neophotonics-amendedandr






EXECUTION VERSION   DB1/ 121979154.7        AMENDED AND RESTATED CREDIT AGREEMENT  by and among  WELLS FARGO BANK, NATIONAL ASSOCIATION,  as Agent,  THE LENDERS THAT ARE PARTIES HERETO  as the Lenders,  and  NEOPHOTONICS CORPORATION  as Borrower  Dated as of June 29, 2021    





 






TABLE OF CONTENTS    Page   -i-   DB1/ 121979154.7    1. DEFINITIONS AND CONSTRUCTION ...................................................................................... 1  1.1 Definitions ................................................................................................................................ 1  1.2 Accounting Terms .................................................................................................................. 47  1.3 Code ....................................................................................................................................... 48  1.4 Construction ........................................................................................................................... 48  1.5 Time References ..................................................................................................................... 49  1.6 Schedules and Exhibits ........................................................................................................... 49  1.7 Divisions ................................................................................................................................. 49  1.8 Rates; LIBOR Notification ..................................................................................................... 49  2. LOANS AND TERMS OF PAYMENT ....................................................................................... 50  2.1 Revolving Loans..................................................................................................................... 50  2.2 [Intentionally Omitted.] .......................................................................................................... 51  2.3 Borrowing Procedures and Settlements.................................................................................. 51  2.4 Payments; Reductions of Commitments; Prepayments .......................................................... 58  2.5 Promise to Pay; Promissory Notes ......................................................................................... 61  2.6 Interest Rates and Letter of Credit Fee:  Rates, Payments, and Calculations ......................... 61  2.7 Crediting Payments ................................................................................................................ 63  2.8 Designated Account ............................................................................................................... 63  2.9 Maintenance of Loan Account; Statements of Obligations .................................................... 63  2.10 Fees ......................................................................................................................................... 64  2.11 Letters of Credit...................................................................................................................... 64  2.12 LIBOR Option ........................................................................................................................ 72  2.13 Capital Requirements ............................................................................................................. 76  2.14 Incremental Facilities ............................................................................................................. 77  2.15 Joint and Several Liability of Borrowers ................................................................................ 79  3. CONDITIONS; TERM OF AGREEMENT ................................................................................. 83  3.1 Conditions Precedent to the Initial Extension of Credit ......................................................... 83  3.2 Conditions Precedent to all Extensions of Credit ................................................................... 83  3.3 Maturity .................................................................................................................................. 83  3.4 Effect of Maturity ................................................................................................................... 83  3.5 Early Termination by Borrowers ............................................................................................ 83  3.6 Conditions Subsequent ........................................................................................................... 84  4. REPRESENTATIONS AND WARRANTIES ............................................................................. 84  





 






DB1/ 121979154.7    TABLE OF CONTENTS  (continued)  Page     -ii-    4.1 Due Organization and Qualification; Subsidiaries ................................................................. 84  4.2 Due Authorization; No Conflict ............................................................................................. 85  4.3 Governmental Consents ......................................................................................................... 85  4.4 Binding Obligations; Perfected Liens .................................................................................... 85  4.5 Title to Assets; No Encumbrances ......................................................................................... 86  4.6 Litigation ................................................................................................................................ 86  4.7 Compliance with Laws ........................................................................................................... 86  4.8 No Material Adverse Effect ................................................................................................... 86  4.9 Solvency ................................................................................................................................. 86  4.10 Employee Benefits ................................................................................................................. 87  4.11 Environmental Condition ....................................................................................................... 87  4.12 Complete Disclosure .............................................................................................................. 87  4.13 Patriot Act .............................................................................................................................. 88  4.14 Indebtedness ........................................................................................................................... 88  4.15 Payment of Taxes ................................................................................................................... 88  4.16 Margin Stock .......................................................................................................................... 88  4.17 Governmental Regulation ....................................................................................................... 88  4.18 OFAC; Sanctions; Anti-Corruption Laws; Anti-Money Laundering Laws ........................... 88  4.19 Employee and Labor Matters ................................................................................................. 89  4.20 Immaterial Subsidiaries .......................................................................................................... 89  4.21 Leases ..................................................................................................................................... 89  4.22 Eligible Accounts ................................................................................................................... 89  4.23 Hedge Agreements ................................................................................................................. 90  4.24 Material Contracts .................................................................................................................. 90  5. AFFIRMATIVE COVENANTS .................................................................................................. 90  5.1 Financial Statements, Reports, Certificates ............................................................................ 90  5.2 Reporting ................................................................................................................................ 90  5.3 Existence ................................................................................................................................ 91  5.4 Maintenance of Properties ...................................................................................................... 91  5.5 Taxes ...................................................................................................................................... 91  5.6 Insurance ................................................................................................................................ 91  





 






DB1/ 121979154.7    TABLE OF CONTENTS  (continued)  Page     -iii-    5.7 Inspection ............................................................................................................................... 92  5.8 Compliance with Laws ........................................................................................................... 92  5.9 Environmental ........................................................................................................................ 92  5.10 Disclosure Updates ................................................................................................................. 93  5.11 Formation of Subsidiaries ...................................................................................................... 93  5.12 Further Assurances ................................................................................................................. 93  5.13 Lender Meetings ..................................................................................................................... 94  5.14 Location of Collateral; Chief Executive Office ...................................................................... 94  5.15 OFAC; Sanctions; Anti-Corruption Laws; Anti-Money Laundering Laws ........................... 94  5.16 Material Contracts .................................................................................................................. 95  5.17 Bank Products......................................................................................................................... 95  6. NEGATIVE COVENANTS ......................................................................................................... 95  6.1 Indebtedness ........................................................................................................................... 95  6.2 Liens ....................................................................................................................................... 95  6.3 Restrictions on Fundamental Changes ................................................................................... 95  6.4 Disposal of Assets .................................................................................................................. 96  6.5 Nature of Business.................................................................................................................. 96  6.6 Prepayments and Amendments .............................................................................................. 96  6.7 Restricted Payments ............................................................................................................... 97  6.8 Accounting Methods .............................................................................................................. 98  6.9 Investments ............................................................................................................................. 98  6.10 Transactions with Affiliates ................................................................................................... 98  6.11 Use of Proceeds ...................................................................................................................... 98  7. FINANCIAL COVENANTS ........................................................................................................ 99  8. EVENTS OF DEFAULT .............................................................................................................. 99  8.1 Payments ................................................................................................................................ 99  8.2 Covenants ............................................................................................................................... 99  8.3 Judgments ............................................................................................................................. 100  8.4 Voluntary Bankruptcy, etc ................................................................................................... 100  8.5 Involuntary Bankruptcy, etc ................................................................................................. 100  8.6 Default Under Other Agreements ......................................................................................... 100  





 






DB1/ 121979154.7    TABLE OF CONTENTS  (continued)  Page     -iv-    8.7 Representations, etc .............................................................................................................. 100  8.8 Guaranty ............................................................................................................................... 100  8.9 Security Documents ............................................................................................................. 100  8.10 Loan Documents................................................................................................................... 101  8.11 Change of Control ................................................................................................................ 101  9. RIGHTS AND REMEDIES ....................................................................................................... 101  9.1 Rights and Remedies ............................................................................................................ 101  9.2 Remedies Cumulative ........................................................................................................... 102  10. WAIVERS; INDEMNIFICATION ............................................................................................ 102  10.1 Demand; Protest; etc ............................................................................................................ 102  10.2 The Lender Group’s Liability for Collateral ........................................................................ 102  10.3 Indemnification .................................................................................................................... 102  11. NOTICES .................................................................................................................................... 103  12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE  PROVISION ............................................................................................................................... 104  13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS .................................................. 107  13.1 Assignments and Participations ............................................................................................ 107  13.2 Successors ............................................................................................................................ 111  14. AMENDMENTS; WAIVERS .................................................................................................... 111  14.1 Amendments and Waivers .................................................................................................... 111  14.2 Replacement of Certain Lenders .......................................................................................... 113  14.3 No Waivers; Cumulative Remedies ..................................................................................... 114  15. AGENT; THE LENDER GROUP .............................................................................................. 114  15.1 Appointment and Authorization of Agent ............................................................................ 114  15.2 Delegation of Duties ............................................................................................................. 115  15.3 Liability of Agent ................................................................................................................. 115  15.4 Reliance by Agent ................................................................................................................ 115  15.5 Notice of Default or Event of Default .................................................................................. 116  15.6 Credit Decision ..................................................................................................................... 116  15.7 Costs and Expenses; Indemnification ................................................................................... 116  15.8 Agent in Individual Capacity ............................................................................................... 117  15.9 Successor Agent ................................................................................................................... 117  





 






DB1/ 121979154.7    TABLE OF CONTENTS  (continued)  Page     -v-    15.10 Lender in Individual Capacity .............................................................................................. 118  15.11 Collateral Matters ................................................................................................................. 118  15.12 Restrictions on Actions by Lenders; Sharing of Payments .................................................. 120  15.13 Agency for Perfection .......................................................................................................... 120  15.14 Payments by Agent to the Lenders ....................................................................................... 121  15.15 Concerning the Collateral and Related Loan Documents .................................................... 121  15.16 Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports  and Information .................................................................................................................... 121  15.17 Several Obligations; No Liability ......................................................................................... 122  16. WITHHOLDING TAXES .......................................................................................................... 122  16.1 Payments .............................................................................................................................. 122  16.2 Exemptions ........................................................................................................................... 123  16.3 Reductions ............................................................................................................................ 124  16.4 Refunds ................................................................................................................................. 125  17. GENERAL PROVISIONS ......................................................................................................... 125  17.1 Effectiveness ........................................................................................................................ 125  17.2 Section Headings .................................................................................................................. 125  17.3 Interpretation ........................................................................................................................ 126  17.4 Severability of Provisions .................................................................................................... 126  17.5 Bank Product Providers ........................................................................................................ 126  17.6 Debtor-Creditor Relationship ............................................................................................... 126  17.7 Counterparts; Electronic Execution ...................................................................................... 127  17.8 Revival and Reinstatement of Obligations; Certain Waivers ............................................... 127  17.9 Confidentiality ...................................................................................................................... 128  17.10 Survival ................................................................................................................................ 129  17.11 Patriot Act; Due Diligence ................................................................................................... 129  17.12 Integration ............................................................................................................................ 130  17.13 NeoPhotonics as Agent for Borrowers ................................................................................. 130  17.14 Acknowledgement and Consent to Bail-In of EEA Financial Institutions ........................... 130  17.15 Acknowledgement Regarding Any Supported QFCs ........................................................... 131  17.16 Amendment and Restatement ............................................................................................... 131    





 






     -vi-   DB1/ 121979154.7      EXHIBITS AND SCHEDULES  Exhibit A-1 Form of Assignment and Acceptance   Exhibit B-1 Form of Borrowing Base Certificate  Exhibit B-2   Form of Bank Product Provider Agreement  Exhibit C-1 Form of Compliance Certificate  Exhibit L-1 Form of LIBOR Notice   Exhibit J-1   Form of Joinder  Exhibit P-1   Form of Perfection Certificate     Schedule A-1 Agent’s Account  Schedule C-1 Commitments  Schedule E-1   Eligibility     Schedule 3.1   Conditions Precedent  Schedule 5.1   Financial Statements, Reports, Certificates  Schedule 5.2   Collateral Reporting    





 






   DB1/ 121979154.7    AMENDED AND RESTATED CREDIT AGREEMENT  THIS AMENDED AND RESTATED CREDIT AGREEMENT, is entered into as of  June 29, 2021 by and among the lenders identified on the signature pages hereof (each of such lenders,  together with its successors and permitted assigns, is referred to hereinafter as a “Lender”, as that term is  hereinafter further defined), WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking  association, as administrative agent for each member of the Lender Group and the Bank Product Providers  (in such capacity, together with its successors and assigns in such capacity, “Agent”), NEOPHOTONICS  CORPORATION, a Delaware corporation (“NeoPhotonics”), and those additional Persons that are joined  as a party hereto by executing the form of Joinder attached hereto as Exhibit J-1 (each, a “Borrower” and  individually and collectively, jointly and severally, the “Borrowers”).  The parties agree as follows:  1. DEFINITIONS AND CONSTRUCTION.  1.1 Definitions.  As used in this Agreement, the following terms shall have the following  definitions:  “Account” means an account (as that term is defined in the Code).  “Account Debtor” means any Person who is obligated on an Account, chattel paper, or a  general intangible.  “Account Party” has the meaning specified therefor in Section 2.11(h) of this Agreement.  “Accounting Changes” means changes in accounting principles required by the  promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards  Board of the American Institute of Certified Public Accountants (or successor thereto or any agency with  similar functions).  “Acquired Secured Indebtedness” means Indebtedness of a Person whose assets or Equity  Interests are acquired by a Loan Party or any of its Subsidiaries in a Permitted Acquisition; provided, that  such Indebtedness (a) is either purchase money Indebtedness or a Capital Lease with respect to Equipment  or mortgage financing with respect to Real Property, (b) was in existence prior to the date of such Permitted  Acquisition, and (c) was not incurred in connection with, or in contemplation of, such Permitted  Acquisition.   “Acquisition” means (a) the purchase or other acquisition by a Person or its Subsidiaries  of all or substantially all of the assets of (or any division or business line of) any other Person, or (b) the  purchase or other acquisition (whether by means of a merger, consolidation, or otherwise) by a Person or  its Subsidiaries of all or substantially all of the Equity Interests of any other Person.  “Additional Documents” has the meaning specified therefor in Section 5.12 of this  Agreement.  “Administrative Borrower” has the meaning specified therefor in Section 17.13 of this  Agreement.  “Administrative Questionnaire” has the meaning specified therefor in Section 13.1(a) of  this Agreement.  





 






DB1/ 121979154.7      2    “Affected Lender” has the meaning specified therefor in Section 2.13(b) of this Agreement.  “Affiliate” means, as applied to any Person, any other Person who controls, is controlled  by, or is under common control with, such Person.  For purposes of this definition, “control” means the  possession, directly or indirectly through one or more intermediaries, of the power to direct the management  and policies of a Person, whether through the ownership of Equity Interests, by contract, or otherwise;  provided, that for purposes of the definition of Eligible Accounts, Eligible Tier 1 Accounts, Eligible Tier 2  Accounts, Eligible Fiberhome Accounts, Huawei, Fiberhome, ZTE, Section 6.10 of this Agreement, and  Schedule E-1 hereto: (a) any Person which owns directly or indirectly 10% or more of the Equity Interests  having ordinary voting power for the election of directors or other members of the governing body of a  Person or 10% or more of the partnership or other ownership interests of a Person (other than as a limited  partner of such Person) shall be deemed an Affiliate of such Person, (b) each director (or comparable  manager) of a Person shall be deemed to be an Affiliate of such Person, and (c) each partnership in which  a Person is a general partner shall be deemed an Affiliate of such Person.  “Agent” has the meaning specified therefor in the preamble to this Agreement.  “Agent-Related Persons” means Agent, together with its Affiliates, officers, directors,  employees, attorneys, and agents.  “Agent’s Account” means the Deposit Account of Agent identified on Schedule A-1 hereto  (or such other Deposit Account of Agent that has been designated as such, in writing, by Agent to Borrowers  and the Lenders).  “Agent’s Liens” means the Liens granted by each Loan Party or its Subsidiaries to Agent  under the Loan Documents and securing the Obligations.  “Agreement” means this Credit Agreement, as amended, restated, amended and restated,  supplemented or otherwise modified from time to time.  “Anti-Corruption Laws” means the FCPA, the U.K. Bribery Act of 2010, as amended, and  all other applicable laws and regulations or ordinances concerning or relating to bribery, money laundering  or corruption in any jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is located  or is doing business.  “Anti-Money Laundering Laws” means the applicable laws or regulations in any  jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is located or is doing business  that relates to money laundering, any predicate crime to money laundering, or any financial record keeping  and reporting requirements related thereto.   “Applicable Margin” means, as of any date of determination and with respect to Base Rate  Loans or LIBOR Rate Loans, as applicable, the applicable margin set forth in the following table that  corresponds to the Average Excess Availability of Borrowers for the most recently completed calendar  quarter; provided, that until the first date of determination on or after the Closing Date with respect to any  Base Rate Loan or LIBOR Rate Loan, the Applicable Margin shall remain at the margin in effect under the  Existing Credit Agreement as in effect immediately prior to the Closing Date; provided further, that any  time an Event of Default has occurred and is continuing, the Applicable Margin shall be set at the margin  in the row styled “Level II”:  





 






DB1/ 121979154.7      3    Level  Average Excess  Availability  Applicable Margin for Base  Rate Loans which are  Revolving Loans (the  “Revolving Loan Base Rate  Margin”)  Applicable Margin for LIBOR  Rate Loans which are  Revolving Loans  (the  “Revolving Loan LIBOR Rate  Margin”)  I > $25,000,000  0.50 percentage points 1.50 percentage points  II < $25,000,000 0.75 percentage points 1.75 percentage points    The Applicable Margin shall be re-determined by the Agent as of the first day of each quarter based on  Average Excess Availability during the immediately preceding calendar quarter.  “Application Event” means the occurrence of (a) a failure by Borrowers to repay all of the  Obligations in full on the Maturity Date, or (b) an Event of Default and the election by Agent or the Required  Lenders to require that payments and proceeds of Collateral be applied pursuant to Section 2.4(b)(iii) of  this Agreement.  “Assignee” has the meaning specified therefor in Section 13.1(a) of this Agreement.  “Assignment and Acceptance” means an Assignment and Acceptance Agreement  substantially in the form of Exhibit A-1 to this Agreement.  “Authorized Person” means any one of the individuals identified as an officer of a  Borrower on Schedule A-2 of the Disclosure Letter, or any other individual identified by Administrative  Borrower as an authorized person and authenticated through Agent’s electronic platform or portal in  accordance with its procedures for such authentication.  “Available Tenor” means, as of any date of determination and with respect to the then- current Benchmark, as applicable, (x) if the then-current Benchmark is a term rate, any tenor for such  Benchmark or (y) otherwise, any payment period for interest calculated with reference to such Benchmark,  as applicable, that is or may be used for determining the length of an Interest Period pursuant to this  Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark  that is then-removed from the definition of “Interest Period” pursuant to Section 2.12(d)(vi).  “Availability” means, as of any date of determination, the amount that Borrowers are  entitled to borrow as Revolving Loans under Section 2.1 of this Agreement (after giving effect to the then  outstanding Revolver Usage).   “Available Increase Amount” means, as of any date of determination, an amount equal to  the result of (a) $25,000,000, minus (b) the aggregate principal amount of Increases to the Revolver  Commitments previously made pursuant to Section 2.14 of this Agreement.   “Average Excess Availability” means, with respect to any period, the sum of the aggregate  amount of Excess Availability for each day in such period (as calculated by Agent as of the end of each  respective day) divided by the number of days in such period.  





 






DB1/ 121979154.7      4    “Average Revolver Usage” means, with respect to any period, the sum of the aggregate  amount of Revolver Usage for each day in such period (calculated as of the end of each respective day)  divided by the number of days in such period.  “Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the  applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.  “Bail-In Legislation” means, with respect to any EEA Member Country implementing  Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union,  the implementing law for such EEA Member Country from time to time which is described in the EU Bail- In Legislation Schedule.  “Bank Product” means any one or more of the following financial products or  accommodations extended to any Loan Party or any of its Subsidiaries by a Bank Product Provider:  (a)  credit cards (including commercial cards (including so-called “purchase cards”, “procurement cards” or “p- cards”)), (b) payment card processing services, (c) debit cards, (d) stored value cards, (e) Cash Management  Services, or (f) transactions under Hedge Agreements.  “Bank Product Agreements” means those agreements entered into from time to time by  any Loan Party or any of its Subsidiaries with a Bank Product Provider in connection with the obtaining of  any of the Bank Products.  “Bank Product Collateralization” means providing cash collateral (pursuant to  documentation reasonably satisfactory to Agent) to be held by Agent for the benefit of the Bank Product  Providers (other than the Hedge Providers) in an amount determined by Agent as sufficient to satisfy the  reasonably estimated credit exposure, operational risk or processing risk with respect to the then existing  Bank Product Obligations (other than Hedge Obligations).  “Bank Product Obligations” means (a) all obligations, liabilities, reimbursement  obligations, fees, or expenses owing by each Loan Party and its Subsidiaries to any Bank Product Provider  pursuant to or evidenced by a Bank Product Agreement and irrespective of whether for the payment of  money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter  arising, (b) all Hedge Obligations, and (c) all amounts that Agent or any Lender is obligated to pay to a  Bank Product Provider as a result of Agent or such Lender purchasing participations from, or executing  guarantees or indemnities or reimbursement obligations to, a Bank Product Provider with respect to the  Bank Products provided by such Bank Product Provider to a Loan Party or its Subsidiaries.   “Bank Product Provider” means Wells Fargo or any of its Affiliates, including each of the  foregoing in its capacity, if applicable, as a Hedge Provider.   “Bank Product Provider Agreement” means an agreement in substantially the form  attached hereto as Exhibit B-2 to this Agreement, in form and substance satisfactory to Agent, duly executed  by the applicable Bank Product Provider, the applicable Loan Parties, and Agent.  “Bank Product Reserves” means, as of any date of determination, those reserves that Agent  deems necessary or appropriate to establish (based upon the Bank Product Providers’ determination of the  liabilities and obligations of each Loan Party and its Subsidiaries in respect of Bank Product Obligations)  in respect of Bank Products then provided or outstanding.  “Bankruptcy Code” means title 11 of the United States Code, as in effect from time to time.  





 






DB1/ 121979154.7      5    “Base Rate” means the greatest of (a) the Federal Funds Rate plus 1⁄2%, (b) the LIBOR Rate  (which rate shall be calculated based upon an Interest Period of one month and shall be determined on a  daily basis), plus one percentage point, and (c) the rate of interest announced, from time to time, within  Wells Fargo at its principal office in San Francisco as its “prime rate”, with the understanding that the  “prime rate” is one of Wells Fargo’s base rates (not necessarily the lowest of such rates) and serves as the  basis upon which effective rates of interest are calculated for those loans making reference thereto and is  evidenced by the recording thereof after its announcement in such internal publications as Wells Fargo may  designate (and, if any such announced rate is below zero, then the rate determined pursuant to this clause  (c) shall be deemed to be zero).  “Base Rate Loan” means each portion of the Revolving Loans that bears interest at a rate  determined by reference to the Base Rate.  “Benchmark” means, initially, the LIBOR Rate; provided that if a Benchmark Transition  Event, a Term SOFR Transition Event, or an Early Opt-in Election, as applicable, and its related Benchmark  Replacement Date have occurred with respect to the LIBOR Rate or the then-current Benchmark, then  “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark  Replacement has replaced such prior benchmark rate pursuant to Section 2.12(d)(iii).  “Benchmark Replacement” means, for any Available Tenor,  (a) with respect to any Benchmark Transition Event or Early Opt-in Election, the first  alternative set forth in the order below that can be determined by the Agent for the applicable Benchmark  Replacement Date:  (i) the sum of: (A) Term SOFR and (B) the related Benchmark Replacement  Adjustment;  (ii) the sum of: (A) Daily Simple SOFR and (B) the related Benchmark  Replacement Adjustment;  (iii) the sum of: (A) the alternate benchmark rate that has been selected by the  Agent as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving  due consideration to (x) any selection or recommendation of a replacement benchmark rate or the  mechanism for determining such a rate by the Relevant Governmental Body or (y) any evolving or then- prevailing market convention for determining a benchmark rate as a replacement for the then-current  Benchmark for Dollar-denominated syndicated credit facilities at such time and (B) the related Benchmark  Replacement Adjustment; or  (b) with respect to any Term SOFR Transition Event, the sum of (i) Term SOFR and  (ii) the related Benchmark Replacement Adjustment;  provided that, (x) in the case of clause (a)(i), if the Agent decides that Term SOFR is not administratively  feasible for the Agent, then Term SOFR will be deemed unable to be determined for purposes of this  definition and (y) in the case of clause (a)(i) or clause (b) of this definition, the applicable Unadjusted  Benchmark Replacement is displayed on a screen or other information service that publishes such rate from  time to time as selected by the Agent in its reasonable discretion. If the Benchmark Replacement as  determined pursuant to clause (a)(i), (a)(ii) or (a)(iii) or clause (b) of this definition would be less than the  Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and  the other Loan Documents.  





 






DB1/ 121979154.7      6    “Benchmark Replacement Adjustment” means, with respect to any replacement of the  then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period  and Available Tenor for any setting of such Unadjusted Benchmark Replacement:  (a) for purposes of clauses (a)(i) and (a)(ii) of the definition of “Benchmark  Replacement,” the first alternative set forth in the order below that can be determined by the Agent:  (i) the spread adjustment, or method for calculating or determining such  spread adjustment, (which may be a positive or negative value or zero) as of the Reference Time such  Benchmark Replacement is first set for such Interest Period that has been selected or recommended by the  Relevant Governmental Body for the replacement of such Available Tenor of such Benchmark with the  applicable Unadjusted Benchmark Replacement;  (ii) the spread adjustment (which may be a positive or negative value or zero)  as of the Reference Time such Benchmark Replacement is first set for such Interest Period that would apply  to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective upon an  index cessation event with respect to such Available Tenor of such Benchmark;  (b) for purposes of clause (a)(iii) of the definition of “Benchmark Replacement,” the  spread adjustment, or method for calculating or determining such spread adjustment, (which may be a  positive or negative value or zero) that has been selected by the Agent giving due consideration to (i) any  selection or recommendation of a spread adjustment, or method for calculating or determining such spread  adjustment, for the replacement of such Available Tenor of such Benchmark with the applicable Unadjusted  Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement  Date or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or  method for calculating or determining such spread adjustment, for the replacement of such Available Tenor  of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated  syndicated credit facilities; and  (c) for purposes of clause (b) of the definition of “Benchmark Replacement,” the  spread adjustment, or method for calculating or determining such spread adjustment, (which may be a  positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for  such Interest Period that has been selected or recommended by the Relevant Governmental Body for the  replacement of such Available Tenor of the LIBOR Rate with a SOFR-based rate;  provided that, (x) in the case of clause (a) above, such adjustment is displayed on a screen or other  information service that publishes such Benchmark Replacement Adjustment from time to time as selected  by the Agent in its reasonable discretion and (y) if the then-current Benchmark is a term rate, more than  one tenor of such Benchmark is available as of the applicable Benchmark Replacement Date and the  applicable Unadjusted Benchmark Replacement that will replace such Benchmark in accordance with  Section 2.12(d)(iii) will not be a term rate, the Available Tenor of such Benchmark for purposes of this  definition of “Benchmark Replacement Adjustment” shall be deemed to be, with respect to each Unadjusted  Benchmark Replacement having a payment period for interest calculated with reference thereto, the  Available Tenor that has approximately the same length (disregarding business day adjustments) as such  payment period.  “Benchmark Replacement Conforming Changes” means, with respect to any Benchmark  Replacement, any technical, administrative or operational changes (including changes to the definition of  “Base Rate,” the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of  determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion  





 






DB1/ 121979154.7      7    or continuation notices, length of lookback periods, the applicability of breakage provisions, and other  technical, administrative or operational matters) that the Agent decides may be appropriate to reflect the  adoption and implementation of such Benchmark Replacement and to permit the administration thereof by  the Agent in a manner substantially consistent with market practice (or, if the Agent decides that adoption  of any portion of such market practice is not administratively feasible or if the Agent determines that no  market practice for the administration of such Benchmark Replacement exists, in such other manner of  administration as the Agent decides is reasonably necessary in connection with the administration of this  Agreement and the other Loan Documents).  “Benchmark Replacement Date” means the earliest to occur of the following events with  respect to the then-current Benchmark:  (a) in the case of clause (a) or (b) of the definition of “Benchmark Transition Event,”  the later of (x) the date of the public statement or publication of information referenced therein and (y) the  date on which the administrator of such Benchmark (or the published component used in the calculation  thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such  component thereof);  (b) in the case of clause (c) of the definition of “Benchmark Transition Event,” the  date of the public statement or publication of information referenced therein;  (c) in the case of a Term SOFR Transition Event, the date that is thirty (30) days after  the Agent has provided the Term SOFR Notice to the Lenders and the Borrower pursuant to Section  2.12(d)(iii)(B); or  (d) in the case of an Early Opt-in Election, the sixth (6th) Business Day after the date  notice of such Early Opt-in Election is provided to the Lenders, so long as the Agent has not received, by  5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Early Opt-in  Election is provided to the Lenders, written notice of objection to such Early Opt-in Election from Lenders  comprising the Required Lenders.  For the avoidance of doubt, (x) if the event giving rise to the Benchmark Replacement Date occurs  on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark  Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and  (y) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b)  with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with  respect to all then-current Available Tenors of such Benchmark (or the published component used in the  calculation thereof).  “Benchmark Transition Event” means the occurrence of one or more of the following  events with respect to the then-current Benchmark:  (a) a public statement or publication of information by or on behalf of the  administrator of such Benchmark (or the published component used in the calculation thereof) announcing  that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such  component thereof), permanently or indefinitely, provided that, at the time of such statement or publication,  there is no successor administrator that will continue to provide any Available Tenor of such Benchmark  (or such component thereof);  (b) a public statement or publication of information by the regulatory supervisor for  the administrator of such Benchmark (or the published component used in the calculation thereof), the FRB,  





 






DB1/ 121979154.7      8    the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for  such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for  such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority  over the administrator for such Benchmark (or such component), which states that the administrator of such  Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such  Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such  statement or publication, there is no successor administrator that will continue to provide any Available  Tenor of such Benchmark (or such component thereof); or  (c) a public statement or publication of information by the regulatory supervisor for  the administrator of such Benchmark (or the published component used in the calculation thereof)  announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer  representative.  For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with  respect to any Benchmark if a public statement or publication of information set forth above has occurred  with respect to each then-current Available Tenor of such Benchmark (or the published component used in  the calculation thereof).  “Benchmark Unavailability Period” means the period (if any) (x) beginning at the time that  a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such  time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and  under any Loan Document in accordance with Section 2.12(d) and (y) ending at the time that a Benchmark  Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan  Document in accordance with Section 2.12(d).  “Beneficial Ownership Certification” means a certification regarding beneficial ownership  as required by the Beneficial Ownership Regulation.  “Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.  “Benefit Plan” means a “defined benefit plan” (as defined in Section 3(35) of ERISA) for  which any Loan Party or any of its Subsidiaries or ERISA Affiliates has been an “employer” (as defined in  Section 3(5) of ERISA) within the past six years.  “BHC Act Affiliate” of a Person means an “affiliate” (as such term is defined under, and  interpreted in accordance with, 12 U.S.C. 1841(k)) of such Person.   “Board of Directors” means, as to any Person, the board of directors (or comparable  managers) of such Person, or any committee thereof duly authorized to act on behalf of the board of  directors (or comparable managers).  “Board of Governors” means the Board of Governors of the Federal Reserve System of the  United States (or any successor).  “Borrower” and “Borrowers” have the respective meanings specified therefor in the  preamble to this Agreement.  “Borrower Materials” has the meaning specified therefor in Section 17.9(c) of this  Agreement.  





 






DB1/ 121979154.7      9    “Borrowing” means a borrowing consisting of Revolving Loans made on the same day by  the Lenders (or Agent on behalf thereof), or by Swing Lender in the case of a Swing Loan, or by Agent in  the case of an Extraordinary Advance.  “Borrowing Base” means, as of any date of determination, the result of:  (a) 90% of the amount of Eligible Domestic Accounts, less the amount, if any, of the  Dilution Reserve (without duplication of any Dilution Reserve deducted in clauses (b), (c), (e), and (f)),  plus  (b) 85% of the amount of Eligible Tier 1 Accounts, less the amount, if any, of the  Dilution Reserve (without duplication of any Dilution Reserve deducted in clauses (a), (c), (e), and (f)),  plus  (c) 80% of the amount of Eligible Tier 2 Accounts, less the amount, if any, of the  Dilution Reserve (without duplication of any Dilution Reserve deducted in clauses (a), (b), (e), and (f)),  plus   (d) 100% of Qualified Cash up to $15,000,000, plus  (e) Solely during the Fiberhome Ineligible Period, 80% of the amount of Eligible  Fiberhome Accounts, less the amount, if any, of the Dilution Reserve (without duplication of any Dilution  Reserve deducted in clauses (a), (b), (c), and (f)) (provided, for clarity, that any inclusion of Eligible  Fiberhome Accounts in this clause (e) is subject to the concentration limits set forth in clause (j) of the  definition of Eligible Accounts), less  (f) the aggregate amount of Reserves, if any, established by Agent from time to time  under Section 2.1(c) of this Agreement.   “Borrowing Base Certificate” means a certificate substantially in the form of Exhibit B-1  to this Agreement, which such form of Borrowing Base Certificate may be amended, restated, supplemented  or otherwise modified from time to time (including without limitation, changes to the format thereof), as  approved by Agent in Agent’s sole discretion.  “Business Day” means any day that is not a Saturday, Sunday, or other day on which banks  are authorized or required to close in the state of California, except that, if a determination of a Business  Day shall relate to a LIBOR Rate Loan, the term “Business Day” also shall exclude any day on which banks  are closed for dealings in Dollar deposits in the London interbank market.  “Capitalized Lease Obligation” means that portion of the obligations under a Capital Lease  that is required to be capitalized in accordance with GAAP.  “Capital Lease” means a lease that is required to be capitalized for financial reporting  purposes in accordance with GAAP.  “Cash Equivalents” means (a) marketable direct obligations issued by, or unconditionally  guaranteed by, the United States or issued by any agency thereof and backed by the full faith and credit of  the United States, in each case maturing within one year from the date of acquisition thereof, (b) marketable  direct obligations issued or fully guaranteed by any state of the United States or any political subdivision  of any such state or any public instrumentality thereof maturing within one year from the date of acquisition  thereof and, at the time of acquisition, having one of the three highest ratings obtainable from either  





 






DB1/ 121979154.7      10    Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”), (c) commercial  paper maturing no more than 270 days from the date of creation thereof and, at the time of acquisition,  having a rating of at least A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit, time  deposits, overnight bank deposits or bankers’ acceptances maturing within one year from the date of  acquisition thereof issued by any bank organized under the laws of the United States or any state thereof or  the District of Columbia or any United States branch of a foreign bank having at the date of acquisition  thereof combined capital and surplus of not less than $250,000,000, (e) Deposit Accounts maintained with  (i) any bank that satisfies the criteria described in clause (d) above, or (ii) any other bank organized under  the laws of the United States or any state thereof so long as the full amount maintained with any such other  bank is insured by the Federal Deposit Insurance Corporation, (f) repurchase obligations of any commercial  bank satisfying the requirements of clause (d) of this definition or of any recognized securities dealer having  combined capital and surplus of not less than $250,000,000, having a term of not more than seven days,  with respect to securities satisfying the criteria in clauses (a) or (d) above, (g) debt securities with maturities  of six months or less from the date of acquisition backed by standby letters of credit issued by any  commercial bank satisfying the criteria described in clause (d) above, (h) Investments in money market  funds substantially all of whose assets are invested in the types of assets described in clauses (a) through  (g) above, and (i) deposits of any Foreign Subsidiary of any Loan Party maintained with regulated financial  institutions (reasonably determined by the applicable Loan Party to be reputable and solvent) located in  countries outside of the United States where the Loan Parties conduct business.  “Cash Management Services” means any cash management or related services including  treasury, depository, return items, overdraft, controlled disbursement,  merchant store value cards, e- payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer  (including the Automated Clearing House processing of electronic funds transfers through the direct Federal  Reserve Fedline system) and other customary cash management arrangements.  “CFC” means a Person that is a controlled foreign corporation as such term is defined in  Section 957 of the IRC.  “Change of Control” means that:  (a) any Person or two or more Persons acting in concert, shall have acquired beneficial  ownership, directly or indirectly, of Equity Interests of Administrative Borrower (or other securities  convertible into such Equity Interests) representing 40% or more of the combined voting power of all Equity  Interests of Administrative Borrower entitled (without regard to the occurrence of any contingency) to vote  for the election of members of the Board of Directors of Administrative Borrower, or  (b) Administrative Borrower fails to own and control, directly or indirectly, 100% of  the Equity Interests of each other Loan Party.  “Change in Law” means the occurrence after the date of this Agreement of: (a) the adoption  or effectiveness of any law, rule, regulation, judicial ruling, judgment or treaty, (b) any change in any law,  rule, regulation, judicial ruling, judgment or treaty or in the administration, interpretation, implementation  or application by any Governmental Authority of any law, rule, regulation, guideline or treaty, or (c) the  making or issuance by any Governmental Authority of any request, rule, guideline or directive, whether or  not having the force of law; provided, that notwithstanding anything in this Agreement to the contrary, (i)  the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or  directives thereunder or issued in connection therewith, and (ii) all requests, rules, guidelines or directives  concerning capital adequacy promulgated by the Bank for International Settlements, the Basel Committee  on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory  





 






DB1/ 121979154.7      11    authorities shall, in each case, be deemed to be a “Change in Law,” regardless of the date enacted, adopted  or issued.  “Closing Date” means June 29, 2021.  “Code” means the California Uniform Commercial Code, as in effect from time to time.  “Collateral” means all assets and interests in assets and proceeds thereof now owned or  hereafter acquired by any Loan Party or its Subsidiaries in or upon which a Lien is granted by such Person  in favor of Agent or the Lenders under any of the Loan Documents.  “Collateral Access Agreement” means a landlord waiver, bailee letter, processor letter, or  acknowledgement agreement of any lessor, warehouseman, processor, consignee, or other Person in  possession of, having a Lien upon, or having rights or interests in any Loan Party’s or its Subsidiaries’  books and records, Equipment, or Inventory, in each case, in form and substance reasonably satisfactory to  Agent.  “Collections” means, all cash, checks, notes, instruments, and other items of payment  (including insurance proceeds, cash proceeds of asset sales, rental proceeds and tax refunds).  “Commitment” means, with respect to each Lender, its Revolver Commitment, and with  respect to all Lenders, their Revolver Commitments, in each case as such Dollar amounts are set forth beside  such Lender’s name under the applicable heading on Schedule C-1 to this Agreement or in the Assignment  and Acceptance pursuant to which such Lender became a Lender under this Agreement, as such amounts  may be reduced or increased from time to time pursuant to assignments made in accordance with the  provisions of Section 13.1 of this Agreement.  “Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.),  as amended from time to time, and any successor statute.  “Compliance Certificate” means a certificate substantially in the form of Exhibit C-1 to  this Agreement delivered by the chief financial officer or treasurer of Administrative Borrower to Agent.  “Confidential Information” has the meaning specified therefor in Section 17.9(a) of this  Agreement.  “Continuing Director” means (a) any member of the Board of Directors who was a director  (or comparable manager) of Administrative Borrower on the Closing Date, and (b) any individual who  becomes a member of the Board of Directors after the Closing Date if such individual was approved,  appointed or nominated for election to the Board of Directors by a majority of the Continuing Directors.  “Control Agreement” means a control agreement, in form and substance reasonably  satisfactory to Agent, executed and delivered by a Loan Party or one of its Subsidiaries, Agent, and the  applicable securities intermediary (with respect to a Securities Account) or bank (with respect to a Deposit  Account).  “Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a  tenor (including overnight) or an interest payment period having approximately the same length  (disregarding business day adjustment) as such Available Tenor.  





 






DB1/ 121979154.7      12    “Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which  will include a lookback) being established by the Agent in accordance with the conventions for this rate  selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for  syndicated business loans; provided, that if the Agent decides that any such convention is not  administratively feasible for the Agent, then the Agent may establish another convention in its reasonable  discretion.  “Default” means an event, condition, or default that, with the giving of notice, the passage  of time, or both, would be an Event of Default.  “Default Right” has the meaning assigned to that term in, and shall be interpreted in  accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.   “Defaulting Lender” means any Lender that (a) has failed to (i) fund all or any portion of  its Loans within two Business Days of the date such Loans were required to be funded hereunder unless  such Lender notifies Agent and Administrative Borrower in writing that such failure is the result of such  Lender’s determination that one or more conditions precedent to funding (each of which conditions  precedent, together with any applicable Default or Event of Default, shall be specifically identified in such  writing) has not been satisfied, or (ii) pay to Agent, Issuing Bank, or any other Lender any other amount  required to be paid by it hereunder (including in respect of its participation in Letters of Credit) within two  Business Days of the date when due, (b) has notified any Borrower, Agent or Issuing Bank in writing that  it does not intend to comply with its funding obligations hereunder, or has made a public statement to that  effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder  and states that such position is based on such Lender’s determination that a condition precedent to funding  (which condition precedent, together with any applicable Default or Event of Default, shall be specifically  identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business  Days after written request by Agent or Administrative Borrower, to confirm in writing to Agent and  Administrative Borrower that it will comply with its prospective funding obligations hereunder (provided,  that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such  written confirmation by Agent and Administrative Borrower), or (d) has, or has a direct or indirect parent  company that has, (i) become the subject of any Insolvency Proceeding, (ii) had appointed for it a receiver,  custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged  with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance  Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii) become the  subject of a Bail-in Action; provided, that a Lender shall not be a Defaulting Lender solely by virtue of the  ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company  thereof by a Governmental Authority so long as such ownership interest does not result in or provide such  Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of  judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to  reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any  determination by Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through  (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a  Defaulting Lender upon delivery of written notice of such determination to Administrative Borrower,  Issuing Bank, and each Lender.  “Defaulting Lender Rate” means (a) for the first three days from and after the date the  relevant payment is due, the Base Rate, and (b) thereafter, the interest rate then applicable to Revolving  Loans that are Base Rate Loans (inclusive of the Revolving Loan Base Rate Margin).  “Deposit Account” means any deposit account (as that term is defined in the Code).  





 






DB1/ 121979154.7      13    “Designated Account” means the Deposit Account of Administrative Borrower identified  on Schedule D-1 of the Disclosure Letter (or such other Deposit Account of Administrative Borrower  located at Designated Account Bank that has been designated as such, in writing, by Borrowers to Agent).  “Designated Account Bank” has the meaning specified therefor in Schedule D-1 of the  Disclosure Letter (or such other bank that is located within the United States that has been designated as  such, in writing, by Borrowers to Agent).  “Dilution” means, as of any date of determination, a percentage, based upon the experience  of a period determined by Agent in its Permitted Discretion, but not less than the immediately prior 12  months, that is the result of dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising  allowances, credits, or other dilutive items with respect to Borrowers’ Accounts during such period, by (b)  Borrowers’ billings with respect to Accounts during such period.   “Dilution Reserve” means, as of any date of determination, an amount sufficient to reduce  the advance rate against Eligible Accounts by the extent to which Dilution is in excess of 5%.  “Disclosure Letter” means the disclosure letter delivered to Agent by the Administrative  Borrower on the Closing Date.  “Disqualified Equity Interests” means any Equity Interests that, by their terms (or by the  terms of any security or other Equity Interests into which they are convertible or for which they are  exchangeable), or upon the happening of any event or condition (a) matures or are mandatorily redeemable  (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except  as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence  of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all  other Obligations that are accrued and payable and the termination of the Commitments), (b) are redeemable  at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part, (c)  provide for the scheduled payments of dividends in cash, or (d) are or become convertible into or  exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity  Interests, in each case, prior to the date that is 180 days after the Maturity Date.  “Disqualified Institution” means, on any date, (a) any Person designated by Administrative  Borrower as a “Disqualified Institution” by written notice delivered to Agent prior to the date hereof, and  (b) those Persons who are direct competitors of any of the Loan Parties or its Subsidiaries identified in  writing by Administrative Borrower to Agent from time to time, subject to the written consent of Agent;  provided, that “Disqualified Institutions” shall exclude any Person that Administrative Borrower has  designated as no longer being a “Disqualified Institution” by written notice delivered to Agent from time  to time; provided further, that in connection with any assignment or participation, the Assignee or  Participant with respect to such proposed assignment or participation that is an investment bank, a  commercial bank, a finance company, a fund, or other Person which merely has an economic interest in  any such direct competitor, and is not itself such a direct competitor of Borrower or its Subsidiaries, shall  not be deemed to be a Disqualified Institution for the purposes of this definition.  “Disregarded Person” means a direct or indirect Subsidiary if it holds, directly or indirectly,  no material assets other than Equity Interests in Foreign Subsidiaries that are CFCs.   “Dollars” or “$” means United States dollars.  





 






DB1/ 121979154.7      14    “Domestic Country” means the United States, Canada, the Republic of Ireland, or the  United Kingdom.  “Domestic Subsidiary” means any Subsidiary of any Loan Party that is not a Foreign  Subsidiary.  “Drawing Document” means any Letter of Credit or other document presented for purposes  of drawing under any Letter of Credit, including by electronic transmission such as SWIFT, electronic mail,  facsimile or computer generated communication.  “Early Opt-in Election” means, if the then-current Benchmark is the LIBOR Rate, the  occurrence of:  (a) a notification by the Agent to (or the request by the Borrower to the Agent to  notify) each of the other parties hereto that at least five currently outstanding Dollar-denominated  syndicated credit facilities at such time contain (as a result of amendment or as originally executed) a SOFR- based rate (including SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark rate (and  such syndicated credit facilities are identified in such notice and are publicly available for review), and  (b) the joint election by the Agent and the Borrower to trigger a fallback from the  LIBOR Rate and the provision by the Agent of written notice of such election to the Lenders.  “Earn-Outs” means unsecured liabilities of a Loan Party arising under an agreement to  make any deferred payment as a part of the Purchase Price for a Permitted Acquisition, including  performance bonuses or consulting payments in any related services, employment or similar agreement, in  an amount that is subject to or contingent upon the revenues, income, cash flow or profits (or the like) of  the target of such Permitted Acquisition.  “EBITDA” means, with respect to any fiscal period and with respect to any Person  determined, in each case, on a consolidated basis in accordance with GAAP:  (a) the consolidated net income (or loss),  minus  (b) without duplication, the sum of the following amounts for such period to the extent  included in determining consolidated net income (or loss) for such period:  (i) extraordinary gains, and  (ii) interest income,   plus  (c) without duplication, the sum of the following amounts for such period to the extent  included in determining consolidated net income (or loss) for such period:  (i) non-cash extraordinary losses,  (ii) Interest Expense,  





 






DB1/ 121979154.7      15    (iii) income taxes, and  (iv) depreciation and amortization.   “EEA Financial Institution” means (a) any credit institution or investment firm established  in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any  entity established in an EEA Member Country which is a parent of an institution described in clause (a) of  this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary  of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision  with its parent.  “EEA Member Country” means any of the member states of the European Union, Iceland,  Liechtenstein, and Norway.  “EEA Resolution Authority” means any public administrative authority or any person  entrusted with public administrative authority of any EEA Member Country (including any delegee) having  responsibility for the resolution of any EEA Financial Institution.  “Eligible Accounts” means those Accounts created by a Borrower in the ordinary course  of its business, that arise out of such Borrower’s sale of goods or rendition of services, that comply with  each of the representations and warranties respecting Eligible Accounts made in the Loan Documents, and  that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below;  provided, that such criteria may be revised from time to time by Agent in Agent’s Permitted Discretion to  address the results of any information with respect to the Borrowers’ business or assets of which Agent  becomes aware after the Closing Date, including any field examination performed by (or on behalf of)  Agent from time to time after the Closing Date.  In determining the amount to be included, Eligible  Accounts shall be calculated net of customer deposits, unapplied cash, taxes, finance charges, service  charges, discounts, credits, allowances, and rebates.  Eligible Accounts shall not include the following:  (a) Accounts that the Account Debtor has failed to pay within 90 days of original  invoice date or 60 days of due date, provided, that up to $2,500,000 of Accounts in which the Account  Debtor has failed to pay between 91 to 120 days of original invoice date may be included,   (b) Accounts owed by an Account Debtor (or its Affiliates) where 25% or more of all  Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible under clause (a) above,  (c) Accounts with selling terms of more than 90 days, provided, that up to $7,500,000  of Accounts owing from, Nokia Corporation, ZTE, and any of their respective Affiliates with selling terms  between 91 to 120 days may be included, subject to clause (a) with respect to the Accounts that may be  included as Eligible Accounts if not paid during the time frames set forth in such clause (a) regardless of  the selling terms,  (d) Accounts with respect to which the Account Debtor is an Affiliate of any Borrower  or an employee or agent of any Borrower or any Affiliate of any Borrower,  (e) Accounts (i) arising in a transaction wherein goods are placed on consignment or  are sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill and hold, or any other terms  by reason of which the payment by the Account Debtor may be conditional, or (ii) with respect to which  the payment terms are “C.O.D.”, cash on delivery or other similar terms,  (f) Accounts that are not invoiced in the United States and payable in Dollars,  





 






DB1/ 121979154.7      16    (g) Accounts with respect to which the Account Debtor is the government of any  foreign country or sovereign state, or of any state, province, municipality, or other political subdivision  thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless (A) the  Account is supported by an irrevocable letter of credit reasonably satisfactory to Agent (as to form,  substance, and issuer or domestic confirming bank) that has been delivered to Agent and, if requested by  Agent, is directly drawable by Agent, or (B) the Account is covered by credit insurance in form, substance,  and amount, and by an insurer, reasonably satisfactory to Agent,  (h) Accounts with respect to which the Account Debtor is either (i) the United States  or any department, agency, or instrumentality of the United States (exclusive, however, of Accounts with  respect to which Borrowers have complied, to the reasonable satisfaction of Agent, with the Assignment of  Claims Act, 31 USC §3727), or (ii) any state of the United States or any other Governmental Authority,  (i) Accounts with respect to which the Account Debtor is a creditor of a Borrower,  has or has asserted a right of recoupment or setoff, or has disputed its obligation to pay all or any portion  of the Account, to the extent of such claim, right of recoupment or setoff, or dispute,  (j) Except for such higher percentages otherwise specified on Schedule E-1, Accounts  with respect to an Account Debtor whose Eligible Accounts owing to Borrowers exceed 10% (such  percentage, as applied to a particular Account Debtor, being subject to reduction by Agent in its Permitted  Discretion if the creditworthiness of such Account Debtor deteriorates) of all Eligible Accounts, to the  extent of the obligations owing by such Account Debtor in excess of such percentage; provided, that in each  case (including, without limitation, the percentages set forth on Schedule E-1), (i) the amount of Eligible  Accounts that are excluded because they exceed the foregoing percentage (or the percentages set forth on  Schedule E-1) shall be determined by Agent based on all of the otherwise Eligible Accounts prior to giving  effect to any eliminations based upon the foregoing concentration limit (or the percentages set forth on  Schedule E-1), and (ii) Agent may, in its sole Permitted Discretion, increase or decrease such percentages  or add additional Account Debtors (or amend Schedule E-1 in a similar fashion) from time to time and  without any further action or consent of any other party to this Agreement or any other Loan Document  (and for the avoidance of doubt, the Administrative Borrower may request such modifications from the  Agent),  (k) Accounts with respect to which the Account Debtor is subject to an Insolvency  Proceeding, is not Solvent, has gone out of business, or as to which any Borrower has received notice of an  imminent Insolvency Proceeding or a material impairment of the financial condition of such Account  Debtor,  (l) Accounts, the collection of which, Agent, in its Permitted Discretion, believes to  be doubtful, including by reason of the Account Debtor’s financial condition,  (m) Accounts that are not subject to a valid and perfected first priority Agent’s Lien,  (n) Accounts with respect to which (i) the goods giving rise to such Account have not  been shipped and billed to the Account Debtor, or (ii) the services giving rise to such Account have not  been performed and billed to the Account Debtor,  (o) Accounts with respect to which the Account Debtor is a Sanctioned Person or  Sanctioned Entity,  





 






DB1/ 121979154.7      17    (p) Accounts (i) that represent the right to receive progress payments or other advance  billings that are due prior to the completion of performance by the applicable Borrower of the subject  contract for goods or services, or (ii) that represent credit card sales,  (q) Accounts owned by a target acquired in connection with a Permitted Acquisition  or Permitted Investment, or Accounts owned by a Person that is joined to this Agreement as a Borrower  pursuant to the provisions of this Agreement, until the completion of a field examination with respect to  such Accounts, in each case, satisfactory to Agent in its Permitted Discretion, or  (r) Accounts owing from Account Debtors that are specified as “Ineligible Account  Debtors” on Schedule E-1, as Agent may, in its sole Permitted Discretion, add or remove Account Debtors  from the “Ineligible Account Debtors” list on Schedule E-1 from time to time and without any further action  or consent of any other party to this Agreement or any other Loan Document.  “Eligible Domestic Accounts” means Eligible Accounts with respect to which the Account  Debtor (a) maintains its chief executive office in a Domestic Country, and (b) is organized under the laws  of a Domestic Country, or any state or province thereof; provided that Agent may modify such list from  time to time in its Permitted Discretion without any further action or consent of any other party to this  Agreement or any other Loan Document.  “Eligible Fiberhome Accounts” means Fiberhome Accounts in an aggregate amount not to  exceed $5,000,000; provided, that (a) the sales associated with such Accounts (i) are not prohibited due to  the applicable account debtor’s or its Affiliates’ status as a Sanctioned Person, and (ii) do not violate any  applicable laws promulgated under any Sanctions or other applicable laws, regulations, and licensing  requirements, (b) the foregoing clause (a) shall be certified as true and correct on the most recently delivered  Borrowing Base Certificate including such Accounts, and (c) the Borrowers shall provide the Agent with  any additional information or documentation related to such Accounts as Agent may reasonably request.  “Eligible Tier 1 Accounts” means Eligible Accounts with respect to which the Account  Debtor (a) maintains its chief executive office in a Tier 1 Country, and (b) is organized under the laws of  the a Tier 1 Country, or any state or province thereof, provided, for clarity, that Eligible Accounts owing  from WE Components Pte Ltd. and subsidiaries (to the extent not otherwise included in the Borrowing  Base), solely to the extent that such Eligible Accounts are supported by an irrevocable letter of credit  reasonably satisfactory to Agent (as to form, substance, and issuer or domestic confirming bank) that has  been delivered to Agent and, if requested by Agent, is directly drawable by Agent; provided, that the  aggregate amount of Eligible Accounts that may be included as Eligible Tier 1 Accounts pursuant to the  foregoing proviso shall not exceed the lesser of (x) $500,000 (or such greater amount as the Agent may  agree in its sole discretion) and (y) the undrawn amount of such letter of credit, in each case, shall be treated  as Eligible Tier 1 Accounts, subject to Agent’s right to modify such list for time to time in its Permitted  Discretion without any further action or consent of any other party to this Agreement or any other Loan  Document.  “Eligible Tier 2 Accounts” means Eligible Accounts with respect to which the Account  Debtor (a) maintains its chief executive office in a Tier 2 Country, and (b) is organized under the laws of a  Tier 2 Country, or any state or province thereof; provided, that Eligible Accounts owing from (i) Huawei  (if the Huawei Ineligible Period is no longer continuing), (ii) Fiberhome (if the Fiberhome Ineligible Period  is no longer continuing), (iii) Flex Ltd. (formerly known as Flextronics International Ltd.) and subsidiaries  including, but not limited to, Flextronics Manufacturing SRL, (iv) Celestica, Inc. and subsidiaries including,  but not limited to, Celestica (Thailand) Ltd, (v) ZTE, and (vi) II-VI Incorporated’s foreign subsidiaries (in  a maximum aggregate amount not to exceed $500,000 pursuant to this clause (vi)), in each case, shall be  





 






DB1/ 121979154.7      18    treated as Eligible Tier 2 Accounts, subject to Agent’s right to modify such list for time to time in its  Permitted Discretion without any further action or consent of any other party to this Agreement or any other  Loan Document.  “Eligible Transferee” means (a) any Lender (other than a Defaulting Lender), any Affiliate  of any Lender and any Related Fund of any Lender; (b) (i) a commercial bank organized under the laws of  the United States or any state thereof, and having total assets in excess of $1,000,000,000; (ii) a savings  and loan association or savings bank organized under the laws of the United States or any state thereof, and  having total assets in excess of $1,000,000,000; (iii) a commercial bank organized under the laws of any  other country or a political subdivision thereof; provided, that (A) (x) such bank is acting through a branch  or agency located in the United States, or (y) such bank is organized under the laws of a country that is a  member of the Organization for Economic Cooperation and Development or a political subdivision of such  country, and (B) such bank has total assets in excess of $1,000,000,000; (c) any other entity (other than a  natural person) that is an “accredited investor” (as defined in Regulation D under the Securities Act) that  extends credit or buys loans as one of its businesses including insurance companies, investment or mutual  funds and lease financing companies, and having total assets in excess of $1,000,000,000; and (d) during  the continuation of an Event of Default, any other Person approved by Agent.  “Environmental Action” means any written complaint, summons, citation, notice,  directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter, or  other written communication from any Governmental Authority, or any third party involving violations of  Environmental Laws or releases of Hazardous Materials (a) from any assets, properties, or businesses of  any Borrower, any Subsidiary of any Borrower, or any of their predecessors in interest, (b) from adjoining  properties or businesses, or (c) from or onto any facilities which received Hazardous Materials generated  by any Borrower, any Subsidiary of any Borrower, or any of their predecessors in interest.  “Environmental Law” means any applicable federal, state, provincial, foreign or local  statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable  written policy, or rule of common law now or hereafter in effect and in each case as amended, or any judicial  or administrative interpretation thereof, including any judicial or administrative order, consent decree or  judgment, in each case, to the extent binding on any Loan Party or its Subsidiaries, relating to the  environment, the effect of the environment on employee health, or Hazardous Materials, in each case as  amended from time to time.  “Environmental Liabilities” means all liabilities, monetary obligations, losses, damages,  costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts, or  consultants, and costs of investigation and feasibility studies), fines, penalties, sanctions, and interest  incurred as a result of any claim or demand, or Remedial Action required, by any Governmental Authority  or any third party, and which relate to any Environmental Action.  “Environmental Lien” means any Lien in favor of any Governmental Authority for  Environmental Liabilities.  “Equipment” means equipment (as that term is defined in the Code).  “Equity Interests” means, with respect to a Person, all of the shares, options, warrants,  interests, participations, or other equivalents (regardless of how designated) of or in such Person, whether  voting or nonvoting, including capital stock (or other ownership or profit interests or units), preferred stock,  or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations  promulgated by the SEC under the Exchange Act); provided that restricted stock units, stock appreciation  





 






DB1/ 121979154.7      19    rights and other phantom equity rights (but excluding any capital stock or options or other rights to purchase  capital stock) that are granted to employees of the Borrowers pursuant to the Borrower’s long-term  incentive plans shall not be considered “Equity Interests”.  “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and  any successor statute thereto.  “ERISA Affiliate” means (a) any Person subject to ERISA whose employees are treated as  employed by the same employer as the employees of any Loan Party or its Subsidiaries under IRC Section  414(b), (b) any trade or business subject to ERISA whose employees are treated as employed by the same  employer as the employees of any Loan Party or its Subsidiaries under IRC Section 414(c), (c) solely for  purposes of Section 302 of ERISA and Section 412 of the IRC, any organization subject to ERISA that is  a member of an affiliated service group of which any Loan Party or any of its Subsidiaries is a member  under IRC Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section 412 of the IRC,  any Person subject to ERISA that is a party to an arrangement with any Loan Party or any of its Subsidiaries  and whose employees are aggregated with the employees of such Loan Party or its Subsidiaries under IRC  Section 414(o).  “EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published  by the Loan Market Association (or any successor person), as in effect from time to time.  “Event of Default” has the meaning specified therefor in Section 8 of this Agreement.  “Excess” has the meaning specified therefor in Section 2.14 of this Agreement.   “Excess Availability” means, as of any date of determination, the amount equal to (a) the  lesser of (i) the Maximum Revolver Amount and (ii) the most recently determined Borrowing Base  minus  (b) Revolver Usage, in each case as determined by Agent in its Permitted Discretion.  “Exchange Act” means the Securities Exchange Act of 1934, as in effect from time to time.  “Excluded Subsidiary” means any (a) Immaterial Subsidiaries, (b) Disregarded Persons,  (c) Foreign Subsidiary of a Loan Party if such Foreign Subsidiary is a CFC, or (d) Domestic Subsidiary of  a Loan Party if such Domestic Subsidiary (i)  is a direct or indirect Subsidiary of a Foreign Subsidiary that  is a CFC and (ii) does not own any assets in the United States and has no operations in the United States.  “Excluded Swap Obligation” means, with respect to any Loan Party, any Swap Obligation  if, and to the extent that, all or a portion of the guaranty of such Loan Party of (including by virtue of the  joint and several liability provisions of Section 2.15), or the grant by such Loan Party of a security interest  to secure, such Swap Obligation (or any guaranty thereof) is or becomes illegal under the Commodity  Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the  application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to  constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations  thereunder at the time the guaranty of such Loan Party or the grant of such security interest becomes  effective with respect to such Swap Obligation.  If a Swap Obligation arises under a master agreement  governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that  is attributable to swaps for which such guaranty or security interest is or becomes illegal.  “Excluded Taxes” means (i) any tax imposed on the net income or net profits of any Lender  or any Participant (including any branch profits taxes) and any franchise tax imposed in lieu of income tax,  





 






DB1/ 121979154.7      20    in each case imposed by the jurisdiction (or by any political subdivision or taxing authority thereof) in  which such Lender or such Participant is organized or the jurisdiction (or by any political subdivision or  taxing authority thereof) in which such Lender’s or such Participant’s principal office is located in or as a  result of a present or former connection between such Lender or such Participant and the jurisdiction or  taxing authority imposing the tax (other than any such connection arising solely from such Lender or such  Participant having executed, delivered or performed its obligations or received payment under, or enforced  its rights or remedies under this Agreement or any other Loan Document), (ii) taxes attributable to a  Lender’s or a Participant’s failure to comply with the requirements of Section 16.2 of this Agreement, (iii)  any United States federal withholding taxes that would be imposed on amounts payable to a Foreign Lender  based upon the applicable withholding rate in effect at the time such Foreign Lender becomes a party to  this Agreement (or designates a new lending office, other than a designation made at the request of a Loan  Party), except that Excluded Taxes shall not include (A) any amount that such Foreign Lender (or its  assignor, if any) was previously entitled to receive pursuant to Section 16.1 of this Agreement, if any, with  respect to such withholding tax at the time such Foreign Lender becomes a party to this Agreement (or  designates a new lending office), and (B) additional United States federal withholding taxes that may be  imposed after the time such Foreign Lender becomes a party to this Agreement (or designates a new lending  office), as a result of a change in law, rule, regulation, treaty, order or other decision or other Change in  Law with respect to any of the foregoing by any Governmental Authority, and (iv) any United States federal  withholding taxes imposed under FATCA.  “Existing Credit Agreement” means the Credit Agreement, dated as of September 8, 2017,  among the Borrowers, the Lenders, and the Agent (as amended from time to time).  “Extraordinary Advances” has the meaning specified therefor in Section 2.3(d)(iii) of this  Agreement.  “FATCA” means Sections 1471 through 1474 of the IRC, as of the date of this Agreement  (or any amended or successor version that is substantively comparable and not materially more onerous to  comply with), and (a) any current or future regulations or official interpretations thereof, (b) any agreements  entered into pursuant to Section 1471(b)(1) of the IRC, and (c) any intergovernmental agreement entered  into by the United States (or any fiscal or regulatory legislation, rules, or practices adopted pursuant to any  such intergovernmental agreement entered into in connection therewith).  “FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and  regulations thereunder.  “Fee Letter” means that certain fee letter, dated as of even date with this Agreement, among  Borrowers and Agent, in form and substance reasonably satisfactory to Agent.  “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal to,  for each day during such period, the weighted average of the rates on overnight Federal funds transactions  with members of the Federal Reserve System, 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 which is a Business  Day, the average of the quotations for such day on such transactions received by Agent from three Federal  funds brokers of recognized standing selected by it (and, if any such rate is below zero, then the rate  determined pursuant to this definition shall be deemed to be zero).  “Fiberhome” means, individually and collectively, Fiberhome Telecommunication  Technologies Co., Ltd and its subsidiaries and Affiliates, including, but not limited to, Wuhan Fiberhome  International Technologies Co., Ltd.  





 






DB1/ 121979154.7      21    “Fiberhome Accounts” means Eligible Accounts (as determined without reference to  clause (o) of such definition) owing to the Borrowers from Fiberhome.  “Fiberhome Ineligible Period” means the period commencing on the Closing Date and  continuing until the date when Fiberhome is no longer a Sanctioned Person or Sanctioned Entity and a new  Borrowing Base Certificate has been delivered to the Agent reflecting such change in the status of  Fiberhome, in form and substance satisfactory to Agent.  “Flood Laws” means the National Flood Insurance Act of 1968, Flood Disaster Protection  Act of 1973, and related laws, rules and regulations, including any amendments or successor provisions.  “Floor” means the benchmark rate floor, if any, provided in this Agreement initially (as of  the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise)  with respect to the LIBOR Rate.   “Flow of Funds Agreement” means a flow of funds agreement, dated as of even date with  this Agreement, in form and substance reasonably satisfactory to Agent, executed and delivered by  Borrowers and Agent.  “Foreign Lender” means any Lender or Participant that is not a United States person within  the meaning of IRC section 7701(a)(30).  “Foreign Subsidiary” means any direct or indirect Subsidiary of any Loan Party that is  organized under the laws of any jurisdiction other than the United States, any state thereof or the District  of Columbia.  “FRB” means the Board of Governors of the Federal Reserve System of the United States.  “Funding Date” means the date on which a Borrowing occurs.  “Funding Losses” has the meaning specified therefor in Section 2.12(b)(ii) of this  Agreement.  “GAAP” means generally accepted accounting principles as in effect from time to time in  the United States, consistently applied.  “Governing Documents” means, with respect to any Person, the certificate or articles of  incorporation, by-laws, or other organizational documents of such Person.  “Governmental Authority” means the government of any nation or any political  subdivision thereof, whether at the national, state, territorial, provincial, county, municipal or any other  level, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity  exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of, or  pertaining to, government (including any supra-national bodies such as the European Union or the European  Central Bank).  “Guarantor” means (a) each Person that guaranties all or a portion of the Obligations,  including any Person that is a “Guarantor” under the Guaranty and Security Agreement, and (b) each other  Person that becomes a guarantor after the Closing Date pursuant to Section 5.11 of this Agreement.  





 






DB1/ 121979154.7      22    “Guaranty and Security Agreement” means the Amended and Restated Guaranty and  Security agreement, dated as of even date with this Agreement, in form and substance reasonably  satisfactory to Agent, executed and delivered by each of the Loan Parties to Agent.  “Hazardous Materials” means (a) substances that are defined or listed in, or otherwise  classified pursuant to, any applicable laws or regulations as “hazardous substances,” “hazardous materials,”  “hazardous wastes,” “toxic substances,” or any other formulation intended to define, list, or classify  substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity,  reproductive toxicity, or “EP toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas,  natural gas liquids, synthetic gas, drilling fluids, produced waters, and other wastes associated with the  exploration, development, or production of crude oil, natural gas, or geothermal resources, (c) any  flammable substances or explosives or any radioactive materials, and (d) asbestos in any form or electrical  equipment that contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess  of 50 parts per million.  “Hedge Agreement” means a “swap agreement” as that term is defined in Section  101(53B)(A) of the Bankruptcy Code.  “Hedge Obligations” means any and all obligations or liabilities, whether absolute or  contingent, due or to become due, now existing or hereafter arising, of each Loan Party and its Subsidiaries  arising under, owing pursuant to, or existing in respect of Hedge Agreements entered into with one or more  of the Hedge Providers.  “Hedge Provider” means Wells Fargo or any of its Affiliates.  “Huawei” means, individually and collectively, Huawei Investment & Holding Co., Ltd  and its subsidiaries and Affiliates, including, but not limited to, Hisilicon Optoelectronics Co. Ltd, Huawei  Technologies Co., Ltd, and Huawei Tech. Investment Co., Ltd.  “Huawei Ineligible Period” means the period commencing June 14, 2019 and continuing  until the date when Huawei is no longer a Sanctioned Person or Sanctioned Entity and a new Borrowing  Base Certificate has been delivered to the Agent reflecting such change in the status of Huawei, in form  and substance satisfactory to Agent.  “Immaterial Subsidiary” means each Subsidiary of a Borrower that is not a Material  Subsidiary.  “Increase” has the meaning specified therefor in Section 2.14.  “Increase Date” has the meaning specified therefor in Section 2.14.  “Increase Joinder” has the meaning specified therefor in Section 2.14.   “Increased Reporting Event” means if at any time Excess Availability is less than 12.5%  of the Maximum Revolver Amount for 3 consecutive Business Days.  “Increased Reporting Period” means the period commencing after the continuance of an  Increased Reporting Event and continuing until the date when no Increased Reporting Event has occurred  for 30 consecutive days.   





 






DB1/ 121979154.7      23    “Indebtedness” as to any Person means (a) all obligations of such Person for borrowed  money, (b) all obligations of such Person evidenced by bonds, debentures, notes, or other similar  instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances,  or other financial products, (c) all obligations of such Person as a lessee under Capital Leases, (d) all  obligations or liabilities of others secured by a Lien on any asset of such Person, irrespective of whether  such obligation or liability is assumed, (e) all obligations of such Person to pay the deferred purchase price  of assets (other than trade payables incurred in the ordinary course of business and repayable in accordance  with customary trade practices and, for the avoidance of doubt, other than royalty payments payable in the  ordinary course of business in respect of non-exclusive licenses) and any earn-out or similar obligations,  (f) all monetary obligations of such Person owing under Hedge Agreements (which amount shall be  calculated based on the amount that would be payable by such Person if the Hedge Agreement were  terminated on the date of determination), (g) any Disqualified Equity Interests of such Person, and (h) any  obligation of such Person guaranteeing or intended to guarantee (whether directly or indirectly guaranteed,  endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that constitutes  Indebtedness under any of clauses (a) through (g) above.  For purposes of this definition, (i) the amount of  any Indebtedness represented by a guaranty or other similar instrument shall be the lesser of the principal  amount of the obligations guaranteed and still outstanding and the maximum amount for which the  guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Indebtedness,  and (ii) the amount of any Indebtedness which is limited or is non-recourse to a Person or for which recourse  is limited to an identified asset shall be valued at the lesser of (A) if applicable, the limited amount of such  obligations, and (B) if applicable, the fair market value of such assets securing such obligation.  “Indemnified Liabilities” has the meaning specified therefor in Section 10.3 of this  Agreement.  “Indemnified Person” has the meaning specified therefor in Section 10.3 of this  Agreement.  “Indemnified Taxes” means, (a) Taxes, other than Excluded Taxes, imposed on or with  respect to any payment made by, or on account of any obligation of, any Loan Party under any Loan  Document, and (b) to the extent not otherwise described in the foregoing clause (a), Other Taxes.  “Insolvency Proceeding” means any proceeding commenced by or against any Person  under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency  law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions  generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.  “Intercompany Subordination Agreement” means an intercompany subordination  agreement, executed and delivered by each Loan Party and each of its Subsidiaries, and Agent, the form  and substance of which is reasonably satisfactory to Agent.  “Interest Expense” means, for any period, the aggregate of the interest expense of  Borrowers for such period, determined on a consolidated basis in accordance with GAAP.  “Interest Period” means, with respect to each LIBOR Rate Loan, a period commencing on  the date of the making of such LIBOR Rate Loan (or the continuation of a LIBOR Rate Loan or the  conversion of a Base Rate Loan to a LIBOR Rate Loan) and ending 1, 2, 3, or 6 months thereafter; provided,  that (a) interest shall accrue at the applicable rate based upon the LIBOR Rate from and including the first  day of each Interest Period to, but excluding, the day on which any Interest Period expires, (b) any Interest  Period that would end on a day that is not a Business Day shall be extended to the next succeeding Business  





 






DB1/ 121979154.7      24    Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end  on the next preceding Business Day, (c) with respect to an Interest Period that begins on the last Business  Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar  month at the end of such Interest Period), the Interest Period shall end on the last Business Day of the  calendar month that is 1, 2, 3, or 6 months after the date on which the Interest Period began, as applicable,  and (d) Borrowers may not elect an Interest Period which will end after the Maturity Date.  “Inventory” means inventory (as that term is defined in the Code).  “Investment” means, with respect to any Person, any investment by such Person in any  other Person (including Affiliates) in the form of loans, guarantees, advances, capital contributions  (excluding (a) commission, travel, and similar advances to officers and employees of such Person made in  the ordinary course of business, and (b) bona fide accounts receivable arising in the ordinary course of  business), or acquisitions of Indebtedness, Equity Interests, or all or substantially all of the assets of such  other Person (or of any division or business line of such other Person), and any other items that are or would  be classified as investments on a balance sheet prepared in accordance with GAAP.  The amount of any  Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any  adjustment for increases or decreases in value, or write-ups, write-downs, or write-offs with respect to such  Investment.  “IRC” means the Internal Revenue Code of 1986, as in effect from time to time.  “ISDA Definitions” means the 2006 ISDA Definitions published by the International  Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time  to time, or any successor definitional booklet for interest rate derivatives published from time to time by  the International Swaps and Derivatives Association, Inc. or such successor thereto.  “ISP” means, with respect to any Letter of Credit, the International Standby Practices 1998  (International Chamber of Commerce Publication No. 590) and any version or revision thereof accepted by  the Issuing Bank for use.  “Issuer Document” means, with respect to any Letter of Credit, a letter of credit application,  a letter of credit agreement, or any other document, agreement or instrument entered into (or to be entered  into) by a Borrower in favor of Issuing Bank and relating to such Letter of Credit.  “Issuing Bank” means Wells Fargo or any other Lender that, at the request of Borrowers  and with the consent of Agent, agrees, in such Lender’s sole discretion, to become an Issuing Bank for the  purpose of issuing Letters of Credit pursuant to Section 2.11 of this Agreement, and Issuing Bank shall be  a Lender.  “Joinder” means a joinder agreement substantially in the form of Exhibit J-1 to this  Agreement.  “Landlord Reserve” means, as to each location at which a Borrower has books and records  located and as to which a Collateral Access Agreement has not been received by Agent, a reserve in an  amount equal to 3 months’ rent, storage charges, fees or other amounts under the lease or other applicable  agreement relative to such location or, if greater and Agent so elects, the number of months’ rent, storage  charges, fess or other amounts for which the landlord, bailee, processor, warehouseman or other property  owner will have, under applicable law, a Lien in the assets of such Borrower at such location to secure the  payment of such amounts under the lease or other applicable agreement relative to such location.  





 






DB1/ 121979154.7      25    “Lender” has the meaning set forth in the preamble to this Agreement, shall include Issuing  Bank and the Swing Lender, and shall also include any other Person made a party to this Agreement  pursuant to the provisions of Section 13.1 of this Agreement and “Lenders” means each of the Lenders or  any one or more of them.  “Lender Group” means each of the Lenders (including Issuing Bank and the Swing Lender)  and Agent, or any one or more of them.  “Lender Group Expenses” means all (a) costs or expenses (including taxes and insurance  premiums) required to be paid by any Loan Party or its Subsidiaries under any of the Loan Documents that  are paid, advanced, or incurred by the Lender Group, (b) documented out-of-pocket fees or charges paid or  incurred by Agent in connection with the Lender Group’s transactions with each Loan Party and its  Subsidiaries under any of the Loan Documents, including, photocopying, notarization, couriers and  messengers, telecommunication, public record searches, filing fees, recording fees, publication, real estate  surveys, real estate title policies and endorsements, and environmental audits, (c) Agent’s customary fees  and charges imposed or incurred in connection with any background checks or OFAC/PEP searches related  to any Loan Party or its Subsidiaries, (d) Agent’s customary fees and charges (as adjusted from time to  time) with respect to the disbursement of funds (or the receipt of funds) to or for the account of any  Borrower (whether by wire transfer or otherwise), together with any out-of-pocket costs and expenses  incurred in connection therewith, (e) customary charges imposed or incurred by Agent resulting from the  dishonor of checks payable by or to any Loan Party, (f) reasonable, documented out-of-pocket costs and  expenses paid or incurred by the Lender Group to correct any default or enforce any provision of the Loan  Documents, or during the continuance of an Event of Default, in gaining possession of, maintaining,  handling, preserving, storing, shipping, selling, preparing for sale, or advertising to sell the Collateral, or  any portion thereof, irrespective of whether a sale is consummated, (g) field examination, appraisal, and  valuation fees and expenses of Agent related to any field examinations, appraisals, or valuation to the extent  of the fees and charges (and up to the amount of any limitation) provided in Section 2.10 of this Agreement,  (h) Agent’s and Lenders’ reasonable, documented costs and expenses (including reasonable and  documented attorneys’ fees and expenses) relative to third party claims or any other lawsuit or adverse  proceeding paid or incurred, whether in enforcing or defending the Loan Documents or otherwise in  connection with the transactions contemplated by the Loan Documents, Agent’s Liens in and to the  Collateral, or the Lender Group’s relationship with any Loan Party or any of its Subsidiaries, (i) Agent’s  reasonable and documented costs and expenses (including reasonable and documented attorneys’ fees and  due diligence expenses) incurred in advising, structuring, drafting, reviewing, administering (including  travel, meals, and lodging), syndicating (including reasonable costs and expenses relative to CUSIP,  DXSyndicateTM, SyndTrak or other communication costs incurred in connection with a syndication of the  loan facilities), or amending, waiving, or modifying the Loan Documents, and (j) Agent’s and each Lender’s  reasonable and documented costs and expenses (including reasonable and documented attorneys,  accountants, consultants, and other advisors fees and expenses) incurred in terminating, enforcing  (including attorneys, accountants, consultants, and other advisors fees and expenses incurred in connection  with a “workout,” a “restructuring,” or an Insolvency Proceeding concerning any Loan Party or any of its  Subsidiaries or in exercising rights or remedies under the Loan Documents), or defending the Loan  Documents, irrespective of whether a lawsuit or other adverse proceeding is brought, or in taking any  enforcement action or any Remedial Action with respect to the Collateral.  “Lender Group Representatives” has the meaning specified therefor in Section 17.9 of this  Agreement.  “Lender-Related Person” means, with respect to any Lender, such Lender, together with  such Lender’s Affiliates, officers, directors, employees, attorneys, and agents.  





 






DB1/ 121979154.7      26    “Letter of Credit” means a letter of credit (as that term is defined in the Code) issued by  Issuing Bank.  “Letter of Credit Collateralization” means either (a) providing cash collateral (pursuant to  documentation reasonably satisfactory to Agent (including that Agent has a first priority perfected Lien in  such cash collateral), including provisions that specify that the Letter of Credit Fees and all commissions,  fees, charges and expenses provided for in Section 2.11(k) of this Agreement (including any fronting fees)  will continue to accrue while the Letters of Credit are outstanding) to be held by Agent for the benefit of  the Revolving Lenders in an amount equal to 103% of the then existing Letter of Credit Usage, (b)  delivering to Agent documentation executed by all beneficiaries under the Letters of Credit, in form and  substance reasonably satisfactory to Agent and Issuing Bank, terminating all of such beneficiaries’ rights  under the Letters of Credit, or (c) providing Agent with a standby letter of credit, in form and substance  reasonably satisfactory to Agent, from a commercial bank acceptable to Agent (in its sole discretion) in an  amount equal to 103% of the then existing Letter of Credit Usage (it being understood that the Letter of  Credit Fee and all fronting fees set forth in this Agreement will continue to accrue while the Letters of  Credit are outstanding and that any such fees that accrue must be an amount that can be drawn under any  such standby letter of credit).  “Letter of Credit Disbursement” means a payment made by Issuing Bank pursuant to a  Letter of Credit.  “Letter of Credit Exposure” means, as of any date of determination with respect to any  Lender, such Lender’s participation in the Letter of Credit Usage pursuant to Section 2.11(e) on such date.  “Letter of Credit Fee” has the meaning specified therefor in Section 2.6(b) of this  Agreement.  “Letter of Credit Indemnified Costs” has the meaning specified therefor in Section 2.11(f)  of this Agreement.  “Letter of Credit Related Person” has the meaning specified therefor in Section 2.11(f) of  this Agreement.  “Letter of Credit Sublimit” means $5,000,000.  “Letter of Credit Usage” means, as of any date of determination, the sum of (a) the  aggregate undrawn amount of all outstanding Letters of Credit, plus (b) the aggregate amount of outstanding  reimbursement obligations with respect to Letters of Credit which remain unreimbursed or which have not  been paid through a Revolving Loan.    “LIBOR Deadline” has the meaning specified therefor in Section 2.12(b)(i) of this  Agreement.  “LIBOR Notice” means a written notice in the form of Exhibit L-1 to this Agreement.  “LIBOR Option” has the meaning specified therefor in Section 2.12(a) of this Agreement.  “LIBOR Rate” means the rate per annum as published by ICE Benchmark Administration  Limited (or any successor page or other commercially available source as Agent may designate from time  to time) as of 11:00 a.m., London time, two Business Days prior to the commencement of the requested  





 






DB1/ 121979154.7      27    Interest Period, for a term, and in an amount, comparable to the Interest Period and the amount of the  LIBOR Rate Loan requested (whether as an initial LIBOR Rate Loan or as a continuation of a LIBOR Rate  Loan or as a conversion of a Base Rate Loan to a LIBOR Rate Loan) by Borrowers in accordance with this  Agreement (and, if any such published rate is below zero, then the rate shall be deemed to be zero). Each  determination of the LIBOR Rate shall be made by Agent and shall be conclusive in the absence of manifest  error.  “LIBOR Rate Loan” means each portion of a Revolving Loan that bears interest at a rate  determined by reference to the LIBOR Rate or the then-current Benchmark.  “Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge,  deposit arrangement, encumbrance, easement, lien (statutory or other), security interest, or other security  arrangement and any other preference, priority, or preferential arrangement of any kind or nature  whatsoever, including any conditional sale contract or other title retention agreement, the interest of a lessor  under a Capital Lease and any synthetic or other financing lease having substantially the same economic  effect as any of the foregoing.  “Liquidity” means, as of any date of determination, the sum of Excess Availability and  Qualified Cash (without duplication of any Qualified Cash included in the calculation of clause (c) of the  Borrowing Base).  “Loan” means any Revolving Loan, Swing Loan, or Extraordinary Advance made (or to  be made) hereunder.  “Loan Account” has the meaning specified therefor in Section 2.9 of this Agreement.  “Loan Documents” means this Agreement, the Disclosure Letter, the Control Agreements,  any Borrowing Base Certificate, any Compliance Certificate, the Flow of Funds Agreement, the Fee Letter,  the Guaranty and Security Agreement, any Intercompany Subordination Agreement, any Issuer Documents,  the Letters of Credit, any note or notes executed by Borrowers in connection with this Agreement and  payable to any member of the Lender Group, and any other instrument or agreement entered into, now or  in the future, by any Loan Party or any of its Subsidiaries and any member of the Lender Group in  connection with this Agreement (but specifically excluding Bank Product Agreements).  “Loan Party” means any Borrower or any Guarantor.  “Margin Stock” as defined in Regulation U of the Board of Governors as in effect from  time to time.  “Material Adverse Effect” means (a) a material adverse effect in the business, operations,  results of operations, assets, liabilities or financial condition of the Loan Parties and their Subsidiaries,  taken as a whole, (b) a material impairment of the Loan Parties’ and their Subsidiaries’ ability to perform  their obligations under the Loan Documents to which they are parties or of the Lender Group’s ability to  enforce the Obligations or realize upon the Collateral (other than as a result of as a result of an action taken  or not taken that is solely in the control of Agent), or (c) a material impairment of the enforceability or  priority of Agent’s Liens with respect to all or a material portion of the Collateral.  Material Contract” means, with respect to any Person, each contract or agreement to which  such Person or any of its Subsidiaries is a party involving aggregate consideration payable to or by such  Person or such Subsidiary of $10,000,000 or more (other than purchase orders in the ordinary course of the  





 






DB1/ 121979154.7      28    business of such Person or such Subsidiary and other than contracts that by their terms may be terminated  by such Person or Subsidiary in the ordinary course of its business upon less than 60 days’ notice without  penalty or premium) and all other contracts or agreements, the loss of which could reasonably be expected  to result in a Material Adverse Effect; provided that certain contracts in existence on the Closing Date to  which any of NeoPhotonics Japan, NeoPhotonics (China) Co., Ltd. or NeoPhotonics Dongguan Co., Ltd.  is a party that pertain to such Subsidiaries’ labor relations with a portion of their manufacturing work force  and which are not revenue generating shall not be considered Material Contracts.  “Material Subsidiary” means (a) each Borrower, and (b) each Subsidiary of a Loan Party  that (i) owns at least 5.0% of the consolidated total assets of the Loan Parties and their Subsidiaries,  (ii) generates at least 5.0% of the consolidated revenues of the Loan Parties and their Subsidiaries or  (iii)  is the owner of Equity Interests of any Subsidiary of a Loan Party that otherwise constitutes a Material  Subsidiary.  “Maturity Date” means June 30, 2026.  “Maximum Revolver Amount” means $50,000,000, decreased by the amount of reductions  in the Revolver Commitments made in accordance with Section 2.4(c) of this Agreement and increased by  the amount of any Increase made in accordance with Section 2.14 of this Agreement.  “Moody’s” has the meaning specified therefor in the definition of Cash Equivalents.  “Mortgages” means, individually and collectively, one or more mortgages, deeds of trust,  or deeds to secure debt, executed and delivered by a Loan Party or one of its Subsidiaries in favor of Agent,  in form and substance reasonably satisfactory to Agent, that encumber the Real Property Collateral.  “NeoPhotonics Japan” means NeoPhotonics Semiconductor, Godo Kaisa.  “Non-Consenting Lender” has the meaning specified therefor in Section 14.2(a) of this  Agreement.  “Non-Defaulting Lender” means each Lender other than a Defaulting Lender.  “Obligations” means (a) all loans (including the Revolving Loans (inclusive of  Extraordinary Advances and Swing Loans)), debts, principal, interest (including any interest that accrues  after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole  or in part as a claim in any such Insolvency Proceeding), reimbursement or indemnification obligations  with respect to Letters of Credit (irrespective of whether contingent), premiums, liabilities (including all  amounts charged to the Loan Account pursuant to this Agreement), obligations (including indemnification  obligations), fees (including the fees provided for in the Fee Letter), Lender Group Expenses (including  any fees or expenses that accrue after the commencement of an Insolvency Proceeding, regardless of  whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), guaranties,  and all covenants and duties of any other kind and description owing by any Loan Party arising out of,  under, pursuant to, in connection with, or evidenced by this Agreement or any of the other Loan Documents  and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent,  due or to become due, now existing or hereafter arising, and including all interest not paid when due and  all other expenses or other amounts that any Loan Party is required to pay or reimburse by the Loan  Documents or by law or otherwise in connection with the Loan Documents, and (b) all Bank Product  Obligations; provided that, anything to the contrary contained in the foregoing notwithstanding, the  Obligations shall exclude any Excluded Swap Obligation.  Without limiting the generality of the foregoing,  





 






DB1/ 121979154.7      29    the Obligations of Borrowers under the Loan Documents include the obligation to pay (i) the principal of  the Revolving Loans, (ii) interest accrued on the Revolving Loans, (iii) the amount necessary to reimburse  Issuing Bank for amounts paid or payable pursuant to Letters of Credit, (iv) Letter of Credit commissions,  fees (including fronting fees) and charges, (v) Lender Group Expenses, (vi) fees payable under this  Agreement or any of the other Loan Documents, and (vii) indemnities and other amounts payable by any  Loan Party under any Loan Document.  Any reference in this Agreement or in the Loan Documents to the  Obligations shall include all or any portion thereof and any extensions, modifications, renewals, or  alterations thereof, both prior and subsequent to any Insolvency Proceeding.  “OFAC” means The Office of Foreign Assets Control of the U.S. Department of the  Treasury.  “Originating Lender” has the meaning specified therefor in Section 13.1(e) of this  Agreement.  “Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result  of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other  than connections arising solely from such Recipient having executed, delivered, become a party to,  performed its obligations under, received payments under, received or perfected a security interest under,  engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest  in any Loan or Loan Document).  “Other Taxes” means all present or future stamp, court, or documentary, intangible,  recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery,  performance, enforcement or registration of, from the receipt or perfection of a security interest under, or  otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes  imposed with respect to an assignment (other than an assignment made pursuant to Section 14.2).  “Overadvance” means, as of any date of determination, that the Revolver Usage is greater  than any of the limitations set forth in Section 2.1 or Section 2.11 of this Agreement.  “Participant” has the meaning specified therefor in Section 13.1(e) of this Agreement.  “Participant Register” has the meaning set forth in Section 13.1(i) of this Agreement.  “Patriot Act” has the meaning specified therefor in Section 4.13 of this Agreement.  “Perfection Certificate” means a certificate in the form of Exhibit P-1 to this Agreement.  “Permitted Acquisition” means any Acquisition so long as:  (a) no Default or Event of Default shall have occurred and be continuing or would  result from the consummation of the proposed Acquisition, the proposed Acquisition is consensual, and  Borrowers shall be in compliance with Section 7 immediately after giving effect to such Acquisition,  (b) no Indebtedness will be incurred, assumed, or would exist with respect to any Loan  Party or its Subsidiaries as a result of such Acquisition, other than Indebtedness permitted the definition of  Permitted Indebtedness and no Liens will be incurred, assumed, or would exist with respect to the assets of  any Loan Party or its Subsidiaries as a result of such Acquisition other than Permitted Liens,  





 






DB1/ 121979154.7      30    (c) with respect to any proposed Acquisition that will have a purchase price or  aggregate consideration payable in connection therewith in excess of $5,000,000, Borrowers have provided  Agent with its due diligence package relative to such proposed Acquisition, including forecasted balance  sheets, profit and loss statements, and cash flow statements of the Person or assets to be acquired, all  prepared on a basis consistent with such Person’s (or assets’) historical financial statements, together with  appropriate supporting details and a statement of underlying assumptions for the one year period following  the date of the proposed Acquisition, on a quarter by quarter basis), in form and substance (including as to  scope and underlying assumptions) reasonably satisfactory to Agent,  (d) if the cash portion of the purchase price of such Acquisition is not funded solely  with the cash proceeds received from a substantially concurrent issuance of new Qualified Equity Interests,  Borrowers have Excess Availability (i) at all times during the 30 consecutive days immediately preceding  the date of consummation of such Acquisition, calculated on a pro forma basis as if such Acquisition was  consummated on the first day of such period, and (ii) immediately after giving effect to such Acquisition,  in an amount not less than 20% of the then applicable Maximum Revolver Amount,  (e) with respect to any proposed Acquisition that will have a purchase price or  aggregate consideration payable in connection therewith in excess of $5,000,000, Borrowers have provided  Agent with, not later than 10 Business Days prior to the anticipated closing date of such proposed  Acquisition, copies of the acquisition agreement and other material documents relative to the proposed  Acquisition, which agreement and documents must be reasonably acceptable to Agent,  (f) the assets being acquired (other than a de minimis amount of assets in relation to  Borrowers’ and their Subsidiaries’ total assets), or the Person whose Equity Interests are being acquired,  are useful in or engaged in, as applicable, the business of the Loan Parties and their Subsidiaries or a  business reasonably related, ancillary, supplementary or complementary thereto,  (g) the subject assets or Equity Interests, as applicable, are being acquired directly by  a Borrower or one of its Subsidiaries that is a Loan Party, and, in connection therewith, the applicable Loan  Party shall have complied with Section 5.11 or 5.12 of this Agreement, as applicable, of this Agreement  and, in the case of an acquisition of Equity Interests, the Person whose Equity Interests are acquired shall  become a Loan Party if required by Section 5.11 or 5.12 of this Agreement and the applicable Loan Party  shall have demonstrated to Agent that the new Loan Parties have received consideration sufficient to make  the joinder documents binding and enforceable against such new Loan Parties, and  (h) the cash purchase consideration payable in respect of all Permitted Acquisitions  (including the proposed Acquisition and including deferred payment obligations) shall not exceed  $20,000,000 in the aggregate per fiscal year.  “Permitted Discretion” means a determination made in the exercise of reasonable (from  the perspective of a secured asset-based lender) business judgment.  “Permitted Dispositions” means:  (a) (i) sales, abandonment, or other dispositions of property (other than accounts  receivables, intellectual property, Equity Interests of the Borrower or any Material Subsidiary or Material  Contracts) that is worn, damaged, uneconomic or obsolete or no longer used or useful in the ordinary course  of business; (ii) dispositions of owned or leased vehicles in the ordinary course of business or pursuant to  restructuring and (iii) leases or subleases of Real Property not useful in the conduct of the business of the  Loan Parties and their Subsidiaries,  





 






DB1/ 121979154.7      31    (b) sales or leases of Inventory to buyers in the ordinary course of business,  (c) the use or transfer of money or Cash Equivalents in a manner that is not prohibited  by the terms of this Agreement or the other Loan Documents,  (d) (i) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights, and  other intellectual property rights in the ordinary course of business, (ii) licensing of patents, trademarks,  copyrights, and other intellectual property rights customary for companies of similar size and in the same  industry as Borrowers and that are approved by Borrower’s board of directors and which would not result  in a legal transfer of title of such licensed Intellectual Property, but that may be exclusive as long as such  exclusivity is limited to (x) a particular product line  or application field not including optical  communications and for a limited time period that is less than the expected useful life of such intellectual  property, or  (y)  territorial exclusivity but only as to discrete geographical areas outside of the United  States, and (iii) the license agreement described on Schedule P-3 of the Disclosure Letter,  (e) the granting of Permitted Liens,  (f) the sale or discount, in each case without recourse, of accounts receivable (other  than Eligible Accounts) arising in the ordinary course of business, but only in connection with the  compromise or collection thereof,  (g) any involuntary loss, damage or destruction of property,  (h) any involuntary condemnation, seizure or taking, by exercise of the power of  eminent domain or otherwise, or confiscation or requisition of use of property,  (i) the leasing or subleasing of assets (including Real Property) of any Loan Party or  its Subsidiaries in the ordinary course of business),  (j) the sale or issuance of Equity Interests (other than Disqualified Equity Interests)  of Administrative Borrower,  (k) (i) the lapse or abandonment of registered patents, trademarks, copyrights and  other intellectual property of any Loan Party or any of its Subsidiaries to the extent not economically  desirable in the conduct of its business, or (ii) the lapse or abandonment of patents, trademarks, copyrights,  or other intellectual property rights in the ordinary course of business so long as (in each case under clauses  (i) and (ii)), (A) with respect to copyrights, such copyrights are not material revenue generating copyrights,  and (B) such lapse or abandonment is not materially adverse to the interests of the Lender Group,  (l) the making of Restricted Payments and transactions permitted under Section 6.10  of the Agreement, provided that such transactions do not include the disposition of Eligible Accounts or  the licensing of Intellectual Property owned by a Loan Party except to the extent permitted under clause (d)  of this definition,  (m) the making of Permitted Investments,  (n) transfers of assets (other than Intellectual Property)  (i) from any Loan Party or any  of its Subsidiaries to a Loan Party, (ii) from any Subsidiary of any Loan Party that is not a Loan Party to  any other Subsidiary of any Loan Party and (iii) from any Loan Party to any Subsidiary of any Loan Party  that is not a Loan Party, so long as with respect to transfers and dispositions pursuant to this clause (iii),  (w) the aggregate book value of all such assets subject to such transfer or disposition shall not exceed  





 






DB1/ 121979154.7      32    $10,000,000 in any fiscal year with respect to manufacturing equipment and $2,500,000 in any fiscal year  with respect to all other assets, (x) such disposition shall not include any intellectual property except to the  extent otherwise permitted under clauses (d) and (k) of the definition of Permitted Disposition, (y) no Event  of Default has occurred and is continuing or would immediately result therefrom and (z) with respect to  any transfers or dispositions of assets other than manufacturing equipment,  immediately after giving effect  to such transfer and disposition  and at all times during the 30 consecutive days immediately preceding the  date of such transfer or disposition, the Borrowers shall have Excess Availability in an amount not less than  20% of the then applicable Maximum Revolver Amount,  (o) dispositions of Equipment or Real Property to the extent that (i) such property is  exchanged for credit against the purchase price of similar replacement property, or (ii) the proceeds of such  disposition are promptly applied to the purchase price of such replacement property; provided, that to the  extent the property being transferred constitutes Collateral, such replacement property shall constitute  Collateral,  (p) dispositions of assets (other than Eligible Accounts) acquired by the Loan Parties  and their Subsidiaries pursuant to a Permitted Acquisition consummated within 12 months of the date of  the proposed disposition so long as (i) the consideration received for the assets to be so disposed is at least  equal to the fair market value of such assets, (ii) the assets to be so disposed are not necessary or  economically desirable in connection with the business of the Loan Parties and their Subsidiaries, and (iii)  the assets to be so disposed are readily identifiable as assets acquired pursuant to the subject Permitted  Acquisition,   (q) sales or dispositions to a third party non-Affiliate buyer of (i) an unprofitable  business line or unit and assets used solely in connection therewith if such business line or unit has been  generating negative cash flow for the 18 months prior to such sale or disposition or has otherwise had a  negative impact on EBITDA for Borrower and its Subsidiaries during such period or (ii) fixed assets  (including intangible property related to such fixed assets) not otherwise permitted in clauses (a) through  (p) above; so long as, with respect to dispositions described in clauses (i) and (ii) above, such sale or  disposition is  in exchange for the fair market value of such assets and the aggregate fair market value of  all assets disposed of in any fiscal year (including the proposed disposition) would not exceed $10,000,000,  (r) dispositions by a Loan Party or any of its Subsidiaries of real or personal property  (other than intellectual property) to any Person in connection with a sale and leaseback transaction of such  disposed assets, provided, that (i) such disposition is made at fair market value, (ii) the lease terms pursuant  to which such Loan Party or Subsidiary leases back such assets are customary for transactions of this type  and, if such arrangement is with an Affiliate of such Loan Party or Subsidiary, are comparable to those  which would be obtained by it in an arm’s length transaction with an independent, unrelated third party and  (iii) any Indebtedness incurred in connection therewith (including Capital Lease Obligations) is Permitted  Indebtedness , including a sale leaseback transaction of the assets of NeoPhotonics Japan,  (s) Borrowers may sell, dispose, transfer all or substantially all of its Equity Interests  or assets in NeoPhotonics Corporation, LLC, and  (t) NeoPhotonics Japan may sell, dispose or transfer all or substantially all of its Real  Property so long as such disposition is in exchange for consideration equal to the fair market value of the  assets subject to such sale, disposition or transfer.  “Permitted Indebtedness” means:  (a) Indebtedness in respect of the Obligations,  





 






DB1/ 121979154.7      33    (b) Indebtedness as of the Closing Date (or, in the case of the Reinstatement of  Comprehensive Credit Granting Contracts credit facility referenced as item 4 on Schedule 4.14 of the  Disclosure Letter, to be entered into in the third calendar quarter of 2021) set forth on Schedule 4.14 of the  Disclosure Letter and any Refinancing Indebtedness in respect of such Indebtedness, provided that such  Indebtedness is solely the obligation of Subsidiaries of the Loan Parties that are not Loan Parties and no  Loan Party has provided any guaranty or other assurance of payment with respect thereto,  (c) Permitted Purchase Money Indebtedness and any Refinancing Indebtedness in  respect of such Indebtedness, subject to aggregate limitation set forth in clause (q) of this definition,  (d) Indebtedness arising in connection with the endorsement of instruments or other  payment items for deposit,  (e) Indebtedness consisting of (i) unsecured guarantees incurred in the ordinary course  of business with respect to surety and appeal bonds, performance bonds, bid bonds, appeal bonds,  completion guarantee and similar obligations (including, but not limited to such obligations arising in  connection with worker’s compensation claims, unemployment insurance, health benefits and other social  security legislation and local, state and federal payroll taxes) and obligations arising in the ordinary course  of business in connection with self-insurance or similar requirements; (ii) unsecured guarantees arising with  respect to customary indemnification obligations to purchasers in connection with Permitted Dispositions;  and (iii) unsecured guarantees with respect to Indebtedness of any Loan Party or one of its Subsidiaries, to  the extent that the Person that is obligated under such guaranty could have incurred such underlying  Indebtedness as Permitted Indebtedness hereunder,  (f) unsecured Indebtedness of any Loan Party that is incurred on the date of the  consummation of a Permitted Acquisition solely for the purpose of consummating such Permitted  Acquisition so long as (i) no Event of Default has occurred and is continuing or would result therefrom, (ii)  such unsecured Indebtedness is not incurred for working capital purposes, (iii) such unsecured Indebtedness  does not mature prior to the date that is 91 days after the Maturity Date, (iv) such unsecured Indebtedness  does not amortize until 91 days after the Maturity Date, (v) such unsecured Indebtedness does not provide  for the payment of interest thereon in cash or Cash Equivalents prior to the date that is 91 days after the  Maturity Date, and (vi) such Indebtedness is subordinated in right of payment to the Obligations on terms  and conditions reasonably satisfactory to Agent and is otherwise on terms and conditions (including  economic terms and absence of covenants) reasonably satisfactory to Agent,  (g) Acquired Secured Indebtedness, subject to aggregate limitation set forth in (q) of  the definition of Permitted Indebtedness,  (h) Indebtedness incurred in the ordinary course of business under performance,  surety, statutory, or appeal bonds,  (i) Indebtedness owed to any Person providing property, casualty, liability, or other  insurance to any Loan Party or any of its Subsidiaries, so long as the amount of such Indebtedness is not in  excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance  for the year in which such Indebtedness is incurred and such Indebtedness is outstanding only during such  year,  (j) the incurrence by any Loan Party or its Subsidiaries of Indebtedness under Hedge  Agreements that is incurred for the bona fide purpose of hedging the interest rate, commodity, or foreign  currency risks associated with such Loan Party’s or such Subsidiary’s operations and not for speculative  purposes,  





 






DB1/ 121979154.7      34    (k) Indebtedness incurred in the ordinary course of business in respect of credit cards,  credit card processing services, debit cards, stored value cards, commercial cards (including so-called  “purchase cards”, “procurement cards” or “p-cards”), or Cash Management Services,  (l) unsecured Indebtedness of any Loan Party owing to former or current  employees,  directors, or consultants (or any spouses, ex-spouses, or estates of any of the foregoing) incurred in  connection with the repurchase or redemption by such Loan Party of the Equity Interests of Administrative  Borrower that has been issued to such Persons, so long as no Default or Event of Default has occurred and  is continuing or would result from the incurrence of such Indebtedness, (ii) the aggregate amount of all such  Indebtedness outstanding at any one time does not exceed $1,000,000, and (iii) such Indebtedness is  subordinated in right of payment to the Obligations on terms and conditions reasonably acceptable to Agent,  (m) contingent liabilities in respect of any indemnification obligation, adjustment of  purchase price, non-compete, or similar obligation of any Loan Party incurred in connection with the  consummation of one or more Permitted Acquisitions,  (n) Indebtedness comprising Permitted Investments,  (o) unsecured Indebtedness incurred in respect of netting services, overdraft  protection, and other like services, in each case, incurred in the ordinary course of business,  (p) unsecured Indebtedness of any Loan Party or its Subsidiaries in respect of Earn- Outs owing to sellers of assets or Equity Interests to such Loan Party or its Subsidiaries that is incurred in  connection with the consummation of one or more Permitted Acquisitions so long as such unsecured  Indebtedness is on terms and conditions reasonably acceptable to Agent,  (q) other Indebtedness incurred after the Closing Date (including in respect of letters  of credit, banker’s acceptances or similar arrangements) in an aggregate amount not to exceed (i) for all  Subsidiaries of Loan Parties that are not Loan Parties, in aggregate with Indebtedness of such Subsidiaries  under clauses (c) (including Capital Lease Obligations arising under clause (r) of Permitted Dispositions  without duplication for Capital Lease Obligations included under clause (x) of the definition of Permitted  Indebtedness), and (g) of the definition of Permitted Indebtedness, $10,000,000  at any time outstanding;  provided, that such Indebtedness is not directly or indirectly recourse to any of the Loan Parties or to such  Loan Parties’ assets, and (ii) for all Loan Parties, in aggregate with Indebtedness of the Loan Party’s  permitted under clauses (c) (including Capital Lease Obligations arising under clause (r) of Permitted  Dispositions without duplication for Capital Lease Obligations included under clause (x) of the definition  of Permitted Indebtedness), (f), and (g) of the definition of Permitted Indebtedness, $10,000,000 at any time  outstanding,  (r) accrual of interest, accretion or amortization of original issue discount, or the  payment of interest in kind, in each case, on Indebtedness that otherwise constitutes Permitted Indebtedness,  (s) Subordinated Indebtedness in an amount not to exceed $10,000,000 outstanding at  any one time,   (t) Indebtedness arising from judgments or decrees not deemed to be a Default or  Event of Default under Section 8.3,  (u) Indebtedness to trade creditors in the ordinary course of business,   





 






DB1/ 121979154.7      35    (v) Indebtedness relating to tenant improvement loans and real estate commissions, if  incurred in the ordinary course of business,   (w) guarantee of obligations incurred in the ordinary course of business to support  obligations not constituting Indebtedness for borrowed money of any Loan Party, including, without  limitations, obligations of a Loan Party owing to suppliers, customers, lessors and licensors,   (x) without duplication for Capital Lease Obligations included under clause (q) of the  definition of Permitted Indebtedness, other Indebtedness incurred after the Closing Date by Subsidiaries of  a Loan Party that are not Loan Parties in connection with sale and leaseback transactions permitted under  clause (r) of the definition of Permitted Dispositions so long as the aggregate amount of all such  Indebtedness outstanding at any one time does not exceed $10,000,000; and  (y) any other unsecured Indebtedness incurred by any Loan Party or any of its  Subsidiaries in an aggregate outstanding amount not to exceed $1,000,000 at any one time.  “Permitted Intercompany Advances” means loans made by (a) a Loan Party to another  Loan Party, (b) a Subsidiary of a Loan Party that is not a Loan Party to another Subsidiary of a Loan Party  that is not a Loan Party, (c) a Subsidiary that is not a Loan Party to a Loan Party so long as such loan is  subordinated to the Obligations pursuant to the Intercompany Subordination Agreement, (d) a Loan Party  to a Subsidiary that is not a Loan Party in an aggregate principal  amount not to exceed in any fiscal year  $20,000,000 less any Investments made in such fiscal year which are permitted under clause (s)(iii) of the  definition of Permitted Investments and so long as with respect to all loans under clause (d) above, (i) no  Event of Default has occurred and is continuing or would result therefrom and (ii) immediately after giving  effect to the advance  of any such loan  and at all times during the 30 consecutive days immediately  preceding the date of such advance, the Borrowers have Excess Availability in an amount not less than 20%  of the then applicable Maximum Revolver Amount; provided, that this shall not be deemed to permit  guaranties by a Loan Party of Permitted Indebtedness under clause (q) of the definition of Permitted  Indebtedness of its Subsidiaries that are not Loan Parties.  “Permitted Investments” means:  (a) Investments in cash and Cash Equivalents,  (b) Investments in negotiable instruments deposited or to be deposited for collection  in the ordinary course of business,  (c) advances made in connection with purchases of goods or services in the ordinary  course of business,  (d) Investments received in settlement of amounts due to any Loan Party or any of its  Subsidiaries effected in the ordinary course of business or owing to any Loan Party or any of its Subsidiaries  as a result of Insolvency Proceedings involving an account debtor or upon the foreclosure or enforcement  of any Lien in favor of a Loan Party or its Subsidiaries,  (e) Investments owned by any Loan Party or any of its Subsidiaries on the Closing  Date and set forth on Schedule P-1 of the Disclosure Letter,  (f) guarantees permitted under the definition of Permitted Indebtedness,  (g) Permitted Intercompany Advances,  





 






DB1/ 121979154.7      36    (h) Equity Interests or other securities acquired in connection with the satisfaction or  enforcement of Indebtedness or claims due or owing to a Loan Party or its Subsidiaries (in bankruptcy of  customers or suppliers or otherwise outside the ordinary course of business) or as security for any such  Indebtedness or claims,  (i) deposits of cash made in the ordinary course of business to secure performance of  operating leases and other commercial contracts,  (j) (i) non-cash loans and advances to employees, officers, and directors of a Loan  Party or any of its Subsidiaries for the purpose of purchasing Equity Interests in Administrative Borrower  so long as the proceeds of such loans are used in their entirety to purchase such Equity Interests in  Administrative Borrower, and (ii) loans and advances to employees, directors and officers of a Loan Party  or any of its Subsidiaries in the ordinary course of business for any other business purpose, including but  not limited to moving, entertainment, travel and other similar expenses in an aggregate amount outstanding  at any one time not to exceed $1,000,000,  (k) Permitted Acquisitions and Investments made prior to a Permitted Acquisition  consisting of reasonable earnest money deposits, working capital, working fees or other similar prepaid  consideration or similar amounts that would be applied toward consideration upon consummation of such  Permitted Acquisition (in each case whether or not refundable under any circumstance),  (l) Investments in the form of capital contributions and the acquisition of Equity  Interests made by any Loan Party in any other Loan Party (other than capital contributions to or the  acquisition of Equity Interests of Administrative Borrower),  (m) Investments resulting from entering into (i) Bank Product Agreements, or (ii)  agreements relative to obligations permitted under clause (j) of the definition of Permitted Indebtedness,  (n) equity Investments by any Loan Party in any Subsidiary of such Loan Party which  is required by law to maintain a minimum net capital requirement or as may be otherwise required by  applicable law,  (o) Investments held by a Person acquired in a Permitted Acquisition to the extent that  such Investments were not made in contemplation of or in connection with such Permitted Acquisition and  were in existence on the date of such Permitted Acquisition,   (p) sales on open accounts in the ordinary course of business,   (q)  Investments in connection with joint ventures or strategic alliances in the ordinary  course of business consisting of non-exclusive licensing of technology, the development of technology or  the providing of technical support in an aggregate amount which in aggregate with Investments permitted  under clause (u) of this definition shall not exceed $10,000,000 in any fiscal year; provided, that  immediately after giving effect to any such Investment and at all times during the 30 consecutive days  immediately preceding the date of such Investment, the Borrowers shall have Excess Availability in an  amount not less than 20% of the then applicable Maximum Revolver Amount, and provided, further, no  such Investment shall be a transfer of Intellectual Property except to the extent such transfer would  constitute a Permitted Disposition under clause (d) of the definition of Permitted Disposition,   (r) Investments consisting of note receivable of, or prepaid royalties and other credit  extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided   that, this subparagraph shall not apply to Investments of Borrower in any Subsidiary,   





 






DB1/ 121979154.7      37    (s) Investments (i) by any Loan Party in any other Loan Party, (ii) by any Subsidiary  of a Loan Party that is not a Loan Party in any Loan Party and (iii) by any Loan Party to any Subsidiary of  any Loan Party that is not a Loan Party in an aggregate amount not to exceed in any fiscal year $20,000,000  less any Permitted Intercompany Advances under clause (d) of the definition of Permitted Intercompany  Advances which are made in such fiscal year; provided, that with respect to Investments permitted under  this clause (iii), (x) no Event of Default has occurred and is continuing or would result therefrom, (y)  immediately after giving effect to any such Investment and at all times during the 30 consecutive days  immediately preceding the date of such Investment, the Borrowers shall have Excess Availability in an  amount not less than 20% of the then applicable Maximum Revolver Amount and (z) no such Investment  shall be a transfer of Intellectual Property except to the extent such transfer would constitute a Permitted  Disposition under clause (d) of the definition of Permitted Disposition; provided, further, that this shall not  be deemed to permit guaranties by a Loan Party of Permitted Indebtedness under clause (q) of the definition  of Permitted Indebtedness of its Subsidiaries that are not Loan Parties,  (t) so long as no Event of Default has occurred and is continuing or would result  therefrom, any other Investments in an aggregate amount which in aggregate with Investments permitted  under clause (q) of this definition, shall not exceed $10,000,000 in a fiscal year; provided, that immediately  after giving effect to any such Investment and at all times during the 30 consecutive days immediately  preceding the date of such Investment, the Borrowers shall have Excess Availability in an amount not less  than 20% of the then applicable Maximum Revolver Amount.  “Permitted Liens” means:  (a) Liens granted to, or for the benefit of, Agent to secure the Obligations,  (b) Liens for unpaid taxes, assessments, or other governmental charges or levies that  either (i) are not yet delinquent, or (ii) do not have priority over Agent’s Liens and the underlying taxes,  assessments, or charges or levies are the subject of Permitted Protests,  (c) judgment Liens arising solely as a result of the existence of judgments, orders, or  awards that do not constitute an Event of Default under Section 8.3 of this Agreement,  (d) Liens set forth on Schedule P-2 of the Disclosure Letter; provided, that to qualify  as a Permitted Lien, any such Lien described on Schedule P-2 of the Disclosure Letter shall only secure the  Indebtedness that it secures on the Closing Date and any Refinancing Indebtedness in respect thereof,  (e) the interests of lessors under operating leases and non-exclusive licensors under  license agreements,  (f) purchase money Liens on fixed assets or the interests of lessors under Capital  Leases to the extent that such Liens or interests secure Permitted Purchase Money Indebtedness and so long  as (i) such Lien attaches only to the fixed asset purchased or acquired and the proceeds thereof, and (ii)  such Lien only secures the Indebtedness that was incurred to acquire the fixed asset purchased or acquired  or any Refinancing Indebtedness in respect thereof,  (g) Liens arising by operation of law in favor of warehousemen, landlords, carriers,  mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course of business and not in  connection with the borrowing of money, and which Liens either (i) are for sums not yet delinquent, or (ii)  are the subject of Permitted Protests,  





 






DB1/ 121979154.7      38    (h) Liens on amounts deposited to secure any Borrower’s and its Subsidiaries’  obligations in connection with worker’s compensation or other unemployment insurance or other social  security obligations,  (i) Liens on amounts deposited to secure any Borrower’s and its Subsidiaries’  obligations in connection with the making or entering into of bids, tenders, or leases in the ordinary course  of business and not in connection with the borrowing of money,  (j) Liens on amounts deposited to secure any Borrower’s and its Subsidiaries’  reimbursement obligations with respect to surety, performance or appeal bonds or to secure the performance  of bids, trade and commercial contracts, leases, statutory obligations and other obligations of a like nature,  in each case incurred or obtained in the ordinary course of business,  (k) with respect to any Real Property, encumbrances, easements, rights of way, and  zoning restrictions, building ordinances, minor survey exceptions, title defects or other irregularities or  encumbrances on real property, governmental restrictions on the use of Real Property and liens (other than  liens securing Indebtedness for borrowed money) in favor of governmental authorities and public utilities  that do not, in the aggregate, materially interfere with or impair the use or operation of any Real Property,  (l) licenses of patents, trademarks, copyrights, and other intellectual property rights  in the ordinary course of business so long as such licenses constitute Permitted Dispositions under clause  (d) of the definition of Permitted Dispositions , and leases or subleases of Real Property (which may be  exclusive) granted in the ordinary course of business,  (m) Liens that are replacements of Permitted Liens to the extent that the original  Indebtedness is the subject of permitted Refinancing Indebtedness and so long as the replacement Liens  only encumber those assets that secured the original Indebtedness,  (n) (i) rights of setoff or bankers’ liens upon deposits of funds in favor of banks or  other depository institutions, solely to the extent incurred in connection with the maintenance of such  Deposit Accounts in the ordinary course of business (ii) rights of setoff and similar arrangements and liens  in favor of securities intermediaries to secure customary fees and similar amounts related to security  accounts, and (iii) Liens attaching to commodity trading accounts or other commodities brokerage accounts  incurred in the ordinary course of business and not for speculative purposes,  (o) Liens granted in the ordinary course of business on the unearned portion of  insurance premiums securing the financing of insurance premiums to the extent the financing is permitted  under the definition of Permitted Indebtedness,  (p) Liens 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,  (q) Liens solely on any cash earnest money deposits, escrow arrangements or other  similar arrangements made by a Loan Party or any of its Subsidiaries in connection with any letter of intent  or purchase agreement with respect to a Permitted Acquisition or other acquisition of assets permitted  hereunder,  (r) Liens assumed by any Loan Party or its Subsidiaries in connection with a Permitted  Acquisition that secure Acquired Secured Indebtedness,   





 






DB1/ 121979154.7      39    (s) in connection with the sale, lease or other transfer of assets in a transaction  permitted under Section 6.4, Liens existing or deemed to exist by virtue of customary rights and restrictions  contained in agreements relating to such sale, lease or other transfer pending the completion thereof,   (t) Precautionary UCC or similar filings in respect of true leases;   (u) Liens on assets of any Foreign Subsidiary to secure Indebtedness permitted  pursuant to clause (q) of the definition of “Permitted Indebtedness”, and  (v) other Liens which do not secure Indebtedness for borrowed money or letters of  credit and as to which the aggregate amount of the obligations secured thereby does not exceed $1,000,000.  “Permitted Protest” means the right of any Loan Party or any of its Subsidiaries to protest  any Lien (other than any Lien that secures the Obligations), taxes (other than payroll taxes or taxes that are  the subject of a United States federal tax lien), or rental payment; provided, that (a) a reserve with respect  to such obligation is established on such Loan Party’s or its Subsidiaries’ books and records in such amount  as is required under GAAP, (b) any such protest is instituted promptly and prosecuted diligently by such  Loan Party or its Subsidiary, as applicable, in good faith, and (c) Agent is satisfied that, while any such  protest is pending, there will be no impairment of the enforceability, validity, or priority of any of Agent’s  Liens.  “Permitted Purchase Money Indebtedness” means, as of any date of determination,  Indebtedness (other than the Obligations, but including Capitalized Lease Obligations), incurred after the  Closing Date and at the time of, or within 120 days after, the acquisition of any fixed assets for the purpose  of financing all or any part of the acquisition cost thereof.  “Person” means natural persons, corporations, limited liability companies, limited  partnerships, general partnerships, limited liability partnerships, joint ventures, trusts, land trusts, business  trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies  and political subdivisions thereof.  “Platform” has the meaning specified therefor in Section 17.9(c) of this Agreement.  “Post-Increase Revolver Lenders” has the meaning specified therefor in Section 2.14 of  this Agreement.  “Pre-Increase Revolver Lenders” has the meaning specified therefor in Section 2.14 of this  Agreement.   “Projections” means Borrowers’ forecasted (a) balance sheets, (b) profit and loss  statements, and (c) cash flow statements, all prepared on a basis consistent with Borrowers’ historical  financial statements, together with appropriate supporting details and a statement of underlying  assumptions.  “Pro Rata Share” means, as of any date of determination:  (a) with respect to a Lender’s obligation to make all or a portion of the Revolving  Loans, with respect to such Lender’s right to receive payments of interest, fees, and principal with respect  to the Revolving Loans, and with respect to all other computations and other matters related to the Revolver  Commitments or the Revolving Loans, the percentage obtained by dividing (i) the Revolving Loan  Exposure of such Lender, by (ii) the aggregate Revolving Loan Exposure of all Lenders,  





 






DB1/ 121979154.7      40    (b) with respect to a Lender’s obligation to participate in the Letters of Credit, with  respect to such Lender’s obligation to reimburse Issuing Bank, and with respect to such Lender’s right to  receive payments of Letter of Credit Fees, and with respect to all other computations and other matters  related to the Letters of Credit, the percentage obtained by dividing (i) the Revolving Loan Exposure of  such Lender, by (ii) the aggregate Revolving Loan Exposure of all Lenders; provided, that if all of the  Revolving Loans have been repaid in full and all Revolver Commitments have been terminated, but Letters  of Credit remain outstanding, Pro Rata Share under this clause shall be the percentage obtained by dividing  (A) the Letter of Credit Exposure of such Lender, by (B) the Letter of Credit Exposure of all Lenders, and  (c) with respect to all other matters and for all other matters as to a particular Lender  (including the indemnification obligations arising under Section 15.7 of this Agreement), the percentage  obtained by dividing (i) the Revolving Loan Exposure of such Lender, by (ii) the aggregate Revolving Loan  Exposure of all Lenders, in any such case as the applicable percentage may be adjusted by assignments  permitted pursuant to Section 13.1; provided, that if all of the Loans have been repaid in full and all  Commitments have been terminated, Pro Rata Share under this clause shall be the percentage obtained by  dividing (A) the Letter of Credit Exposure of such Lender, by (B) the Letter of Credit Exposure of all  Lenders.  “Protective Advances” has the meaning specified therefor in Section 2.3(d)(i) of this  Agreement.  “Public Lender” has the meaning specified therefor in Section 17.9(c) of this Agreement.  “Purchase Price” means, with respect to any Acquisition, an amount equal to the aggregate  consideration, whether cash, property or securities (including the fair market value of any Equity Interests  of Administrative Borrower issued in connection with such Acquisition and including the maximum amount  of Earn-Outs), paid or delivered by a Loan Party or one of its Subsidiaries in connection with such  Acquisition (whether paid at the closing thereof or payable thereafter and whether fixed or contingent), but  excluding therefrom (a) any cash of the seller and its Affiliates used to fund any portion of such  consideration, and (b) any cash or Cash Equivalents acquired in connection with such Acquisition.  “Qualified Cash” means, as of any date of determination, the amount of unrestricted cash  and Cash Equivalents of the Loan Parties and their Subsidiaries that is determined in Dollars and that is in  Deposit Accounts or in Securities Accounts, or any combination thereof, which such Deposit Accounts or  Securities Accounts are maintained at Wells Fargo Bank, N.A. located within the United States and subject  to a Control Agreement.  “Qualified Cash Account” means a Deposit Account or Securities Account containing  Qualified Cash.  “Qualified Equity Interests” means and refers to any Equity Interests issued by  Administrative Borrower (and not by one or more of its Subsidiaries) that is not a Disqualified Equity  Interest.  “Real Property” means any estates or interests in real property now owned or hereafter  acquired by any Loan Party or one of its Subsidiaries and the improvements thereto.  “Real Property Collateral” means (a) the Real Property identified on Schedule R-1 of the  Disclosure Letter, and (b) any Real Property hereafter acquired by any Loan Party or one of its Subsidiaries  with a fair market value in excess of $2,000,000.  





 






DB1/ 121979154.7      41    “Receivables Reserves” means, as of any date of determination, those reserves that Agent  deems necessary or appropriate, in its Permitted Discretion and subject to Section 2.1(c), to establish and  maintain (including Landlord Reserves for books and records locations and reserves for rebates, discounts,  warranty claims, and returns) with respect to the Eligible Accounts or the Maximum Revolver Amount;  provided that such reserves shall not be duplicative with the Dilution Reserve.  “Recipient” means Agent or any Lender or Participant.  “Record” means information that is inscribed on a tangible medium or that is stored in an  electronic or other medium and is retrievable in perceivable form.  “Reference Time” with respect to any setting of the then-current Benchmark means (a) if  such Benchmark is the LIBOR Rate, 11:00 a.m. (London time) on the day that is two (2) London Banking  Days preceding the date of such setting, and (b) if such Benchmark is not the LIBOR Rate, the time  determined by the Agent in its reasonable discretion.  “Refinancing Indebtedness” means refinancings, renewals, or extensions of Indebtedness  so long as:  (a) such refinancings, renewals, or extensions do not result in an increase in the  principal amount of the Indebtedness so refinanced, renewed, or extended, other than by the amount of  premiums paid thereon and the fees and expenses incurred in connection therewith and by the amount of  unfunded commitments with respect thereto,  (b) such refinancings, renewals, or extensions do not result in a shortening of the final  stated maturity or the average weighted maturity (measured as of the refinancing, renewal, or extension) of  the Indebtedness so refinanced, renewed, or extended, nor are they on terms or conditions that, taken as a  whole, are or could reasonably be expected to be materially adverse to the interests of the Lenders,  (a) if the Indebtedness that is refinanced, renewed, or extended was subordinated in  right of payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension  must include subordination terms and conditions that are at least as favorable to the Lender Group as those  that were applicable to the refinanced, renewed, or extended Indebtedness,  (b) the Indebtedness that is refinanced, renewed, or extended is not recourse to any  Person that is liable on account of the Obligations other than those Persons which were obligated with  respect to the Indebtedness that was refinanced, renewed, or extended,  (c) if the Indebtedness that is refinanced, renewed or extended was unsecured, such  refinancing, renewal or extension shall be unsecured, and  (d) if the Indebtedness that is refinanced, renewed, or extended was secured (i) such  refinancing, renewal, or extension shall be secured by substantially the same or less collateral as secured  such refinanced, renewed or extended Indebtedness on terms no less favorable to Agent or the Lender Group  and (ii) the Liens securing such refinancing, renewal or extension shall not have a priority more senior than  the Liens securing such Indebtedness that is refinanced, renewed or extended.  “Register” has the meaning set forth in Section 13.1(h) of this Agreement.  “Registered Loan” has the meaning set forth in Section 13.1(h) of this Agreement.  





 






DB1/ 121979154.7      42    “Related 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 and  that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender, or (c) an entity or an  Affiliate of an entity that administers, advises or manages a Lender.  “Relevant Governmental Body” means the FRB or the Federal Reserve Bank of New York,  or a committee officially endorsed or convened by the FRB or the Federal Reserve Bank of New York, or  any successor thereto.  “Remedial Action” means all actions taken to (a) clean up, remove, remediate, contain,  treat, monitor, assess, evaluate, or in any way address Hazardous Materials in the indoor or outdoor  environment, (b) prevent or minimize a release or threatened release of Hazardous Materials so they do not  migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment,  (c) restore or reclaim natural resources or the environment, (d) perform any pre-remedial studies,  investigations, or post-remedial operation and maintenance activities, or (e) conduct any other actions with  respect to Hazardous Materials required by Environmental Laws.  “Replacement Lender” has the meaning specified therefor in Section 2.13(b) of this  Agreement.  “Report” has the meaning specified therefor in Section 15.16 of this Agreement.  “Required Lenders” means, at any time, Lenders having or holding more than 50% of the  aggregate Revolving Loan Exposure of all Lenders; provided, that (i) the Revolving Loan Exposure of any  Defaulting Lender shall be disregarded in the determination of the Required Lenders, and (ii) at any time  there are two or more Lenders (who are not Affiliates of one another or Defaulting Lenders), “Required  Lenders” must include at least two Lenders (who are not Affiliates of one another).  “Reserves” means, as of any date of determination, Receivables Reserves, Bank Product  Reserves and those other reserves that Agent deems necessary or appropriate, in its Permitted Discretion  and subject to Section 2.1(c), to establish and maintain (including reserves with respect to (a) sums that any  Loan Party or its Subsidiaries are required to pay under any Section of this Agreement or any other Loan  Document (such as taxes, assessments, insurance premiums, or, in the case of leased assets, rents or other  amounts payable under such leases) and has failed to pay, and (b) amounts owing by any Loan Party or its  Subsidiaries to any Person to the extent secured by a Lien on, or trust over, any of the Collateral (other than  a Permitted Lien), which Lien or trust, in the Permitted Discretion of Agent likely would have a priority  superior to the Agent’s Liens (such as Liens or trusts in favor of landlords, warehousemen, carriers,  mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or other  taxes where given priority under applicable law) in and to such item of the Collateral) with respect to the  Borrowing Base or the Maximum Revolver Amount.  “Restricted Payment” means (a) any declaration or payment of any dividend or the making  of any other payment or distribution, directly or indirectly, on account of Equity Interests issued by  Administrative Borrower or any of its Subsidiaries (including any payment in connection with any merger  or consolidation involving Administrative Borrower) or to the direct or indirect holders of Equity Interests  issued by Administrative Borrower or any of its Subsidiaries in their capacity as such (other than dividends  or distributions payable in Qualified Equity Interests issued by Administrative Borrower or any of its  Subsidiaries, or (b) any purchase, redemption, making of any sinking fund or similar payment, or other  acquisition or retirement for value (including in connection with any merger or consolidation involving  Administrative Borrower) of any Equity Interests issued by Administrative Borrower or any of its  





 






DB1/ 121979154.7      43    Subsidiaries,(but excluding any exchange solely for Qualified Equity Interests), or (c) any making of any  payment to retire, or to obtain the surrender of, any outstanding warrants, options, or other rights to acquire  Equity Interests of Administrative Borrower or any of its Subsidiaries now or hereafter outstanding.  “Revolver Commitment” means, with respect to each Revolving Lender, its Revolver  Commitment, and, with respect to all Revolving Lenders, their Revolver Commitments, in each case as  such Dollar amounts are set forth beside such Revolving Lender’s name under the applicable heading on  Schedule C-1 to this Agreement or in the Assignment and Acceptance pursuant to which such Revolving  Lender became a Revolving Lender under this Agreement, as such amounts may be reduced or increased  from time to time pursuant to assignments made in accordance with the provisions of Section 13.1 of this  Agreement, and as such amounts may be decreased by the amount of reductions in the Revolver  Commitments made in accordance with Section 2.4(c) hereof.  “Revolver Usage” means, as of any date of determination, the sum of (a) the amount of  outstanding Revolving Loans (inclusive of Swing Loans and Protective Advances), plus (b) the amount of  the Letter of Credit Usage.  “Revolving Lender” means a Lender that has a Revolving Loan Exposure or Letter of  Credit Exposure.  “Revolving Loan Base Rate Margin” has the meaning set forth in the definition of  Applicable Margin.   “Revolving Loan Exposure” means, with respect to any Revolving Lender, as of any date  of determination (a) prior to the termination of the Revolver Commitments, the amount of such Lender’s  Revolver Commitment, and (b) after the termination of the Revolver Commitments, the aggregate  outstanding principal amount of the Revolving Loans of such Lender.  “Revolving Loan LIBOR Rate Margin” has the meaning set forth in the definition of  Applicable Margin.   “Revolving Loans” has the meaning specified therefor in Section 2.1(a) of this Agreement.  “Sanctioned Entity” means (a) a country or territory or a government of a country or  territory, (b) an agency of the government of a country or territory, (c) an organization directly or indirectly  controlled by a country or territory or its government, or (d) a Person resident in or determined to be resident  in a country or territory, in each case of clauses (a) through (d) that is a target of Sanctions, including a  target of any country sanctions program administered and enforced by OFAC.  “Sanctioned Person” means, at any time (a) any Person named on the list of Specially  Designated Nationals and Blocked Persons maintained by OFAC, OFAC’s consolidated Non-SDN list or  any other Sanctions-related list maintained by any Governmental Authority, (b) a Person or legal entity that  is a target of Sanctions, (c) any Person operating, organized or resident in a Sanctioned Entity, or (d) any  Person directly or indirectly owned or controlled (individually or in the aggregate) by or acting on behalf  of any such Person or Persons described in clauses (a) through (c) above.  “Sanctions” means individually and collectively, respectively, any and all economic  sanctions, trade sanctions, financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes  anti-terrorism laws and other sanctions laws, regulations (including without limitation, the Export  Administration Regulations), or embargoes, including those imposed, administered or enforced from time  





 






DB1/ 121979154.7      44    to time by:  (a) the United States of America, including those administered by OFAC, the U.S. Department  of State, the U.S. Department of Commerce, or through any existing or future executive order, (b) the  United Nations Security Council, (c) the European Union or any European Union member state, (d) Her  Majesty’s Treasury of the United Kingdom, or (d) any other Governmental Authority with jurisdiction over  any member of Lender Group or any Loan Party or any of their respective Subsidiaries or Affiliates.     “S&P” has the meaning specified therefor in the definition of Cash Equivalents.  “SEC” means the United States Securities and Exchange Commission and any successor  thereto.  “Securities Account” means a securities account (as that term is defined in the Code).  “Securities Act” means the Securities Act of 1933, as amended from time to time, and any  successor statute.  “Settlement” has the meaning specified therefor in Section 2.3(e)(i) of this Agreement.  “Settlement Date” has the meaning specified therefor in Section 2.3(e)(i) of this  Agreement.  “SOFR” means, with respect to any Business Day, a rate per annum equal to the secured  overnight financing rate for such Business Day published by the SOFR Administrator on the SOFR  Administrator’s Website on the immediately succeeding Business Day.  “SOFR Administrator” means the Federal Reserve Bank of New York (or a successor  administrator of the secured overnight financing rate).  “SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New  York, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing  rate identified as such by the SOFR Administrator from time to time.  “Solvent” means, with respect to any Person as of any date of determination, that (a) at fair  valuations, the sum of such Person’s debts (including contingent liabilities) is less than all of such Person’s  assets, (b) such Person is not engaged in a business or transaction for which the remaining assets of such  Person are unreasonably small in relation to the business or transaction or for which the property remaining  with such Person is an unreasonably small capital, (c) such Person has not incurred debts beyond its ability  to pay such debts as they become due (whether at maturity or otherwise), and (d) such Person is “solvent”  or not “insolvent”, as applicable within the meaning given those terms and similar terms under applicable  laws relating to fraudulent transfers and conveyances.  For purposes of this definition, the amount of any  contingent liability at any time shall be computed as the amount that, in light of all of the facts and  circumstances existing at such time, represents the amount that can reasonably be expected to become an  actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual  under Statement of Financial Accounting Standard No. 5).  “Standard Letter of Credit Practice” means, for Issuing Bank, any domestic or foreign law  or letter of credit practices applicable in the city in which Issuing Bank issued the applicable Letter of Credit  or, for its branch or correspondent, such laws and practices applicable in the city in which it has advised,  confirmed or negotiated such Letter of Credit, as the case may be, in each case, (a) which letter of credit  





 






DB1/ 121979154.7      45    practices are of banks that regularly issue letters of credit in the particular city, and (b) which laws or letter  of credit practices are required or permitted under ISP or UCP, as chosen in the applicable Letter of Credit.  “Subordinated Indebtedness” means any Indebtedness of any Loan Party or its Subsidiaries  incurred from time to time that is subordinated in right of payment to the Obligations and is subject to a  subordination agreement or contains terms and conditions of subordination that are reasonably acceptable  to Agent.  “Subsidiary” of a Person means a corporation, partnership, limited liability company, or  other entity in which that Person directly or indirectly owns or controls the Equity Interests having ordinary  voting power to elect a majority of the Board of Directors of such corporation, partnership, limited liability  company, or other entity.  “Supermajority Lenders” means, at any time, Revolving Lenders having or holding more  than 66 2/3% of the aggregate Revolving Loan Exposure of all Revolving Lenders; provided, that (i) the  Revolving Loan Exposure of any Defaulting Lender shall be disregarded in the determination of the  Supermajority Lenders, and (ii) at any time there are two or more Revolving Lenders (who are not Affiliates  of one another), “Supermajority Lenders” must include at least two Revolving Lenders (who are not  Affiliates of one another or Defaulting Lenders).  “Supported QFC” has the meaning specified therefor in Section 17.15 of this Agreement.  “Swap Obligation” means, with respect to any Loan Party, any obligation to pay or perform  under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47)  of the Commodity Exchange Act.   “Swing Lender” means Wells Fargo or any other Lender that, at the request of Borrowers  and with the consent of Agent agrees, in such Lender’s sole discretion, to become the Swing Lender under  Section 2.3(b) of this Agreement.  “Swing Loan” has the meaning specified therefor in Section 2.3(b) of this Agreement.  “Swing Loan Exposure” means, as of any date of determination with respect to any Lender,  such Lender’s Pro Rata Share of the Swing Loans on such date.  “Taxes” means any taxes, levies, imposts, duties, fees, assessments or other charges of  whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing  authority thereof or therein, and all interest, penalties or similar liabilities with respect thereto.  “Tax Lender” has the meaning specified therefor in Section 14.2(a) of this Agreement.  “Term SOFR” means, for the applicable Corresponding Tenor as of the applicable  Reference Time, the forward-looking term rate based on SOFR that has been selected or recommended by  the Relevant Governmental Body.  “Term SOFR Notice” means a notification by the Agent to the Lenders and the Borrower  of the occurrence of a Term SOFR Transition Event.  “Term SOFR Transition Event” means the determination by the Agent that (a) Term SOFR  has been recommended for use by the Relevant Governmental Body, (b) the administration of Term SOFR  





 






DB1/ 121979154.7      46    is administratively feasible for the Agent and (c) a Benchmark Transition Event or an Early Opt-in Election,  as applicable, has previously occurred resulting in the replacement of the then-current Benchmark for all  purposes hereunder and under any Loan Document in accordance with Section 2.12(d) with a Benchmark  Replacement the Unadjusted Benchmark Replacement component of which is not Term SOFR.  “Tier 1 Country” means Australia, Austria, Belgium, Denmark, Finland, France, Germany,  Hong Kong, Israel, Japan, Luxembourg, Netherlands, New Zealand, Norway, Puerto Rico, Singapore,  Sweden, or Switzerland.  Notwithstanding the foregoing, Agent may at any time (and from time to time),  in its Permitted Discretion, rescind a country’s status as a “Tier 1 Country”, whereupon such country shall  immediately cease to be an “Tier 1 Country” hereunder.   “Tier 2 Country” means British Virgin Islands, Cayman Islands, Cyprus, Italy, Malaysia,  Mexico, Poland, Portugal, Spain, or Taiwan.  Notwithstanding the foregoing, Agent may at any time (and  from time to time), in its Permitted Discretion, rescind a country’s status as a “Tier 2 Country”, whereupon  such country shall immediately cease to be an “Tier 2 Country” hereunder.  “UCP” means, with respect to any Letter of Credit, the Uniform Customs and Practice for  Documentary Credits 2007 Revision, International Chamber of Commerce Publication No. 600 and any  version or revision thereof accepted by Issuing Bank for use.   “Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement  excluding the related Benchmark Replacement Adjustment.  “United States” means the United States of America.  “Unused Line Fee” has the meaning specified therefor in Section 2.10(b) of this  Agreement.  “U.S. Person” means any Person that is a “United States Person” as defined in Section  7701(a)(30) of the IRC.  “Voidable Transfer” has the meaning specified therefor in Section 17.8 of this Agreement.  “Wells Fargo” means Wells Fargo Bank, National Association, a national banking  association.  “Write-Down and Conversion Powers” means, with respect to any EEA Resolution  Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time  under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion  powers are described in the EU Bail-In Legislation Schedule.  “ZTE” means ZTE Kangxun Telecom Co Ltd. and its Affiliates.  1.2 Accounting Terms.  All accounting terms not specifically defined herein shall be  construed in accordance with GAAP; provided, that if Administrative Borrower notifies Agent that  Borrowers request an amendment to any provision hereof to eliminate the effect of any Accounting Change  occurring after the Closing Date or in the application thereof on the operation of such provision (or if Agent  notifies Administrative 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 Accounting Change  or in the application thereof, then Agent and Borrowers agree that they will negotiate in good faith  





 






DB1/ 121979154.7      47    amendments to the provisions of this Agreement that are directly affected by such Accounting Change with  the intent of having the respective positions of the Lenders and Borrowers after such Accounting Change  conform as nearly as possible to their respective positions immediately before such Accounting Change  took effect and, until any such amendments have been agreed upon and agreed to by the Required Lenders,  the provisions in this Agreement shall be calculated as if no such Accounting Change had occurred.  When  used herein, the term “financial statements” shall include the notes and schedules thereto. Whenever the  term “Borrowers” is used in respect of a financial covenant or a related definition, it shall be understood to  mean the Loan Parties and their Subsidiaries on a consolidated basis, unless the context clearly requires  otherwise.  Notwithstanding anything to the contrary contained herein, (a) all financial statements delivered  hereunder shall be prepared, and all financial covenants contained herein shall be calculated, without giving  effect to any election under the Statement of Financial Accounting Standards Board’s Accounting Standards  Codification Topic 825 (or any similar accounting principle) permitting a Person to value its financial  liabilities or Indebtedness at the fair value thereof, and (b) the term “unqualified opinion” as used herein to  refer to opinions or reports provided by accountants shall mean an opinion or report that is (i) unqualified,  and (ii) does not include any explanation, supplemental comment, or other comment concerning the ability  of the applicable Person to continue as a going concern or concerning the scope of the audit, provided, that  it shall not be a violation of this Agreement if the opinion and report accompanying the financial statements  for the fiscal year ending immediately prior to the Latest Maturity Date is subject to a “going concern” or  other qualification solely as a result of such impending Latest Maturity Date.  For purposes of calculations  made pursuant to the terms of this Agreement, GAAP will be deemed to treat operating and capital leases  in a manner consistent with their current treatment under GAAP as in effect on the Closing Date,  notwithstanding any modifications or interpretive changes thereto that may occur thereafter.  1.3 Code.  Any terms used in this Agreement that are defined in the Code shall be construed  and defined as set forth in the Code unless otherwise defined herein; provided, that to the extent that the  Code is used to define any term herein and such term is defined differently in different Articles of the Code,  the definition of such term contained in Article 9 of the Code shall govern.  1.4 Construction.  Unless the context of this Agreement or any other Loan Document clearly  requires otherwise, references to the plural include the singular, references to the singular include the plural,  the terms “includes” and  “including” are not limiting, and the term “or” has, except where otherwise  indicated, the inclusive meaning represented by the phrase “and/or.”  The words “hereof,” “herein,”  “hereby,” “hereunder,” and similar terms in this Agreement or any other Loan Document refer to this  Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision  of this Agreement or such other Loan Document, as the case may be.  Section, subsection, clause, schedule,  and exhibit references herein are to this Agreement unless otherwise specified.  Any reference in this  Agreement or in any other Loan Document to any agreement, instrument, or document shall include all  alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions,  joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations,  amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and  supplements set forth herein).  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.  Any reference  herein or in any other Loan Document to the satisfaction, repayment, or payment in full of the Obligations  shall mean (a) the payment or repayment in full in immediately available funds of (i) the principal amount  of, and interest accrued and unpaid with respect to, all outstanding Loans, together with the payment of any  premium applicable to the repayment of the Loans, (ii) all Lender Group Expenses that have accrued and  are unpaid regardless of whether demand has been made therefor, and (iii) all fees or charges that have  accrued hereunder or under any other Loan Document (including the Letter of Credit Fee and the Unused  Line Fee) and are unpaid, (b) in the case of contingent reimbursement obligations with respect to Letters of  Credit, providing Letter of Credit Collateralization, (c) in the case of obligations with respect to Bank  





 






DB1/ 121979154.7      48    Products (other than Hedge Obligations), providing Bank Product Collateralization, (d) the receipt by Agent  of cash collateral in order to secure any other contingent Obligations for which a claim or demand for  payment has been made on or prior to such time or in respect of matters or circumstances known to Agent  or a Lender at such time that are reasonably expected to result in any loss, cost, damage, or expense  (including attorneys’ fees and legal expenses), such cash collateral to be in such amount as Agent  reasonably determines is appropriate to secure such contingent Obligations, (e) the payment or repayment  in full in immediately available funds of all other outstanding Obligations (including the payment of any  termination amount then applicable (or which would or could become applicable as a result of the  repayment of the other Obligations) under Hedge Agreements provided by Hedge Providers) other than (i)  unasserted contingent indemnification Obligations, (ii) any Bank Product Obligations (other than Hedge  Obligations) that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding  without being required to be repaid or cash collateralized, and (iii) any Hedge Obligations that, at such time,  are allowed by the applicable Hedge Provider to remain outstanding without being required to be repaid,  and (f) the termination of all of the Commitments of the Lenders.  Any reference herein to any Person shall  be construed to include such Person’s successors and assigns.  Any requirement of a writing contained  herein or in any other Loan Document shall be satisfied by the transmission of a Record.  1.5 Time References.  Unless the context of this Agreement or any other Loan Document  clearly requires otherwise, all references to time of day refer to Pacific standard time or Pacific daylight  saving time, as in effect in Los Angeles, California on such day.  For purposes of the computation of a  period of time from a specified date to a later specified date, unless otherwise expressly provided, the word  “from” means “from and including” and the words “to” and “until” each means “to and including”;  provided, that with respect to a computation of fees or interest payable to Agent or any Lender, such period  shall in any event consist of at least one full day.  1.6 Schedules and Exhibits.  All of the schedules and exhibits attached to this Agreement  shall be deemed incorporated herein by reference.  1.7 Divisions.  For all purposes under the Loan Documents, in connection with any division  or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a)  if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a  different Person, then it shall be deemed to have been transferred from the original Person to the subsequent  Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been  organized on the first date of its existence by the holders of its Equity Interests at such time.  1.8 Rates; LIBOR Notification.  The interest rate on LIBOR Rate Loans and Base Rate Loans  (when determined by reference to clause (b) of the definition of Base Rate) is determined by reference to  LIBOR, which is derived from the London interbank offered rate.  The London interbank offered rate is  intended to represent the rate at which contributing banks may obtain short-term borrowings from each  other in the London interbank market.  In July 2017, the U.K. Financial Conduct Authority announced that,  after the end of 2021, it would no longer persuade or compel contributing banks to make rate submissions  to the ICE Benchmark Administration (together with any successor to the ICE Benchmark Administrator,  the “IBA”) for purposes of the IBA setting the London interbank offered rate. As a result, it is possible that  commencing in 2022, the London interbank offered rate may no longer be available or may no longer be  deemed an appropriate reference rate upon which to determine the interest rate on LIBOR Rate Loans or  Base Rate Loans (when determined by reference to clause (b) of the definition of Base Rate). In light of  this eventuality, public and private sector industry initiatives have been and continue, as of the date hereof,  to be underway to identify new or alternative reference rates to be used in place of the London interbank  offered rate.  In the event that the London interbank offered rate or any other then-current Benchmark is no  longer available or in certain other circumstances set forth in Section 2.12(d), such Section 2.12(d) provides  





 






DB1/ 121979154.7      49    a mechanism for determining an alternative rate of interest. The Agent will notify the Borrower in advance,  pursuant to Section 2.12(d), of any change to the reference rate upon which the interest rate on LIBOR Rate  Loans and Base Rate Loans (when determined by reference to clause (b) of the definition of Base Rate) is  based.  However, the Agent does not warrant or accept any responsibility for, and shall not have any liability  with respect to, (x) the administration of, submission of, calculation of or any other matter related to the  London interbank offered rate or other rates in the definition of “LIBOR” or with respect to any alternative,  comparable or successor rate thereto, or replacement rate thereof (including any then-current Benchmark  or any Benchmark Replacement), including whether the composition or characteristics of any such  alternative, successor or replacement reference rate (including any Benchmark Replacement), as it may or  may not be adjusted pursuant to Section 2.12(d), will be similar to, or produce the same value or economic  equivalence of, LIBOR or any other Benchmark, or have the same volume or liquidity as did the London  interbank offered rate or any other Benchmark prior to its discontinuance or unavailability, or (y) the effect,  implementation or composition of any Benchmark Replacement Conforming Changes.  2. LOANS AND TERMS OF PAYMENT.  2.1 Revolving Loans.  (a) Subject to the terms and conditions of this Agreement, and during the term of this  Agreement, each Revolving Lender agrees (severally, not jointly or jointly and severally) to make revolving  loans (“Revolving Loans”) to Borrowers in an amount at any one time outstanding not to exceed the lesser  of:  (i) such Lender’s Revolver Commitment, or  (ii) such Lender’s Pro Rata Share of an amount equal to the lesser of:  (A) the amount equal to (1) the Maximum Revolver Amount, less (2)  the sum of (y) the Letter of Credit Usage at such time, plus (z) the principal amount of Swing Loans  outstanding at such time, and  (B) the amount equal to (1) the Borrowing Base as of such date (based  upon the most recent Borrowing Base Certificate delivered by Borrowers to Agent, as adjusted for Reserves  established by Agent in accordance with Section 2.1(c)), less (2) the sum of (x) the Letter of Credit Usage  at such time, plus (y) the principal amount of Swing Loans outstanding at such time.  (b) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to the  terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement.  The  outstanding principal amount of the Revolving Loans, together with interest accrued and unpaid thereon,  shall constitute Obligations and shall be due and payable on the Maturity Date or, if earlier, on the date on  which they otherwise become due and payable pursuant to the terms of this Agreement.  (c) Anything to the contrary in this Section 2.1 notwithstanding, Agent shall have the  right (but not the obligation) at any time, in the exercise of its Permitted Discretion, to establish and increase  or decrease Reserves against the Borrowing Base or the Maximum Revolver Amount.  The amount of any  Reserve established by Agent, and any changes to the eligibility criteria set forth in the definitions of  Eligible Accounts shall have a reasonable relationship to the event, condition, other circumstance, or fact  that is the basis for such reserve or change in eligibility and shall not be duplicative of any other reserve  established and currently maintained or eligibility criteria.  Upon establishment or an increase in reserves,  Agent agrees to make itself available to discuss the reserve or increase, and Borrower may take such actions  as may be required so that the event, condition, circumstance, or fact that is the basis for such reserve or  





 






DB1/ 121979154.7      50    increase no longer exists, in a manner and to the extent reasonably satisfactory to Agent in the exercise of  its Permitted Discretion.    2.2 [Intentionally Omitted.]  2.3 Borrowing Procedures and Settlements.  (a) Procedure for Borrowing Revolving Loans.  Each Borrowing shall be made by  a written request by an Authorized Person delivered to Agent (which may be delivered through Agent’s  electronic platform or portal) and received by Agent no later than 11:00 a.m. (i) on the Business Day that  is the requested Funding Date in the case of a request for a Swing Loan, (ii) on the Business Day that is one  Business Day prior to the requested Funding Date in the case of a request for a Base Rate Loan, and (iii)  on the Business Day that is three Business Days prior to the requested Funding Date in the case of all other  requests, specifying (A) the amount of such Borrowing, and (B) the requested Funding Date (which shall  be a Business Day); provided, that Agent may, in its sole discretion, elect to accept as timely requests that  are received later than 11:00 a.m. on the applicable Business Day.  All Borrowing requests which are not  made on-line via Agent’s electronic platform or portal shall be subject to (and unless Agent elects otherwise  in the exercise of its sole discretion, such Borrowings shall not be made until the completion of) Agent’s  authentication process (with results satisfactory to Agent) prior to the funding of any such requested   Revolving Loan.  (b) Making of Swing Loans.  In the case of a Revolving Loan and so long as any of  (i) the aggregate amount of Swing Loans made since the last Settlement Date, minus all payments or other  amounts applied to Swing Loans since the last Settlement Date, plus the amount of the requested Swing  Loan does not exceed $10,000,000, or (ii) Swing Lender, in its sole discretion, agrees to make a Swing  Loan notwithstanding the foregoing limitation, Swing Lender shall make a Revolving Loan (any such  Revolving Loan made by Swing Lender pursuant to this Section 2.3(b) being referred to as a “Swing Loan”  and all such Revolving Loans being referred to as “Swing Loans”) available to Borrowers on the Funding  Date applicable thereto by transferring immediately available funds in the amount of such Borrowing to the  Designated Account. Each Swing Loan shall be deemed to be a Revolving Loan hereunder and shall be  subject to all the terms and conditions (including Section 3) applicable to other Revolving Loans, except  that all payments (including interest) on any Swing Loan shall be payable to Swing Lender solely for its  own account.  Subject to the provisions of Section 2.3(d)(ii), Swing Lender shall not make and shall not be  obligated to make any Swing Loan if Swing Lender has actual knowledge that (i) one or more of the  applicable conditions precedent set forth in Section 3 will not be satisfied on the requested Funding Date  for the applicable Borrowing, or (ii) the requested Borrowing would exceed the Availability on such  Funding Date.  Swing Lender shall not otherwise be required to determine whether the applicable conditions  precedent set forth in Section 3 have been satisfied on the Funding Date applicable thereto prior to making  any Swing Loan.  The Swing Loans shall be secured by Agent’s Liens, constitute Revolving Loans and  Obligations, and bear interest at the rate applicable from time to time to Revolving Loans that are Base Rate  Loans.  (c) Making of Revolving Loans.  (i) In the event that Swing Lender is not obligated to make a Swing Loan,  then after receipt of a request for a Borrowing pursuant to Section 2.3(a)(i), Agent shall notify the Lenders  by telecopy, telephone, email, or other electronic form of transmission, of the requested Borrowing; such  notification to be sent on the Business Day that is (A) in the case of a Base Rate Loan, at least one Business  Day prior to the requested Funding Date, or (B) in the case of a LIBOR Rate Loan, prior to 11:00 a.m. at  least three Business Days prior to the requested Funding Date.  If Agent has notified the Lenders of a  





 






DB1/ 121979154.7      51    requested Borrowing on the Business Day that is one Business Day prior to the Funding Date, then each  Lender shall make the amount of such Lender’s Pro Rata Share of the requested Borrowing available to  Agent in immediately available funds, to Agent’s Account, not later than 10:00 a.m. on the Business Day  that is the requested Funding Date.  After Agent’s receipt of the proceeds of such Revolving Loans from  the Lenders, Agent shall make the proceeds thereof available to Borrowers on the applicable Funding Date  by transferring immediately available funds equal to such proceeds received by Agent to the Designated  Account; provided, that subject to the provisions of Section 2.3(d)(ii), no Lender shall have an obligation  to make any Revolving Loan, if (1) one or more of the applicable conditions precedent set forth in Section  3 will not be satisfied on the requested Funding Date for the applicable Borrowing unless such condition  has been waived, or (2) the requested Borrowing would exceed the Availability on such Funding Date.  (ii) Unless Agent receives notice from a Lender prior to 9:30 a.m. on the  Business Day that is the requested Funding Date relative to a requested Borrowing as to which Agent has  notified the Lenders of a requested Borrowing that such Lender will not make available as and when  required hereunder to Agent for the account of Borrowers the amount of that Lender’s Pro Rata Share of  the Borrowing, Agent may assume that each Lender has made or will make such amount available to Agent  in immediately available funds on the Funding Date and Agent may (but shall not be so required), in reliance  upon such assumption, make available to Borrowers a corresponding amount.  If, on the requested Funding  Date, any Lender shall not have remitted the full amount that it is required to make available to Agent in  immediately available funds and if Agent has made available to Borrowers such amount on the requested  Funding Date, then such Lender shall make the amount of such Lender’s Pro Rata Share of the requested  Borrowing available to Agent in immediately available funds, to Agent’s Account, no later than 10:00 a.m.  on the Business Day that is the first Business Day after the requested Funding Date (in which case, the  interest accrued on such Lender’s portion of such Borrowing for the Funding Date shall be for Agent’s  separate account).  If any Lender shall not remit the full amount that it is required to make available to  Agent in immediately available funds as and when required hereby and if Agent has made available to  Borrowers such amount, then that Lender shall be obligated to immediately remit such amount to Agent,  together with interest at the Defaulting Lender Rate for each day until the date on which such amount is so  remitted.  A notice submitted by Agent to any Lender with respect to amounts owing under this Section  2.3(c)(ii) shall be conclusive, absent manifest error.  If the amount that a Lender is required to remit is made  available to Agent, then such payment to Agent shall constitute such Lender’s Revolving Loan for all  purposes of this Agreement.  If such amount is not made available to Agent on the Business Day following  the Funding Date, Agent will notify Administrative Borrower of such failure to fund and, upon demand by  Agent, Borrowers shall pay such amount to Agent for Agent’s account, together with interest thereon for  each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable  at the time to the Revolving Loans composing such Borrowing.  (d) Protective Advances and Optional Overadvances.  (i) Any contrary provision of this Agreement or any other Loan Document  notwithstanding (but subject to Section 2.3(d)(iv)), at any time (A) after the occurrence and during the  continuance of a Default or an Event of Default, or (B) that any of the other applicable conditions precedent  set forth in Section 3 are not satisfied, Agent hereby is authorized by Borrowers and the Lenders, from time  to time, in Agent’s sole discretion, to make Revolving Loans to, or for the benefit of, Borrowers, on behalf  of the Revolving Lenders, that Agent, in its Permitted Discretion, deems necessary or desirable (1) to  preserve or protect the Collateral, or any portion thereof, or (2) to enhance the likelihood of repayment of  the Obligations (other than the Bank Product Obligations) (the Revolving Loans described in this Section  2.3(d)(i) shall be referred to as “Protective Advances”).    





 






DB1/ 121979154.7      52    (ii) Any contrary provision of this Agreement or any other Loan Document  notwithstanding, the Lenders hereby authorize Agent or Swing Lender, as applicable, and either Agent or  Swing Lender, as applicable, may, but is not obligated to, knowingly and intentionally, continue to make  Revolving Loans (including Swing Loans) to Borrowers notwithstanding that an Overadvance exists or  would be created thereby, so long as (A) after giving effect to such Revolving Loans, the outstanding  Revolver Usage does not exceed the Borrowing Base by more than 10% of the Borrowing Base, and (B)  subject to Section 2.3(d)(iv) below, after giving effect to such Revolving Loans, the outstanding Revolver  Usage (except for and excluding amounts charged to the Loan Account for interest, fees, or Lender Group  Expenses) does not exceed the Maximum Revolver Amount.  In the event Agent obtains actual knowledge  that the Revolver Usage exceeds the amounts permitted by this Section 2.3(d), regardless of the amount of,  or reason for, such excess, Agent shall notify the Lenders as soon as practicable (and prior to making any  (or any additional) intentional Overadvances (except for and excluding amounts charged to the Loan  Account for interest, fees, or Lender Group Expenses) unless Agent determines that prior notice would  result in imminent harm to the Collateral or its value, in which case Agent may make such Overadvances  and provide notice as promptly as practicable thereafter), and the Lenders with Revolver Commitments  thereupon shall, together with Agent, jointly determine the terms of arrangements that shall be implemented  with Borrowers intended to reduce, within a reasonable time, the outstanding principal amount of the  Revolving Loans to Borrowers to an amount permitted by the preceding sentence.  In such circumstances,  if any Lender with a Revolver Commitment objects to the proposed terms of reduction or repayment of any  Overadvance, the terms of reduction or repayment thereof shall be implemented according to the  determination of the Required Lenders.  (iii) Each Protective Advance and each Overadvance (each, an “Extraordinary  Advance”) shall be deemed to be a Revolving Loan hereunder, except that no Extraordinary Advance shall  be eligible to be a LIBOR Rate Loan.  Prior to Settlement of any Extraordinary Advance, all payments with  respect thereto, including interest thereon, shall be payable to Agent solely for its own account. Each  Revolving Lender shall be obligated to settle with Agent as provided in Section 2.3(e) (or Section 2.3(g),  as applicable) for the amount of such Lender’s Pro Rata Share of any Extraordinary Advance.  The  Extraordinary Advances shall be repayable on demand, secured by Agent’s Liens, constitute Obligations  hereunder, and bear interest at the rate applicable from time to time to Revolving Loans that are Base Rate  Loans.  The provisions of this Section 2.3(d) are for the exclusive benefit of Agent, Swing Lender, and the  Lenders and are not intended to benefit Borrowers (or any other Loan Party) in any way.  (iv) Notwithstanding anything contained in this Agreement or any other Loan  Document to the contrary, no Extraordinary Advance may be made by Agent if such Extraordinary Advance  would cause the aggregate Revolver Usage to exceed the Maximum Revolver Amount or any Lender’s Pro  Rata Share of the Revolver Usage to exceed such Lender’s Revolver Commitments; provided that Agent  may make Extraordinary Advances in excess of the foregoing limitations so long as such Extraordinary  Advances that cause the aggregate Revolver Usage to exceed the Maximum Revolver Amount or a Lender’s  Pro Rata Share of the Revolver Usage to exceed such Lender’s Revolver Commitments are for Agent’s sole  and separate account and not for the account of any Lender.  No Lender shall have an obligation to settle  with Agent for such Extraordinary Advances that cause the aggregate Revolver Usage to exceed the  Maximum Revolver Amount or a Lender’s Pro Rata Share of the Revolver Usage to exceed such Lender’s  Revolver Commitments as provided in Section 2.3(e) (or Section 2.3(g), as applicable).  (e) Settlement.  It is agreed that each Lender’s funded portion of the Revolving Loans  is intended by the Lenders to equal, at all times, such Lender’s Pro Rata Share of the outstanding Revolving  Loans.  Such agreement notwithstanding, Agent, Swing Lender, and the other Lenders agree (which  agreement shall not be for the benefit of Borrowers) that in order to facilitate the administration of this  Agreement and the other Loan Documents, settlement among the Lenders as to the Revolving Loans  





 






DB1/ 121979154.7      53    (including Swing Loans and Extraordinary Advances) shall take place on a periodic basis in accordance  with the following provisions:  (i) Agent shall request settlement (“Settlement”) with the Lenders on a  weekly basis, or on a more frequent basis if so determined by Agent in its sole discretion (1) on behalf of  Swing Lender, with respect to the outstanding Swing Loans, (2) for itself, with respect to the outstanding  Extraordinary Advances, and (3) with respect to any Loan Party’s or any of their Subsidiaries’ payments or  other amounts received, as to each by notifying the Lenders by telecopy, telephone, or other similar form  of transmission, of such requested Settlement, no later than 2:00 p.m. on the Business Day immediately  prior to the date of such requested Settlement (the date of such requested Settlement being the “Settlement  Date”).  Such notice of a Settlement Date shall include a summary statement of the amount of outstanding  Revolving Loans (including Swing  Loans and Extraordinary Advances) for the period since the prior  Settlement Date.  Subject to the terms and conditions contained herein (including Section 2.3(g)):  (y) if the  amount of the Revolving Loans (including Swing Loans and Extraordinary Advances) made by a Lender  that is not a Defaulting Lender exceeds such Lender’s Pro Rata Share of the Revolving Loans (including  Swing Loans and Extraordinary Advances) as of a Settlement Date, then Agent shall, by no later than 12:00  p.m. on the Settlement Date, transfer in immediately available funds to a Deposit Account of such Lender  (as such Lender may designate), an amount such that each such Lender shall, upon receipt of such amount,  have as of the Settlement Date, its Pro Rata Share of the Revolving Loans (including Swing Loans and  Extraordinary Advances), and (z) if the amount of the Revolving Loans (including Swing Loans and  Extraordinary Advances) made by a Lender is less than such Lender’s Pro Rata Share of the Revolving  Loans (including Swing Loans and Extraordinary Advances) as of a Settlement Date, such Lender shall no  later than 12:00 p.m. on the Settlement Date transfer in immediately available funds to Agent’s Account,  an amount such that each such Lender shall, upon transfer of such amount, have as of the Settlement Date,  its Pro Rata Share of the Revolving Loans (including Swing Loans and Extraordinary Advances).  Such  amounts made available to Agent under clause (z) of the immediately preceding sentence shall be applied  against the amounts of the applicable Swing Loans or Extraordinary Advances and, together with the  portion of such Swing Loans or Extraordinary Advances representing Swing Lender’s Pro Rata Share  thereof, shall constitute Revolving Loans of such Lenders.  If any such amount is not made available to  Agent by any Lender on the Settlement Date applicable thereto to the extent required by the terms hereof,  Agent shall be entitled to recover for its account such amount on demand from such Lender together with  interest thereon at the Defaulting Lender Rate.  (ii) In determining whether a Lender’s balance of the Revolving Loans  (including Swing Loans and Extraordinary Advances) is less than, equal to, or greater than such Lender’s  Pro Rata Share of the Revolving Loans (including Swing Loans and Extraordinary Advances) as of a  Settlement Date, Agent shall, as part of the relevant Settlement, apply to such balance the portion of  payments actually received in good funds by Agent with respect to principal, interest, fees payable by  Borrowers and allocable to the Lenders hereunder, and proceeds of Collateral.  (iii) Between Settlement Dates, Agent, to the extent Extraordinary Advances  or Swing Loans are outstanding, may pay over to Agent or Swing Lender, as applicable, any payments or  other amounts received by Agent, that in accordance with the terms of this Agreement would be applied to  the reduction of the Revolving Loans, for application to the Extraordinary Advances or Swing Loans.   Between Settlement Dates, Agent, to the extent no Extraordinary Advances or Swing Loans are outstanding,  may pay over to Swing Lender any payments or other amounts received by Agent, that in accordance with  the terms of this Agreement would be applied to the reduction of the Revolving Loans, for application to  Swing Lender’s Pro Rata Share of the Revolving Loans.  If, as of any Settlement Date, payments or other  amounts of the Loan Parties or their Subsidiaries received since the then immediately preceding Settlement  Date have been applied to Swing Lender’s Pro Rata Share of the Revolving Loans other than to Swing  





 






DB1/ 121979154.7      54    Loans, as provided for in the previous sentence, Swing Lender shall pay to Agent for the accounts of the  Lenders, and Agent shall pay to the Lenders (other than a Defaulting Lender if Agent has implemented the  provisions of Section 2.3(g)), to be applied to the outstanding Revolving Loans of such Lenders, an amount  such that each such Lender shall, upon receipt of such amount, have, as of such Settlement Date, its Pro  Rata Share of the Revolving Loans.  During the period between Settlement Dates, Swing Lender with  respect to Swing Loans, Agent with respect to Extraordinary Advances, and each Lender with respect to  the Revolving Loans other than Swing Loans and Extraordinary Advances, shall be entitled to interest at  the applicable rate or rates payable under this Agreement on the daily amount of funds employed by Swing  Lender, Agent, or the Lenders, as applicable.  (iv) Anything in this Section 2.3(e) to the contrary notwithstanding, in the  event that a Lender is a Defaulting Lender, Agent shall be entitled to refrain from remitting settlement  amounts to the Defaulting Lender and, instead, shall be entitled to elect to implement the provisions set  forth in Section 2.3(g).  (f) Notation.  Consistent with Section 13.1(h), Agent, as a non-fiduciary agent for  Borrowers, shall maintain a register showing the principal amount and stated interest of the Revolving  Loans owing to each Lender, including the Swing Loans owing to Swing Lender, and Extraordinary  Advances owing to Agent, and the interests therein of each Lender, from time to time and such register  shall, absent manifest error, conclusively be presumed to be correct and accurate.  (g) Defaulting Lenders.  (i) Notwithstanding the provisions of Section 2.4(b)(iii), Agent shall not be  obligated to transfer to a Defaulting Lender any payments made by Borrowers to Agent for the Defaulting  Lender’s benefit or any proceeds of Collateral that would otherwise be remitted hereunder to the Defaulting  Lender, and, in the absence of such transfer to the Defaulting Lender, Agent shall transfer any such  payments (A) first, to Agent to the extent of any Extraordinary Advances that were made by Agent and that  were required to be, but were not, paid by Defaulting Lender, (B) second, to Swing Lender to the extent of  any Swing Loans that were made by Swing Lender and that were required to be, but were not, paid by the  Defaulting Lender,  (C) third, to Issuing Bank, to the extent of the portion of a Letter of Credit Disbursement  that was required to be, but was not, paid by the Defaulting Lender, (D) fourth, to each Non-Defaulting  Lender ratably in accordance with their Commitments (but, in each case, only to the extent that such  Defaulting Lender’s portion of a Revolving Loan (or other funding obligation) was funded by such other  Non-Defaulting Lender), (E) fifth, in Agent’s sole discretion, to a suspense account maintained by Agent,  the proceeds of which shall be retained by Agent and may be made available to be re-advanced to or for the  benefit of Borrowers (upon the request of Borrowers and subject to the conditions set forth in Section 3.2)  as if such Defaulting Lender had made its portion of Revolving Loans (or other funding obligations)  hereunder, and (F) sixth, from and after the date on which all other Obligations have been paid in full, to  such Defaulting Lender in accordance with tier (L) of Section 2.4(b)(iii).  Subject to the foregoing, Agent  may hold and, in its discretion, re-lend to Borrowers for the account of such Defaulting Lender the amount  of all such payments received and retained by Agent for the account of such Defaulting Lender.  Solely for  the purposes of voting or consenting to matters with respect to the Loan Documents (including the  calculation of Pro Rata Share in connection therewith) and for the purpose of calculating the fee payable  under Section 2.10(b), such Defaulting Lender shall be deemed not to be a “Lender” and such Lender’s  Commitment shall be deemed to be zero; provided, that the foregoing shall not apply to any of the matters  governed by Section 14.1(a)(i) through (iii).  The provisions of this Section 2.3(g) shall remain effective  with respect to such Defaulting Lender until the earlier of (y) the date on which all of the Non-Defaulting  Lenders, Agent, Issuing Bank, and Borrowers shall have waived, in writing, the application of this Section  2.3(g) to such Defaulting Lender, or (z) the date on which such Defaulting Lender makes payment of all  





 






DB1/ 121979154.7      55    amounts that it was obligated to fund hereunder, pays to Agent all amounts owing by Defaulting Lender in  respect of the amounts that it was obligated to fund hereunder, and, if requested by Agent, provides adequate  assurance of its ability to perform its future obligations hereunder (on which earlier date, so long as no  Event of Default has occurred and is continuing, any remaining cash collateral held by Agent pursuant to  Section 2.3(g)(ii) shall be released to Borrowers).  The operation of this Section 2.3(g) shall not be construed  to increase or otherwise affect the Commitment of any Lender, to relieve or excuse the performance by  such Defaulting Lender or any other Lender of its duties and obligations hereunder, or to relieve or excuse  the performance by any Borrower of its duties and obligations hereunder to Agent, Issuing Bank, or to the  Lenders other than such Defaulting Lender.  Any failure by a Defaulting Lender to fund amounts that it  was obligated to fund hereunder shall constitute a material breach by such Defaulting Lender of this  Agreement and shall entitle Borrowers, at their option, upon written notice to Agent, to arrange for a  substitute Lender to assume the Commitment of such Defaulting Lender, such substitute Lender to be  reasonably acceptable to Agent.  In connection with the arrangement of such a substitute Lender, the  Defaulting Lender shall have no right to refuse to be replaced hereunder, and agrees to execute and deliver  a completed form of Assignment and Acceptance in favor of the substitute Lender (and agrees that it shall  be deemed to have executed and delivered such document if it fails to do so) subject only to being paid its  share of the outstanding Obligations (other than Bank Product Obligations, but including (1) all interest,  fees, and other amounts that may be due and payable in respect thereof, and (2) an assumption of its Pro  Rata Share of its participation in the Letters of Credit); provided, that any such assumption of the  Commitment of such Defaulting Lender shall not be deemed to constitute a waiver of any of the Lender  Groups’ or Borrowers’ rights or remedies against any such Defaulting Lender arising out of or in relation  to such failure to fund.  In the event of a direct conflict between the priority provisions of this Section 2.3(g)  and any other provision contained in this Agreement or any other Loan Document, it is the intention of the  parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in  concert with each other.  In the event of any actual, irreconcilable conflict that cannot be resolved as  aforesaid, the terms and provisions of this Section 2.3(g) shall control and govern.  (ii) If any Swing Loan or Letter of Credit is outstanding at the time that a  Lender becomes a Defaulting Lender then:  (A) such Defaulting Lender’s Swing Loan Exposure and Letter of  Credit Exposure shall be reallocated among the Non-Defaulting Lenders in accordance with their respective  Pro Rata Shares but only to the extent (x) the sum of all Non-Defaulting Lenders’ Pro Rata Share of  Revolver Usage plus such Defaulting Lender’s Swing Loan Exposure and Letter of Credit Exposure does  not exceed the total of all Non-Defaulting Lenders’ Revolver Commitments and (y) the conditions set forth  in Section 3.2 are satisfied at such time;   (B) if the reallocation described in clause (A) above cannot, or can  only partially, be effected, Borrowers shall within one Business Day following notice by Agent (x) first,  prepay such Defaulting Lender’s Swing Loan Exposure (after giving effect to any partial reallocation  pursuant to clause (A) above), and (y) second, cash collateralize such Defaulting Lender’s Letter of Credit  Exposure (after giving effect to any partial reallocation pursuant to clause (A) above), pursuant to a cash  collateral agreement to be entered into in form and substance reasonably satisfactory to Agent, for so long  as such Letter of Credit Exposure is outstanding; provided, that Borrowers shall not be obligated to cash  collateralize any Defaulting Lender’s Letter of Credit Exposure if such Defaulting Lender is also Issuing  Bank;  (C) if Borrowers cash collateralize any portion of such Defaulting  Lender’s Letter of Credit Exposure pursuant to this Section 2.3(g)(ii), Borrowers shall not be required to  pay any Letter of Credit Fees to Agent for the account of such Defaulting Lender pursuant to Section 2.6(b)  





 






DB1/ 121979154.7      56    with respect to such cash collateralized portion of such Defaulting Lender’s Letter of Credit Exposure  during the period such Letter of Credit Exposure is cash collateralized;  (D) to the extent the Letter of Credit Exposure of the Non-Defaulting  Lenders is reallocated pursuant to this Section 2.3(g)(ii), then the Letter of Credit Fees payable to the Non- Defaulting Lenders pursuant to Section 2.6(b) shall be adjusted in accordance with such Non-Defaulting  Lenders’ Letter of Credit Exposure;  (E) to the extent any Defaulting Lender’s Letter of Credit Exposure is  neither cash collateralized nor reallocated pursuant to this Section 2.3(g)(ii), then, without prejudice to any  rights or remedies of Issuing Bank or any Lender hereunder, all Letter of Credit Fees that would have  otherwise been payable to such Defaulting Lender under Section 2.6(b) with respect to such portion of such  Letter of Credit Exposure shall instead be payable to Issuing Bank until such portion of such Defaulting  Lender’s Letter of Credit Exposure is cash collateralized or reallocated;  (F) so long as any Lender is a Defaulting Lender, the Swing Lender  shall not be required to make any Swing Loan and Issuing Bank shall not be required to issue, amend, or  increase any Letter of Credit, in each case, to the extent (x) the Defaulting Lender’s Pro Rata Share of such  Swing Loans or Letter of Credit cannot be reallocated pursuant to this Section 2.3(g)(ii), or (y) the Swing  Lender or Issuing Bank, as applicable, has not otherwise entered into arrangements reasonably satisfactory  to the Swing Lender or Issuing Bank, as applicable, and Borrowers to eliminate the Swing Lender’s or  Issuing Bank’s risk with respect to the Defaulting Lender’s participation in Swing Loans or Letters of  Credit; and  (G) Agent may release any cash collateral provided by Borrowers  pursuant to this Section 2.3(g)(ii) to Issuing Bank and Issuing Bank may apply any such cash collateral to  the payment of such Defaulting Lender’s Pro Rata Share of any Letter of Credit Disbursement that is not  reimbursed by Borrowers pursuant to Section 2.11(d).  Subject to Section 17.14, no reallocation hereunder  shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising  from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as  a result of such Non-Defaulting Lender’s increased exposure following such reallocation.  (h) Independent Obligations.  All Revolving Loans (other than Swing Loans and  Extraordinary Advances) shall be made by the Lenders contemporaneously and in accordance with their  Pro Rata Shares.  It is understood that (i) no Lender shall be responsible for any failure by any other Lender  to perform its obligation to make any Revolving Loan (or other extension of credit) hereunder, nor shall  any Commitment of any Lender be increased or decreased as a result of any failure by any other Lender to  perform its obligations hereunder, and (ii) no failure by any Lender to perform its obligations hereunder  shall excuse any other Lender from its obligations hereunder.  2.4 Payments; Reductions of Commitments; Prepayments.  (a) Payments by Borrowers.  (i) Except as otherwise expressly provided herein, all payments by Borrowers  shall be made to Agent’s Account for the account of the Lender Group and shall be made in immediately  available funds, no later than 1:30 p.m. on the date specified herein.  Any payment received by Agent later  than 1:30 p.m. shall be deemed to have been received (unless Agent, in its sole discretion, elects to credit  





 






DB1/ 121979154.7      57    it on the date received) on the following Business Day and any applicable interest or fee shall continue to  accrue until such following Business Day.  (ii) Unless Agent receives notice from Borrowers prior to the date on which  any payment is due to the Lenders that Borrowers will not make such payment in full as and when required,  Agent may assume that Borrowers have made (or will make) such payment in full to Agent on such date in  immediately available funds and Agent may (but shall not be so required), in reliance upon such assumption,  distribute to each Lender on such due date an amount equal to the amount then due such Lender.  If and to  the extent Borrowers do not make such payment in full to Agent on the date when due, each Lender  severally shall repay to Agent on demand such amount distributed to such Lender, together with interest  thereon at the Defaulting Lender Rate for each day from the date such amount is distributed to such Lender  until the date repaid.  (b) Apportionment and Application.  (i) So long as no Application Event has occurred and is continuing and except  as otherwise provided herein with respect to Defaulting Lenders, all principal and interest payments  received by Agent shall be apportioned ratably among the Lenders (according to the unpaid principal  balance of the Obligations to which such payments relate held by each Lender) and all payments of fees  and expenses received by Agent (other than fees or expenses that are for Agent’s separate account or for  the separate account of Issuing Bank) shall be apportioned ratably among the Lenders having a Pro Rata  Share of the type of Commitment or Obligation to which a particular fee or expense relates.  (ii) Subject to Section 2.4(b)(v), Section 2.4(d), and Section 2.4(e), all  payments to be made hereunder by Borrowers shall be remitted to Agent and all such payments, and all  proceeds of Collateral received by Agent, shall be applied, so long as no Application Event has occurred  and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, to reduce the  balance of the Revolving Loans outstanding and, thereafter, to Borrowers (to be wired to the Designated  Account) or such other Person entitled thereto under applicable law.  (iii) At any time that an Application Event has occurred and is continuing and  except as otherwise provided herein with respect to Defaulting Lenders, all payments remitted to Agent and  all proceeds of Collateral received by Agent shall be applied as follows:  (A) first, to pay any Lender Group Expenses (including cost or  expense reimbursements) or indemnities then due to Agent under the Loan Documents and to pay interest  and principal on Extraordinary Advances that are held solely by Agent pursuant to the terms of Section  2.3(d)(iv), until paid in full,  (B) second, to pay any fees or premiums then due to Agent under the  Loan Documents, until paid in full,  (C) third, to pay interest due in respect of all Protective Advances,  until paid in full,  (D) fourth, to pay the principal of all Protective Advances, until paid  in full,  (E) fifth, ratably, to pay any Lender Group Expenses (including cost  or expense reimbursements) or indemnities then due to any of the Lenders under the Loan Documents, until  paid in full,  





 






DB1/ 121979154.7      58    (F) sixth, ratably, to pay any fees or premiums then due to any of the  Lenders under the Loan Documents, until paid in full,  (G) seventh, to pay interest accrued in respect of the Swing Loans,  until paid in full,  (H) eighth, to pay the principal of all Swing Loans, until paid in full,  (I) ninth, ratably, to pay interest accrued in respect of the Revolving  Loans (other than Protective Advances and Swing Loans), until paid in full,  (J) tenth, ratably  i. ratably, to pay the principal of all Revolving  Loans (other than Protective Advances and Swing Loans), until paid in full,  ii. to Agent, to be held by Agent, for the benefit of  Issuing Bank (and for the ratable benefit of each of the Lenders that have an obligation to pay to Agent, for  the account of Issuing Bank, a share of each Letter of Credit Disbursement), as cash collateral in an amount  up to 105% of the Letter of Credit Usage (to the extent permitted by applicable law, such cash collateral  shall be applied to the reimbursement of any Letter of Credit Disbursement as and when such disbursement  occurs and, if a Letter of Credit expires undrawn, the cash collateral held by Agent in respect of such Letter  of Credit shall, to the extent permitted by applicable law, be reapplied pursuant to this Section 2.4(b)(iii),  beginning with tier (A) hereof),  iii. ratably, to (y) the Bank Product Providers based  upon amounts then certified by each applicable Bank Product Provider to Agent (in form and substance  satisfactory to Agent) to be due and payable to such Bank Product Provider on account of Bank Product  Obligations, and (z) with any balance to be paid to Agent, to be held by Agent, for the ratable benefit of the  Bank Product Providers, as cash collateral (which cash collateral may be released by Agent to the applicable  Bank Product Provider and applied by such Bank Product Provider to the payment or reimbursement of any  amounts due and payable with respect to Bank Product Obligations owed to the applicable Bank Product  Provider as and when such amounts first become due and payable and, if and at such time as all such Bank  Product Obligations are paid or otherwise satisfied in full, the cash collateral held by Agent in respect of  such Bank Product Obligations shall be reapplied pursuant to this Section 2.4(b)(iii), beginning with tier  (A) hereof,  (K) eleventh, to pay any other Obligations other than Obligations  owed to Defaulting Lenders (including being paid, ratably, to the Bank Product Providers on account of all  amounts then due and payable in respect of Bank Product Obligations, with any balance to be paid to Agent,  to be held by Agent, for the ratable benefit of the Bank Product Providers, as cash collateral (which cash  collateral may be released by Agent to the applicable Bank Product Provider and applied by such Bank  Product Provider to the payment or reimbursement of any amounts due and payable with respect to Bank  Product Obligations owed to the applicable Bank Product Provider as and when such amounts first become  due and payable and, if and at such time as all such Bank Product Obligations are paid or otherwise satisfied  in full, the cash collateral held by Agent in respect of such Bank Product Obligations shall be reapplied  pursuant to this Section 2.4(b)(iii), beginning with tier (A) hereof),  (L) twelfth, ratably to pay any Obligations owed to Defaulting  Lenders; and  





 






DB1/ 121979154.7      59    (M) thirteenth, to Borrowers (to be wired to the Designated Account)  or such other Person entitled thereto under applicable law.  (iv) Agent promptly shall distribute to each Lender, pursuant to the applicable  wire instructions received from each Lender in writing, such funds as it may be entitled to receive, subject  to a Settlement delay as provided in Section 2.3(e).  (v) In each instance, so long as no Application Event has occurred and is  continuing, Section 2.4(b)(ii) shall not apply to any payment made by Borrowers to Agent and specified by  Borrowers to be for the payment of specific Obligations then due and payable (or prepayable) under any  provision of this Agreement or any other Loan Document.  (vi) For purposes of Section 2.4(b)(iii), “paid in full” of a type of Obligation  means payment in cash or immediately available funds of all amounts owing on account of such type of  Obligation, including interest accrued after the commencement of any Insolvency Proceeding, default  interest, interest on interest, and expense reimbursements, irrespective of whether any of the foregoing  would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.  (vii) In the event of a direct conflict between the priority provisions of this  Section 2.4 and any other provision contained in this Agreement or any other Loan Document, it is the  intention of the parties hereto that such provisions be read together and construed, to the fullest extent  possible, to be in concert with each other.  In the event of any actual, irreconcilable conflict that cannot be  resolved as aforesaid, if the conflict relates to the provisions of Section 2.3(g) and this Section 2.4, then the  provisions of Section 2.3(g) shall control and govern, and if otherwise, then the terms and provisions of this  Section 2.4 shall control and govern.  (c) Reduction of Commitments.  The Revolver Commitments shall terminate on the  Maturity Date or earlier termination thereof pursuant to the terms of this Agreement.  Borrowers may reduce  the Revolver Commitments, without premium or penalty, to an amount (which may be zero) not less than  the sum of (A) the Revolver Usage as of such date, plus (B) the principal amount of all Revolving Loans  not yet made as to which a request has been given by Borrowers under Section 2.3(a), plus (C) the amount  of all Letters of Credit not yet issued as to which a request has been given by Borrowers pursuant to Section  2.11(a).  Each such reduction shall be in an amount which is not less than $5,000,000 (unless the Revolver  Commitments are being reduced to zero), shall be made by providing not less than ten Business Days prior  written notice to Agent, and shall be irrevocable.  The Revolver Commitments, once reduced, may not be  increased.  Each such reduction of the Revolver Commitments shall reduce the Revolver Commitments of  each Lender proportionately in accordance with its ratable share thereof.  In connection with any reduction  in the Revolver Commitments prior to the Maturity Date, if any Loan Party or any of its Subsidiaries owns  any Margin Stock, Borrowers shall deliver to Agent an updated Form U-1 (with sufficient additional  originals thereof for each Lender), duly executed and delivered by the Borrowers, together with such other  documentation as Agent shall reasonably request, in order to enable Agent and the Lenders to comply with  any of the requirements under Regulations T, U or X of the Federal Reserve Board.  (d) Optional Prepayments. Borrowers may prepay the principal of any Revolving  Loan at any time in whole or in part, without premium or penalty.  (e) Mandatory Prepayments.  If, at any time, (A) the Revolver Usage on such date  exceeds (B) the lesser of (x) the Borrowing Base reflected in the Borrowing Base Certificate most recently  delivered by Borrowers to Agent, or (y) the Maximum Revolver Amount, in all cases as adjusted for  Reserves established by Agent in accordance with Section 2.1(c), then Borrowers shall immediately prepay  





 






DB1/ 121979154.7      60    the Obligations in accordance with Section 2.4(f) in an aggregate amount equal to the amount of such  excess.  (f) Application of Payments.  Each prepayment pursuant to Section 2.4(e) shall,  (1) so long as no Application Event shall have occurred and be continuing, be applied, first, to the  outstanding principal amount of the Revolving Loans until paid in full, and second, to cash collateralize the  Letters of Credit in an amount equal to 103% of the then outstanding Letter of Credit Usage, and (2) if an  Application Event shall have occurred and be continuing, be applied in the manner set forth in  Section 2.4(b)(iii).   2.5 Promise to Pay; Promissory Notes.  (a) Borrowers agree to pay the Lender Group Expenses on the earlier of (i) the first  day of the month following the date on which the applicable Lender Group Expenses were first incurred,  or (ii) the date on which demand therefor is made by Agent (it being acknowledged and agreed that any  charging of such costs, expenses or Lender Group Expenses to the Loan Account pursuant to the provisions  of Section 2.6(d) shall be deemed to constitute a demand for payment thereof for the purposes of this  subclause (ii)).  Borrowers promise to pay all of the Obligations (including principal, interest, premiums, if  any, fees, costs, and expenses (including Lender Group Expenses)) in full on the Maturity Date or, if earlier,  on the date on which the Obligations (other than the Bank Product Obligations) become due and payable  pursuant to the terms of this Agreement. Borrowers agree that their obligations contained in the first  sentence of this Section 2.5(a) shall survive payment or satisfaction in full of all other Obligations.  (b) Any Lender may request that any portion of its Commitments or the Loans made  by it be evidenced by one or more promissory notes.  In such event, Borrowers shall execute and deliver to  such Lender the requested promissory notes payable to the order of such Lender in a form furnished by  Agent and reasonably satisfactory to Borrowers.  Thereafter, the portion of the Commitments and Loans  evidenced by such promissory notes and interest thereon shall at all times be represented by one or more  promissory notes in such form payable to the order of the payee named therein.  2.6 Interest Rates and Letter of Credit Fee:  Rates, Payments, and Calculations.  (a) Interest Rates.  Except as provided in Section 2.6(c) and Section 2.12(d), all  Obligations (except for undrawn Letters of Credit) that have been charged to the Loan Account pursuant to  the terms hereof shall bear interest as follows:  (i) if the relevant Obligation is a LIBOR Rate Loan, at a per annum rate equal  to the LIBOR Rate plus the Revolving Loan LIBOR Rate Margin, and  (ii) otherwise, at a per annum rate equal to the Base Rate plus the Revolving  Loan Base Rate Margin.  (b) Letter of Credit Fee.  Borrowers shall pay Agent (for the ratable benefit of the  Revolving Lenders), a Letter of Credit fee (the “Letter of Credit Fee”) (which fee shall be in addition to the  fronting fees and  commissions, other fees, charges and expenses set forth in Section 2.11(k)) that shall  accrue at a per annum rate equal to the Revolving Loan LIBOR Rate Margin times the average amount of  the Letter of Credit Usage during the immediately preceding month.  (c) Default Rate.  (i) Automatically upon the occurrence and during the continuation  of an Event of Default under Section 8.4 or 8.5 and (ii) upon the occurrence and during the continuation of  any other Event of Default (other than an Event of Default under Section 8.4 or 8.5), at the direction of  





 






DB1/ 121979154.7      61    Agent or the Required Lenders, and upon written notice by Agent to Borrowers of such direction (provided,  that such notice shall not be required for any Event of Default under Section 8.1), (A) all Loans and all  Obligations (except for undrawn Letters of Credit) that have been charged to the Loan Account pursuant to  the terms hereof shall bear interest at a per annum rate equal to two percentage points above the per annum  rate otherwise applicable thereunder, and (B) the Letter of Credit Fee shall be increased to two percentage  points above the per annum rate otherwise applicable hereunder.   (d) Payment.  Except to the extent provided to the contrary in Section 2.10, Section  2.11(k) or Section 2.12(a), (i) all interest and all other fees payable hereunder or under any of the other  Loan Documents (other than Letter of Credit Fees) shall be due and payable, in arrears, on the first day of  each month, (ii) all Letter of Credit Fees payable hereunder, and all fronting fees and all commissions, other  fees, charges and expenses provided for in Section 2.11(k)  shall be due and payable, in arrears, on the first  Business Day of each month, and (iii) all costs and expenses payable hereunder or under any of the other  Loan Documents, and all other Lender Group Expenses shall be due and payable on the earlier of (x) the  first day of the month following the date on which the applicable costs, expenses, or Lender Group Expenses  were first incurred, or (y) the date on which demand therefor is made by Agent (it being acknowledged and  agreed that any charging of such costs, expenses or Lender Group Expenses to the Loan Account pursuant  to the provisions of the following sentence shall be deemed to constitute a demand for payment thereof for  the purposes of this subclause (y)).  Borrowers hereby authorize Agent, from time to time without prior  notice to Borrowers, to charge to the Loan Account (A) on the first day of each month, all interest accrued  during the prior month on the Revolving Loans hereunder, (B) on the first Business Day of each month, all  Letter of Credit Fees accrued or chargeable hereunder during the prior month, (C) as and when incurred or  accrued, all fees and costs provided for in Section 2.10(a) or (c), (D) on the first day of each month, the  Unused Line Fee accrued during the prior month pursuant to Section 2.10(b), (E) as and when due and  payable, all other fees payable hereunder or under any of the other Loan Documents, (F) as and when  incurred or accrued, all other Lender Group Expenses, and (G) as and when due and payable all other  payment obligations payable under any Loan Document or any Bank Product Agreement (including any  amounts due and payable to the Bank Product Providers in respect of Bank Products).  All amounts  (including interest, fees, costs, expenses, Lender Group Expenses, or other amounts payable hereunder or  under any other Loan Document or under any Bank Product Agreement) charged to the Loan Account shall  thereupon constitute Revolving Loans hereunder, shall constitute Obligations hereunder, and shall initially  accrue interest at the rate then applicable to Revolving Loans that are Base Rate Loans (unless and until  converted into LIBOR Rate Loans in accordance with the terms of this Agreement).  (e) Computation.  All interest and fees chargeable under the Loan Documents shall  be computed on the basis of a 360 day year, in each case, for the actual number of days elapsed in the period  during which the interest or fees accrue. In the event the Base Rate is changed from time to time hereafter,  the rates of interest hereunder based upon the Base Rate automatically and immediately shall be increased  or decreased by an amount equal to such change in the Base Rate.  (f) Intent to Limit Charges to Maximum Lawful Rate.  In no event shall the interest  rate or rates payable under this Agreement, plus any other amounts paid in connection herewith, exceed the  highest rate permissible under any law that a court of competent jurisdiction shall, in a final determination,  deem applicable.  Borrowers and the Lender Group, in executing and delivering this Agreement, intend  legally to agree upon the rate or rates of interest and manner of payment stated within it; provided, that  anything contained herein to the contrary notwithstanding, if such rate or rates of interest or manner of  payment exceeds the maximum allowable under applicable law, then, ipso facto, as of the date of this  Agreement, Borrowers are and shall be liable only for the payment of such maximum amount as is allowed  by law, and payment received from Borrowers in excess of such legal maximum, whenever received, shall  be applied to reduce the principal balance of the Obligations to the extent of such excess.  





 






DB1/ 121979154.7      62    2.7 Crediting Payments.  The receipt of any payment item by Agent shall not be required to  be considered a payment on account unless such payment item is a wire transfer of immediately available  funds made to Agent’s Account or unless and until such payment item is honored when presented for  payment.  Should any payment item not be honored when presented for payment, then Borrowers shall be  deemed not to have made such payment.  Anything to the contrary contained herein notwithstanding, any  payment item shall be deemed received by Agent only if it is received into Agent’s Account on a Business  Day on or before 1:30 p.m.  If any payment item is received into Agent’s Account on a non-Business Day  or after 1:30 p.m. on a Business Day (unless Agent, in its sole discretion, elects to credit it on the date  received), it shall be deemed to have been received by Agent as of the opening of business on the  immediately following Business Day.  2.8 Designated Account.  Agent is authorized to make the Revolving Loans, and Issuing Bank  is authorized to issue the Letters of Credit, under this Agreement based upon telephonic or other instructions  received from anyone purporting to be an Authorized Person or, without instructions, if pursuant to Section  2.6(d).  Borrowers agree to establish and maintain the Designated Account with the Designated Account  Bank for the purpose of receiving the proceeds of the Revolving Loans requested by Borrowers and made  by Agent or the Lenders hereunder.  Unless otherwise agreed by Agent and Borrowers, any Revolving Loan  or Swing Loan requested by Borrowers and made by Agent or the Lenders hereunder shall be made to the  Designated Account.  2.9 Maintenance of Loan Account; Statements of Obligations.  Agent shall maintain an  account on its books in the name of Borrowers (the “Loan Account”) on which Borrowers will be charged  with all Revolving Loans (including Extraordinary Advances and Swing Loans) made by Agent, Swing  Lender, or the Lenders to Borrowers or for Borrowers’ account, the Letters of Credit issued or arranged by  Issuing Bank for Borrowers’ account, and with all other payment Obligations hereunder or under the other  Loan Documents, including, accrued interest, fees and expenses, and Lender Group Expenses.  In  accordance with Section 2.7, the Loan Account will be credited with all payments received by Agent from  Borrowers or for Borrowers’ account.  Agent shall make available to Borrowers monthly statements  regarding the Loan Account, including the principal amount of the Revolving Loans, interest accrued  hereunder, fees accrued or charged hereunder or under the other Loan Documents, and a summary  itemization of all charges and expenses constituting Lender Group Expenses accrued hereunder or under  the other Loan Documents, and each such statement, absent manifest error, shall be conclusively presumed  to be correct and accurate and constitute an account stated between Borrowers and the Lender Group unless,  within 30 days after Agent first makes such a statement available to Borrowers, Borrowers shall deliver to  Agent written objection thereto describing the error or errors contained in such statement.  2.10 Fees.  (a) Agent Fees.  Borrowers shall pay to Agent, for the account of Agent, as and when  due and payable under the terms of the Fee Letter, the fees set forth in the Fee Letter.  (b) Unused Line Fee.  Borrowers shall pay to Agent, for the ratable account of the  Revolving Lenders, an unused line fee (the “Unused Line Fee”) in an amount equal to 0.25% per annum  times the result of (i) the aggregate amount of the Revolver Commitments, less (ii) the Average Revolver  Usage during the immediately preceding month (or portion thereof), which Unused Line Fee shall be due  and payable, in arrears, on the first day of each month from and after the Closing Date up to the first day of  the month prior to the date on which the Obligations are paid in full and on the date on which the Obligations  are paid in full.  





 






DB1/ 121979154.7      63    (c) Field Examination and Other Fees.  Subject to any applicable limitations  contained in Section 5.7(c), Borrowers shall pay to Agent, field examination, appraisal, and valuation fees  and charges, as and when incurred or chargeable, as follows (i) a fee of $1,000 per day, per examiner, plus  out-of-pocket expenses (including travel, meals, and lodging) for each field examination of any Loan Party  or its Subsidiaries performed by or on behalf of Agent, and (ii) the fees, charges or expenses paid or incurred  by Agent if it elects to employ the services of one or more third Persons to perform field exams, to appraise  the Collateral, or any portion thereof, or to assess any Loan Party’s or its Subsidiaries’ business valuation;  provided that so long as no Event of Default shall have and be continuing, Borrowers shall not be obligated  to reimburse Agent for more than one (1) field exam during any calendar year; provided further, that while  an Increased Reporting Period is continuing the Borrowers shall be obligated to reimburse Agent for two  (2) field exams for any such calendar year.  2.11 Letters of Credit.  (a) Subject to the terms and conditions of this Agreement, upon the request of  Borrowers made in accordance herewith, and prior to the Maturity Date, Issuing Bank agrees to issue a  requested standby Letter of Credit or a sight commercial Letter of Credit for the account of Borrowers.  By  submitting a request to Issuing Bank for the issuance of a Letter of Credit, Borrowers shall be deemed to  have requested that Issuing Bank issue the requested Letter of Credit.  Each request for the issuance of a  Letter of Credit, or the amendment, renewal, or extension of any outstanding Letter of Credit, shall be (i)  irrevocable and  made in writing by an Authorized Person, (ii) delivered to Agent and Issuing Bank via  telefacsimile or other electronic method of transmission reasonably acceptable to Agent and Issuing Bank  and reasonably in advance of the requested date of issuance, amendment, renewal, or extension, and (iii)  subject to Issuing Bank’s authentication procedures with results satisfactory to Issuing Bank.  Each such  request shall be in form and substance reasonably satisfactory to Agent and Issuing Bank and (i) shall  specify (A) the amount of such Letter of Credit, (B) the date of issuance, amendment, renewal, or extension  of such Letter of Credit, (C) the proposed expiration date of such Letter of Credit, (D) the name and address  of the beneficiary of the Letter of Credit, and (E) such other information (including, the conditions to  drawing, and, in the case of an amendment, renewal, or extension, identification of the Letter of Credit to  be so amended, renewed, or extended) as shall be necessary to prepare, amend, renew, or extend such Letter  of Credit, and (ii) shall be accompanied by such Issuer Documents as Agent or Issuing Bank may request  or require, to the extent that such requests or requirements are consistent with the Issuer Documents that  Issuing Bank generally requests for Letters of Credit in similar circumstances.  Issuing Bank’s records of  the content of any such request will be conclusive.  Anything contained herein to the contrary  notwithstanding, Issuing Bank may, but shall not be obligated to, issue a Letter of Credit that supports the  obligations of a Loan Party or one of its Subsidiaries in respect of (x) a lease of real property, or (y) an  employment contract.  (b) Issuing Bank shall have no obligation to issue a Letter of Credit if any of the  following would result after giving effect to the requested issuance:  (i) the Letter of Credit Usage would exceed the Letter of Credit Sublimit, or  (ii) the Letter of Credit Usage would exceed the Maximum Revolver Amount  less the outstanding amount of Revolving Loans (including Swing Loans), or  (iii) the Letter of Credit Usage would exceed the Borrowing Base at such time  less the outstanding principal balance of the Revolving Loans (inclusive of Swing Loans) at such time.  (c) In the event there is a Defaulting Lender as of the date of any request for the  issuance of a Letter of Credit, Issuing Bank shall not be required to issue or arrange for such Letter of Credit  





 






DB1/ 121979154.7      64    to the extent (i) the Defaulting Lender’s Letter of Credit Exposure with respect to such Letter of Credit may  not be reallocated pursuant to Section 2.3(g)(ii), or (ii) Issuing Bank has not otherwise entered into  arrangements reasonably satisfactory to it and Borrowers to eliminate Issuing Bank’s risk with respect to  the participation in such Letter of Credit of the Defaulting Lender, which arrangements may include  Borrowers cash collateralizing such Defaulting Lender’s Letter of Credit Exposure in accordance with  Section 2.3(g)(ii).  Additionally, Issuing Bank shall have no obligation to issue or extend a Letter of Credit  if (A) any order, judgment, or decree of any Governmental Authority or arbitrator shall, by its terms, purport  to enjoin or restrain Issuing Bank from issuing such Letter of Credit, or any law applicable to Issuing Bank  or any request or directive (whether or not having the force of law) from any Governmental Authority with  jurisdiction over Issuing Bank shall prohibit or request that Issuing Bank refrain from the issuance of letters  of credit generally or such Letter of Credit in particular, (B) the issuance of such Letter of Credit would  violate one or more policies of Issuing Bank applicable to letters of credit generally, or (C) if amounts  demanded to be paid under any Letter of Credit will not or may not be in United States Dollars.  (d) Any Issuing Bank (other than Wells Fargo or any of its Affiliates) shall notify  Agent in writing no later than the Business Day prior to the Business Day on which such Issuing Bank  issues any Letter of Credit.  In addition, each Issuing Bank (other than Wells Fargo or any of its Affiliates)  shall, on the first Business Day of each week, submit to Agent a report detailing the daily undrawn amount  of each Letter of Credit issued by such Issuing Bank during the prior calendar week.  Each Letter of Credit  shall be in form and substance reasonably acceptable to Issuing Bank, including the requirement that the  amounts payable thereunder must be payable in Dollars.  If Issuing Bank makes a payment under a Letter  of Credit, Borrowers shall pay to Agent an amount equal to the applicable Letter of Credit Disbursement  on the Business Day such Letter of Credit Disbursement is made and, in the absence of such payment, the  amount of the Letter of Credit Disbursement immediately and automatically shall be deemed to be a  Revolving Loan hereunder (notwithstanding any failure to satisfy any condition precedent set forth in  Section 3) and, initially, shall bear interest at the rate then applicable to Revolving Loans that are Base Rate  Loans. If a Letter of Credit Disbursement is deemed to be a Revolving Loan hereunder, Borrowers’  obligation to pay the amount of such Letter of Credit Disbursement to Issuing Bank shall be automatically  converted into an obligation to pay the resulting Revolving Loan.  Promptly following receipt by Agent of  any payment from Borrowers pursuant to this paragraph, Agent shall distribute such payment to Issuing  Bank or, to the extent that Revolving Lenders have made payments pursuant to Section 2.11(e) to reimburse  Issuing Bank, then to such Revolving Lenders and Issuing Bank as their interests may appear.  (e) Promptly following receipt of a notice of a Letter of Credit Disbursement pursuant  to Section 2.11(d), each Revolving Lender agrees to fund its Pro Rata Share of any Revolving Loan deemed  made pursuant to Section 2.11(d) on the same terms and conditions as if Borrowers had requested the  amount thereof as a Revolving Loan and Agent shall promptly pay to Issuing Bank the amounts so received  by it from the Revolving Lenders.  By the issuance of a Letter of Credit (or an amendment, renewal, or  extension of a Letter of Credit) and without any further action on the part of Issuing Bank or the Revolving  Lenders, Issuing Bank shall be deemed to have granted to each Revolving Lender, and each Revolving  Lender shall be deemed to have purchased, a participation in each Letter of Credit issued by Issuing Bank,  in an amount equal to its Pro Rata Share of such Letter of Credit, and each such Revolving Lender agrees  to pay to Agent, for the account of Issuing Bank, such Revolving Lender’s Pro Rata Share of any Letter of  Credit Disbursement made by Issuing Bank under the applicable Letter of Credit.  In consideration and in  furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay  to Agent, for the account of Issuing Bank, such Revolving Lender’s Pro Rata Share of each Letter of Credit  Disbursement made by Issuing Bank and not reimbursed by Borrowers on the date due as provided in  Section 2.11(d), or of any reimbursement payment that is required to be refunded (or that Agent or Issuing  Bank elects, based upon the advice of counsel, to refund) to Borrowers for any reason.  Each Revolving  Lender acknowledges and agrees that its obligation to deliver to Agent, for the account of Issuing Bank, an  





 






DB1/ 121979154.7      65    amount equal to its respective Pro Rata Share of each Letter of Credit Disbursement pursuant to this Section  2.11(e) shall be absolute and unconditional and such remittance shall be made notwithstanding the  occurrence or continuation of an Event of Default or Default or the failure to satisfy any condition set forth  in Section 3.  If any such Revolving Lender fails to make available to Agent the amount of such Revolving  Lender’s Pro Rata Share of a Letter of Credit Disbursement as provided in this Section, such Revolving  Lender shall be deemed to be a Defaulting Lender and Agent (for the account of Issuing Bank) shall be  entitled to recover such amount on demand from such Revolving Lender together with interest thereon at  the Defaulting Lender Rate until paid in full.  (f) Each Borrower agrees to indemnify, defend and hold harmless each member of the  Lender Group (including Issuing Bank and its branches, Affiliates, and correspondents) and each such  Person’s respective directors, officers, employees, attorneys and agents (each, including Issuing Bank, a  “Letter of Credit Related Person”) (to the fullest extent permitted by law) from and against any and all  claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and damages,  and all reasonable fees and disbursements of attorneys, experts, or consultants and all other costs and  expenses actually incurred in connection therewith or in connection with the enforcement of this  indemnification (as and when they are incurred and irrespective of whether suit is brought), which may be  incurred by or awarded against any such Letter of Credit Related Person (other than Taxes, which shall be  governed by Section 16) (the “Letter of Credit Indemnified Costs”), and which arise out of or in connection  with, or as a result of:  (i) any Letter of Credit or any pre-advice of its issuance;  (ii) any transfer, sale, delivery, surrender or endorsement (or lack thereof) of  any Drawing Document at any time(s) held by any such Letter of Credit Related Person in connection with  any Letter of Credit;  (iii) any action or proceeding arising out of, or in connection with, any Letter  of Credit (whether administrative, judicial or in connection with arbitration), including any action or  proceeding to compel or restrain any presentation or payment under any Letter of Credit, or for the wrongful  dishonor of, or honoring a presentation under, any Letter of Credit;  (iv) any independent undertakings issued by the beneficiary of any Letter of  Credit;  (v) any unauthorized instruction or request made to Issuing Bank in  connection with any Letter of Credit or requested Letter of Credit, or any error, omission, interruption or  delay in such instruction or request, whether transmitted by mail, courier, electronic transmission, SWIFT,  or any other telecommunication including communications through a correspondent;  (vi) an adviser, confirmer or other nominated person seeking to be reimbursed,  indemnified or compensated;  (vii) any third party seeking to enforce the rights of an applicant, beneficiary,  nominated person, transferee, assignee of Letter of Credit proceeds or holder of an instrument or document;  (viii) the fraud, forgery or illegal action of parties other than the Letter of Credit  Related Person;  





 






DB1/ 121979154.7      66    (ix) any prohibition on payment or delay in payment of any amount payable  by Issuing Bank to a beneficiary or transferee beneficiary of a Letter of Credit arising out of Anti-Corruption  Laws, Anti-Money Laundering Laws, or Sanctions;   (x) Issuing Bank’s performance of the obligations of a confirming institution  or entity that wrongfully dishonors a confirmation;   (xi) any foreign language translation provided to Issuing Bank in connection  with any Letter of Credit;    (xii) any foreign law or usage as it relates to Issuing Bank’s issuance of a Letter  of Credit in support of a foreign guaranty including without limitation the expiration of such guaranty after  the related Letter of Credit expiration date and any resulting drawing paid by Issuing Bank in connection  therewith; or   (xiii) the acts or omissions, whether rightful or wrongful, of any present or  future de jure or de facto governmental or regulatory authority or cause or event beyond the control of the  Letter of Credit Related Person;  provided, that such indemnity shall not be available to any Letter of Credit Related Person claiming  indemnification under clauses (i) through (x) above to the extent that such Letter of Credit Indemnified  Costs may be finally determined in a final, non-appealable judgment of a court of competent jurisdiction to  have resulted directly from the gross negligence or willful misconduct of the Letter of Credit Related Person  claiming indemnity.  Borrowers hereby agree to pay the Letter of Credit Related Person claiming indemnity  on demand from time to time all amounts owing under this Section 2.11(f).  If and to the extent that the  obligations of Borrowers under this Section 2.11(f) are unenforceable for any reason, Borrowers agree to  make the maximum contribution to the Letter of Credit Indemnified Costs permissible under applicable  law.  This indemnification provision shall survive termination of this Agreement and all Letters of Credit.  (g) The liability of Issuing Bank (or any other Letter of Credit Related Person) under,  in connection with or arising out of any Letter of Credit (or pre-advice), regardless of the form or legal  grounds of the action or proceeding, shall be limited to direct damages suffered by Borrowers that are  caused directly by Issuing Bank’s gross negligence or willful misconduct in (i) honoring a presentation  under a Letter of Credit that on its face does not at least substantially comply with the terms and conditions  of such Letter of Credit, (ii) failing to honor a presentation under a Letter of Credit that strictly complies  with the terms and conditions of such Letter of Credit, or (iii) retaining Drawing Documents presented  under a Letter of Credit.  Borrowers’ aggregate remedies against Issuing Bank and any Letter of Credit  Related Person for wrongfully honoring a presentation under any Letter of Credit or wrongfully retaining  honored Drawing Documents shall in no event exceed the aggregate amount paid by Borrowers to Issuing  Bank in respect of the honored presentation in connection with such Letter of Credit under Section 2.11(d),  plus interest at the rate then applicable to Base Rate Loans hereunder.  Borrowers shall take action to avoid  and mitigate the amount of any damages claimed against Issuing Bank or any other Letter of Credit Related  Person, including by enforcing its rights against the beneficiaries of the Letters of Credit.  Any claim by  Borrowers under or in connection with any Letter of Credit shall be reduced by an amount equal to the sum  of (x) the amount (if any) saved by Borrowers as a result of the breach or alleged wrongful conduct  complained of, and (y) the amount (if any) of the loss that would have been avoided had Borrowers taken  all reasonable steps to mitigate any loss, and in case of a claim of wrongful dishonor, by specifically and  timely authorizing Issuing Bank to effect a cure.  (h) Borrowers are responsible for the final text of the Letter of Credit as issued by  Issuing Bank, irrespective of any assistance Issuing Bank may provide such as drafting or recommending  





 






DB1/ 121979154.7      67    text or by Issuing Bank’s use or refusal to use text submitted by Borrowers. Borrowers understand that the  final form of any Letter of Credit may be subject to such revisions and changes as are deemed necessary or  appropriate by Issuing Bank, and Borrowers hereby consent to such revisions and changes not materially  different from the application executed in connection therewith. Borrowers are solely responsible for the  suitability of the Letter of Credit for Borrowers’ purposes.  If Borrowers request Issuing Bank to issue a  Letter of Credit for an affiliated or unaffiliated third party (an “Account Party”), (i) such Account Party  shall have no rights against Issuing Bank; (ii) Borrowers shall be responsible for the application and  obligations under this Agreement; and (iii) communications (including notices) related to the respective  Letter of Credit shall be among Issuing Bank and Borrowers.  Borrowers will examine the copy of the  Letter of Credit and any other documents sent by Issuing Bank in connection therewith and shall promptly  notify Issuing Bank (not later than 3 Business Days following Borrowers’ receipt of documents from  Issuing Bank) of any non-compliance with Borrowers’ instructions and of any discrepancy in any document  under any presentment or other irregularity.  Borrowers understand and agree that Issuing Bank is not  required to extend the expiration date of any Letter of Credit for any reason. With respect to any Letter of  Credit containing an “automatic amendment” to extend the expiration date of such Letter of Credit, Issuing  Bank, in its sole and absolute discretion, may give notice of nonrenewal of such Letter of Credit and, if  Borrowers do not at any time want the then current expiration date of such Letter of Credit to be extended,  Borrowers will so notify Agent and Issuing Bank at least 15 calendar days before Issuing Bank is required  to notify the beneficiary of such Letter of Credit or any advising bank of such non-extension pursuant to  the terms of such Letter of Credit.  (i) Borrowers’ reimbursement and payment obligations under this Section 2.11 are  absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this  Agreement under any and all circumstances whatsoever, including:  (i) any lack of validity, enforceability or legal effect of any Letter of Credit,  any Issuer Document, this Agreement, or any Loan Document, or any term or provision therein or herein;  (ii) payment against presentation of any draft, demand or claim for payment  under any Drawing Document that does not comply in whole or in part with the terms of the applicable  Letter of Credit or which proves to be fraudulent, forged or invalid in any respect or any statement therein  being untrue or inaccurate in any respect, or which is signed, issued or presented by a Person or a transferee  of such Person purporting to be a successor or transferee of the beneficiary of such Letter of Credit;  (iii) Issuing Bank or any of its branches or Affiliates being the beneficiary of  any Letter of Credit;  (iv) Issuing Bank or any correspondent honoring a drawing against a Drawing  Document up to the amount available under any Letter of Credit even if such Drawing Document claims  an amount in excess of the amount available under the Letter of Credit;  (v) the existence of any claim, set-off, defense or other right that any Loan  Party or any of its Subsidiaries may have at any time against any beneficiary or transferee beneficiary, any  assignee of proceeds, Issuing Bank or any other Person;  (vi) Issuing Bank or any correspondent honoring a drawing upon receipt of an  electronic presentation under a Letter of Credit requiring the same, regardless of whether the original  Drawing Documents arrive at Issuing Bank’s counters or are different from the electronic presentation;   (vii) any other event, circumstance or conduct whatsoever, whether or not  similar to any of the foregoing that might, but for this Section 2.11(i), constitute a legal or equitable defense  





 






DB1/ 121979154.7      68    to or discharge of, or provide a right of set-off against, any Borrower’s or any of its Subsidiaries’  reimbursement and other payment obligations and liabilities, arising under, or in connection with, any Letter  of Credit, whether against Issuing Bank, the beneficiary or any other Person; or  (viii) the fact that any Default or Event of Default shall have occurred and be  continuing;  provided, that subject to Section 2.11(g) above, the foregoing shall not release Issuing Bank from such  liability to Borrowers as may be finally determined in a final, non-appealable judgment of a court of  competent jurisdiction against Issuing Bank following reimbursement or payment of the obligations and  liabilities, including reimbursement and other payment obligations, of Borrowers to Issuing Bank arising  under, or in connection with, this Section 2.11 or any Letter of Credit.  (j) Without limiting any other provision of this Agreement, Issuing Bank and each  other Letter of Credit Related Person (if applicable) shall not be responsible to Borrowers for, and Issuing  Bank’s rights and remedies against Borrowers and the obligation of Borrowers to reimburse Issuing Bank  for each drawing under each Letter of Credit shall not be impaired by:  (i) honor of a presentation under any Letter of Credit that on its face  substantially complies with the terms and conditions of such Letter of Credit, even if the Letter of Credit  requires strict compliance by the beneficiary;  (ii) honor of a presentation of any Drawing Document that appears on its face  to have been signed, presented or issued (A) by any purported successor or transferee of any beneficiary or  other Person required to sign, present or issue such Drawing Document or (B) under a new name of the  beneficiary;  (iii) acceptance as a draft of any written or electronic demand or request for  payment under a Letter of Credit, even if nonnegotiable or not in the form of a draft or notwithstanding any  requirement that such draft, demand or request bear any or adequate reference to the Letter of Credit;  (iv) the identity or authority of any presenter or signer of any Drawing  Document or the form, accuracy, genuineness or legal effect of any Drawing Document (other than Issuing  Bank’s determination that such Drawing Document appears on its face substantially to comply with the  terms and conditions of the Letter of Credit);  (v) acting upon any instruction or request relative to a Letter of Credit or  requested Letter of Credit that Issuing Bank in good faith believes to have been given by a Person authorized  to give such instruction or request;  (vi) any errors, omissions, interruptions or delays in transmission or delivery  of any message, advice or document (regardless of how sent or transmitted) or for errors in interpretation  of technical terms or in translation or any delay in giving or failing to give notice to any Borrower;  (vii) any acts, omissions or fraud by, or the insolvency of, any beneficiary, any  nominated person or entity or any other Person or any breach of contract between any beneficiary and any  Borrower or any of the parties to the underlying transaction to which the Letter of Credit relates;  (viii) assertion or waiver of any provision of the ISP or UCP that primarily  benefits an issuer of a letter of credit, including any requirement that any Drawing Document be presented  to it at a particular hour or place;  





 






DB1/ 121979154.7      69    (ix) payment to any presenting bank (designated or permitted by the terms of  the applicable Letter of Credit) claiming that it rightfully honored or is entitled to reimbursement or  indemnity under Standard Letter of Credit Practice applicable to it;  (x) acting or failing to act as required or permitted under Standard Letter of  Credit Practice applicable to where Issuing Bank has issued, confirmed, advised or negotiated such Letter  of Credit, as the case may be;  (xi) honor of a presentation after the expiration date of any Letter of Credit  notwithstanding that a presentation was made prior to such expiration date and dishonored by Issuing Bank  if subsequently Issuing Bank or any court or other finder of fact determines such presentation should have  been honored;  (xii) dishonor of any presentation that does not strictly comply or that is  fraudulent, forged or otherwise not entitled to honor; or  (xiii) honor of a presentation that is subsequently determined by Issuing Bank  to have been made in violation of international, federal, state or local restrictions on the transaction of  business with certain prohibited Persons.  (k) Borrowers shall pay immediately upon demand to Agent for the account of Issuing  Bank as non-refundable fees, commissions, and charges (it being acknowledged and agreed that any  charging of such fees, commissions, and charges to the Loan Account pursuant to the provisions of Section  2.6(d) shall be deemed to constitute a demand for payment thereof for the purposes of this Section 2.11(k)):   (i) a fronting fee which shall be imposed by Issuing Bank equal to.125% per annum times the average  amount of the Letter of Credit Usage during the immediately preceding month, plus (ii) any and all other  customary commissions, fees and charges then in effect imposed by, and any and all expenses incurred by,  Issuing Bank, or by any adviser, confirming institution or entity or other nominated person, relating to  Letters of Credit, at the time of issuance of any Letter of Credit and upon the occurrence of any other  activity with respect to any Letter of Credit (including transfers, assignments of proceeds, amendments,  drawings, renewals or cancellations).  (l) If by reason of (x) any Change in Law, or (y) compliance by Issuing Bank or any  other member of the Lender Group with any direction, request, or requirement (irrespective of whether  having the force of law) of any Governmental Authority or monetary authority including, Regulation D of  the Board of Governors as from time to time in effect (and any successor thereto):  (i) any reserve, deposit, or similar requirement is or shall be imposed or  modified in respect of any Letter of Credit issued or caused to be issued hereunder or hereby, or any Loans  or obligations to make Loans hereunder or hereby, or  (ii) there shall be imposed on Issuing Bank or any other member of the Lender  Group any other condition regarding any Letter of Credit, Loans, or obligations to make Loans hereunder,  and the result of the foregoing is to increase, directly or indirectly, the cost to Issuing Bank or any other  member of the Lender Group of issuing, making, participating in, or maintaining any Letter of Credit or to  reduce the amount receivable in respect thereof, then, and in any such case, Agent may, at any time within  a reasonable period after the additional cost is incurred or the amount received is reduced, notify Borrowers,  and Borrowers shall pay within 30 days after demand therefor, such amounts as Agent may specify to be  necessary to compensate Issuing Bank or any other member of the Lender Group for such additional cost  or reduced receipt, together with interest on such amount from the date of such demand until payment in  





 






DB1/ 121979154.7      70    full thereof at the rate then applicable to Base Rate Loans hereunder; provided, that (A) Borrowers shall  not be required to provide any compensation pursuant to this Section 2.11(l) for any such amounts incurred  more than 180 days prior to the date on which the demand for payment of such amounts is first made to  Borrowers, and (B) if an event or circumstance giving rise to such amounts is retroactive, then the 180-day  period referred to above shall be extended to include the period of retroactive effect thereof.  The  determination by Agent of any amount due pursuant to this Section 2.11(l), as set forth in a certificate  setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable  error, be final and conclusive and binding on all of the parties hereto.  (m) Each standby Letter of Credit shall expire not later than the date that is 12 months  after the date of the issuance of such Letter of Credit; provided, that any standby Letter of Credit may  provide for the automatic extension thereof for any number of additional periods each of up to one year in  duration; provided further, that with respect to any Letter of Credit which extends beyond the Maturity  Date, Letter of Credit Collateralization shall be provided therefor on or before the date that is five Business  Days prior to the Maturity Date.  Each commercial Letter of Credit shall expire on the earlier of (i) 120  days after the date of the issuance of such commercial Letter of Credit and (ii) five Business Days prior to  the Maturity Date.  (n) If (i) any Event of Default shall occur and be continuing, or (ii) Availability shall  at any time be less than zero, then on the Business Day following the date when the Administrative  Borrower receives notice from Agent or the Required Lenders (or, if the maturity of the Obligations has  been accelerated, Revolving Lenders with Letter of Credit Exposure representing greater than 50% of the  total Letter Credit Exposure) demanding Letter of Credit Collateralization pursuant to this Section 2.11(n)  upon such demand, Borrowers shall provide Letter of Credit Collateralization with respect to the then  existing Letter of Credit Usage.  If Borrowers are required to provide Letter of Credit Collateralization  hereunder as a result of the occurrence of an Event of Default, any cash collateral held by Agent as a result  of such Letter of Credit Collateralization shall be returned by Agent to Borrowers promptly, but in no event  later than seven Business Days, after such Event of Default has been cured or waived in accordance with  this Agreement.  If Borrowers fail to provide Letter of Credit Collateralization as required by this Section  2.11(n), the Revolving Lenders may (and, upon direction of Agent, shall) advance, as Revolving Loans the  amount of the cash collateral required pursuant to the Letter of Credit Collateralization provision so that  the then existing Letter of Credit Usage is cash collateralized in accordance with the Letter of Credit  Collateralization provision (whether or not the Revolver Commitments have terminated, an Overadvance  exists or the conditions in Section 3 are satisfied).  (o) Unless otherwise expressly agreed by Issuing Bank and Borrowers when a Letter  of Credit is issued, (i) the rules of the ISP shall apply to each standby Letter of Credit, and (ii) the rules of  the UCP shall apply to each commercial Letter of Credit.  (p) Issuing Bank shall be deemed to have acted with due diligence and reasonable care  if Issuing Bank’s conduct is in accordance with Standard Letter of Credit Practice or in accordance with  this Agreement.   (q) In the event of a direct conflict between the provisions of this Section 2.11 and any  provision contained in any Issuer Document, it is the intention of the parties hereto that such provisions be  read together and construed, to the fullest extent possible, to be in concert with each other.  In the event of  any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this  Section 2.11 shall control and govern.  





 






DB1/ 121979154.7      71    (r) The provisions of this Section 2.11 shall survive the termination of this Agreement  and the repayment in full of the Obligations with respect to any Letters of Credit that remain outstanding.  (s) At Borrowers’ costs and expense, Borrowers shall execute and deliver to Issuing  Bank such additional certificates, instruments and/or documents and take such additional action as may be  reasonably requested by Issuing Bank to enable Issuing Bank to issue any Letter of Credit pursuant to this  Agreement and related Issuer Document, to protect, exercise and/or enforce Issuing Banks’ rights and  interests under this Agreement or to give effect to the terms and provisions of this Agreement or any Issuer  Document.  Each Borrower irrevocably appoints Issuing Bank as its attorney-in-fact and authorizes Issuing  Bank, without notice to Borrowers, to execute and deliver ancillary documents and letters customary in the  letter of credit business that may include but are not limited to advisements, indemnities, checks, bills of  exchange and issuance documents.  The power of attorney granted by the Borrowers is limited solely to  such actions related to the issuance, confirmation or amendment of any Letter of Credit and to ancillary  documents or letters customary in the letter of credit business.  This appointment is coupled with an interest.  2.12 LIBOR Option.  (a) Interest and Interest Payment Dates.  In lieu of having interest charged at the  rate based upon the Base Rate, Borrowers shall have the option, subject to Section 2.12(b) below (the  “LIBOR Option”) to have interest on all or a portion of the Revolving Loans be charged (whether at the  time when made (unless otherwise provided herein), upon conversion from a Base Rate Loan to a LIBOR  Rate Loan, or upon continuation of a LIBOR Rate Loan as a LIBOR Rate Loan) at a rate of interest based  upon the LIBOR Rate.  Interest on LIBOR Rate Loans shall be payable on the earliest of (i) the last day of  the Interest Period applicable thereto; provided, that subject to the following clauses (ii) and (iii), in the  case of any Interest Period greater than three months in duration, interest shall be payable at three month  intervals after the commencement of the applicable Interest Period and on the last day of such Interest  Period), (ii) the date on which all or any portion of the Obligations are accelerated pursuant to the terms  hereof, or (iii) the date on which this Agreement is terminated pursuant to the terms hereof.  On the last day  of each applicable Interest Period, unless Borrowers have properly exercised the LIBOR Option with  respect thereto, the interest rate applicable to such LIBOR Rate Loan automatically shall convert to the rate  of interest then applicable to Base Rate Loans of the same type hereunder.  At any time that an Event of  Default has occurred and is continuing, at the written election of Agent or the Required Lenders, Borrowers  no longer shall have the option to request that Revolving Loans bear interest at a rate based upon the LIBOR  Rate.  (b) LIBOR Election.  (i) Borrowers may, at any time and from time to time, so long as no Event of  Default has occurred and is continuing, elect to exercise the LIBOR Option by notifying Agent prior to  11:00 a.m. at least three Business Days prior to the commencement of the proposed Interest Period (the  “LIBOR Deadline”). Notice of Borrowers’ election of the LIBOR Option for a permitted portion of the  Revolving Loans and an Interest Period pursuant to this Section shall be made by delivery to Agent of a  LIBOR Notice received by Agent before the LIBOR Deadline.  Promptly upon its receipt of each such  LIBOR Notice, Agent shall provide a copy thereof to each of the affected Lenders.  (ii) Each LIBOR Notice shall be irrevocable and binding on Borrowers.  In  connection with each LIBOR Rate Loan, each Borrower shall indemnify, defend, and hold Agent and the  Lenders harmless against any loss, cost, or expense actually incurred by Agent or any Lender as a result of  (A) the payment or required assignment of any principal of any LIBOR Rate 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  





 






DB1/ 121979154.7      72    of any LIBOR Rate Loan other than on the last day of the Interest Period applicable thereto, or (C) the  failure to borrow, convert, continue or prepay any LIBOR Rate Loan on the date specified in any LIBOR  Notice delivered pursuant hereto (such losses, costs, or expenses, “Funding Losses”).  A certificate of Agent  or a Lender delivered to Borrowers setting forth in reasonable detail any amount or amounts that Agent or  such Lender is entitled to receive pursuant to this Section 2.12 shall be conclusive absent manifest error.   Borrowers shall pay such amount to Agent or the Lender, as applicable, within 30 days of the date of its  receipt of such certificate.  If a payment of a LIBOR Rate Loan on a day other than the last day of the  applicable Interest Period would result in a Funding Loss, Agent may, in its sole discretion at the request  of Borrowers, hold the amount of such payment as cash collateral in support of the Obligations until the  last day of such Interest Period and apply such amounts to the payment of the applicable LIBOR Rate Loan  on such last day, it being agreed that Agent has no obligation to so defer the application of payments to any  LIBOR Rate Loan and that, in the event that Agent does not defer such application, Borrowers shall be  obligated to pay any resulting Funding Losses.  (iii) Unless Agent, in its sole discretion, agrees otherwise, Borrowers shall  have not more than five LIBOR Rate Loans in effect at any given time.  Borrowers may only exercise the  LIBOR Option for proposed LIBOR Rate Loans of at least $1,000,000.  (c) Conversion; Prepayment.  Borrowers may convert LIBOR Rate Loans to Base  Rate Loans or prepay LIBOR Rate Loans at any time; provided, that in the event that LIBOR Rate Loans  are converted or prepaid on any date that is not the last day of the Interest Period applicable thereto,  including as a result of any prepayment through the required application by Agent of any payments or  proceeds of Collateral in accordance with Section 2.4(b) or for any other reason, including early termination  of the term of this Agreement or acceleration of all or any portion of the Obligations pursuant to the terms  hereof, each Borrower shall indemnify, defend, and hold Agent and the Lenders and their Participants  harmless against any and all Funding Losses in accordance with Section 2.12 (b)(ii).  (d) Special Provisions Applicable to LIBOR Rate.  (i) The LIBOR Rate may be adjusted by Agent with respect to any Lender on  a prospective basis to take into account any additional or increased costs to such Lender of maintaining or  obtaining any eurodollar deposits or increased costs (other than Taxes which shall be governed by Section  16), in each case, due to changes in applicable law occurring subsequent to the commencement of the then  applicable Interest Period, including any Changes in Law and changes in the reserve requirements imposed  by the Board of Governors, which additional or increased costs would increase the cost of funding or  maintaining loans bearing interest at the LIBOR Rate.  In any such event, the affected Lender shall give  Borrowers and Agent notice of such a determination and adjustment and Agent promptly shall transmit the  notice to each other Lender and, upon its receipt of the notice from the affected Lender,  Borrowers may,  by notice to such affected Lender (A) require such Lender to furnish to Borrowers a statement setting forth  in reasonable detail the basis for adjusting such LIBOR Rate and the method for determining the amount  of such adjustment, or (B) repay the LIBOR Rate Loans of such Lender with respect to which such  adjustment is made (together with any amounts due under Section 2.12(b)(ii)).  (ii) In the event that any change in market conditions or any Change in Law  shall at any time after the date hereof, in the reasonable opinion of any Lender, make it unlawful or  impractical for such Lender to fund or maintain LIBOR Rate Loans or to continue such funding or  maintaining, or to determine or charge interest rates at the LIBOR Rate, such Lender shall give notice of  such changed circumstances to Agent and Borrowers and Agent promptly shall transmit the notice to each  other Lender and (y) in the case of any LIBOR Rate Loans of such Lender that are outstanding, the date  specified in such Lender’s notice shall be deemed to be the last day of the Interest Period of such LIBOR  





 






DB1/ 121979154.7      73    Rate Loans, and interest upon the LIBOR Rate Loans of such Lender thereafter shall accrue interest at the  rate then applicable to Base Rate Loans, and (z) Borrowers shall not be entitled to elect the LIBOR Option  until such Lender determines that it would no longer be unlawful or impractical to do so.  (iii) Benchmark Replacement Setting.  (A) Benchmark Replacement. Notwithstanding anything to the  contrary herein or in any other Loan Document (and any Hedge Agreement shall be deemed not to be a  “Loan Document” for purposes of this Section 2.12(d)) if a Benchmark Transition Event or an Early Opt- in Election, as applicable, and its related Benchmark Replacement Date have occurred prior to the  Reference Time in respect of any setting of the then-current Benchmark, then (x) if a Benchmark  Replacement is determined in accordance with clause (a)(i) or (a)(ii) of the definition of “Benchmark  Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such  Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting  and subsequent Benchmark settings without any amendment to, or further action or consent of any other  party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined  in accordance with clause (a)(iii) of the definition of “Benchmark Replacement” for such Benchmark  Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder  and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City  time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to  the Lenders without any amendment to, or further action or consent of any other party to, this Agreement  or any other Loan Document so long as the Agent has not received, by such time, written notice of objection  to such Benchmark Replacement from Lenders comprising the Required Lenders.  (B) Notwithstanding anything to the contrary herein or in any other  Loan Document, if a Term SOFR Transition Event and its related Benchmark Replacement Date have  occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then the  applicable Benchmark Replacement will replace the then-current Benchmark for all purposes hereunder or  under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings,  without any amendment to, or further action or consent of any other party to, this Agreement or any other  Loan Document; provided that this clause (B) shall not be effective unless the Agent has delivered to the  Lenders and the Borrower a Term SOFR Notice.  For the avoidance of doubt, the Agent shall not be required  to deliver a Term SOFR Notice after a Term SOFR Transition Event and may elect or not elect to do so in  its sole discretion.  (iv) Benchmark Replacement Conforming Changes. In connection with the  implementation of a Benchmark Replacement, the Agent will have the right to make Benchmark  Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein  or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming  Changes will become effective without any further action or consent of any other party to this Agreement  or any other Loan Document.  (v) Notices; Standards for Decisions and Determinations. The Agent will  promptly notify the Borrower and the Lenders of (A) any occurrence of a Benchmark Transition Event, a  Term SOFR Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark  Replacement Date, (B) the implementation of any Benchmark Replacement, (C) the effectiveness of any  Benchmark Replacement Conforming Changes, (D) the removal or reinstatement of any tenor of a  Benchmark pursuant to Section 2.12(d)(vi) below and (E) the commencement or conclusion of any  Benchmark Unavailability Period.  Any determination, decision or election that may be made by the Agent  or, if applicable, any Lender (or group of Lenders) pursuant to this Section 2.12(d), including any  





 






DB1/ 121979154.7      74    determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event,  circumstance or date and any decision to take or refrain from taking any action or any selection, will be  conclusive and binding absent manifest error and may be made in its or their sole discretion and without  consent from any other party to this Agreement or any other Loan Document, except, in each case, as  expressly required pursuant to this Section 2.12(d).  (vi) Unavailability of Tenor of Benchmark.  Notwithstanding anything to the  contrary herein or in any other Loan Document, at any time (including in connection with the  implementation of a Benchmark Replacement), (A) if the then-current Benchmark is a term rate (including  Term SOFR or the LIBOR Rate) and either (1) any tenor for such Benchmark is not displayed on a screen  or other information service that publishes such rate from time to time as selected by the Agent in its  reasonable discretion or (2) the regulatory supervisor for the administrator of such Benchmark has provided  a public statement or publication of information announcing that any tenor for such Benchmark is or will  be no longer representative, then the Agent may modify the definition of “Interest Period” for any  Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (B) if  a tenor that was removed pursuant to clause (A) above either (1) is subsequently displayed on a screen or  information service for a Benchmark (including a Benchmark Replacement) or (2) is not, or is no longer,  subject to an announcement that it is or will no longer be representative for a Benchmark (including a  Benchmark Replacement), then the Agent may modify the definition of “Interest Period” for all Benchmark  settings at or after such time to reinstate such previously removed tenor.  (vii) Benchmark Unavailability Period. Upon the Borrower’s receipt of notice  of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any request for a  borrowing of, conversion to or continuation of LIBOR Rate Loans to be made, converted or continued  during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have  converted any such request into a request for a borrowing of or conversion to Base Rate Loans. During any  Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an  Available Tenor, the component of the Base Rate based upon the then-current Benchmark or such tenor for  such Benchmark, as applicable, will not be used in any determination of the Base Rate.  (e) No Requirement of Matched Funding.  Anything to the contrary contained  herein notwithstanding, neither Agent, nor any Lender, nor any of their Participants, is required actually to  acquire eurodollar deposits to fund or otherwise match fund any Obligation as to which interest accrues at  the LIBOR Rate.  2.13 Capital Requirements.  (a) If, after the date hereof, Issuing Bank or any Lender determines that (i) any Change  in Law regarding capital, liquidity or reserve requirements for banks or bank holding companies, or (ii)  compliance by Issuing Bank or such Lender, or their respective parent bank holding companies, with any  guideline, request or directive of any Governmental Authority regarding capital adequacy or liquidity  requirements (whether or not having the force of law), has the effect of reducing the return on Issuing  Bank’s, such Lender’s, or such holding companies’ capital or liquidity as a consequence of Issuing Bank’s  or such Lender’s commitments, Loans, participations or other obligations hereunder to a level below that  which Issuing Bank, such Lender, or such holding companies could have achieved but for such Change in  Law or compliance (taking into consideration Issuing Bank’s, such Lender’s, or such holding companies’  then existing policies with respect to capital adequacy or liquidity requirements and assuming the full  utilization of such entity’s capital) by any amount deemed by Issuing Bank or such Lender to be material,  then Issuing Bank or such Lender may notify Borrowers and Agent thereof.  Following receipt of such  notice, Borrowers agree to pay Issuing Bank or such Lender on demand the amount of such reduction of  





 






DB1/ 121979154.7      75    return of capital as and when such reduction is determined, payable within 30 days after presentation by  Issuing Bank or such Lender of a statement in the amount and setting forth in reasonable detail Issuing  Bank’s or such Lender’s calculation thereof and the assumptions upon which such calculation was based  (which statement shall be deemed true and correct absent manifest error).  In determining such amount,  Issuing Bank or such Lender may use any reasonable averaging and attribution methods.  Failure or delay  on the part of Issuing Bank or any Lender to demand compensation pursuant to this Section shall not  constitute a waiver of Issuing Bank’s or such Lender’s right to demand such compensation; provided, that  Borrowers shall not be required to compensate Issuing Bank or a Lender pursuant to this Section for any  reductions in return incurred more than 180 days prior to the date that Issuing Bank or such Lender notifies  Borrowers of such Change in Law giving rise to such reductions and of such Lender’s intention to claim  compensation therefor; provided further, that if such claim arises by reason of the Change in Law that is  retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive  effect thereof.  (b) If Issuing Bank or any Lender requests additional or increased costs referred to in  Section 2.11(l) or  Section 2.12(d)(i) or amounts under Section 2.13(a) or sends a notice under Section  2.12(d)(ii) relative to changed circumstances (such Issuing Bank or Lender, an “Affected Lender”), then,  at the request of Administrative Borrower, such Affected Lender shall use reasonable efforts to promptly  designate a different one of its lending offices or to assign its rights and obligations hereunder to another  of its offices or branches, if (i) in the reasonable judgment of such Affected Lender, such designation or  assignment would eliminate or reduce amounts payable pursuant to Section 2.11(l), Section 2.12(d)(i) or  Section 2.13(a), as applicable, or would eliminate the illegality or impracticality of funding or maintaining  LIBOR Rate Loans, and (ii) in the reasonable judgment of such Affected Lender, such designation or  assignment would not subject it to any material unreimbursed cost or expense and would not otherwise be  materially disadvantageous to it.  Borrowers agree to pay all reasonable out-of-pocket costs and expenses  incurred by such Affected Lender in connection with any such designation or assignment.  If, after such  reasonable efforts, such Affected Lender does not so designate a different one of its lending offices or assign  its rights to another of its offices or branches so as to eliminate Borrowers’ obligation to pay any future  amounts to such Affected Lender pursuant to Section 2.11(l), Section 2.12(d)(i) or Section 2.13(a), as  applicable, or to enable Borrowers to obtain LIBOR Rate Loans, then Borrowers (without prejudice to any  amounts then due to such Affected Lender under Section 2.11(l), Section 2.12(d)(i) or Section 2.13(a), as  applicable) may, unless prior to the effective date of any such assignment the Affected Lender withdraws  its request for such additional amounts under Section 2.11(l),  Section 2.12(d)(i) or Section 2.13(a), as  applicable, or indicates that it is no longer unlawful or impractical to fund or maintain LIBOR Rate Loans,  may designate a different Issuing Bank or substitute a Lender or prospective Lender, in each case,   reasonably acceptable to Agent to purchase the Obligations owed to such Affected Lender and such  Affected Lender’s commitments hereunder (a “Replacement Lender”), and if such Replacement Lender  agrees to such purchase, such Affected Lender shall assign to the Replacement Lender its Obligations and  commitments, and upon such purchase by the Replacement Lender, which such Replacement Lender shall  be deemed to be “Issuing Bank” or a “Lender” (as the case may be) for purposes of this Agreement and  such Affected Lender shall cease to be “Issuing Bank” or a “Lender” (as the case may be) for purposes of  this Agreement.  (c) Notwithstanding anything herein to the contrary, the protection of Sections 2.11(l),  2.12(d), and 2.13 shall be available to Issuing Bank and each Lender (as applicable) regardless of any  possible contention of the invalidity or inapplicability of the law, rule, regulation, judicial ruling, judgment,  guideline, treaty or other change or condition which shall have occurred or been imposed, so long as it shall  be customary for issuing banks or lenders affected thereby to comply therewith.  Notwithstanding any other  provision herein, neither Issuing Bank nor any Lender shall demand compensation pursuant to this Section  2.13 if it shall not at the time be the general policy or practice of Issuing Bank or such Lender (as the case  





 






DB1/ 121979154.7      76    may be) to demand such compensation in similar circumstances under comparable provisions of other credit  agreements, if any.  2.14 Incremental Facilities.  (a) At any time from and after the Closing Date, at the option of Borrowers (but subject  to the conditions set forth in clause (b) below), the Revolver Commitments and the Maximum Revolver  Amount may be increased by an amount in the aggregate for all such increases of the Revolver  Commitments and the Maximum Revolver Amount not to exceed the Available Increase Amount (each  such increase, an “Increase”); provided, that in no event shall the Revolver Commitments and the Maximum  Revolver Amount be increased by an amount in excess of the Available Revolver Increase Amount.  Agent  shall invite each Lender to increase its Revolver Commitments (it being understood that no Lender shall be  obligated to increase its Revolver Commitments) in connection with a proposed Increase at the interest  margin proposed by Borrowers, and if sufficient Lenders do not agree to increase their Revolver  Commitments in connection with such proposed Increase, then Agent or Borrowers may invite any  prospective lender who is reasonably satisfactory to Agent and Borrowers to become a Lender in connection  with a proposed Increase.  Any Increase shall be in an amount of at least $5,000,000 and integral multiples  of $5,000,000 in excess thereof.  In no event may the Revolver Commitments and the Maximum Revolver  Amount be increased pursuant to this Section 2.14 on more than 3 occasions in the aggregate for all such  Increases.  Additionally, for the avoidance of doubt, it is understood and agreed that in no event shall the  aggregate amount of the Increases to the Revolver Commitments exceed $25,000,000.  (b) Each of the following shall be conditions precedent to any Increase of the Revolver  Commitments and the Maximum Revolver Amount in connection therewith:  (i) Agent or Borrowers have obtained the commitment of one or more  Lenders (or other prospective lenders) reasonably satisfactory to Agent and Borrowers to provide the  applicable Increase and any such Lenders (or prospective lenders), Borrowers, and Agent have signed a  joinder agreement to this Agreement (an “Increase Joinder”), in form and substance reasonably satisfactory  to Agent, to which such Lenders (or prospective lenders), Borrowers, and Agent are party,  (ii) each of the conditions precedent set forth in Section 3.2 are satisfied,  (iii) in connection with any Increase, if any Loan Party or any of its  Subsidiaries owns or will acquire any Margin Stock, Borrowers shall deliver to Agent an updated Form U- 1 (with sufficient additional originals thereof for each Lender), duly executed and delivered by the  Borrowers, together with such other documentation as Agent shall reasonably request, in order to enable  Agent and the Lenders to comply with any of the requirements under Regulations T, U or X of the Federal  Reserve Board,  (iv) Borrowers have delivered to Agent updated pro forma Projections (after  giving effect to the applicable Increase) for the Loan Parties and their Subsidiaries evidencing compliance  on a pro forma basis with Section 7 for the twelve months (on a month-by-month basis) immediately  following the proposed date of the applicable Increase and  (v) Borrowers shall have reached agreement with the Lenders (or prospective  lenders) agreeing to the increased Revolver Commitments with respect to the interest margins applicable  to Revolving Loans to be made pursuant to the increased Revolver Commitments (which interest margins  may be with respect to Revolving Loans made pursuant to the increased Revolver Commitments, higher  than or equal to the interest margins applicable to Revolving Loans set forth in this Agreement immediately  prior to the date of the increased Revolver Commitments (the date of the effectiveness of the increased  





 






DB1/ 121979154.7      77    Revolver Commitments and the Maximum Revolver Amount, the “Increase Date”)) and shall have  communicated the amount of such interest margins to Agent.  Any Increase Joinder may, with the consent  of Agent, Borrowers and the Lenders or prospective lenders agreeing to the proposed Increase, effect such  amendments to this Agreement and the other Loan Documents as may be necessary to effectuate the  provisions of this Section 2.14 (including any amendment necessary to effectuate the interest margins for  the Revolving Loans to be made pursuant to the increased Revolver Commitments).  Anything to the  contrary contained herein notwithstanding, if the all-in yield (including interest margins, interest floors, and  any original issue discount or similar yield-related discounts or payments, but excluding any arrangement,  underwriting, or similar fees payable in connection therewith that are not paid to all Lenders providing the  Increase to the Revolver Commitment) that is to be applicable to the Revolving Loans to be made pursuant  to the increased Revolver Commitments is higher than the all-in yield (including interest margins, interest  floors, and any original issue discount or similar yield-related discounts or payments, but excluding any  arrangement, underwriting, or similar fees payable in connection therewith that are not paid to all Lenders  providing the Increase to the Revolver Commitment) applicable to the Revolving Loans immediately prior  to the applicable Increase Date (the amount by which all-in yield is higher, the “Excess”), then the interest  margin applicable to the Revolving Loans immediately prior to the Increase Date shall be increased by the  amount of the Excess, effective on the applicable Increase Date, and without the necessity of any action by  any party hereto.  (c) Unless otherwise specifically provided herein, all references in this Agreement and  any other Loan Document to Revolving Loans shall be deemed, unless the context otherwise requires, to  include Revolving Loans made pursuant to the increased Revolver Commitments and Maximum Revolver  Amount pursuant to this Section 2.14.  (d) Each of the Lenders having a Revolver Commitment prior to the Increase Date (the  “Pre-Increase Revolver Lenders”) shall assign to any Lender which is acquiring a new or additional  Revolver Commitment on the Increase Date (the “Post-Increase Revolver Lenders”), and such Post- Increase Revolver Lenders shall purchase from each Pre-Increase Revolver Lender, at the principal amount  thereof, such interests in the Revolving Loans and participation interests in Letters of Credit on such  Increase Date as shall be necessary in order that, after giving effect to all such assignments and purchases,  such Revolving Loans and participation interests in Letters of Credit will be held by Pre-Increase Revolver  Lenders and Post-Increase Revolver Lenders ratably in accordance with their Pro Rata Share after giving  effect to such increased Revolver Commitments.  (e) The Revolving Loans, Revolver Commitments, and Maximum Revolver Amount  established pursuant to this Section 2.14 shall constitute Revolving Loans, Revolver Commitments, and  Maximum Revolver Amount under, and shall be entitled to all the benefits afforded by, this Agreement and  the other Loan Documents, and shall, without limiting the foregoing, benefit equally and ratably from any  guarantees and the security interests created by the Loan Documents.  Borrowers shall take any actions  reasonably required by Agent to ensure and demonstrate that the Liens and security interests granted by the  Loan Documents continue to be perfected under the Code or otherwise after giving effect to the  establishment of any such new Revolver Commitments and Maximum Revolver Amount.  2.15 Joint and Several Liability of Borrowers.  (a) Each Borrower is accepting joint and several liability hereunder and under the  other Loan Documents in consideration of the financial accommodations to be provided by the Lender  Group under this Agreement, for the mutual benefit, directly and indirectly, of each Borrower and in  consideration of the undertakings of the other Borrowers to accept joint and several liability for the  Obligations.  





 






DB1/ 121979154.7      78    (b) Each Borrower, jointly and severally, hereby irrevocably and unconditionally  accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers,  with respect to the payment and performance of all of the Obligations (including any Obligations arising  under this Section 2.15), it being the intention of the parties hereto that all the Obligations shall be the joint  and several obligations of each Borrower without preferences or distinction among them.  Accordingly,  each Borrower hereby waives any and all suretyship defenses that would otherwise be available to such  Borrower under applicable law.   (c) If and to the extent that any Borrower shall fail to make any payment with respect  to any of the Obligations as and when due, whether upon maturity, acceleration, or otherwise, or to perform  any of the Obligations in accordance with the terms thereof, then in each such event the other Borrowers  will make such payment with respect to, or perform, such Obligations until such time as all of the  Obligations are paid in full, and without the need for demand, protest, or any other notice or formality.  (d) The Obligations of each Borrower under the provisions of this Section 2.15  constitute the absolute and unconditional, full recourse Obligations of each Borrower enforceable against  each Borrower to the full extent of its properties and assets, irrespective of the validity, regularity or  enforceability of the provisions of this Agreement (other than this Section 2.15(d)) or any other  circumstances whatsoever.  (e) Without limiting the generality of the foregoing and except as otherwise expressly  provided in this Agreement, each Borrower hereby waives presentments, demands for performance, protests  and notices, including notices of acceptance of its joint and several liability, notice of any Revolving Loans  or any Letters of Credit issued under or pursuant to this Agreement, notice of the occurrence of any Default,  Event of Default, notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance  of this Agreement, notices of the existence, creation, or incurring of new or additional Obligations or other  financial accommodations or of any demand for any payment under this Agreement, notice of any action  at any time taken or omitted by Agent or Lenders under or in respect of any of the Obligations, any right to  proceed against any other Borrower or any other Person, to proceed against or exhaust any security held  from any other Borrower or any other Person, to protect, secure, perfect, or insure any security interest or  Lien on any property subject thereto or exhaust any right to take any action against any other Borrower,  any other Person, or any collateral, to pursue any other remedy in any member of the Lender Group’s or  any Bank Product Provider’s power whatsoever, any requirement of diligence or to mitigate damages and,  generally, to the extent permitted by applicable law, all demands, notices and other formalities of every  kind in connection with this Agreement (except as otherwise provided in this Agreement), any right to  assert against any member of the Lender Group or any Bank Product Provider, any defense (legal or  equitable), set-off, counterclaim, or claim which each Borrower may now or at any time hereafter have  against any other Borrower or any other party liable to any member of the Lender Group or any Bank  Product Provider, any defense, set-off, counterclaim, or claim, of any kind or nature, arising directly or  indirectly from the present or future lack of perfection, sufficiency, validity, or enforceability of the  Obligations or any security therefor, and any right or defense arising by reason of any claim or defense  based upon an election of remedies by any member of the Lender Group or any Bank Product Provider  including any defense based upon an impairment or elimination of such Borrower’s rights of subrogation,  reimbursement, contribution, or indemnity of such Borrower against any other Borrower.  Without limiting  the generality of the foregoing, each Borrower hereby assents to, and waives notice of, any extension or  postponement of the time for the payment of any of the Obligations, the acceptance of any payment of any  of the Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or  acquiescence by Agent or Lenders at any time or times in respect of any default by any Borrower in the  performance or satisfaction of any term, covenant, condition or provision of this Agreement, any and all  other indulgences whatsoever by Agent or Lenders in respect of any of the Obligations, and the taking,  





 






DB1/ 121979154.7      79    addition, substitution or release, in whole or in part, at any time or times, of any security for any of the  Obligations or the addition, substitution or release, in whole or in part, of any Borrower.  Without limiting  the generality of the foregoing, each Borrower assents to any other action or delay in acting or failure to act  on the part of any Agent or Lender with respect to the failure by any Borrower to comply with any of its  respective Obligations, including any failure strictly or diligently to assert any right or to pursue any remedy  or to comply fully with applicable laws or regulations thereunder, which might, but for the provisions of  this Section 2.15 afford grounds for terminating, discharging or relieving any Borrower, in whole or in part,  from any of its Obligations under this Section 2.15, it being the intention of each Borrower that, so long as  any of the Obligations hereunder remain unsatisfied, the Obligations of each Borrower under this Section  2.15 shall not be discharged except by performance and then only to the extent of such performance.  The  Obligations of each Borrower under this Section 2.15 shall not be diminished or rendered unenforceable by  any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect  to any other Borrower or any Agent or Lender.  Each of the Borrowers waives, to the fullest extent permitted  by law, the benefit of any statute of limitations affecting its liability hereunder or the enforcement hereof.   Any payment by any Borrower or other circumstance which operates to toll any statute of limitations as to  any Borrower shall operate to toll the statute of limitations as to each of the Borrowers.  Each of the  Borrowers waives any defense based on or arising out of any defense of any Borrower or any other Person,  other than payment of the Obligations to the extent of such payment, based on or arising out of the disability  of any Borrower or any other Person, or the validity, legality, or unenforceability of the Obligations or any  part thereof from any cause, or the cessation from any cause of the liability of any Borrower other than  payment of the Obligations to the extent of such payment.  Agent may, at the election of the Required  Lenders, foreclose upon any Collateral held by Agent by one or more judicial or nonjudicial sales or other  dispositions, whether or not every aspect of any such sale is commercially reasonable or otherwise fails to  comply with applicable law or may exercise any other right or remedy Agent, any other member of the  Lender Group, or any Bank Product Provider may have against any Borrower or any other Person, or any  security, in each case, without affecting or impairing in any way the liability of any of the Borrowers  hereunder except to the extent the Obligations have been paid.    (f) Each Borrower represents and warrants to Agent and Lenders that such Borrower  is currently informed of the financial condition of Borrowers and of all other circumstances which a diligent  inquiry would reveal and which bear upon the risk of nonpayment of the Obligations.  Each Borrower  further represents and warrants to Agent and Lenders that such Borrower has read and understands the  terms and conditions of the Loan Documents.  Each Borrower hereby covenants that such Borrower will  continue to keep informed of Borrowers’ financial condition and of all other circumstances which bear  upon the risk of nonpayment or nonperformance of the Obligations.  (g) The provisions of this Section 2.15 are made for the benefit of Agent, each member  of the Lender Group, each Bank Product Provider, and their respective successors and assigns, and may be  enforced by it or them from time to time against any or all Borrowers as often as occasion therefor may  arise and without requirement on the part of Agent, any member of the Lender Group, any Bank Product  Provider, or any of their successors or assigns first to marshal any of its or their claims or to exercise any  of its or their rights against any Borrower or to exhaust any remedies available to it or them against any  Borrower or to resort to any other source or means of obtaining payment of any of the Obligations hereunder  or to elect any other remedy.  The provisions of this Section 2.15 shall remain in effect until all of the  Obligations shall have been paid in full or otherwise fully satisfied.  If at any time, any payment, or any  part thereof, made in respect of any of the Obligations, is rescinded or must otherwise be restored or returned  by Agent or any Lender upon the insolvency, bankruptcy or reorganization of any Borrower, or otherwise,  the provisions of this Section 2.15 will forthwith be reinstated in effect, as though such payment had not  been made.  





 






DB1/ 121979154.7      80    (h) Each Borrower hereby agrees that it will not enforce any of its rights that arise  from the existence, payment, performance or enforcement of the provisions of this Section 2.15,  including  rights of subrogation, reimbursement, exoneration, contribution or indemnification and any right to  participate in any claim or remedy of Agent, any other member of the Lender Group, or any Bank Product  Provider against any Borrower, whether or not such claim, remedy or right arises in equity or under contract,  statute or common law, including the right to take or receive from any Borrower, directly or indirectly, in  cash or other property or by set-off or in any other manner, payment or security solely on account of such  claim, remedy or right, unless and until such time as all of the Obligations have been paid in full in cash.   Any claim which any Borrower may have against any other Borrower with respect to any payments to any  Agent or any member of the Lender Group hereunder or under any of the Bank Product Agreements are  hereby expressly made subordinate and junior in right of payment, without limitation as to any increases in  the Obligations arising hereunder or thereunder, to the prior payment in full in cash of the Obligations and,  in the event of any insolvency, bankruptcy, receivership, liquidation, reorganization or other similar  proceeding under the laws of any jurisdiction relating to any Borrower, its debts or its assets, whether  voluntary or involuntary, all such Obligations shall be paid in full in cash before any payment or distribution  of any character, whether in cash, securities or other property, shall be made to any other Borrower therefor.   If any amount shall be paid to any Borrower in violation of the immediately preceding sentence, such  amount shall be held in trust for the benefit of Agent, for the benefit of the Lender Group and the Bank  Product Providers, and shall forthwith be paid to Agent to be credited and applied to the Obligations and  all other amounts payable under this Agreement, whether matured or unmatured, in accordance with the  terms of this Agreement, or to be held as Collateral for any Obligations or other amounts payable under this  Agreement thereafter arising.  Notwithstanding anything to the contrary contained in this Agreement, no  Borrower may exercise any rights of subrogation, contribution, indemnity, reimbursement or other similar  rights against, and may not proceed or seek recourse against or with respect to any property or asset of, any  other Borrower (the “Foreclosed Borrower”), including after payment in full of the Obligations, if all or  any portion of the Obligations have been satisfied in connection with an exercise of remedies in respect of  the Equity Interests of such Foreclosed Borrower whether pursuant to this Agreement or otherwise.  (i) Each of the Borrowers hereby acknowledges and affirms that it understands that  to the extent the Obligations are secured by Real Property located in California, the Borrowers shall be  liable for the full amount of the liability hereunder notwithstanding the foreclosure on such Real Property  by trustee sale or any other reason impairing such Borrower’s right to proceed against any other Loan  Party.  In accordance with Section 2856 of the California Civil Code or any similar laws of any other  applicable jurisdiction, each of the Borrowers hereby waives until such time as the Obligations have been  paid in full:  (i) all rights of subrogation, reimbursement, indemnification, and  contribution and any other rights and defenses that are or may become available to the Borrowers by reason  of Sections 2787 to 2855, inclusive, 2899, and 3433 of the California Civil Code or any similar laws of any  other applicable jurisdiction;   (ii) all rights and defenses that the Borrowers may have because the  Obligations are secured by Real Property located in California, meaning, among other things, that:  (A)  Agent, the other members of the Lender Group, and the Bank Product Providers may collect from the  Borrowers without first foreclosing on any real or personal property collateral pledged by any Loan Party,  and (B) if Agent, on behalf of the Lender Group, forecloses on any Real Property Collateral pledged by any  Loan Party, (1) the amount of the Obligations may be reduced only by the price for which that collateral is  sold at the foreclosure sale, even if the collateral is worth more than the sale price, and (2) the Lender Group  may collect from the Loan Parties even if, by foreclosing on the Real Property Collateral, Agent or the other  members of the Lender Group have destroyed or impaired any right the Borrowers may have to collect from  





 






DB1/ 121979154.7      81    any other Loan Party, it being understood that this is an unconditional and irrevocable waiver of any rights  and defenses the Borrowers may have because the Obligations are secured by Real Property (including,  without limitation, any rights or defenses based upon Sections 580a, 580d, or 726 of the California Code  of Civil Procedure or any similar laws of any other applicable jurisdiction); and   (iii) all rights and defenses arising out of an election of remedies by Agent, the  other members of the Lender Group, and the Bank Product Providers, even though that election of remedies,  such as a nonjudicial foreclosure with respect to security for the Obligations, has destroyed the Borrowers’  rights of subrogation and reimbursement against any other Loan Party by the operation of Section 580d of  the California Code of Civil Procedure or any similar laws of any other applicable jurisdiction or otherwise.   3. CONDITIONS; TERM OF AGREEMENT.  3.1 Conditions Precedent to the Initial Extension of Credit.  The obligation of each Lender  to make the initial extensions of credit provided for hereunder is subject to the fulfillment, to the satisfaction  of Agent and each Lender, of each of the conditions precedent set forth on Schedule 3.1 to this Agreement  (the making of such initial extensions of credit by a Lender being conclusively deemed to be its satisfaction  or waiver of the conditions precedent).  3.2 Conditions Precedent to all Extensions of Credit.  The obligation of the Lender Group  (or any member thereof) to make any Revolving Loans hereunder (or to extend any other credit hereunder)  at any time shall be subject to the following conditions precedent:  (a) the representations and warranties of each Loan Party or its Subsidiaries contained  in this Agreement or in the other Loan Documents shall be true and correct in all material respects (except  that such materiality qualifier shall not be applicable to any representations and warranties that already are  qualified or modified by materiality in the text thereof) on and as of the date of such extension of credit, as  though made on and as of such date (except to the extent that such representations and warranties relate  solely to an earlier date, in which case such representations and warranties shall be true and correct in all  material respects (except that such materiality qualifier shall not be applicable to any representations and  warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date);  and  (b) no Default or Event of Default shall have occurred and be continuing on the date  of such extension of credit, nor shall either result from the making thereof.  3.3 Maturity.  The Commitments shall continue in full force and effect for a term ending on  the Maturity Date (unless terminated earlier in accordance with the terms hereof).  3.4 Effect of Maturity.  On the Maturity Date, all commitments of the Lender Group to  provide additional credit hereunder shall automatically be terminated and all of the Obligations (other than  Hedge Obligations) immediately shall become due and payable without notice or demand and Borrowers  shall be required to repay all of the Obligations (other than Hedge Obligations) in full.  No termination of  the obligations of the Lender Group (other than payment in full of the Obligations and termination of the  Commitments) shall relieve or discharge any Loan Party of its duties, obligations, or covenants hereunder  or under any other Loan Document and Agent’s Liens in the Collateral shall continue to secure the  Obligations and shall remain in effect until all Obligations have been paid in full.  When all of the  Obligations have been paid in full, Agent will, at Borrowers’ sole expense, execute and deliver any  termination statements, lien releases, discharges of security interests, and other similar discharge or release  documents (and, if applicable, in recordable form) as are reasonably necessary to release, as of record,  Agent’s Liens and all notices of security interests and liens previously filed by Agent.  





 






DB1/ 121979154.7      82    3.5 Early Termination by Borrowers.  Borrowers have the option, at any time upon five (5)  Business Days prior written notice to Agent, to repay all of the Obligations in full and terminate the  Commitments.  The foregoing notwithstanding, (a) Borrowers may rescind termination notices or make  such notices conditional upon the consummation of an acquisition or sale transaction or upon the effect  thereof of other credit facilitates or the receipt of proceeds from the issuance of Indebtedness, equity or  other transaction relative to proposed payments in full of the Obligations with the proceeds of third party  Indebtedness if the closing for such issuance or incurrence does not happen on or before the date of the  proposed termination (in which case, a new notice shall be required to be sent in connection with any  subsequent termination), and (b) Borrowers may extend the date of termination at any time with the consent  of Agent (which consent shall not be unreasonably withheld or delayed).  3.6 Conditions Subsequent.  The obligation of the Lender Group (or any member thereof) to  continue to make Revolving Loans (or otherwise extend credit hereunder) is subject to the fulfillment, on  or before the date applicable thereto, of the conditions subsequent set forth on Schedule 3.6 to this  Agreement (the failure by Borrowers to so perform or cause to be performed such conditions subsequent  as and when required by the terms thereof (unless such date is extended, in writing, by Agent, which Agent  may do without obtaining the consent of the other members of the Lender Group), shall constitute an Event  of Default).  4. REPRESENTATIONS AND WARRANTIES.  In order to induce the Lender Group to enter into this Agreement, each Borrower makes  the following representations and warranties to the Lender Group which shall be true, correct, and complete,  in all material respects (except that such materiality qualifier shall not be applicable to any representations  and warranties that already are qualified or modified by materiality in the text thereof), as of the Closing  Date, and shall be true, correct, and complete, in all material respects (except that such materiality qualifier  shall not be applicable to any representations and warranties that already are qualified or modified by  materiality in the text thereof), as of the date of the making of each Revolving Loan (or other extension of  credit) made thereafter, as though made on and as of the date of such Revolving Loan (or other extension  of credit) (except to the extent that such representations and warranties relate solely to an earlier date, in  which case such representations and warranties shall be true and correct in all material respects (except that  such materiality qualifier shall not be applicable to any representations and warranties that already are  qualified or modified by materiality in the text thereof) as of such earlier date), and such representations  and warranties shall survive the execution and delivery of this Agreement:  4.1 Due Organization and Qualification; Subsidiaries.  (a) Each Loan Party and each of its Subsidiaries (i) is duly organized and existing and  in good standing under the laws of the jurisdiction of its organization, (ii) is qualified to do business in any  state where the failure to be so qualified could reasonably be expected to result in a Material Adverse Effect,  and (iii) has all requisite power and authority to own and operate its properties, to carry on its business as  now conducted and as proposed to be conducted, to enter into the Loan Documents to which it is a party  and to carry out the transactions contemplated thereby.  (b) [Reserved].    (c) Set forth on Schedule 4.1(c) of the Disclosure Letter (as such Schedule may be  updated from time to time to reflect changes resulting from transactions permitted under this Agreement),  is a complete and accurate list of the Loan Parties’ direct and indirect Subsidiaries, showing: (i) the number  of shares of each class of common and preferred Equity Interests authorized for each of such Subsidiaries,  and (ii) the number and the percentage of the outstanding shares of each such class and the  number of  





 






DB1/ 121979154.7      83    shares of each such class owned directly or indirectly by such Loan Party.  All of the outstanding Equity  Interests of each such Subsidiary has been validly issued and is fully paid and non-assessable.  (d) Except as set forth on Schedule 4.1(d) of the Disclosure Letter, as of the Closing  Date, there are no subscriptions, options, warrants, or calls relating to any shares of any Loan Party’s or  any of its Subsidiaries’ Equity Interests, including any right of conversion or exchange under any  outstanding security or other instrument.  No Loan Party is subject to any obligation (contingent or  otherwise) to repurchase or otherwise acquire or retire any shares of its Equity Interests or any security  convertible into or exchangeable for any of its Equity Interests.  4.2 Due Authorization; No Conflict.  (a) As to each Loan Party, the execution, delivery, and performance by such Loan  Party of the Loan Documents to which it is a party have been duly authorized by all necessary action on the  part of such Loan Party.  (b) As to each Loan Party, the execution, delivery, and performance by such Loan  Party of the Loan Documents to which it is a party do not and will not (i) violate any material provision of  federal, state, or local law or regulation applicable to any Loan Party or its Subsidiaries, the Governing  Documents of any Loan Party or its Subsidiaries, or any order, judgment, or decree of any court or other  Governmental Authority binding on any Loan Party or its Subsidiaries, (ii) conflict with, result in a breach  of, or constitute (with due notice or lapse of time or both) a default under any material agreement of any  Loan Party or its Subsidiaries where any such conflict, breach or default could individually or in the  aggregate reasonably be expected to have a Material Adverse Effect, (iii) result in or require the creation  or imposition of any Lien of any nature whatsoever upon any assets of any Loan Party, other than Permitted  Liens, or (iv) require any approval of any holder of Equity Interests of a Loan Party or any approval or  consent of any Person under any material agreement of any Loan Party, other than consents or approvals  that have been obtained and that are still in force and effect and except, in the case of material agreements,  for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be  expected to cause a Material Adverse Effect.  4.3 Governmental Consents.  The execution, delivery, and performance by each Loan Party  of the Loan Documents to which such Loan Party is a party and the consummation of the transactions  contemplated by the Loan Documents do not and will not require any registration with, consent, or approval  of, or notice to, or other action with or by, any Governmental Authority, except for (i) registrations,  consents, approvals, notices, or other actions (a) where the failure to obtain or perform the same could not  reasonably be expected to have a Material Adverse Effect or (b) that have been obtained or performed and  that are still in force and effect and (ii) filings and recordings with respect to the Collateral to be made, or  otherwise delivered to Agent for filing or recordation, as of the Closing Date, (iii) filings and recordings  permitted to be made after the Closing Date pursuant to Section 3.6 and (iv) SEC filings required to be  made in connection with the consummation of the transactions contemplated by this Agreement.  4.4 Binding Obligations; Perfected Liens.  (a) Each Loan Document has been duly executed and delivered by each Loan Party  that is a party thereto and is the legally valid and binding obligation of such Loan Party, enforceable against  such Loan Party in accordance with its respective terms, except as enforcement may be limited by equitable  principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting  creditors’ rights generally.  





 






DB1/ 121979154.7      84    (b) Agent’s Liens are validly created, perfected (other than (i) in respect of motor  vehicles that are subject to a certificate of title, (ii) money, (iii) letter-of-credit rights (other than supporting  obligations), (iv) commercial tort claims (other than those that, by the terms of the Guaranty and Security  Agreement, are required to be perfected), (v) any Deposit Accounts and Securities Accounts not subject to  a Control Agreement as permitted by Section 7(k)(iv) of the Guaranty and Security Agreement and (vi)  Liens that are not required to be perfected pursuant to the Guaranty and Security Agreement or Section 3.6,  and subject only to the filing of financing statements and in each case, in the appropriate filing offices), and  first priority Liens, subject only to Permitted Liens which are non-consensual Permitted Liens, permitted  purchase money Liens, or the interests of lessors under Capital Leases and Liens described under clauses  (e), (h), (i), (j), (l), (n), (o), (q) and (s) of the definition of Permitted Liens.  4.5 Title to Assets; No Encumbrances.  Each of the Loan Parties and its Subsidiaries has (a)  good, sufficient and legal title to (in the case of fee interests in Real Property), (b) valid leasehold interests  in (in the case of leasehold interests in real or personal property), and (c) good and marketable title to (in  the case of all other personal property), all of their respective assets reflected in their most recent financial  statements delivered pursuant to Section 5.1, in each case except for assets disposed of since the date of  such financial statements to the extent permitted hereby.  All of such assets are free and clear of Liens  except for Permitted Liens.  4.6 Litigation.  (a) Except as set forth on Schedule 4.6(a) of the Disclosure Letter, there are no actions,  suits, or proceedings pending or, to the knowledge of any Borrower, after due inquiry, threatened in writing  against a Loan Party or any of its Subsidiaries that either individually or in the aggregate could reasonably  be expected to result in a Material Adverse Effect.  (b) Schedule 4.6(b) of the Disclosure Letter sets forth a complete and accurate  description of each of the actions, suits, or proceedings with asserted liabilities in excess of, or that could  reasonably be expected to result in liabilities in excess of, $5,000,000 that, as of the Closing Date, is pending  or, to the knowledge of any Borrower, after due inquiry, threatened in writing against a Loan Party or any  of its Subsidiaries, of (i) the parties to such actions, suits or proceedings, (ii) the nature of the dispute that  is the subject of such actions, suits or proceedings, (iii) the procedural status, as of the Closing Date, with  respect to such actions, suits, or proceedings, and (iv) whether any liability of the Loan Parties’  and their  Subsidiaries in connection with such actions, suits, or proceedings is covered by insurance.  4.7 Compliance with Laws.  No Loan Party nor any of its Subsidiaries (a) is in violation of  any applicable laws, rules, regulations, executive orders, or codes (including Environmental Laws) that,  individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect, or  (b) is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or  regulations of any court or any federal, state, municipal or other governmental department, commission,  board, bureau, agency or instrumentality, domestic or foreign, that, individually or in the aggregate, could  reasonably be expected to result in a Material Adverse Effect.  4.8 No Material Adverse Effect.  All historical financial statements relating to the Loan  Parties and their Subsidiaries that have been delivered by Borrowers to Agent have been prepared in  accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and  being subject to year-end audit adjustments) and present fairly in all material respects, the Loan Parties’  and their Subsidiaries’ consolidated financial condition as of the date thereof and results of operations for  the period then ended.  Since December 31, 2016, no event, circumstance, or change has occurred that has  or could reasonably be expected to result in a Material Adverse Effect.  





 






DB1/ 121979154.7      85    4.9 Solvency.  (a) After the incurrence of all Obligations being incurred hereunder, Administrative  Borrower is Solvent and the Loan Parties, taken as a whole, are Solvent.    (b) No transfer of property is being made by any Loan Party and no obligation is being  incurred by any Loan Party in connection with the transactions contemplated by this Agreement or the other  Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of such Loan  Party.  4.10 Employee Benefits.  No Loan Party, none of their Subsidiaries, nor any of their ERISA  Affiliates maintains or contributes to any Benefit Plan.  4.11 Environmental Condition.  Except as set forth on Schedule 4.11 of the Disclosure Letter,  (a) to each Borrower’s knowledge, no Loan Party’s nor any of its Subsidiaries’ properties or assets has ever  been used by a Loan Party, its Subsidiaries, or by previous owners or operators in the disposal of, or to  produce, store, handle, treat, release, or transport, any Hazardous Materials, where such disposal,  production, storage, handling, treatment, release or transport was in violation, in any material respect, of  any applicable Environmental Law, (b) to each Borrower’s knowledge, after due inquiry, no Loan Party’s  nor any of its Subsidiaries’ properties or assets has ever been designated or identified in any manner  pursuant to any environmental protection statute as a Hazardous Materials disposal site, (c) no Loan Party  nor any of its Subsidiaries has received notice that a Lien arising under any Environmental Law has attached  to any revenues or to any Real Property owned or operated by a Loan Party or its Subsidiaries, and (d) no  Loan Party nor any of its Subsidiaries nor any of their respective facilities or operations is subject to any  outstanding written order, consent decree, or settlement agreement with any Person relating to any  Environmental Law or Environmental Liability that, individually or in the aggregate, could reasonably be  expected to result in a Material Adverse Effect.  4.12 Complete Disclosure.  All factual information taken as a whole (other than forward- looking information and projections and information of a general economic nature and general information  about the industry of any Loan Party or its Subsidiaries) furnished by or on behalf of a Loan Party or its  Subsidiaries in writing to Agent or any Lender (including all information contained in the Schedules hereto  or in the other Loan Documents) for purposes of or in connection with this Agreement or the other Loan  Documents, and all other such factual information taken as a whole (other than forward-looking information  and projections and information of a general economic nature and general information about the industry  of any Loan Party or its Subsidiaries) hereafter furnished by or on behalf of a Loan Party or its Subsidiaries  in writing to Agent or any Lender will be, true and accurate, in all material respects, on the date as of which  such information is dated or certified and not incomplete by omitting to state any fact necessary to make  such information (taken as a whole) not misleading in any material respect at such time in light of the  circumstances under which such information was provided.  The Projections delivered to Agent on May  19, 2021 represent, and as of the date on which any other Projections are delivered to Agent, such additional  Projections represent, Borrowers’ good faith estimate, on the date such Projections are delivered, of the  Loan Parties’ and their Subsidiaries’ future performance for the periods covered thereby based upon  assumptions believed by Borrowers to be reasonable at the time of the delivery thereof to Agent (it being  understood that such Projections are subject to significant uncertainties and contingencies, many of which  are beyond the control of the Loan Parties and their Subsidiaries, and no assurances can be given that such  Projections will be realized, and although reflecting Borrowers’ good faith estimate, projections or forecasts  based on methods and assumptions which Borrowers believed to be reasonable at the time such Projections  were prepared, are not to be viewed as facts, and that actual results during the period or periods covered by  the Projections may differ materially from projected or estimated results).  





 






DB1/ 121979154.7      86    4.13 Patriot Act.  To the extent applicable, each Loan Party is in compliance, in all material  respects, with the (a) Trading with the Enemy Act, as amended, and each of the foreign assets control  regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and  any other enabling legislation or executive order relating thereto, and (b) Uniting and Strengthening  America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act  of 2001, as amended) (the “Patriot Act”).  4.14 Indebtedness.  Set forth on Schedule 4.14 of the Disclosure Letter is a true and complete  list of all Indebtedness of each Loan Party and each of its Subsidiaries outstanding immediately prior to the  Closing Date that is to remain outstanding immediately after giving effect to the closing hereunder on the  Closing Date and such Schedule accurately sets forth the aggregate principal amount of such Indebtedness  as of the Closing Date.  4.15 Payment of Taxes.  Except as otherwise permitted under Section 5.5, all income and other  material Tax returns and reports of each Loan Party and its Subsidiaries required to be filed by any of them  have been timely filed, and all material Taxes shown on such Tax returns to be due and payable and all  other material Taxes levied upon a Loan Party and its Subsidiaries and upon their respective assets, income,  businesses and franchises that are due and payable have been paid when due and payable.  Each Loan Party  and each of its Subsidiaries have made adequate provision in accordance with GAAP for all Taxes not yet  due and payable.  No Borrower knows of any delinquent and unpaid Tax assessment against a Loan Party  or any of its Subsidiaries that is not being actively contested by such Loan Party or such Subsidiary  diligently, in good faith, and by appropriate proceedings and that if such contest is adversely determined,  could reasonably be expected to result in a Material Adverse Effect; provided, that such reserves or other  appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or  provided therefor.  4.16 Margin Stock.  Neither any Loan Party nor any of its Subsidiaries owns any Margin Stock  or is engaged principally, or as one of its important activities, in the business of extending credit for the  purpose of purchasing or carrying any Margin Stock.  No part of the proceeds of the loans made to  Borrowers will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose  of purchasing or carrying any Margin Stock or for any purpose that violates the provisions of Regulation  T, U or X of the Board of Governors.  Neither any Loan Party nor any of its Subsidiaries expects to acquire  any Margin Stock.  4.17 Governmental Regulation.  No Loan Party nor any of its Subsidiaries is subject to  regulation under the Federal Power Act or the Investment Company Act of 1940 or under any other federal  or state statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render  all or any portion of the Obligations unenforceable.  No Loan Party nor any of its Subsidiaries is a  “registered investment company” or a company “controlled” by a “registered investment company” or a  “principal underwriter” of a “registered investment company” as such terms are defined in the Investment  Company Act of 1940.  4.18 OFAC; Sanctions; Anti-Corruption Laws; Anti-Money Laundering Laws.  No Loan  Party or any of its Subsidiaries is in violation of any Sanctions.  No Loan Party nor any of its Subsidiaries  nor, to the knowledge of such Loan Party, any director, officer, employee, agent or Affiliate of such Loan  Party or such Subsidiary (a) is a Sanctioned Person or a Sanctioned Entity, (b) has any assets located in  Sanctioned Entities, or (c) derives revenues from investments in, or transactions with Sanctioned Persons  or Sanctioned Entities.  Each of the Loan Parties and its Subsidiaries has implemented and maintains in  effect policies and procedures designed to ensure compliance with all Sanctions, Anti-Corruption Laws and  Anti-Money Laundering Laws.  Each of the Loan Parties and its Subsidiaries, and to the knowledge of each  





 






DB1/ 121979154.7      87    such Loan Party, each director, officer, employee, agent and Affiliate of each such Loan Party and each  such Subsidiary, is in compliance with all Sanctions, Anti-Corruption Laws and Anti-Money Laundering  Laws.  No proceeds of any Loan made or Letter of Credit issued hereunder will be used to fund any  operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a  Sanctioned Entity, or otherwise used in any manner that would result in a violation of any Sanction, Anti- Corruption Law or Anti-Money Laundering Law by any Person (including any Lender, Bank Product  Provider, or other individual or entity participating in any transaction).  4.19 Employee and Labor Matters.  There is (i) no unfair labor practice complaint pending or,  to the knowledge of any Borrower, threatened against any Loan Party or its Subsidiaries before any  Governmental Authority and no grievance or arbitration proceeding pending or threatened against any Loan  Party or its Subsidiaries which arises out of or under any collective bargaining agreement and that could  reasonably be expected to result in a material liability, (ii) no strike, labor dispute, slowdown, stoppage or  similar action or grievance pending or threatened in writing against any Loan Party or its Subsidiaries that  could reasonably be expected to result in a material liability, or (iii) to the knowledge of any Borrower,  after due inquiry, no union representation question existing with respect to the employees of any Loan Party  or its Subsidiaries and no union organizing activity taking place with respect to any of the employees of  any Loan Party or its Subsidiaries, in each case, that would be reasonably expected to have a Material  Adverse Effect.  None of any Loan Party or its Subsidiaries has incurred any liability or obligation under  the Worker Adjustment and Retraining Notification Act or similar state law, which remains unpaid or  unsatisfied.  The hours worked and payments made to employees of each Loan Party and its Subsidiaries  have not been in violation of the Fair Labor Standards Act or any other applicable legal requirements,  except to the extent such violations could not, individually or in the aggregate, reasonably be expected to  result in a Material Adverse Effect.  All material payments due from any Loan Party or its Subsidiaries on  account of wages and employee health and welfare insurance and other benefits have been paid or accrued  as a liability on the books of Borrowers, except where the failure to do so could not, individually or in the  aggregate, reasonably be expected to result in a Material Adverse Effect.  4.20 Immaterial Subsidiaries.  Set forth on Schedule 4.20 of the Disclosure Letter (as such  Schedule may be updated from time to time to reflect changes resulting from transactions permitted under  this Agreement) is a complete and accurate description of all Immaterial Subsidiaries.   4.21 Leases.  Each Loan Party and its Subsidiaries enjoy peaceful and undisturbed possession  under all leases material to their business and to which they are parties or under which they are operating,  and, subject to Permitted Protests, all of such material leases are valid and subsisting and no material default  by the applicable Loan Party or its Subsidiaries exists under any of them.  4.22 Eligible Accounts.  As to each Account that is identified by Borrowers as an Eligible  Domestic Account, Eligible Tier 1 Account or Eligible Tier 2 Account in a Borrowing Base Certificate  submitted to Agent, such Account is (a) a bona fide existing payment obligation of the applicable Account  Debtor organized in a Domestic Country, Tier 1 Country or a Tier 2 Country, as applicable, created by the  sale and delivery of Inventory or the rendition of services to such Account Debtor in the ordinary course of  a Borrower’s business, (b) owed to a Borrower without any known defenses, disputes, offsets,  counterclaims, or rights of return or cancellation, and (c) not excluded as ineligible by virtue of one or more  of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible  Accounts.  4.23 Hedge Agreements.  On each date that any Hedge Agreement is executed by any Hedge  Provider, Borrower and each other Loan Party satisfy all eligibility, suitability and other requirements under  





 






DB1/ 121979154.7      88    the Commodity Exchange Act (7 U.S.C. § 1, et seq., as in effect from time to time) and the Commodity  Futures Trading Commission regulations.  4.24 Material Contracts.  Set forth on Schedule 4.24 of the Disclosure Letter (as such Schedule  may be updated from time to time in accordance herewith) is a reasonably detailed description of the  Material Contracts of each Loan Party and its Subsidiaries as of the most recent date on which  Administrative Borrower provided the Compliance Certificate pursuant to Section 5.1; provided, that  Borrowers may amend Schedule 4.24 to add additional Material Contracts so long as such amendment  occurs by written notice to Agent on the date that Administrative Borrower provides the Compliance  Certificate.  Except for matters which, either individually or in the aggregate, could not reasonably be  expected to result in a Material Adverse Effect, each Material Contract (other than those that have expired  at the end of their normal terms) (a) is in full force and effect and is binding upon and enforceable against  the applicable Loan Party or its Subsidiary and, to each Borrower’s knowledge, after due inquiry, each other  Person that is a party thereto in accordance with its terms, (b) has not been otherwise amended or modified  (other than amendments or modifications permitted by Section 6.6(b)), and (c) is not in default due to the  action or inaction of the applicable Loan Party or its Subsidiary.  5. AFFIRMATIVE COVENANTS.  Each Borrower covenants and agrees that, until the termination of all of the Commitments  and payment in full of the Obligations:  5.1 Financial Statements, Reports, Certificates.  Borrowers (a) will deliver to Agent, with  copies to each Lender, each of the financial statements, reports, and other items set forth on Schedule 5.1  to this Agreement no later than the times specified therein, (b) agree that no Subsidiary of a Loan Party will  have a fiscal year different from that of Administrative Borrower and (c) agree to maintain a system of  accounting that enables Borrowers to produce financial statements in accordance with GAAP, and (d) agree  that they will, and will cause each other Loan Party to, (i) keep a reporting system that shows all additions,  sales, claims, returns, and allowances with respect to their and their Subsidiaries’ sales, and (ii) maintain  their billing systems and practices substantially as in effect as of the Closing Date and shall only make  material modifications thereto with notice to, and with the consent of, Agent.  Documents required to be  furnished pursuant to this Section 5.1 (to the extent any such documents are included in materials otherwise  filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been  delivered on the date (i) on which Administrative Borrower posts such documents, or provides a link  thereto, on the Administrative Borrower’s website or (ii) on which such documents are posted on the  Administrative Borrower’s behalf on an Internet or intranet website, if any, to which Agent and each Lender  have access (whether a commercial or public third-party website or whether sponsored by Agent (including  the website of the SEC at http://sec.gov)); provided that (x) in each case, the Borrowers shall notify Agent  of the posting of any such documents and (y) in the case of documents required to be furnished pursuant to  clauses (a), (d), (e), (h), (i) and (j) of Schedule 5.1, at the request of Agent, the Administrative Borrower  shall furnish to Agent a hard copy of such document.  Each Lender shall be solely responsible for timely  accessing posted documents and maintaining its copies of such documents.    5.2 Reporting.  Borrowers (a) will deliver to Agent (and if so requested by Agent, with copies  for each Lender) each of the reports set forth on Schedule 5.2 to this Agreement at the times specified  therein, and (b) agree to use commercially reasonable efforts in cooperation with Agent to facilitate and  implement a system of electronic collateral reporting in order to provide electronic reporting of each of the  items set forth on such Schedule.  Borrowers and Agent hereby agree that the delivery of the Borrowing  Base Certificate through the Agent’s electronic platform or portal, subject to Agent’s authentication  process, by such other electronic method as may be approved by Agent from time to time in its sole  





 






DB1/ 121979154.7      89    discretion, or by such other electronic input of information necessary to calculate the Borrowing Bases as  may be approved by Agent from time to time in its sole discretion, shall in each case be deemed to satisfy  the obligation of Borrowers to deliver such Borrowing Base Certificate, with the same legal effect as if such  Borrowing Base Certificate had been manually executed by Borrowers and delivered to Agent.  5.3 Existence.  Except as otherwise permitted under Section 6.3 or Section 6.4, each Loan  Party will, and will cause each of its Subsidiaries (other than the Immaterial Subsidiaries) to, at all times  preserve and keep in full force and effect such Person’s valid existence and good standing in its jurisdiction  of organization and, except as could not reasonably be expected to result in a Material Adverse Effect, good  standing with respect to all other jurisdictions in which it is qualified to do business and any rights,  franchises, permits, licenses, accreditations, authorizations, or other approvals material to their businesses.  5.4 Maintenance of Properties.  Each Loan Party will, and will cause each of its Subsidiaries  to, maintain and preserve all of its assets that are necessary or useful in the proper conduct of its business  in good working order and condition, ordinary wear, tear, casualty, and condemnation and Permitted  Dispositions excepted (and except where the failure to so maintain and preserve assets could not reasonably  be expected to result in a Material Adverse Effect).  5.5 Taxes.  Each Loan Party will, and will cause each of its Subsidiaries to, pay in full before  delinquency or before the expiration of any extension period all Taxes imposed, levied, or assessed against  it, or any of its assets or in respect of any of its income, businesses, or franchises, other than Taxes not in  excess of $250,000 outstanding at any time and other than to the extent that the validity of such Tax is the  subject of a Permitted Protest.  5.6 Insurance.  Each Loan Party will, and will cause each of its Subsidiaries to, at Borrowers’  expense, maintain insurance respecting each of each Loan Party’s and its Subsidiaries’ assets wherever  located, covering liabilities, losses or damages as are customarily are insured against by other Persons  engaged in same or similar businesses and similarly situated and located.  All such policies of insurance  shall be with financially sound and reputable insurance companies acceptable to Agent (it being agreed  that, as of the Closing Date, Zurich American Insurance Company is acceptable to Agent) and in such  amounts as is carried generally in accordance with sound business practice by companies in similar  businesses similarly situated and located and, in any event, in amount, adequacy, and scope reasonably  satisfactory to Agent (it being agreed that the amount, adequacy, and scope of the policies of insurance of  Borrowers in effect as of the Closing Date are acceptable to Agent).  All property insurance policies are to  be made payable to Agent for the benefit of Agent and the Lenders, as their interests may appear, in case  of loss, pursuant to a standard lender’s loss payable endorsement with a standard non-contributory “lender”  or “secured party” clause and are to contain such other provisions as Agent may reasonably require to fully  protect the Lenders’ interest in the Collateral and to any payments to be made under such policies.  All  certificates of property and general liability insurance are to be delivered to Agent, with the lender’s loss  payable and additional insured endorsements in favor of Agent and shall provide for not less than thirty  days (ten days in the case of non-payment) prior written notice to Agent of the exercise of any right of  cancellation.  If any Loan Party or its Subsidiaries fails to maintain such insurance, Agent may arrange for  such insurance, but at Borrowers’ expense and without any responsibility on Agent’s part for obtaining the  insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of  claims.  Borrowers shall give Agent prompt notice of any loss exceeding $500,000 covered by the casualty  or business interruption insurance of any Loan Party or its Subsidiaries.  Upon the occurrence and during  the continuance of an Event of Default, Agent shall have the sole right to file claims under any property  and general liability insurance policies in respect of the Collateral, to receive, receipt and give acquittance  for any payments that may be payable thereunder, and to execute any and all endorsements, receipts,  releases, assignments, reassignments or other documents that may be necessary to effect the collection,  





 






DB1/ 121979154.7      90    compromise or settlement of any claims under any such insurance policies.  If at any time the area in which  any Real Property that is subject to a Mortgage is located is designated a “flood hazard area” in any Flood  Insurance Rate Map published by the Federal Emergency Management Agency (or any successor agency),  obtain flood insurance in such total amount and on terms that are satisfactory to Agent and all Lenders from  time to time, and otherwise comply with the Flood Laws or as is otherwise satisfactory to Agent and all  Lenders.  5.7 Inspection.  (a) Each Loan Party will, and will cause each of its Subsidiaries to, permit Agent, any  Lender, and each of their respective duly authorized representatives or agents to visit any of its properties  and inspect any of its assets or books and records, to examine and make copies of its books and records,  and to discuss its affairs, finances, and accounts with, and to be advised as to the same by, its officers and  employees (provided, that an authorized representative of a Borrower shall be allowed to be present) at  such reasonable times and intervals as Agent or any Lender, as applicable, may designate and, so long as  no Default or Event of Default has occurred and is continuing, with reasonable prior notice to Borrowers  and during regular business hours, at Borrowers’ expense in accordance with the provisions of the Fee  Letter, subject to the limitations set forth below in Section 5.7(c).  (b) Each Loan Party will, and will cause each of its Subsidiaries to, permit Agent and  each of its duly authorized representatives or agents to conduct field examinations, appraisals or valuations  at such reasonable times and intervals as Agent may designate upon prior reasonable written notice, at  Borrowers’ expense in accordance with the provisions of the Fee Letter, subject to the limitations set forth  below in Section 5.7(c).  (c) So long as no Event of Default shall have occurred and be continuing during a  calendar year, Borrowers shall not be obligated to reimburse Agent for more than one (1) field examination  in such calendar year, except for field examinations and appraisals conducted in connection with a proposed  Permitted Acquisition (whether or not consummated); provided, that while an Increased Reporting Period  is continuing the Borrowers shall be obligated to reimburse Agent for two (2) field examinations for any  such calendar year.  5.8 Compliance with Laws.  Each Loan Party will, and will cause each of its Subsidiaries to,  comply with the requirements of all applicable laws, rules, regulations, and orders of any Governmental  Authority, other than laws, rules, regulations, and orders the non-compliance with which, individually or  in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.  5.9 Environmental.  Each Loan Party will, and will cause each of its Subsidiaries to,  (a) Keep any property either owned or operated by any Loan Party or its Subsidiaries  free of any Environmental Liens or post bonds or other financial assurances sufficient to satisfy the  obligations or liability evidenced by such Environmental Liens,  (b) Comply, in all material respects, with Environmental Laws and provide to Agent  documentation of such compliance which Agent reasonably requests,  (c) Promptly notify Agent of any release of which any Loan Party has knowledge of  a Hazardous Material in any reportable quantity from or onto property owned or operated by any Loan  Party or its Subsidiaries and take any Remedial Actions required to abate said release or otherwise to come  into compliance, in all material respects, with applicable Environmental Law, and  





 






DB1/ 121979154.7      91    (d) Promptly, but in any event within five Business Days of its receipt thereof, provide  Agent with written notice of any of the following:  (i) notice that an Environmental Lien has been filed  against any of the real or personal property of a Loan Party or its Subsidiaries, (ii) commencement of any  Environmental Action or written notice that an Environmental Action will be filed against a Loan Party or  its Subsidiaries, and (iii) written notice of a violation, citation, or other administrative order from a  Governmental Authority.  5.10 Disclosure Updates.  Each Loan Party will, promptly and in no event later than five  Business Days after obtaining knowledge thereof, notify Agent if any written information, exhibit, or report  furnished to Agent or the Lenders contained, at the time it was furnished, any untrue statement of a material  fact or omitted to state any material fact necessary to make the statements contained therein not misleading  in light of the circumstances in which made.  The foregoing to the contrary notwithstanding, any notification  pursuant to the foregoing provision will not cure or remedy the effect of the prior untrue statement of a  material fact or omission of any material fact nor shall any such notification have the effect of amending or  modifying this Agreement or any of the Schedules hereto.  5.11 Formation of Subsidiaries.  Each Loan Party will, at the time that any Loan Party forms  any direct or indirect Subsidiary,  acquires any direct or indirect Subsidiary after the Closing Date, or at  any time when any direct or indirect Subsidiary of a Loan Party that previously was an Immaterial  Subsidiary becomes a Material Subsidiary, within 30 days of such event (or such later date as permitted by  Agent in its sole discretion) (a) unless such Subsidiary is an Excluded Subsidiary, cause such new  Subsidiary (i) if such Subsidiary is a Domestic Subsidiary and Administrative Borrower requests, subject  to the consent of Agent, that such Domestic Subsidiary be joined as a Borrower hereunder, to provide to  Agent a Joinder to this Agreement, and (ii) to provide to Agent a joinder to the Guaranty and Security  Agreement, in each case, together with such other security agreements (including Mortgages with respect  to any Real Property owned in fee of such new Subsidiary with a fair market value of greater than  $2,000,000), as well as appropriate financing statements (and with respect to all property subject to a  Mortgage, fixture filings), all in form and substance reasonably satisfactory to Agent (including being  sufficient to grant Agent a first priority Lien (subject to Permitted Liens) in and to the assets of such newly  formed or acquired Subsidiary), (b) provide, or cause the applicable Loan Party to provide, to Agent a  pledge agreement (or an addendum to the Guaranty and Security Agreement) and appropriate certificates  and powers or financing statements, pledging all of the direct or beneficial ownership interest in such new  Subsidiary in form and substance reasonably satisfactory to Agent; provided, that only 65% of the total  outstanding voting Equity Interests of any first tier Subsidiary of a Loan Party that is a CFC or a Disregarded  Person (and none of the Equity Interests of any Subsidiary of such CFC or Disregarded Person) shall be  required to be pledged, and (c) provide to Agent all other documentation, including the Governing  Documents of such Subsidiary and one or more opinions of counsel reasonably satisfactory to Agent, which,  in its opinion, is appropriate with respect to the execution and delivery of the applicable documentation  referred to above (including policies of title insurance, flood certification documentation or other  documentation with respect to all Real Property owned in fee and subject to a mortgage).  Any document,  agreement, or instrument executed or issued pursuant to this Section 5.11 shall constitute a Loan Document.  5.12 Further Assurances.  Each Loan Party will, and will cause each of the other Loan Parties  to, at any time upon the reasonable request of Agent, execute or deliver to Agent any and all financing  statements, fixture filings, security agreements, pledges, assignments, mortgages, deeds of trust, opinions  of counsel, and all other documents (the “Additional Documents”) that Agent may reasonably request in  form and substance reasonably satisfactory to Agent, to create, perfect, and continue perfected or to better  perfect Agent’s Liens in all of the assets of each of the Loan Parties (whether now owned or hereafter  arising or acquired, tangible or intangible, real or personal) (other than any assets expressly excluded from  the Collateral (as defined in the Guaranty and Security Agreement) pursuant to Section 3 of the Guaranty  





 






DB1/ 121979154.7      92    and Security Agreement), to create and perfect Liens in favor of Agent in any Real Property acquired by  any other Loan Party with a fair market value in excess of $2,000,000, and in order to fully consummate  all of the transactions contemplated hereby and under the other Loan Documents; provided, that the  foregoing shall not apply to any Excluded Subsidiary.  To the maximum extent permitted by applicable  law, if any Borrower  or any other Loan Party refuses or fails to execute or deliver any reasonably requested  Additional Documents within a reasonable period of time not to exceed 10 Business Days following the  request to do so, each Borrower and each other Loan Party hereby authorizes Agent to execute any such  Additional Documents in the applicable Loan Party’s name and authorizes Agent to file such executed  Additional Documents in any appropriate filing office.  In furtherance of, and not in limitation of, the  foregoing, each Loan Party shall take such actions as Agent may reasonably request from time to time to  ensure that the Obligations are guaranteed by the Guarantors and are secured by substantially all of the  assets of the Loan Parties, including all of the outstanding capital Equity Interests of each Borrower and its  Subsidiaries (in each case, other than with respect to any assets expressly excluded from the Collateral (as  defined in the Guaranty and Security Agreement) pursuant to Section 3 of the Guaranty and Security  Agreement).  Notwithstanding anything to the contrary contained herein (including Section 5.11 hereof and  this Section 5.12) or in any other Loan Document, (x) Agent shall not accept delivery of any Mortgage  from any Loan Party unless each of the Lenders has received 45 days prior written notice thereof and Agent  has received confirmation from each Lender that such Lender has completed its flood insurance diligence,  has received copies of all flood insurance documentation and has confirmed that flood insurance  compliance has been completed as required by the Flood Laws or as otherwise satisfactory to such Lender  and (y) Agent shall not accept delivery of any joinder to any Loan Document with respect to any Subsidiary  of any Loan Party that is not a Loan Party, if such Subsidiary qualifies as a “legal entity customer” under  the Beneficial Ownership Regulation unless such Subsidiary has delivered a Beneficial Ownership  Certification in relation to such Subsidiary and Agent has completed its Patriot Act searches, OFAC/PEP  searches and customary individual background checks for such Subsidiary, the results of which shall be  satisfactory to Agent.  5.13 Lender Meetings.  Borrowers will, within 90 days after the close of each fiscal year of  Administrative Borrower, at the request of Agent or of the Required Lenders and upon reasonable prior  notice, hold a meeting (at a mutually agreeable location and time or, at the option of Agent, by conference  call) with all Lenders who choose to attend such meeting at which meeting shall be reviewed the financial  results of the previous fiscal year and the financial condition of the Loan Parties and their Subsidiaries and  the projections presented for the current fiscal year of Administrative Borrower.  5.14 Location of Collateral; Chief Executive Office.  Each Loan Party will keep their  respective chief executive offices and the location of their books and records only at the locations identified  on Schedule 7 to the Guaranty and Security Agreement unless 10 day prior written notice is given to Agent.   Each Loan Party will use their commercially reasonable efforts to obtain Collateral Access Agreements for  each respective chief executive offices and locations where their books and records are kept.   5.15 OFAC; Sanctions; Anti-Corruption Laws; Anti-Money Laundering Laws.  Each Loan  Party will, and will cause each of its Subsidiaries to comply with all applicable Sanctions, Anti-Corruption  Laws and Anti-Money Laundering Laws.  Each of the Loan Parties and its Subsidiaries shall implement  and maintain in effect policies and procedures designed to ensure compliance by the Loan Parties and their  Subsidiaries and their respective directors, officers, employees, agents and Affiliates with all Sanctions,  Anti-Corruption Laws and Anti-Money Laundering Laws.  Each of the Loan Parties shall and shall cause  their respective Subsidiaries to comply with all Sanctions, Anti-Corruption Laws and Anti-Money  Laundering Laws.  





 






DB1/ 121979154.7      93    5.16 Material Contracts.  Contemporaneously with the delivery of each Compliance  Certificate pursuant to Section 5.1, Borrowers will provide Agent with copies of (a) each Material Contract  entered into since the delivery of the previous Compliance Certificate, and (b) each material amendment or  modification of any Material Contract entered into since the delivery of the previous Compliance  Certificate.  5.17 Bank Products.  On or before the 120th day (or such longer period as agreed to by Agent  in its reasonable sole discretion) after the Closing Date, the Loan Parties shall establish their primary  depository and treasury management relationships with Wells Fargo or one or more of its Affiliates and  will maintain such depository and treasury management relationships at all times during the term of the  Agreement.  6. NEGATIVE COVENANTS.  Each Borrower covenants and agrees that, until the termination of all of the Commitments  and the payment in full of the Obligations:  6.1 Indebtedness.  Each Loan Party will not, and will not permit any of its Subsidiaries to,  create, incur, assume, suffer to exist, guarantee, or otherwise become or remain, directly or indirectly, liable  with respect to any Indebtedness, except for Permitted Indebtedness.  6.2 Liens.  Each Loan Party will not, and will not permit any of its Subsidiaries to, create,  incur, assume, or suffer to exist, directly or indirectly, any Lien on or with respect to any of its assets, of  any kind, whether now owned or hereafter acquired, or any income or profits therefrom, except for  Permitted Liens.  6.3 Restrictions on Fundamental Changes.  Each Loan Party will not, and will not permit  any of its Subsidiaries to,  (a) Other than in order to consummate a Permitted Acquisition, enter into any merger,  consolidation, reorganization, or recapitalization, or reclassify its Equity Interests, except for (i) any merger  between Loan Parties; provided, that a Borrower must be the surviving entity of any such merger to which  it is a party, (ii) any merger between a Loan Party and a Subsidiary of such Loan Party that is not a Loan  Party so long as such Loan Party is the surviving entity of any such merger, and (iii) any merger between  Subsidiaries of any Loan Party that are not Loan Parties, and  (b) liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution),  except for (i) the liquidation or dissolution of non-operating Immaterial Subsidiaries of any Loan Party, (ii)  the liquidation or dissolution of a Loan Party (other than any Borrower) so long as (1) all of the assets  (including any interest in any Equity Interests) of such liquidating or dissolving Loan Party are transferred  to a Loan Party that is not liquidating or dissolving or (2) if the Borrower determines in good faith that such  liquidation or dissolution is in the best interests of the Borrower in order to reduce costs and administrative  burden and such dissolution or liquidation is a Permitted Disposition, so long as no Default or Event of  Default has occurred and is continuing or would result therefrom, or (iii) the liquidation or dissolution of a  Subsidiary that is not a Loan Party (other than any such Subsidiary the Equity Interests of which (or any  portion thereof) is subject to a Lien in favor of Agent) so long as all of the assets of such liquidating or  dissolving Subsidiary are transferred to a Subsidiary or a Loan Party that is not liquidating or dissolving,  (c) suspend or cease operating a substantial portion of its or their business, except as  permitted pursuant to clauses (a) or (b) above or in connection with a transaction permitted under  Section 6.4, or  





 






DB1/ 121979154.7      94    (d) change its classification/status for U.S. federal income tax purposes.  6.4 Disposal of Assets.  Other than Permitted Dispositions or transactions expressly permitted  by Sections 6.3 or 6.9, each Loan Party will not, and will not permit any of its Subsidiaries to, convey, sell,  lease, license, assign, transfer, or otherwise dispose of any of its or their assets  (including by an allocation  of assets among newly divided limited liability companies pursuant to a “plan of division”).   Notwithstanding the foregoing, if the most recent Borrowing Base Certificate received by Agent includes  Qualified Cash, the Loan Parties shall not transfer any Qualified Cash out of a Qualified Cash Account if  after giving effect to such transfer the amount of Qualified Cash remaining in such Qualified Cash Account  is less than the amount of Qualified Cash shown in the most recent Borrowing Base Certificate unless the  Borrower delivers an updated Borrowing Base Certificate demonstrating that after giving effect to such  transfer the Loan Parties are in compliance with the terms of this Agreement and no payment would then  be due under Section 2.4(e) of this Agreement   6.5 Nature of Business.  Each Loan Party will not, and will not permit any of its Subsidiaries  to, make any material change in the nature of its or their business as of the date of the Closing Date or  acquire any properties or assets that are not reasonably related to the conduct of such business activities or  business activities that are reasonably related, ancillary or complementary thereto; provided, that the  foregoing shall not prevent any Loan Party and its Subsidiaries from engaging in any business that is  reasonably related, complementary or ancillary to its or their business.  6.6 Prepayments and Amendments.  Each Loan Party will not, and will not permit any of its  Subsidiaries to,  (a) Except in connection with Refinancing Indebtedness permitted by Section 6.1,  (i) optionally prepay, redeem, defease, purchase, or otherwise acquire any  Indebtedness of any Loan Party or its Subsidiaries, other than (A) the Obligations in accordance with this  Agreement, (B) Hedge Obligations, or (C) Permitted Intercompany Advances, or  (ii) make any payment on account of Subordinated Indebtedness that has been  contractually subordinated in right of payment to the Obligations if such payment is not permitted at such  time under the subordination terms and conditions, or  (b) Directly or indirectly, amend, modify, or change any of the terms or provisions of:  (i) any agreement, instrument, document, indenture, or other writing  evidencing  or concerning Permitted Indebtedness other than (A) the Obligations in accordance with this  Agreement, (B) Hedge Obligations, (C) Permitted Intercompany Advances, and (D) Indebtedness permitted  under clauses (c), (h), (j) and (k) of the definition of Permitted Indebtedness and any Refinancing  Indebtedness with respect thereto, except to the extent that such amendment, modification, or change could  not, individually or in the aggregate, reasonably be expected to be materially adverse to the interests of the  Lenders,  (ii) any Material Contract except to the extent that such amendment,  modification, or change could not, individually or in the aggregate, reasonably be expected to be materially  adverse to the interests of the Lenders, or  (iii) the Governing Documents of any Loan Party or any of its Subsidiaries if  the effect thereof, either individually or in the aggregate, could reasonably be expected to be materially  adverse to the interests of the Lenders.  





 






DB1/ 121979154.7      95    6.7 Restricted Payments.  Each Loan Party will not, and will not permit any of its Subsidiaries  to, make any Restricted Payment; provided, that so long as it is permitted by law,  (a) so long as no Event of Default shall have occurred and be continuing or would  result therefrom, Administrative Borrower may make distributions to former or current employees, officers,  consultants or directors of Administrative Borrower (or any spouses, ex-spouses, or estates of any of the  foregoing) on account of redemptions of Equity Interests of Administrative Borrower held by such Persons  (and for the avoidance of doubt, salary, wages, or other cash compensation for services provided paid to  employees shall not be considered distributions hereunder); provided, that the aggregate amount of such  redemptions (other than redemptions made in connection with tax payments) made by Administrative  Borrower during the term of this Agreement  plus the amount of Indebtedness outstanding under clause (l)  of the definition of Permitted Indebtedness and any purchases under clause (e)(ii) of this Section, do not  exceed $4,000,000 in the aggregate,  (b) so long as no Event of Default shall have occurred and be continuing or would  result therefrom, Administrative Borrower may make distributions to former employees, officers,  consultants or directors of Administrative Borrower (or any spouses, ex-spouses, or estates of any of the  foregoing), solely in the form of forgiveness of Indebtedness of such Persons owing to Administrative  Borrower on account of repurchases of the Equity Interests of Administrative Borrower held by such  Persons; provided, that such Indebtedness was incurred by such Persons solely to acquire Equity Interests  of Administrative Borrower and the amount of Indebtedness forgiven does not exceed $1,000,000,   (c) [Intentionally omitted.]  (d) Subsidiaries of a Loan Party may make distributions to a Loan Party,   (e) (i) repurchase Equity Interests from stockholders owning less than 1% of the  outstanding equity securities for aggregate consideration of less than $1,000,000 in any twelve month  period and $200,000 in each instance and (ii) make other purchases of Equity Interests in aggregate with  distributions under clause (a) of this Section and Indebtedness outstanding under clause (l) of the definition  of Permitted Indebtedness not greater than $4,000,000 per Fiscal Year, provided, that no Event of Default  has occurred and is continuing (both before and after giving effect thereto), at the time of the repurchase,   (f) each Loan Party may declare and make Restricted Payments payable in the  Qualified Equity Interests of such Loan Party, provided, that the issuance of such Qualified Equity Interests  does not otherwise violate the terms of this Agreement and no Event of Default has occurred and is  continuing at the time of making such Restricted Payments or would result from the making of such  Restricted Payments,  (g) so long as no Event of Default shall have occurred and be continuing or would  result therefrom, a Borrower may distribute securities, or other payments, awards or grants in cash,  securities or otherwise pursuant to, in the ordinary course of business consistent with past practice,  employment arrangements, stock options, equity compensation awards, and other benefit plans to  employees, officers, consultants or directors, or   (h) So long as no Event of Default has occurred and is continuing, any Borrower may  make any redemption of Qualified Equity Interests with the cash proceeds received from a substantially  concurrent issuance of new Qualified Equity Interests.  





 






DB1/ 121979154.7      96    6.8 Accounting Methods.  Each Loan Party will not, and will not permit any of its Subsidiaries  to, modify or change its fiscal year or its method of accounting (other than as may be required to conform  to GAAP).  6.9 Investments.  Each Loan Party will not, and will not permit any of its Subsidiaries to,  directly or indirectly, make or acquire any Investment or incur any liabilities (including contingent  obligations) for or in connection with any Investment except for Permitted Investments.  6.10 Transactions with Affiliates.  Each Loan Party will not, and will not permit any of its  Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction with any Affiliate of any  Loan Party or any of its Subsidiaries except for:  (a) transactions (other than the payment of management, consulting, monitoring, or  advisory fees) between such Loan Party or its Subsidiaries, on the one hand, and any Affiliate of such Loan  Party or its Subsidiaries, on the other hand, so long as such transactions are no less favorable, taken as a  whole, to such Loan Party or its Subsidiaries, as applicable, than would be obtained in an arm’s length  transaction with a non-Affiliate,  (b) any fees or indemnities provided for the benefit of employees, officers, directors  (or comparable managers) or consultants of a Loan Party or one of its Subsidiaries,  (c) (i) the payment of compensation, severance, or employee benefit arrangements to  employees, officers, consultants and directors of a Loan Party or one of its Subsidiaries in the ordinary  course of business in accordance with applicable law and (ii) loans or advances to employees, officers or  other directors of a Loan Party that would otherwise be Permitted Investments,  (d) (i) transactions solely among the Loan Parties, (ii) transactions solely among  Subsidiaries of Loan Parties that are not Loan Parties, and (iii) transactions pursuant to agreements listed  on Schedule 6.10 of the Disclosure Letter substantially as such agreements are in effect on the Closing Date  or as specifically approved in writing by Agent,  (e) transactions permitted by Section 6.3, Section 6.7, or Section 6.9,   (f) sale of Qualified Equity Interests to Affiliates, and  (g) any payments or other transactions pursuant to any tax sharing agreement in  existence on the Closing Date or specifically approved in writing by Agent.  6.11 Use of Proceeds.  Each Loan Party will not, and will not permit any of its Subsidiaries to,  use the proceeds of any Loan made hereunder for any purpose other than (a) on the Closing Date, to pay  the fees, costs, and expenses incurred in connection with this Agreement, the other Loan Documents, and  the transactions contemplated hereby and thereby, in each case, as set forth in the Flow of Funds Agreement,  and (b) thereafter, consistent with the terms and conditions hereof, for lawful and permitted general  corporate purposes; provided that (x) no part of the proceeds of the Loans will be used to purchase or carry  any such Margin Stock or to extend credit to others for the purpose of purchasing or carrying any such  Margin Stock or for any purpose that violates the provisions of Regulation T, U or X of the Board of  Governors, (y) no part of the proceeds of any Loan or Letter of Credit will be used, directly or indirectly,  to make any payments to a Sanctioned Entity or a Sanctioned Person, to fund any investments, loans or  contributions in, or otherwise make such proceeds available to, a Sanctioned Entity or a Sanctioned Person,  to fund any operations, activities or business of a Sanctioned Entity or a Sanctioned Person, or in any other  manner that would result in a violation of Sanctions by any Person, and (z) that no part of the proceeds of  





 






DB1/ 121979154.7      97    any Loan or Letter of Credit will be used, directly or indirectly, in furtherance of an offer, payment, promise  to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in  violation of any Sanctions, Anti-Corruption Laws or Anti-Money Laundering Laws.  7. FINANCIAL COVENANTS.  Each Borrower covenants and agrees that, until the termination of all of the Commitments  and the payment in full of the Obligations, Borrowers will not permit Liquidity to be less than $20,000,000,  of which at least $5,000,000 shall be comprised of Excess Availability.  No Qualified Cash included in the  Borrowing Base and thereby included in the calculation of Excess Availability shall be otherwise included  as Qualified Cash for purposes of determining Liquidity.  8. EVENTS OF DEFAULT.  Any one or more of the following events shall constitute an event of default (each, an  “Event of Default”) under this Agreement:  8.1 Payments.  If Borrowers fail to pay when due and payable, or when declared due and  payable, (a) all or any portion of the Obligations consisting of interest, fees, or charges due the Lender  Group, reimbursement of Lender Group Expenses, or other amounts (other than any portion thereof  constituting principal) constituting Obligations (including any portion thereof that accrues after the  commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in  part as a claim in any such Insolvency Proceeding), and such failure continues for a period of three Business  Days, (b) all or any portion of the principal of the Loans, or (c) any amount payable to Issuing Bank in  reimbursement of any drawing under a Letter of Credit;  8.2 Covenants.  If any Loan Party or any of its Subsidiaries:  (a) fails to perform or observe any covenant or other agreement contained in any of  (i) Sections 3.6, 5.1, 5.2, 5.3 (solely if any Borrower is not in good standing in its jurisdiction of  organization), 5.6, 5.7 (solely if any Borrower refuses to allow Agent or its representatives or agents to visit  any Borrower’s properties, inspect its assets or books or records, examine and make copies of its books and  records, or discuss Borrowers’ affairs, finances, and accounts with officers and employees of any  Borrower), 5.10, 5.11, 5.13, 5.14, 5.15, 5.16, or 5.17 of this Agreement, (ii) Section 6 of this Agreement,  (iii) Section 7 of this Agreement, or (iv) Section 7 of the Guaranty and Security Agreement;  (b) fails to perform or observe any covenant or other agreement contained in any of  Sections 5.3 (other than if any Borrower is not in good standing in its jurisdiction of organization), 5.4, 5.5,  5.8, and 5.12 of this Agreement and such failure continues for a period of ten days after the earlier of (i) the  date on which such failure shall first become known to any officer of any Borrower, or (ii) the date on  which written notice thereof is given to Borrowers by Agent; or  (c) fails to perform or observe any covenant or other agreement contained in this  Agreement, or in any of the other Loan Documents, in each case, other than any such covenant or agreement  that is the subject of another provision of this Section 8 (in which event such other provision of this Section  8 shall govern), and such failure continues for a period of thirty days after the earlier of (i) the date on which  such failure shall first become known to any officer of any Borrower, or (ii) the date on which written notice  thereof is given to Borrowers by Agent;  8.3 Judgments.  If one or more judgments, orders, or awards for the payment of money  involving an aggregate amount of $2,500,000, or more (except to the extent fully covered (other than to the  





 






DB1/ 121979154.7      98    extent of customary deductibles) by insurance pursuant to which the insurer has not denied coverage) is  entered or filed against a Loan Party or any of its Subsidiaries, or with respect to any of their respective  assets, and either (a) there is a period of 30 consecutive days at any time after the entry of any such  judgment, order, or award during which (i) the same is not discharged, satisfied, vacated, or bonded pending  appeal, or (ii) a stay of enforcement thereof is not in effect, or (b) enforcement proceedings are commenced  upon such judgment, order, or award;  8.4 Voluntary Bankruptcy, etc.  If an Insolvency Proceeding is commenced by a Loan Party  or any of its Subsidiaries;  8.5 Involuntary Bankruptcy, etc.  If an Insolvency Proceeding is commenced against a Loan  Party or any of its Subsidiaries and any of the following events occur: (a) such Loan Party or such  Subsidiary consents to the institution of such Insolvency Proceeding against it, (b) the petition commencing  the Insolvency Proceeding is not timely controverted, (c) the petition commencing the Insolvency  Proceeding is not dismissed within sixty calendar days of the date of the filing thereof, (d) an interim trustee  is appointed to take possession of all or any substantial portion of the properties or assets of, or to operate  all or any substantial portion of the business of, such Loan Party or its Subsidiary, or (e) an order for relief  shall have been issued or entered therein;  8.6 Default Under Other Agreements.  If there is a default in one or more agreements to  which a Loan Party or any of its Subsidiaries is a party with one or more third Persons relative to a Loan  Party’s or any of its Subsidiaries’ Indebtedness involving an aggregate amount of $2,500,000 or more, and  such default (i) occurs at the final maturity of the obligations thereunder, or (ii) results in a right by such  third Person, irrespective of whether exercised, to accelerate the maturity of such Loan Party’s or its  Subsidiary’s obligations thereunder;  8.7 Representations, etc.  If any warranty, representation, certificate, statement, or Record  made herein or in any other Loan Document or delivered in writing to Agent or any Lender in connection  with this Agreement or any other Loan Document proves to be untrue in any material respect (except that  such materiality qualifier shall not be applicable to any representations and warranties that already are  qualified or modified by materiality in the text thereof) as of the date of issuance or making or deemed  making thereof;  8.8 Guaranty.  If the obligation of any Guarantor under the guaranty contained in the Guaranty  and Security Agreement is limited or terminated by operation of law or by such Guarantor (other than in  accordance with the terms of this Agreement) or if any Guarantor repudiates or revokes or purports to  repudiate or revoke any such guaranty;  8.9 Security Documents.  If the Guaranty and Security Agreement or any other Loan  Document that purports to create a Lien, shall, for any reason, fail or cease to create a valid and perfected  and (except to the extent of Permitted Liens which are non-consensual Permitted Liens, permitted purchase  money Liens or the interests of lessors under Capital Leases) first priority Lien on the Collateral covered  thereby, except (a) as a result of a disposition of the applicable Collateral in a transaction permitted under  this Agreement, (b) with respect to Collateral the aggregate value of which, for all such Collateral, does not  exceed at any time, $250,000;  8.10 Loan Documents.  The validity or enforceability of any Loan Document shall at any time  for any reason  (other than solely as the result of an action or failure to act on the part of Agent) be declared  to be null and void, or a proceeding shall be commenced by a Loan Party or its Subsidiaries, or by any  Governmental Authority having jurisdiction over a Loan Party or its Subsidiaries, seeking to establish the  





 






DB1/ 121979154.7      99    invalidity or unenforceability thereof, or a Loan Party or its Subsidiaries shall deny that such Loan Party or  its Subsidiaries has any liability or obligation purported to be created under any Loan Document; or  8.11 Change of Control.  A Change of Control shall occur.  9. RIGHTS AND REMEDIES.  9.1 Rights and Remedies.  Upon the occurrence and during the continuation of an Event of  Default, Agent may, and, at the instruction of the Required Lenders, shall, in addition to any other rights or  remedies provided for hereunder or under any other Loan Document or by applicable law, do any one or  more of the following:  (a) by written notice to Borrowers, (i) declare the principal of, and any and all accrued  and unpaid interest and fees in respect of, the Loans and all other Obligations (other than the Bank Product  Obligations), whether evidenced by this Agreement or by any of the other Loan Documents to be  immediately due and payable, whereupon the same shall become and be immediately due and payable and  Borrowers shall be obligated to repay all of such Obligations in full, without presentment, demand, protest,  or further notice or other requirements of any kind, all of which are hereby expressly waived by each  Borrower, and (ii) direct Borrowers to provide (and Borrowers agree that upon receipt of such notice  Borrowers will provide) Letter of Credit Collateralization to Agent to be held as security for Borrowers’  reimbursement obligations for drawings that may subsequently occur under issued and outstanding Letters  of Credit;  (b) by written notice to Borrowers, declare the Commitments terminated, whereupon  the Commitments shall immediately be terminated together with (i) any obligation of any Revolving Lender  to make Revolving Loans, (ii) the obligation of the Swing Lender to make Swing Loans, and (iii) the  obligation of Issuing Bank to issue Letters of Credit; and  (c) exercise all other rights and remedies available to Agent or the Lenders under the  Loan Documents, under applicable law, or in equity.  The foregoing to the contrary notwithstanding, upon the occurrence of any Event of Default described in  Section 8.4 or Section 8.5, in addition to the remedies set forth above, without any notice to Borrowers or  any other Person or any act by the Lender Group, the Commitments shall automatically terminate and the  Obligations (other than the Bank Product Obligations), inclusive of the principal of, and any and all accrued  and unpaid interest and fees in respect of, the Loans and all other Obligations (other than the Bank Product  Obligations), whether evidenced by this Agreement or by any of the other Loan Documents, shall  automatically become and be immediately due and payable and Borrowers shall automatically be obligated  to repay all of such Obligations in full (including Borrowers being obligated to provide (and Borrowers  agree that they will provide) (1) Letter of Credit Collateralization to Agent to be held as security for  Borrowers’ reimbursement obligations in respect of drawings that may subsequently occur under issued  and outstanding Letters of Credit and (2) Bank Product Collateralization to be held as security for  Borrowers’ or their Subsidiaries’ obligations in respect of outstanding Bank Products), without  presentment, demand, protest, or notice or other requirements of any kind, all of which are expressly waived  by Borrowers.  9.2 Remedies Cumulative.  The rights and remedies of the Lender Group under this  Agreement, the other Loan Documents, and all other agreements shall be cumulative.  The Lender Group  shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in  equity.  No exercise by the Lender Group of one right or remedy shall be deemed an election, and no waiver  





 






DB1/ 121979154.7      100    by the Lender Group of any Default or Event of Default shall be deemed a continuing waiver.  No delay by  the Lender Group shall constitute a waiver, election, or acquiescence by it.  10. WAIVERS; INDEMNIFICATION.  10.1 Demand; Protest; etc.  Each Borrower waives demand, protest, notice of protest, notice  of default or dishonor, notice of payment and nonpayment, nonpayment at maturity, release, compromise,  settlement, extension, or renewal of documents, instruments, chattel paper, and guarantees at any time held  by the Lender Group on which any Borrower may in any way be liable.  10.2 The Lender Group’s Liability for Collateral.  Each Borrower hereby agrees that:  (a) so  long as Agent complies with its obligations, if any, under the Code, the Lender Group shall not in any way  or manner be liable or responsible for:  (i) the safekeeping of the Collateral, (ii) any loss or damage thereto  occurring or arising in any manner or fashion from any cause, (iii) any diminution in the value thereof, or  (iv) any act or default of any carrier, warehouseman, bailee, processor, forwarding agency, or other Person,  and (b) all risk of loss, damage, or destruction of the Collateral shall be borne by the Loan Parties.  10.3 Indemnification.  Each Borrower shall pay, indemnify, defend, and hold the Agent- Related Persons, the Lender-Related Persons, the Issuing Bank, and each Participant (each, an “Indemnified  Person”) harmless (to the fullest extent permitted by law) from and against any and all claims, demands,  suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and damages, and all reasonable  fees and disbursements of attorneys, experts, or consultants and all other costs and expenses actually  incurred in connection therewith or in connection with the enforcement of this indemnification (as and  when they are incurred and irrespective of whether suit is brought), at any time asserted against, imposed  upon, or incurred by any of them (a) in connection with or as a result of or related to the execution and  delivery (provided, that Borrowers shall not be liable for costs and expenses (including attorneys’ fees) of  any Lender (other than Wells Fargo) incurred in advising, structuring, drafting, reviewing, administering  or syndicating the Loan Documents), enforcement, performance, or administration (including any  restructuring or workout with respect hereto) of this Agreement, any of the other Loan Documents, or the  transactions contemplated hereby or thereby or the monitoring of Borrowers’ and their Subsidiaries’  compliance with the terms of the Loan Documents (provided, that the indemnification in this clause (a)  shall not extend to (i) disputes solely between or among the Lenders that do not involve any acts  or omissions of any Loan Party, or (ii) disputes solely between or among the Lenders and their respective  Affiliates that do not involve any acts or omissions of any Loan Party; it being understood and agreed that  the indemnification in this clause (a) shall extend to Agent (but not the Lenders unless the dispute involves  an act or omission of a Loan Party) relative to disputes between or among Agent on the one hand, and one  or more Lenders, or one or more of their Affiliates, on the other hand, (b) with respect to any actual or  prospective investigation, litigation, or proceeding related to this Agreement, any other Loan Document, the  making of any Loans or issuance of any Letters of Credit hereunder, or the use of the proceeds of the Loans  or the Letters of Credit provided hereunder (irrespective of whether any Indemnified Person is a party  thereto), or any act, omission, event, or circumstance in any manner related thereto, and (c) in connection  with or arising out of any presence or release of Hazardous Materials at, on, under, to or from any assets or  properties owned, leased or operated by any Loan Party or any of its Subsidiaries or any Environmental  Actions, Environmental Liabilities or Remedial Actions related in any way to any such assets or properties  of any Loan Party or any of its Subsidiaries (each and all of the foregoing, the “Indemnified Liabilities”).   This Section 10.3 shall not apply with respect to Taxes which shall be governed by Section 16 other than  any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.  The foregoing to  the contrary notwithstanding, no Borrower shall have any obligation to any Indemnified Person under this  Section 10.3 with respect to any Indemnified Liability that a court of competent jurisdiction finally  determines to have resulted from the gross negligence or willful misconduct of such Indemnified Person or  





 






DB1/ 121979154.7      101    its officers, directors, employees, attorneys, or agents.  This provision shall survive the termination of this  Agreement and the repayment in full of the Obligations.  If any Indemnified Person makes any payment to  any other Indemnified Person with respect to an Indemnified Liability as to which Borrowers were required  to indemnify the Indemnified Person receiving such payment, the Indemnified Person making such payment  is entitled to be indemnified and reimbursed by Borrowers with respect thereto.  WITHOUT  LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED  PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART  ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH  INDEMNIFIED PERSON OR OF ANY OTHER PERSON.  11. NOTICES.  Unless otherwise provided in this Agreement, all notices or demands relating to this  Agreement or any other Loan Document shall be in writing and (except for financial statements and other  informational documents which may be sent by first-class mail, postage prepaid) shall be personally  delivered or sent by registered or certified mail (postage prepaid, return receipt requested), overnight  courier, electronic mail (at such email addresses as a party may designate in accordance herewith), or  telefacsimile.  In the case of notices or demands to any Loan Party or Agent, as the case may be, they shall  be sent to the respective address set forth below:  If to any Loan Party: c/o Administrative Borrower  NEOPHOTONICS CORPORATION    3081 Zanker Road   San Jose, CA 95134   Attn: General Counsel   Email: barbara.rogan92@neophotonics.com      with copies to: COOLEY LLP   3175 Hanover Street    Palo Alto, CA 94304   Attn:  John Sellers   Email: jsellers@cooley.com     If to Agent: WELLS FARGO BANK, NATIONAL  ASSOCIATION  1800 Century Park East  Suite 1100  Los Angeles, California 90067  Attn: Business Finance Manager  Fax No.:  877-401-6389  Email:  Estefania.S.Becerra@wellsfargo.com   David.Klages@wellsfargo.com  with copies to: MORGAN, LEWIS & BOCKIUS LLP  300 S. Grand Avenue, Twenty-Second Floor  Los Angeles, CA 90071-3132  Attn:  Marshall Stoddard, Jr., Esq.  Fax No.:  213-612-2501  Email: marshall.stoddard@morganlewis.com  





 






DB1/ 121979154.7      102    Any party hereto may change the address at which they are to receive notices hereunder,  by notice in writing in the foregoing manner given to the other party.  All notices or demands sent in  accordance with this Section 11, shall be deemed received on the earlier of the date of actual receipt or three  Business Days after the deposit thereof in the mail; provided, that (a) notices sent by overnight courier  service shall be deemed to have been given when received, (b) notices by facsimile shall be deemed to have  been given when sent (except 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) and (c)  notices by electronic mail shall be deemed received upon the sender’s receipt of an acknowledgment from  the intended recipient (such as by the “return receipt requested” function, as available, return email or other  written acknowledgment).  12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE  PROVISION.  (a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN  DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN  DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION,  INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, THE RIGHTS OF THE  PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING  HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO, AND ANY  CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR THEREUNDER OR  RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND  CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.  (b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS  ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN  DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE  EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE  COUNTY OF LOS ANGELES, STATE OF CALIFORNIA; PROVIDED, THAT ANY SUIT  SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE  BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE  AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER  PROPERTY MAY BE FOUND.  EACH BORROWER AND EACH MEMBER OF THE LENDER  GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT  EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO  OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE  WITH THIS SECTION 12(b).  (c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW,  EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE  THEIR RESPECTIVE RIGHTS, IF ANY, TO A JURY TRIAL OF ANY CLAIM,  CONTROVERSY, DISPUTE OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY BASED  UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE  TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT  CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY  CLAIMS (EACH A “CLAIM”).  EACH BORROWER AND EACH MEMBER OF THE LENDER  GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH  KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING  CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF  





 






DB1/ 121979154.7      103    THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE  COURT.  (d) EACH BORROWER HEREBY IRREVOCABLY AND  UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND  FEDERAL COURTS LOCATED IN THE COUNTY OF CALIFORNIA AND THE STATE OF  CALIFORNIA, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO  ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY  JUDGMENT.  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 AGENT 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.  (e) NO CLAIM MAY BE MADE BY ANY LOAN PARTY AGAINST AGENT,  THE SWING LENDER, ANY OTHER LENDER, ISSUING BANK, OR ANY AFFILIATE,  DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR  ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT,  CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OR LOSSES IN RESPECT OF  ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY  ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS  AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION, OR EVENT  OCCURRING IN CONNECTION THEREWITH, AND EACH LOAN PARTY HEREBY WAIVES,  RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES,  WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO  EXIST IN ITS FAVOR.  (f) IN THE EVENT ANY LEGAL PROCEEDING IS FILED IN A COURT OF  THE STATE OF CALIFORNIA (THE “COURT”) BY OR AGAINST ANY PARTY HERETO IN  CONNECTION WITH ANY CLAIM AND THE WAIVER SET FORTH IN CLAUSE (C) ABOVE  IS NOT ENFORCEABLE IN SUCH PROCEEDING, THE PARTIES HERETO AGREE AS  FOLLOWS:  (i) WITH THE EXCEPTION OF THE MATTERS SPECIFIED IN  SUBCLAUSE (ii) BELOW, ANY CLAIM SHALL BE DETERMINED BY A GENERAL  REFERENCE PROCEEDING IN ACCORDANCE WITH THE PROVISIONS OF CALIFORNIA  CODE OF CIVIL PROCEDURE SECTIONS 638 THROUGH 645.1.  THE PARTIES INTEND  THIS GENERAL REFERENCE AGREEMENT TO BE SPECIFICALLY ENFORCEABLE.   VENUE FOR THE REFERENCE PROCEEDING SHALL BE IN THE COUNTY OF LOS  ANGELES, CALIFORNIA.  (ii) THE FOLLOWING MATTERS SHALL NOT BE SUBJECT TO A  GENERAL REFERENCE PROCEEDING: (A) NON-JUDICIAL FORECLOSURE OF ANY  SECURITY INTERESTS IN REAL OR PERSONAL PROPERTY, (B) EXERCISE OF SELF- HELP REMEDIES (INCLUDING SET-OFF OR RECOUPMENT), (C) APPOINTMENT OF A  RECEIVER, AND (D) TEMPORARY, PROVISIONAL, OR ANCILLARY REMEDIES  (INCLUDING WRITS OF ATTACHMENT, WRITS OF POSSESSION, TEMPORARY  





 






DB1/ 121979154.7      104    RESTRAINING ORDERS, OR PRELIMINARY INJUNCTIONS).  THIS AGREEMENT DOES  NOT LIMIT THE RIGHT OF ANY PARTY TO EXERCISE OR OPPOSE ANY OF THE RIGHTS  AND REMEDIES DESCRIBED IN CLAUSES (A) - (D) AND ANY SUCH EXERCISE OR  OPPOSITION DOES NOT WAIVE THE RIGHT OF ANY PARTY TO PARTICIPATE IN A  REFERENCE PROCEEDING PURSUANT TO THIS AGREEMENT WITH RESPECT TO ANY  OTHER MATTER.  (iii) UPON THE WRITTEN REQUEST OF ANY PARTY, THE  PARTIES SHALL SELECT A SINGLE REFEREE, WHO SHALL BE A RETIRED JUDGE OR  JUSTICE.  IF THE PARTIES DO NOT AGREE UPON A REFEREE WITHIN TEN DAYS OF  SUCH WRITTEN REQUEST, THEN, ANY PARTY SHALL HAVE THE RIGHT TO REQUEST  THE COURT TO APPOINT A REFEREE PURSUANT TO CALIFORNIA CODE OF CIVIL  PROCEDURE SECTION 640(B).  THE REFEREE SHALL BE APPOINTED TO SIT WITH ALL  OF THE POWERS PROVIDED BY LAW.  PENDING APPOINTMENT OF THE REFEREE, THE  COURT SHALL HAVE THE POWER TO ISSUE TEMPORARY OR PROVISIONAL  REMEDIES.  (iv) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,  THE REFEREE SHALL DETERMINE THE MANNER IN WHICH THE REFERENCE  PROCEEDING IS CONDUCTED INCLUDING THE TIME AND PLACE OF HEARINGS, THE  ORDER OF PRESENTATION OF EVIDENCE, AND ALL OTHER QUESTIONS THAT ARISE  WITH RESPECT TO THE COURSE OF THE REFERENCE PROCEEDING.  ALL  PROCEEDINGS AND HEARINGS CONDUCTED BEFORE THE REFEREE, EXCEPT FOR  TRIAL, SHALL BE CONDUCTED WITHOUT A COURT REPORTER, EXCEPT WHEN ANY  PARTY SO REQUESTS A COURT REPORTER AND A TRANSCRIPT IS ORDERED, A COURT  REPORTER SHALL BE USED AND THE REFEREE SHALL BE PROVIDED A COURTESY  COPY OF THE TRANSCRIPT.  THE PARTY MAKING SUCH REQUEST SHALL HAVE THE  OBLIGATION TO ARRANGE FOR AND PAY THE COSTS OF THE COURT REPORTER;  PROVIDED, THAT SUCH COSTS, ALONG WITH THE REFEREE’S FEES, SHALL  ULTIMATELY BE BORNE BY THE PARTY WHO DOES NOT PREVAIL, AS DETERMINED  BY THE REFEREE.  (v) THE REFEREE MAY REQUIRE ONE OR MORE PREHEARING  CONFERENCES.  THE PARTIES HERETO SHALL BE ENTITLED TO DISCOVERY, AND THE  REFEREE SHALL OVERSEE DISCOVERY IN ACCORDANCE WITH THE RULES OF  DISCOVERY, AND SHALL ENFORCE ALL DISCOVERY ORDERS IN THE SAME MANNER  AS ANY TRIAL COURT JUDGE IN PROCEEDINGS AT LAW IN THE STATE OF  CALIFORNIA.  (vi) THE REFEREE SHALL APPLY THE RULES OF EVIDENCE  APPLICABLE TO PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA AND SHALL  DETERMINE ALL ISSUES IN ACCORDANCE WITH CALIFORNIA SUBSTANTIVE AND  PROCEDURAL LAW.  THE REFEREE SHALL BE EMPOWERED TO ENTER EQUITABLE AS  WELL AS LEGAL RELIEF AND RULE ON ANY MOTION WHICH WOULD BE AUTHORIZED  IN A TRIAL, INCLUDING MOTIONS FOR DEFAULT JUDGMENT OR SUMMARY  JUDGMENT.  THE REFEREE SHALL REPORT HIS OR HER DECISION, WHICH REPORT  SHALL ALSO INCLUDE FINDINGS OF FACT AND CONCLUSIONS OF LAW.  THE REFEREE  SHALL ISSUE A DECISION AND PURSUANT TO CALIFORNIA CODE OF CIVIL  PROCEDURE, SECTION 644, THE REFEREE’S DECISION SHALL BE ENTERED BY THE  COURT AS A JUDGMENT IN THE SAME MANNER AS IF THE ACTION HAD BEEN TRIED  





 






DB1/ 121979154.7      105    BY THE COURT.  THE FINAL JUDGMENT OR ORDER FROM ANY APPEALABLE  DECISION OR ORDER ENTERED BY THE REFEREE SHALL BE FULLY APPEALABLE AS  IF IT HAS BEEN ENTERED BY THE COURT.  (vii) THE PARTIES RECOGNIZE AND AGREE THAT ALL CLAIMS  RESOLVED IN A GENERAL REFERENCE PROCEEDING PURSUANT HERETO WILL BE  DECIDED BY A REFEREE AND NOT BY A JURY.  AFTER CONSULTING (OR HAVING HAD  THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR OWN CHOICE, EACH  PARTY HERETO KNOWINGLY AND VOLUNTARILY AND FOR THEIR MUTUAL BENEFIT  AGREES THAT THIS REFERENCE PROVISION SHALL APPLY TO ANY DISPUTE  BETWEEN THEM THAT ARISES OUT OF OR IS RELATED TO THIS AGREEMENT OR THE  OTHER LOAN DOCUMENTS.  13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.  13.1 Assignments and Participations.  (a) (i)  Subject to the conditions set forth in clause (a)(ii) below, any Lender may  assign and delegate all or any portion of its rights and duties under the Loan Documents (including the  Obligations owed to it and its Commitments) to one or more assignees so long as such prospective assignee  is an Eligible Transferee (each, an “Assignee”), with the prior written consent (such consent not be  unreasonably withheld or delayed) of:   (A) Borrowers; provided, that no consent of Borrowers shall be required (1)  if  a Default or Event of Default has occurred and is continuing or (2) in connection with an assignment to a  Person that is a Lender or an Affiliate (other than natural persons) of a Lender; provided further, that  Borrowers shall be deemed to have consented to a proposed assignment unless they object thereto by written  notice to Agent within five Business Days after having received notice thereof; and   (B) Agent, Swing Lender, and Issuing Bank.  (ii) Assignments shall be subject to the following additional conditions:   (A) no assignment may be made (i) so long as no Event of Default has occurred  and is continuing, to a Disqualified Institution, or (ii) to a natural person,   (B) no assignment may be made to a Loan Party or an Affiliate of a Loan Party,   (C) the amount of the Commitments and the other rights and obligations of the  assigning Lender hereunder and under the other Loan Documents subject to each such assignment  (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to  Agent) shall be in a minimum amount (unless waived by Agent) of $5,000,000 (except such minimum  amount shall not apply to (I) an assignment or delegation by any Lender to any other Lender, an Affiliate  of any Lender, or a Related Fund of such Lender, or (II) a group of new Lenders, each of which is an  Affiliate of each other or a Related Fund of such new Lender to the extent that the aggregate amount to be  assigned to all such new Lenders is at least $5,000,000),   (D) 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,  





 






DB1/ 121979154.7      106     (E) the parties to each assignment shall execute and deliver to Agent an  Assignment and Acceptance; provided, that Borrowers and Agent may continue to deal solely and directly  with the assigning Lender in connection with the interest so assigned to an Assignee until written notice of  such assignment, together with payment instructions, addresses, and related information with respect to the  Assignee, have been given to Borrowers and Agent by such Lender and the Assignee,   (F) unless waived by Agent, the assigning Lender or Assignee has paid to  Agent, for Agent’s separate account, a processing fee in the amount of $3,500, and   (G) the assignee, if it is not a Lender, shall deliver to Agent an Administrative  Questionnaire in a form approved by Agent (the “Administrative Questionnaire”).  (b) From and after the date that Agent receives the executed Assignment and  Acceptance and, if applicable, payment of the required processing fee, (i) the Assignee thereunder shall be  a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to  such Assignment and Acceptance, shall be a “Lender” and shall have the rights and obligations of a Lender  under the Loan Documents, and (ii) the assigning Lender shall, to the extent that rights and obligations  hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and  Acceptance, relinquish its rights (except with respect to Section 10.3) and be released from any future  obligations under this Agreement (and in the case of an Assignment and Acceptance covering all or the  remaining portion of an assigning Lender’s rights and obligations under this Agreement and the other Loan  Documents, such Lender shall cease to be a party hereto and thereto); provided, that nothing contained  herein shall release any assigning Lender from obligations that survive the termination of this Agreement,  including such assigning Lender’s obligations under Section 15 and Section 17.9(a).  (c) By executing and delivering an Assignment and Acceptance, the assigning Lender  thereunder and the Assignee thereunder confirm to and agree with each other and the other parties hereto  as follows:  (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes  no representation or warranty and assumes no responsibility with respect to any statements, warranties or  representations made in or in connection with this Agreement or the execution, legality, validity,  enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document furnished  pursuant hereto, (ii) such assigning Lender makes no representation or warranty and assumes no  responsibility with respect to the financial condition of any Loan Party or the performance or observance  by any Loan Party of any of its obligations under this Agreement or any other Loan Document furnished  pursuant hereto, (iii) such Assignee confirms that it has received a copy of this Agreement, together with  such other documents and information as it has deemed appropriate to make its own credit analysis and  decision to enter into such Assignment and Acceptance, (iv) such Assignee will, independently and without  reliance upon Agent, such assigning Lender or any other Lender, and based on such documents and  information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or  not taking action under this Agreement, (v) such Assignee appoints and authorizes Agent to take such  actions and to exercise such powers under this Agreement and the other Loan Documents as are delegated  to Agent, by the terms hereof and thereof, together with such powers as are reasonably incidental thereto,  and (vi) such Assignee agrees that it will perform all of the obligations which by the terms of this Agreement  are required to be performed by it as a Lender.  (d) Immediately upon Agent’s receipt of the required processing fee, if applicable, and  delivery of notice to the assigning Lender pursuant to Section 13.1(b), this Agreement shall be deemed to  be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the  resulting adjustment of the Commitments arising therefrom.  The Commitment allocated to each Assignee  shall reduce such Commitments of the assigning Lender pro tanto.  





 






DB1/ 121979154.7      107    (e) Any Lender may at any time sell to one or more commercial banks, financial  institutions, or other Persons (a “Participant”) participating interests in all or any portion of its Obligations,  its Commitment, and the other rights and interests of that Lender (the “Originating Lender”) hereunder and  under the other Loan Documents; provided, that (i) the Originating Lender shall remain a “Lender” for all  purposes of this Agreement and the other Loan Documents and the Participant receiving the participating  interest in the Obligations, the Commitments, and the other rights and interests of the Originating Lender  hereunder shall not constitute a “Lender” hereunder or under the other Loan Documents and the Originating  Lender’s obligations under this Agreement shall remain unchanged, (ii) the Originating Lender shall remain  solely responsible for the performance of such obligations, (iii) Borrowers, Agent, and the Lenders shall  continue to deal solely and directly with the Originating Lender in connection with the Originating Lender’s  rights and obligations under this Agreement and the other Loan Documents, (iv) no Lender shall transfer  or grant any participating interest under which the Participant has the right to approve any amendment to,  or any consent or waiver with respect to, this Agreement or any other Loan Document, except to the extent  such amendment to, or consent or waiver with respect to this Agreement or of any other Loan Document  would (A) extend the final maturity date of the Obligations hereunder in which such Participant is  participating, (B) reduce the interest rate applicable to the Obligations hereunder in which such Participant  is participating, (C) release all or substantially all of the Collateral or guaranties (except to the extent  expressly provided herein or in any of the Loan Documents) supporting the Obligations hereunder in which  such Participant is participating, (D) postpone the payment of, or reduce the amount of, the interest or fees  payable to such Participant through such Lender (other than a waiver of default interest), or (E) decreases  the amount or postpones the due dates of scheduled principal repayments or prepayments or premiums  payable to such Participant through such Lender, (v) no participation shall be sold to a natural person, (vi)  no participation shall be sold to a Loan Party or an Affiliate of a Loan Party, and (vii) all amounts payable  by Borrowers hereunder shall be determined as if such Lender had not sold such participation, except that,  if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have  become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to  have the right of set off in respect of its participating interest in amounts owing under this Agreement to  the same extent as if the amount of its participating interest were owing directly to it as a Lender under this  Agreement.  The rights of any Participant only shall be derivative through the Originating Lender with  whom such Participant participates and no Participant shall have any rights under this Agreement or the  other Loan Documents or any direct rights as to the other Lenders, Agent, Borrowers, the Collateral, or  otherwise in respect of the Obligations.  No Participant shall have the right to participate directly in the  making of decisions by the Lenders among themselves.  (f) In connection with any such assignment or participation or proposed assignment  or participation or any grant of a security interest in, or pledge of, its rights under and interest in this  Agreement, a Lender may, subject to the provisions of Section 17.9,  disclose all documents and information  which it now or hereafter may have relating to any Loan Party and its Subsidiaries and their respective  businesses.  (g) Any other provision in this Agreement notwithstanding, any Lender may at any  time create a security interest in, or pledge, all or any portion of its rights under and interest in this  Agreement to secure obligations of such Lender, including any pledge in favor of any Federal Reserve Bank  in accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury Regulation 31 CFR §203.24,  and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under  applicable law; provided, that no such pledge shall release such Lender from any of its obligations  hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.  (h) Agent (as a non-fiduciary agent on behalf of Borrowers) shall maintain, or cause  to be maintained, a register (the “Register”) on which it enters the name and address of each Lender as the  





 






DB1/ 121979154.7      108    registered owner of the Loan (and the principal amount thereof and stated interest thereon) held by such  Lender (each, a “Registered Loan”).  Other than in connection with an assignment by a Lender of all or any  portion of its portion of the Commitments to an Affiliate of such Lender or a Related Fund of such Lender  (i) a Registered Loan (and the registered note, if any, evidencing the same) may be assigned or sold in  whole or in part only by registration of such assignment or sale on the Register (and each registered note  shall expressly so provide) and (ii) any assignment or sale of all or part of such Registered Loan (and the  registered note, if any, evidencing the same) may be effected only by registration of such assignment or  sale on the Register, together with the surrender of the registered note, if any, evidencing the same duly  endorsed by (or accompanied by a written instrument of assignment or sale duly executed by) the holder of  such registered note, whereupon, at the request of the designated assignee(s) or transferee(s), one or more  new registered notes in the same aggregate principal amount shall be issued to the designated assignee(s)  or transferee(s).  Prior to the registration of assignment or sale of any Registered Loan (and the registered  note, if any evidencing the same), Borrowers shall treat the Person in whose name such Registered Loan  (and the registered note, if any, evidencing the same) is registered as the owner thereof for the purpose of  receiving all payments thereon and for all other purposes, notwithstanding notice to the contrary.  In the  case of any assignment by a Lender of all or any portion of its Commitment to an Affiliate of such Lender  or a Related Fund of such Lender, and which assignment is not recorded in the Register, the assigning  Lender, on behalf of Borrowers, shall maintain a register comparable to the Register.  (i) In the event that a Lender sells participations in the Registered Loan, such Lender,  as a non-fiduciary agent on behalf of Borrowers, shall maintain (or cause to be maintained) a register on  which it enters the name of all participants in the Registered Loans held by it (and the principal amount  (and stated interest thereon) of the portion of such Registered Loans that is subject to such participations)  (the “Participant Register”).  A Registered Loan (and the Registered Note, if any, evidencing the same)  may be participated in whole or in part only by registration of such participation on the Participant Register  (and each registered note shall expressly so provide).  Any participation of such Registered Loan (and the  registered note, if any, evidencing the same) may be effected only by the registration of such participation  on the Participant Register. No Lender shall have any obligation to disclose all or any portion of the  Participant Register (including the identity of any Participant or any information relating to a Participant’s  interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to  any Person except to the extent that such disclosure is necessary to establish that such commitment, loan,  letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States  Treasury Regulations.  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.  For the  avoidance of doubt, Agent (in its capacity as Agent) shall have no responsibility for maintaining a  Participant Register.   (j) Agent shall make a copy of the Register (and each Lender shall make a copy of its  Participant Register to the extent it has one) available for review by Borrowers from time to time as  Borrowers may reasonably request.  13.2 Successors.  This Agreement shall bind and inure to the benefit of the respective successors  and assigns of each of the parties; provided, that no Borrower may assign this Agreement or any rights or  duties hereunder without the Lenders’ prior written consent and any prohibited assignment shall be  absolutely void ab initio.  No consent to assignment by the Lenders shall release any Borrower from its  Obligations.  A Lender may assign this Agreement and the other Loan Documents and its rights and duties  hereunder and thereunder pursuant to Section 13.1 and, except as expressly required pursuant to Section  13.1, no consent or approval by any Borrower is required in connection with any such assignment.  





 






DB1/ 121979154.7      109    14. AMENDMENTS; WAIVERS.  14.1 Amendments and Waivers.  (a) No amendment, waiver or other modification of any provision of this Agreement  or any other Loan Document (other than Bank Product Agreements or the Fee Letter), and no consent with  respect to any departure by any Borrower therefrom, shall be effective unless the same shall be in writing  and signed by the Required Lenders (or by Agent at the written request of the Required Lenders) and the  Loan Parties that are party thereto and then any such waiver or consent shall be effective, but only in the  specific instance and for the specific purpose for which given; provided, that no such waiver, amendment,  or consent shall, unless in writing and signed by all of the Lenders directly and adversely affected thereby  and all of the Loan Parties that are party thereto, do any of the following:  (i) increase the amount of or extend the expiration date of any Commitment  of any Lender or amend, modify, or eliminate Section 2.4(c),  (ii) postpone or delay any date fixed by this Agreement or any other Loan  Document for any payment of principal, interest, fees, or other amounts due hereunder or under any other  Loan Document,  (iii) reduce the principal of, or the rate of interest on, any loan or other  extension of credit hereunder, or reduce any fees or other amounts payable hereunder or under any other  Loan Document (except (y) in connection with the waiver of applicability of Section 2.6(c) (which waiver  shall be effective with the written consent of the Required Lenders), and (z) that any amendment or  modification of defined terms used in the financial covenants in this Agreement shall not constitute a  reduction in the rate of interest or a reduction of fees for purposes of this clause (iii)),  (iv) amend, modify, or eliminate this Section or any provision of this  Agreement providing for consent or other action by all Lenders,  (v) amend, modify, or eliminate Section 3.1 or 3.2,  (vi) amend, modify, or eliminate Section 15.11,  (vii) other than as permitted by Section 15.11, release or contractually  subordinated Agent’s Lien in and to any of the Collateral,  (viii) amend, modify, or eliminate the definitions of “Required Lenders”,  Supermajority Lenders or “Pro Rata Share”,  (ix) other than in connection with a merger, liquidation, dissolution or sale of  such Person expressly permitted by the terms hereof or the other Loan Documents, release any Borrower  or any Guarantor from any obligation for the payment of money or consent to the assignment or transfer by  any Borrower or any Guarantor of any of its rights or duties under this Agreement or the other Loan  Documents,  (x) amend, modify, or eliminate any of the provisions of Section 2.4(b)(i), (ii)  or (iii),  





 






DB1/ 121979154.7      110    (xi) amend, modify, or eliminate any of the provisions of Section 13.1 with  respect to assignments to, or participations with, Persons who are Loan Parties or Affiliates of a Loan Party,  or  (xii) at any time that any Real Property is included in the Collateral, add,  increase, renew or extend any Loan, Letter of Credit or Commitment hereunder until the completion of  flood due diligence, documentation and coverage as required by the Flood Laws or as otherwise satisfactory  to all Lenders;   (b) No amendment, waiver, modification, or consent shall amend, modify, waive, or  eliminate,  (i) the definition of, or any of the terms or provisions of, the Fee Letter,  without the written consent of Agent and Borrowers (and shall not require the written consent of any of the  Lenders),  (ii) any provision of Section 15 pertaining to Agent, or any other rights or  duties of Agent under this Agreement or the other Loan Documents, without the written consent of Agent,  Borrowers, and the Required Lenders;  (c) No amendment, waiver, modification, elimination, or consent shall amend, without  written consent of Agent, Borrowers and the Supermajority Lenders, modify, or eliminate the definition of  Borrowing Base or any of the defined terms (including the definitions of Eligible Accounts) that are used  in such definition to the extent that any such change results in more credit being made available to  Borrowers based upon the Borrowing Base, but not otherwise, or the definition of Maximum Revolver  Amount, or change Section 2.1(c);  (d) No amendment, waiver, modification, elimination, or consent shall amend,  modify, or waive any provision of this Agreement or the other Loan Documents pertaining to Issuing Bank,  or any other rights or duties of Issuing Bank under this Agreement or the other Loan Documents, without  the written consent of Issuing Bank, Agent, Borrowers, and the Required Lenders;  (e) No amendment, waiver, modification, elimination, or consent shall amend,  modify, or waive any provision of this Agreement or the other Loan Documents pertaining to Swing Lender,  or any other rights or duties of Swing Lender under this Agreement or the other Loan Documents, without  the written consent of Swing Lender, Agent, Borrowers, and the Required Lenders; and  (f) Anything in this Section 14.1 to the contrary notwithstanding, (i) any amendment,  modification, elimination, waiver, consent, termination, or release of, or with respect to, any provision of  this Agreement or any other Loan Document that relates only to the relationship of the Lender Group among  themselves, and that does not affect the rights or obligations of any Loan Party, shall not require consent  by or the agreement of any Loan Party, and (ii) any amendment, waiver, modification, elimination, or  consent of or with respect to any provision of this Agreement or any other Loan Document may be entered  into without the consent of, or over the objection of, any Defaulting Lender other than any of the matters  governed by Section 14.1(a)(i) through (iii) that affect such Lender.  In addition, Agent may, with the  consent of the Borrowers only, amend, modify or supplement this Agreement to cure any ambiguity,  omission, defect or inconsistency, so long as such amendment, modification or supplement does not  adversely affect the rights of Agent, any Lender, any Bank Product Provider or the Issuing Bank.  14.2 Replacement of Certain Lenders.  





 






DB1/ 121979154.7      111    (a) If (i) any action to be taken by the Lender Group or Agent hereunder requires the  consent, authorization, or agreement of all Lenders or all Lenders affected thereby and if such action has  received the consent, authorization, or agreement of the Required Lenders but not of all Lenders or all  Lenders affected thereby, or (ii) any Lender makes a claim for compensation under Section 16, then  Borrowers or Agent, upon at least five Business Days prior irrevocable notice, may permanently replace  any Lender that failed to give its consent, authorization, or agreement (a “Non-Consenting Lender”) or any  Lender that made a claim for compensation (a “Tax Lender”) with one or more Replacement Lenders, and  the Non-Consenting Lender or Tax Lender, as applicable, shall have no right to refuse to be replaced  hereunder.  Such notice to replace the Non-Consenting Lender or Tax Lender, as applicable, shall specify  an effective date for such replacement, which date shall not be later than 15 Business Days after the date  such notice is given.  (b) Prior to the effective date of such replacement, the Non-Consenting Lender or Tax  Lender, as applicable, and each Replacement Lender shall execute and deliver an Assignment and  Acceptance, subject only to the Non-Consenting Lender or Tax Lender, as applicable, being repaid in full  its share of the outstanding Obligations (without any premium or penalty of any kind whatsoever, but  including (i) all interest, fees and other amounts that may be due in payable in respect thereof, (ii) an  assumption of its Pro Rata Share of participations in the Letters of Credit, and (iii) Funding Losses).  If the  Non-Consenting Lender or Tax Lender, as applicable, shall refuse or fail to execute and deliver any such  Assignment and Acceptance prior to the effective date of such replacement, Agent may, but shall not be  required to, execute and deliver such Assignment and Acceptance in the name or and on behalf of the Non- Consenting Lender or Tax Lender, as applicable, and irrespective of whether Agent executes and delivers  such Assignment and Acceptance, the Non-Consenting Lender or Tax Lender, as applicable, shall be  deemed to have executed and delivered such Assignment and Acceptance.  The replacement of any Non- Consenting Lender or Tax Lender, as applicable, shall be made in accordance with the terms of Section  13.1.  Until such time as one or more Replacement Lenders shall have acquired all of the Obligations, the  Commitments, and the other rights and obligations of the Non-Consenting Lender or Tax Lender, as  applicable, hereunder and under the other Loan Documents, the Non-Consenting Lender or Tax Lender, as  applicable, shall remain obligated to make the Non-Consenting Lender’s or Tax Lender’s, as applicable,  Pro Rata Share of Revolving Loans and to purchase a participation in each Letter of Credit, in an amount  equal to its Pro Rata Share of participations in such Letters of Credit.  14.3 No Waivers; Cumulative Remedies.  No failure by Agent or any Lender to exercise any  right, remedy, or option under this Agreement or any other Loan Document, or delay by Agent or any  Lender in exercising the same, will operate as a waiver thereof.  No waiver by Agent or any Lender will be  effective unless it is in writing, and then only to the extent specifically stated.  No waiver by Agent or any  Lender on any occasion shall affect or diminish Agent’s and each Lender’s rights thereafter to require strict  performance by Borrowers of any provision of this Agreement.  Agent’s and each Lender’s rights under  this Agreement and the other Loan Documents will be cumulative and not exclusive of any other right or  remedy that Agent or any Lender may have.  15. AGENT; THE LENDER GROUP.  15.1 Appointment and Authorization of Agent.  Each Lender hereby designates and appoints  Wells Fargo as its agent under this Agreement and the other Loan Documents and each Lender hereby  irrevocably authorizes (and by entering into a Bank Product Agreement, each Bank Product Provider shall  be deemed to designate, appoint, and authorize) Agent to execute and deliver each of the other Loan  Documents on its behalf and to take such other action on its behalf under the provisions of this Agreement  and each other Loan Document and to exercise such powers and perform such duties as are expressly  delegated to Agent by the terms of this Agreement or any other Loan Document, together with such powers  





 






DB1/ 121979154.7      112    as are reasonably incidental thereto.  Agent agrees to act as agent for and on behalf of the Lenders (and the  Bank Product Providers) on the conditions contained in this Section 15.  Any provision to the contrary  contained elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent shall not  have any duties or responsibilities, except those expressly set forth herein or in the other Loan Documents,  nor shall Agent have or be deemed to have any fiduciary relationship with any Lender (or Bank Product  Provider), and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be  read into this Agreement or any other Loan Document or otherwise exist against Agent.  Without limiting  the generality of the foregoing, the use of the term “agent” in this Agreement or the other Loan Documents  with reference to Agent is not intended to connote any fiduciary or other implied (or express) obligations  arising under agency doctrine of any applicable law.  Instead, such term is used merely as a matter of market  custom, and is intended to create or reflect only a representative relationship between independent  contracting parties.  Each Lender hereby further authorizes (and by entering into a Bank Product  Agreement, each Bank Product Provider shall be deemed to authorize) Agent to act as the secured party  under each of the Loan Documents that create a Lien on any item of Collateral.  Except as expressly  otherwise provided in this Agreement, Agent shall have and may use its sole discretion with respect to  exercising or refraining from exercising any discretionary rights or taking or refraining from taking any  actions that Agent expressly is entitled to take or assert under or pursuant to this Agreement and the other  Loan Documents.  Without limiting the generality of the foregoing, or of any other provision of the Loan  Documents that provides rights or powers to Agent, Lenders agree that Agent shall have the right to exercise  the following powers as long as this Agreement remains in effect:  (a) maintain, in accordance with its  customary business practices, ledgers and records reflecting the status of the Obligations, the Collateral,  payments and proceeds of Collateral, and related matters, (b) execute or file any and all financing or similar  statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim,  notices and other written agreements with respect to the Loan Documents, or to take any other action with  respect to any Collateral or Loan Documents which may be necessary to perfect, and maintain perfected,  the security interests and Liens upon Collateral pursuant to the Loan Documents, (c) make Revolving  Loans, for itself or on behalf of Lenders, as provided in the Loan Documents, (d) exclusively receive, apply,  and distribute payments and proceeds of the Collateral as provided in the Loan Documents, (e) open and  maintain such bank accounts and cash management arrangements as Agent deems necessary and  appropriate in accordance with the Loan Documents for the foregoing purposes, (f) perform, exercise, and  enforce any and all other rights and remedies of the Lender Group with respect to any Loan Party or its  Subsidiaries, the Obligations, the Collateral, or otherwise related to any of same as provided in the Loan  Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem necessary or  appropriate for the performance and fulfillment of its functions and powers pursuant to the Loan  Documents.  15.2 Delegation of Duties.  Agent may execute any of its duties under this Agreement or any  other Loan Document by or through agents, employees or attorneys in fact and shall be entitled to advice  of counsel concerning all matters pertaining to such duties.  Agent shall not be responsible for the  negligence or misconduct of any agent or attorney in fact that it selects as long as such selection was made  without gross negligence or willful misconduct.  15.3 Liability of Agent.  None of the Agent-Related Persons shall (a) be liable for any action  taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan  Document or the transactions contemplated hereby (except for its own gross negligence or willful  misconduct), or (b) be responsible in any manner to any of the Lenders (or Bank Product Providers) for any  recital, statement, representation or warranty made by any Loan Party or any of its Subsidiaries or Affiliates,  or any officer or director thereof, contained in this Agreement or in any other Loan Document, or in any  certificate, report, statement or other document referred to or provided for in, or received by Agent under  or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness,  





 






DB1/ 121979154.7      113    genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure  of any Loan Party or its Subsidiaries or any other party to any Loan Document to perform its obligations  hereunder or thereunder.  No Agent-Related Person shall be under any obligation to any Lenders (or Bank  Product Providers) to ascertain or to inquire as to the observance or performance of any of the agreements  contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the books and  records or properties of any Loan Party or its Subsidiaries.  No Agent-Related Person shall have any liability  to any Lender, and Loan Party or any of their respective Affiliates if any request for a Loan, Letter of Credit  or other extension of credit was not authorized by the applicable Borrower.  Agent shall not be required to  take any action that, in its opinion or in the opinion of its counsel, may expose it to liability or that is  contrary to any Loan Document or applicable law or regulation.  15.4 Reliance by Agent.  Agent shall be entitled to rely, and shall be fully protected in relying,  upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, telefacsimile or other  electronic method of transmission, telex or telephone message, statement or other document or conversation  believed by it to be genuine and correct and to have been signed, sent, or made by the proper Person or  Persons, and upon advice and statements of legal counsel (including counsel to Borrowers or counsel to  any Lender), independent accountants and other experts selected by Agent.  Agent shall be fully justified  in failing or refusing to take any action under this Agreement or any other Loan Document unless Agent  shall first receive such advice or concurrence of the Lenders as it deems appropriate and until such  instructions are received, Agent shall act, or refrain from acting, as it deems advisable.  If Agent so requests,  it shall first be indemnified to its reasonable satisfaction by the Lenders (and, if it so elects, the Bank Product  Providers) against any and all liability and expense that may be incurred by it by reason of taking or  continuing to take any such action.  Agent shall in all cases be fully protected in acting, or in refraining  from acting, under this Agreement or any other Loan Document in accordance with a request or consent of  the Required Lenders and such request and any action taken or failure to act pursuant thereto shall be  binding upon all of the Lenders (and Bank Product Providers).  15.5 Notice of Default or Event of Default.  Agent shall not be deemed to have knowledge or  notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment  of principal, interest, fees, and expenses required to be paid to Agent for the account of the Lenders and,  except with respect to Events of Default of which Agent has actual knowledge, unless Agent shall have  received written notice from a Lender or Borrowers referring to this Agreement, describing such Default  or Event of Default, and stating that such notice is a “notice of default.”  Agent promptly will notify the  Lenders of its receipt of any such notice or of any Event of Default of which Agent has actual knowledge.   If any Lender obtains actual knowledge of any Event of Default, such Lender promptly shall notify the  other Lenders and Agent of such Event of Default.  Each Lender shall be solely responsible for giving any  notices to its Participants, if any.  Subject to Section 15.4, Agent shall take such action with respect to such  Default or Event of Default as may be requested by the Required Lenders in accordance with Section 9;  provided, that unless and until Agent has received any such request, Agent may (but shall not be obligated  to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as  it shall deem advisable.  15.6 Credit Decision.  Each Lender (and Bank Product Provider) acknowledges that none of  the Agent-Related Persons has made any representation or warranty to it, and that no act by Agent  hereinafter taken, including any review of the affairs of any Loan Party and its Subsidiaries or Affiliates,  shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender  (or Bank Product Provider).  Each Lender represents (and by entering into a Bank Product Agreement, each  Bank Product Provider shall be deemed to represent) to Agent that it has, independently and without  reliance upon any Agent-Related Person and based on such due diligence, documents and information as it  has deemed appropriate, made its own appraisal of and investigation into the business, prospects,  





 






DB1/ 121979154.7      114    operations, property, financial and other condition and creditworthiness of each Borrower or any other  Person party to a Loan Document, and all applicable bank regulatory laws relating to the transactions  contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to  Borrowers.  Each Lender also represents (and by entering into a Bank Product Agreement, each Bank  Product Provider shall be deemed to represent) that it will, independently and without reliance upon any  Agent-Related Person and based on such documents and information as it shall deem appropriate at the  time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under  this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to  inform itself as to the business, prospects, operations, property, financial and other condition and  creditworthiness of each Borrower or any other Person party to a Loan Document.  Except for notices,  reports, and other documents expressly herein required to be furnished to the Lenders by Agent, Agent shall  not have any duty or responsibility to provide any Lender (or Bank Product Provider) with any credit or  other information concerning the business, prospects, operations, property, financial and other condition or  creditworthiness of any Borrower or any other Person party to a Loan Document that may come into the  possession of any of the Agent-Related Persons.  Each Lender acknowledges (and by entering into a Bank  Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that Agent does not  have any duty or responsibility, either initially or on a continuing basis (except to the extent, if any, that is  expressly specified herein) to provide such Lender (or Bank Product Provider) with any credit or other  information with respect to any Borrower, its Affiliates or any of their respective business, legal, financial  or other affairs, and irrespective of whether such information came into Agent’s or its Affiliates’ or  representatives’ possession before or after the date on which such Lender became a party to this Agreement  (or such Bank Product Provider entered into a Bank Product Agreement).  15.7 Costs and Expenses; Indemnification.  Agent may incur and pay Lender Group Expenses  to the extent Agent reasonably deems necessary or appropriate for the performance and fulfillment of its  functions, powers, and obligations pursuant to the Loan Documents, including court costs, attorneys’ fees  and expenses, fees and expenses of financial accountants, advisors, consultants, and appraisers, costs of  collection by outside collection agencies, auctioneer fees and expenses, and costs of security guards or  insurance premiums paid to maintain the Collateral, whether or not Borrowers are obligated to reimburse  Agent or Lenders for such expenses pursuant to this Agreement or otherwise.  Agent is authorized and  directed to deduct and retain sufficient amounts from payments or proceeds of the Collateral received by  Agent to reimburse Agent for such out-of-pocket costs and expenses prior to the distribution of any amounts  to Lenders (or Bank Product Providers).  In the event Agent is not reimbursed for such costs and expenses  by the Loan Parties and their Subsidiaries, each Lender hereby agrees that it is and shall be obligated to pay  to Agent such Lender’s ratable thereof.  Whether or not the transactions contemplated hereby are  consummated, each of the Lenders, on a ratable basis, shall indemnify and defend the Agent-Related  Persons (to the extent not reimbursed by or on behalf of Borrowers and without limiting the obligation of  Borrowers to do so) from and against any and all Indemnified Liabilities; provided, that no Lender shall be  liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities resulting  solely from such Person’s gross negligence or willful misconduct nor shall any Lender be liable for the  obligations of any Defaulting Lender in failing to make a Revolving Loan or other extension of credit  hereunder.  Without limitation of the foregoing, each Lender shall reimburse Agent upon demand for such  Lender’s ratable share of any costs or out of pocket expenses (including attorneys, accountants, advisors,  and consultants fees and expenses) incurred by Agent in connection with the preparation, execution,  delivery, administration, modification, amendment, or enforcement (whether through negotiations, legal  proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement  or any other Loan Document to the extent that Agent is not reimbursed for such expenses by or on behalf  of Borrowers.  The undertaking in this Section shall survive the payment of all Obligations hereunder and  the resignation or replacement of Agent.  





 






DB1/ 121979154.7      115    15.8 Agent in Individual Capacity.  Wells Fargo and its Affiliates may make loans to, issue  letters of credit for the account of, accept deposits from, provide Bank Products to, acquire Equity Interests  in, and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business  with any Loan Party and its Subsidiaries and Affiliates and any other Person party to any Loan Document  as though Wells Fargo were not Agent hereunder, and, in each case, without notice to or consent of the  other members of the Lender Group.  The other members of the Lender Group acknowledge (and by  entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge)  that, pursuant to such activities, Wells Fargo or its Affiliates may receive information regarding a Loan  Party or its Affiliates or any other Person party to any Loan Documents that is subject to confidentiality  obligations in favor of such Loan Party or such other Person and that prohibit the disclosure of such  information to the Lenders (or Bank Product Providers), and the Lenders acknowledge (and by entering  into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, in such  circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver Agent will  use its reasonable best efforts to obtain), Agent shall not be under any obligation to provide such information  to them.  The terms “Lender” and “Lenders” include Wells Fargo in its individual capacity.  15.9 Successor Agent.  Agent may resign as Agent upon 30 days (ten days if an Event of Default  has occurred and is continuing) prior written notice to the Lenders (unless such notice is waived by the  Required Lenders) and Borrowers (unless such notice is waived by Borrowers or a Default or Event of  Default has occurred and is continuing) and without any notice to the Bank Product Providers.  If Agent  resigns under this Agreement, the Required Lenders shall be entitled, with (so long as no Event of Default  has occurred and is continuing) the consent of Borrowers (such consent not to be unreasonably withheld,  delayed, or conditioned), appoint a successor Agent for the Lenders (and the Bank Product Providers).  If,  at the time that Agent’s resignation is effective, it is acting as Issuing Bank or the Swing Lender, such  resignation shall also operate to effectuate its resignation as Issuing Bank or the Swing Lender, as  applicable, and it shall automatically be relieved of any further obligation to issue Letters of Credit, or to  make Swing Loans.  If no successor Agent is appointed prior to the effective date of the resignation of  Agent, Agent may appoint, after consulting with the Lenders and Borrowers, a successor Agent.  If Agent  has materially breached or failed to perform any material provision of this Agreement or of applicable law,  the Required Lenders may agree in writing to remove and replace Agent with a successor Agent from  among the Lenders with (so long as no Event of Default has occurred and is continuing) the consent of  Borrowers (such consent not to be unreasonably withheld, delayed, or conditioned).  In any such event,  upon the acceptance of its appointment as successor Agent hereunder, such successor Agent shall succeed  to all the rights, powers, and duties of the retiring Agent and the term “Agent” shall mean such successor  Agent and the retiring Agent’s appointment, powers, and duties as Agent shall be terminated.  After any  retiring Agent’s resignation hereunder as Agent, the provisions of this Section 15 shall inure to its benefit  as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.  If no successor  Agent has accepted appointment as Agent by the date which is 30 days following a retiring Agent’s notice  of resignation, the retiring Agent’s resignation shall nevertheless thereupon become effective and the  Lenders shall perform all of the duties of Agent hereunder until such time, if any, as the Lenders appoint a  successor Agent as provided for above.  15.10 Lender in Individual Capacity.  Any Lender and its respective Affiliates may make loans  to, issue letters of credit for the account of, accept deposits from, provide Bank Products to, acquire Equity  Interests in and generally engage in any kind of banking, trust, financial advisory, underwriting, or other  business with any Loan Party and its Subsidiaries and Affiliates and any other Person party to any Loan  Documents as though such Lender were not a Lender hereunder without notice to or consent of the other  members of the Lender Group (or the Bank Product Providers).  The other members of the Lender Group  acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed  to acknowledge) that, pursuant to such activities, such Lender and its respective Affiliates may receive  





 






DB1/ 121979154.7      116    information regarding a Loan Party or its Affiliates or any other Person party to any Loan Documents that  is subject to confidentiality obligations in favor of such Loan Party or such other Person and that prohibit  the disclosure of such information to the Lenders, and the Lenders acknowledge (and by entering into a  Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, in such  circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver such Lender  will use its reasonable best efforts to obtain), such Lender shall not be under any obligation to provide such  information to them.  15.11 Collateral Matters.  (a) The Lenders hereby irrevocably authorize (and by entering into a Bank Product  Agreement, each Bank Product Provider shall be deemed to authorize) Agent to release any Lien on any  Collateral (i) upon the termination of the Commitments and payment and satisfaction in full by the Loan  Parties and their Subsidiaries of all of the Obligations, (ii) constituting property being sold or disposed of  if a release is required or desirable in connection therewith and if Borrowers certify to Agent that the sale  or disposition is permitted under Section 6.4 (and Agent may rely conclusively on any such certificate,  without further inquiry), (iii) constituting property in which no Loan Party or any of its Subsidiaries owned  any interest at the time Agent’s Lien was granted nor at any time thereafter, (iv) constituting property leased  or licensed to a Loan Party or its Subsidiaries under a lease or license that has expired or is terminated in a  transaction permitted under this Agreement, or (v) in connection with a credit bid or purchase authorized  under this Section 15.11.  The Loan Parties and the Lenders hereby irrevocably authorize (and by entering  into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) Agent, based  upon the instruction of the Required Lenders, to (a) consent to the sale of, credit bid, or purchase (either  directly or indirectly through one or more entities) all or any portion of the Collateral at any sale thereof  conducted under the provisions of the Bankruptcy Code, including Section 363 of the Bankruptcy Code,  (b) credit bid or purchase (either directly or indirectly through one or more entities) all or any portion of  the Collateral at any sale or other disposition thereof conducted under the provisions of the Code, including  pursuant to Sections 9-610 or 9-620 of the Code, or (c) credit bid or purchase (either directly or indirectly  through one or more entities) all or any portion of the Collateral at any other sale or foreclosure conducted  or consented to by Agent in accordance with applicable law in any judicial action or proceeding or by the  exercise of any legal or equitable remedy.  In connection with any such credit bid or purchase, (i) the  Obligations owed to the Lenders and the Bank Product Providers shall be entitled to be, and shall be, credit  bid on a ratable basis (with Obligations with respect to contingent or unliquidated claims being estimated  for such purpose if the fixing or liquidation thereof would not impair or unduly delay the ability of Agent  to credit bid or purchase at such sale or other disposition of the Collateral and, if such contingent or  unliquidated claims cannot be estimated without impairing or unduly delaying the ability of Agent to credit  bid at such sale or other disposition, then such claims shall be disregarded, not credit bid, and not entitled  to any interest in the Collateral that is the subject of such credit bid or purchase) and the Lenders and the  Bank Product Providers whose Obligations are credit bid shall be entitled to receive interests (ratably based  upon the proportion of their Obligations credit bid in relation to the aggregate amount of Obligations so  credit bid) in the Collateral that is the subject of such credit bid or purchase (or in the Equity Interests of  the any entities that are used to consummate such credit bid or purchase), and (ii) Agent, based upon the  instruction of the Required Lenders, may accept non-cash consideration, including debt and equity  securities issued by any entities used to consummate such credit bid or purchase and in connection therewith  Agent may reduce the Obligations owed to the Lenders and the Bank Product Providers (ratably based upon  the proportion of their Obligations credit bid in relation to the aggregate amount of Obligations so credit  bid) based upon the value of such non-cash consideration; provided, that Bank Product Obligations not  entitled to the application set forth in Section 2.4(b)(iii)(J) shall not be entitled to be, and shall not be, credit  bid, or used in the calculation of the ratable interest of the Lenders and Bank Product Providers in the  Obligations which are credit bid.  Except as provided above, Agent will not execute and deliver a release  





 






DB1/ 121979154.7      117    of any Lien on any Collateral without the prior written authorization of (y) if the release is of all or  substantially all of the Collateral, all of the Lenders (without requiring the authorization of the Bank Product  Providers), or (z) otherwise, the Required Lenders (without requiring the authorization of the Bank Product  Providers).  Upon request by Agent or Borrowers at any time, the Lenders will (and if so requested, the  Bank Product Providers will) confirm in writing Agent’s authority to release any such Liens on particular  types or items of Collateral pursuant to this Section 15.11; provided, that (1) anything to the contrary  contained in any of the Loan Documents notwithstanding, Agent shall not be required to execute any  document or take any action necessary to evidence such release on terms that, in Agent’s opinion, could  expose Agent to liability or create any obligation or entail any consequence other than the release of such  Lien without recourse, representation, or warranty, and (2) such release shall not in any manner discharge,  affect, or impair the Obligations or any Liens (other than those expressly released) upon (or obligations of  Borrowers in respect of) any and all interests retained by any Borrower, including, the proceeds of any sale,  all of which shall continue to constitute part of the Collateral.  Each Lender further hereby irrevocably  authorize (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed  to irrevocably authorize) Agent, at its option and in its sole discretion, to subordinate (by contract or  otherwise) any Lien granted to or held by Agent on any property under any Loan Document (a) to the holder  of any Permitted Lien on such property if such Permitted Lien secures purchase money Indebtedness  (including Capitalized Lease Obligations) which constitute Permitted Indebtedness and (b) to the extent  Agent has the authority under this Section 15.11 to release its Lien on such property.  Notwithstanding the  provisions of this Section 15.11, the Agent shall be authorized, without the consent of any Lender and  without the requirement that an asset sale consisting of the sale, transfer or other disposition having  occurred, to release any security interest in any building, structure or improvement located in an area  determined by the Federal Emergency Management Agency to have special flood hazards provided that  such building, structure or improvement has an immaterial fair market value.  (b) Agent shall have no obligation whatsoever to any of the Lenders (or the Bank  Product Providers) (i) to verify or assure that the Collateral exists or is owned by a Loan Party or any of its  Subsidiaries or is cared for, protected, or insured or has been encumbered, (ii) to verify or assure that  Agent’s Liens have been properly or sufficiently or lawfully created, perfected, protected, or enforced or  are entitled to any particular priority, (iii) to verify or assure that any particular items of Collateral meet the  eligibility criteria applicable in respect thereof, (iv) to impose, maintain, increase, reduce, implement, or  eliminate any particular reserve hereunder or to determine whether the amount of any reserve is appropriate  or not, or (v) to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity,  or to continue exercising, any of the rights, authorities and powers granted or available to Agent pursuant  to any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act,  omission, or event related thereto, subject to the terms and conditions contained herein, Agent may act in  any manner it may deem appropriate, in its sole discretion given Agent’s own interest in the Collateral in  its capacity as one of the Lenders and that Agent shall have no other duty or liability whatsoever to any  Lender (or Bank Product Provider) as to any of the foregoing, except as otherwise expressly provided  herein.  15.12 Restrictions on Actions by Lenders; Sharing of Payments.  (a) Each of the Lenders agrees that it shall not, without the express written consent of  Agent, and that it shall, to the extent it is lawfully entitled to do so, upon the written request of Agent, set  off against the Obligations, any amounts owing by such Lender to any Loan Party or its Subsidiaries or any  deposit accounts of any Loan Party or its Subsidiaries now or hereafter maintained with such Lender.  Each  of the Lenders further agrees that it shall not, unless specifically requested to do so in writing by Agent,  take or cause to be taken any action, including, the commencement of any legal or equitable proceedings to  





 






DB1/ 121979154.7      118    enforce any Loan Document against any Borrower or any Guarantor or to foreclose any Lien on, or  otherwise enforce any security interest in, any of the Collateral.  (b) If, at any time or times any Lender shall receive (i) by payment, foreclosure, setoff,  or otherwise, any proceeds of Collateral or any payments with respect to the Obligations, except for any  such proceeds or payments received by such Lender from Agent pursuant to the terms of this Agreement,  or (ii) payments from Agent in excess of such Lender’s Pro Rata Share of all such distributions by Agent,  such Lender promptly shall (A) turn the same over to Agent, in kind, and with such endorsements as may  be required to negotiate the same to Agent, or in immediately available funds, as applicable, for the account  of all of the Lenders and for application to the Obligations in accordance with the applicable provisions of  this Agreement, or (B) purchase, without recourse or warranty, an undivided interest and participation in  the Obligations owed to the other Lenders so that such excess payment received shall be applied ratably as  among the Lenders in accordance with their Pro Rata Shares; provided, that to the extent that such excess  payment received by the purchasing party is thereafter recovered from it, those purchases of participations  shall be rescinded in whole or in part, as applicable, and the applicable portion of the purchase price paid  therefor shall be returned to such purchasing party, but without interest except to the extent that such  purchasing party is required to pay interest in connection with the recovery of the excess payment.  15.13 Agency for Perfection.  Agent hereby appoints each other Lender (and each Bank Product  Provider) as its agent (and each Lender hereby accepts (and by entering into a Bank Product Agreement,  each Bank Product Provider shall be deemed to accept) such appointment) for the purpose of perfecting  Agent’s Liens in assets which, in accordance with Article 8 or Article 9, as applicable, of the Code can be  perfected by possession or control.  Should any Lender obtain possession or control of any such Collateral,  such Lender shall notify Agent thereof, and, promptly upon Agent’s request therefor shall deliver  possession or control of such Collateral to Agent or in accordance with Agent’s instructions.  15.14 Payments by Agent to the Lenders.  All payments to be made by Agent to the Lenders  (or Bank Product Providers) shall be made by bank wire transfer of immediately available funds pursuant  to such wire transfer instructions as each party may designate for itself by written notice to Agent.   Concurrently with each such payment, Agent shall identify whether such payment (or any portion thereof)  represents principal, premium, fees, or interest of the Obligations.  15.15 Concerning the Collateral and Related Loan Documents.  Each member of the Lender  Group authorizes and directs Agent to enter into this Agreement and the other Loan Documents.  Each  member of the Lender Group agrees (and by entering into a Bank Product Agreement, each Bank Product  Provider shall be deemed to agree) that any action taken by Agent in accordance with the terms of this  Agreement or the other Loan Documents relating to the Collateral and the exercise by Agent of its powers  set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be  binding upon all of the Lenders (and such Bank Product Provider).  15.16 Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports  and Information.  By becoming a party to this Agreement, each Lender:  (a) is deemed to have requested that Agent furnish such Lender, promptly after it  becomes available, a copy of each field examination report respecting any Loan Party or its Subsidiaries  (each, a “Report”) prepared by or at the request of Agent, and Agent shall so furnish each Lender with such  Reports,  (b) expressly agrees and acknowledges that Agent does not (i) make any  representation or warranty as to the accuracy of any Report, and (ii) shall not be liable for any information  contained in any Report,  





 






DB1/ 121979154.7      119    (c) expressly agrees and acknowledges that the Reports are not comprehensive audits  or examinations, that Agent or other party performing any field examination will inspect only specific  information regarding the Loan Parties and their Subsidiaries and will rely significantly upon Borrowers’  and their Subsidiaries’ books and records, as well as on representations of Borrowers’ personnel,  (d) agrees to keep all Reports and other material, non-public information regarding the  Loan Parties and their Subsidiaries and their operations, assets, and existing and contemplated business  plans in a confidential manner in accordance with Section 17.9, and  (e) without limiting the generality of any other indemnification provision contained in  this Agreement, agrees:  (i) to hold Agent and any other Lender preparing a Report harmless from any  action the indemnifying Lender may take or fail to take or any conclusion the indemnifying Lender may  reach or draw from any Report in connection with any loans or other credit accommodations that the  indemnifying Lender has made or may make to Borrowers, or the indemnifying Lender’s participation in,  or the indemnifying Lender’s purchase of, a loan or loans of Borrowers, and (ii) to pay and protect, and  indemnify, defend and hold Agent, and any such other Lender preparing a Report harmless from and  against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including,  attorneys’ fees and costs) incurred by Agent and any such other Lender preparing a Report as the direct or  indirect result of any third parties who might obtain all or part of any Report through the indemnifying  Lender.  In addition to the foregoing,  (x) any Lender may from time to time request of Agent in writing that Agent  provide to such Lender a copy of any report or document provided by any Loan Party or its Subsidiaries to  Agent that has not been contemporaneously provided by such Loan Party or such Subsidiary to such Lender,  and, upon receipt of such request, Agent promptly shall provide a copy of same to such Lender, (y) to the  extent that Agent is entitled, under any provision of the Loan Documents, to request additional reports or  information from any Loan Party or its Subsidiaries, any Lender may, from time to time, reasonably request  Agent to exercise such right as specified in such Lender’s notice to Agent, whereupon Agent promptly shall  request of Borrowers the additional reports or information reasonably specified by such Lender, and, upon  receipt thereof from such Loan Party or such Subsidiary, Agent promptly shall provide a copy of same to  such Lender, and (z) any time that Agent renders to Borrowers a statement regarding the Loan Account,  Agent shall send a copy of such statement to each Lender.  15.17 Several Obligations; No Liability.  Notwithstanding that certain of the Loan Documents  now or hereafter may have been or will be executed only by or in favor of Agent in its capacity as such,  and not by or in favor of the Lenders, any and all obligations on the part of Agent (if any) to make any  credit available hereunder shall constitute the several (and not joint) obligations of the respective Lenders  on a ratable basis, according to their respective Commitments, to make an amount of such credit not to  exceed, in principal amount, at any one time outstanding, the amount of their respective Commitments.   Nothing contained herein shall confer upon any Lender any interest in, or subject any Lender to any liability  for, or in respect of, the business, assets, profits, losses, or liabilities of any other Lender.  Each Lender  shall be solely responsible for notifying its Participants of any matters relating to the Loan Documents to  the extent any such notice may be required, and no Lender shall have any obligation, duty, or liability to  any Participant of any other Lender.  Except as provided in Section 15.7, no member of the Lender Group  shall have any liability for the acts of any other member of the Lender Group.  No Lender shall be  responsible to any Borrower or any other Person for any failure by any other Lender (or Bank Product  Provider) to fulfill its obligations to make credit available hereunder, nor to advance for such Lender (or  Bank Product Provider) or on its behalf, nor to take any other action on behalf of such Lender (or Bank  Product Provider) hereunder or in connection with the financing contemplated herein.  





 






DB1/ 121979154.7      120    16. WITHHOLDING TAXES.  16.1 Payments.  All payments made by any Loan Party under any Loan Document will be made  free and clear of, and without deduction or withholding for, any Taxes, except as otherwise required by  applicable law, and in the event any deduction or withholding of Taxes is required, the applicable Loan  Party shall make the requisite withholding, promptly pay over to the applicable Governmental Authority  the withheld tax, and furnish to Agent as promptly as possible after the date the payment of any such Tax  is due pursuant to applicable law, certified copies of tax receipts evidencing such payment by the Loan  Parties.   Furthermore, if any such Tax is an Indemnified Taxes or an Indemnified Tax is so levied or  imposed, the Loan Parties agree to pay the full amount of such Indemnified Taxes and such additional  amounts as may be necessary so that every payment of all amounts due under this Agreement, any note, or  Loan Document, including any amount paid pursuant to this Section 16.1 after withholding or deduction  for or on account of any Indemnified Taxes, will not be less than the amount provided for herein.  The Loan  Parties will promptly pay any Other Taxes or reimburse Agent for such Other Taxes upon Agent’s demand.   The Loan Parties shall jointly and severally indemnify each Recipient (collectively a “Tax Indemnitee”) for  the full amount of Indemnified Taxes arising in connection with this Agreement or any other Loan  Document or breach thereof by any Loan Party (including, without limitation, any Indemnified Taxes  imposed or asserted on, or attributable to, amounts payable under this Section 16) imposed on, or paid by,  such Tax Indemnitee and all reasonable costs and expenses related thereto (including fees and  disbursements of attorneys and other tax professionals), as and when they are incurred and irrespective of  whether suit is brought, whether or not such Indemnified Taxes were correctly or legally imposed or  asserted by the relevant Governmental Authority (other than Indemnified Taxes and additional amounts  that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful  misconduct of such Tax Indemnitee).  The obligations of the Loan Parties under this Section 16 shall survive  the termination of this Agreement, the resignation and replacement of Agent, and the repayment of the  Obligations.  16.2 Exemptions.  (a) If a Lender or Participant is entitled to claim an exemption or reduction from  United States withholding tax, such Lender or Participant agrees with and in favor of Agent and the Loan  Parties, to deliver to Agent (or, in the case of a Participant, to the Lender granting the participation only)  and the Administrative Borrower on behalf of all Borrowers one of the following before receiving its first  payment under this Agreement:  (i) if such Lender or Participant is entitled to claim an exemption from United  States withholding tax pursuant to the portfolio interest exception, (A) a statement of the Lender or  Participant, signed under penalty of perjury, that it is not a (I) a “bank” as described in Section 881(c)(3)(A)  of the IRC, (II) a 10% shareholder of any Borrower (within the meaning of Section 871(h)(3)(B) of the  IRC), or (III) a controlled foreign corporation related to Borrowers within the meaning of Section 864(d)(4)  of the IRC, and (B) a properly completed and executed IRS Form W-8BEN, Form W-8BEN-E or Form W- 8IMY (with proper attachments as applicable);  (ii) if such Lender or Participant is entitled to claim an exemption from, or a  reduction of, withholding tax under a United States tax treaty, a properly completed and executed copy of  IRS Form W-8BEN or Form W-8BEN-E, as applicable, claiming such treaty benefit;  (iii) if such Lender or Participant is entitled to claim that interest paid under  this Agreement is exempt from United States withholding tax because it is effectively connected with a  





 






DB1/ 121979154.7      121    United States trade or business of such Lender, a properly completed and executed copy of IRS Form W- 8ECI;  (iv) if such Lender or Participant is entitled to claim that interest paid under  this Agreement is exempt from United States withholding tax because such Lender or Participant serves as  an intermediary, a properly completed and executed copy of IRS Form W-8IMY (including a withholding  statement and copies of the tax certification documentation for its beneficial owner(s) of the income paid  to the intermediary, if required based on its status provided on the Form W-8IMY); or  (v) a properly completed and executed copy of any other form or forms,  including IRS Form W-9, as may be required under the IRC or other laws of the United States as a condition  to exemption from, or reduction of, United States withholding or backup withholding tax.  (b) Each Lender or Participant shall provide new forms (or successor forms) upon the  expiration or obsolescence of any previously delivered forms and will promptly notify Agent and  Administrative Borrower (or, in the case of a Participant, will promptly notify the Lender granting the  participation only) of any change in circumstances which would modify or render invalid any claimed  exemption or reduction.  (c) If a Lender or Participant claims an exemption from withholding tax in a  jurisdiction other than the United States, such Lender or such Participant agrees with and in favor of Agent  and the Loan Parties, to deliver to Agent and Administrative Borrower (or, in the case of a Participant, to  the Lender granting the participation only) any such form or forms, as may be required under the laws of  such jurisdiction as a condition to exemption from, or reduction of, foreign withholding or backup  withholding tax before receiving its first payment under this Agreement, but only if such Lender or such  Participant is legally able to deliver such forms, or the providing of or delivery of such forms in the Lender’s  reasonable judgment would not subject such Lender to any material unreimbursed cost or expense or  materially prejudice the legal or commercial position of such Lender (or its Affiliates); provided, that  nothing in this Section 16.2(c) shall require a Lender or Participant to disclose any information that it deems  to be confidential (including without limitation, its tax returns).  Each Lender and each Participant shall  promptly provide new forms (or successor forms) upon the expiration or obsolescence of any previously  delivered forms and will promptly notify Agent and Administrative Borrower (or, in the case of a  Participant, to the Lender granting the participation only) of any change in circumstances which would  modify or render invalid any claimed exemption or reduction.  (d) If a Lender or Participant claims exemption from, or reduction of, withholding tax  and such Lender or Participant sells, assigns, grants a participation in, or otherwise transfers all or part of  the Obligations of Borrowers to such Lender or Participant, such Lender or Participant agrees to notify  Agent and Administrative Borrower (or, in the case of a sale of a participation interest, to the Lender  granting the participation only) of the percentage amount in which it is no longer the beneficial owner of  Obligations of Borrowers to such Lender or Participant.  To the extent of such percentage amount, Agent  and Administrative Borrower will treat such Lender’s or such Participant’s documentation provided  pursuant to Section 16.2(a) or 16.2(c) as no longer valid.  With respect to such percentage amount, such  Participant or Assignee shall provide new documentation, pursuant to Section 16.2(a) or 16.2(c), if  applicable.  Borrowers agree that each Participant shall be entitled to the benefits of this Section 16 with  respect to its participation in any portion of the Commitments and the Obligations so long as such  Participant complies with the obligations set forth in this Section 16 with respect thereto.  (e) If a payment made to a Recipient under any Loan Document would be subject to  U.S. federal withholding tax imposed by FATCA if such Recipient were to fail to comply with the  





 






DB1/ 121979154.7      122    applicable due diligence and reporting requirements of FATCA (including those contained in Section  1471(b) or 1472(b) of the IRC, as applicable), such Recipient shall deliver to Agent (or, in the case of a  Participant, to the Lender granting the participation only) and Administrative Borrower at the time or times  prescribed by law and at such time or times reasonably requested by Agent (or, in the case of a Participant,  the Lender granting the participation) or Administrative Borrower such documentation prescribed by  applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the IRC) and such additional  documentation reasonably requested by Agent (or, in the case of a Participant, the Lender granting the  participation) or Administrative Borrower as may be necessary for Agent or the Loan Parties to comply  with their obligations under FATCA and to determine that such Lender has complied with such Lender’s  obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely  for purposes of this clause (e), “FATCA” shall include any amendments made to FATCA after the date of  this Agreement.  (f) On or prior to the date Agent, that is not otherwise a Lender, becomes a party to  this Agreement, Agent shall, in the event that Agent is a U.S. Person, deliver an IRS Form W-9 to  Administrative Borrower, and in the event Agent is not a U.S. Person, deliver the appropriate IRS Form W- 8 certifying Agent’s exemption, if any, from U.S. withholding Taxes with respect to amounts payable under  any Loan Document.  16.3 Reductions.  (a) If a Lender or a Participant is subject to an applicable withholding tax, Agent (or,  in the case of a Participant, the Lender granting the participation) may withhold from any payment to such  Lender or such Participant an amount equivalent to the applicable withholding tax.  If the forms or other  documentation required by Section 16.2(a) or 16.2(c) are not delivered to Agent (or, in the case of a  Participant, to the Lender granting the participation), then Agent (or, in the case of a Participant, to the  Lender granting the participation) may withhold from any payment to such Lender or such Participant not  providing such forms or other documentation an amount equivalent to the applicable withholding tax.  (b) If the IRS or any other Governmental Authority of the United States or other  jurisdiction asserts a claim that Agent (or, in the case of a Participant, to the Lender granting the  participation) did not properly withhold tax from amounts paid to or for the account of any Lender or any  Participant due to a failure on the part of the Lender or any Participant (because the appropriate form was  not delivered, was not properly executed, or because such Lender failed to notify Agent (or such Participant  failed to notify the Lender granting the participation) of a change in circumstances which rendered the  exemption from, or reduction of, withholding tax ineffective, or for any other reason) such Lender shall  indemnify and hold Agent harmless (or, in the case of a Participant, such Participant shall indemnify and  hold the Lender granting the participation harmless) for all amounts paid, directly or indirectly, by Agent  (or, in the case of a Participant, to the Lender granting the participation), as tax or otherwise, including  penalties and interest, and including any taxes imposed by any jurisdiction on the amounts payable to Agent  (or, in the case of a Participant, to the Lender granting the participation only) under this Section 16, together  with all costs and expenses (including attorneys’ fees and expenses).  The obligation of the Lenders and the  Participants under this subsection shall survive the payment of all Obligations and the resignation or  replacement of Agent.  16.4 Refunds.  .  If Agent, a Lender or a Participant determines, in its sole discretion, that it has  received a refund of any Indemnified Taxes with respect to which any Loan Party has paid additional  amounts pursuant to this Section 16, so long as no Default or Event of Default has occurred and is  continuing, it shall pay over such refund to the Administrative Borrower on behalf of the Loan Parties (but  only to the extent of payments made, or additional amounts paid, by the Loan Parties under this Section 16  





 






DB1/ 121979154.7      123    with respect to Indemnified Taxes giving rise to such a refund), net of all out-of-pocket expenses of Agent,  such Lender or such Participant and without interest (other than any interest paid by the applicable  Governmental Authority with respect to such a refund); provided, that the Loan Parties, upon the request  of Agent, such Lender or such Participant, agrees to repay the amount paid over to the Administrative  Borrower (plus any penalties, interest or other charges, imposed by the applicable Governmental Authority,  other than such penalties, interest or other charges imposed as a result of the willful misconduct or gross  negligence of Agent, Lender or such Participant hereunder as finally determined by a court of competent  jurisdiction) to Agent, such Lender or such Participant in the event Agent, such Lender or such Participant  is required to repay such refund to such Governmental Authority.  Notwithstanding anything in this  Agreement to the contrary, this Section 16 shall not be construed to require Agent, any Lender or any  Participant to make available its tax returns (or any other information which it deems confidential) to Loan  Parties or any other Person or require Agent or any Lender to pay any amount to an indemnifying party  pursuant to Section 16.4, the payment of which would place Agent or such Lender (or their Affiliates) in a  less favorable net after-Tax position than such Person would have been in if the Tax subject to  indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and  the indemnification payments or additional amounts with respect to such Tax had never been paid.  17. GENERAL PROVISIONS.  17.1 Effectiveness.  This Agreement shall be binding and deemed effective when executed by  each Borrower, Agent, and each Lender whose signature is provided for on the signature pages hereof.  17.2 Section Headings.  Headings and numbers have been set forth herein for convenience only.   Unless the contrary is compelled by the context, everything contained in each Section applies equally to  this entire Agreement.  17.3 Interpretation.  Neither this Agreement nor any uncertainty or ambiguity herein shall be  construed against the Lender Group or any Borrower, whether under any rule of construction or otherwise.   On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted  according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions  of all parties hereto.  17.4 Severability of Provisions.  Each provision of this Agreement shall be severable from  every other provision of this Agreement for the purpose of determining the legal enforceability of any  specific provision.  17.5 Bank Product Providers.  Each Bank Product Provider in its capacity as such shall be  deemed a third party beneficiary hereof and of the provisions of the other Loan Documents for purposes of  any reference in a Loan Document to the parties for whom Agent is acting.  Agent hereby agrees to act as  agent for such Bank Product Providers and, by virtue of entering into a Bank Product Agreement, the  applicable Bank Product Provider shall be automatically deemed to have appointed Agent as its agent and  to have accepted the benefits of the Loan Documents.  It is understood and agreed that the rights and benefits  of each Bank Product Provider under the Loan Documents consist exclusively of such Bank Product  Provider’s being a beneficiary of the Liens and security interests (and, if applicable, guarantees) granted to  Agent and the right to share in payments and collections out of the Collateral as more fully set forth herein.  In addition, each Bank Product Provider, by virtue of entering into a Bank Product Agreement, shall be  automatically deemed to have agreed that Agent shall have the right, but shall have no obligation, to  establish, maintain, relax, or release reserves in respect of the Bank Product Obligations and that if reserves  are established there is no obligation on the part of Agent to determine or insure whether the amount of any  such reserve is appropriate or not.  In connection with any such distribution of payments or proceeds of  





 






DB1/ 121979154.7      124    Collateral, Agent shall be entitled to assume no amounts are due or owing to any Bank Product Provider  unless such Bank Product Provider has provided a written certification (setting forth a reasonably detailed  calculation) to Agent as to the amounts that are due and owing to it and such written certification is received  by Agent a reasonable period of time prior to the making of such distribution.  Agent shall have no  obligation to calculate the amount due and payable with respect to any Bank Products, but may rely upon  the written certification of the amount due and payable from the applicable Bank Product Provider.  In the  absence of an updated certification, Agent shall be entitled to assume that the amount due and payable to  the applicable Bank Product Provider is the amount last certified to Agent by such Bank Product Provider  as being due and payable (less any distributions made to such Bank Product Provider on account thereof).   Borrowers may obtain Bank Products from any Bank Product Provider, although Borrowers are not required  to do so.  Each Borrower acknowledges and agrees that no Bank Product Provider has committed to provide  any Bank Products and that the providing of Bank Products by any Bank Product Provider is in the sole  and absolute discretion of such Bank Product Provider.  Notwithstanding anything to the contrary in this  Agreement or any other Loan Document, no provider or holder of any Bank Product shall have any voting  or approval rights hereunder (or be deemed a Lender) solely by virtue of its status as the provider or holder  of such agreements or products or the Obligations owing thereunder, nor shall the consent of any such  provider or holder be required (other than in their capacities as Lenders, to the extent applicable) for any  matter hereunder or under any of the other Loan Documents, including as to any matter relating to the  Collateral or the release of Collateral or Guarantors.  17.6 Debtor-Creditor Relationship.  The relationship between the Lenders and Agent, on the  one hand, and the Loan Parties, on the other hand, is solely that of creditor and debtor.  No member of the  Lender Group has (or shall be deemed to have) any fiduciary relationship or duty to any Loan Party arising  out of or in connection with the Loan Documents or the transactions contemplated thereby, and there is no  agency or joint venture relationship between the members of the Lender Group, on the one hand, and the  Loan Parties, on the other hand, by virtue of any Loan Document or any transaction contemplated therein.  17.7 Counterparts; Electronic Execution.  This Agreement may be executed in any number  of counterparts and by different parties on separate counterparts, each of which, when executed and  delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one  and the same Agreement.  Execution of any such counterpart may be by means of (a) an electronic signature  that complies with the federal Electronic Signatures in Global and National Commerce Act, state  enactments of the Uniform Electronic Transactions Act, or any other relevant and applicable electronic  signatures law; (b) an original manual signature; or (c) a faxed, scanned, or photocopied manual signature.   Each electronic signature or faxed, scanned, or photocopied manual signature shall for all purposes have  the same validity, legal effect, and admissibility in evidence as an original manual signature.  Lender  reserves the right, in its discretion, to accept, deny, or condition acceptance of any electronic signature on  this Agreement.   Any party delivering an executed counterpart of this Agreement by faxed, scanned or  photocopied manual signature shall also deliver an original manually executed counterpart, but the failure  to deliver an original manually executed counterpart shall not affect the validity, enforceability and binding  effect of this Agreement.  The foregoing shall apply to each other Loan Document, and any notice delivered  hereunder or thereunder, mutatis mutandis.  17.8 Revival and Reinstatement of Obligations; Certain Waivers.  (a) If any member of the Lender Group or any Bank Product Provider repays, refunds,  restores, or returns in whole or in part, any payment or property (including any proceeds of Collateral)  previously paid or transferred to such member of the Lender Group or such Bank Product Provider in full  or partial satisfaction of any Obligation or on account of any other obligation of any Loan Party under any  Loan Document or any Bank Product Agreement, because the payment, transfer, or the incurrence of the  





 






DB1/ 121979154.7      125    obligation so satisfied is asserted or declared to be void, voidable, or otherwise recoverable under any law  relating to creditors’ rights, including provisions of the Bankruptcy Code relating to fraudulent transfers,  preferences, or other voidable or recoverable obligations or transfers (each, a “Voidable Transfer”), or  because such member of the Lender Group or Bank Product Provider elects to do so on the reasonable  advice of its counsel in connection with a claim that the payment, transfer, or incurrence is or may be a  Voidable Transfer, then, as to any such Voidable Transfer, or the amount thereof that such member of the  Lender Group or Bank Product Provider elects to repay, restore, or return (including pursuant to a  settlement of any claim in respect thereof), and as to all reasonable costs, expenses, and attorneys’ fees  of such member of the Lender Group or Bank Product Provider related thereto, (i) the liability of the Loan  Parties with respect to the amount or property paid, refunded, restored, or returned will automatically and  immediately be revived, reinstated, and restored and will exist, and (ii) Agent’s Liens securing such liability  shall be effective, revived, and remain in full force and effect, in each case, as fully as if such Voidable  Transfer had never been made.  If, prior to any of the foregoing, (A) Agent’s Liens shall have been released  or terminated, or (B) any provision of this Agreement shall have been terminated or cancelled, Agent’s  Liens, or such provision of this Agreement, shall be reinstated in full force and effect and such prior release,  termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the  obligation of any Loan Party in respect of such liability or any Collateral securing such liability. This  provision shall survive the termination of this Agreement and the repayment in full of the Obligations.  (b) Anything to the contrary contained herein notwithstanding, if Agent or any Lender  accepts a guaranty of only a portion of the Obligations pursuant to any guaranty, each Borrower hereby  waive its right under Section 2822(a) of the California Civil Code or any similar laws of any other  applicable jurisdiction to designate the portion of the Obligations satisfied by the applicable guarantor’s  partial payment.  17.9 Confidentiality.  (a) Agent and Lenders each individually (and not jointly or jointly and severally) agree  that material, non-public information regarding the Loan Parties and their Subsidiaries, their operations,  assets, and existing and contemplated business plans (“Confidential Information”) shall be treated by Agent  and the Lenders in a confidential manner, and shall not be disclosed by Agent and the Lenders to Persons  who are not parties to this Agreement, except:  (i) to attorneys for and other advisors, accountants, auditors,  and consultants to any member of the Lender Group  and to employees, directors and officers of any  member of the Lender Group (the Persons in this clause (i), “Lender Group Representatives”) on a “need  to know” basis in connection with this Agreement and the transactions contemplated hereby and on a  confidential basis, (ii) to Subsidiaries and Affiliates of any member of the Lender Group (including the  Bank Product Providers); provided, that any such Subsidiary or Affiliate shall have agreed to receive such  information hereunder subject to the terms of this Section 17.9, (iii) as may be required by regulatory  authorities so long as such authorities are informed of the confidential nature of such information, (iv) as  may be required by statute, decision, or judicial or administrative order, rule, or regulation; provided, that  (x) prior to any disclosure under this clause (iv), the disclosing party agrees to provide Borrowers with prior  notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is  permitted to provide such prior notice to Borrowers pursuant to the terms of the applicable statute, decision,  or judicial or administrative order, rule, or regulation and (y) any disclosure under this clause (iv) shall be  limited to the portion of the Confidential Information as may be required by such statute, decision, or  judicial or administrative order, rule, or regulation, (v) as may be agreed to in advance in writing by  Borrowers, (vi) as requested or required by any Governmental Authority pursuant to any subpoena or other  legal process; provided, that (x) prior to any disclosure under this clause (vi) the disclosing party agrees to  provide Borrowers with prior written notice thereof, to the extent that it is practicable to do so and to the  extent that the disclosing party is permitted to provide such prior written notice to Borrowers pursuant to  





 






DB1/ 121979154.7      126    the terms of the subpoena or other legal process and (y) any disclosure under this clause (vi) shall be limited  to the portion of the Confidential Information as may be required by such Governmental Authority pursuant  to such subpoena or other legal process, (vii) as to any such information that is or becomes generally  available to the public (other than as a result of prohibited disclosure by Agent or the Lenders or the Lender  Group Representatives), (viii) in connection with any assignment, participation  or pledge of any Lender’s  interest under this Agreement; provided, that prior to receipt of Confidential Information any such assignee,  participant, or pledgee shall have agreed in writing to receive such Confidential Information either subject  to the terms of this Section 17.9 or pursuant to confidentiality requirements substantially similar to those  contained in this Section 17.9 (and such Person may disclose such Confidential Information to Persons  employed or engaged by them as described in clause (i) above), (ix) in connection with any litigation or  other adversary proceeding involving parties hereto which such litigation or adversary proceeding involves  claims related to the rights or duties of such parties under this Agreement or the other Loan Documents;  provided, that prior to any disclosure to any Person (other than any Loan Party, Agent, any Lender, any of  their respective Affiliates, or their respective counsel) under this clause (ix) with respect to litigation  involving any Person (other than any Borrower, Agent, any Lender, any of their respective Affiliates, or  their respective counsel), the disclosing party agrees to provide Borrowers with prior written notice thereof,  and (x) in connection with, and to the extent reasonably necessary for, the exercise of any secured creditor  remedy under this Agreement or under any other Loan Document.  (b) Anything in this Agreement to the contrary notwithstanding, Agent may disclose  information concerning the terms and conditions of this Agreement and the other Loan Documents to loan  syndication and pricing reporting services or in its marketing or promotional materials, with such  information to consist of deal terms and other information customarily found in such publications or  marketing or promotional materials and may otherwise use the name, logos, and other insignia of any  Borrower or the other Loan Parties and the Commitments provided hereunder in any “tombstone” or other  advertisements, on its website or in other marketing materials of Agent.  (c) Each Loan Party agrees that Agent may make available to the Lenders materials  or information provided by or on behalf of the Loan Parties hereunder (collectively, “Borrower Materials”)  by posting the Borrower Materials on IntraLinks, SyndTrak or a substantially similar secure electronic  transmission system (the “Platform”).  The Platform is provided “as is” and “as available.”  Agent does not  warrant the accuracy or completeness of the Borrower Materials, or the adequacy of the Platform and  expressly disclaim liability for errors or omissions in the communications.  No warranty of any kind,  express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a  particular purpose, non-infringement of third party rights or freedom from viruses or other code defects, is  made by Agent in connection with the Borrower Materials or the Platform.  In no event shall Agent or any  of the Agent-Related Persons have any liability to the Loan Parties, any Lender or any other person for  damages of any kind, including direct or indirect, special, incidental or consequential damages, losses or  expenses (whether in tort, contract or otherwise) arising out of any Loan Party’s or Agent’s transmission of  communications through the Internet, except to the extent the liability of such person is found in a final  non-appealable judgment by a court of competent jurisdiction to have resulted from such person’s gross  negligence or willful misconduct.  Each Loan Party further agrees that certain of the Lenders may be  “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect  to the Loan Parties or their securities) (each, a “Public Lender”).  The Loan Parties shall be deemed to have  authorized Agent and its Affiliates and the Lenders to treat Borrower Materials marked “PUBLIC” or  otherwise at any time filed with the SEC as not containing any material non-public information with respect  to the Loan Parties or their securities for purposes of United States federal and state securities laws.  All  Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform  designated as “Public Investor” (or another similar term).  Agent and its Affiliates and the Lenders shall be  entitled to treat any Borrower Materials that are not marked “PUBLIC” or that are not at any time filed with  





 






DB1/ 121979154.7      127    the SEC as being suitable only for posting on a portion of the Platform not marked as “Public Investor” (or  such other similar term).  17.10 Survival.  All 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 Agent, Issuing Bank, or any Lender may have had notice or knowledge  of any Default or Event of 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 or unpaid or any  Letter of Credit is outstanding and so long as the Commitments have not expired or been terminated.  17.11 Patriot Act; Due Diligence.  Each Lender that is subject to the requirements of the Patriot  Act hereby notifies the Loan Parties that pursuant to the requirements of the Patriot Act, it is required to  obtain, verify and record information that identifies each Loan Party, which information includes the name  and address of each Loan Party and other information that will allow such Lender to identify each Loan  Party in accordance with the Patriot Act.  In addition, Agent and each Lender shall have the right to  periodically conduct due diligence on all Loan Parties, their senior management and key principals and  legal and beneficial owners.  Each Loan Party agrees to cooperate in respect of the conduct of such due  diligence and further agrees that the reasonable costs and charges for any such due diligence by Agent shall  constitute Lender Group Expenses hereunder and be for the account of Borrowers.  17.12 Integration.  This Agreement, together with the other Loan Documents, reflects the entire  understanding of the parties with respect to the transactions contemplated hereby and shall not be  contradicted or qualified by any other agreement, oral or written, before the date hereof.  The foregoing to  the contrary notwithstanding, all Bank Product Agreements, if any, are independent agreements governed  by the written provisions of such Bank Product Agreements, which will remain in full force and effect,  unaffected by any repayment, prepayments, acceleration, reduction, increase, or change in the terms of any  credit extended hereunder, except as otherwise expressly provided in such Bank Product Agreement.  17.13 NeoPhotonics as Agent for Borrowers.  Each Borrower hereby irrevocably appoints  NeoPhotonics as the borrowing agent and attorney-in-fact for all Borrowers (the “Administrative  Borrower”) which appointment shall remain in full force and effect unless and until Agent shall have  received prior written notice signed by each Borrower that such appointment has been revoked and that  another Borrower has been appointed Administrative Borrower.  Each Borrower hereby irrevocably  appoints and authorizes the Administrative Borrower (a) to provide Agent with all notices with respect to  Revolving Loans and Letters of Credit obtained for the benefit of any Borrower and all other notices and  instructions under this Agreement and the other Loan Documents (and any notice or instruction provided  by Administrative Borrower shall be deemed to be given by Borrowers hereunder and shall bind each  Borrower), (b) to receive notices and instructions from members of the Lender Group (and any notice or  instruction provided by any member of the Lender Group to the Administrative Borrower in accordance  with the terms hereof shall be deemed to have been given to each Borrower), (c) to enter into Bank Product  Provider Agreements on behalf of Borrowers and their Subsidiaries, and (d) to take such action as the  Administrative Borrower deems appropriate on its behalf to obtain Revolving Loans and Letters of Credit  and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this  Agreement.  It is understood that the handling of the Loan Account and Collateral in a combined fashion,  as more fully set forth herein, is done solely as an accommodation to Borrowers in order to utilize the  collective borrowing powers of Borrowers in the most efficient and economical manner and at their request,  





 






DB1/ 121979154.7      128    and that Lender Group shall not incur liability to any Borrower as a result hereof.  Each Borrower expects  to derive benefit, directly or indirectly, from the handling of the Loan Account and the Collateral in a  combined fashion since the successful operation of each Borrower is dependent on the continued successful  performance of the integrated group.  To induce the Lender Group to do so, and in consideration thereof,  each Borrower hereby jointly and severally agrees to indemnify each member of the Lender Group and  hold each member of the Lender Group harmless against any and all liability, expense, loss or claim of  damage or injury, made against the Lender Group by any Borrower or by any third party whosoever, arising  from or incurred by reason of (i) the handling of the Loan Account and Collateral of Borrowers as herein  provided, or (ii) the Lender Group’s relying on any instructions of the Administrative Borrower, except that  Borrowers will have no liability to the relevant Agent-Related Person or Lender-Related Person under this  Section 17.13 with respect to any liability that has been finally determined by a court of competent  jurisdiction to have resulted solely from the gross negligence or willful misconduct of such Agent-Related  Person or Lender-Related Person, as the case may be.  17.14 Acknowledgement and Consent to Bail-In of EEA Financial Institutions.   Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement  or understanding among any such parties, each party hereto acknowledges that any liability of any EEA  Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be  subject to the Write-Down and Conversion Powers and agrees and consents to, and acknowledges and  agrees to be bound by:   (a) the application of any Write-Down and Conversion Powers to any such liabilities  arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and  (b) the effects of any Bail-in Action on any such liability, including, if applicable:  (i) a reduction in full or in part or cancellation of any such liability;  (ii) a conversion of all, or a portion of, such liability into shares or other  instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution  that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership  will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any  other Loan Document; or  (iii) the variation of the terms of such liability in connection with the exercise  of the Write-Down and Conversion Powers.  17.15 Acknowledgement Regarding Any Supported QFCs.  To the extent that the Loan  Documents provide support, through a guarantee or otherwise, for Hedge Agreements or any other  agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC a  “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of  the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the  Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated  thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit  Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported  QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States  or any other state of the United States): In the event a Covered Entity that is party to a Supported QFC  (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the  transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation  in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such  





 






DB1/ 121979154.7      129    Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent  as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such  QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws  of the United States or a state of the United States.  In the event a Covered Party or a BHC Act Affiliate of  a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights  under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support  that may be exercised against such Covered Party are permitted to be exercised to no greater extent than  such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC  and the Loan Documents were governed by the laws of the United States or a state of the United States.   Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with  respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a  Supported QFC or any QFC Credit Support.  17.16 Amendment and Restatement.  On the Closing Date, this Agreement shall amend and  restate and supersede the Existing Credit Agreement in its entirety.  On the Closing, the rights and  obligations of the parties evidenced by the Existing Credit Agreement shall be evidenced by this Agreement  and the other Loan Documents.  In the event that any payment made by the Borrowers under the Existing  Credit Agreement must be disgorged or otherwise returned by any Lender thereunder, such Lender shall be  entitled to the benefits of the Existing Credit Agreement and the Borrowers shall unconditionally be  obligated to repay the same along with any applicable interest and fees.  This Agreement represents a  modification, and not a novation, of the credit facility under the Existing Credit Agreement.  All interest,  fees and expenses, if any, owing or accruing under or in respect of the Existing Credit Agreement for  periods prior to the Closing Date shall be calculated and paid at the times and otherwise in accordance with  the terms of the Existing Credit Agreement and shall continue as Obligations under this Agreement and  shall be payable at times and in the manner applicable to such Obligations under this Agreement.  The  Borrowers acknowledge, represent and warrant that as of the Closing Date they have no claims, defenses  or offsets with respect to the Existing Credit Agreement or any of the Loan Documents (as defined therein)  related thereto and that immediately prior to the effectiveness of this Agreement, the Existing Credit  Agreement and such other loan and collateral documents are valid, binding and enforceable in accordance  with the terms thereof.  Except as provided herein, this Agreement shall not be deemed to (i) be a consent  to any amendment, waiver or modification of any other term or condition of the Existing Credit Agreement  or any other Loan Document (as defined therein), or (ii) operate as a waiver or otherwise prejudice any  right, power or remedy that the Agent or Lenders may now have or may have in the future under or in  connection with the Existing Credit Agreement or any other Loan Document (as defined therein), except  as specifically set forth herein.  Upon the effectiveness of this Agreement, each reference in the Loan  Documents to “the Credit Agreement” shall mean this Agreement.    [Signature pages to follow.]        





 






  [SIGNATURE PAGE TO CREDIT AGREEMENT]  IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed  and delivered as of the date first above written.  BORROWERS: NEOPHOTONICS CORPORATION,  a Delaware corporation         By: /s/ Elizabeth Eby   Name:  Title:  Elizabeth Eby  Chief Financial Officer                   





 






  [SIGNATURE PAGE TO CREDIT AGREEMENT]   WELLS FARGO BANK, NATIONAL  ASSOCIATION,   a national banking association,   as Agent and as a Lender         By: /s/ David Klages   Name: David Klages    Its Authorized Signatory