiliates is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other obligations at any time owing by such Lender or Affiliate to or
for the credit or the account of the Borrower or such Loan Guarantor against any
of and all the Secured Obligations held by such Lender, irrespective of whether
or not such Lender shall have made any demand under the Loan Documents and
although such obligations may be unmatured.  The applicable Lender shall notify
the Borrower and the Administrative Agent of such set-off or application,
provided that any failure to give or any delay in giving such notice shall not
affect the validity of any such set-off or application under this Section.  The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
 

 

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SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process
 
.  (a)  The Loan Documents (other than those containing a contrary express
choice of law provision) shall be governed by and construed in accordance with
the laws of the State of New York, but giving effect to federal laws applicable
to national banks.
 
(b) Each Loan Party hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any U.S. Federal or New
York State court sitting in New York, New York in any action or proceeding
arising out of or relating to any Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court.  Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this Agreement or any other Loan Document shall
affect any right that the Administrative Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or any other Loan Document against any Loan Party or its properties in the
courts of any jurisdiction.
 
(c) Each Loan Party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section.  Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
 
(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01.  Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
 
SECTION 9.10. WAIVER OF JURY TRIAL
 
.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
 
SECTION 9.11. Headings
 
.  Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting, this
Agreement.
 

 

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SECTION 9.12. Confidentiality
 
.  Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by Requirement of Law or by any subpoena
or similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or (ii)  any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Loan Parties and their obligations, (g) with the consent of the
Borrower or (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
the Administrative Agent, the Issuing Bank or any Lender on a non-confidential
basis from a source other than the Borrower.  For the purposes of this Section,
“Information” means all information received from the Borrower relating to the
Borrower or their business, other than any such information that is available to
the Administrative Agent, the Issuing Bank or any Lender on a non-confidential
basis prior to disclosure by the Borrower; provided that, in the case of
information received from the Borrower after the date hereof, such information
is clearly identified at the time of delivery as confidential.  Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
 
EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12 FURNISHED
TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION
CONCERNING THE COMPANY AND ITS AFFILIATES AND  THEIR RELATED PARTIES OR THEIR
RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES
REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE
SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND
APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.
 
ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE
BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY
CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE COMPANY, THE LOAN PARTIES AND
THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES.  ACCORDINGLY, EACH LENDER
REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED
IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION
THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS
COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES
LAWS.
 
SECTION 9.13. Several Obligations; Nonreliance; Violation of Law
 
.  The respective obligations of the Lenders hereunder are several and not joint
and the failure of any Lender to make any Loan or perform any of its obligations
hereunder shall not relieve any other Lender from any of its obligations
hereunder.  Each Lender hereby represents that it is not relying on or looking
to any margin stock for the repayment of the Borrowings provided for
herein.  Anything contained in this Agreement to the contrary notwithstanding,
neither the Issuing Bank nor any Lender shall be obligated to extend credit to
the Borrower in violation of any Requirement of Law.
 

 

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SECTION 9.14. USA PATRIOT Act
 
.  Each Lender that is subject to the requirements of the USA Patriot Act (Title
III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) hereby
notifies the Borrower that pursuant to the requirements of the Act, it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the names and addresses of the Borrower and other
information that will allow such Lender to identify the Borrower in accordance
with the Act.
 
SECTION 9.15. Disclosure
 
.  Each Loan Party and each Lender hereby acknowledges and agrees that the
Administrative Agent and/or its Affiliates from time to time may hold
investments in, make other loans to or have other relationships with any of the
Loan Parties and their respective Affiliates.
 
SECTION 9.16. Appointment for Perfection
 
.  Each Lender hereby appoints each other Lender as its agent for the purpose of
perfecting Liens, for the benefit of the Secured Parties, in assets which, in
accordance with Article 9 of the UCC or any other applicable law can be
perfected only by possession.  Should any Lender (other than the Administrative
Agent) obtain possession of any such Collateral, such Lender shall notify the
Administrative Agent thereof, and, promptly upon the Administrative Agent’s
request therefor shall deliver such Collateral to the Administrative Agent or
otherwise deal with such Collateral in accordance with the Administrative
Agent’s instructions.
 
SECTION 9.17. Interest Rate Limitation
 
.  Notwithstanding anything herein to the contrary, if at any time the interest
rate applicable to any Loan, together with all fees, charges and other amounts
which are treated as interest on such Loan under applicable law (collectively
the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which
may be contracted for, charged, taken, received or reserved by the Lender
holding such Loan in accordance with applicable law, the rate of interest
payable in respect of such Loan hereunder, together with all Charges payable in
respect thereof, shall be limited to the Maximum Rate and, to the extent lawful,
the interest and Charges that would have been payable in respect of such Loan
but were not payable as a result of the operation of this Section shall be
cumulated and the interest and Charges payable to such Lender in respect of
other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received
by such Lender.
 
 
ARTICLE X                      
 
Loan Guaranty
SECTION 10.01. Guaranty
 
.  Each Loan Guarantor (other than those that have delivered a separate
Guaranty) hereby agrees that it is jointly and severally liable for, and, as
primary obligor and not merely as surety, absolutely and unconditionally
guarantees to the Secured Parties the prompt payment when due, whether at stated
maturity, upon acceleration or otherwise, and at all times thereafter, of the
Secured Obligations and all costs and expenses including, without limitation,
all court costs and attorneys’ and paralegals’ fees (including allocated costs
of in-house counsel and paralegals) and expenses paid or incurred by the
Administrative Agent, the Issuing Bank and the other Secured Parties in
endeavoring to collect all or any part of the Secured Obligations from, or in
prosecuting any action against, the Borrower, any Loan Guarantor or any other
guarantor of all or any part of the Secured Obligations (such costs and
expenses, together with the Secured Obligations, collectively the “Guaranteed
Obligations”). Each Loan Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed in whole or in part without notice to or
further assent from it, and that it remains bound upon its guarantee
notwithstanding any such extension or renewal. All terms of this Loan Guaranty
apply to and may be enforced by or on behalf of any domestic or foreign branch
or Affiliate of any Secured Party that extended any portion of the Guaranteed
Obligations.
 

 

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SECTION 10.02. Guaranty of Payment
 
.  This Loan Guaranty is a guaranty of payment and not of collection. Each Loan
Guarantor waives any right to require the Administrative Agent, the Issuing Bank
or any other Secured Party to sue the Borrower, any Loan Guarantor, any other
guarantor, or any other person obligated for all or any part of the Guaranteed
Obligations (each, an “Obligated Party”), or otherwise to enforce its payment
against any collateral securing all or any part of the Guaranteed Obligations.
 
SECTION 10.03. No Discharge or Diminishment of Loan Guaranty
 
.  (a)  Except as otherwise provided for herein, the obligations of each Loan
Guarantor hereunder are unconditional and absolute and not subject to any
reduction, limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Guaranteed Obligations),
including:  (i) any claim of waiver, release, extension, renewal, settlement,
surrender, alteration, or compromise of any of the Guaranteed Obligations, by
operation of law or otherwise; (ii) any change in the corporate existence,
structure or ownership of the Borrower or any other guarantor of or other person
liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any Obligated Party, or
their assets or any resulting release or discharge of any obligation of any
Obligated Party; or (iv) the existence of any claim, setoff or other rights
which any Loan Guarantor may have at any time against any Obligated Party, the
Administrative Agent, the Issuing Bank, any other Secured Party, or any other
person, whether in connection herewith or in any unrelated transactions.
 
(b) The obligations of each Loan Guarantor hereunder are not subject to any
defense or setoff, counterclaim, recoupment, or termination whatsoever by reason
of the invalidity, illegality, or unenforceability of any of the Guaranteed
Obligations or otherwise, or any provision of applicable law or regulation
purporting to prohibit payment by any Obligated Party, of the Guaranteed
Obligations or any part thereof.
 
(c) Further, the obligations of any Loan Guarantor hereunder are not discharged
or impaired or otherwise affected by: (i) the failure of the Administrative
Agent, the Issuing Bank or any other Secured Party to assert any claim or demand
or to enforce any remedy with respect to all or any part of the Guaranteed
Obligations; (ii) any waiver or modification of or supplement to any provision
of any agreement relating to the Guaranteed Obligations; (iii) any release,
non-perfection, or invalidity of any indirect or direct security for the
obligations of the Borrower for all or any part of the Guaranteed Obligations or
any obligations of any other guarantor of or other person liable for any of the
Guaranteed Obligations; (iv) any action or failure to act by the Administrative
Agent, the Issuing Bank or any other Secured Party with respect to any
collateral securing any part of the Guaranteed Obligations; or (v) any default,
failure or delay, willful or otherwise, in the payment or performance of any of
the Guaranteed Obligations, or any other circumstance, act, omission or delay
that might in any manner or to any extent vary the risk of such Loan Guarantor
or that would otherwise operate as a discharge of any Loan Guarantor as a matter
of law or equity (other than the indefeasible payment in full in cash of the
Guaranteed Obligations).
 
SECTION 10.04. Defenses Waived
 
.  To the fullest extent permitted by applicable law, each Loan Guarantor hereby
waives any defense based on or arising out of any defense of the Borrower or any
Loan Guarantor or the unenforceability of all or any part of the Guaranteed
Obligations from any cause, or the cessation from any cause of the liability of
the Borrower or any Loan Guarantor, other than the indefeasible payment in full
in cash of the Guaranteed Obligations. Without limiting the generality of the
foregoing, each Loan Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest and, to the fullest extent permitted by law, any
notice not provided for herein, as well as any requirement that at any time any
action be taken by any person against any Obligated Party, or any other
person.  The Administrative Agent may, at its election, foreclose on any
Collateral held by it by one or more judicial or nonjudicial sales, accept an
assignment of any such Collateral in lieu of foreclosure or otherwise act or
fail to act with respect to any collateral securing all or a part of the
Guaranteed Obligations, compromise or adjust any part of the Guaranteed
Obligations, make any other accommodation with any Obligated Party or exercise
any other right or remedy available to it against any Obligated Party, without
affecting or impairing in any way the liability of such Loan Guarantor under
this Loan Guaranty except to the extent the Guaranteed Obligations have been
fully and indefeasibly paid in cash.  To the fullest extent permitted by
applicable law, each Loan Guarantor waives any defense arising out of any such
election even though that election may operate, pursuant to applicable law, to
impair or extinguish any right of reimbursement or subrogation or other right or
remedy of any Loan Guarantor against any Obligated Party or any security.
 

 

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SECTION 10.05. Rights of Subrogation
 
.  No Loan Guarantor will assert any right, claim or cause of action, including,
without limitation, a claim of subrogation, contribution or indemnification that
it has against any Obligated Party, or any collateral, until the Loan Parties
and the Loan Guarantors have fully performed all their obligations to the
Administrative Agent, the Issuing Bank and the other Secured Parties.
 
SECTION 10.06. Reinstatement; Stay of Acceleration
 
.  If at any time any payment of any portion of the Guaranteed Obligations is
rescinded or must otherwise be restored or returned upon the insolvency,
bankruptcy, or reorganization of the Borrower or otherwise, each Loan
Guarantor’s obligations under this Loan Guaranty with respect to that payment
shall be reinstated at such time as though the payment had not been made and
whether or not the Administrative Agent, the Issuing Bank and the other Secured
Parties are in possession of this Loan Guaranty. If acceleration of the time for
payment of any of the Guaranteed Obligations is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower, all such amounts otherwise subject
to acceleration under the terms of any agreement relating to the Guaranteed
Obligations shall nonetheless be payable by the Loan Guarantors forthwith on
demand by the Secured Parties.
 
SECTION 10.07. Information
 
.  Each Loan Guarantor assumes all responsibility for being and keeping itself
informed of the Borrower’s financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations
and the nature, scope and extent of the risks that each Loan Guarantor assumes
and incurs under this Loan Guaranty, and agrees that neither the Administrative
Agent, the Issuing Bank nor any other Secured Party shall have any duty to
advise any Loan Guarantor of information known to it regarding those
circumstances or risks.
 
SECTION 10.08. Taxes
 
.  All payments of the Guaranteed Obligations will be made by each Loan
Guarantor free and clear of and without deduction for any Indemnified Taxes or
Other Taxes; provided that if any Loan Guarantor shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent, Lender or Issuing Bank (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) such Loan Guarantor shall make such deductions and (iii) such Loan
Guarantor shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
 
SECTION 10.09. Maximum Liability
 
.  The provisions of this Loan Guaranty are severable, and in any action or
proceeding involving any state corporate law, or any state, federal or foreign
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Loan Guarantor under this Loan
Guaranty would otherwise be held or determined to be avoidable, invalid or
unenforceable on account of the amount of such Loan Guarantor’s liability under
this Loan Guaranty, then, notwithstanding any other provision of this Loan
Guaranty to the contrary, the amount of such liability shall, without any
further action by the Loan Guarantors or the Secured Parties, be automatically
limited and reduced to the highest amount that is valid and enforceable as
determined in such action or proceeding (such highest amount determined
hereunder being the relevant Loan Guarantor’s “Maximum Liability”).  This
Section with respect to the Maximum Liability of each Loan Guarantor is intended
solely to preserve the rights of the Secured Parties to the maximum extent not
subject to avoidance under applicable law, and no Loan Guarantor nor any other
person or entity shall have any right or claim under this Section with respect
to such Maximum Liability, except to the extent necessary so that the
obligations of any Loan Guarantor hereunder shall not be rendered voidable under
applicable law. Each Loan Guarantor agrees that the Guaranteed Obligations may
at any time and from time to time exceed the Maximum Liability of each Loan
Guarantor without impairing this Loan Guaranty or affecting the rights and
remedies of the Secured Parties hereunder, provided that, nothing in this
sentence shall be construed to increase any Loan Guarantor’s obligations
hereunder beyond its Maximum Liability.
 

 

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SECTION 10.10. Contribution
 
.  In the event any Loan Guarantor (a “Paying Guarantor”) shall make any payment
or payments under this Loan Guaranty or shall suffer any loss as a result of any
realization upon any collateral granted by it to secure its obligations under
this Loan Guaranty, each other Loan Guarantor (each a “Non-Paying Guarantor”)
shall contribute to such Paying Guarantor an amount equal to such Non-Paying
Guarantor’s “Applicable Percentage” of such payment or payments made, or losses
suffered, by such Paying Guarantor.  For purposes of this Article X, each
Non-Paying Guarantor’s “Applicable Percentage” with respect to any such payment
or loss by a Paying Guarantor shall be determined as of the date on which such
payment or loss was made by reference to the ratio of (i) such Non-Paying
Guarantor’s Maximum Liability as of such date (without giving effect to any
right to receive, or obligation to make, any contribution hereunder) or, if such
Non-Paying Guarantor’s Maximum Liability has not been determined, the aggregate
amount of all monies received by such Non-Paying Guarantor from the Borrower
after the date hereof (whether by loan, capital infusion or by other means) to
(ii) the aggregate Maximum Liability of all Loan Guarantors hereunder (including
such Paying Guarantor) as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder), or to the extent
that a Maximum Liability has not been determined for any Loan Guarantor, the
aggregate amount of all monies received by such Loan Guarantors from the
Borrower after the date hereof (whether by loan, capital infusion or by other
means).  Nothing in this provision shall affect any Loan Guarantor’s several
liability for the entire amount of the Guaranteed Obligations (up to such Loan
Guarantor’s Maximum Liability).  Each of the Loan Guarantors covenants and
agrees that its right to receive any contribution under this Loan Guaranty from
a Non-Paying Guarantor shall be subordinate and junior in right of payment to
the payment in full in cash of the Guaranteed Obligations.  This provision is
for the benefit of the Administrative Agent, the Issuing Bank, the Secured
Parties and the Loan Guarantors and may be enforced by any one, or more, or all
of them in accordance with the terms hereof.
 
SECTION 10.11. Liability Cumulative
 
.  The liability of each Loan Party as a Loan Guarantor under this Article X is
in addition to and shall be cumulative with all liabilities of each Loan Party
to the Administrative Agent, the Issuing Bank and the other Secured Parties
under this Agreement and the other Loan Documents to which such Loan Party is a
party or in respect of any obligations or liabilities of the other Loan Parties,
without any limitation as to amount, unless the instrument or agreement
evidencing or creating such other liability specifically provides to the
contrary.
 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
 

BORROWER:

AUDIOVOX CORPORATION

By _________________________
     Name:
      Title:

OTHER LOAN PARTIES:

[NAME OF LOAN PARTY]

By _________________________
     Name:
      Title:

[NAME OF LOAN PARTY]

By _________________________
     Name:
      Title:

 

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JPMORGAN CHASE BANK, N.A., individually, as Administrative Agent, Issuing Bank
and Swingline Lender

By  _________________________
      Name:
      Title:

[OTHER BANKS]

By  _________________________
      Name:
      Title:

 

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