Document:

prxl10.4 Stock Purchase Agreement Between PAREXEL and HERON

STOCK PURCHASE AGREEMENT
BY AND AMONG
PAREXEL INTERNATIONAL HOLDING B.V.,
HERON GROUP LIMITED,
THE STOCKHOLDERS OF HERON GROUP LIMITED
(NAMED HEREIN)
AND
JOHN KERRIGAN, SOLELY IN HIS CAPACITY AS REPRESENTATIVE
April 30, 2013

1

TABLE OF CONTENTS
	
			
	 
	 
	Page

	 
	 
	 

	ARTICLE I
	PURCHASE AND SALE
	1

	 
	 
	 

	1.1
	Purchase and Sale
	1

	1.2
	The Closing
	1

	1.3
	Purchase Price
	1

	1.4
	Actions at the Closing
	1

	1.5
	Adjustment After the Closing
	3

	1.6
	Options and Warrants
	5

	1.7
	Escrow Arrangements
	5

	1.8
	Earn-Out Consideration
	6

	1.9
	Representative
	15

	1.10
	Withholding Obligations
	17

	 
	 
	 

	ARTICLE II
	REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLERS
	18

	 
	 
	 

	2.1
	Authorization
	18

	2.2
	Noncontravention
	18

	2.3
	Ownership of Stock
	18

	2.4
	Litigation
	19

	2.5
	Brokers’ Fees
	19

	 
	 
	 

	ARTICLE III
	REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY AND THE SUBSIDIARIES
	19

	 
	 
	 

	3.1
	Organization, Qualification and Corporate Power
	19

	3.2
	Capitalization
	19

	3.3
	Authorization
	20

	3.4
	Noncontravention
	20

	3.5
	Subsidiaries
	21

	3.6
	Financial Statements
	22

	3.7
	Absence of Certain Changes
	24

	3.8
	Undisclosed Liabilities
	25

	3.9
	Tax Matters
	25

	3.10
	Assets
	32

	3.11
	Owned Real Property
	33

	3.12
	Real Property Leases
	33

	3.13
	Intellectual Property
	34

	3.14
	Inventory
	38

	3.15
	Contracts
	38

	3.16
	Accounts Receivable
	40

	3.17
	Powers of Attorney
	41

i

	
			
	3.18
	Insurance
	41

	3.19
	Litigation
	41

	3.20
	Warranties
	41

	3.21
	Employees
	42

	3.22
	Employee Benefits
	44

	3.23
	Environmental Matters
	48

	3.24
	Legal Compliance
	48

	3.25
	Customers and Suppliers
	49

	3.26
	Permits
	50

	3.27
	Certain Business Relationships With Affiliates
	50

	3.28
	Brokers’ Fees
	50

	3.29
	Books and Records
	50

	3.30
	Data Protection
	50

	3.31
	Prepayments, Prebilled Invoices and Deposits
	52

	3.32
	Customer Offerings
	52

	3.33
	Disclosure
	52

	3.34
	No Further Representations; Projections
	52

	 
	 
	 

	ARTICLE IV
	REPRESENTATIONS AND WARRANTIES OF THE BUYER
	53

	 
	 
	 

	4.1
	Organization and Corporate Power
	53

	4.2
	Authorization of Transaction
	53

	4.3
	Noncontravention
	54

	4.4
	Broker’s Fees
	54

	4.5
	Disclosure
	54

	4.6
	No Further Representations
	54

	 
	 
	 

	ARTICLE V
	COVENANTS
	54

	 
	 
	 

	5.1
	Cooperation in Litigation
	54

	5.2
	Transition Assistance
	55

	5.3
	Tax Matters
	55

	5.4
	Expenses
	59

	5.5
	Heron Market Access Limited Name Change
	59

	5.6
	Data Room Contents
	60

	5.7
	Company Employees and Company Employee Plans
	60

	5.8
	Key Employee Retention Plan
	60

	5.9
	Equity Interest in HHPL
	60

	5.10
	Further Assurances
	61

	 
	 
	 

	ARTICLE VI
	INDEMNIFICATION
	61

	 
	 
	 

	6.1
	Indemnification
	61

	6.2
	Indemnification Claims
	64

	6.3
	Survival of Representations and Warranties
	68

	6.4
	Limitations
	69

ii

	
			
	6.5
	Payments
	70

	 
	 
	 

	ARTICLE VII
	PROPRIETARY INFORMATION; NO SOLICITATION AND NON-COMPETITION
	70

	 
	 
	 

	7.1
	Proprietary Information
	70

	7.2
	No Solicitation or Hiring of Former Employees
	71

	7.3
	Non-Competition Agreement
	72

	 
	 
	 

	ARTICLE VIII
	DEFINITIONS
	74

	 
	 
	 

	ARTICLE IX
	MISCELLANEOUS
	90

	 
	 
	 

	9.1
	Press Releases and Announcements
	90

	9.2
	No Third Party Beneficiaries
	90

	9.3
	Entire Agreement
	90

	9.4
	Succession and Assignment
	90

	9.5
	Counterparts and Facsimile Signature
	90

	9.6
	Headings
	90

	9.7
	Notices
	91

	9.8
	Governing Law
	91

	9.9
	Amendments and Waivers
	92

	9.10
	Severability
	92

	9.11
	Submission to Jurisdiction
	92

	9.12
	Specific Performance
	93

	9.13
	Representation by Counsel
	93

	9.14
	Construction
	93

	 
	 
	 

	Exhibit A -
	[RESERVED]
	 

	Exhibit B -
	Form of Opinion of U.K. Counsel to the Company and the Sellers
	 

	Exhibit C -
	Form of Employment Agreement between the Company and John Kerrigan
	 

	Exhibit D -
	Form of Consulting Agreement between the Company and Paul Howard
	 

	Exhibit E -
	Form of Consulting Agreement between the Company and Chris Knight
	 

	Exhibit F-1 -
	Form of Key Employee Agreement (United Kingdom)
	 

	Exhibit F-2 -
	Form of Key Employee Agreement (United States)
	 

	Exhibit F-3 -
	Form of Key Employee Agreement (India)
	 

	Exhibit F-4 -
	Form of Key Employee Agreement (Sweden)
	 

	Exhibit G -
	Form of Release
	 

	Exhibit H -
	Financial Model
	 

	Exhibit I -
	Form of Escrow Agreement
	 

	Schedule I -
	Allocation of Purchase Price
	 

	Schedule II -
	Estimated Closing Adjustment Statement
	 

	Schedule 1.4(a)(iv)
	Resignations
	 

iii

	
			
	Schedule 1.4(a)(x)
	Related Party Agreement Terminations
	 

	Schedule 5.8
	Key Employee Retention Plan
	 

iv

STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the “Agreement”) is entered into as of April 30, 2013, by and among PAREXEL International Holding B.V., a company organized under the laws of the Netherlands (the “Buyer”); Heron Group Limited, a private limited company organized under the laws of England and Wales (the “Company”); the Persons named as sellers on the signature pages attached hereto (collectively, the “Sellers”); and John Kerrigan, solely in such Person’s capacity as the representative of the Sellers (the “Representative”).  The Buyer, the Company, the Sellers and the Representative are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.
RECITALS
A.    The Individual Sellers are the legal owners of all the Company Shares.  The Individual Sellers and the Entity Seller are, between them, the beneficial owners of all the Company Shares.    
B.    The Parties desire to enter into this Agreement pursuant to which each Individual Seller agrees to sell to the Buyer the entire legal interest in and such beneficial interest as is described in Section 3.2(b) of the Disclosure Schedule in the Company Shares and the Entity Seller agrees to sell to the Buyer such beneficial interest as is described in Section 3.2(b) of the Disclosure Schedule in the Company Shares and the Buyer agrees to purchase from each Seller the same in the terms contained herein.
Now, therefore, in consideration of the representations, warranties and covenants herein contained, the Parties hereby agree as follows.
ARTICLE I 
PURCHASE AND SALE
1.1    Purchase and Sale.  At the Closing, upon the terms set forth herein, the Buyer shall purchase from each Seller, and each Seller shall sell, convey, assign, transfer, and deliver to the Buyer, all of their respective legal and/or beneficial interest in the Company Shares as described in Section 3.2(b) of the Disclosure Schedule, free and clear of all Security Interests (other than restrictions on transfer arising under applicable securities Laws).
1.2    The Closing.  The Closing shall take place by remote exchange of signature and documents simultaneously with the execution and delivery of this Agreement.
1.3    Purchase Price.  The Buyer shall pay the Purchase Price for the Company Shares to the Sellers.  The Purchase Price shall be allocated among the Sellers in accordance with Schedule I.  The Company has prepared and delivered to the Buyer the statement attached as Schedule II (the “Estimated Closing Adjustment Statement”) setting forth the Estimated Closing Adjustment.
1.4    Actions at the Closing.  At the Closing:

1

(a)    the Company and the Sellers shall deliver to the Buyer:
(i)    certificates representing (A) all of the Company Shares duly endorsed together with duly executed transfers into the name of the Buyer or its nominee in respect of all of the Company Shares and any other documents necessary to transfer to the Buyer with full title guarantee the Company Shares free and clear of all Security Interests (other than restrictions on transfer arising under applicable securities Laws) and (B) all of the outstanding equity interests in each Subsidiary;
(ii)    duly executed written instruments (A) releasing (1) any Security Interest (other than Permitted Security Interests) on any asset, right or property of the Company or any Subsidiary and (2) any Security Interest (other than restrictions on transfer arising under applicable securities Laws) on any Company Shares or any other equity securities of the Company or any Subsidiary, and (B) authorizing the filing of UCC-3 termination statements (or other comparable documents) for all UCC-1 financing statements (or other comparable documents) filed in connection with any such Security Interest;
(iii)    [reserved];
(iv)    resignations from such position (but not of employment), effective as of the Closing, of each director and officer (or person holding a comparable position) of the Company or any Subsidiary;
(v)    an opinion of Bird and Bird, U.K. counsel to the Company and the Sellers, in the form attached hereto as Exhibit B addressed to the Buyer and dated as of the Closing Date; 
(vi)    [reserved];  
(vii)    each of the following duly executed, as applicable, by the Company and each Seller party thereto: (A) an employment document between the Buyer or an Affiliate of the Buyer and John Kerrigan in the form attached as Exhibit C hereto; (B) an employment document between the Company and Paul Howard in the form attached as Exhibit D hereto; and (C) an employment document between the Company and Chris Knight in the form attached as Exhibit E hereto;
(viii)    key employee agreements with each Key Employee (other than the Sellers), each in the form attached hereto as Exhibit F-1 (in the case of any such person employed in the United Kingdom), Exhibit F-2 (in the case of any such person employed in the United States), Exhibit F-3 (in the case of any such person employed in India) or Exhibit F-4 (in the case of any such person employed in Sweden), duly executed by employee party thereto;
(ix)    evidence that the Company and the Subsidiaries have terminated the Heron 401(k) Plan effective no later than the calendar day before the Closing Date on terms reasonably satisfactory to the Buyer;  

2

(x)    evidence that all Contracts and other arrangements listed on Schedule 1.4(a)(x) have been terminated on terms satisfactory to the Buyer;                                       
(xi)    releases in the form attached hereto as Exhibit G duly executed by each Seller;
(xii)    such other certificates and instruments (including, where applicable, certificates of good standing of the Company and the Subsidiaries in their jurisdictions of organization and the various foreign jurisdictions in which they are qualified, certified charter or organizational documents, certificates as to the incumbency of officers and the adoption of authorizing resolutions) as the Buyer shall reasonably request in connection with the Closing;
(b)    the Buyer shall deliver to the Representative such certificates and instruments (including certificates of good standing of the Buyer in its jurisdiction of organization, certified charter documents, certificates as to the incumbency of officers and the adoption of authorizing resolutions) as he shall reasonably request in connection with the Closing; and
(c)    the Buyer shall pay the Purchase Price in accordance with Section 1.3.  
1.5    Adjustment After the Closing.  The Purchase Price shall be subject to adjustment as follows:
(a)    Not later than ninety (90)  calendar days after the Closing Date, the Buyer shall deliver to the Representative the Closing Adjustment Statement.  The Closing Adjustment Statement shall be prepared in accordance with GAAP applied consistently with the Company’s past practices (to the extent such past practices are consistent with GAAP).
(b)    The Closing Adjustment Statement delivered pursuant to Section 1.5(a) shall be accompanied by a statement setting forth the amount, if any, by which the total of the Closing Adjustment Items is greater than, or less than, the Estimated Closing Adjustment.
(c)    The Representative shall have reasonable access to the books and records of the Company necessary to verify the accuracy of the Closing Adjustment Statement delivered pursuant to Section 1.5(a) and the statement delivered pursuant to Section 1.5(b) during normal business hours upon reasonable advance request to the Buyer solely for the purpose of verifying the accuracy of such documents; provided that such access shall not include documents the disclosure of which would violate any obligation of the Company or any  Subsidiary with respect to confidentiality, jeopardize protections afforded the Company or any Subsidiary under the attorney-client privilege or the attorney work product doctrine or similar doctrine or protection, or violate any applicable Law.  In the event that the Representative disputes the Closing Adjustment Statement or the amount of the Closing Adjustment Items, the Representative shall notify the Buyer in writing (the “Dispute Notice”) of the amount, nature and basis of such dispute, within thirty (30) calendar days after delivery of the Closing Adjustment Statement.  If the Representative does not provide a Dispute Notice within such thirty (30) calendar day period, 

3

the Representative and the Sellers shall be deemed to have accepted the Closing Adjustment Statement and the calculation of the Closing Adjustment Items delivered by the Buyer, which shall be final, binding and conclusive for all purposes hereunder.  Any such Dispute Notice shall specify those items or amounts as to which the Representative disagrees, and the Representative shall be deemed to have agreed with all other items and amounts contained in the Closing Adjustment Statement and the amount of the other Closing Adjustment Items delivered pursuant to Sections 1.5(a) and 1.5(b); provided however that other Closing Adjustment Items shall be subject to modification to the extent that the Neutral Accountant concludes that the final determination of the disputed Closing Adjustment Items by the Neutral Accountant (defined below) impacts the calculations of such other Closing Adjustment Items.  In the event of such a dispute, the Buyer and the Representative shall first use their Reasonable Best Efforts to reach agreement on the disputed items or amounts in order to determine the amount of the Closing Adjustment Items, which amount shall not be less than the Buyer’s calculation delivered pursuant to Section 1.5(b) nor more than the Representative’s calculation delivered pursuant to this Section 1.5(c).  If the Buyer and the Representative are unable to resolve the dispute within thirty (30) calendar days after delivery of the Dispute Notice, then any remaining items in dispute shall be submitted to an independent internationally recognized accounting firm selected in writing by the Representative and the Buyer or, if the Representative and the Buyer fail or refuse to select a firm within ten (10) calendar days after written request therefor by the Representative or the Buyer, such an independent internationally recognized accounting firm shall be selected in accordance with the rules of the Boston, Massachusetts office of the AAA (the “Neutral Accountant”).  All determinations and calculations pursuant to this Section 1.5(c) shall consider only those Closing Adjustment Items as to which the Representative has disagreed; provided however that other Closing Adjustment Items shall be subject to modification to the extent that Neutral Accountants concludes that the final determination of the disputed Closing Adjustment Items by the Neutral Accountant impacts the calculations of such other Closing Adjustment Items.  The Buyer and the Representative will each present in writing to the Neutral Accountant and to the other (A) its proposed resolution of the disputed items, and (B) any materials it wishes to present to justify the resolution it so presents.  The Neutral Accountant shall review each of the proposed resolutions and the supporting materials submitted in favor of the proposed resolutions to resolve the disputed items.  The Neutral Accountant’s determination shall be made within thirty (30) calendar days after its engagement (which engagement shall be made no later than five (5) Business Days after the time of the submission of the objections to the Neutral Accountant), or as soon thereafter as possible, shall be set forth in a written statement delivered to the Buyer and the Representative and shall be final, binding, conclusive and non-appealable by the Parties hereto, absent manifest error.  A judgment on the determination made by the Neutral Accountant pursuant to this Section 1.5 may be entered in and enforced by any court having jurisdiction thereover.  Following the resolution of all disputes pursuant to this Section 1.5(c), the Buyer shall deliver to the Representative the Closing Adjustment Statement as revised to reflect such resolution (the “Final Closing Adjustment Statement”).
(d)    The fees and expenses of the Neutral Accountant in connection with the resolution of disputes pursuant to Section 1.5(c) shall be allocated by the Neutral Accountant 

4

between the Buyer and the Sellers according to the degree to which the positions of the respective parties on the disputed items are not accepted by the Neutral Accountant.
(e)    Immediately upon the expiration of the thirty (30) calendar day period for giving the Dispute Notice, if no such notice is given, or upon notification by the Representative to the Buyer that no such notice will be given, or immediately upon the resolution of disputes, if any, pursuant to this Section 1.5, the Purchase Price shall be adjusted as follows (the “Adjusted Purchase Price”):
(i)    If the amount of the Final Closing Adjustment exceeds the amount of the Estimated Closing Adjustment, the Sellers shall pay to the Buyer by wire transfer of immediately available funds an amount equal to such deficiency no later than two (2) Business Days following the final determination of the Final Closing Adjustment (provided that, to the extent it so elects, Buyer shall also be entitled to recover such deficiency pursuant to the terms of the Escrow Agreement);
(ii)    If the amount of the Final Closing Adjustment is equal to the amount of the Estimated Closing Adjustment, the Purchase Price shall not be adjusted; and
(iii)    If the amount of the Estimated Closing Adjustment exceeds the Final Closing Adjustment (such excess, the “Closing Adjustment Surplus”), the Buyer shall, no later than two (2) Business Days following the final determination of the Final Closing Adjustment, (A) pay to the Sellers by wire transfer of immediately available funds an amount equal to 90% of the Closing Adjustment Surplus (with such payment allocated among the Sellers in accordance with the percentages set forth on Schedule I) and (B) deposit with the Escrow Agent an amount equal to 10% of the Closing Adjustment Surplus in escrow pursuant to the Escrow Agreement.
1.6    Options and Warrants.  There are no Options or Warrants issued or outstanding, nor is there any Company Stock Plan.
1.7    Escrow Arrangements.
(a)    As promptly as practicable following the execution of the Escrow Agreement by the Buyer, the Representative and the Escrow Agent and the Escrow Agent’s confirmation that the escrow accounts contemplated by the Escrow Agreement are available to accept funds, the Buyer shall deliver to the Escrow Agent the Original Escrow Amount for the purpose of (i) providing security for any adjustment to the amount of the Purchase Price pursuant to Section 1.5 and (ii) securing the indemnification obligations of the Sellers set forth in Article VI, it being understood that the parties will use their respective reasonable best efforts to cause the execution of the Escrow Agreement and the delivery to the Escrow Agent of the Original Escrow Amount as promptly as practicable and in no event later than 5 Business Days after the date hereof.  The Escrow Fund shall be held by the Escrow Agent under the Escrow Agreement pursuant to the terms thereof.  The Escrow Fund shall be held as a trust fund and shall not be subject to any lien, attachment, trustee process or any other judicial process of any creditor of 

5

any party, and shall be held and disbursed solely for the purposes and in accordance with the terms of the Escrow Agreement.
(b)    The Sellers, by their execution of this Agreement, hereby approve the Escrow Agreement and of all of the arrangements relating thereto, including the placement of the Original Escrow Amount in the escrow established pursuant to this Section 1.7.
1.8    Earn-Out Consideration.  
(a)    In addition to the Adjusted Purchase Price, the Buyer shall pay additional consideration of $14,200,000 to the Sellers (with such consideration to be allocated among the Sellers in accordance with the percentages set forth on Schedule I) subject to the terms and conditions set forth in this Section 1.8.  The aggregate amount payable by the Buyer pursuant to this Section 1.8(a), after the deduction of damages, is referred to herein as the “Earn-Out Consideration” and the aggregate value of the Adjusted Purchase Price plus the Earn-Out Consideration is referred to herein as the “Aggregate Consideration”.  Earn-Out Consideration shall be payable as follows:
(i)    in respect of the First Period (as defined in Section 1.8(b) below),  consideration of $6,000,000, less any damages calculated by reference to Section 1.8(b), shall be paid once Company EBITDA for the First Period has been finally determined, provided that the aggregate amount payable pursuant to this Section 1.8(a)(i) shall not exceed $6,000,000 (the aggregate amount actually payable pursuant to this Section 1.8(a)(i) as finally determined being referred to as the “First Period Earn-Out Consideration”);
(ii)    in respect of the Second Period (as defined in Section 1.8(c) below), consideration of $14,200,000, less any damages calculated by reference to Section 1.8(c), shall be paid once Combined Business EBITDA for the Second Period has been finally determined, provided that the aggregate amount payable pursuant to this Section 1.8(a)(ii) shall not exceed $14,200,000 minus the First Period Earn-Out Consideration (the aggregate amount actually payable pursuant to this Section 1.8(a)(ii) as finally determined being referred to as the “Second Period Earn-Out Consideration”);
(iii)    in respect of the Third Period (as defined in Section 1.8(d) below), consideration of $14,200,000, less any damages calculated by reference to Section 1.8(d), shall be paid once Combined Business EBITDA for the Third Period has been finally determined, provided that the aggregate amount actually  payable pursuant to this Section 1.8(a)(iii) shall not exceed $14,200,000 minus the First Period Earn-Out Consideration and minus the Second Period Earn-Out Consideration.  
(b)    The Sellers, jointly and severally, hereby represent and warrant to the Buyer that the Company EBITDA for the period from July 1, 2012 through June 30, 2013 (the “First Period”) shall not be less than $4,200,000, and to the extent that it is less than $4,200,000 then the Sellers shall pay damages to the Buyer calculated as follows:

6

(i)    if the Company EBITDA for the First Period is less than $3,000,000, damages in the amount of $6,000,000;
(ii)    if the Company EBITDA for the First Period is between $3,000,000 and $4,200,000, the amount of damages shall be the product of (A) the amount by which the Company EBITDA for the First Period is less than $4,200,000 and (B) five (5); and
(iii)    if the Company EBITDA for the First Period is equal to or exceeds $4,200,000, the amount of damages shall be nil.
(c)    The Sellers, jointly and severally, hereby represent and warrant that the Combined Business EBITDA for the period from July 1, 2013 through June 30, 2014 (the “Second Period”) shall exceed $5,735,000, and to the extent that it does not exceed $5,735,000 then the Sellers shall pay damages to the Buyer calculated as follows:
(i)    if the Combined Business EBITDA for the Second Period is less than $4,200,000, damages in the amount of $14,200,000;
(ii)    if the Combined Business EBITDA for the Second Period is equal to or exceeds $4,200,000, but is less than $5,735,000, the amount of damages shall be the product of (A) the amount by which the Combined Business EBITDA for the Second Period is less than $5,735,000 and (B) nine and one-quarter (9.25);
(iii)    if the Combined Business EBITDA for the Second Period is equal to or exceeds $5,735,000, the amount of damages shall be nil.
(d)    The Sellers, jointly and severally, hereby represent and warrant that the Combined Business EBITDA for the period from July 1, 2014 through June 30, 2015 (the “Third Period”) shall exceed $7,532,258 and to the extent that it does not exceed $7,532,258 then the Sellers shall pay damages to the Buyer calculated as follows:
(i)    if the Combined Business EBITDA for the Third Period is less than $5,700,000, damages in the amount of $14,200,000;
(ii)    if the Combined Business EBITDA for the Third Period is equal to or exceeds $5,700,000, but is less than $7,532,258, the amount of damages shall be the product of (A) the amount by which the Combined Business EBITDA for the Third Period is less than $7,532,258 and (B) seven and three-quarters (7.75);
(iii)    if the Combined Business EBITDA for the Third Period is equal to or exceeds $7,532,258, the amount of damages shall be nil.
(e)    Notwithstanding any other provision in this Agreement to the contrary, in no event shall the aggregate Earn-Out Consideration payable, net of damages, exceed $14,200,000 and in no event shall the damages payable by the Sellers pursuant to Sections 1.8(b) to (d) exceed $14,200,000 in aggregate.  Any damages which the Sellers are required to pay pursuant to Sections 1.8(b) to (d) shall be set-off so as to reduce the Earn-Out Consideration 

7

payable pursuant to Section 1.8(a).  The sole and exclusive remedy of the Buyer in respect of any breaches of the representations and warranties in Sections 1.8(b) to (d) shall be its rights of set off under this Section 1.8(e).  Under no circumstances shall the Sellers be liable for any loss, damage or other claim alleged or suffered by the Buyer for breach of the representations and warranties in Sections 1.8(b) to (d).
(f)    For purposes of this Section 1.8, the following terms shall have the respective meanings set forth below:
(i)    “Business Unit” shall mean (A) with respect to the period prior to July 1, 2013, the Company and its Subsidiaries, and (B) with respect to the period after June 30, 2013, the Combined Business.
(ii)    “Business Unit EBITDA” shall mean (A) with respect to the Earn-Out Year ending June 30, 2013, Company EBITDA, and (B) with respect to any Earn-Out Year ending after June 30, 2013, Combined Business EBITDA.
(iii)    “Cause” shall mean (A) a good faith finding by the Buyer that (1) the Manager (as defined below) has, except as a result of his or her death or disability or permanent incapacity due to ill health, failed to perform his or her reasonably assigned duties for the Business Unit (which duties shall be assigned by the Buyer or its designee) and has failed to remedy such failure within ten (10) Business Days following written notice from the Buyer to the Manager notifying him or her of such failure and specifying in reasonable detail the nature of such failure, or (2) the Manager has engaged in dishonesty, gross negligence or misconduct in connection with his or her employment by the Business Unit, or (B) the conviction of the Manager of, or the entry of a pleading of guilty or nolo contendere by the Manager to, any crime involving moral turpitude or any felony.
(iv)    “Combined Business” shall mean the integrated business comprised of (A) the Company and its Subsidiaries and (B) the RMA Business.
(v)    “Combined Business EBITDA” shall mean, with respect to the specified period, the earnings before interest, taxes, depreciation and amortization of the Combined Business during such period, as determined on a combined and consolidated basis in accordance with GAAP as applied by the Buyer in the preparation of its financial statements; provided that (A) any bonuses payable pursuant to Section 5.8 shall be excluded from the calculation of Company Business EBITDA, (B) the calculation of Company Business EBITDA will include as an expense the Normal Participant Bonus, (C) the calculation of Company Business EBITDA will exclude any overhead allocations actually made for information technology, finance, human resources, legal, corporate and marketing, (D) notwithstanding the foregoing clause (C), the calculation of Company Business EBITDA will include as an expense an overhead allocation for information technology, finance, human resources, legal, corporate and marketing in an aggregate amount equal to (1) for the Second Period, the greater of $1,850,000 and 8.4% of the revenue of the Combined Business for the Second Period and (2) for the Third Period, the greater of $2,200,000 and 8.4% of the revenue of the Combined Business for the Third Period, (E) the calculation of Company Business EBITDA will include an expense 

8

for the cost of any facilities shared between Combined Business, on the one hand, and the Buyer Parent or any Subsidiary or division of the Buyer not comprising a part of the Combined Business on the other hand, in an amount calculated in accordance with the allocation policies and procedures then applicable to all Subsidiaries and divisions of the Buyer Parent and (F) for the avoidance of doubt, the calculation of Combined Business EBITDA will include the actual costs of any third party recruiting costs incurred by or on behalf of the Combined Business.
(vi)    “Company EBITDA” shall mean, with respect to the specified period, the earnings before interest, taxes, depreciation and amortization of the Company and its Subsidiaries during such period, as determined on a consolidated basis in accordance with GAAP as applied by the Buyer in the preparation of its financial statements; provided that (A) any costs or expenses encompassed within any line item category specified on the table below shall be excluded from the calculation of Company EBITDA to the extent such costs or expenses are incurred on or prior to the date hereof and do not, in the aggregate, exceed the “Maximum Amount Excludable” specified with respect to such category on the table below:
	
		
	Cost or Expense Category
	Maximum Amount Excludable

	Key man insurance, pension and car allowances for the Sellers
	$81,000

	Salary and National Insurance costs for Chris Knight
	$240,000

	Retroactive salary increases for the Sellers
	$350,000

	Dividend payments to the Sellers (if otherwise includable as expenses in the determination of Company EBITDA)
	$270,000

	Retention bonuses paid to junior staff and senior management
	$650,000

	Expenses related to the transaction contemplated by this Agreement, including travel expenses and fees for investment banking, legal and accounting services
	$250,000

(B), the aggregate amount excluded pursuant to the foregoing clause (A) shall not exceed $1,800,000, (C) the calculation of Company EBITDA will exclude any vacation accrual and (D) the calculation of Company EBITDA will exclude any intercompany charges and corporate allocations (except that intercompany services, if any, provided to the Company after the Closing will be included in the calculation of Company EBIDTA at the charges agreed by the Buyer and the Manager.    

9

(vii)    “Directed Actions” shall mean actions that the Buyer or its designee directs the Manager to undertake in connection with the operation of the Combined Business that either (A) are consistent with actions taken by the Buyer in the management of other subsidiaries and/or business units or (B) would not reasonably be expected to have a material adverse impact on the Combined Business EBITDA.  By way of example and without limitation, Directed Actions include obtaining insurance from the Buyer’s preferred insurer and making bulk purchases from the Buyer’s preferred vendors.  
(viii)     “Earn-Out Period” shall mean the period from the Closing Date through June 30, 2015.
(ix)    “Earn-Out Year” shall mean, as applicable, (A) the period from July 1, 2012 through June 30, 2013, (B) the period from July 1, 2013 through June 30, 2014 or (C) the period from July 1, 2014 through June 30, 2015.
(x)    “Financial Model” shall mean the financial model attached to this Agreement as Exhibit H hereto (it being acknowledged and agreed that the revenue figures therein are goals not entirely within the control of the Parties or any individual).
(xi)    “Manager” shall mean John Kerrigan, or his successor approved in writing by the Buyer.
(xii)    “Normal Participant Bonus” shall mean with respect to the Second Period and the Third Period, respectively, the aggregate amount of bonuses that would have been payable to the Participants with respect to such period as determined in accordance with the historical compensation practices of the Company and the Subsidiaries; provided that the Normal Participant Bonus shall not be less than $298,000 for the Second Period or $357,000 for the Third Period.  
(xiii)    “RMA Business” shall mean the Buyer’s Reimbursement Market Access business, including market access services, health economics services and value dossiers, but excluding helplines.
(g)    No later than two (2) Business Days after the Buyer files its Annual Report on Form 10-K with the SEC for a fiscal year that coincides with any Earn-Out Year, the Buyer shall (i) at its expense, but with the full cooperation of the Manager, prepare (or cause to be prepared) and deliver to the Representative a calculation of the Business Unit EBITDA and a statement (the “Earn-Out Statement”) of the amount, if any, of the Earn-Out Consideration payable in respect of such Earn-Out Year and (ii) pay to the Sellers (with such payment to be allocated among the Sellers in accordance with the percentages set forth on Schedule I), by wire transfer of immediately available funds, the amount of Earn-Out Consideration specified on the Earn-Out Statement.  Unless the Representative shall, in accordance with the provisions of Section 1.8(h), challenge the Buyer’s determination of the Business Unit EBITDA for the Earn-Out Year within thirty (30) calendar days after the delivery of the Buyer’s calculation thereof, the Buyer’s determination shall be conclusive and binding upon the Representative and the Sellers.

10

(h)    The Representative shall have reasonable access to the books and records of the Company necessary to verify the accuracy of any Earn-Out Statement delivered pursuant to Section 1.5(g) during normal business hours upon reasonable advance request to the Buyer solely for the purpose of verifying the accuracy of such document; provided that such access shall not include documents the disclosure of which would violate any obligation of the Company or any Subsidiary with respect to confidentiality, jeopardize protections afforded the Company or any Subsidiary under the attorney-client privilege or the attorney work product doctrine or similar doctrine or protection, or violate any applicable Law.  If the Representative disputes the calculation of the Business Unit EBITDA for any Earn-Out Year, the Representative shall notify the Buyer in writing by delivery of a notice (an “Earn-Out Dispute Notice”) within thirty (30) calendar days after delivery of the Buyer’s calculation of the Business Unit EBITDA for such Earn-Out Year, which Earn-Out Dispute Notice shall set forth in reasonable detail the basis for such dispute.  Any such dispute shall be resolved in accordance with the procedures set forth in Section 1.5(c) of this Agreement.  If such resolution results in a determination that the Buyer owes additional Earn-Out Consideration for such Earn-Out Year, the Buyer shall pay such additional Earn-Out Consideration to the Sellers (with such payment to be allocated among the Sellers in accordance with the percentages set forth on Schedule I), by wire transfer of immediately available funds, no later than two (2) Business Days following such resolution.  The fees and expenses of the Neutral Accountant in connection with the resolution of disputes pursuant to Section 1.8(h) shall be allocated by the Neutral Accountant between the Buyer and the Sellers according to the degree to which the positions of the respective parties on the disputed items are not accepted by the Neutral Accountant.
(i)    The Sellers acknowledge and agree that the Buyer may make from time to time such business decisions as it deems appropriate, in its sole discretion, in the conduct of the business of the Buyer and its subsidiaries (including the Business Unit, the Company and the Subsidiaries), including actions that may have an impact on the Business Unit EBITDA and/or the Earn-Out Consideration.  No Seller will have any right to claim any lost Earn-Out Consideration or other damages as a result of such decisions so long as the actions were not taken by the Buyer in (i) bad faith for the principal purpose of frustrating provisions of this Section 1.8 or (ii) violation of Section 1.8(j).  Notwithstanding anything to the contrary, except as may be otherwise agreed in writing by the Manager and the Buyer (which agreement shall specify the applicable charges), neither the Buyer nor any of its Affiliates (other than the Company and the Subsidiaries) shall have any obligation to provide any services to the Company or any of the Subsidiaries during the period from the Closing through June 30, 2013.      
(j)    Notwithstanding Section 1.8(i), but subject to the provisions of Sections 1.8(k) and 1.8(l), which Sections 1.8(k) and 1.8(l) shall each prevail in the event of any conflict between either such Section and this Section 1.8(j):
(i)    During the period from the Closing Date through June 30, 2013, the Manager will have management and budget responsibility, subject to the review, direction and supervision of the Buyer, for the normal day to day operation of the Company and the Subsidiaries; provided, however that the Sellers shall cause the Manager to operate the Company and the Subsidiaries (A) on a basis that is consistent with the Financial Model, (B) except as 

11

otherwise provided by the Financial Model, in a manner consistent with the Ordinary Course of Business, (C) using proper business practices, (D) in compliance with applicable Law, (E) in compliance with an annual budget and business plan submitted by the Manager, which shall be approved by the Buyer or its designee in its reasonable discretion, and any budget increases from the Financial Model, which shall be approved by the Buyer or its designee in its reasonable discretion, and (F) in compliance with all other policies and procedures generally applicable to other subsidiaries or business units of the Buyer Parent.  Without limiting the proviso to the preceding sentence, during the period from the Closing Date through June 30, 2013, neither the Company nor any of the Subsidiaries shall, without the prior written consent of the Buyer or its designee, (v) award or pay any bonus to any Participant, (w) accept pro bono or below market products or services or employee compensation (and the rate of cash cost associated with each of the base salary, bonus, automobile allowance and other compensatory benefits, respectively, provided to each of John Kerrigan, Paul Howard and Chris Knight during such period shall be equal to his rate for each such item during the period from July 1, 2012 through March 31, 2013, (x) make any expenditure, or incur any expense, not provided for in the then effective annual budget for the Company and the Subsidiaries approved by the Buyer or its designee, (y) take any action that, if taken during the period from December 31, 2012 through the Closing Date, would have been required to be set forth in Section 3.7 of the Disclosure Schedule or (z) bind the Buyer Parent or any subsidiary of the Buyer Parent, including the Company or any Subsidiary, for any obligation which extends beyond the Earn-Out Period.  The Sellers shall cause the Manager to fully cooperate with the Buyer in the preparation of each Earn-Out Statement and to implement any Directed Action.
(ii)    During the period from July 1, 2013 through June 30, 2015, the Manager will have management and budget responsibility, subject to the review, direction and supervision of the Buyer, for the normal day to day operation of the Combined Business; provided, however that the Sellers shall cause the Manager to operate the Combined Business (A) on a basis that is consistent with the Financial Model, (B) except as otherwise provided by the Financial Model, in a manner consistent with the Ordinary Course of Business, (C) using proper business practices, (D) in compliance with applicable Law, (E) in compliance with an annual budget and business plan submitted by the Manager, which shall be approved by the Buyer or its designee in its reasonable discretion, and any budget increases from the Financial Model, which shall be approved by the Buyer or its designee in its reasonable discretion, and (F) in compliance with all other policies and procedures generally applicable to other subsidiaries or business units of the Buyer Parent.  Without limiting the proviso to the preceding sentence, during the period from July 1, 2013 through the end of the Earn-Out Period, the Combined Business shall not, without the prior written consent of the Buyer or its designee, (v) award or pay any bonus to any Participant except as required pursuant to Section 5.8, (w) accept pro bono or below market products or services or employee compensation (and the rate of cash cost associated with each of the base salary, bonus, automobile allowance and other compensatory benefits, respectively, provided to each of John Kerrigan and Paul Howard during such period shall be equal to his rate for each such item during the period from July 1, 2012 through March 31, 2013, (x) make any expenditure, or incur any expense, not provided for in the then effective annual budget for the Combined Business approved by the Buyer or its designee, (y) take any action that, if taken by the Company or any Subsidiary during the period from December 31, 

12

2012 through the Closing Date, would have been required to be set forth in Section 3.7 of the Disclosure Schedule or (z) bind the Buyer Parent or any subsidiary of the Buyer Parent, including the Combined Business, for any obligation which extends beyond the Earn-Out Period.  The Sellers shall cause the Manager to fully cooperate with the Buyer in the preparation of each Earn-Out Statement and to implement any Directed Action.
(iii)    For so long as he remains a full time employee of the Buyer or any of its Affiliates during the Earn-Out Period, pricing levels for the Company and the Combined Business for products and services will be set by John Kerrigan; provided that, (i) pricing levels will be established in accordance with the Financial Model and (ii) for so long as he remains a full time employee of the Buyer or any of its Affiliates during the Earn-Out Period, pricing levels for any of the Buyer’s strategic accounts and for bundled products and services with other of the Buyer’s or the Buyer’s Parent’s products and services shall be set jointly by John Kerrigan and the Buyer or its designee.  Except to the extent otherwise contemplated by the preceding sentence, all pricing shall be determined by the Buyer or its designee.
(iv)    For so long as John Kerrigan remains a full time employee of the Buyer or any of its Affiliates during the Earn-Out Period, the Buyer and the Company shall not terminate any employee of the Business Unit (including John Kerrigan) without the prior written consent of John Kerrigan (such consent not be unreasonably withheld, conditioned or delayed); provided that the Company and the Buyer may terminate any employee for cause without the prior written consent of John Kerrigan; provided further that for purposes of this sentence, “cause” shall be defined (A) as set forth in the applicable employee’s then effective employment agreement (if such employee is a party to a then effective employment agreement with the Buyer or any of its Affiliates that defines “cause”) or (B) if cause is not defined pursuant to the preceding clause (A), as reasonably determined by the Buyer in light of the employment policies, procedures and practices applicable to similarly situated employees of the Buyer and its Affiliates.  Additionally, for so long as John Kerrigan remains a full time employee of the Buyer or any of its Affiliates during the Earn-Out Period, the Buyer and the Buyer Parent shall not transfer or relocate any employee of the Company to another area or division of the Buyer’s or the Buyer’s Parent’s business without the prior written consent of John Kerrigan (such consent not be unreasonably withheld, conditioned or delayed).
(v)    During the Earn-Out Period, the Buyer will make available to the Company sales resources, of a type and amount determined by the Buyer in its reasonable judgment, to assist in the sale of the service offerings provided by the Company and its Subsidiaries as of the Closing Date.  The cost of such resources shall be allocated to the Business Unit.
(vi)    From the Closing Date through June 30, 2013, the Buyer will make commercially reasonable efforts to minimize any adverse impact of integration activities on the operations of the Company and the Subsidiaries.
(vii)    The Buyer shall not, and shall cause the Buyer Parent and the other subsidiaries of the Buyer Parent not to, except through the Combined Business, during the period from July 1, 2013 through the end of the Earn-Out Period, engage in any Competitive Business.

13

(k)    Notwithstanding the provisions of Section 1.8(j), the Buyer shall at all times have the absolute right to take such actions as the Buyer in good faith deems necessary or proper to (i) fulfill its fiduciary obligations to its shareholders so long as the actions were not taken by the Buyer in bad faith for the principal purpose of frustrating provisions of this Section 1.8, (ii) compel compliance with the provisions of Section 1.8(j)(i), (iii) prevent any act that would present a risk of impairment of the value of the Combined Business or remediate the impact of any act that has impaired the value of the Combined Business or (iv) terminate the Manager for Cause (the “Buyer’s Oversight Rights”).  The Buyer’s Oversight Rights shall include, but not be limited to, the right to (x) intervene in the business and affairs of the Combined Business, (y) approve and execute all agreements, contracts and other binding arrangements of the Combined Business and (z) overrule the decision-making and operating authority of the Manager.  The Sellers acknowledge and agree that the exercise of the Buyer’s Oversight Rights may have an impact on Combined Business EBITDA and/or the Earn-Out Consideration and no Seller will have any right to claim any lost Earn-Out Consideration or other damages as a result of such decisions so long as the actions were taken in accordance with the provisions of this Agreement.   
(l)    Notwithstanding anything in this Agreement to the contrary, if any of the following events shall occur, in addition to having the right to exercise the Buyer’s Oversight Rights for the remainder of the Earn-Out Period, the Buyer shall be permitted to exercise full and unconditional control of the Company, its Subsidiaries and the Combined Business and the Buyer shall not have any further obligation under this Section 1.8 (including any obligation to pay any Earn-Out Consideration):
(i)    The Combined Business EBITDA for the Second Period is less than $2,000,000.
(ii)    Any fraud or violation of Law by the Manager in connection with the exercise of his duties related to the Company, any of its Subsidiaries or the Combined Business, or any fraud or violation of Law by, other than at the direction of the Buyer, the Company, any of the Subsidiaries or the Combined Business, occurs.
(iii)    Any Seller breaches any obligation under Article VII or any obligation concerning non-competition, non-solicitation or confidentiality set forth in any agreement referred to in Section 1.4(a).
(m)    Notwithstanding any other provision in this Agreement to the contrary, all deals that either have been awarded, or are pending award, to the RMA Business as of the Closing Date will be sold and worked solely by the Buyer prior to July 1, 2013 and shall not be included in the calculation of Company EBITDA.  If, during the period from the Closing Date through June 30, 2013, the Buyer or any of its Affiliates receives a new Request For Proposal within the scope of the RMA Business, the Company will solely respond to and work the subject of such Request For Proposal during such period and such work shall be included in the calculation of Company EBITDA.

14

(n)    Notwithstanding any other provision in this Agreement to the contrary, the Buyer may elect to set off all or a portion of any Earn-Out Consideration to satisfy (i) any amount payable to the Buyer pursuant to Section 1.5, and (ii) any claim, whether resolved or pending, for indemnification by any Seller as provided in Section 6.1.
1.9    Representative.
(a)    In order to efficiently administer the transactions contemplated hereby, including (i) the determination of the Final Closing Adjustment, the Adjusted Purchase Price and any Earn-Out Consideration and (ii) the defense and/or settlement of any claims for which any Seller may be required to indemnify the Buyer pursuant to this Agreement, each Seller hereby designates, nominates, constitutes and appoints the Representative as such Seller’s representative, attorney-in-fact and agent.
(b)    Each Seller hereby authorizes the Representative (i) to make all decisions relating to the determination of the Final Closing Adjustment and the Adjusted Purchase Price pursuant to Section 1.5 and the Earn-Out Consideration pursuant to Section 1.8, (ii) to take all action necessary in connection with the defense and/or settlement of any claims for which any Seller may be required to indemnify the Buyer pursuant to Article VI hereof, (iii) to give and receive all notices required to be given under the Agreement, and (iv) to take any and all additional action as is contemplated to be taken by or on behalf of any Seller by the terms of this Agreement.
(c)    In the event that the Representative becomes unable to perform such Person’s responsibilities hereunder or resigns from such position, the Sellers (acting by the vote of the Sellers who immediately prior to the Effective Time held at least a majority of the outstanding Company Shares) shall select another representative to fill the vacancy of the Representative, and such substituted representative shall be deemed to be the Representative for all purposes of this Agreement and the documents delivered pursuant hereto.
(d)    A decision, act, consent, instruction or action of the Representative, including any agreement between the Representative and the Buyer relating to the determination of the Final Closing Adjustment, the Adjusted Purchase Price, any Earn-Out Consideration or the defense or settlement of any claims for which the Sellers may be required to indemnify the Buyer pursuant to Article VI hereof, shall constitute a decision, act, consent, instruction or action of all Sellers and shall be binding and conclusive upon each Seller and the Escrow Agent may rely upon any such decision, act, consent, instruction or action as being the decision, act, consent or instructions of each and every Seller.  The Buyer and the Escrow Agent are hereby relieved from any Liability to any Seller for any acts done by them in accordance with such decision, act, consent, instruction or action of the Representative.
(e)    By his execution of this Agreement, each Seller agrees that:
(i)    the Buyer shall be able to rely conclusively on the instructions and decisions of the Representative as to the determination of the Final Closing Adjustment, the Adjusted Purchase Price, any Earn-Out Consideration, the settlement of any claims for 

15

indemnification by the Buyer pursuant to Article VI or any other actions required or permitted to be taken by the Representative hereunder, and no party shall have any cause of action against the Buyer for any action taken by the Buyer in reliance upon the instructions or decisions of the Representative;
(ii)    no Seller shall have any cause of action against the Representative for any action taken, decision made or instruction given by the Representative under this Agreement or the execution of the Representative’s duties and responsibilities, except for fraud or willful breach of this Agreement by the Representative.  Furthermore, the Sellers shall indemnify and hold harmless the Representative for any damages (including damages arising out of the negligence of the Representative) arising out of the acceptance or administration of the Representative’s duties hereunder and reasonable fees and expenses incurred in the fulfillment of the Representative’s duties and responsibilities. The Sellers shall, severally, not jointly, indemnify the Representative and hold the Representative harmless against any loss, liability or expense incurred without fraud or willful breach on the part of the Representative and arising out of or in connection with the acceptance or administration of the Representative’s duties hereunder;
(iii)    the provisions of this Section 1.9 are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Seller may have in connection with the transactions contemplated by this Agreement;
(iv)    remedies available at Law for any breach of the provisions of this Section 1.9 are inadequate; therefore, the Buyer shall be entitled to temporary and permanent injunctive relief without the necessity of proving damages if the Buyer brings an action to enforce the provisions of this Section 1.9; and
(v)    the provisions of this Section 1.9 shall be binding upon the executors, heirs, legal representatives, personal representatives, successors and permitted assigns of each Seller, and any references in this Agreement to a Seller or the Sellers shall mean and include the successors to the Seller’s rights hereunder, whether pursuant to testamentary disposition, the Laws of descent and distribution or otherwise.
(f)    The Sellers recognize and intend that the power of attorney granted in Section 1.9:
(i)    is coupled with an interest and is irrevocable; and
(ii)    shall survive the death or incapacity of each of the Sellers.
(g)    The Representative shall be entitled to treat as genuine, and as the document it purports to be, any letter, facsimile, telex or other document that is believed by the Representative to be genuine and to have been telexed, telegraphed, faxed or cabled by a Seller or to have been signed and presented by a Seller.

16

(h)    All expenses incurred by the Representative in connection with the performance of the Representative’s duties as Representative shall be borne and paid by the Sellers.
1.10    Withholding Obligations.
(a)    Subject to Section 1.10(b), each of the Buyer, the Company and the Escrow Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to any provision of this Agreement to any Person such amounts as it reasonably determines that it is required to deduct and withhold with respect to the making of such payment under the Code, or any other applicable Law, provided, however that except in the case of compensatory withholding Taxes or Indian withholding Taxes, the Buyer or the Company shall not withhold against any amounts payable hereunder without first notifying the Representative and providing the Sellers with a reasonable opportunity to claim any exemption or reduction in otherwise applicable withholding Taxes.  The Parties agree that Indian Taxes will be withheld from the Purchase Price pursuant to Indian Law and the Buyer shall remit any such Indian Taxes to the applicable Governmental Entity, and will file all required Tax Returns in relation to such Taxes, in accordance with applicable Law.  Any amounts payable hereunder and subject to compensatory withholding Taxes shall be distributed to the applicable employer entity and promptly disbursed through such entity’s payroll system net of any applicable Tax withholding.  To the extent that amounts are withheld by the Buyer, the Company, the applicable employer entity or the Escrow Agent, as the case may be, and paid to the applicable Governmental Entity, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Persons in respect of which such deduction and withholding was made by the Buyer, the Company, the applicable employer entity or the Escrow Agent, as the case may be.
(b)    If, after the Closing, the Buyer transfers or assigns any or all of the Buyer’s rights and obligations under this Agreement and such transfer or assignment results in the imposition of a withholding Tax or Indirect Tax that would not have otherwise applied to amounts payable under this Agreement then notwithstanding anything to the contrary in this Agreement, the amounts payable under this Agreement shall be increased so that the recipient receives an amount equal to what the recipient would have received had no such additional withholding Taxes or Indirect Taxes applied.
(c)    The Parties shall use commercially reasonable efforts to provide any information required to claim a Tax credit and/or file a Tax Return with respect to any withheld Taxes or Indirect Taxes.  Any Party that withholds Taxes against a payment hereunder shall provide the recipient, at the recipient’s request, with an explanation of such Party’s rationale for such withholding.  The Buyer shall have the right to collect Forms W-8 or W-9, or such other forms relating to withholding obligations and/or any exemption, reduction or credits in respect of withholding taxes as may be applicable, from such Persons.  
(d)    None of the Buyer, the Company nor the Escrow Agent shall be entitled to deduct and withhold from the consideration in respect of an amount of  Tax to the extent that such amount of Tax has either been paid to the Buyer pursuant to Section 5.3(i) or Section 6.1(a) or been deducted, withheld or set off pursuant to Section 5.3(j).  

17

ARTICLE II 
REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLERS
Each Seller severally, and not jointly, represents and warrants to the Buyer that, except as set forth in the Disclosure Schedule, the statements contained in this Article II are true and correct with respect to the applicable Seller.  The Disclosure Schedule shall be arranged in sections and paragraphs corresponding to the numbered and lettered sections and paragraphs contained in this Article II and in Article III.  The disclosures in any section or paragraph of the Disclosure Schedule shall qualify only (a) the corresponding section or paragraph in this Article II or Article III, as the case may be, and (b) other sections or paragraphs in this Article II or Article III to the extent that it is clear from a reading of the disclosure that such disclosure also qualifies or applies to such other section or paragraph.
2.1    Authorization.  The Seller has all requisite power and authority to execute and deliver this Agreement and the other agreements contemplated hereby and to perform the Seller’s obligations hereunder and thereunder.  This Agreement and all other agreements contemplated hereby have been duly and validly executed and delivered by the Seller and constitute valid and binding obligations of the Seller, enforceable against the Seller in accordance with their respective terms, except as to enforceability which may be limited by bankruptcy, insolvency reorganization, moratorium or other similar Laws relating to or affecting creditors’ rights generally, or equitable principles.
2.2    Noncontravention.  Neither the execution and delivery by the Seller of this Agreement or any other agreement contemplated hereby, nor the performance by the Seller of the Seller’s obligations hereunder or thereunder, nor the consummation by the Seller of the transactions contemplated hereby or thereby, will (a) require on the part of the Seller any notice to or filing with, or any permit, authorization, consent or approval of, any Governmental Entity, (b) conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the imposition or acceleration of any obligation or the loss of a benefit under, create in any party the right to accelerate, terminate, modify or cancel, or require any notice, consent or waiver under, any contract, lease, sublease, license, sublicense, franchise, permit, indenture, agreement or mortgage for borrowed money, instrument of indebtedness, Security Interest or other arrangement to which the Seller is a party or by which the Seller is bound or to which any of the assets of the Seller are subject, (c) result in the imposition of any Security Interest upon any assets of the Seller or (d) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Seller or any of his or its properties or assets.  Section 2.2 of the Disclosure Schedule sets forth a true, correct and complete list of all consents and approvals of third parties and Governmental Entities, and all filings and notices that are required in connection with the consummation by the Seller of the transactions contemplated by this Agreement.
2.3    Ownership of Stock.  The Seller holds solely, beneficially, legally and of record all of the interest in the Company Shares as set forth in Section 3.2(b) of the Disclosure Schedule, free and clear of any Security Interests (other than restrictions on transfer arising under applicable securities Laws).  The Seller is not a party to any voting trust, proxy, or other agreement or understanding with respect to the voting or transfer of any Company Shares.  Upon 

18

consummation of the purchase contemplated hereby, the Buyer will acquire from the Seller with full title guarantee the legal and beneficial ownership of those Company Shares as set forth in Section 3.2(b) of the Disclosure Schedule against each Seller’s name, free and clear of all Security Interests (other than restrictions on transfer arising under applicable securities Laws).
2.4    Litigation.  There is no Legal Proceeding which is pending or has been threatened in writing against the Seller that questions the validity of this Agreement or any action taken or to be taken by the Seller in connection herewith or that could reasonably be expected to have a material adverse effect on the Seller’s ability to consummate the transactions contemplated by this Agreement.
2.5    Brokers’ Fees.  The Seller has no Liability to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.
ARTICLE III 
REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY AND THE SUBSIDIARIES
The Sellers, jointly and severally, represent and warrant to the Buyer that, except as set forth in the Disclosure Schedule, the statements contained in this Article III are true and correct.
3.1    Organization, Qualification and Corporate Power.  The Company is a private limited company duly organized and validly existing under the Laws of England and Wales.  The Company is duly qualified to conduct business and is in corporate good standing under the Laws of each jurisdiction listed in Section 3.1 of the Disclosure Schedule (in so far as such concepts are applicable in the relevant jurisdictions listed), which jurisdictions constitute the only jurisdictions in which the nature of the Company’s businesses or the ownership or leasing of its properties requires such qualification.  The Company has all requisite power and authority (corporate and other) to carry on the businesses in which it is engaged and to own and use the properties owned and used by it.  The Company has made available to the Buyer complete and accurate copies of its memorandum and articles of association, each as amended to date.  The Company is not in default under or in violation of any provision of its memorandum and articles of association, and, to the Company’s Knowledge, there exists no condition or event which, after notice, lapse of time or both, would result in any such default or violation.  Datacuity Ltd. has never engaged in any business competitive with any business engaged in by the Company, any Subsidiary, Buyer Parent or any direct or indirect subsidiary of Buyer Parent.  
3.2    Capitalization.
(a)    The Company Shares constitute the whole of the allotted and issued share capital of the Company and are fully paid or credited as fully paid.
(b)    Section 3.2(b) of the Disclosure Schedule sets forth a complete and accurate list of the holders of share capital in the Company, showing the number of shares, and the class or series of such shares, held by each holder thereof and their legal and beneficial interests therein.  Section 3.2(b) of the Disclosure Schedule also indicates all outstanding Company Shares that constitute restricted shares or that are otherwise subject to a repurchase or 

19

redemption right, indicating the name of the applicable shareholder, the vesting schedule (including any acceleration provisions with respect thereto), and the repurchase price payable by the Company.  All of the issued and outstanding shares in the share capital of the Company are duly authorized, validly issued, fully paid, and free of all preemptive rights.  All of the issued and outstanding shares in the share capital of the Company have been issued and allotted by the Company in compliance with all applicable securities Laws.  
(c)    The Company has never had any Company Stock Plans and has never issued any Options or Warrants.
(d)    Except as set forth in Section 3.2(d) of the Disclosure Schedule, (i) no subscription, warrant, option, convertible security or other right (contingent or otherwise) to purchase or acquire any shares in the share capital of the Company is authorized or outstanding, (ii) the Company has no obligation (contingent or otherwise) to issue any subscription, warrant, option, convertible security or other such right, or to issue or distribute to holders of any shares in the share capital of the Company any evidences of indebtedness or assets of the Company, (iii) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of capital stock of the Company or any interest therein or to pay any dividend or to make any other distribution in respect thereof, and (iv) there are no outstanding or authorized stock appreciation, phantom stock or similar rights with respect to the Company.  The Company has not issued any voting debt.
(e)    Except as set forth in Section 3.2(e) of the Disclosure Schedule, there is no agreement, written or oral, between the Company and any holder of its securities, or, to the Company’s Knowledge, among any holders of its securities, relating to the sale or transfer (including agreements relating to rights of first refusal, co sale rights or “drag along” rights), registration under the securities Laws of any jurisdiction, or voting, of the capital stock of the Company.
3.3    Authorization.  The Company has all requisite power and authority (corporate and other) to execute and deliver this Agreement and the other agreements contemplated hereby and to perform its obligations hereunder and thereunder.  The execution and delivery by the Company of this Agreement and the other agreements contemplated hereby and the performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate and other action on the part of the Company.  This Agreement and all other agreements contemplated hereby have been duly and validly executed and delivered by the Company and constitute valid and binding obligations of the Company, enforceable against it in accordance with its terms, except as to enforceability which may be limited by bankruptcy, insolvency reorganization, moratorium or other similar Laws relating to or affecting creditors’ rights generally, or equitable principles.
3.4    Noncontravention.  Neither the execution and delivery by the Company or the Sellers of this Agreement or any other agreement contemplated hereby, nor the performance by the Company or the Sellers of their respective obligations hereunder or thereunder, nor the consummation by the Company or the Sellers of the transactions contemplated hereby or thereby, 

20

will (a) conflict with or violate any provision of the memorandum or articles of association of the Company, each as amended or restated to date, or the memorandum or articles of association (or comparable organizational documents) of any Subsidiary, each as amended or restated to date, (b) require on the part of the Company or any Subsidiary any notice to or filing with, or any permit, authorization, consent or approval of, any Governmental Entity or any employee of the Company or any Subsidiary, (c) conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the imposition or acceleration of any obligation or the loss of a benefit under, create in any party the right to accelerate, terminate, modify or cancel, or require any notice, consent or waiver under, any contract, lease, sublease, license, sublicense, franchise, permit, indenture, agreement or mortgage for borrowed money, instrument of indebtedness, Security Interest or other arrangement to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary is bound or to which any of the assets of the Company or any Subsidiary are subject, (d) result in the imposition of any Security Interest upon any assets of the Company or any Subsidiary or (e) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company, any Subsidiary or any of their respective properties or assets.  Section 3.4 of the Disclosure Schedule sets forth a true, correct and complete list of all consents and approvals of third parties and Governmental Entities, and all filings and notices, that are required in connection with the consummation by the Company or the Sellers of the transactions contemplated by this Agreement.
3.5    Subsidiaries.
(a)    Section 3.5 of the Disclosure Schedule sets forth: (i) the name of each Subsidiary; (ii) the number and type of outstanding equity securities of each Subsidiary and a list of the holders thereof; (iii) the jurisdiction of organization of each Subsidiary; (iv) the names of the officers and directors of each Subsidiary; and (v) the jurisdictions in which each Subsidiary is qualified or holds licenses to do business as a foreign corporation or other entity.
(b)    Each Subsidiary is a corporation duly organized, validly existing and, to the extent that such concepts are applicable in the relevant jurisdiction, in corporate and Tax good standing under the Laws of the jurisdiction of its incorporation.  Each Subsidiary is duly qualified to conduct business and, to the extent that such concepts are applicable in the relevant jurisdiction, is in corporate and Tax good standing under the Laws of each jurisdiction in which the nature of its businesses or the ownership or leasing of its properties requires such qualification.  Each Subsidiary has all requisite power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it.  The Company has made available to the Buyer complete and accurate copies of the charter, by‐laws or other organizational documents of each Subsidiary.  No Subsidiary is in default under or in violation of any provision of its charter, by-laws or other organizational documents, and, to the Company’s Knowledge, there exists no condition or event which, after notice, lapse of time or both, would result in any such default or violation.  All of the issued and outstanding shares of capital stock or other equity interests of each Subsidiary are duly authorized, validly issued, fully paid, nonassessable (to the extent applicable) and free of preemptive rights.  All shares of capital stock or other equity interests of each Subsidiary that are held of record or owned beneficially by either the Company or any Subsidiary are held or owned free and clear of any restrictions on transfer 

21

(other than restrictions under applicable securities Laws), claims, Security Interests, options, warrants, rights, contracts, calls, commitments, equities and demands.  There are no outstanding or authorized options, warrants, rights, agreements or commitments to which the Company or any Subsidiary is a party or which are binding on any of them providing for the issuance, disposition or acquisition of any capital stock or other equity interest of any Subsidiary.  There are no outstanding stock appreciation, phantom stock or similar rights with respect to any Subsidiary.  There are no voting trusts, proxies or other agreements or understandings with respect to the voting of any capital stock of any Subsidiary.  No Subsidiary has issued any voting debt.
(c)    The Company does not own or control, directly or indirectly, or have any direct or indirect equity participation or similar interest in any other corporation, partnership, limited liability company, joint venture, trust or other business association or entity that is not a Subsidiary.
(d)    Since the formation of Heron Market Access Limited, a private limited company organized under the laws of England and Wales (“HMA”), no Person other than the Sellers and Matthew McGlennon has owned or controlled, directly or indirectly, or had any direct or indirect equity participation or similar interest in HMA.  HMA has not engaged in any business or other activity since December 31, 2003, does not have any assets, rights or properties, and is not subject to any Liabilities.
(e)    Mr. Manekjit Singh Shergill, R/o B-20, Malcha Marg, Chankyapuri, New Delhi -110021, India (“Shergill”), resigned as director of Heron Health Private Limited, a company organized under the laws of India (“HHPL”), effective from May 19, 2008 by virtue of his resignation letter dated May 19, 2008.  HHPL has complied with all the terms and conditions of the compromise agreement, dated July 4, 2008, between HHPL and Shergill  relating to the termination of Shergill.  
3.6    Financial Statements.
(a)    The Company has made available to the Buyer the Financial Statements.  The Financial Statements (i) comply as to form with all applicable accounting requirements and (ii) were prepared in accordance with Applicable GAAP applied on a consistent basis throughout the periods covered thereby; provided, however, that the Financial Statements referred to in clauses (c) and (d) of the definition of such term are subject to normal recurring year-end adjustments (which, individually and in the aggregate, will not be material) and do not include footnotes.
(b)    Each of the Consolidated Financial Statements fairly presents the consolidated assets, liabilities, business, financial condition, results of operations and cash flows of the Company and the Subsidiaries as of the date thereof and for the period referred to therein, and is consistent with the books and records of the Company and the Subsidiaries.  Each of the Entity Financial Statements fairly presents the assets, liabilities, business, financial condition, results of operations and cash flows of the Company or Subsidiary covered thereby as of the date thereof and for the period referred to therein, and is consistent with the books and records of the 

22

Company or Subsidiary covered thereby.  The accruals for vacation expenses, severance payments and Taxes are accounted for on the Most Recent Balance Sheet and are adequate and properly reflect the expenses associated therewith in accordance with UK GAAP.
(c)    The Company and the Subsidiaries maintain accurate books and records reflecting their respective assets and liabilities and maintain proper and adequate internal accounting controls which provide assurance that (i) transactions are executed with management’s authorization, (ii) transactions are recorded as necessary to permit preparation of the consolidated financial statements of the Company and to maintain accountability for the respective assets of the Company and the Subsidiaries, (iii) access to the respective assets of the Company and the Subsidiaries is permitted only in accordance with management’s authorization, (iv) the reporting of the respective assets of the Company and the Subsidiaries is compared with existing assets at regular intervals, and (v) the respective accounts, notes and other receivables and inventory of the Company and the Subsidiaries were recorded accurately, and proper and adequate procedures are implemented to effect the collection thereof on a current and timely basis.
(d)    The Company and the Subsidiaries maintain disclosure controls and procedures that are effective to ensure that all material information concerning the Company and the Subsidiaries is made known on a timely basis to the individuals responsible for the preparation of the Company’s consolidated financial statements.  Section 3.6(d) of the Disclosure Schedule lists, and the Company has delivered to the Buyer copies of, all written descriptions of, and all policies, manuals and other documents promulgating, such disclosure controls and procedures.
(e)    Section 3.6(e) of the Disclosure Schedule lists, and the Company has delivered to the Buyer copies of the documentation creating or governing, all securitization transactions and “off-balance sheet arrangements” (as defined in Item 303 (a)(4) of Regulation S-K of the SEC) effected by the Company or any Subsidiary.  Section 3.6(e) of the Disclosure Schedule lists all non-audit services performed by the Company’s or any Subsidiary’s auditors for the Company or any Subsidiary.
(f)    Neither the Company nor any Subsidiary has extended or maintained credit, arranged for the extension of credit, modified or renewed an extension of credit, in the form of a personal loan or otherwise, to or for any director or executive officer of the Company or any Subsidiary.  Section 3.6(f) of the Disclosure Schedule identifies any loan or extension of credit maintained by the Company or any Subsidiary to which the second sentence of Section 13(k)(1) of the Exchange Act would apply.
(g)    SBM and Co., the Company’s auditor, is and has been at all times since its engagement by the Company (i) “independent” with respect to the Company and the Subsidiaries within the meaning of Regulation S-X (or equivalent legislation relating to the requirement of independence of auditors in the relevant jurisdiction) and (ii) in compliance with subsections (g) through (l) of Section 10A of the Exchange Act (to the extent applicable) and the related rules of the SEC and the Public Company Accounting Oversight Board (to the extent applicable).

23

3.7    Absence of Certain Changes.  Since December 31, 2012, (a) there has occurred no event or development which, individually or in the aggregate, has had, or could reasonably be expected to have in the future, a Company Material Adverse Effect, and (b) neither the Company nor any Subsidiary has:
(a)    issued or sold any stock or other securities of the Company or any Subsidiary or any options, warrants or rights to acquire any such stock or other securities (except pursuant to the exercise or conversion of convertible promissory notes, options or warrants), or amended any of the terms of (including the vesting of) any options, warrants or restricted stock agreements, or repurchased or redeemed any stock or other securities of the Company (except from former employees, directors or consultants in accordance with agreements in place on the date thereof and providing for the repurchase of shares at their original issue price in connection with any termination of employment with or services to the Company or any Subsidiary);
(b)    split, combined or reclassified any shares or other equity securities; or declared, set aside or paid any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock or other equity securities;
(c)    created, incurred or assumed any indebtedness (including obligations in respect of capital leases); assumed, guaranteed, endorsed or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person; or made any loans, advances or capital contributions to, or investments in, any other Person;
(d)    entered into, adopted, terminated or amended any Employee Benefit Plan or any employment or severance agreement or arrangement of the type described in Section 3.22(l) or (except for normal salary increases in the Ordinary Course of Business for employees who are not Affiliates) increased in any manner the compensation or fringe benefits of, or materially modified the employment terms of, its directors, officers, consultants or employees, generally or individually, or paid any bonus or other benefit to its directors, officers, consultants or employees or hired any new officers or (except in the Ordinary Course of Business) any new employees or consultants; amended or accelerated the payment, right to payment, or vesting of any compensation or benefits; or taken any action other than in the Ordinary Course of Business to fund or in any other way secure the payment of compensation or benefits under any Employee Benefit Plan;
(e)    acquired, sold, leased, licensed or disposed of any assets or property (including any shares or other equity interests in or securities of any Subsidiary or any other corporation, partnership, association or other business organization or division thereof), other than purchases and sales of assets to customers in the Ordinary Course of Business;
(f)    mortgaged or pledged any of its property or assets or subjected any such property or assets to any Security Interest (other than Permitted Security Interests);
(g)    discharged or satisfied any Security Interest (other than Permitted Security Interests) or paid any Liability other than in the Ordinary Course of Business;

24

(h)    amended its charter, by-laws or other organizational documents;
(i)    sold, assigned, transferred, licensed or sublicensed any Company Intellectual Property, other than pursuant to licenses with customers entered into in the Ordinary Course of Business;
(j)    changed the nature or scope of its business being carried on or commenced any new business not being ancillary or incidental to such business or taken any action to alter its organizational or management structure;
(k)    changed its accounting methods, principles or practices;
(l)    made or changed any Tax election, changed an annual accounting period, filed any amended Tax Return, entered into any closing agreement with a Governmental Entity, waived or extended any statute of limitation with respect to Taxes, settled or compromised any Tax Liability, surrendered any right to claim a refund of Taxes or taken any other similar action relating to the filing of any Tax Return or the payment of any Tax;
(m)    entered into, amended, terminated, taken or omitted to take any action that would constitute a violation of or default under, or waived any rights under, applicable Law or any contract or agreement of a nature required to be listed in Section 3.12, Section 3.13 or Section 3.15 of the Disclosure Schedule;
(n)    made or committed to make any capital expenditure in excess of $10,000 per item or $25,000 in the aggregate;
(o)    instituted or settled any Legal Proceeding;
(p)    failed to take any action necessary to preserve the validity of any Company Intellectual Property or Permit; or
(q)    agreed in writing or otherwise to take any of the foregoing actions.
3.8    Undisclosed Liabilities.  Neither the Company nor any Subsidiary has any Liability, except for (a) Liabilities shown on the Most Recent Balance Sheet, a copy of which is attached to Section 3.8 of the Disclosure Schedule, (b) Liabilities that have arisen since the Most Recent Balance Sheet Date in the Ordinary Course of Business and which are similar in nature and amount to the Liabilities that arose during the comparable period of time in the immediately preceding fiscal period and (c) contractual and other Liabilities incurred in the Ordinary Course of Business that are not required by UK GAAP to be reflected on a balance sheet and that are not in the aggregate material.
3.9    Tax Matters.
(a)    The Company and each Subsidiary has properly filed on a timely basis all Tax Returns that it was required to file, and all such Tax Returns were true, correct and complete in all respects when submitted and remain accurate and complete in all respects.  No such Tax 

25

Return is, or could reasonably be expected to become, subject to any dispute with any Governmental Entity.  The Company and the Subsidiaries have paid on a timely basis all Taxes that were due and payable and no penalties, fines, surcharges or interest have been incurred.  The unpaid Taxes of the Company and the Subsidiaries for Tax periods ending on or before the Most Recent Balance Sheet Date do not exceed the accruals and reserves for Taxes (excluding accruals and reserves for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the Most Recent Balance Sheet and all unpaid Taxes of the Company and each Subsidiary for all Tax periods commencing after the date of the Most Recent Balance Sheet arose in the Ordinary Course of Business and are of a type and amount commensurate with Taxes attributable to prior similar periods.  The Most Recent Balance Sheet makes full provision or reserve within UK GAAP for any period ending on or before the date thereof for all Taxes assessed or liable to be assessed on the Company or any Subsidiary, or for which the Company or any Subsidiary is accountable at that date, whether or not the Company or any Subsidiary has (or may have) the right of reimbursement against any other Person.  Proper provision has been made and shown in the Most Recent Balance Sheet for deferred Taxation in accordance with UK GAAP.  The Company and the Subsidiaries have duly submitted all claims, disclaimers and elections with respect to Taxes the making of which has been assumed for the purposes of the Most Recent Balance Sheet.  No such claims, disclaimers or elections are likely to be disputed or withdrawn.  Neither the Company nor any Subsidiary has any Liability under Treasury Regulations Section 1.1502-6 (or any comparable or similar provision of U.K., U.S., state, local or foreign Law), as a transferee or successor, pursuant to any contractual obligation, or otherwise for any Taxes of any Person other than the Company or a Subsidiary.  Neither the Company nor any Subsidiary is a party to or bound by any Tax indemnity, Tax sharing, Tax allocation or similar agreement.  All Taxes that the Company and the Subsidiaries were required by Law to withhold or collect have been duly withheld or collected and, to the extent required, have been properly paid to the appropriate Governmental Entity, and the Company and each Subsidiary has complied with all information reporting and backup withholding requirements, including the maintenance of required records with respect thereto, in connection with amounts paid to any employee, independent contractor, creditor, or other third party.  No payments or loans have been made to, or assets made available or transferred to, or any assets earmarked, however informally, by the Company or any Subsidiary for the benefit of, any employee or former employee (or any associate of such employee or former employee) of the Company or any Subsidiary by an employee benefit trust or another third party.
(b)    The Company has delivered or made available to the Buyer (i) complete and correct copies of all Tax Returns of the Company and the Subsidiaries relating to Taxes for all taxable periods for which the applicable statute of limitations has not yet expired and (ii) complete and correct copies of all private letter rulings, revenue agent reports, information document requests, notices of proposed deficiencies, deficiency notices, protests, petitions, closing agreements, settlement agreements, pending ruling requests and any similar documents submitted by, received by, or agreed to by or on behalf of the Company or a Subsidiary relating to Taxes for all taxable periods for which the statute of limitations has not yet expired.  The income Tax Returns of the Company and each Subsidiary have been audited by the applicable Governmental Entity or are closed by the applicable statute of limitations for all taxable years through the taxable year specified in Section 3.9(b) of the Disclosure Schedule.  No examination 

26

or audit of any Tax Return of the Company or any Subsidiary by any Governmental Entity is currently in progress or, to the Knowledge of the Company, threatened or contemplated.  Neither the Company nor any Subsidiary has been informed by any jurisdiction in which the Company or any Subsidiary did not file a Tax Return that the jurisdiction believes that the Company or such Subsidiary was required to file any Tax Return that was not filed or is subject to Tax in such jurisdiction.  Neither the Company nor any Subsidiary has (x) waived any statute of limitations with respect to Taxes or agreed to extend the period for assessment or collection of any Taxes, which waiver or extension is still in effect, (y) requested any extension of time within which to file any Tax Return, which Tax Return has not yet been filed, or (z) executed or filed any power of attorney with any taxing authority which is still in effect.  Neither the Company nor any Subsidiary is involved in any dispute with any Governmental Entity with respect to Taxes, nor has the Company or any Subsidiary, within the past seven years, been subject to any visit, audit, investigation, discovery or access order by any Governmental Entity with respect to Taxes.  To the Knowledge of the Company, there are no circumstances existing which make it likely that a visit, audit, investigation, discovery or access order with respect to Taxes will be made in the next 12 months.  Neither the Company nor any Subsidiary has received from any Governmental Entity (and has not subsequently repaid to or settled with that Governmental Entity) any payment to which it was not entitled, or any notice in which its liability to Taxation was understated.
(c)    The Company and each Subsidiary have, within applicable time limits, kept and maintained complete and accurate records, invoices and other information in relation to Taxes as they are required or is prudent to keep and maintain.  Such records, invoices and information form part of Tax accounting arrangements that enable the Tax liabilities of the Company and any Subsidiary to be calculated accurately.  The Company and each Subsidiary have complied within applicable time limits with all notices served on them and any other requirements lawfully made of them by any Governmental Entity.
(d)    Section 3.9(d) of the Disclosure Schedule contains details of all concessions, agreements and arrangements that the Company or any Subsidiary has entered into with any Governmental Entity and all notifications given to any Governmental Entity.  The amount of Taxation chargeable on the Company or any Subsidiary during any accounting period ending on or within the six years before the Closing Date has not, to any material extent, depended on any concession, agreement or other formal or informal arrangement with any Governmental Entity.  All transactions in respect of which any clearance or consent was required from any Governmental Entity have been entered into by the Company or any Subsidiary after such consent or clearance has been properly obtained.  Any application for such clearance or consent has been made on the basis of full and accurate disclosure of all the relevant material facts and considerations, and all such transactions have been carried into effect only in accordance with the terms of the relevant clearance or consent.
(e)    Neither the Company nor any Subsidiary is, or will become, liable to make to any Person (including any Governmental Entity) any payment in respect of any liability to Taxation which is primarily or directly chargeable against, or attributable to, any other Person (other than the Company or any Subsidiary).

27

(f)    The gross book value shown in, or adopted for the purposes of, the Financial Statements as the value of each of the tangible fixed assets of the Company or any Subsidiary does not exceed the amount which on a disposal of such asset at the date of this Agreement would be deductible as acquisition cost in computing the capital gain or deductible loss.  The Company and each Subsidiary has sufficient records to determine the Tax consequence which would arise on any disposal or realization of any asset owned at the Most Recent Balance Sheet Date or acquired since that date, but prior to the Closing.  Neither the execution nor completion of this Agreement, nor any other event since the Most Recent Balance Sheet Date, will result in any asset being deemed to have been disposed of and re-acquired by the Company or any Subsidiary for Taxation purposes under any Law of any jurisdiction.
(g)    If any asset of the Company or any Subsidiary was disposed of at Closing for its book value as shown in, or adopted for the purpose of, the Financial Statements, or for the value of consideration actually given for it on its acquisition (if such asset was acquired since the Most Recent Balance Sheet Date), no balancing charge or similar clawback of relief or disallowance of depreciation relief in any jurisdiction would be made on the Company or that Subsidiary.
(h)    No distribution or deemed distribution has been made (or will be deemed to have been made) by the Company or any Subsidiary, except dividends shown in their statutory Financial Statements, and neither the Company nor any Subsidiary is bound to make any such distribution.
(i)    All financing costs, including interest, discounts and premiums payable by the Company or any Subsidiary in respect of its loans and amounts payable by the Company or any Subsidiary in respect of its derivatives contracts, are deductible by the Company or such Subsidiary in computing its profits, gains or losses for Taxation purposes.  No rents, interest, annual payments or other sums of an income nature, paid or payable by the Company or any Subsidiary, or which the Company or any Subsidiary is under an existing obligation to pay in the future, are or may be wholly or partially disallowable as deductions, management expenses or charges in computing taxable profits for Taxation purposes.
(j)    Section 3.9(j) of the Disclosure Schedule contains full particulars of (i) all groups and consolidated groups for Taxation purposes and fiscal unities of which the Company or any Subsidiary is, or has been, a member within the last seven years and to the Company’s Knowledge there are no circumstances or arrangements as a result of which any Subsidiary or the Company will cease to form part of such group; (ii) every agreement relating to the use of losses (including in the United Kingdom by way of group relief) or allowance to which the Company or any Subsidiary is, or has been, a party within the last seven years; and (iii) any arrangements for the payment of group Taxation liabilities to which the Company or any Subsidiary has ever been party.
(k)    All claims made by the Company and the Subsidiaries for the use of losses (including in the United Kingdom by way of group relief) or allowance were valid when made and have been or will be allowed by way of relief from or allowance or credit against Taxation.  All arrangements entered into by the Company and the Subsidiaries in relation to groups and 

28

consolidated groups for Taxation purposes and fiscal unities were valid when made and will be valid up to the Closing.  The Company and the Subsidiaries have met all procedural and other requirements of all Taxation Statutes in respect of such claims, unities or groups.
(l)    Neither the execution of this Agreement nor the Closing, nor any other event since the Most Recent Balance Sheet Date, will result in the clawback or disallowance of any losses (including in the United Kingdom losses taking the form of group relief) or allowance previously given.
(m)    The Company and each Subsidiary has, throughout the past seven years, been resident for Taxation purposes in the country in which it is incorporated, and neither the Company nor any Subsidiary has, at any time in the past seven years, been treated as resident in any other jurisdiction for the purposes of any double Taxation arrangements.  Neither the Company nor any Subsidiary has had a permanent establishment or taxable presence in any country other than the country in which it is incorporated.
(n)    Neither the Company nor any Subsidiary holds, or within the last seven years has held, shares in any company except for the shares in the Subsidiaries currently held by the Company.
(o)    All transactions or arrangements made by the Company or any Subsidiary have been made on arm’s length terms and the processes by which prices and terms have been arrived at have, in each case, been fully documented.  No notice, inquiry or adjustment has been made by any Governmental Entity in connection with any such transactions or arrangements.  There are no circumstances in which any rule or provision could apply causing any Governmental Entity to make an adjustment to the terms on which such transaction or arrangement is treated as being made for Taxation purposes.  In relation to each transaction for the supply of goods or services or the lending or borrowing of money into which the Company or any Subsidiary has entered with a party with which it was connected, the Company or the relevant Subsidiary has full contemporaneous documentary evidence of the process used to establish that arm’s length terms applied.  No notice, inquiry or adjustment has been made by any Governmental Entity in connection with any such transactions or arrangements.
(p)    Neither the Company nor any Subsidiary has been involved in any transaction or series of transactions either designed wholly or mainly or containing steps or stages having no commercial purpose or the main purpose, or one of the main purposes of which, was the avoidance of Taxation or deferring Taxation or reducing a liability to Taxation or amounts to be accounted for under PAYE in the United Kingdom, or any transaction that produced a loss for Taxation purposes with no corresponding commercial loss.
(q)    The Company and each Subsidiary has complied with all obligations relating to any Indirect Tax.  Neither the Company nor any Subsidiary is or has been, in the period of six years ending with the Closing Date, a member of a group for the purposes of Indirect Tax.  Neither the Company nor any Subsidiary has been, or will be, denied full credit or allowance for all Indirect Tax paid or suffered by it.  Neither the Company nor any Subsidiary has been the subject of any inquiries, investigation or routine visit by a Governmental Entity 

29

relating to Indirect Tax within the past six years as a result of which any liabilities or other irregularities were identified and there are no outstanding inquiries arising from any such enquiries, investigations or visits.
(r)    Any document that may be necessary or desirable in proving the title of the Company or any Subsidiary to any asset which is owned by the Company or any Subsidiary at the Closing is duly stamped for stamp duty purposes or has had the transfer or registration Tax due in respect of it paid.  Neither entering into this agreement nor the Closing will result in the withdrawal of any stamp duty or transfer or registration Tax relief granted on or before the Closing which will affect the Company or any Subsidiary.  Section 3.9(r) of the Disclosure Schedule sets out full and accurate details of any asset acquired or held by the Company or any Subsidiary before the Closing for which, to the Knowledge of the Company, or to which the Company ought reasonably to be aware, an additional Taxation return will be required to be filed with a Governmental Entity and/or a payment of stamp duty or transfer or registration Tax made on or after Closing.
(s)    Neither the Company nor any Subsidiary has made any loan or advance to any Seller such that the Company or a Subsidiary has incurred a liability to Taxes.
(t)    Neither the Company nor any Subsidiary has offered or made available to any of its employees or officers any form of participation in a share incentive plan, including by way of share or stock options.
(u)    There are no Security Interests with respect to Taxes upon any of the assets or properties of the Company or any Subsidiary, other than with respect to Taxes not yet due and payable.
(v)    Section 3.9(v) of the Disclosure Schedule sets forth each jurisdiction in which the Company and each Subsidiary files, is required to file or has been required to file a Tax Return or is or has been liable for any Taxes and each jurisdiction that has sent notices or communications of any kind requesting information relating to the Company’s nexus with such jurisdiction.  Section 3.9(v) of the Disclosure Schedule lists all Tax Returns (and their respective due dates without regard to extensions) required to be filed by the Company or any Subsidiary for periods beginning before the Closing Date that will not be filed on or before the Closing Date.
(w)    Neither the Company nor any Subsidiary has made any payment, is obligated to make any payment or is a party to any agreement that could obligate it to make any payment, as a result of the transactions contemplated in this Agreement, that may be treated as an “excess parachute payment” under Section 280G of the Code (without regard to Sections 280G(b)(4) and 280G(b)(5) of the Code).
(x)    Neither the Company nor any Subsidiary (i) is a party to any joint venture, partnership, or other arrangement that is treated as a partnership for U.S. federal income Tax purposes, (ii) has made an entity classification (“check-the-box”) election under Section 7701 of the Code, (iii) is or has ever been a stockholder of a “controlled foreign corporation” as defined 

30

in Section 957 of the Code (or any similar provision of state or local Law), or (iv) is or has ever been (and is not and has not been a stockholder in) a “passive foreign investment company” within the meaning of Section 1297 of the Code.
(y)    Neither the Company nor any Subsidiary has ever engaged in any “reportable transaction” or  “listed transaction” for purposes of U.S. Treasury Regulation sections 1.6011-4(b) or 301.6111-2(b)(2) or any analogous provision of state, local or foreign Law.  The Company and each Subsidiary has disclosed on its U.S. federal income Tax Returns, if any, all positions taken therein that could give rise to a substantial understatement of U.S. federal income Tax within the meaning of Section 6662 of the Code.
(z)    The U.S. Subsidiary has never distributed to its stockholders or security holders stock or securities of a controlled corporation, nor has stock or securities of the U.S. Subsidiary been distributed, in a transaction to which Section 355 of the Code applies (i) in the two (2) years prior to the date of this Agreement or (ii) in a distribution that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) that includes the transactions contemplated by this Agreement.
(aa)    Neither the Company nor any Subsidiary is a party to a gain recognition agreement under Section 367 of the Code.
(bb)    Neither the Company nor any Subsidiary will be required to include any item of income in, or exclude any item of deduction from, taxable income for any period (or any portion thereof) ending after the Closing Date as a result of any (i) closing agreement as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign Tax Law) executed on or prior to the Closing Date, (ii) installment sale or other open transaction disposition made on or prior to the Closing Date, (iii) prepaid amount received on or prior to the Closing Date, (iv) election made pursuant to Section 108(i) of the Code on or prior to the Closing Date, or (v) adjustments under Section 481 of the Code (or any similar adjustments under any provision of the Code or the corresponding foreign, state or local Tax Law).
(cc)    The Buyer has been provided with the operating agreement, formation documents and other agreements (if any) related to the formation and operation of the Entity Seller and copies of all documents under which the Entity Seller acquired its holding of Company Shares.  All those agreements and documents remain in full force and effect and have not been varied as at the date of this Agreement and there is no agreement to vary the same and the same shall not be varied without the Buyer’s prior written consent after the date of this Agreement.  The documents provided to the Buyer provide all the details of the membership interests and/or shareholdings in the Entity Seller and all details of the arrangements pursuant to which the Entity Seller acquired its holding of or any interest in Company Shares.  None of the arrangements by virtue of which the Entity Seller acquired such Company Shares or any interest in Company Shares and/or by virtue of which the members of the Entity Seller acquired their membership interests and/or shares in the Entity Seller and/or by virtue of which the Entity Seller shares in any part of the Purchase Price and the Earn Out Consideration and/or by virtue of which any of the members of the Entity Seller will be entitled to share in any part of the Purchase Price and the Earn Out Consideration have given or will give rise to any Liability for 

31

the Buyer, the Company or any Subsidiary or any member of the Buyer’s Tax Group or employer or former employer of any Seller to account for income tax or national insurance contributions (employee’s or employer’s) to HM Revenue & Customs in the United Kingdom or otherwise for any Tax in any jurisdiction.
(dd)    Since August 2007 John Kerrigan has not been resident or ordinarily resident in the United Kingdom for United Kingdom tax purposes and has not performed any duties in the United Kingdom such that a Liability to United Kingdom income tax has arisen in respect of all or any part of his remuneration.  John Kerrigan will be neither resident nor ordinarily resident in the United Kingdom for United Kingdom tax purposes and nor will he perform any duties in the United Kingdom (save at the request of the Buyer or any member of the Buyer’s Tax Group) such that a Liability to United Kingdom income tax arises in respect of all or any part of his remuneration in any United Kingdom tax year post Closing in which the Earn Out Consideration is payable.  
(ee)    No person who is either resident or ordinarily resident in the United Kingdom for United Kingdom tax purposes or has performed any duties in the United Kingdom such that a Liability to United Kingdom income tax has arisen within the last 5 years in respect of all or any part of his remuneration shall have any membership interests and/or shares in the Entity Seller by virtue of which that person shares in any part of either the Purchase Price or the Earn Out Consideration.  
3.10    Assets.
(a)    The Company or the applicable Subsidiary (i) is the true and lawful owner of, and has good title to, all of the assets (tangible or intangible) purported to be owned by the Company or such Subsidiary, free and clear of all Security Interests (other than Permitted Security Interests), and (ii) has a valid lease or license to all other assets (tangible or intangible) used by the Company or such Subsidiary.  Such assets to which the Company or a Subsidiary has good title or a valid lease or license are sufficient for the conduct of its businesses as presently conducted and as presently proposed to be conducted, and such tangible assets are reflected in the Financial Statements (other than to the extent disposed of in the Ordinary Course of Business).  Each such tangible asset is free from material defects, has been maintained in accordance with normal industry practice, is in good operating condition and repair (subject to normal wear and tear) and is suitable for the purposes for which it presently is used.
(b)    Section 3.10(b) of the Disclosure Schedule lists individually (i) all fixed assets (within the meaning of GAAP) of the Company or the Subsidiaries, indicating the cost, accumulated book depreciation (if any) and the net book value of each such fixed asset as of April 28, 2013, and (ii) all other assets of a tangible nature (other than inventories) of the Company or the Subsidiaries.
(c)    Each item of equipment, motor vehicle and other asset that the Company or a Subsidiary has possession of pursuant to a lease agreement or other contractual arrangement is in such condition that, upon its return to its lessor or owner in its present condition at the end of the relevant lease term or as otherwise contemplated by the applicable lease or contract, the 

32

obligations of the Company or such Subsidiary to such lessor or owner will have been discharged in full.
3.11    Owned Real Property.  Neither the Company nor any Subsidiary owns, or has ever owned, any real property.
3.12    Real Property Leases.  Section 3.12 of the Disclosure Schedule lists all Leases and lists the term of such Lease, any extension and expansion options, and the rent payable, security deposit, maintenance and like charges thereunder, and any advance rent thereunder.  The Company has made available to the Buyer complete and accurate copies of the Leases.  With respect to each Lease:
(a)    no Person, other than the Company or any Subsidiary, is or claims to be entitled (actually or conditionally) to occupy, use or control the property subject to such Lease;
(b)    such Lease is legal, valid, binding, enforceable and in full force and effect against the Company or the Subsidiary that is the party thereto, as applicable, and, to the Company’s Knowledge, against each other party thereto;
(c)    such Lease will continue to be legal, valid, binding, enforceable and in full force and effect against the Company or the Subsidiary that is the party thereto, as applicable, and, to the Company’s Knowledge, against each other party thereto immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing;
(d)    none of the Company, any Subsidiary or, to the Knowledge of the Company, any other party, is in breach or violation of, or default under, any such Lease, and no event has occurred, is pending or, to the Knowledge of the Company, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a breach or default by the Company or any Subsidiary or, to the Knowledge of the Company, any other party under such Lease;
(e)    there are no disputes, oral agreements, forbearance programs, licenses, collateral assurances, undertakings, side agreements or concessions in effect as to such Lease;
(f)    neither the Company nor any Subsidiary has assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in the leasehold or subleasehold;
(g)    all facilities leased or subleased thereunder are supplied with utilities and other services adequate for the operation of said facilities;
(h)    the Company has no Knowledge of any Security Interest, easement, covenant or other restriction applicable to the real property subject to such Lease which would reasonably be expected to impair the current uses or the occupancy by the Company or any Subsidiary of the property subject thereto;

33

(i)    no construction, alteration or other leasehold improvement work with respect to the Lease remains to be paid for or performed by the Company or any Subsidiary;
(j)    to the extent the property subject to such Lease is located in the United Kingdom, fire risk assessments have been carried out and copies thereof are held at such properties where requisite and there are no requirements of the local fire authority which have not been implemented or which are outstanding, and such properties comply with all fire regulations and have sufficient rights of escape in the event of fire or other emergency;
(k)    where an option has been exercised to break such Lease it has been validly exercised by the Company and any Subsidiary (as appropriate) and accepted by the landlord of the property which is subject to the Lease, and any pre-conditions to the exercise of such break have been satisfied in so far as practicable;
(l)    neither the Company nor any Subsidiary is obligated to pay any leasing or brokerage commission relating to such Lease and will not have any obligation to pay any leasing or brokerage commission upon the renewal of the Lease; and
(m)    the Financial Statements contain adequate reserves to provide for the restoration of the property subject to the Lease at the end of the respective Lease term, to the extent required by the Lease.
3.13    Intellectual Property.
(a)    Section 3.13(a) of the Disclosure Schedule lists all Company Registrations, in each case enumerating specifically the applicable filing or registration number, title, jurisdiction in which filing was made or from which registration issued, date of filing or issuance, names of all current applicant(s) and registered owners(s), as applicable.  All assignments of Company Registrations to the Company or any Subsidiary have been properly executed and recorded.  All Company Registrations are valid and enforceable and all issuance, renewal, maintenance and other payments that are or have become due with respect thereto have been timely paid by or on behalf of the Company.
(b)    There are no inventorship challenges, opposition or nullity proceedings or interferences declared or commenced or interference proceeding provoked, or to the Knowledge of the Company, threatened, with respect to any Patent Rights included in the Company Registrations. The Company and the Subsidiaries have complied with their duty of candor and disclosure to the United States Patent and Trademark Office and any relevant foreign patent or trademark office with respect to all patent and trademark applications filed by or on behalf of the Company or any Subsidiary and have made no material misrepresentation in such applications.  The Company has no Knowledge of any information that would preclude the Company or any Subsidiary from having clear title to the Company Registrations or affecting the patentability or enforceability of any Company Registrations.
(c)    Each item of Company Intellectual Property will be owned or available for use by the Buyer or a subsidiary of the Buyer following the Closing on substantially identical 

34

terms and conditions as it was immediately prior to the Closing.  The Company or a Subsidiary is the sole and exclusive owner of all Company Owned Intellectual Property, free and clear of any Security Interests (other than Permitted Security Interests), and all joint owners of the Company Owned Intellectual Property are listed in Section 3.13(c) of the Disclosure Schedule.  The Company Intellectual Property constitutes all Intellectual Property necessary (i) to Exploit the Customer Offerings in the manner so done currently by the Company and the Subsidiaries, (ii) to Exploit the Internal Systems as they are currently used by the Company and the Subsidiaries and (iii) otherwise to conduct the Company’s business in the manner currently conducted by the Company and the Subsidiaries.  Section 3.13(c) of the Disclosure Schedule sets forth a true and complete list of all Customer Offerings.  Section 3.13(c) of the Disclosure Schedule also sets forth a true and complete list of all Internal Systems that are material to the business of the Company or any Subsidiary and a description of each such Internal System.   
(d)    The Company or the appropriate Subsidiary, as applicable, has taken all commercially reasonable measures to protect the proprietary nature of each item of Company Owned Intellectual Property, and to maintain in confidence all trade secrets and confidential information comprising a part thereof.  The Company and each Subsidiary has complied with all applicable contractual and legal requirements pertaining to information privacy and security.  No complaint relating to an improper use or disclosure of, or a breach in the security of, any such information has been made or, to the Knowledge of the Company, threatened against the Company or any Subsidiary.  To the Knowledge of the Company, there has been no: (i) unauthorized disclosure of any third party proprietary or confidential information in the possession, custody or control of the Company or any Subsidiary, or (ii) breach of the Company’s or any Subsidiary’s security procedures wherein confidential information has been disclosed to a third Person.  The Company and each Subsidiary has actively policed the quality of all goods and services sold, distributed or marketed under each of its Trademarks and has enforced adequate quality control measures to ensure that no Trademarks that it has licensed to others shall be deemed to be abandoned.
(e)    None of the Customer Offerings, or the Exploitation thereof by the Company or the Subsidiaries or by any reseller, distributor, customer or user thereof in accordance with their applicable agreement with Company or its Subsidiaries, or any other activity of the Company or the Subsidiaries, infringes or violates, or constitutes a misappropriation of, any Intellectual Property rights of any third party.  None of the Internal Systems, to the extent developed by or on behalf of the Company or any Subsidiary, or the Company’s or any Subsidiary’s past, current or currently contemplated Exploitation thereof, or any other activity undertaken by any of them in connection with their business, infringes or violates, or constitutes a misappropriation of, any Intellectual Property rights of any third party.  To the Knowledge of the Company, none of the other Internal Systems, or the Company’s or any Subsidiary’s past, current or currently contemplated Exploitation thereof, or any other activity undertaken by them in connection with their business, infringes or violates, or constitutes a misappropriation of, any Intellectual Property rights of any third party.  Section 3.13(e) of the Disclosure Schedule lists any complaint, claim or notice, or threat of any of the foregoing (including any notification that a license under any patent is or may be required), received by the Company or any Subsidiary alleging any such infringement, violation or misappropriation and 

35

any request or demand for indemnification or defense received by the Company or any Subsidiary from any reseller, distributor, customer, user or any other third party; and the Company has provided to the Buyer copies of all such complaints, claims, notices, requests, demands or threats, as well as any legal opinions, studies, market surveys and analyses relating to any alleged or potential infringement, violation or misappropriation.
(f)    To the Knowledge of the Company, no Person (including any current or former employee or consultant of Company or the Subsidiaries) or entity is infringing, violating or misappropriating any of the Company Owned Intellectual Property or any Company Licensed Intellectual Property which is exclusively licensed to the Company or any Subsidiary.  The Company has provided to the Buyer copies of all correspondence, analyses, legal opinions, complaints, claims, notices or threats concerning the infringement, violation or misappropriation of any Company Owned Intellectual Property; provided, however, that the Company is not required to provide any such legal opinions if the provision of such would violate the attorney client privilege.  The Company has not received any such legal opinions.
(g)    Section 3.13(g) of the Disclosure Schedule identifies each license, covenant or other agreement pursuant to which the Company or any Subsidiary has assigned, transferred, licensed, distributed or otherwise granted any right or access to any Person, or covenanted not to assert any right, with respect to any past, existing or future Company Intellectual Property (other than non-exclusive licenses to end user customers entered into in the Ordinary Course of Business).  Except as described in Section 3.13(g) of the Disclosure Schedule, neither the Company nor any Subsidiary has agreed to indemnify any Person against any infringement, violation or misappropriation of any Intellectual Property rights with respect to any Customer Offerings or any third party Intellectual Property rights.  Except as set forth in Section 3.13(g) of the Disclosure Schedule, neither the Company nor any Subsidiary is a member of or party to any patent pool, industry standards body, trade association or other organization pursuant to the rules of which it is obligated to license any existing or future Intellectual Property to any Person.
(h)    Section 3.13(h) of the Disclosure Schedule identifies (i) each item of Company Licensed Intellectual Property and the license or agreement pursuant to which the Company or any Subsidiary Exploits it (excluding currently-available, off‐the‐shelf software programs that are part of the Internal Systems and are licensed by the Company or any Subsidiary pursuant to “shrink wrap” licenses, the total annual fees associated with which are less than $10,000) and (ii) each agreement, contract, assignment or other instrument pursuant to which the Company or any Subsidiary has obtained any joint or sole ownership interest in or to each item of Company Owned Intellectual Property.  None of the Customer Offerings or Internal Systems includes “shareware,” “freeware” or other Software or other material that was obtained by the Company or any Subsidiary from third parties other than pursuant to the license agreements listed in Section 3.13(h) of the Disclosure Schedule.
(i)    Neither the Company nor any Subsidiary has licensed, distributed or disclosed, and knows of no distribution or disclosure by others (including its and the Subsidiaries’ employees and contractors) of, the Company Source Code to any Person, except 

36

pursuant to the agreements listed in Section 3.13(i) of the Disclosure Schedule, and the Company and the Subsidiaries have taken all reasonable physical and electronic security measures to prevent disclosure of such Company Source Code.  No event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time, or both) will, or would reasonably be expected to, nor will the consummation of the transactions contemplated hereby, result in the disclosure or release of such Company Source Code by the Company, the Subsidiaries, their escrow agent(s) or any other Person to any third party.
(j)    All of the Software and Documentation comprising, incorporated in or bundled with the Customer Offerings or Internal Systems that constitute Company-Owned Intellectual Property have been designed, authored, tested and debugged by regular employees of the Company or a Subsidiary within the scope of their employment or by independent contractors of the Company or a Subsidiary who have executed valid and binding agreements expressly assigning all right, title and interest in such copyrightable materials to the Company or a Subsidiary, waiving their non-assignable rights (including moral rights) in favor of the Company or a Subsidiary and its permitted assigns and licensees, and have no residual claim to such materials.
(k)    Section 3.13(k) of the Disclosure Schedule lists all Open Source Materials that the Company or the Subsidiaries have utilized in any way in the Exploitation of Company Offerings or Internal Systems (which, with respect to any Company Licensed Intellectual Property, shall be to the Knowledge of the Company) and describes the manner in which such Open Source Materials have been utilized, including whether and how the Open Source Materials have been modified and/or distributed by the Company or the Subsidiaries.  Neither the Company nor any Subsidiary has (i) incorporated Open Source Materials into, or combined Open Source Materials with, the Customer Offerings; (ii) distributed Open Source Materials in conjunction with any other software developed or distributed by the Company or any Subsidiary; or (iii) used Open Source Materials that create, or purport to create, obligations for the Company or any Subsidiary with respect to the Customer Offerings or grant, or purport to grant, to any third party, any rights or immunities under Intellectual Property rights (including using any Open Source Materials that require, as a condition of Exploitation of such Open Source Materials, that other Software incorporated into, derived from or distributed with such Open Source Materials be (x) disclosed or distributed in source code form, (y) licensed for the purpose of making derivative works, or (z) redistributable at no charge or minimal charge).
(l)    Each current or former employee of the Company or any Subsidiary and each current or former independent contractor of the Company or any Subsidiary has executed a valid, binding and enforceable written agreement expressly assigning to the Company or such Subsidiary all right, title and interest in any inventions and works of authorship, whether or not patentable, invented, created, developed, conceived and/or reduced to practice during the term of such employee’s employment or such independent contractor’s work for the Company or the relevant Subsidiary, and all Intellectual Property rights therein, and has waived all moral rights therein to the extent legally permissible.

37

(m)    Neither the Company nor any Subsidiary has introduced into any Customer Offering or Internal System, and the Company and each Subsidiary has taken industry standard measures to detect and remove from each Customer Offering and each Internal System, any Virus or, to the extent that the Company or any Subsidiary did not have the authority to remove a Virus from any Internal System licensed to the Company or any Subsidiary, the Company and each such Subsidiary terminated the use of such Internal Systems in which a Virus has been detected.  The Company and the Subsidiaries have not received any warranty claims, contractual terminations or requests for settlement or refund due to the failure of the Customer Offerings to meet their specifications or otherwise to satisfy end user needs or for harm or damage to any third party except as set forth in Section 3.13(m) of the Disclosure Schedule.
(n)    The Company and the Subsidiaries have neither sought, applied for nor received any support, funding, resources or assistance from any U.S. federal, state, local or foreign governmental or quasi-governmental agency or funding source in connection with the Exploitation of the Customer Offerings, the Internal Systems or any facilities or equipment used in connection therewith.
3.14    Inventory.  Other than general office supplies, neither the Company nor any Subsidiary maintains any inventory.
3.15    Contracts.
(a)    Section 3.15(a) of the Disclosure Schedule lists the following agreements (each a “Contract”) to which the Company or any Subsidiary is a party:
(i)    any agreement (or group of related agreements) for the lease of personal property from or to third parties;
(ii)    any agreement (or group of related agreements) for the purchase or sale of products or for the furnishing or receipt of services (A) which calls for performance over a period of more than one year, (B) which involves more than the sum of $50,000 in any 12 month period, or (C) in which the Company or any Subsidiary has granted manufacturing rights, “most favored nation” pricing provisions or marketing or distribution rights relating to any services, products or territory or has agreed to purchase a minimum quantity of goods or services or has granted exclusive rights to a certain party;
(iii)    any agreement concerning the establishment or operation of a partnership, joint venture or limited liability company;
(iv)    any agreement (or group of related agreements) under which the Company or any Subsidiary has created, incurred, assumed or guaranteed (or may create, incur, assume or guarantee) indebtedness (including capitalized lease obligations) or under which it has imposed (or may impose) a Security Interest (other than Permitted Security Interests) on any of its assets, tangible or intangible;
(v)    any agreement for the disposition of any significant portion of the assets or business of the Company or any Subsidiary (other than sales of products in the Ordinary 

38

Course of Business) or any agreement for the acquisition of the assets or business of any other entity (other than purchases of inventory or components in the Ordinary Course of Business);
(vi)    any agreement concerning confidentiality, noncompetition or non-solicitation (other than confidentiality agreements with customers or employees of the Company or any Subsidiary set forth in the Company’s or the applicable Subsidiary’s standard terms and conditions of sale or standard form of employment agreement, copies of which have previously been made available to the Buyer);
(vii)    any employment agreement, consulting agreement, severance agreement (or agreement that includes provisions for the payment of severance) or retention agreement or any agreement with any other person who provides services to the Company;
(viii)    any settlement agreement or settlement-related agreement (including any agreement in connection with which any employment-related claim is settled);
(ix)    any agreement involving any current or former officer, director or stockholder or shareholder of the Company or any Affiliate thereof;
(x)    any agreement under which the consequences of a default or termination could reasonably be expected to have a Company Material Adverse Effect;
(xi)    any agency, distributor, sales representative, franchise or similar agreements to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary is bound;
(xii)    any agreement which contains any provisions requiring the Company or any Subsidiary to indemnify any other party (excluding indemnities contained in agreements for the purchase, sale or license of products or services entered into in the Ordinary Course of Business);
(xiii)    any agreement that could reasonably be expected to have the effect of prohibiting or impairing the conduct of the business of the Company or any of the Subsidiaries or the Buyer or any of its subsidiaries as currently conducted and as currently proposed to be conducted;
(xiv)    any prime contract, subcontract, basic ordering agreement, letter contract, purchase order, delivery order, bid, change order, arrangement or other commitment of any kind between the Company or any Subsidiary, on the one hand, and any Governmental Entity, any prime contractor to a Governmental Entity or any subcontractor to any such Governmental Entity or prime contractor, on the other hand;
(xv)    any agreement that would bind, or purport to bind, the Buyer or any of its Affiliates; and

39

(xvi)    any other agreement (or group of related agreements) either involving more than $50,000 in any 12 month period or not entered into in the Ordinary Course of Business.
(b)    The Company has made available to the Buyer a complete and accurate copy of each Contract (as amended to date).  With respect to each Contract: (i) the Contract is legal, valid, binding and enforceable and in full force and effect against the Company or the Subsidiary that is the party thereto, as applicable, and, to the Company’s Knowledge, against each other party thereto,  except as to enforceability which may be limited by bankruptcy, insolvency reorganization, moratorium or other similar Laws relating to or affecting creditors’ rights generally, or equitable principles; (ii) the Contract will continue to be legal, valid, binding and enforceable and in full force and effect against the Company or the Subsidiary that is the party thereto, as applicable, and, to the Company’s Knowledge, against each other party thereto immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing, except as to enforceability which may be limited by bankruptcy, insolvency reorganization, moratorium or other similar Laws relating to or affecting creditors’ rights generally, or equitable principles; and (iii) neither the Company, any Subsidiary nor, to the Knowledge of the Company, any other party, is in breach or violation of, or default under, any such Contract, and no event has occurred, is pending or, to the Knowledge of the Company, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a breach or default by the Company, any Subsidiary or, to the Knowledge of the Company, any other party under such Contract.
(c)    Neither the Company nor any Subsidiary is a party to any oral contract, agreement or other arrangement which, if reduced to written form, would be required to be listed in Section 3.15(a) of the Disclosure Schedule under the terms of Section 3.15(a).  None of the agreements listed in Section 3.15(c) of the Disclosure Schedule, if reduced to written form, would be described by Section 3.15(a)(vi).  Neither the Company nor any Subsidiary is a party to any written or oral arrangement (i) to perform services or sell products which is expected to be performed at, or to result in, a loss or (ii) for which the customer has already been billed or paid that have not been fully accounted for on the Most Recent Balance Sheet.
3.16    Accounts Receivable.  All accounts receivable of the Company and the Subsidiaries reflected on the Most Recent Balance Sheet (other than those paid since such date) are valid receivables subject to no setoffs or counterclaims and are current and collectible (within 90 calendar days after the date on which it first became due and payable), net of the applicable reserve for bad debts on the Most Recent Balance Sheet.  A complete and accurate list of the accounts receivable of the Company and the Subsidiaries as of April 25, 2013, showing the aging thereof, is included in Section 3.16 of the Disclosure Schedule.  All accounts receivable of the Company and the Subsidiaries that have arisen since the Most Recent Balance Sheet Date are valid receivables subject to no setoffs or counterclaims and are collectible (within 90 calendar days after the date on which it first became due and payable), net of a reserve for bad debts related to such accounts receivable in an amount proportionate to the reserve shown on the Most Recent Balance Sheet.  Neither the Company nor any Subsidiary has received any written notice 

40

from an account debtor stating that any account receivable in an amount in excess of $15,000 is subject to any contest, claim or setoff by such account debtor.
3.17    Powers of Attorney.  There are no outstanding powers of attorney executed on behalf of the Company or any Subsidiary.
3.18    Insurance.  Section 3.18 of the Disclosure Schedule lists each insurance policy (including fire, theft, casualty, comprehensive general liability, workers compensation, business interruption, environmental, product liability and automobile insurance policies and bond and surety arrangements) to which the Company or any Subsidiary is a party, a named insured or otherwise the beneficiary of coverage, all of which are in full force and effect.  All claims eligible to be asserted by the Company or any Subsidiary under any such policy have been asserted on a timely basis.  There is no claim pending under any such policy as to which coverage has been questioned, denied or disputed by the underwriter of such policy.  All premiums due and payable under all such policies have been paid, neither the Company nor any Subsidiary may be liable for retroactive premiums or similar payments, and the Company and the Subsidiaries are otherwise in compliance with the terms of such policies.  The Company has no Knowledge of any threatened termination of, or premium increase with respect to, any such policy.  Each such policy will continue to be enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing.  Section 3.18 of the Disclosure Schedule identifies all claims asserted by the Company pursuant to any insurance policy since the inception of the Company and describes the nature and status of each such claim.
3.19    Litigation.  There is no Legal Proceeding which is pending or has been threatened in writing against the Company or any Subsidiary. There are no judgments, orders or decrees outstanding against the Company or any Subsidiary.
3.20    Warranties.
(a)    No service or product provided, manufactured, sold, leased, licensed or delivered by the Company or any Subsidiary is subject to any guaranty, warranty, right of return, right of credit, service level agreement obligation or other indemnity.  Section 3.20(a) of the Disclosure Schedule sets forth the aggregate expenses incurred by the Company and the Subsidiaries in fulfilling their obligations under their guaranty, warranty, right of return, service level agreement credit and indemnity provisions during each of the fiscal years and the interim period covered by the Financial Statements; and the Company has no Knowledge of any reason why such expenses should significantly increase as a percentage of sales in the future.
(b)    The reserve for warranty claims set forth on the Most Recent Balance Sheet and any reserves for warranty claims created by the Company in the Ordinary Course of Business subsequent to the Most Recent Balance Sheet Date are adequate and were calculated in accordance with UK GAAP consistently applied.
(c)    Neither the Company nor any Subsidiary has any Liability to any customer in connection with any service provided or product manufactured, sold, leased or 

41

delivered by the Company or a Subsidiary to provide the customer with any other services or products of the Company or a Subsidiary on pre-negotiated terms, including for upgrades to other services or products at prices below the Company’s or the Subsidiary’s, as the case may be, published price for such services or products.  Neither the Company nor any Subsidiary has any Liability to any customer in connection with any service provided or product manufactured, sold, leased or delivered by the Company or a Subsidiary other than those arising in the Ordinary Course of Business.
3.21    Employees.
(a)    Section 3.21(a) of the Disclosure Schedule contains a list, for each employee of the Company and each Subsidiary, of the employee’s position, engaging entity,  notice period, date of hire, country in which the employee works, annual rate of compensation (or with respect to employees compensated on an hourly or per diem basis, the hourly or per diem rate of compensation), estimated or target annual incentive compensation, and employment status (including whether the person is on leave of absence, the dates of such leave and the basis for such leave).  Each of such employees is retained at-will, other than such employees employed in the United Kingdom, and none of such employees is a party to an employment agreement or contract with the Company or any Subsidiary.  Each current and former employee of the Company or any Subsidiary has entered into the Company’s or such Subsidiary’s standard form of confidentiality, non-competition and assignment of inventions agreement, a copy of which has previously been delivered to the Buyer.  All of the agreements referenced in the preceding sentence will continue to be legal, valid, binding and enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing.  To the Knowledge of the Company, no Key Employee or group of employees has any plans to terminate employment with the Company or any Subsidiary, nor has the Company or any Subsidiary given notice to terminate any such Key Employee or group of employees.  The Company and the Subsidiaries are in compliance with all applicable Laws relating to the employment of employees, including the hiring, classification and termination of employees.
(b)    Neither the Company nor any Subsidiary is a party to or bound by any collective bargaining agreement, nor has either of them experienced any actual or threatened strikes, grievances, claims of unfair labor practices or other collective bargaining disputes.  The Company has no Knowledge of any organizational effort made or threatened (including the filing of a petition for certification) either currently or within the past two (2) years, by or on behalf of any labor union, trade union or works council with respect to employees of the Company or any Subsidiary.
(c)    None of the Company, any Subsidiary, any director, officer or other Key Employee of the Company or any Subsidiary, or any Affiliate of any of the foregoing, has any existing undisclosed contractual relationship with the Company or a Subsidiary or owns, directly or indirectly, individually or collectively, any interest in any entity which is in a business similar or competitive to the business of the Company and the Subsidiaries.

42

(d)    Section 3.21(d) of the Disclosure Schedule contains a list of all consultants and independent contractors currently engaged by either the Company or any Subsidiary, along with the position, date of retention, engaging entity, country in which the individual provides services, notice required to terminate such engagement and rate of remuneration for each such Person.  None of such consultants or independent contractors is a party to a written agreement or contract with the Company or any Subsidiary.  Each such consultant and independent contractor has entered into the Company’s or such Subsidiary’s standard form of confidentiality, non-competition and assignment of inventions agreement with the Company or such Subsidiary, a copy of which has previously been delivered to the Buyer.
(e)    Section 3.21(e) of the Disclosure Schedule contains a list by employee name, identification number and country of citizenship of all employees of the Company or any Subsidiary employed in the United States who are not citizens of the United States.  Section 3.21(e) of the Disclosure Schedule also sets forth a list by name and identification number of each employee of the Company or any Subsidiary who is providing services in the United States and who holds a temporary work authorization (“Work Permit”), including H-1B, TN, E-1, E-2, L-1, F-1 or J-1 visa status or Employment Authorization Document (“EAD”) work authorizations, setting forth the name and identification number of such employee, the type of Work Permit and the length of time remaining on such Work Permit.  With respect to each Work Permit, all of the information that the Company or any Subsidiary provided to the United States Department of Labor (“DOL”) and the United States Customs and Immigration Service (“USCIS”) in the applications for such Work Permit was, to the Knowledge of the Company, true and complete at the time of filing such applications.  The Company or the applicable Subsidiary received the appropriate notice of approval or other evidence of authorized employment from the USCIS, the DOL, the Department of State or other relevant Governmental Entity with respect to each such Work Permit.  Neither the Company nor any Subsidiary has received any notice from the USCIS or any other Governmental Entity that any Work Permit has been revoked.  There is no action pending or, to the Knowledge of the Company, threatened to revoke or adversely modify the terms of any of the Work Permits.  Every employee or worker of the Company or any Subsidiary who requires a work permit to work in the jurisdiction in which such person works has a current work permit or other permission to remain in such jurisdiction.
(f)    The Company or a Subsidiary obtained the necessary prevailing wage documentation for each H-1B worker and has paid and continues to pay each H-1B worker the prevailing wage according to the regulations of the DOL to the extent that such regulations are applicable to it.  The Company and the Subsidiaries have complied with all terms of the Labor Condition Applications for all H-1B workers and has maintained all documentation required by the DOL regulations to the extent that such terms and regulations are applicable to it.  The Company has provided the Buyer with a written statement which summarizes the compliance of the Company and each Subsidiary with the DOL regulations governing labor condition applications to the extent that such regulations are applicable to it.
(g)    The Company has withheld and paid to the appropriate Governmental Entity or is holding for payment not yet due to such Governmental Entity all amounts required to be withheld from its employees and is not liable for any arrears of wages, Taxes, penalties or 

43

other sums for failure to comply with any of the foregoing.  There are no, and at no time have there been, any independent contractors who have provided services to the Company for a period of six (6) consecutive months or longer.  The Company has never had any temporary or leased employees.
(h)    Section 3.21(h) of the Disclosure Schedule contains a complete and accurate list of (i) all of the Company’s and each Subsidiary’s written employee handbooks, employment manuals, employment policies, or affirmative action plans, and (ii) written summaries of all unwritten employment policies.
(i)    To the extent applicable to it, neither the Company nor any Subsidiary has caused or will cause any “employment loss” (as that term is defined or used in the U.S. Worker Adjustment Retraining Notification Act) at any time during the 90 calendar day period ending on the date hereof, nor has the Company or any Subsidiary incurred any Liability in connection with the termination of employment of any of its employees for failure to provide information or to consult with employees under any applicable Law.
(j)    Neither the Company nor any Subsidiary has incurred, and no circumstances exist under which the Company or any Subsidiary could incur, any Liability arising from the misclassification of employees as consultants or independent contractors, or from the misclassification of consultants or independent contractors as employees.
3.22    Employee Benefits.
(a)    Section 3.22(a) of the Disclosure Schedule contains a complete and accurate list of all Company Plans.  Complete and accurate details of all Liabilities of the Company or any Subsidiary in respect of each Company Plan have been disclosed to the Buyer.  For the avoidance of doubt, such disclosure includes the delivery to the Buyer (where applicable) of complete and accurate copies of (i) all Company Plans which have been reduced to writing, together with all amendments thereto, (ii) written summaries of all unwritten Company Plans, (iii) all related trust agreements, insurance contracts and summary plan descriptions, (iv) all annual reports filed on IRS Form 5500, 5500C or 5500R and (for all funded plans) all plan financial statements for the last three plan years for each Company Plan, (v) all reports regarding the satisfaction of the nondiscrimination requirements of Sections 410(b), 401(k), and 401(m) of the Code for the past three years, and (vi) any written or electronic communications from or to any Governmental Entity, including the Internal Revenue Service or the DOL, with respect to a Company Plan (including any voluntary correction submissions).  All Company Plans comply with all applicable Law.
(b)    Each Company Plan has been administered in accordance with its terms and each of the Company, the Subsidiaries and (where applicable) the ERISA Affiliates has met its obligations with respect to each Company Plan and has timely made all required contributions thereto.  Each Company Plan is in compliance with the provisions of all applicable Laws relating to each Company Plan (and its governing documentation), including (where relevant) ERISA and the Code, and the regulations thereunder.  All filings and reports as to each Company Plan 

44

required to have been submitted to each relevant Governmental Entity, including the Internal Revenue Service or the DOL, have been timely submitted.
(c)    There are no Legal Proceedings (except claims for benefits payable in the normal operation of the Company Plans and proceedings with respect to qualified domestic relations orders) against or involving any Company Plan or asserting any rights or claims to benefits under any Company Plan that could give rise to any Liability, and neither the Company nor any Subsidiary is aware of any issue which could reasonably be expected to give rise to any Liability in the future.  No Company Plan is or within the last three calendar years has been the subject of, or has received notice that it is the subject of, examination by a Governmental Entity or a participant in a government sponsored amnesty, voluntary compliance or similar program.
(d)    All the Company Plans that are intended to be qualified under Section 401(a) of the Code have received determination letters or opinion letters from the Internal Revenue Service to the effect that such Company Plans are qualified and the plans and the trusts related thereto are exempt from federal income Taxes under Sections 401(a) and 501(a), respectively, of the Code, no such determination letter or opinion letter has been revoked and revocation has not been threatened, and no act or omission has occurred, that would adversely affect its qualification or increase its cost.
(e)    Neither the Company, any Subsidiary nor any ERISA Affiliate has ever maintained or contributed to an Employee Benefit Plan which was ever subject to Section 412 of the Code or Title IV of ERISA.  At no time has the Company, any Subsidiary or any ERISA Affiliate been obligated to contribute to any “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA).
(f)    No Company Plan that is funded has assets that include securities issued by the Company, any Subsidiary or any ERISA Affiliate.
(g)    With respect to the Company Plans, there are no benefit obligations for which contributions have not been made or properly accrued and there are no benefit obligations that have not been accounted for by reserves on the Financial Statements if required by applicable accounting standards.
(h)    All group health plans of the Company, any Subsidiary and any ERISA Affiliate comply in all respects with the requirements of all applicable Laws, including, to the extent applicable, COBRA, Code Section 5000, the Health Insurance Portability and Accountability Act and the Patient Protection and Affordable Care Act (“PPACA”).  Neither the Company, any Subsidiary, nor any ERISA Affiliate has any Liability under or with respect to COBRA for its own actions or omissions, or those of any predecessor.  No Company Plan provides health care continuation coverage beyond termination of employment, except to COBRA qualified beneficiaries at their own, and not at the Company’s, expense.  No Person (or any beneficiary of such Person) is entitled to receive any welfare benefits, including death or medical benefits (whether or not insured) beyond retirement or other termination of employment, other than as applicable Law requires or as required by the terms of any Company Plan, and there have been no written or oral commitments inconsistent with the foregoing.

45

(i)    No act or omission has occurred and no condition exists with respect to any Company Plan that would subject the Buyer, the Company, any Subsidiary, any ERISA Affiliate, or any plan participant to (i) any fine, penalty, Tax or Liability of any kind imposed under any applicable Law, including ERISA or the Code, or (ii) any contractual indemnification or contribution obligation protecting any fiduciary, insurer or service provider with respect to any Company Plan, nor will the transactions contemplated by this Agreement give rise to any such Liability.
(j)    No Company Plan is funded by, associated with or related to a “voluntary employee’s beneficiary association” within the meaning of Section 501(c)(9) of the Code.
(k)    Each Company Plan is amendable and terminable unilaterally by the Company and any Subsidiary that is a party thereto or covered thereby at any time without Liability or expense to the Company, any Subsidiary or such Company Plan as a result thereof (other than for benefits accrued through the date of termination or amendment and reasonable administrative expenses related thereto) and no Company Plan, plan documentation or agreement, summary plan description or other written communication distributed generally to employees by its terms prohibits the Company or any Subsidiary from amending or terminating any such Company Plan, or in any way limit such action.  The investment vehicles used to fund any Company Plan may be changed at any time without incurring a sales charge, surrender fee or other similar expense.
(l)    Section 3.22(l) of the Disclosure Schedule discloses each: (i) agreement with any stockholder, director, executive officer or other Key Employee of the Company or any Subsidiary (A) the benefits of which are contingent, or the terms of which are altered, upon the occurrence of a transaction involving the Company or any Subsidiary of the nature of any of the transactions contemplated by this Agreement, (B) providing any term of employment or compensation guarantee or (C) providing severance benefits or other benefits after the termination of employment of such stockholder, director, executive officer or Key Employee; (ii) agreement, plan or arrangement under which any person may receive payments from the Company or any Subsidiary that may be subject to the Tax imposed by Section 4999 of the Code or included in the determination of such person’s “parachute payment” under Section 280G of the Code without regard to Section 280G(b)(4); and (iii) agreement or plan binding the Company or any Subsidiary, including any stock option plan, stock appreciation right plan, restricted stock plan, stock purchase plan, severance benefit plan or Company Plan, any of the benefits of which will be increased, or the vesting of the benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement.
(m)    Each individual who has received compensation for the performance of services on behalf of the Company, any Subsidiary or the ERISA Affiliates has been properly classified as an employee or independent contractor in accordance with applicable Law.
(n)    Section 3.22(n) of the Disclosure Schedule sets forth the policy of the Company and each Subsidiary with respect to accrued vacation, accrued sick time and earned time off and the amount of such liabilities as of the Closing Date.

46

(o)    Section 3.22(o) of the Disclosure Schedule sets forth all bonuses earned by the Company’s or any Subsidiary’s employees through the Closing Date that are expected to be accrued on the Closing Adjustment Statement but unpaid as of the Closing Date.
(p)    There are no loans or extensions of credit from the Company, any Subsidiary or any ERISA Affiliate to any employee of or independent contractor to the Company or any Subsidiary.
(q)    There is no plan or commitment, whether legally binding or not, to create any additional Company Plans or to modify any existing Company Plans with respect to employees of the Company or any Subsidiary.
(r)    There is no corporate-owned life insurance (COLI), split-dollar life insurance policy or any other life insurance policy on the life of any employee of the Company or any Subsidiary or on any Company Stockholder.
(s)    With respect each Company Plan, to the extent it provides benefits or compensation to a United States taxpayer:  (i) if such Company Plan is a “nonqualified deferred compensation plan” (as defined in Code Section 409A(d)(1)), such Company Plan has been since January 1, 2005 in compliance with Code Section 409A and IRS Notice 2005-1 and has been in documentary compliance since January 1, 2009; (ii) if such Company Plan is a “nonqualified deferred compensation plan” that is grandfathered from the provisions of Section 409A of the Code, such Company Plan has not been materially modified (as determined under Notice 2005-1) after October 3, 2004; (iii) no event has occurred that would be treated by Code Section 409A(b) as a transfer of property for purposes of Code Section 83; and (iv) no stock option or equity unit option granted under any Company Plan has an exercise price that has been or may be less than the fair market value of the underlying stock or equity units (as the case may be) as of the date such option was granted or has any feature for the deferral of compensation other than the deferral of recognition of income until the later of exercise or disposition of such option.
(t)    Each Company Plan that is subject to the Laws of any jurisdiction outside of the United States (i) has been maintained in accordance with its terms and with all applicable Laws, (ii) if intended to qualify for special Tax treatment, meets all requirements for such treatment, (iii) is fully funded (including with respect to benefits not vested) and (iv) if required to be registered, has been registered with the appropriate authorities and has been maintained in good standing with the appropriate regulatory authorities.
(u)    Except for the Pension Schemes, neither the Company nor any Subsidiary has any Liability in respect of a UK pension scheme (as defined by Section 150 of the United Kingdom Finance Act 2004) for or in respect of any past or present officer or employee of the Company or any Subsidiary (or any predecessor in business).
(v)    Except for a lump sum death benefit scheme that is fully insured, the benefits provided to individuals employed by the Company or any Subsidiary in the United Kingdom are money purchase benefits (as defined by Section 181 of the United Kingdom Pension Scheme Act 1993).  Where any such individual transferred to the Company or any 

47

Subsidiary (or a predecessor in business) upon the transfer of an undertaking to which the United Kingdom Transfer of Undertakings (Protection of Employment) Regulations 2006 applied, no Liability in respect of an occupational pension scheme transferred by virtue of those Regulations.
(w)    The Company and each Subsidiary has at all times complied with the United Kingdom statutory provisions relating to stakeholder pensions under the United Kingdom Welfare Reform and Pensions Act 1999 and Part 1 of the United Kingdom Pensions Act 2008 (Scheme Membership for Jobholders) and their associated Regulations.
(x)    Neither the Company, nor any Subsidiary is an employer of a UK occupational pension scheme, or connected or associated to any such employer (such terms being defined in Sections 38 to 50 of the United Kingdom Pensions Act 2004).
(y)    No Pension Scheme accepts, or has accepted, any contribution from a European employer, as defined for the purposes of Part 7 of the United Kingdom Pensions Act 2004.
3.23    Environmental Matters.
(a)    The Company and the Subsidiaries have complied with all applicable Environmental Laws.  There is no pending or, to the Knowledge of the Company, threatened civil or criminal litigation, written notice of violation, administrative proceeding, or investigation, inquiry or information request by any Governmental Entity, relating to any Environmental Law involving the Company or any Subsidiary.
(b)    Neither the Company nor any Subsidiary has any Liabilities arising from the release or threatened release of any Materials of Environmental Concern into the environment.
(c)    Neither the Company nor any Subsidiary is a party to or bound by any court order, administrative order, consent order or other agreement between the Company or any Subsidiary and any Governmental Entity entered into in connection with any legal Liability arising under any Environmental Law.
(d)    Set forth in Section 3.23(d) of the Disclosure Schedule is a list of all documents (whether in hard copy or electronic form) that contain any environmental reports, investigations and audits relating to premises currently or previously owned or operated by the Company or any Subsidiary (whether conducted by or on behalf of the Company, any Subsidiary or a third party, and whether done at the initiative of the Company or a Subsidiary or directed by a Governmental Entity or other third party) which the Company has possession of or access to.  A complete and accurate copy of each such document has been made available to the Buyer.
(e)    The Company has no Knowledge of any environmental Liability relating to any solid or hazardous waste transporter or treatment, storage or disposal facility that has been used by the Company or any Subsidiary.
3.24    Legal Compliance.

48

(a)    The Company and each Subsidiary is currently conducting, and has at all times since its inception conducted, its business in compliance with each applicable Law.  Neither the Company nor any Subsidiary has received any notice or communication alleging noncompliance with any applicable Law.
(b)    Neither the Company nor any Subsidiary is or has at any time engaged in any activity, practice or conduct which would constitute an offense under the United Kingdom Bribery Act 2010.No Associated Person of the Company or of any Subsidiary has bribed another person (within the meaning given in Section 7(3) of the United Kingdom Bribery Act 2010) intending to obtain or retain business or an advantage in the conduct of business for the Company and/or any Subsidiary, and the Company and each Subsidiary has in place adequate procedures designed to prevent their respective Associated Persons from undertaking any such conduct.  Neither the Company nor any Subsidiary nor any of their respective Associated Persons is or has been the subject of any investigation, inquiry or enforcement proceedings by any Governmental Entity or any customer regarding any offense or alleged offense under the United Kingdom Bribery Act 2010, and no such investigation, inquiry or proceedings have been threatened or are pending and there are no circumstances likely to give rise to any such investigation, inquiry or proceedings.  Neither the Company nor any Subsidiary is ineligible to be awarded any contract or business under Section 23 of the United Kingdom Public Contracts Regulations 2006 or Section 26 of the United Kingdom Utilities Contracts Regulations 2006 (each as amended).
(c)    Neither the Company, any Subsidiary nor any officer, director, employee or agent thereof or any Company stockholder acting on behalf of the Company or any Subsidiary, has condoned any act or authorized, directed or participated in any act in violation of any provision of the United States and Foreign Corrupt Practices Act of 1977, or any comparable Law, as applied to such officer, director, employee, agent or Company stockholder.
(d)    No Person currently or previously employed or otherwise engaged (as a consultant, independent contractor or otherwise) by the Company or any Subsidiary has been, at any time so employed or otherwise engaged, debarred (including, for the avoidance of doubt, pursuant to a debarment issued prior to such employment or engagement that remains in effect at any time during such employment or engagement) pursuant to the provisions of the United States Federal Food, Drug and Cosmetic Act, any rule or regulation thereunder or any other comparable Law.
3.25    Customers and Suppliers.  Section 3.25 of the Disclosure Schedule sets forth a list of (a) each customer of the Company or any Subsidiary during the last full fiscal year and the interim period through April 25, 2013 and the amount of revenues accounted for by such customer during each such period and (b) each supplier that is the sole supplier of any significant product or service to the Company or any Subsidiary.  No such customer or supplier has indicated within the past year that it will stop, or decrease the rate of, buying materials, products or services or supplying materials, products or services, as applicable, to the Company or any Subsidiary.  The Company and the Subsidiaries each have good relations with their customers.  No unfilled customer order or commitment obligating the Company or any Subsidiary to process, manufacture, provide or deliver products or perform services will result in a loss to the Company 

49

or any Subsidiary upon completion of performance.  No purchase order or commitment of the Company or any Subsidiary is in excess of normal requirements, nor are prices provided therein in excess of current market prices for the products or services to be provided thereunder.
3.26    Permits.  Section 3.26 of the Disclosure Schedule sets forth a list of all Permits issued to or held by the Company or any Subsidiary.  Such listed Permits are the only Permits that are required for the Company and the Subsidiaries to conduct their business as presently conducted or as proposed to be conducted.  Each such Permit is in full force and effect; the Company or the applicable Subsidiary, as the case may be, is and has been in compliance with the terms of each such Permit; and, to the Knowledge of the Company, no suspension or cancellation of such Permit is threatened and there is no basis for believing that such Permit will not be renewable upon expiration.  Each such Permit will continue in full force and effect immediately following the Closing.
3.27    Certain Business Relationships With Affiliates.  No Affiliate of the Company, any Subsidiary or any Seller (a) owns any property or right, tangible or intangible, which is used in the business of the Company or any Subsidiary, (b) has any claim or cause of action against the Company or any Subsidiary, (c) owes any money to, or is owed any money by, the Company or any Subsidiary, or (d) is a party to any contract or other arrangement (written or oral) with the Company or any Subsidiary.  Section 3.27 of the Disclosure Schedule describes any transactions or relationships between the Company or any Subsidiary and any Affiliate thereof or any Seller that occurred or have existed since the beginning of the time period covered by the Financial Statements.
3.28    Brokers’ Fees.  Neither the Company nor any Subsidiary has any Liability to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.
3.29    Books and Records.  The minute books and other similar records of the Company and each Subsidiary contain complete and accurate records of all actions taken at any meetings of the Company’s or such Subsidiary’s equityholders, Board of Directors (or comparable management body) or any committee thereof and of all written consents executed in lieu of the holding of any such meeting.  The books and records of the Company and each Subsidiary accurately reflect the assets, liabilities, business, financial condition and results of operations of the Company and the Subsidiaries and have been maintained in accordance with good business and bookkeeping practices.  Section 3.29 of the Disclosure Schedule contains a list of all bank accounts and safe deposit boxes of the Company and the Subsidiaries and the names of persons having signature authority with respect thereto or access thereto.
3.30    Data Protection.  
(a)    The Company and each Subsidiary (to the extent applicable to it) has notified registrable particulars under the United Kingdom Data Protection Act 1998 of all personal data held by it and:

50

(i)    has renewed such notifications and has notified any changes occurring in between such notifications as required by the United Kingdom Data Protection Act 1998;
(ii)    has paid all fees payable in respect of such notifications;
(iii)    the contents of such notifications (copies of which are included in the Section 3.30(a)(iii) of Disclosure Schedule) are complete and accurate; and
(iv)    there has been no unauthorized disclosure of personal data outside the terms of such notifications.
(b)    Neither the Company nor any Subsidiary (to the extent it is restricted from doing so) has transferred any personal data outside the European Economic Area.
(c)    The Company and each Subsidiary (to the extent applicable to it) has:
(i)    complied in all respects with the United Kingdom Data Protection Act of 1984 and the United Kingdom Data Protection Act 1998 (including in relation to any manual data in respect of which the transitional exemptions under Schedule 8 of the United Kingdom Data Protection Act 1998 have now expired);
(ii)    satisfied any requests for access to personal data subject to Section 3.30(c)(i);
(iii)    established the procedures necessary to ensure continued compliance with the United Kingdom Data Protection Act 1984 and the United Kingdom Data Protection Act 1998; and
(iv)    complied with the requirements of the seventh principle of the United Kingdom Data Protection Act 1998 in respect of any processing of data carried out by a data processor on behalf of the Company or any Subsidiary, including by entering into a written contract with the data processor confirming that the data processor will only act on the instructions of the Company or the relevant Subsidiary, and requiring the data processor to comply with obligations relating to security measures equivalent to those imposed on the Company or the relevant Subsidiary by the seventh principle as mentioned above.
(d)    Neither the Company nor any Subsidiary has received any:
(i)    notice or complaint under the United Kingdom Data Protection Act 1998 alleging non-compliance with that Act (including any information or enforcement notice, or any transfer prohibition notice); or
(ii)    claim for compensation for loss or unauthorized disclosure of data; or

51

(iii)    notification of an application for rectification or erasure of personal data;
and there are no circumstances which may give rise to the giving of any such notice or the making of any such notification.
(e)    The Company and each Subsidiary (to the extent applicable to it) has complied with its obligations under the United Kingdom Privacy and Electronic Communications (EC Directive) Regulations 2003 in respect of the use of electronic communications (including e-mail, text messaging, fax machines, automated calling systems and non-automated telephone calls) for direct marketing purposes.
3.31    Prepayments, Prebilled Invoices and Deposits.
(a)    Section 3.31(a)  of the Disclosure Schedule sets forth (i) all prepayments, prebilled invoices and deposits that have been received by the Company and the Subsidiaries from customers for products to be shipped, or services to be performed, after the Closing Date, and (ii) with respect to each such prepayment, prebilled invoice or deposit, (A) the party and contract credited, (B) the date received or invoiced, (C) the products and/or services to be delivered and (D) the conditions for the return of such prepayment, prebilled invoice or deposit.  All such prepayments, prebilled invoices and deposits are properly accrued for on the Most Recent Balance Sheet in accordance with UK GAAP applied on a consistent basis with the past practice of the Company and the Subsidiaries.
(b)    Section 3.31(b) of the Disclosure Schedule sets forth (i) all prepayments, prebilled invoices and deposits that have been made or paid by the Company and the Subsidiaries for products to be purchased, services to be performed or other benefits to be received after the Closing Date and (ii) with respect to each such prepayment, prebilled invoice or deposit, (A) the party to whom such prepayment, prebilled invoice or deposit was made or paid, (B) the date made or paid, (C) the products and/or services to be delivered and (D) the conditions for the return of such prepayment, prebilled invoice or deposit.  All such prepayments, prebilled invoices and deposits are properly accrued for on the Most Recent Balance Sheet in accordance with UK GAAP applied on a consistent basis with the past practice of the Company and the Subsidiaries.
3.32    Customer Offerings.  The Customer Offerings substantially conform to the functional description in the Documentation for such Customer Offerings under normal use and service in accordance with the applicable Documentation.  
3.33    Disclosure.  No representation or warranty by the Sellers contained in this Agreement, and no statement contained in the Disclosure Schedule or any other document, certificate or other instrument delivered or to be delivered by or on behalf of the Company or the Sellers pursuant to this Agreement, contains any untrue statement of a material fact or omits to state any material fact necessary, in light of the circumstances under which it was made, in order to make the statements herein or therein not misleading.
3.34    No Further Representations; Projections.

52

(a)    EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE II AND THIS ARTICLE III, NEITHER THE COMPANY NOR ANY SELLER MAKES ANY REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, AT LAW OR IN EQUITY IN RESPECT OF THE COMPANY OR ANY OF ITS SUBSIDIARIES, OR ANY OF THEIR RESPECTIVE ASSETS, LIABILITIES OR OPERATIONS, AND ANY SUCH OTHER REPRESENTATIONS OR WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED.
(b)    In connection with the Buyer’s investigation of the Company, the Buyer has received certain projections, including projected statements of revenues and income from operations of the Company and certain business plan information.  The Buyer acknowledges that there are uncertainties inherent in attempting to make such estimates, projections and other forecasts and plans, that the Buyer is familiar with such uncertainties and that the Buyer is taking full responsibility for making its own evaluation of the adequacy and accuracy of all estimates, projections and other forecasts and plans so furnished to it, including the reasonableness of the assumptions underlying such estimates, projections and forecasts.  Accordingly, the Company and the Sellers make no representation or warranty with respect to such estimates, projections and other forecasts and plans, including the reasonableness of the assumptions underlying such estimates, projections and forecasts.
(c)    Notwithstanding anything to the contrary, nothing in this Section 3.34 or elsewhere in this Agreement shall limit any right or remedy that may be available in respect of any claim based on fraud or Knowing Misrepresentation.  
ARTICLE IV 
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Sellers that the statements contained in this Article IV are true and correct:
4.1    Organization and Corporate Power.  The Buyer is a company duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization.  The Buyer has all requisite power and authority (corporate and other) to carry on the businesses in which it is engaged and to own and use the properties owned and used by it.  The Buyer is an indirect wholly-owned subsidiary of the Buyer Parent.
4.2    Authorization of Transaction.  The Buyer has all requisite power and authority (corporate and other) to execute and deliver this Agreement, the Escrow Agreement and the other agreements contemplated hereby and thereby, and to perform its obligations hereunder and thereunder.  The execution and delivery by the Buyer of this Agreement, the Escrow Agreement and the other agreements contemplated hereby and thereby, and the consummation by the Buyer of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action on the part of the Buyer.  This Agreement and all other agreements contemplated hereby (other than the Escrow Agreement) have been, and the Escrow Agreement when executed and delivered by the Buyer will be, duly and validly executed and delivered by the Buyer and constitute valid and binding obligations of the Buyer, enforceable against it in accordance with its terms, except as to enforceability which may be limited by bankruptcy, 

53

insolvency reorganization, moratorium or other similar Laws relating to or affecting creditors’ rights generally, or equitable principles.
4.3    Noncontravention.  Neither the execution and delivery by the Buyer of this Agreement, the Escrow Agreement or any other agreement contemplated hereby or thereby, nor the performance by the Buyer of its obligations hereunder or thereunder, nor the consummation by the Buyer of the transactions contemplated hereby or thereby, will (a) conflict with or violate any provision of the charter or By-laws (or comparable organizational documents) of the Buyer, (b) require on the part of the Buyer any filing with, or permit, authorization, consent or approval of, any Governmental Entity, (c) conflict with, result in breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the imposition or acceleration of any obligation under, create in any party any right to accelerate, terminate, modify or cancel, or require any notice, consent or waiver under, any contract, lease, sublease, license, sublicense, franchise, permit, indenture, agreement or mortgage for borrowed money, instrument of indebtedness, Security Interest or other agreement to which the Buyer is a party or by which it is bound or to which any of its assets are subject, or (d) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Buyer or any of its properties or assets.
4.4    Broker’s Fees.  The Buyer has no Liability to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.
4.5    Disclosure.  No representation or warranty by the Buyer contained in this Agreement or any other document, certificate or other instrument delivered or to be delivered by or on behalf of the Buyer pursuant to this Agreement, contains any untrue statement of a material fact or omits to state any material fact necessary, in light of the circumstances under which it was made, in order to make the statements herein or therein not misleading.
4.6    No Further Representations.  
(a)    EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE IV, THE BUYER MAKES NO REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, AT LAW OR IN EQUITY IN RESPECT OF THE BUYER OR ANY OF ITS AFFILIATES, OR ANY OF THEIR RESPECTIVE ASSETS, LIABILITIES OR OPERATIONS, AND ANY SUCH OTHER REPRESENTATIONS OR WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED.
(b)    Notwithstanding anything to the contrary, nothing in this Section 4.6 or elsewhere in this Agreement shall limit any right or remedy that may be available in respect of any claim based on fraud or Knowing Misrepresentation.  
ARTICLE V 
COVENANTS
5.1    Cooperation in Litigation.  In the event that a claim is asserted against the Buyer or any of its Affiliates (including the Company and the Subsidiaries) with respect to the Company or any Subsidiary, any business conducted by the Company or any Subsidiary, or any of the transactions contemplated hereby, each Seller shall cooperate with Buyer in the defense of 

54

such claim.  Each Seller shall reasonably consult with the Buyer regarding the defense of any proceedings or litigation against any Seller relating to any of the transactions contemplated hereby.
5.2    Transition Assistance.  Without payment of any further consideration, other than the consideration expressly set forth in this Agreement, each Seller shall provide to Buyer and its Affiliates such assistance as Buyer shall reasonably request in order to effect the transition of the business of the Company and the Subsidiaries to the Buyer.
5.3    Tax Matters.  Subject always to Section 6.1, this Section 5.3 shall control the allocation and responsibility as between the Parties for the Tax matters described below.
(a)    Subject to the provisions of this Section 5.3, the Buyer will have exclusive conduct of all Taxation affairs of the Company and the Subsidiaries after the Closing.
(b)    The Buyer will procure that the Company keeps the Representative reasonably informed of the conduct of its Taxation affairs in respect of any Pre-Closing Tax Period and any Straddle Period.
(c)    The Buyer will cause to be prepared and timely filed all Tax Returns of the Company and any Subsidiaries for a Pre-Closing Tax Period that are required to be filed after the Closing Date, including Tax Returns for any Straddle Period that are filed after the Closing Date (the “Buyer Prepared Tax Returns”).  All Buyer Prepared Tax Returns shall be filed in a manner consistent in all material respects with the prior practice of the Company and the Subsidiaries, as applicable, except to the extent the Buyer makes a good faith determination that a position or other method of reporting in such Tax Return is not reasonably likely to be sustained upon audit or is inconsistent with the requirements of Law.  At least twenty (20) Business Days prior to the due date (including any applicable extensions) of each Buyer Prepared Tax Return, the Buyer shall cause to be delivered to the Representative a draft copy of such Tax Return, in the case of a Pre-Closing Tax Period, and, in the case of a Straddle Period, a pro forma return for the portion of the period ending on the Closing Date for the Representative’s review and comment.  At least ten (10) Business Days prior to the due date of each Buyer Prepared Tax Return, the Representative shall deliver to the Buyer its comments, if any, in writing relating to such Buyer Prepared Tax Return.  The Buyer shall consider in good faith the Representative’s comments to such Buyer Prepared Tax Returns.  The Buyer shall promptly provide the Representative copies of all filed Buyer Prepared Tax Returns for Pre-Closing Tax Periods and, in the case of a Straddle Period, a pro forma return for the portion of the period ending on the Closing Date.  At least five (5) Business Days prior to the due date of each payment (including whether the payment is for an estimated amount of tax or an instalment or otherwise) with respect to either the Pre-Closing Tax Periods or the Pre-Closing Portion of the Straddle Period or relating to a Buyer Prepared Tax Return, the Sellers shall pay to the Buyer the amount of Taxes due with respect to the Pre-Closing Tax Periods (whether or not a Buyer Prepared Tax Return is filed) or relating to such Buyer Prepared Tax Return for a Pre-Closing Tax Period and the amount of Taxes due with respect to either the Pre-Closing Portion of a Straddle Period (whether or not a Buyer Prepared Tax Return is filed) or relating to such Buyer Prepared Tax Return for a Straddle Period to the extent allocated to the Pre-Closing Portion pursuant to Section 5.3(d), except to the extent such 

55

Taxes (i) were taken into account in determining the Final Closing Adjustment, (ii) are not Indemnified Taxes, (iii) are Excluded Taxes or (iv) are Taxes arising from transfer pricing adjustments for the fiscal years ending June 30, 2010, June 30, 2011 and/or June 30, 2012 and for which funds have been set aside in the Transfer Pricing Escrow Account.  In the case of any payments due from the Sellers pursuant to this Section 5.3(c) and for which the Representative has not received a Buyer Prepared Tax Return or pro forma tax return, the Buyer shall, if requested by the Representative in writing, provide the Representative with reasonable documentation supporting the determination of the payment.  Any payments made by the Sellers pursuant to this Section shall be treated as adjustments to the Purchase Price for Tax purposes.
(d)    Save for those Indirect Taxes and Indian Indirect Taxes and Indian Taxes generally allocated to the Seller or the Buyer under Section 5.3(m) or Section 5.3(n) as applicable, in the case of any taxable period that includes but does not end on the Closing Date (a “Straddle Period”), (i) the amount of any Taxes that are based on or measured by income, profits, gains or receipts or relate to any sales or use Tax or employment taxes (including social security and national insurance) or stamp taxes or stamp duty reserve tax or United Kingdom inheritance tax or any Taxes required to be withheld or deducted from payments, will be allocated between the Pre-Closing Portion and Post-Closing Portion of the Straddle Period determined based on an interim closing of the books as of the end of the Closing Date (and for the purposes of corporation tax of the Company and any United Kingdom Subsidiary determined based on an interim closing of the books shall mean determined based on the end of the Closing Date being deemed to be the end of an accounting period), and (ii) the amount of any other Taxes such as the amount of any business rates related to UK real estate or similar real estate taxes in other countries, will be deemed to be the amount of such Tax for the entire period multiplied by a fraction, the numerator of which is the number of days in the Pre-Closing Portion of the Straddle Period and the denominator of which is the number of days in such Straddle Period.  Tax deductions arising from the payment of any Closing Adjustment Items shall be allocated to a Pre-Closing Tax Period or the Pre-Closing Portion of a Straddle Period, as applicable, unless otherwise required by applicable Law. Transactions, including any election under Section 338 of the Code or any election filed pursuant to IRS Form 8832, that occur on the Closing Date but after the Closing and that are not incurred in the Ordinary Course of Business of the Company or its Subsidiaries shall be allocated to the period that commences on the day following the Closing Date.
(e)    The Buyer shall pay to the Representative any refunds of Taxes of the Company or any Subsidiaries that relate or are attributable to a Pre-Closing Tax Period, other than any refunds that relate or are attributable to any carryback of net operating losses, capital losses or other Tax attributes relating to a taxable period or portion thereof beginning after the Closing and refunds that are taken into account in the Final Closing Adjustment.  The Buyer shall use commercially reasonable efforts to pursue any claims for refund of the Company or any Subsidiary pending as of the Closing, all of which are listed in Section 5.3(e) of the Disclosure Schedule.  The Buyer shall pay any refund described in this Section, net of any reasonable costs incurred by the Buyer in obtaining such refund, to the Representative within ten (10) Business Days of the actual receipt of the refund.

56

(f)    The Parties will provide each other upon request with such assistance as may reasonably be required, including the provision of such information as may be known or available to the Parties, in order to assist the Parties with the preparation of any Tax return or other Tax compliance matter in respect to events occurring, or any Tax period (or portion thereof) ending, on or before, or that includes the Closing Date.  Such cooperation shall include the provision by the Buyer or the Company, at the request of a Seller, of information reasonably required by a Seller for the purpose of complying with U.S. information reporting requirements.  Any assistance or cooperation provided pursuant to this Section 5.3(f) shall be at the sole cost and expense of the requesting Party.
(g)    Notwithstanding any provision herein to the contrary the provisions of this Section will apply to any Tax Claim.  With respect to any Pre-Closing Tax Period or Straddle Period, each Party will provide all other Parties with prompt notice of any audit, any other proceeding relating to Taxes, or any other matter for which indemnification for Taxes may be sought under this Agreement or payment may be sought or a right of set off may be exercised under Section 5.3 of this Agreement (each such inquiry, audit, Proceeding or matter, a “Tax Claim”).  No delay or failure to give written notice of a Tax Claim by a Party shall adversely affect any of the rights or remedies that such Party has under this Agreement or alter or release any obligation to indemnify the indemnified Party, except to the extent, and only to the extent, that such delay or failure has materially prejudiced the indemnifying Party.  The Buyer or the Company shall deliver to the Representative, as promptly as possible but in no event later than ten (10) days after receipt thereof, copies of all notices and documents (including court papers) received by Buyer or the Company with respect to any Tax Claim. Notwithstanding anything to the contrary in this Agreement, in the case of any Tax Claim relating to any Pre-Closing Tax Period or Straddle Period that, if determined adversely to the Company or any Subsidiary, would be grounds for a claim for indemnity pursuant to Article VI, the Buyer shall have the right to control  the conduct of such Tax Claim and shall have the right to settle such Tax Claim; provided, however, that the Buyer shall keep the Representative reasonably informed of the commencement, status, and nature of such Tax Claim, provide the Representative an opportunity to discuss the Tax Claim with the Buyer, and consider in good faith any comments of the Representative with respect to the Tax Claim. In addition, the Buyer will contest such Tax Claim in good faith and use commercially reasonable efforts to reduce or eliminate any amounts payable pursuant to any such Tax Claim.
(h)    None of the Buyer, the Company, or any of their Affiliates will amend, or cause to be amended, any Buyer Prepared Tax Return or any other Tax Return filed with respect to any Pre-Closing Tax Period or Straddle Period without the prior written consent of the Representative (which such consent shall not be unreasonably withheld, conditioned or delayed) except to the extent required by Law.  None of the Buyer, the Buyer Parent, or any of their Affiliates will (i) make or allow to be made any election under Section 338 of the Code (or any similar election under any applicable Law) without the prior written consent of the Representative or (ii) take any action on or after the Closing that Buyer knows or would reasonably be expected to know would increase the indemnity obligations of the Sellers for Taxes pursuant to Article VI without the prior written consent of the Representative unless otherwise required by Law; provided, however, that clause (ii) shall not apply with respect to 

57

either any indemnity obligations of the Sellers for Taxes relating to transfer pricing or prevent the Buyer, Company or any Subsidiary or any employer entity (current or former) of any Individual Seller seeking guidance or clarification from any Governmental Entity as to the proper taxation treatment of all or any part of the Aggregate Consideration (including the Earn-Out Consideration).
(i)    The Sellers jointly and severally irrevocably agree to:
(i)    pay to the Buyer, the Company or any relevant Subsidiary or any other employer (or former employer(s)) of any Seller (in each case a “Recipient Party”) the amount of any Company Shares Tax Liability; and
(ii)    enter into arrangements to the satisfaction of the Buyer, the Company, or any relevant Subsidiary, any Seller’s employer (or former employer(s)) as the Buyer considers appropriate for the satisfaction and/or minimization of any Company Shares Tax Liability, save to the extent that such Company Shares Tax Liability is deducted at source from any payment under this Agreement.
(j)    The Buyer has the right to deduct and/or withhold from and/or set off against all or any part of the Earn Out Consideration otherwise payable to any of the Sellers:-
(i)    any liability under United Kingdom Law to PAYE income Tax and primary class 1 (employee) national insurance contributions and any similar liability under the Laws of any other jurisdiction to deduct and/or withhold and/or account to any Governmental Entity for amounts in respect of Tax, income tax or social security contribution in any jurisdiction that the Buyer, the Company or any Subsidiary or any other employer (or former employer(s)) of any Seller is liable to account for as a result of any Taxable Event; and
(ii)    any secondary class 1 (employer) national insurance contributions in the United Kingdom (or any similar liability for social security contribution in any jurisdiction) that the Buyer, Company or any Subsidiary or any other employer (or former employer(s) of any Seller) is liable to pay as a result of any Taxable Event; and
(iii)    any interest and penalties that the Buyer, the Company or any Subsidiary or any other employer (or former employer(s)) of any Seller is liable to account for in respect of liabilities mentioned in (i) or (ii) above together with any costs reasonably and properly incurred by the Buyer, the Company or the relevant Subsidiary or the relevant employer (or former employer(s)) of any Seller in connection with such liabilities, except to the extent that interest or penalties result from a failure on the part of the Buyer or the Company to discharge any liability within a reasonable time after the Sellers (or any of them) have made any payment to the Buyer in respect of that liability;
save to the extent such sums have been either paid to the Buyer pursuant to Section 5.3(i) or Section 6.1(a) of this Agreement or such sums have been deducted at source from any payment under this Agreement.

58

(k)    The Buyer shall not initiate (save as required by Law), or respond to, communications with a Governmental Entity where the Buyer knew or ought reasonably to have known such communications relate to a Company Shares Tax Liability without first providing the Representative with a reasonable opportunity to comment.  Nothing in this Agreement shall prevent the Buyer, the Company or the relevant Subsidiary or the relevant employer (or former employer(s)) of any Seller seeking guidance or clarification from any Governmental Entity as to the proper taxation treatment of all or any part of the Aggregate Consideration (including the Earn-Out Consideration).
(l)    All sums payable by the Sellers pursuant to Section 5.3(i) shall be paid in cleared and immediate available funds no later than five Business Days before the date on which the Company Shares Tax Liability in question becomes due and payable (or five Business Days after the date on which the Buyer serves notice on the Sellers requesting payment, if later) free and clear of all deductions or withholdings whatsoever unless the deduction or withholding is required by Law.  If any deduction or withholding is required by Law to be made from any of the sums payable by the Sellers pursuant to Section 5.3(i), the Sellers shall pay such sum as will, after the deduction or withholding has been made, leave the Recipient Party (as defined in Section 5.3(i) above) with the same amount as it would have been entitled to receive in the absence of any such requirement to make a deduction or withholding.  If the Recipient Party incurs a Taxation liability which results from, or is calculated by reference to, any sum paid under Section 5.3(i), the amount so payable shall be increased by such amount as will ensure that, after payment of the Taxation liability, the Recipient Party is left with a net sum equal to the sum it would have received had no such Taxation liability arisen. 
(m)    The Sellers shall be responsible for payment of 100% of all Indirect Taxes arising out of the conveyance of the Company Shares to the Entity Seller.  The Sellers shall be responsible for 100% of any Indian Indirect Taxes and Indian Taxes generally arising out of the conveyance of the Company Shares to the Entity Seller or out of the conveyance of the Company Shares to the Buyer or otherwise as a result of or related to the transactions contemplated by this Agreement to the extent such Indian Indirect Taxes and such Indian Taxes generally exceed $137,000.
(n)    The Buyer shall be responsible for payment of 100% of all Indirect Taxes arising out of the conveyance of the Company Shares to the Buyer other than as provided in Section 5.3(m).  The Parties shall cooperate with each other in connection with the filing of any Tax Returns relating to Indirect Taxes, including joining in the execution of any such Tax Return or other documentation where necessary.
5.4    Expenses.  Except as otherwise expressly provided herein, the Buyer will pay all costs, fees and expenses (including legal and accounting costs, fees and expenses) incurred by it in connection with the transactions contemplated hereby and the Company Transaction Expenses and all costs, fees and expenses (including legal and accounting costs, fees and expenses) incurred by any Seller shall be paid by the Sellers.
5.5    Heron Market Access Limited Name Change.  No later than two (2) Business Days following the Closing Date, the Sellers shall (a) take all action necessary to change the 

59

name of HMA to a name that does not include “Heron” or any name intended or likely to be confused or associated with any name used by the Company or any Subsidiary on or prior to the Closing Date and (b) register such name change with all applicable Governmental Entities as necessary or appropriate.
5.6    Data Room Contents.  No later than five (5) Business Days following the Closing Date, the Sellers shall deliver to the Buyer a compact disc containing complete and accurate copies of all documents included in the Data Room.
5.7    Company Employees and Company Employee Plans.  Following the Closing and for six (6) months thereafter, the Buyer shall, or shall cause the Company to, subject to requirements of Law, provide the employees of the Company who remain employed immediately after the Closing Date, including each such employee who is on an approved leave of absence on the Closing Date (the “Continuing Employees”), provided such Continuing Employees remain employed by the Buyer or the Company during such six (6) month period, employee benefits that are substantially similar to those provided to the Continuing Employees before the Closing.  Notwithstanding the foregoing, following the Closing Date, the Buyer shall, or shall cause the Company to, use commercially reasonable efforts to cause each Continuing Employee to receive service credit after the Closing Date for their employment with the Company prior to the Closing Date for purposes of (i) eligibility to participate and vesting (but not benefit accrual or amount) with respect to such Buyer or Company employee benefit plans and (ii) accrual towards vacation leave and other paid time off, except, in each case, where receiving such service credit would result in a duplication of benefits.  Subject to the approval of any insurance carrier or third party provider, the Buyer shall use commercially reasonable efforts to waive all limitations as to preexisting conditions exclusions (or actively at work or similar limitations), evidence of insurability requirements and waiting periods with respect to participation and coverage requirements applicable to the Continuing Employees and their eligible dependents under any health and welfare plan sponsored by the Buyer or the Company that such Continuing Employees may be eligible to participate in after the Closing Date in accordance with this Section 5.7.  Notwithstanding anything to the contrary, the provisions of this Section 5.7 are not intended to, and do not, create any rights or obligations to or for the benefit of anyone other than the Buyer and the Company.  Nothing in this Section 5.7 shall constitute an amendment of any employee benefit plan.  
5.8    Key Employee Retention Plan.  Within five (5) Business Days following the Closing, the Buyer shall, or shall cause the Company to, establish a management retention pool of $1,800,000 and enter into retention bonus documents with Key Employees other than the Sellers with respect to such management retention pool on the terms set forth on Schedule 5.8.
5.9    Equity Interest in HHPL.  Paul Howard acknowledges and agrees that any equity interest he holds in HHPL as of the date hereof is held as the nominee, and for the benefit, of the Company, and that he shall exercise any right associated with any such interest solely for the benefit of, and as directed by, the Buyer.  Upon the Buyer’s request, for no additional consideration, Paul Howard shall execute such documents, and take such other actions, as may be required to transfer any such interest to a transferee designated by the Buyer.  

60

5.10    Further Assurances.  From time to time after the Closing Date, upon request of any Party, each Party shall execute, acknowledge and deliver all such other instruments and documents and shall take all such other actions required to consummate and make effective the transactions contemplated by this Agreement and the other agreements and instruments delivered pursuant to this Agreement (including by executing, acknowledging and delivering any instrument or document contemplated to be delivered at the Closing pursuant to Section 1.4 not so delivered); provided that the Buyer shall not be required to pay any further consideration or amounts therefor.  
ARTICLE VI 
INDEMNIFICATION
6.1    Indemnification.
(a)    Indemnification by the Sellers.  The Sellers shall, jointly and severally (except as otherwise provided in Sections 6.1(a)(i), 6.1(a)(iii) and 6.1(a)(v) below), indemnify the Buyer in respect of, and hold it harmless against, any and all Damages incurred or suffered by the Company, the Buyer or any Affiliate thereof resulting from, relating to or constituting:
(i)    any breach or inaccuracy of any representation or warranty of any Seller contained in Article II of this Agreement or any other agreement or instrument furnished by such Seller to the Buyer pursuant to this Agreement (with respect to which the Sellers’ indemnification obligation shall be several and not joint; provided, however, that, subject to Section 6.4(h), all Sellers shall be jointly and severally liable for any such breach by the Entity Seller);
(ii)    any breach or inaccuracy of any representation or warranty of any Seller contained in Article III of this Agreement or any breach or inaccuracy of any representation or warranty of the Company contained in any other agreement or instrument furnished at the Closing by the Company to the Buyer pursuant to this Agreement except to the extent that the claim relates to Excluded Taxes;
(iii)    any failure to perform any covenant or agreement of any Seller contained in this Agreement or any other agreement or instrument furnished by such Seller to the Buyer pursuant to this Agreement (with respect to which the Sellers’ indemnification obligation shall be several and not joint (save in respect of Section 5.3(i) where the Sellers’ obligations are joint and several); provided, however, that, subject to Section 6.4(h), all Sellers shall be jointly and severally liable for any such failure by the Entity Seller);
(iv)    any failure to perform any covenant or agreement of the Company to be performed at the Closing contained in this Agreement or any other agreement or instrument furnished by the Company to the Buyer pursuant to this Agreement;
(v)    any failure of any Seller to transfer with full title guarantee the Company Shares issued in the name of such Seller and identified in Section 3.2 of the Disclosure Schedule against that Seller’s name, free and clear of all Security Interests, other than restrictions 

61

on transfer arising under applicable securities Laws (with respect to which the Sellers’ indemnification obligation shall be several and not joint; provided, however, that, subject to Section 6.4(h), all Sellers shall be jointly and severally liable for any such failure by the Entity Seller);
(vi)    any claim by a stockholder or former stockholder (or holder of any other equity securities) of the Company or any Subsidiary, or any other Person, seeking to assert, or based upon:  (A) the ownership or rights to ownership of any shares of stock (or other equity securities) of the Company or any Subsidiary; (B) any rights of a stockholder (or holder of any other equity securities) (other than the right to receive any of the Purchase Price, if any, to which such Person is entitled pursuant to this Agreement), including any option, preemptive rights or rights to notice or to vote; (C) any rights under the charter or By-laws (or other organizational documents) of the Company or any Subsidiary; or (D) any claim that his, her or its shares were wrongfully repurchased by the Company or any Subsidiary;
(vii)    except to the extent actually deducted in the calculation of the Adjusted Purchase Price, (A) any Company Transaction Expenses, (B) any Employee Amounts or (C) any Other Liabilities outstanding at the Closing;
(viii)    any Indemnified Taxes other than Excluded Taxes;
(ix)    any loss or non-availability of any Accounts Relief (except where the loss or non-availability arises as a result of (i) any withdrawal or change in law, regulation, or directive, or the published practice or published interpretation of any Governmental Entity, in each case occurring after the Closing Date, having retrospective effect and which was not announced before Closing, (ii) any change after the Closing Date to any accounting policies used by the Company on or before Closing (including a change to the accounting reference date of the Company or a Subsidiary) save where such change is made in order to comply with this Agreement or with legislation or generally accepted accounting principles, (iii) a voluntary transaction, action or omission, not being the making of any appropriate provision for Tax in the accounts of the Company or any Subsidiary or the making of any return or other provisions of information to any Governmental Entity as may be required, carried out or effected by the Company at any time after the Closing or the Buyer (or any person deriving title from it), or any other member of the Buyer’s Tax Group or where the loss or nonavailability arises after the end of the statutory limitation period in the relevant jurisdiction), in which case the amount of the Damages to be indemnified by the Sellers shall be regarded as the value attributed to the Accounts Relief in the Final Closing Adjustment Statement which is lost or which proves to be non-available;
(x)    any liability for inheritance Tax payable in the United Kingdom which is a liability of the Company or any Subsidiary and arises as a result of a transfer of value occurring or being deemed to occur on or before the Closing (whether or not in conjunction with the death of any Person whensoever occurring); or has given rise at the Closing to a charge on any of the Company Shares or assets of the Company or any Subsidiary; or gives rise after the Closing to a charge on any of the Company Shares or assets of the Company or any Subsidiary as a result of the death of any Person within seven years of a transfer of value which occurred 

62

before the Closing; and in determining whether a charge on the shares in or assets of the Company or any Subsidiary arises at any time or whether there is a liability for inheritance Tax, the fact that any Tax may be paid in installments shall be disregarded and such Tax shall be treated for the purposes of this Section 6.1(a)(x) as becoming due or to have become due and a charge as arising or having arisen on the date of the transfer of value or other date or event on or in respect of which it becomes payable or arises; and the provisions of Section 213 of United Kingdom Inheritance Act 1984 (refund by installments) shall be deemed not to apply to any liability for inheritance Tax referred to in this Section 6.1(a)(x);
(xi)    any claim for fraud or a Knowing Misrepresentation committed by any Seller or the Company arising in connection with the transactions contemplated by this Agreement;
(xii)    any Litigation Matter;
(xiii)    any claim associated with the matters described in Section 3.9 of the Disclosure Schedule;
(xiv)    any claim associated with any statement made by or on behalf of the Company or any Subsidiary to the effect that the continuous service start date of any employee of the Company or any Subsidiary is the end of such employee’s probationary period or any other date other than the date on which such employee’s employment with the Company or such Subsidiary commenced;
(xv)    any (A) business, activity or operation engaged in by HMA or (B) transaction, agreement, arrangement, understanding, association or relationship between the Company or any Subsidiary, on the one hand, and HMA, on the other hand (including any act or omission related to any separation of HMA from the Company and the Subsidiaries);
(xvi)    any claim asserted by or on behalf of any employee of the Company or any Subsidiary that the execution and delivery by the Company or the Sellers of this Agreement or any other agreement contemplated hereby, or the performance by the Company or the Sellers of their respective obligations hereunder or thereunder, requires on the part of the Company or any Subsidiary any notice to or filing with, or any permit, authorization, consent or approval of, any employee of the Company or any Subsidiary; 
(xvii)    any actual or alleged failure to comply with any applicable Law in connection with the issue of any security by HHPL or the sale, transfer or other disposition of any security issued by HHPL, including any remedial or corrective action taken in connection therewith; 
(xviii)    any claim or Liability relating to or associated with the creation of the Entity Seller, the issue or creation of shares of other membership interests in the Entity Seller, the transfer of certain interests of the other Sellers to such entity, the ownership of any Company Shares or any interest in Company Shares by such entity, the sale or transfer of any Company Share or any interest in Company Shares by such entity to the Buyer and/or the payment of 

63

amounts under this Agreement to such entity rather than the other Sellers, including all or any part of the Aggregate Consideration (including the Earn-Out Consideration) and/or any participation, directly or indirectly, by any member of the Entity Seller in any part of the Aggregate Consideration (including Earn-Out Consideration), including where such participation arises by virtue of that member’s entitlement to share in profits or in any distribution of profits of the Entity Seller, including any claim for Taxes whenever arising in connection with or arising from the same save to the extent that an amount in respect of such Liability or claim is deducted or withheld at source from any payment under this Agreement or set off pursuant to Section 5.3(j); 
(xix)    any failure of the Company Intellectual Property to constitute all Intellectual Property necessary (A) to Exploit the Customer Offerings in the manner so done currently by the Company and the Subsidiaries, (B) to Exploit the Internal Systems as they are currently used by the Company and the Subsidiaries or (C) otherwise to conduct the Company’s business in the manner currently conducted by the Company and the Subsidiaries; or  
(xx)    any claim asserted by or on behalf of any former employee of the Company or any Subsidiary (including claims by or on behalf of Michael Herepath, Suki Kandola, Anthony Ajose, Andrew Nicol, Judith Balvanyos, Clare Jamookeeah and/or Eilish McCann) in connection with their employment with the Company or any Subsidiary or in connection with the termination thereof.
(b)    Indemnification by the Buyer.  The Buyer shall indemnify each of the Sellers in respect of, and hold each of the Sellers harmless against, any and all Damages incurred or suffered by such Seller or any Affiliate thereof resulting from, relating to or constituting:
(i)    any breach or inaccuracy of any representation or warranty of the Buyer contained in Article IV of this Agreement or any other agreement or instrument furnished by the Buyer to such Seller pursuant to this Agreement; 
(ii)    any failure to perform any covenant or agreement of the Buyer contained in this Agreement or any other agreement or instrument furnished by the Buyer to such Seller pursuant to this Agreement; or 
(iii)    any failure to perform any covenant or agreement of the Company contained in Section 5.3 to be performed by the Company after the Closing.  
6.2    Indemnification Claims.
(a)    Any Indemnitee that receives notice of any Third Party Action shall give written notification to the Indemnifying Party of the commencement of such Third Party Action.  Such notification shall be given within twenty (20) calendar days after receipt by the Indemnitee of notice of such Third Party Action, and shall describe in reasonable detail (to the extent then known by the Indemnitee) the facts constituting the basis for such Third Party Action and the amount of the claimed damages.  No delay or failure on the part of the Indemnitee in so notifying the Indemnifying Party shall relieve such Indemnifying Party of any Liability hereunder except 

64

to the extent of any Liability caused by or arising out of such delay or failure.  Within twenty (20) calendar days after delivery of such notification, the Indemnifying Party may, upon written notice thereof to the Indemnitee, assume control of the defense of such Third Party Action with counsel reasonably satisfactory to the Indemnitee; provided that (i) the Indemnifying Party may only assume control of such defense if (A) it acknowledges in writing to the Indemnitee on behalf of all Indemnifying Parties that any damages, fines, costs or other Liabilities that may be assessed against the Indemnitee in connection with such Third Party Action constitute Damages for which the Indemnitee shall be indemnified pursuant to this Article VI, (B) the ad damnum in such Third Party Action, taken together with the estimated costs of defense thereof and the Claimed Amount with respect to any unresolved claims for indemnification then pending, is less than or equal to the current balance of the Escrow Fund (if the Indemnifying Party is any Seller) or the amount of Damages for which the Buyer is potentially liable under this Article VI in connection with such Third Party action (if the Indemnifying Party is the Buyer), and (C) only if the Buyer is the Indemnitee, an adverse resolution of the Third Party Action would not have a material adverse effect on the goodwill or reputation of the Indemnitee or the business, operations or future conduct of the Indemnitee and (ii) the Indemnifying Party may not assume control of the defense of any Third Party Action involving Taxes or criminal Liability or in which equitable relief is sought against the Indemnitee or any of its subsidiaries or Affiliates.  The Indemnitee is hereby authorized (but not obligated) prior to and during the twenty (20) calendar day period referred to in the preceding sentence to file any motion, answer or other pleading and to take any other action which the Indemnitee shall deem necessary or appropriate to protect its interests.  If the Indemnifying Party does not, or is not permitted under the terms hereof to, so assume control of the defense of a Third Party Action, the Indemnitee shall control such defense.  The Non-controlling Party may participate in such defense at its own expense.  The Controlling Party shall keep the Non-controlling Party advised of the status of such Third Party Action and the defense thereof and shall consider in good faith recommendations made by the Non-controlling Party with respect thereto.  The Non-controlling Party shall furnish the Controlling Party with such information as it may have with respect to such Third Party Action (including copies of any summons, complaint or other pleading which may have been served on such party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party in the defense of such Third Party Action as reasonably requested by the Controlling Party.  The fees and expenses of counsel to the Indemnitee with respect to a Third Party Action shall be considered Damages for purposes of this Agreement if (i) the Indemnitee controls the defense of such Third Party Action pursuant to the terms of this Section 6.2(a) or (ii) the Indemnifying Party assumes control of such defense and the Indemnitee reasonably concludes that the Indemnifying Party and the Indemnitee have conflicting interests or different defenses available with respect to such Third Party Action.  The Indemnifying Party shall not agree to any settlement of, or the entry of any judgment arising from, any Third Party Action without the prior written consent of the Indemnitee; provided that the consent of the Indemnitee shall not be required if the Indemnifying Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete and unconditional release of the Indemnitee and its Affiliates from further Liability, involves no admission of wrongdoing by the Indemnitee or any of its Affiliates, excludes any injunctive or non-monetary relief applicable to the Indemnitee or any of its Affiliates and has no other adverse effect on the Indemnitee or any of its Affiliates.

65

(b)    In order to seek indemnification under this Article VI, the Indemnitee shall deliver a Claim Notice to the Indemnifying Party.
(c)    Within twenty (20) calendar days after delivery of a Claim Notice, the Indemnifying Party shall deliver to the Indemnitee a Response, in which the Indemnifying Party shall:  (i) agree that the Indemnitee is entitled to receive all of the Claimed Amount (in which case, (A) if the Indemnifying Party is any Seller, the Response shall be accompanied, as applicable, by a letter from the Representative instructing the Escrow Agent to disburse to the Buyer from the Escrow Fund an amount in cash equal to the Claimed Amount and/or payment by the applicable Seller(s) in cash equal to the Claimed Amount by wire transfer of immediately available funds, or (B) if the Indemnifying Party is the Buyer, the Response shall be accompanied by payment by the Buyer in cash equal to the Claimed Amount by wire transfer of immediately available funds), (ii) agree that the Indemnitee is entitled to receive the Agreed Amount (in which case, (A) if the Indemnifying Party is any Seller, the Response shall be accompanied, as applicable, by a letter from the Representative instructing the Escrow Agent to disburse to the Buyer from the Escrow Fund an amount in cash equal to the Agreed Amount and/or payment by the applicable Seller(s) in cash equal to the Agreed Amount by wire transfer of immediately available funds, or (B) if the Indemnifying Party is the Buyer, the Response shall be accompanied by payment by the Buyer in cash equal to the Agreed Amount by wire transfer of immediately available funds) or (iii) dispute that the Indemnitee is entitled to receive any of the Claimed Amount.  The Indemnifying Party may contest the payment of all or a portion of the Claimed Amount only based upon a good faith belief that all or such portion of the Claimed Amount does not constitute Damages for which the Indemnitee is entitled to indemnification under this Article VI.  If no Response is delivered by the Indemnifying Party within such twenty (20) calendar day period, the Indemnifying Party shall be deemed to have agreed that all of the Claimed Amount is owed to the Indemnitee.  Acceptance by the Indemnitee of partial payment of any Claimed Amount shall be without prejudice to the Indemnitee’s right to claim the balance of any such Claimed Amount.
(d)    During the thirty (30) calendar day period following the delivery of a Response that reflects a Dispute, the Representative and the Buyer shall use good faith efforts to resolve the Dispute.  If the Dispute is not resolved within such thirty (30) calendar day period, the Representative and the Buyer shall discuss in good faith the submission of the Dispute to binding arbitration, and if the Representative and the Buyer agree in writing to submit the Dispute to such arbitration, then the provisions of Section 6.2(e) shall become effective with respect to such Dispute.  The provisions of this Section 6.2(d) shall not obligate the Representative and the Buyer to submit to arbitration or any other alternative dispute resolution procedure with respect to any Dispute, and in the absence of an agreement by the Representative and the Buyer to arbitrate a Dispute, such Dispute shall be resolved in a state or federal court sitting in the Commonwealth of Massachusetts, in accordance with Section 9.11.  If the Buyer is seeking to enforce the claim that is the subject of the Dispute pursuant to the Escrow Agreement, the Representative and the Buyer shall deliver to the Escrow Agent, promptly following the resolution of the Dispute (whether by mutual agreement, arbitration, judicial decision or otherwise), a written notice executed by both parties instructing the Escrow Agent as to what (if 

66

any) portion of the Escrow Fund shall be distributed to the Buyer (which notice shall be consistent with the terms of the resolution of the Dispute).
(e)    If, as set forth in Section 6.2(d), the Buyer and the Representative agree to submit any Dispute to binding arbitration, the arbitration shall be conducted by a single arbitrator (the “Arbitrator”) in accordance with the Commercial Rules in effect from time to time and the following provisions:
(i)    In the event of any conflict between the Commercial Rules in effect from time to time and the provisions of this Agreement, the provisions of this Agreement shall prevail and be controlling;
(ii)    Either party shall commence the arbitration by filing a written submission with the Boston, Massachusetts office of the AAA in accordance with Commercial Rule 5 (or any successor provision);
(iii)    All depositions or other discovery shall be conducted pursuant to the applicable U.S. federal rules relating to discovery;
(iv)    Not later than thirty (30) calendar days after the conclusion of the arbitration hearing, the Arbitrator shall prepare and distribute to the parties a writing setting forth the arbitral award and the Arbitrator’s reasons therefor.  Any award rendered by the Arbitrator shall be final, conclusive and binding upon the parties, and judgment thereon may be entered and enforced in any court of competent jurisdiction (subject to Section 9.11);
(v)    The Arbitrator shall have no power or authority, under the Commercial Rules or otherwise, to (x) modify or disregard any provision of this Agreement, including the provisions of this Section 6.2(e), or (y) address or resolve any issue not submitted by the parties; and
(vi)    In connection with any arbitration proceeding pursuant to this Agreement, each party shall bear its own costs and expenses, except that the fees and costs of the AAA and the Arbitrator, the costs and expenses of obtaining the facility where the arbitration hearing is held, and such other costs and expenses as the Arbitrator may determine to be directly related to the conduct of the arbitration and appropriately borne jointly by the parties (which shall not include any party’s attorneys’ fees or costs, witness fees (if any), costs of investigation and similar expenses) shall be shared equally by the Buyer and the Sellers.
(f)    Notwithstanding the other provisions of this Section 6.2, if a third party asserts (other than by means of a lawsuit) that the Buyer or any of its Affiliates is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which the Buyer may be entitled to indemnification pursuant to this Article VI, and the Buyer reasonably determines that it or its Affiliate has a valid business reason to fulfill such obligation, then (i) the Buyer shall be entitled to satisfy such obligation, without prior notice to or consent from the Representative or the Sellers, (ii) the Buyer may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) the Buyer shall be 

67

reimbursed, in accordance with the provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Representative, on behalf of the Sellers, to dispute the Buyer’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).
(g)    Without limiting the authority granted under Section 1.9, the Representative shall have full power and authority on behalf of each Seller to take any and all actions on behalf of, execute any and all instruments on behalf of, receive or deliver any and all notices on behalf of, and execute or waive any and all rights of, the Sellers under this Article VI.  The Representative shall have no Liability to any Sellers for any action taken or omitted on behalf of the Sellers pursuant to this Article VI.
(h)    For the avoidance of doubt, the Buyer shall not be able to recover Damages from the Sellers in respect of any matter to the extent that it has already recovered Damages from the Sellers in respect of such matter.
6.3    Survival of Representations and Warranties.
(a)    Unless otherwise specified in this Section 6.3 or elsewhere in this Agreement, all provisions of this Agreement shall survive the Closing and the consummation of the transactions contemplated hereby and shall continue in full force and effect in accordance with their terms until 60 calendar days after the expiration of the applicable statute of limitations; provided, however, that except for claims based on fraud or a Knowing Misrepresentation, all representations and warranties that are covered by the indemnification obligations in Section 6.1(a)(ii) shall expire at 5:00 p.m. (U.S. Eastern time) on the date that is eighteen (18) months after the Closing Date; provided, however, that (i) the representations and warranties set forth in Sections 3.1, 3.2, 3.3, 3.5(d), 3.9, 3.22 (to the extent related to Tax), 3.23, 3.27 and 3.28 (the “Fundamental Representations”) shall survive until 60 calendar days after the expiration of the applicable statute of limitations, and (ii) the representations and warranties set forth in Section 3.13 shall expire at 5:00 p.m. (U.S. Eastern time) on the date that is two (2) years after the Closing Date.
(b)    If the Indemnitee delivers to the Indemnifying Party, before expiration of a representation, warranty, covenant or agreement, either a Claim Notice based upon a breach of such representation, warranty, covenant or agreement or an Expected Claim Notice based upon a breach of such representation, warranty, covenant or agreement then the applicable representation, warranty, covenant or agreement shall survive until, but only for purposes of, the resolution of the matter covered by such notice and the discharge of any Liability determined by such resolution.  If the legal proceeding or written claim with respect to which an Expected Claim Notice has been given is definitively withdrawn or resolved in favor of the Indemnitee, the Indemnitee shall promptly so notify the Indemnifying Party.  The rights to indemnification set forth in this Article VI shall not be affected by any investigation conducted by or on behalf of the Indemnitee or any knowledge acquired (or capable of being acquired) by the Indemnitee, whether before or after the Closing Date, with respect to the inaccuracy or noncompliance with any representation, warranty, covenant or obligation which is the subject of indemnification hereunder, it being agreed that the Indemnitee, in entering into this Agreement, has bargained for 

68

the accuracy of, or compliance with, each representation, warranty, covenant and agreement of the other Parties contained herein.
6.4    Limitations.
(a)    With respect to claims for Damages arising under Section 6.1(a)(ii), the Sellers shall not be liable for any such Damages until the aggregate amount of all such Damages exceeds the Threshold (at which point the Sellers shall become liable for that portion of all Damages under Section 6.1(a)(ii) that exceed the Threshold); provided that the limitation set forth in this sentence shall not apply to (i) claims based on fraud or Knowing Misrepresentation or (ii) any claim pursuant to Section 6.1(a)(ii) relating to a breach of any Fundamental Representation.  For purposes of determining (x) whether there has been a breach requiring indemnification as provided in Section 6.1 and (y) the Damages with respect thereto, each representation, warranty, covenant and agreement, whether made herein or in any other agreement or instrument delivered pursuant to this Agreement, shall be deemed to have been made without any qualifications or limitations as to materiality (including any qualifications or limitations made by reference to a Company Material Adverse Effect).
(b)    Except for (i) claims based on fraud or Knowing Misrepresentation and (ii) claims based on a breach of any Fundamental Representation, the Escrow Fund and the Earn-Out Consideration shall be the exclusive source for the Buyer to collect any Damages for which it is entitled to indemnification under Section 6.1(a)(ii).
(c)    Notwithstanding anything to the contrary herein, except for (i) claims based on (A) any representation or warranty set forth in Section 3.9 or, to the extent related to Taxes, Section 3.22, (B) any covenant or agreement set forth in Section 5.3, (C) any provision set forth in Section 6.1(a)(iii) relating to Section 5.3, Section 6.1(a)(viii), Section 6.1(a)(ix), Section 6.1(a)(x), Section 6.1(a)(xiii) or Section 6.1(a)(xviii) or (D) fraud or a Knowing Misrepresentation and (ii) claims arising under Article VII, the aggregate Liability of each Seller for Damages under this Article VI shall not exceed the portion of the Aggregate Consideration such Seller is entitled to receive pursuant to this Agreement.  
(d)    Notwithstanding anything to the contrary herein, the aggregate Liability of the Buyer for Damages under this Article VI shall not exceed the Aggregate Consideration the Sellers are entitled to receive pursuant to this Agreement.
(e)    No Seller shall have any right of contribution against the Company with respect to any indemnification obligation or any other  Liability to which such Seller may become subject under this Agreement.  Except with respect to claims based on fraud or a Knowing Misrepresentation, claims arising under Article VII, and claims for specific performance and other equitable relief, after the Closing, the rights of the Buyer under this Article VI shall be the exclusive remedy of the Buyer with respect to claims resulting from or relating to any misrepresentation, breach of warranty or failure to perform any covenant or agreement of the Company or any Seller contained in this Agreement.

69

(f)    Except with respect to claims for specific performance and other equitable relief, after the Closing, the rights of the Sellers under this Article VI shall be the exclusive remedy of the Sellers with respect to claims resulting from or relating to any misrepresentation, breach of warranty or failure to perform any covenant or agreement of the Buyer contained in this Agreement.
(g)    The amount of Damages recoverable by the Buyer under this Article VI shall be reduced, on a dollar-for-dollar basis, by the amount of any insurance proceeds actually received by the Buyer in connection with a claim under this Article VI under any insurance policies if and only if such proceeds were paid to or received by the Buyer under an insurance policy maintained by the Company or any Subsidiary prior to the Closing and the premiums for such insurance policies were paid prior to the Closing.
(h)    Notwithstanding anything to the contrary herein, the aggregate liability of any Individual Seller pursuant to Section 6.1(a)(i), Section 6.1(a)(iii) other than relating to Section 5.3(i), or Section 6.1(a)(v) in respect of a breach or failure by the Entity Seller shall not exceed such Individual Seller’s Pro Rata Share of the Damages resulting from or related to such breach or failure for which the Buyer is entitled to indemnification.  
6.5    Payments.
(a)    All sums payable to the Buyer under this Article VI shall be paid free and clear of all deductions or withholdings whatsoever unless the deduction or withholding is required by Law.  If any deductions or withholdings are required by Law to be made from any of the sums payable to the Buyer under this Article VI, such sum shall be paid to the Buyer as will, after the deduction or withholding has been made, leave the Buyer with the same amount as it would have been entitled to receive in the absence of any such requirement to make a deduction or withholding.
(b)    If the Buyer incurs a liability to Taxes which results from, or is calculated by reference to, any sum paid under this Article VI, the amount so payable shall be increased by such amount as will ensure that, after payment of the Taxes in question, the Buyer is left with a net sum equal to the sum it would have received had no such liability to Taxes arisen.
(c)    Any payments made pursuant to this Article VI or pursuant to the Escrow Agreement shall be treated as an adjustment to the Purchase Price or the Adjusted Purchase Price (as applicable) for Tax purposes to the extent permitted by Law.
ARTICLE VII 
PROPRIETARY INFORMATION; NO SOLICITATION AND NON-COMPETITION
7.1    Proprietary Information.
(a)    From and after the Closing, the Sellers and each of their respective Affiliates shall not disclose or make use of any information relating to the business of the Company or any Subsidiary that provides the Company or the Buyer with a competitive advantage (or that could be used to the disadvantage of the Company, any Subsidiary or the 

70

Buyer by a Competitive Business), which is not generally known by, nor easily learned or determined by, persons outside the Company (collectively referred to herein as “Proprietary Information”) including: (i) specifications, manuals, software in various stages of development, and other technical data; (ii) customer and prospect lists, details of agreements and communications with customers and prospects, and other customer information; (iii) sales plans and projections, product pricing information, protocols, acquisition, expansion, marketing, financial and other business information and existing and future products and business plans and strategies of the Company, any Subsidiary or the Buyer; (iv) sales proposals, demonstrations systems, sales material; (v) research and development; (vi) software systems, computer programs and source codes; (vii) sources of supply; (viii) identity of specialized consultants and contractors and Proprietary Information developed by them for the Company or any Subsidiary; (ix) purchasing, operating and other cost data; (x) special customer needs, cost and pricing data; and (xi) employee information (including personnel, payroll, compensation and benefit data and plans), including all such information recorded in manuals, memoranda, projections, reports, minutes, plans, drawings, sketches, designs, data, specifications, software programs and records, whether or not legended or otherwise identified by the Company, any Subsidiary or the Buyer as Proprietary Information, as well as such information that is the subject of meetings and discussions and not recorded.  Proprietary Information shall not include such information that the Sellers can demonstrate (A) is generally available to the public (other than as a result of a disclosure by a Seller), (B) was disclosed to a Seller by a third party under no obligation to keep such information confidential, or (C) was independently developed by any Seller without reference to Proprietary Information and such Proprietary Information does not relate to a Competitive Business.  Notwithstanding the foregoing, a Seller shall have no obligation hereunder to keep confidential any of the Proprietary Information to the extent such Seller is advised in writing by counsel that disclosure is required by Law or the order of any Governmental Entity of competent jurisdiction under color of Law; provided that prior to making any such required disclosure, such Seller shall give prior written notice thereof to the Buyer and provide the Buyer with the opportunity to contest such disclosure and shall cooperate with efforts to prevent such disclosure.
(b)    Each Seller agrees that the remedy at Law for any breach of this Section 7.1 would be inadequate and that the Buyer shall be entitled to injunctive relief in addition to any other remedy it may have upon breach of any provision of this Section 7.1.
7.2    No Solicitation or Hiring of Former Employees.  During the period commencing on the Closing Date and ending on the third (3rd) anniversary of the Closing Date, no Seller or Affiliate thereof shall directly or indirectly, for such Seller or on behalf of or in conjunction with any other Person, (a) recruit, solicit or induce any Person who was an employee, subcontractor, vendor or supplier of the Buyer, the Company or any of their respective subsidiaries on the Closing Date to terminate his or her employment with, or otherwise cease such Person’s relationship with, the Buyer (or the Company or any of their respective subsidiaries, as the case may be) or to become an employee of such Seller or Affiliate or (b) hire or employ or use in any subcontracting arrangement any present or former employee of the Buyer, the Company or any of their respective subsidiaries.  Notwithstanding the foregoing, the placement of a general, 

71

public advertisement or general recruiting efforts of any Seller or its Affiliates shall not be a violation of the foregoing non-solicitation restrictions.
7.3    Non-Competition Agreement.
(a)    During the period commencing on the Closing Date and ending on the third (3rd) anniversary of the Closing Date (the “Non-compete Period”), no Seller shall (other than in his or her capacity as an employee of the Buyer, the Company or any of their respective subsidiaries) directly or indirectly, for such Seller or on behalf of or in conjunction with any other Person, whether as a partner, officer, director, employee, stockholder, joint venturer, member, investor (other than as the passive holder of not more than one percent (1%), if such Seller is then employed by the Buyer or any of its Affiliates, or three percent (3%), if such Seller is not then so employed), of the total outstanding stock of a publicly-held company) or otherwise:
(i)    engage in, operate or establish any aspect of the business of the Company or any Subsidiary as such business has been conducted or had on the Closing Date planned to be conducted by the Company or any of the Subsidiaries, or, if such Seller becomes an employee of the Buyer, the business of the Buyer, anywhere in the world; or
(ii)    solicit, divert or take away, or attempt to solicit, divert or take away, the business or patronage of any individual, corporation or other entity which was or is a prospective client, customer or account of the Company or the Buyer or any of their respective subsidiaries on the Closing Date, or had been a client, customer or account of the Company or the Buyer or any of their respective subsidiaries within a period of eighteen (18) months prior to the Closing Date.
(b)    For the sake of clarification, notwithstanding any provision of Section 7.3(a) to the contrary, this Section 7.3 shall not prohibit any Seller, individually or together with any other Seller, from engaging in the activity of publishing and selling syndicated reports that deal with, on a general basis, the topics of therapeutic value, reimbursement potential and economic impact of healthcare interventions (“Publishing Activities”), but solely to the extent that such Publishing Activities (i) do not compete in any manner with the business of the Company or any Subsidiary as such business has been conducted at any time prior to the Closing Date, or the business of the Buyer or any of its Affiliates, (ii) (x) are not customized for any clients, (y) are only marketed and/or sold to individual consumers, patients, patient groups, national and local public health systems and providers, and financial analysts, and (z) are not marketed and/or sold to pharmaceutical, biotech, consumer health and medical device manufacturers, or other customers of Buyer or any of its Affiliates and (iii) do not take place during any period during which the Seller is an employee of, or providing consulting services to, the Buyer or any of its Affiliates.
(c)    The Sellers agree to provide to the Buyer upon request a description of the Publishing Activities and to whom they are sold during the Non-compete Period.

72

(d)    Each of the Parties agrees that the duration and geographic scope of the non-competition provision set forth in this Section 7.3 are reasonable.  In the event that any court of competent jurisdiction determines that the duration or the geographic scope, or both, are unreasonable and that such provision is to that extent unenforceable, each of the Parties agrees that the provision shall remain in full force and effect for the greatest time period and in the greatest area that would not render it unenforceable.  Each of the Parties intends that this non-competition provision shall be deemed to be a series of separate covenants, one for each and every county of each and every state of the United States of America and each comparable jurisdiction or subdivision thereof anywhere else in the world where this provision is intended to be effective.  Each of the Parties agrees that damages are an inadequate remedy for any breach of this provision and that the Buyer shall, whether or not it is pursuing any potential remedies at Law, be entitled to equitable relief in the form of preliminary and permanent injunctions without bond or other security upon any actual or threatened breach of this non-competition provision.
(e)    The Sellers acknowledge that their ownership of  Company Shares represents a substantial interest in the Company and each Seller intends to transfer to the Buyer the goodwill reflected in the Company Shares owned by such Seller. The Sellers further acknowledge that the Buyer would not enter into this Agreement but for the restrictions in this Section 7.3.
(f)    If a Seller violates the terms of this Section 7.3, such Seller shall continue to be bound by the restrictions set forth herein until a period of three (3) years has expired without any violations of this Section 7.3.

73

ARTICLE VIII 
DEFINITIONS
For purposes of this Agreement, each of the following terms shall have the meaning set forth below.
“AAA” shall mean the American Arbitration Association.
“Accounts Relief” shall mean any Relief (including the right to a repayment of Tax) that has been shown as an asset in the Final Closing Adjustment Statement; and any Relief that has been taken into account in computing (and so reducing or eliminating) any provision for deferred Tax in the Final Closing Adjustment.
“Adjusted Purchase Price” shall have the meaning set forth in Section 1.5(e).
“Affiliate” shall mean any affiliate, as defined in Rule 12b-2 under the Exchange Act; provided that neither the Company nor any of its Subsidiaries shall be, or be deemed to be, an Affiliate of the Buyer with respect to any period (or portion of any period) prior to the Closing.
“Aggregate Consideration” shall have the meaning set forth in Section 1.8(a).
“Agreed Amount” shall mean part, but not all, of the Claimed Amount.
“Agreement” shall have the meaning set forth in the first paragraph hereto.
“Applicable GAAP” shall mean with respect to (a) the Company (including with respect to any reference to financial statements of the Company and its Subsidiaries prepared on a consolidated basis) or any Subsidiary organized under the Laws of England and Wales, UK GAAP, (b) any Subsidiary organized under the Laws of a state in the United States, United States generally accepted accounting principles, (c) any Subsidiary organized under the Laws of Sweden, Sweden generally accepted accounting principles and (d) any Subsidiary organized under the Laws of India, India generally accepted accounting principles.
“Arbitrator” shall have the meaning set forth in Section 6.2(e).
“Associated Person” shall mean, in relation to a specified Person, a Person (including an employee, agent or subsidiary) who performs or has performed services for or on behalf of such specified Person.
“Base Purchase Price” shall mean $23,863,000.
“Business Day” shall mean any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions located in Boston, Massachusetts or London, England are permitted or required by Law to remain closed.

74

“Business Unit” shall have the meaning set forth in Section 1.8(f)(i).
“Business Unit EBITDA” shall have the meaning set forth in Section 1.8(f)(ii).
“Buyer” shall have the meaning set forth in the first paragraph of this Agreement.
“Buyer Parent” shall PAREXEL International Corporation, a Massachusetts corporation.
“Buyer Prepared Tax Returns” shall have the meaning set forth in Section 5.3(c).
“Buyer’s Oversight Rights” shall have the meaning set forth in Section 1.8(k).
“Buyer’s Tax Group” shall mean the Buyer and any Person affiliated with the Buyer for any Tax purpose. 
“B&B” shall have the meaning set forth in Section 9.13.
“Cause” shall have the meaning set forth in Section 1.8(f)(iii).
“CERCLA” shall mean the U.S. Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended.
“Certificates” shall mean stock or share certificates for Company Shares.
“Claim Notice” shall mean written notification which contains (a) a description of the Damages incurred or reasonably expected to be incurred by the Indemnitee and the Claimed Amount of such Damages, to the extent then known, (b) a statement that the Indemnitee is entitled to indemnification under Article VI for such Damages and a reasonable explanation of the basis therefor, and (c) a demand for payment in the amount of such Damages.
“Claimed Amount” shall mean the amount of any Damages incurred or reasonably expected to be incurred by the Indemnitee in connection with a claim for indemnification pursuant to Article VI.
“Closing” shall mean the closing of the transactions contemplated by this Agreement.
“Closing Adjustment Items” shall mean (a) the Company Transaction Expenses, (b) the Employee Amount, (c) any Other Liabilities outstanding at the Closing, (d) if the Working Capital Target exceeds Closing Working Capital, the amount of such excess, and (e) if Closing Working Capital exceeds the Working Capital Target, a negative number (which, for the avoidance of doubt, shall reduce the Estimated Closing Adjustment and Final Closing Adjustment) equal to such excess.
“Closing Adjustment Statement” shall mean the statement of the Closing Adjustment Items prepared in accordance with the provisions of Section 1.5 hereof.
“Closing Adjustment Surplus” shall have the meaning set forth in Section 1.5(e)(iii).

75

“Closing Date” shall mean the date on which the Closing actually occurs.
“Closing Working Capital” shall mean the Company’s consolidated current assets less the sum of (a) the Company’s consolidated current liabilities and (b) the Company’s consolidated accrued and deferred income liabilities (without duplication to the extent such liabilities have already been included in the calculation of Closing Working Capital pursuant to the foregoing clause (a)), in each case as of the Closing (determined in accordance with GAAP, consistently applied with the Financial Statements).  Closing Working Capital shall not include deferred Tax assets and liabilities.  For the avoidance of doubt, Company Transaction Expenses, the Employee Amount and Other Liabilities shall not be included in Closing Working Capital.
“Code” shall mean the United States Internal Revenue Code of 1986, as amended.
“Combined Business” shall have the meaning set forth in Section 1.8(f)(iv).
“Combined Business EBITDA” shall have the meaning set forth in Section 1.8(f)(v).
“Commercial Rules” shall mean the Commercial Arbitration Rules of the AAA.
“Company” shall have the meaning set forth in the first paragraph of this Agreement.
“Company EBITDA” shall have the meaning set forth in Section 1.8(f)(vi).
“Company Intellectual Property” shall mean the Company Owned Intellectual Property and the Company Licensed Intellectual Property.
“Company Licensed Intellectual Property” shall mean all Intellectual Property that is licensed to the Company or any Subsidiary by any third party.
“Company Material Adverse Effect” shall mean any material adverse change, event, circumstance or development with respect to, or material adverse effect on, (a) the business, assets, Liabilities, capitalization, condition (financial or other), prospects or results of operations of the Company and the Subsidiaries, taken as a whole or (b) the ability of the Buyer to operate the business of the Company and the Subsidiaries immediately after the Closing.  For the avoidance of doubt, the parties agree that the terms “material,” “materially” and “materiality” as used in this Agreement with an initial lower case “m” shall have their respective customary and ordinary meanings, without regard to the meaning ascribed to Company Material Adverse Effect.
“Company Owned Intellectual Property” shall mean all Intellectual Property owned or purported to be owned by the Company or any Subsidiary, in whole or in part.
“Company Plan” shall mean any Pension Scheme or any Employee Benefit Plan maintained, or contributed to, by the Company, any Subsidiary or any ERISA Affiliate for the benefit of or relating to any current or former employee or independent contractor of the Company, any Subsidiary or any ERISA Affiliate.

76

“Company Registrations” shall mean Intellectual Property Registrations that are registered or filed in the name of the Company or any Subsidiary, alone or jointly with others.
“Company Shares” shall mean all of the issued shares in the capital of the Company.
“Company Shares Tax Liability” shall mean the total of:
(a)    any liability under United Kingdom Law to PAYE income Tax and primary class 1 (employee) national insurance contributions and any similar liability under the Laws of any other jurisdiction to deduct and/or withhold and/or account to any Governmental Entity for amounts in respect of Tax, income tax or social security contribution in any jurisdiction that the Buyer, the Company or any Subsidiary or any other employer (or former employer(s)) of any Seller is liable to account for as a result of any Taxable Event;
(b)    if these amounts may be lawfully recovered from any Seller, any secondary class 1 (employer) national insurance contributions in the United Kingdom (or any similar liability for social security contribution in any jurisdiction) that the Buyer, Company or any Subsidiary or any other employer (or former employer(s) of any Seller) is liable to pay as a result of any Taxable Event; and
(c)    any interest and penalties that the Buyer, the Company or any Subsidiary or any other employer (or former employer(s)) of any Seller is liable to account for in respect of liabilities mentioned in (a) or (b) above together with any costs reasonably and properly incurred by the Buyer, the Company or the relevant Subsidiary or the relevant employer (or former employer(s)) of any Seller in connection with such liabilities, except to the extent that interest or penalties result from a failure on the part of the Buyer or the Company to discharge any liability within a reasonable time after the Sellers (or any of them) have made any payment to the Buyer in respect of that liability.
“Company Source Code” shall mean the source code for any Software included in the Customer Offerings or Internal Systems or other confidential information constituting, embodied in or pertaining to such Software.
“Company Stock Plan” shall mean any stock option plan or other stock or equity-related plan of the Company.
“Company Stockholders” shall mean the stockholders or shareholders of record of the Company immediately prior to the Closing.
“Company Transaction Expenses” shall mean all third-party costs, fees or expenses unpaid as of the Closing (including, for the avoidance of doubt, any such costs, fees or expenses payable as a result of the consummation of the transactions contemplated by this Agreement) and incurred by the Company or any Subsidiary in connection with the transactions contemplated by this Agreement.

77

“Competitive Business” shall mean any business or other activity that, directly or indirectly, provides one or more third parties with products, services, solutions or information designed to assist the receiving party(ies) to make decisions related to the development of strategies that support or determine reimbursement, market/patient access, coverage or payment of any Product in any therapeutic category, whether or not said Product is owned or accessible by the third party(ies); provided that, with regard to the Sellers, the Publishing Activities of Datacuity, Ltd. shall not be considered a Competitive Business.
“Consolidated Financial Statements” shall mean the Financial Statements other than the Entity Financial Statements.
“Contract” shall have the meaning set forth in Section 3.15(a).
“Continuing Employees” shall have the meaning set forth in Section 5.7.
“Controlling Party” shall mean the Party controlling the defense of any Third Party Action.
“Cooley” shall have the meaning set forth in Section 9.13.
“Customer Offerings” shall mean (a) the products (including Software and Documentation) that the Company or any Subsidiary (i) currently develops, manufactures, markets, distributes, makes available, sells or licenses to third parties, or (ii) has developed, manufactured, marketed, distributed, made available, sold or licensed to third parties within the previous six years and (b) the services that the Company or any Subsidiary (i) currently provides or makes available to third parties, or (ii) has provided or made available to third parties within the previous six years.  
 “Damages” shall mean any and all claims, debts, obligations and other Liabilities (whether absolute, accrued, contingent, fixed or otherwise, or whether known or unknown, or due or to become due or otherwise), diminution in value, monetary damages, fines, fees, penalties, interest obligations, deficiencies, losses and expenses (including amounts paid in settlement, interest, court costs, costs of investigators, fees and expenses of attorneys, accountants, financial advisors and other experts, and other expenses of litigation, arbitration or other dispute resolution procedures), other than those costs and expenses of arbitration of a Dispute which are to be shared equally by the Buyer and the Sellers, as set forth in Section 6.2(e)(vi).
“Data Room” shall mean the Internet based due diligence data room maintained by the Company in connection with the transactions contemplated by this Agreement.
“Directed Actions” shall have the meaning set forth in Section 1.8(f)(vii).
“Disclosure Schedule” shall mean the disclosure schedule provided by the Sellers and the Company to the Buyer on the date hereof and accepted in writing by the Buyer.

78

“Dispute” shall mean the dispute resulting if the Indemnifying Party in a Response disputes the liability of the Indemnifying Party for all or part of a Claimed Amount.
“Dispute Notice” shall have the meaning set forth in Section 1.5(c).
“Documentation” shall mean printed, visual or electronic materials, reports, white papers, documentation, specifications, designs, flow charts, code listings, instructions, user manuals, frequently asked questions, release notes, recall notices, error logs, diagnostic reports, marketing materials, packaging, labeling, service manuals and other information describing the use, operation, installation, configuration, features, functionality, pricing, marketing or correction of a product, whether or not provided to end users.
“DOL” shall have the meaning set forth in Section 3.21(e).
“EAD” shall have the meaning set forth in Section 3.21(e).
“Earn-Out Consideration” shall have the meaning set forth in Section 1.8(a).
“Earn-Out Dispute Notice” shall have the meaning set forth in Section 1.8(h).
“Earn-Out Period” shall have the meaning set forth in Section 1.8(f)(viii).
“Earn-Out Year” shall have the meaning set forth in Section 1.8(f)(ix).
“Employee Amount” shall mean the aggregate amount payable to employees of the Company or any of the Subsidiaries pursuant to any change in control bonus plan, severance plan, change of control, retention or similar arrangement of the Company or any Subsidiary, in each case payable solely as a result of the transactions contemplated by this Agreement.
“Employee Benefit Plan” shall mean any “employee pension benefit plan” (as defined in Section 3(2) of ERISA), any “employee welfare benefit plan” (as defined in Section 3(1) of ERISA) and any other written or unwritten plan, policy, agreement or arrangement involving direct or indirect compensation, including insurance coverage, severance benefits, change in control benefits, disability benefits, deferred compensation, bonuses, fringe benefits, stock options, stock purchase, phantom stock, stock appreciation or other forms of incentive compensation or post-termination compensation, and all employment agreements providing for terms of compensation.
“Entity Financial Statements” shall mean the Financial Statements referred to in clause (a) of the definition of “Financial Statements.”
“Entity Seller” shall mean ST EVENAGE HOLDINGS LLC, a Delaware limited liability company.  
“Environmental Law” shall mean any Law relating to the environment, occupational health and safety, or exposure of persons or property to Materials of Environmental Concern, including any statute, regulation, administrative decision or order pertaining to:   (a) the presence 

79

of or the treatment, storage, disposal, generation, transportation, handling, distribution, manufacture, processing, use, import, export, labeling, recycling, registration, investigation or remediation of Materials of Environmental Concern or documentation related to the foregoing; (b) air, water and noise pollution; (c) groundwater and soil contamination; (d) the release, threatened release, or accidental release into the environment, the workplace or other areas of Materials of Environmental Concern, including emissions, discharges, injections, spills, escapes or dumping of Materials of Environmental Concern; (e) transfer of interests in or control of real property which may be contaminated; (f) community or worker right-to-know disclosures with respect to Materials of Environmental Concern; (g) the protection of wild life, marine life and wetlands, and endangered and threatened species; (h) storage tanks, vessels, containers, abandoned or discarded barrels and other closed receptacles; and (i) health and safety of employees and other persons.  As used above, the term “release” shall have the meaning set forth in CERCLA.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” shall mean any entity which is, or at any applicable time was, a member of (a) a controlled group of corporations (as defined in Section 414(b) of the Code), (b) a group of trades or businesses under common control (as defined in Section 414(c) of the Code), or (c) an affiliated service group (as defined under Section 414(m) of the Code or the regulations under Section 414(o) of the Code), any of which includes or included the Company or any Subsidiary.
“Escrow Agent” shall mean JPMorgan Chase Bank, N.A., London Branch.
“Escrow Agreement” shall mean the Escrow Agreement in the form attached hereto as Exhibit I by and among the Buyer, the Representative and the Escrow Agent.
“Escrow Fund” shall mean the Original Escrow Amount held and disposed of in accordance with the terms of the Escrow Agreement, together with (a) any additional amounts deposited in escrow pursuant to Section 1.5(e)(iii) and (b) any interest thereon.
“Estimated Closing Adjustment” shall mean the sum of the Closing Adjustment Items estimated as of the Closing Date as set forth on the Estimated Closing Adjustment Statement.
“Estimated Closing Adjustment Statement” shall have the meaning set forth in Section 1.3.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Excluded Taxes” shall mean (i) any Taxes that were taken into account in determining or provided for in the Final Closing Adjustment, (ii) any Taxes that result from an election under Section 338 of the Code (or any similar election under any applicable Law) made by the Buyer, the Company or any of their respective Affiliates after the Closing, (iii) where written notice of a claim in respect of the Liability is not given to the Representative within 60 days after the end of 

80

the statutory limitation period in the relevant jurisdiction, (iv) where the Liability arises or is increased as a result only of any change in rates of Tax or as a result of any withdrawal or change in law, regulation, or directive, or the published practice or published interpretation of any Governmental Entity, in each case occurring after the Closing Date, having retrospective effect and which was not announced before Closing, (v) where the Liability arises or is increased as a result of any change after the Closing Date to any accounting policies used by the Company on or before Closing (including a change to the accounting reference date of the Company or a Subsidiary) save where such change is made in order to comply with this Agreement or with legislation or generally accepted accounting principles, (vi) where the Liability would not have arisen but for a Tax election made or voluntary transaction or action carried out or effected by the Company at any time after Closing or the Buyer, or any other member of the Buyer’s Tax Group, which the Buyer knew or ought reasonably to have known would give rise to the liability other than any such transaction or action which was required by Law or to comply with the reasonable requests of any Governmental Authority or which involves preparation of accounts in accordance with generally accepted accounting principles or carried out with the agreement of or at the request of the Sellers or the Representative, (vii) where such Liability would not have arisen but for an increase in the number of associated companies (within the meaning of Section 25 Corporation Taxes Act 2010) of the Company or a Subsidiary on or after Closing; or (viii) where such Liability would not have arisen or would have been reduced or eliminated but for the failure or omission on the part of the Company or a Subsidiary after Closing to comply with a written request of the Sellers to make any valid claim, election, surrender or disclaimer, or to give any valid notice or consent or to do any other such thing relating to Tax, in circumstances where the making, giving or doing of which was taken into account in determining the Final Closing Adjustment and full details of which have been provided in writing by the Sellers to the Buyer and is contained in Section 3.9(v)(4)(a)(iii) of the Disclosure Schedule before Closing; provided, however, that Excluded Taxes shall not include any Taxes relating to a claim described in Section 6.1(a)(xiii) or Section 6.1(a)(xviii).
“Expected Claim Notice” shall mean a notice that, as a result of a legal proceeding instituted by or written claim made by a third party, the Indemnitee reasonably expects to incur Damages for which it is entitled to indemnification under Article VI.
“Exploit” shall mean develop, design, test, modify, make, use, sell, have made, used and sold, import, reproduce, market, distribute, commercialize, support, maintain, correct and create derivative works of.
“Final Closing Adjustment” shall mean the amount of the Closing Adjustment Items determined in accordance with the provisions of Section 1.5(c).
“Final Closing Adjustment Statement” shall have the meaning set forth in Section 1.5(c).
“Financial Model” shall have the meaning set forth in Section 1.8(f)(x).
“Financial Statements” shall mean:

81

(a)    with respect to the Company and each Subsidiary, respectively, the audited balance sheets and statements of income, changes in shareholders’ equity and cash flows of such Person as of the end of and for each of the fiscal years ended June 30, 2011 and 2012, as certified without qualification by such Person’s independent public accountants;  
(b)    the consolidated audited balance sheet and statements of income, changes in shareholders’ equity and cash flows of the Company as of the end of and for the fiscal year ended June 30, 2012, as certified without qualification by SBM and Co., the Company’s independent public accountants;
(c)    the consolidated unaudited balance sheet of the Company as of December 31, 2012 and the related consolidated unaudited statements of operations, changes in stockholders’ equity and cash flows for the six months then ended; and
(d)    the consolidated unaudited balance sheet of the Company as of March 31, 2013 and the related consolidated unaudited statements of operations, changes in stockholders’ equity and cash flows for the nine months then ended.
“First Period” shall have the meaning set forth in Section 1.8(b).
“First Period Earn-Out Consideration” shall have the meaning set forth in Section 1.8(a)(i).
“Fundamental Representations” shall have the meaning set forth in Section 6.3(a) of this Agreement.
“GAAP” shall mean United States generally accepted accounting principles.  
“Governmental Entity” shall mean any federal, state, municipality, or any local or foreign government or any court, arbitrational tribunal, administrative agency or commission or government authority acting under the authority of the federal or any state, local or foreign government, including any local, state, federal or other fiscal, revenue, customs, or excise authority, body or official competent to impose, administer, levy, assess or collect Tax.
“HHPL” shall have the meaning set forth in Section 3.5(e).
“HMA” shall have the meaning set forth in Section 3.5(d).
“Indemnified Taxes” means any Liability of the Company or any Subsidiary for (a) Taxes related or attributable to any Pre-Closing Tax Period or the Pre-Closing Portion of a Straddle Period, (b) Taxes as a result of its having been included in an affiliated group prior to the Closing Date that files consolidated, combined, unitary or similar Tax Returns (including any Liability pursuant to Treasury Regulations Section 1.1502-6 or any similar provision of state, local or foreign law), (c) the Indirect Taxes, Indian Indirect Taxes and Indian Taxes generally for which Sellers are responsible pursuant to Section 5.3(m), (d) any Taxes of another Person for which the Company or any Subsidiary is liable as a transferee or successor as a result of actions or events occurring prior to the Closing, and (e) payments under any Tax indemnification, allocation, 

82

sharing or similar agreement, contract or arrangement (whether oral or written), entered into prior to the Closing, to which the Company or any Subsidiary is subject.
“Indemnifying Party” shall mean a Party from whom indemnification is sought by the Indemnitee.
“Indemnitee” shall mean a Party entitled, or seeking to assert rights, to indemnification pursuant to Article VI.
“Indian Indirect Tax” shall mean any liability under Indian Law to deduct and/or withhold and/or account for any Taxes or an amount in respect of Taxes arising in connection with or as a result of the indirect change in ownership of Heron Health Private Limited arising as a result of either any transfer of any of the Company Shares to the Entity Seller prior to Closing or arising out of the sale of the Company Shares pursuant to this Agreement.
“Indirect Tax” shall mean any stamp duty, stamp duty reserve tax, value added, transfer, turnover, sales, use, distribution or corresponding Tax, including value added tax in the United Kingdom.
“Individual Seller” shall mean any Seller other than the Entity Seller.  
“Intellectual Property” shall mean the following subsisting throughout the world:
(a)    Patent Rights;
(b)    Trademarks and all goodwill in the Trademarks;
(c)    copyrights, designs, data and database rights and registrations and applications for registration thereof, including moral rights of authors;
(d)    mask works and registrations and applications for registration thereof and any other rights in semiconductor topologies under the Laws of any jurisdiction;
(e)    inventions, invention disclosures, statutory invention registrations,  trade secrets and confidential business information, know-how, manufacturing and product processes and techniques, research and development information, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information, whether patentable or nonpatentable, whether copyrightable or noncopyrightable and whether or not reduced to practice; and
(f)    other proprietary rights relating to any of the foregoing (including remedies against infringement thereof and rights of protection of interest therein under the Laws of all jurisdictions).
“Intellectual Property Registrations” shall mean Patent Rights, registered Trademarks, registered copyrights and designs, mask work registrations, and applications for each of the foregoing.

83

“Internal Systems” shall mean the Software and Documentation and the computer, communications and network systems (both desktop and enterprise-wide), laboratory equipment, reagents, materials and test, calibration and measurement apparatus used by the Company or any Subsidiary in their business or operations or to develop, manufacture, fabricate, assemble, provide, distribute, support, maintain or test the Customer Offerings, whether located on the premises of the Company or any Subsidiary or hosted at a third party site.
“Key Employees” shall mean collectively, the Sellers and Peter Hempshall, Dawn Giles, John Posnett, Barry Farrimond, Ebony Samuels, Manu Sehgal and Emma Medin.
“Knowing Misrepresentation” shall mean (a) with respect to any Seller, to such Seller's actual knowledge, that such representation or warranty was incorrect when made, and (b) with respect to the Buyer, to the Buyer's actual knowledge, that such representation or warranty was incorrect when made.
“Knowledge of the Company”, “Company’s Knowledge” and phrases of like import shall mean the knowledge of any Key Employee.  The above named individuals will be deemed to have knowledge of a particular fact, circumstance, event or other matter if (a) such individual has actual knowledge of such fact, circumstance, event or other matter, (b) such fact, circumstance, event or other matter is reflected in one or more documents (whether written or electronic, including electronic mails sent to or by such individual) in the possession of such individual, including his or her personal files, (c) such fact, circumstance, event or other matter is reflected in one or more documents (whether written or electronic) contained in books and records of such individual that would reasonably be expected to be reviewed by such individual in the customary performance of his or her duties or (d) such fact, circumstance, event or other matter would be known to such individual had he or she made reasonable inquiry of appropriate employees.
“Law” shall mean any federal, state or local or foreign law, common law, statute, standard, ordinance, code, rule, regulation, convention, resolution or promulgation, or any decree, order, injunction, rule, judgment, consent of or by any Governmental Entity, or any Permit or similar right granted under any of the foregoing, or any similar provision having the force or effect of law.
“Lease” shall mean any lease or sublease pursuant to which the Company or any Subsidiary leases or subleases from another party any real property.
“Legal Proceeding” shall mean any action, suit, proceeding, claim, complaint, hearing, arbitration or investigation before any Governmental Entity or before any arbitrator.
“Liability” shall mean any direct or indirect liability, indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost, expense, obligation or responsibility, whether accrued, absolute, contingent, mature, unmature or otherwise and whether known or unknown, fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or unsecured.
“Litigation Matter” shall mean any Legal Proceedings set forth in Section 3.19 of the Disclosure Schedule.

84

“Manager” shall have the meaning set forth in Section 1.8(f)(xi).
“Materials of Environmental Concern” shall mean any:  pollutants, contaminants or hazardous substances (as such terms are defined under CERCLA), pesticides (as such term is defined under the Federal Insecticide, Fungicide and Rodenticide Act), solid wastes and hazardous wastes (as such terms are defined under the Resource Conservation and Recovery Act), chemicals, other hazardous, radioactive or toxic materials, oil, petroleum and petroleum products (and fractions thereof), or any other material (or article containing such material) listed or subject to regulation under any Law due to its potential, directly or indirectly, to harm the environment or the health of humans or other living beings.
“Most Recent Balance Sheet” shall mean the audited balance sheet of the Company as of the Most Recent Balance Sheet Date.
“Most Recent Balance Sheet Date” shall mean June 30, 2012.
“Neutral Accountant” shall have the meaning set forth in Section 1.5(c).
“Non-compete Period” shall have the meaning set forth in Section 7.3(a).
“Non-controlling Party” shall mean the party not controlling the defense of any Third Party Action.
“Normal Participant Bonus” shall have the meaning set forth in Section 1.8(f)(xii).
“Open Source Materials” shall mean all Software, Documentation or other material that is distributed as “free software”, “open source software” or under a similar licensing or distribution model, including the GNU General Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License (MPL), or any other license described by the Open Source Initiative as set forth on www.opensource.org.
“Option” shall mean each option to purchase or acquire Company Shares.
“Ordinary Course of Business” shall mean the ordinary course of business consistent with past custom and practice (including with respect to frequency and amount).
“Original Escrow Amount” shall mean $5,024,510 of the Base Purchase Price deposited in escrow pursuant to Section 1.7(a). 
“Other Liability” shall mean any Liability of the Company or any of the Subsidiaries not included in the calculation of Closing Working Capital or any loss or unavailability of any Accounts Relief.
“Participant” shall have the meaning set forth on Schedule 5.8.  
“Parties” shall have the meaning set forth in the first paragraph of this Agreement.

85

“Patent Rights” shall mean all patents, patent applications, utility models, design registrations and certificates of invention and other governmental grants for the protection of inventions or industrial designs (including all related continuations, continuations-in-part, divisionals, reissues and reexaminations).
“Pension Scheme” shall mean the Heron Stakeholder Pension Scheme and the life assurance scheme operated for the benefit of employees of Heron Group Limited.  
“Permits” shall mean all permits, licenses, registrations, certificates, orders, approvals, franchises, variances and similar rights issued by or obtained from any Governmental Entity (including those issued or required under Environmental Laws and those relating to the occupancy or use of owned or leased real property).
“Permitted Security Interests” shall mean (a) mechanic’s, material men’s and similar liens, (b) liens arising under worker’s compensation, unemployment insurance, social security, retirement and similar legislation, or statutory liens for Taxes not yet due and payable, (c) liens on goods in transit incurred pursuant to documentary letters of credit, (in the case of (a) to (c) in each case arising in the Ordinary Course of Business of the Company and the Subsidiaries and not material to the Company or any Subsidiary) and (d) the debentures dated 2 April 2009 granted by each of the Company and Heron Evidence Development Limited respectively in favour of The Royal Bank of Scotland.
 “Person” shall mean an individual, a partnership, a corporation, an association, a limited liability company, a joint stock company, a trust, a joint venture, an unincorporated organization or a Governmental Entity.
“Post-Closing Portion” means the portion of a Straddle Period beginning on the day after the Closing Date.
“PPACA” shall have the meaning set forth in Section 3.22(h).
“Pre-Closing Portion” means the portion of a Straddle Period ending on the Closing Date.
“Pre-Closing Tax Period” means any taxable period (or portion thereof) ending on or before the Closing Date.
“Product” shall mean any drug, biologic, device or diagnostic that has received regulatory approval in any market, or is at any level of pre-approval development.
“Proprietary Information” shall have the meaning set forth in Section 7.1(a).
“Pro Rata Share” shall mean, with respect to any Individual Seller, a fraction, (a) the numerator of which is the Aggregate Consideration such Individual Seller is entitled to receive pursuant to this Agreement, and (b) the denominator of which is the Aggregate Consideration all Individuals Sellers are entitled to receive pursuant to this Agreement.  
“Publishing Activities” shall have the meaning set forth in Section 7.3(b).

86

“Purchase Price” shall mean (a) the Base Purchase Price, minus (b) the Estimated Closing Adjustment and minus (c) the Original Escrow Amount.
“Reasonable Best Efforts” shall mean best efforts, to the extent commercially reasonable.
“Recipient Party” shall have the meaning set forth in Section 5.3(i)(i).
“Relief” shall mean any loss, relief, allowance, credit, exemption or set off in respect of Tax or any deduction in computing income, profits or gains for the purposes of Tax and any right to a repayment of Tax.
“Representative” shall have the meaning set forth in the first paragraph of this Agreement.
“Required Funding” shall have the meaning set forth in Section 1.8(j)(ii).
“Response” shall mean a written response containing the information provided for in Section 6.2(c).
“RMA Business” shall have the meaning set forth in Section 1.8(f)(xiii).
“SEC” shall mean the United States Securities and Exchange Commission.
“Second Period” shall have the meaning set forth in Section 1.8(c).
“Second Period Earn-Out Consideration” shall have the meaning set forth in Section 1.8(a)(ii).
“Securities Act” shall mean the Securities Act of 1933, as amended.
“Security Interest” shall mean any mortgage, pledge, security interest, encumbrance, charge or other lien (whether arising by contract or by operation of Law).
“Sellers” shall have the meaning set forth in the first paragraph of this Agreement.
“Sellers’ Counsel” shall have the meaning set forth in Section 9.13.
“Shergill” shall have the meaning set forth in Section 3.5(e).
“Software” shall mean computer software code, applications, utilities, development tools, diagnostics, databases and embedded systems, whether in source code, interpreted code or object code form.
“Specified Court” shall have the meaning set forth in Section 9.11.
“Straddle Period” shall have the meaning set forth in Section 5.3(d).

87

“Subsidiary” shall mean any corporation, partnership, trust, limited liability company or other non-corporate business enterprise in which the Company (or another Subsidiary) holds stock or other ownership interests representing (a) more than 50% of the voting power of all outstanding stock or ownership interests of such entity or (b) the right to receive more than 50% of the net assets of such entity available for distribution to the holders of outstanding stock or ownership interests upon a liquidation or dissolution of such entity.
“Tax Claim” shall have the meaning set forth in Section 5.3(g).
“Tax Returns” shall mean any and all reports, returns (including information returns and any land transaction returns), accounts, computations, assessments, claims, disclaimers, elections, registrations, declarations, or statements and any other necessary information relating to Taxes, including any schedule or attachment thereto and any related or supporting workpapers or information with respect to any of the foregoing, including any amendment thereof filed with or submitted to any Governmental Entity in connection with the determination, assessment, collection or payment of Taxes or in connection with the administration, implementation or enforcement of or compliance with any legal requirement relating to any Tax, and including, for the avoidance of doubt, U.S. Department of the Treasury Form TD F 90-22.1.
“Taxable Event” shall mean the original issue of any Company Share by the Company to any Individual Seller, the ownership of any Company Share by any Seller, and/or any transfer by any Individual Seller of any Company Share or interest in any Company Share to the Entity Seller and/or the sale or transfer of any Company Share or interest in any Company Share by any Seller to the Buyer and/or any other taxable event relating to any Company Share or any interest in any Company Share and/or the payment by the Buyer to any Seller of all or any part of the Aggregate Consideration (including the Earn-Out Consideration) and/or any participation, directly or indirectly, by any member of the Entity Seller in any part of the Aggregate Consideration (including Earn-Out Consideration), including where such participation arises by virtue of that member’s entitlement of share in profits or in any distribution of profits of the Entity Seller.
“Taxation Statute” shall mean any directive, statute, enactment, law or regulation wherever enacted or issued, coming into force or entered into providing for or imposing any Tax, or providing for the reporting, collection, assessment or administration of any Tax liability, and shall include orders, regulations, instruments, bye-laws or other subordinate legislation made under the relevant statute or statutory provision and any directive, statute, enactment, law, order, regulation or provision which amends, extends, consolidates or replaces the same or which has been amended, extended, consolidated or replaced by the same.
“Taxes” shall mean any and all taxes, charges, fees, duties, contributions, levies or other similar assessments or Liabilities, including income, gross receipts, corporation, ad valorem, premium, value-added, net worth, capital stock, capital gains, documentary, recapture, alternative or add-on minimum, disability, estimated, registration, recording, excise, real property, personal property, sales, use, license, lease, service, service use, transfer, withholding, employment, unemployment, insurance, social security, national insurance, business license, business organization, environmental, workers compensation, payroll, profits, severance, stamp, 

88

occupation, escheat, windfall profits, customs duties, franchise and other taxes of any kind whatsoever imposed by the United Kingdom, the United States of America or any state, local or foreign government, or any agency or political subdivision thereof, and any interest, fines, penalties, assessments or additions to tax imposed with respect to such items or any contest or dispute thereof, and the words “Tax” and “Taxation” shall be construed accordingly.
“Third Party Action” shall mean any suit or proceeding by a Person other than a Party for which indemnification may be sought by a Party under Article VI.
“Third Period” shall have the meaning set forth in Section 1.8(d).
“Threshold” shall mean $120,000.
“Trademarks” shall mean all registered trademarks and service marks, logos, Internet domain names, corporate names and doing business designations and all registrations and applications for registration of the foregoing, common law trademarks and service marks and trade dress.
“Transfer Pricing Escrow Account” shall have the meaning set forth in the Escrow Agreement. 
“UK GAAP” shall mean United Kingdom generally accepted accounting principles.
“USCIS” shall mean the meaning set forth in Section 3.21(e).
“U.S. Subsidiary” shall mean Heron Evidence Development LLC, a Delaware limited liability company.
“Virus” means a disabling device, virus, worm, back door, Trojan horse or other disruptive or malicious code that may or are intended to impair their intended performance or otherwise permit unauthorized access to, hamper, delete or damage any computer system, software, network or data, other than any access control feature that is part of the Customer Offering to control access to the Customer Offering or Internal Systems to only licensed uses and is intentionally coded as part of the Customer Offering or Internal System by Company or, with respect to Internal Systems licensed to the Company or any Subsidiary by a third party, by such third party.
“Warrant” shall mean each warrant or other contractual right to purchase or acquire Company Shares.
“Work Permit” shall have the meaning set forth in Section 3.21(e).
“Working Capital Target” shall mean $626,000.

89

ARTICLE IX 
MISCELLANEOUS
9.1    Press Releases and Announcements.  No Seller shall issue any press release or public announcement relating to the subject matter of this Agreement without the prior written approval of the Buyer; provided, however, that any Seller may make any public disclosure it believes in good faith is required by applicable Law (in which case the disclosing Seller shall use reasonable efforts to advise the Buyer and provide the Buyer with a copy of the proposed disclosure prior to making the disclosure).
9.2    No Third Party Beneficiaries.  This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns.
9.3    Entire Agreement.  This Agreement (including the documents referred to herein) constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements or representations by or among the Parties, written or oral, with respect to the subject matter hereof.
9.4    Succession and Assignment.  This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns.  No Party may assign either this Agreement or any of its rights, interests or obligations hereunder without the prior written approval of the other Parties; provided that the Buyer may assign its rights, interests and obligations hereunder to (a) an Affiliate of the Buyer or (b) any Person that acquires all or substantially all of the assets of the Buyer to which this Agreement relates; provided further however that notwithstanding any such assignment by the Buyer to an Affiliate of the Buyer pursuant to clause (a) of this Section 9.4, the Buyer shall remain obligated to perform all obligations under this Agreement to the extent that such assignee is unwilling or unable to perform such obligations.
9.5    Counterparts and Facsimile Signature.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  This Agreement may be executed by facsimile signature (including by an electronic scan delivered by electronic mail).
9.6    Headings.  The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

90

9.7    Notices.  All notices, requests, demands, claims, and other communications hereunder shall be in writing.  Any notice, request, demand, claim or other communication hereunder shall be deemed duly delivered, given and received two (2) Business Days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one (1) Business Days after it is sent for next Business Day delivery via a reputable international overnight courier service, in each case to the intended recipient as set forth below:	
		
	To the Buyer or the Company:
	with a copy (which copy shall not constitute notice) to:

	PAREXEL International Corporation 
195 West Street 
Waltham, MA 02451 
Attn:  Douglas Batt, Esq. 
Telecopy:  (781) 487-0525 
Telephone:  (781) 487-9900
	Wilmer Cutler Pickering Hale and Dorr LLP 
60 State Street 
Boston, MA  02109 
Attn: Hal J. Leibowitz, Esq. 
Telecopy:  (617) 526-5000 
Telephone:  (617) 526-6000

	To the Representative or any Seller:
	 

	John Kerrigan
20 Higgins Farm Road
Stockton NJ 08559
Telephone: 908-627-0181

	with a copy (which copy shall not constitute notice) to:
Cooley LLP
1299 Pennsylvania Avenue, NW, Suite 700
Washington, DC 20004
Attn: Thomas R. Salley
Telecopy: (202) 842-7899 
Telephone:   (202) 842-7878

Any Party may give any notice, request, demand, claim or other communication hereunder using any other means (including personal delivery, expedited courier, messenger service, telecopy, ordinary mail or electronic mail), but no such notice, request, demand, claim or other communication shall be deemed to have been duly given unless and until it actually is received by the party for whom it is intended.  Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.
9.8    Governing Law.  All matters arising out of or relating to this Agreement and the transactions contemplated hereby (including its interpretation, construction, performance and enforcement) shall be governed by and construed in accordance with the internal Laws of the Commonwealth of Massachusetts without giving effect to any choice or conflict of law provision or rule (whether of the Commonwealth of Massachusetts or any other jurisdiction) that would cause the application of Laws of any jurisdictions other than those of the Commonwealth of Massachusetts.  Notwithstanding the foregoing, the provisions of this Agreement related to the procedures necessary to effectuate the transfer of title to the Company Shares shall, to the extent required by internal Laws of England and Wales, be governed by and construed in accordance with such Laws.

91

9.9    Amendments and Waivers.  The Parties may mutually amend any provision of this Agreement at any time.  No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by all of the Parties.  No waiver of any right or remedy hereunder shall be valid unless the same shall be in writing and signed by the Party giving such waiver.  No waiver by any Party with respect to any default, misrepresentation or breach of warranty or covenant hereunder shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.  No failure on the part of any Person to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any Person in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy.
9.10    Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.  If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the Parties agree that the court making the determination of invalidity or unenforceability shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified.  In the event such court does not exercise the power granted to it in the prior sentence, the Parties agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term.
9.11    Submission to Jurisdiction.  Each Party (a) submits to the non-exclusive jurisdiction of any state or federal court sitting in Boston, Massachusetts (each, a “Specified Court”) in any action or proceeding arising out of or relating to this Agreement (including any action or proceeding for the enforcement of any arbitral award made in connection with any arbitration of a Dispute hereunder), (b) agrees that all claims in respect of such action or proceeding may be heard and determined in any Specified Court, (c) waives any claim of inconvenient forum or other challenge to venue in any Specified Court, and (d) waives any right it may have to a trial by jury with respect to any action or proceeding arising out of or relating to this Agreement; provided in each case that, solely with respect to any arbitration of a Dispute, the Arbitrator shall resolve all threshold issues relating to the validity and applicability of the arbitration provisions of this Agreement, contract validity, applicability of statutes of limitations and issue preclusion, and such threshold issues shall not be heard or determined by any court.  Each Seller and the Representative agrees not to bring any action or proceeding arising out of or relating to this Agreement in any court other than a Specified Court.  Each Party agrees to accept service of any summons, complaint or other initial pleading made in the manner provided for the giving of notices in Section 9.7, provided that nothing in this Section 9.11 shall affect the right of 

92

any Party to serve such summons, complaint or other initial pleading in any other manner permitted by Law.
9.12    Specific Performance.  The Parties agree that irreparable damage would occur in the event that any provision of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in each case without posting a bond or undertaking, this being in addition to any other remedy to which they are entitled at law or in equity.  Each Party agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that (a) the Party seeking such remedy has an adequate remedy at law or (b) an award of specific performance is not an appropriate remedy for any reason at law or equity.  Nothing in this Section 9.12 is intended to limit the provisions of Section 7.3(c).
9.13    Representation by Counsel.  The Parties hereto agree that, notwithstanding the fact that Cooley LLP (“Cooley”) and Bird & Bird LLP ("B&B", and together with Cooley, collectively referred to herein as "Sellers' Counsel") may have jointly represented the Company and/or its affiliates in connection with the transactions contemplated by this Agreement, and has also represented the Company in connection with matters other than the transactions contemplated by this Agreement prior to Closing, Sellers' Counsel will be permitted in the future, after the Closing, to represent any Seller in connection with any disputes that any Seller may hereafter have with the Company and/or with the Buyer arising out of, or related to, this Agreement and any document entered into in connection herewith.  The Company and the Buyer hereby agree, in advance, subject to the applicable Law, to use their reasonable efforts to waive any actual or potential conflict of interest that may hereafter arise in connection with any disputes that such Seller may hereafter have with the Company and/or with the Buyer arising out of, or related to, this Agreement and any document entered into in connection herewith.  In no event shall the foregoing waiver constitute (a) a release by the Buyer, the Company, any of their affiliates or any of their respective successors of any claims that they or any of them may have with respect to the representation by Sellers' Counsel of the Company and/or its affiliates or (b) a waiver of any work product, attorney-client or other similar privilege, protection or obligation of Sellers' Counsel to or for the benefit of the Company or any of its affiliates.
9.14    Construction.  For purposes of this Agreement, including the Schedules hereto:
(a)    The language used shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party.
(b)    Any reference to “including” shall be interpreted as “including without limitation”.
(c)    Any reference to any Article, Section or paragraph shall be deemed to refer to an Article, Section or paragraph of this Agreement, unless the context clearly indicates otherwise.

93

(d)    The defined terms shall apply equally to both the singular and plural forms of the terms defined.
(e)    The words “hereof”, “herein” and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement.
(f)    When reference is made to information that has been “made available” to the Buyer, that shall mean that such information was either (i) contained in the Company’s electronic data room or (ii) delivered to the Buyer or its counsel, in each case, not less than two (2) Business Days prior to the date of this Agreement.
(g)    Whenever any payment is to be paid in “cash”, payment shall be made in the legal tender of the United States and the method for payment shall be by wire transfer of immediately available funds.  In the event there is any need to convert U.S. dollars into any foreign currency, or vice versa, for any purpose, the exchange rate shall be that published by the Wall Street Journal on the date an obligation is paid (or if the Wall Street Journal is not published on such date, the first date thereafter on which the Wall Street Journal is published).
(h)    Unless otherwise expressly provided, wherever the consent of any Person is required or permitted, such consent may be withheld in such Person’s sole and absolute discretion.
(i)    The phrase “made available” shall mean that the referenced document(s) was actually delivered to the Buyer or continuously accessible in the Data Room by the Buyer and its representatives during the period from 8:00 am Eastern Time on the second Business Day prior to the Closing through the Closing.
(j)    The phrase “full title guarantee” shall have the meaning set forth in Section 1(2)(a) of the Law of Property (Miscellaneous Provisions) Act 1994 in England and Wales.  
[Remainder of the Page Intentionally Left Blank]

94

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.
BUYER:
PAREXEL INTERNATIONAL HOLDING B.V.
By:  /s/ Pieter Rietman
Title:  Managing Director
COMPANY:
HERON GROUP LIMITED
By:  /s/ C.J. Knight
Title:  Director
REPRESENTATIVE:
JOHN KERRIGAN
Solely in his capacity as the Representative
By:  /s/ John Kerrigan
Title:  CEO
SELLERS:
PAUL HOWARD
/s/ PA Howard
JOHN KERRIGAN
/s/ John Kerrigan
CHRIS KNIGHT
/s/ C.J. Knight
ST EVENAGE HOLDINGS LLC
By:  /s/ Catherine Kerrigan    
Name:  Catherine S. Kerrigan
Title:  Manager

- Signature Page to Stock Purchase Agreement -exhibit10-200.htm

  

  

  

Exhibit 10.200

 

THIRD AMENDED AND RESTATED CREDIT AND GUARANTEE AGREEMENT

 

dated as of April 30, 2013

 

among

 

GCI HOLDINGS, INC.,

as Borrower,

 

GCI, INC.,

as Parent,

 

the Subsidiary Guarantors party hereto

 

the Lenders party hereto,

 

UNION BANK, N.A.,

as Syndication Agent,

 

SUNTRUST BANK,

as Documentation Agent,

 

and

 

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,

as Administrative Agent

 

______________________

 

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,

 

UNION BANK, N.A.

 

and

 

SUNTRUST ROBINSON HUMPHREY, INC.,

as Co-Lead Arrangers and Joint Book Runners

 

 

Bryan Cave LLP

1290 Avenue of the Americas

New York, New York  10104

 

 

 

  

  

  

	
TABLE OF CONTENTS

	  
	 	 	 
	  	  	
Page

	
Article 1 DEFINITIONS

	  	
1

	
Section 1.1.

	
Defined Terms

	
1

	
Section 1.2.

	
Classification of Loans and Borrowings

	
31

	
Section 1.3.

	
Terms Generally

	
31

	
Section 1.4.

	
Accounting Terms; GAAP

	
32

	
Article 2 THE CREDITS

	  	
32

	
Section 2.1.

	
Commitments and Loans

	
32

	
Section 2.2.

	
Loans and Borrowings

	
34

	
Section 2.3.

	
Requests for Borrowings

	
35

	
Section 2.4.

	
Funding of Borrowings

	
36

	
Section 2.5.

	
Termination, Reduction and Increase of Commitments

	
37

	
Section 2.6.

	
Repayment of Loans

	
39

	
Section 2.7.

	
Prepayment of Loans

	
39

	
Section 2.8.

	
Evidence of Debt

	
41

	
Section 2.9.

	
Letters of Credit

	
42

	
Section 2.10.

	
Swingline Loans

	
46

	
Section 2.11.

	
Payments Generally; Pro Rata Treatment; Sharing of Setoffs

	
48

	
Section 2.12.

	
Defaulting Lenders

	
49

	
Article 3 INTEREST, FEES, YIELD PROTECTION, ETC.

	  	
51

	
Section 3.1.

	
Interest

	
51

	
Section 3.2.

	
Interest Elections

	
52

	
Section 3.3.

	
Fees

	
54

	
Section 3.4.

	
Alternate Rate of Interest

	
55

	
Section 3.5.

	
Increased Costs; Illegality

	
55

	
Section 3.6.

	
Break Funding Payments

	
57

	
Section 3.7.

	
Taxes

	
58

	
Section 3.8.

	
Mitigation Obligations

	
60

	
Section 3.9.

	
Replacement of Lenders

	
60

	
Article 4 REPRESENTATIONS AND WARRANTIES

	  	
61

	
Section 4.1.

	
Organization; Powers

	
61

	
Section 4.2.

	
Authorization; Enforceability

	
61

	
Section 4.3.

	
Governmental Approvals; No Conflicts

	
61

	
Section 4.4.

	
Financial Condition

	
62

	
Section 4.5.

	
Properties

	
63

	
Section 4.6.

	
Litigation and Environmental Matters

	
63

	
Section 4.7.

	
Compliance with Laws and Agreements

	
63

	
Section 4.8.

	
Franchises, FCC, State PUC and Certain Copyright Matters

	
63

	
Section 4.9.

	
Investment Company Status

	
65

	
Section 4.10.

	
Taxes

	
65

	
Section 4.11.

	
ERISA

	
65

	
Section 4.12.

	
Disclosure

	
65

 

  

  

  

	
Section 4.13.

	
Subsidiaries

	
66

	
Section 4.14.

	
Insurance

	
66

	
Section 4.15.

	
Labor Matters

	
66

	
Section 4.16.

	
Solvency

	
66

	
Section 4.17.

	
Federal Reserve Regulations

	
67

	
Section 4.18.

	
Use of Proceeds

	
67

	
Section 4.19.

	
USA PATRIOT Act, OFAC and Other Regulations

	
67

	
Article 5 CONDITIONS

	  	
68

	
Section 5.1.

	
Initial Conditions.

	
68

	
Section 5.2.

	
Conditions to Future Credit Events

	
70

	
Article 6 AFFIRMATIVE COVENANTS

	  	
71

	
Section 6.1.

	
Financial Statements and Other Information

	
71

	
Section 6.2.

	
Notices of Material Events

	
73

	
Section 6.3.

	
Existence; Conduct of Business

	
74

	
Section 6.4.

	
Payment and Performance of Obligations

	
74

	
Section 6.5.

	
Maintenance of Properties

	
74

	
Section 6.6.

	
Books and Records; Inspection Rights

	
74

	
Section 6.7.

	
Compliance with Laws

	
74

	
Section 6.8.

	
Environmental Compliance

	
75

	
Section 6.9.

	
Insurance

	
75

	
Section 6.10.

	
Casualty and Condemnation

	
75

	
Section 6.11.

	
Additional Subsidiaries

	
75

	
Section 6.12.

	
Information Regarding Collateral.

	
76

	
Section 6.13.

	
Further Assurances

	
76

	
Section 6.14.

	
Use of Proceeds

	
76

	
Article 7 NEGATIVE COVENANTS

	  	
77

	
Section 7.1.

	
Indebtedness

	
77

	
Section 7.2.

	
Liens

	
79

	
Section 7.3.

	
Fundamental Changes

	
80

	
Section 7.4.

	
Investments

	
81

	
Section 7.5.

	
Acquisitions

	
83

	
Section 7.6.

	
Sale and Lease-Back Transactions

	
84

	
Section 7.7.

	
Dispositions

	
84

	
Section 7.8.

	
Restricted Payments

	
86

	
Section 7.9.

	
Prepayments

	
87

	
Section 7.10.

	
Transactions with Affiliates

	
87

	
Section 7.11.

	
Restrictive Agreements

	
87

	
Section 7.12.

	
Hedging Agreements

	
88

	
Section 7.13.

	
Amendment of Material Documents

	
88

	
Section 7.14.

	
Ownership of Subsidiaries

	
89

	
Section 7.15.

	
Interest Coverage Ratio

	
89

	
Section 7.16.

	
Total Leverage Ratio

	
89

	
Section 7.17.

	
Senior Leverage Ratio

	
89

	
Section 7.18.

	
Capital Expenditures

	
89

	
Article 8 EVENTS OF DEFAULT

	  	
90

 

  

  

  

	
Article 9 THE ADMINISTRATIVE AGENT

	  	
92

	
Article 10 MISCELLANEOUS

	  	
95

	
Section 10.1.

	
Notices

	
95

	
Section 10.2.

	
Waivers; Amendments

	
96

	
Section 10.3.

	
Expenses; Indemnity; Damage Waiver

	
99

	
Section 10.4.

	
Successors and Assigns

	
101

	
Section 10.5.

	
Survival

	
104

	
Section 10.6.

	
Counterparts; Integration; Effectiveness

	
104

	
Section 10.7.

	
Severability

	
104

	
Section 10.8.

	
Right of Setoff

	
105

	
Section 10.9.

	
Governing Law; Waiver of Jury Trial

	
105

	
Section 10.10.

	
Submission To Jurisdiction; Waivers

	
105

	
Section 10.11.

	
Headings

	
106

	
Section 10.12.

	
Interest Rate Limitation

	
106

	
Section 10.13.

	
Patriot Act

	
106

	
Section 10.14.

	
Confidentiality

	
107

	
Section 10.15.

	
Amendment and Restatement

	
108

	
Article 11 GUARANTEE

	  	
108

	
Section 11.1.

	
Guarantee; Fraudulent Transfer, Etc.; Contribution

	
108

	
Section 11.2.

	
Obligations Not Waived

	
110

	
Section 11.3.

	
Security

	
110

	
Section 11.4.

	
No Discharge or Diminishment of Guarantee

	
110

	
Section 11.5.

	
Defenses of Borrower Waived

	
111

	
Section 11.6.

	
Agreement to Pay; Subordination

	
111

	
Section 11.7.

	
Information

	
112

	
Section 11.8.

	
Termination

	
112

	
Section 11.9.

	
Additional Guarantors

	
112

 

  

  

  

	  	  	  
	
EXHIBITS:

	  	  
	 	 	 
	
Exhibit A

	
Form of Assignment and Acceptance

	  
	
Exhibit B-1

	
Form of Revolving Loan Note

	  
	
Exhibit B-2

	
Form of Delayed Draw Term Note

	  
	
Exhibit B-3

	
Form of Swingline Note

	  
	
Exhibit C

	
Form of Borrowing Request

	  
	
Exhibit D

	
Form of Interest Election Request

	  
	
Exhibit E

	
Form of Second Amended and Restated Security Agreement

	  
	
Exhibit F

	
Form of Second Amended and Restated Pledge Agreement

	  
	
Exhibit G-1

	
Form of Opinion of Sherman & Howard L.L.C.

	  
	
Exhibit G-2

	
Form of Opinion of Davis Wright Tremaine LLP

	  
	
Exhibit G-3

	
Form of Opinion of Borrower

	  
	
Exhibit H

	
Form of Closing Certificate

	  
	
Exhibit I

	
Form of Compliance Certificate

	  
	
Exhibit J

	
Form of Solvency Certificate

	  
	
Exhibit K

	
Form of Guarantee Supplement

	  
	
Exhibit L

	
Form of Add-on Term Loan Supplement

	  
	
Exhibit M

	
Form of Revolving Increase Supplement

	  
	  	  	  
	
SCHEDULES:

	  	  
	 	 	 
	
Schedule 1.1A

	
Commitments

	  
	
Schedule 1.1B

	
List of Existing Letters of Credit

	  
	
Schedule 4.6

	
Disclosed Matters

	  
	
Schedule 4.8

	
List of Matters Affecting Authorizations

	  
	
Schedule 4.13

	
List of Subsidiaries

	  
	
Schedule 4.14

	
List of Insurance

	  
	
Schedule 7.1

	
List of Existing Indebtedness

	  
	
Schedule 7.2

	
List of Existing Liens

	  
	
Schedule 7.4

	
List of Existing Investments

	  
	
Schedule 7.10

	
List of Agreements with Affiliates

	  
	
Schedule 7.11

	
List of Existing Restrictions

	  

 

  

  

  

THIRD AMENDED AND RESTATED CREDIT AND GUARANTEE AGREEMENT, dated as of April 30, 2013, among GCI HOLDINGS, INC., GCI, INC., the SUBSIDIARY GUARANTORS party hereto, the LENDERS party hereto, UNION BANK, N.A., as Syndication Agent, SUNTRUST BANK, as Documentation Agent, and CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as Administrative Agent.

 

RECITALS

 

This Third Amended and Restated Credit and Guarantee Agreement amends, restates, replaces and supersedes, in its entirety, without a breach in continuity and without constituting a novation, the Second Amended and Restated Credit and Guarantee Agreement, dated as of January 29, 2010 (as amended, the “Existing Credit Agreement”), among the Borrower, the subsidiary guarantors party thereto, the lenders party thereto, the other parties thereto and Credit Agricole CIB, as the administrative agent (the “Existing Administrative Agent”).

 

The Borrower acknowledges that on the Closing Date immediately before the satisfaction of the condition set forth in Section 5.1(o) under this Agreement (i) the Borrower has Existing Revolving Loans in the outstanding principal amount of $20,000,000 and (ii) Existing Add-on Term Loans in the outstanding principal amount of $80,000,000.

 

Accordingly, the parties hereto agree as follows:

 

ARTICLE 1

DEFINITIONS

Section 1.1. Defined Terms

 

As used in this Agreement, the following terms have the meanings specified below:

 

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.

 

“Acquisition” has the meaning set forth in Section 7.5.

 

“ACS” means Alaska Communications Systems Group, Inc., a Delaware corporation.

 

“Add-on Term Loan” and “Add-on Term Loans” shall have the respective meanings set forth in Section 2.1(d).

 

“Add-on Term Borrowing Date” shall, with respect to each Add-on Term Loan, have the meaning set forth in the Effective Add-on Term Loan Supplement with respect to such Add-on Term Loan.

 

  

1

  

“Add-on Term Commitment” shall mean, as of any date and with respect to any Lender, the amount set forth in paragraph 2 or 3 of the applicable Effective Add-on Term Loan Supplement.

 

“Add-on Term Loan Supplement” means a supplement in substantially the form of Exhibit L.

 

“Adjusted Operating Cash Flow” means, with respect to any Person, Operating Cash Flow of such Person adjusted, on a consistent basis, to give effect to each acquisition, disposition and merger that occurred during the relevant period as if each had occurred on the first day of such period.  The adjustment to give effect to the AWN Transaction shall be deemed to be an increase in Operating Cash Flow of an amount equal to $65,000,000 divided by 365 for each day during the one year period ending on the date of the consummation of the AWN Transaction.

 

“Administrative Agent” means Credit Agricole CIB, in its capacity as administrative agent for the Lenders hereunder, or any successor thereto appointed pursuant to Article 9.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

“Affected Sale” has the meaning set forth in Section 2.7(d).

 

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

“Agents” means, collectively, the Administrative Agent, the Syndication Agent and the Documentation Agent.

 

“Agreement” means this Third Amended and Restated Credit and Guarantee Agreement, as amended, restated, supplemented or otherwise modified from time to time.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (i) the Prime Rate in effect on such day, (ii) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (iii) the One Month LIBO Rate plus 1%.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the One Month LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the One Month LIBO Rate, respectively.

 

“Amortization Event” has the meaning set forth in Section 2.7(c).

 

“Amortization Termination Event” has the meaning set forth in Section 2.7(c).

 

“Anti-Terrorism Law” means any applicable law, rule or regulation related to money laundering or financing terrorism including the Patriot Act, The Currency and Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act”, 31 U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959), the Trading With the Enemy Act (50 U.S.C. § 1 et seq., as amended) and Executive Order 13224 (effective September 24, 2001).

 

  

2

  

“Applicable Margin” means, at all times from and after the Closing Date, except as otherwise provided in Section 2.1(e), (i) with respect to each ABR Borrowing and each Swingline Loan, the per annum rate equal to the percentage set forth below under the heading “ABR Margin” during the applicable periods set forth below, and (ii) with respect to each Eurodollar Borrowing and the fees payable under Section 3.3(b)(i), the per annum rate equal to the percentage set forth below under the heading “Eurodollar and LC Fee Margin” during the applicable periods set forth below, provided that until the delivery of the Compliance Certificate for the second full fiscal quarter after the Closing Date pursuant to Section 6.1(c), the Total Leverage Ratio shall be deemed to be greater than or equal to 5.0:1.0 and less than 5.5:1:0 for purposes of determining the Applicable Margin:

 

	
When the Total Leverage Ratio is:

	
ABR Margin

	
Eurodollar and LC Fee Margin

	
Less Than

	
Greater Than or Equal to

	  	
5.5:1.0

	
2.00%

	
3.00%

	
5.5:1.0

	
5.0:1.0

	
1.75%

	
2.75%

	
5.0:1.0

	
4.5:1.0

	
1.50%

	
2.50%

	
4.5:1.0

	
4.0:1.0

	
1.25%

	
2.25%

	
4.0:1.0

	  	
1.00%

	
2.00%

 

With respect to each Add-on Term Loan, “Applicable Margin” shall have the meaning set forth in Schedule I to the Effective Add-on Term Loan Supplement applicable thereto.  Changes in the Applicable Margin resulting from a change in the Total Leverage Ratio shall be based upon the Compliance Certificate most recently delivered under Section 6.1(c) and shall become effective on the date such Compliance Certificate is received by the Administrative Agent.  Notwithstanding anything to the contrary in this definition, if the Borrower shall fail to deliver to the Administrative Agent a Compliance Certificate on or prior to any date required hereby, then solely for purposes of determining the “Applicable Margin”, the Total Leverage Ratio shall be deemed to be greater than or equal to 5.5:1.0 from and including such date to the date of receipt by the Administrative Agent of such certificate.  In the event that any financial statement or certification delivered pursuant to Section 6.1 is shown to be inaccurate, and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “Applicable Period”) than the Applicable Margin applied for such Applicable Period, the Borrower shall immediately (a) deliver to the Administrative Agent a corrected compliance certificate for such Applicable Period, (b) determine the Applicable Margin for such Applicable Period based upon the corrected compliance certificate, and (c) immediately pay to the Administrative Agent for the benefit of the Lenders the accrued additional interest and other fees owing as a result of such increased Applicable Margin for such Applicable Period, which payment shall be promptly distributed by the Administrative Agent to the Lenders entitled thereto.

 

  

3

  

“Applicable Percentage” means, with respect to any applicable Lender, the percentage of the total Revolving Commitments represented by such Lender’s Revolving Commitment.  If the Revolving Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Revolving Commitments most recently in effect, giving effect to any assignments.

 

“Approved Debt” means Indebtedness incurred by the Parent or any subsidiary thereof (other than NMTC Subsidiaries) (a) having a final stated maturity date that is earlier than the Permitted Debt Maturity Date, and (b) in an aggregate principal amount at any one time outstanding not in excess of $10,000,000.

 

“Approved Fund” means any Person (other than a natural person) that is primarily engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c)(i) an entity or an Affiliate of an entity that administers or manages a Lender or (ii) an entity or an Affiliate of an entity that is the investment advisor to a Lender.

 

“Arrangers” means Credit Agricole CIB, Union Bank, N.A. and SunTrust Robinson Humphrey, Inc., in their capacities as Co-Lead Arrangers of the credit facility evidenced by this Agreement.

 

“Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 10.4(b)(iii)), and accepted by the Administrative Agent, substantially in the form of Exhibit A or any other form approved by the Administrative Agent and the Borrower.

 

“Authorization” means, collectively, (a) any FCC License, (b) any Franchise, or (c) any other franchise, franchise application, ordinance, agreement, permit, license, order, certificate, registration, qualification, variance, license, approval, permit or other form of permission, consent or authority issued by the FCC, any State PUC, or any other Governmental Authority regulating the ownership or operation of the Communications Business.

 

“AWN” means The Alaska Wireless Network, LLC, an Alaska limited liability company.

 

“AWN Contribution” means the contribution of assets (including the AWN Purchased Assets) to be made by GCI Wireless to AWN at the closing of the transactions contemplated by the AWN Contribution Agreement, and the contemporaneous contribution of such assets by GCI Communication Corp. to GCI Wireless.

 

“AWN Contribution Agreement” means the Asset Purchase and Contribution Agreement, dated as of June 4, 2012, by and among ACS, ACS Wireless, Inc., GCI, GCI Wireless and AWN, as amended by the Amendment to Asset Purchase and Contribution Agreement dated as of October 1, 2012.

 

“AWN Documents” means, collectively, the AWN Contribution Agreement, the documents governing the AWN Line of Credit, the AWN Operating Agreement, and all of the other agreements, instruments and other documents executed or delivered by the Parent or any of its subsidiaries in connection with the consummation of the AWN Transaction.

 

  

4

  

“AWN Line of Credit” means a revolving credit facility of up to $50 million to be established by the Borrower in favor of AWN as part of the AWN Transaction.1

 

“AWN Operating Agreement” means the First Amended and Restated Operating Agreement of The Alaska Wireless Network, LLC, by and among AWN, GCI Wireless, ACS Wireless, Inc., ACS and GCI in the form attached as Exhibit A to the AWN Contribution Agreement.

 

“AWN Preferred Payments” means the ACS Preferred Distributions under and as defined in the AWN Operating Agreement to holders of AWN’s Equity Interests to be acquired by ACS or its affiliate at the closing of the transactions contemplated by the AWN Contribution Agreement.

 

“AWN Purchased Assets” means the assets to be purchased by GCI Wireless from ACS or its affiliate at the closing of the transactions contemplated by the AWN Contribution Agreement.

 

“AWN Transaction” means establishment of AWN as a wireless joint venture between GCI Wireless and ACS or its affiliate as contemplated by the AWN Documents, including the purchase by GCI Wireless of the AWN Purchased Assets and the AWN Contribution.

 

“Blocked Person” means any Person that (a) is publicly identified on the most current list of “Specially Designated Nationals and Blocked Persons” published by the Office of Foreign Assets Control of the US Department of the Treasury (“OFAC”) or resides, is organized or chartered, or has a place of business in a country or territory subject to OFAC sanctions or embargo programs or (b) is publicly identified as prohibited from doing business with the United States under the International Emergency Economic Powers Act, the Trading With the Enemy Act, or any other applicable law, rule or regulation.

 

“Board” means the Board of Governors of the Federal Reserve System of the United States of America.

 

“Borrower” means GCI Holdings, Inc., an Alaska Corporation.

 

“Borrowing” means Loans of the same Type and Class, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect.

 

“Borrowing Request” means a Borrowing Request, substantially in the form of Exhibit C.

 

  

5

  

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed, provided that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

 

“Capital Expenditures” means for any period, with respect to any Person, the aggregate of all expenditures by such Person during such period for the acquisition or leasing (pursuant to a capital lease but excluding any amount representing capitalized interest) of fixed or capital assets or additions to property, plant or equipment (including replacements, capitalized repairs and improvements during such period) which are required to be capitalized under GAAP on a balance sheet of such Person, provided that in any event the term “Capital Expenditures” shall exclude: (i) expenditures to the extent financed with amounts reinvested from the proceeds of asset sales, casualty events or condemnation and (ii) expenditures for leasehold improvements for which such Person is reimbursed or receives a credit from a Person that is not the Borrower or any Subsidiary.

 

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

 

“Cash Equivalents” means:

 

(a)           securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof), maturing not more than one year from the date of acquisition;

 

(b)           certificates of deposit, dollar time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case, with any Credit Party making such deposits available in the ordinary course of business, First National Bank of Alaska, Northrim Bank or any domestic commercial bank having capital and surplus in excess of $500,000,000 and a rating at the time of acquisition thereof of “P-2” or better from Moody’s Investors Service, Inc. (“Moody’s”) or “A-2” or better from Standard & Poor’s Ratings Group, Inc. (“S&P”);

 

(c)           repurchase obligations for underlying securities of the types described in clauses (a) and (b) above entered into with any financial institution meeting the qualifications specified in clause (b) above;

 

(d)           commercial paper issued by a corporation (other than an Affiliate of the Borrower) rated at least “P-1” or higher from Moody’s or “A-1” or higher from S&P, and in each case maturing within one year after the date of acquisition;

 

  

6

  

(e)           securities issued and fully guaranteed by any state, commonwealth or territory of the United States, or by any political subdivision or taxing authority thereof, rated at least “A2” by Moody’s or at least “A” by S&P and in each case having maturities of not more than one year from the date of acquisition; and

 

(f)           money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (e) of this definition or cash.

 

“Cash Interest Expense” means, for any Person for any period, an amount equal to (a) the interest expense (including, without limitation, the interest component of Capital Lease Obligations) of such Person and its subsidiaries during such period determined on a consolidated basis in accordance with GAAP, but without taking into account any payments, accruals or other items whatsoever under or with respect to any Interest Rate Derivative, minus (b) all payments (including, without limitation, all initial payments, periodic payments and termination payments) received by such Person and its subsidiaries during such period on a consolidated basis under all Interest Rate Derivatives, plus (c) all payments (including, without limitation, all initial payments, periodic payments and termination payments) made by such Person and its subsidiaries during such period on a consolidated basis under all Interest Rate Derivatives.

 

“Change in Control” means the occurrence of one or more of the following events: (1) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions), but other than by way of merger or consolidation, of all or substantially all of the assets of GCI or the Parent to any Person or group of related Persons for purposes of Section 13(d) of the Securities Exchange Act of 1934 (a “Group”), together with any Affiliates thereof (whether or not otherwise in compliance with the provisions hereof) other than to the Permitted Holders; (2) the approval by the holders of Equity Interests of GCI or the Parent, as the case may be, of any plan or proposal for the liquidation or dissolution of GCI or the Parent, as the case may be (whether or not otherwise in compliance with the provisions hereof); (3) any Person or Group (other than the Permitted Holders, any entity formed for the purpose of owning Equity Interests of the Parent or any direct or indirect wholly owned subsidiary of GCI) shall become the owner, directly or indirectly, beneficially or of record, of shares representing more than 50% of the aggregate ordinary voting power represented by Equity Interests of GCI or the Parent; (4) the replacement of a majority of the board of directors of GCI or the Parent over a two-year period from the directors who constituted the board of directors of GCI or the Parent, as the case may be, at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of the board of directors of GCI or the Parent, as the case may be, then still in office who either were members of such board of directors at the beginning of such period or whose election as a member of such board of directors was previously so approved; or (5) the failure of the Parent to own directly, beneficially and of record, 100% of the aggregate voting power and economic interests represented by the issued and outstanding Equity Interests of the Borrower on a fully diluted basis.

 

“Change in Law” means (i) the adoption of any law, rule or regulation by any Governmental Authority after the Closing Date, (ii) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the Closing Date or (iii) compliance by any Credit Party (or, for purposes of Section 3.5(b), by any lending office of such Credit Party or by such Credit Party’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the Closing Date; provided that notwithstanding anything herein to the contrary, (a) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith, and (b) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.

 

  

7

  

“Class” means (i) when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Delayed Draw Term Loans, Add-on Term Loans or Swingline Loans and (ii) when used in reference to any Lender, refers to such Lender in its capacity as a holder of Revolving Loans, Delayed Draw Term Loans or Add-on Term Loans, as applicable.

 

“Closing Date” means April 30, 2013.

 

“CoBank” means CoBank, ACB.

 

“CoBank Equities” means, as of any date, any and all Equity Interests issued by CoBank and held by one or more of the Loan Parties.

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateral” means any property of any Loan Party which, pursuant to any Security Document, secures any or all of the Obligations.

 

“Commitment Fee Rate” means, at all times from and after the Closing Date, the per annum rate equal to the percentage set forth below under the heading “Commitment Fee Rate” during the applicable periods set forth below, provided that until the delivery of the Compliance Certificate for the second full fiscal quarter after the Closing Date pursuant to Section 6.1(c), the Total Leverage Ratio shall be deemed to be equal to or greater than 4.5:1.0 for purposes of determining the Commitment Fee Rate:

 

	
When the Total Leverage Ratio is:

	
Commitment Fee Rate

	
Less Than

	
Greater Than or Equal to

	  	
4.5:1.0

	
0.500%

	
4.5:1.0

	  	
0.375%

 

Changes in the Commitment Fee Rate resulting from a change in the Total Leverage Ratio shall be based upon the Compliance Certificate most recently delivered under Section 6.1(c) and shall become effective on the date such Compliance Certificate is received by the Administrative Agent.  Notwithstanding anything to the contrary in this definition, if the Borrower shall fail to deliver to the Administrative Agent a Compliance Certificate on or prior to any date required hereby, then solely for purposes of determining the “Commitment Fee Rate”, the Total Leverage Ratio shall be deemed to be equal to or greater than 4.5:1.0 from and including such date to the date of receipt by the Administrative Agent of such certificate.

 

  

8

  

“Commitments” means, collectively, the Revolving Commitments, the Delayed Draw Term Commitments and the Add-on Term Commitments, if existing.

 

“Communications Act” means the Federal Communications Act of 1934, and the rules and regulations issued thereunder.

 

“Communications Business” means the cable (including without limitation cable television), local access, wireline and wireless (whether fixed or mobile) communications systems and other businesses (including long distance, data and internet services) of the Borrower and the Subsidiaries (other than NMTC Subsidiaries) generally.

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. §1 et seq.), and the rules and regulations issued thereunder.

 

“Compliance Certificate” means a certificate, substantially in the form of Exhibit I.

 

“Compliance Certificate Delivery Date” means the date on which a Compliance Certificate is delivered to the Administrative Agent in accordance with Section 6.1(c).

 

“Compliance Certificate Reference Date” means, with respect to each Compliance Certificate delivered to the Administrative Agent in accordance with Section 6.1(c), the end date of the fiscal period for the financial statements to which such Compliance Certificate relates.

 

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  The terms “Controlling” and “Controlled” have meanings correlative thereto.

 

“Copyright Act” means The Copyright Act of 1976.

 

“Credit Agricole CIB” means Credit Agricole Corporate and Investment Bank and its successors.

 

“Credit Parties” means the Administrative Agent, the Issuing Bank, the Swingline Lender and the Lenders.

 

“Default” means any event or condition that constitutes an Event of Default or that upon notice, lapse of time or both would, unless cured or waived, become an Event of Default under Article 8.

 

  

9

  

“Defaulting Lender” means any Lender, as reasonably determined by the Administrative Agent (and the Administrative Agent shall promptly notify the parties hereto after making such determination), that has (a) failed to fund any portion of its Loans or participations in Letters of Credit or Swingline Loans within three Business Days of the date  required to be funded by it hereunder, unless such Lender notifies the Administrative Agent and the 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, shall be specifically identified in such writing) has not been satisfied, (b) notified any Loan Party or any Credit Party in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement, 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, shall be specifically identified in such writing or public statement) cannot be satisfied, (c) failed, three Business Days after written request by the Administrative Agent or the Borrower (at any time the Administrative Agent or the Borrower) shall have reasonably determined that such Lender may fail to comply with the terms of this Agreement relating to its obligations to fund prospective Loans or participations in then outstanding Letters of Credit or Swingline Loans), to confirm it will comply with the terms of this Agreement relating to such 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 the Administrative Agent and the Borrower), (d) otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute, or (e)(i) become or is insolvent or has a direct or indirect parent company that has become or is insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, interim receiver, receiver and manager, administrator, liquidator, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a direct or indirect parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, interim receiver, receiver and manager, administrator, liquidator, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment.  For the avoidance of doubt, the mere acquisition or maintenance by a Governmental Authority of a Lender in and of itself will not cause a Lender to be a “Defaulting Lender” as long as it 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 permits such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.

 

“Delayed Draw Term Availability Period” means the period from and including the Closing Date to but excluding the earlier of April 30, 2014 and the date of termination of the Delayed Draw Term Commitments.

 

“Delayed Draw Term Commitment” means, with respect to each Lender having a Delayed Draw Term Commitment, the commitment of such Lender to make Delayed Draw Term Loans in an aggregate outstanding amount not exceeding the amount of such Lender’s Delayed Draw Term Commitment as set forth on Schedule 1.1A or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Delayed Draw Term Commitment, as applicable, as such commitment may be reduced from time to time pursuant to Section 2.5 or reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 10.4.  The amount of each Lender’s Delayed Draw Term Commitment on the Closing Date is set forth on such Schedule 1.1A.  The aggregate amount of the Delayed Draw Term Commitments on the Closing Date is $240,000,000.

 

  

10

  

“Delayed Draw Term Lender” means a Lender with a Delayed Draw Term Commitment or that holds a Delayed Draw Term Loan.

 

“Delayed Draw Term Loan” means a Loan referred to in Section 2.1(b) and made pursuant to Section 2.4.

 

“Disclosed Matters” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 4.6.

 

“Disqualified Equity” means any Equity Interest of any Person that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, or requires or mandates payments or distributions, on or prior to the date that is one year after the Maturity Date; provided, however, that an Equity Interest that would constitute Disqualified Equity solely because the holders thereof have the right to require such Person to repurchase or redeem such Equity Interests upon the occurrence of one or more certain events shall not constitute Disqualified Equity if the terms of such Equity Interest provide that such Person may not repurchase or redeem any such Equity Interest unless such repurchase or redemption complies with Section 7.8.  The term “Disqualified Equity” shall also include any option, warrant or other right that is convertible into Disqualified Equity or that is redeemable at the option of the holder, or required to be redeemed, prior to the date that is one year after the Maturity Date.

 

“Documentation Agent” means SunTrust Bank in its capacity as a documentation agent hereunder.

 

“dollars” or “$” refers to lawful money of the United States of America.

 

“Effective Add-on Term Loan Supplement” shall mean an Add-on Term Loan Supplement, if any, that has been delivered to and accepted by the Administrative Agent.

 

“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority having the force or effect of law or regulation, relating in any way to the environment, preservation or reclamation of natural resources, or the management, release or threatened release of any Hazardous Material.

 

“Environmental Liability” means, as to any Person, any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of such Person directly or indirectly resulting from or based upon (i) violation of any Environmental Law, (ii) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (iii) exposure to any Hazardous Materials, (iv) the release or threatened release of any Hazardous Materials into the environment or (v) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

  

11

  

“Equity Interest” means (a) a share of corporate stock, a partnership interest, a membership interest in a limited liability company, any interest that confers on a Person the right to receive a share of the profits and losses of the issuing Person and any other interest (other than to the extent constituting a debt) that confers on a Person the right to receive a share of the distribution of assets upon the liquidation of the issuing Person and (b) all warrants, options or other rights to acquire any Equity Interest set forth in clause (a) of this defined term (but excluding any debt security that is convertible into, or exchangeable for, any such Equity Interest).

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

 

“ERISA Event” means (i) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (ii) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (iii) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (iv) the incurrence by the Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the distress termination of any Plan; (v) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan under Section 4042 of ERISA; (vi) the incurrence by the Borrower or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (vii) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

 

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the LIBO Rate.

 

“Event of Default” has the meaning assigned to such term in Article 8.

 

“Excluded Collateral” means interests of the Borrower and the Subsidiary Guarantors in (a) the following interests in Real Property (except to the extent that a lien thereon may be perfected by the filing of a uniform commercial code financing statement): (i) interests in Real Property owned or held by the Borrower or any Subsidiary Guarantor on the Closing Date, (ii) fee interests in Real Property acquired after the Closing Date not in excess of $20,000,0000 in respect of any individual parcel (or contiguous parcels) of Real Property, or $40,000,000 in the aggregate, and (iii) leasehold interests in Real Property, (b) patents, trademarks and copyrights (other than any patents, trademarks and copyrights constituting Collateral immediately prior to the Closing Date) not in excess of $10,000,000 in the aggregate, (c) joint ventures (other than any joint ventures constituting Collateral immediately prior to the Closing Date) not in excess of $10,000,000 individually or $20,000,000 in the aggregate, and (d) personal property acquired after the Closing Date not included in the definition of “Collateral” as defined in the Security Agreement.

 

  

12

  

“Excluded Subsidiary” means United Utilities, Inc., an Alaska corporation, Unicom, Inc., an Alaska corporation, United-KUC, Inc., an Alaska corporation, GCI Community Development, LLC, an Alaska limited liability company, United2, LLC, an Alaska limited liability company, GCI Wireless, AWN, each NMTC Subsidiary, any future Subsidiary designated as an “Excluded Subsidiary” by the Borrower in a written notice delivered to the Administrative Agent in accordance with Section 6.11, and each existing and future subsidiary of each of the foregoing.

 

“Excluded Swap Obligations” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee 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 of or official interpretation of any thereof) by virtue of such Guarantor’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 Guarantee of such Guarantor or the grant of such security interest becomes effective with respect to such Swap Obligation.  If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.

 

“Excluded Taxes” means, with respect to any Credit Party or any other recipient of any payment to be made by or on account of any obligation of any Loan Party under any Loan Document, (i) net income or net profits, net worth, capital and franchise Taxes imposed in lieu of net income Taxes imposed (A) by the United States of America or by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient (or, in the case of a pass through entity, any of its beneficial owners) is organized or in which its principal office is located or, in the case of any Credit Party, in which its applicable lending office is located or (B) as a result of a present or former connection between such recipient or such beneficial owner thereof and the jurisdiction of the Governmental Authority imposing such Tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from such recipient having executed, delivered or performed its obligations or received a payment under, or enforced, any Loan Document), (ii) any branch profits Taxes imposed by the United States of America or any similar Tax imposed by any other jurisdiction in which such Loan Party is organized or in which its principal office is located or, in the case of any Credit Party, in which its applicable lending office is located, (iii) in the case of a Foreign Lender, United States federal withholding Taxes, including backup withholding Taxes, imposed on amounts payable to such Foreign Lender unless such Taxes are imposed as a result of a change in the applicable statute, regulation or treaty occurring after such Lender becomes a party hereto (or designates a new lending office), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from such Loan Party with respect to such Taxes pursuant to Section 3.7, (iv) Taxes resulting from a Lender’s (or, in the case of a pass-through entity, any of its beneficial owners’) failure to comply with Section 3.7(e) or (f), and (v) any United States federal withholding taxes imposed under FATCA.

 

  

13

  

“Existing Add-on Term Loan” means each Add-on Term Loan (as such term is defined in the Existing Credit Agreement) outstanding on the Closing Date immediately prior to satisfaction of the condition precedent contained in Section 5.1(o).

 

“Existing Credit Agreement” has the meaning set forth in the Recitals.

 

“Existing Lender” shall have the meaning assigned to such term in Section 5.1(a).

 

“Existing Letter of Credit” means each letter of credit listed on Schedule 1.1B.

 

“Existing Mortgages” means each mortgage, deed of trust or other equivalent instrument or document on file in the real estate recording office or such other office where real estate records are kept or recorded in any applicable jurisdiction evidencing a security interest in real property of the Borrower or any of its Subsidiaries in favor of the Administrative Agent on its own behalf or as an agent of any Lender in connection with loans or other financial accommodations made to the Borrower or any of its Subsidiaries under the Existing Credit Agreement.

 

“Existing NMTC Transactions” has the meaning assigned to such term in Section 5.1(p).

 

“Existing Revolving Loans” means Revolving Loans (as such term is defined in the Existing Credit Agreement) outstanding on the Closing Date immediately prior to satisfaction of the condition precedent contained in Section 5.1(o).

 

“FATCA” means Section 1471 through 1474 of the Code, and regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

 

“FCC” means the Federal Communications Commission, or any Governmental Authority succeeding to the functions thereof.

 

“FCC License” means any governmental approval or authorization issued by the FCC pursuant to the Communications Act or otherwise that authorizes a Person to transmit or receive radio waves, microwaves or other signals (whether terrestrial or otherwise).

 

“Federal Funds Effective Rate” means, for any day, a rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (i) if the day for which such rate is to be determined is not a Business Day, the Federal Funds Effective Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (ii) if such rate is not so published for any day, the Federal Funds Effective Rate for such day shall be the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal Funds brokers of recognized standing selected by it.

 

  

14

  

“Financial Covenants” means the covenants set forth in Sections 7.15, 7.16, 7.17 and 7.18.

 

“Financial Officer” means, with respect to any Person, the chief financial officer, principal accounting officer, treasurer, controller, senior vice president-finance or vice president-finance of such Person.

 

“Forecasts” has the meaning assigned to such term in Section 4.4.

 

“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which the applicable Loan Party is located.  For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

 

“Franchises” means all franchises and franchise applications required in connection with the Communications Business, other than FCC Licenses.

 

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

 

“GCI” means General Communication, Inc., an Alaska corporation.

 

“GCI Wireless” means GCI Wireless Holdings, LLC, an Alaska limited liability company.

 

“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof; (ii) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor as to enable the primary obligor to pay such Indebtedness or other obligation or (iv) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation, provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made and (b) the maximum amount for which such guarantor may be liable pursuant to the terms of the instrument embodying such Guarantee in accordance with GAAP.  The term “guarantee” or “guaranteed” as a verb has a correlative meaning thereto.

 

  

15

  

“Guarantee Supplement” means a Guarantee Supplement in the form of Exhibit K.

 

“Guarantors” means the Parent and the Subsidiary Guarantors.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Hedging Agreement” means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price swap, cap, collar, hedging or other like arrangement.

 

“Indebtedness” of any Person means, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (iii) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (iv) all obligations of such Person in respect of the deferred purchase price of property (excluding accounts payable incurred in the ordinary course of business), (v) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (vi) all Guarantees by such Person of Indebtedness of others, (vii) all Capital Lease Obligations of such Person, (viii) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (ix) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (x) Disqualified Equity, and (xi) the maximum remaining liability (whether or not contingent) of such Person for the AWN Preferred Payments.  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitee” has the meaning assigned to such term in Section 10.3(b).

 

  

16

  

“Interest Coverage Ratio” means, as of any date, the ratio of (i) Operating Cash Flow of the Parent to (ii) Cash Interest Expense of the Parent, in each case for the most recently completed four fiscal quarters in respect of which a Compliance Certificate has been delivered in accordance with Section 6.1(c).

 

“Interest Election Request” means an Interest Election Request, substantially in the form of Exhibit D.

 

“Interest Expense” means, for any Person for any period, the interest expense (including, without limitation, the interest component of Capital Lease Obligations) of such Person and its subsidiaries during such period determined on a consolidated basis in accordance with GAAP.

 

“Interest Payment Date” means (i) with respect to each ABR Loan, the last day of each March, June, September and December, (ii) with respect to each Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Loan with an Interest Period of more than three months duration, each day prior to the last day of such Interest Period that occurs at intervals of three months duration after the first day of such Interest Period, (iii) with respect to each Loan, the Maturity Date, and (iv) with respect to each Swingline Loan, the day that such Swingline Loan is required to be repaid pursuant to Section 2.6(a).

 

“Interest Period” means, with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending one month, two months, three months or six months thereafter, as the Borrower may elect, or such other period as each Lender affected thereby may agree in each such Lender’s sole discretion, provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day, unless, in the case of any Interest Period of at least one month, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, and (ii) any Interest Period of at least one month that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

 

“Interest Rate Derivative” means any interest rate swap, cap or collar agreement.

 

“Investment” has the meaning assigned to such term in Section 7.4.

 

“IRU” shall mean any agreement whereby one Person grants the exclusive and irrevocable right to use conduit, dark fiber, lit fiber (including associated electronic and/or optical components) or other telecommunications network facilities owned by such Person to another Person for such other Person’s own network use, but not the right to physical possession and control of such facilities, and without regard to whether such agreement should be characterized as a lease or as a conveyance of an ownership interest.

 

  

17

  

“Issuing Bank” means Credit Agricole CIB, in its capacity as the issuer of Letters of Credit.

 

“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of Credit.

 

“LC Exposure” means, at any time, the sum, without duplication, of (i) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (ii) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time.  The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.

 

“Lenders” means the Persons listed on Schedule 1.1A and any other Person that shall have become a party hereto pursuant to the terms and provisions of Section 10.4 and pursuant to an Assignment and Acceptance, pursuant to a Revolving Increase Supplement, or pursuant to an Add-on Term Loan Supplement, other than any such Person that ceases to be a party hereto pursuant to the terms and provisions of Section 10.4 and pursuant to an Assignment and Acceptance.  Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.

 

“Letter of Credit” means (i) any letter of credit (and any successive renewals thereof) issued pursuant to this Agreement and (ii) any Existing Letter of Credit.

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate per annum appearing on Reuters Page LIBOR01 (or on any successor or substitute page of such service, or any successor to or substitute for such service) as the London interbank offered rate for deposits in dollars at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period.  In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of an amount equivalent to such Eurodollar Borrowings and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

 

“Lien” means, with respect to any asset, (i) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (ii) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement relating to such asset and (iii) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

 

“Loan Documents” means this Agreement, the Notes, the documentation in respect of each Letter of Credit and the Security Documents.

 

“Loan Parties” means the Borrower, the Parent and the Subsidiary Guarantors.

 

  

18

  

“Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

 

“Margin Stock” has the meaning assigned to such term in Regulation U.

 

“Material Adverse Effect” means a material adverse effect on (i) the business, assets, properties, operations, or financial condition of the Borrower and the Subsidiaries (other than NMTC Subsidiaries), taken as a whole, or (ii) the rights of, or remedies available to, any Credit Party, under the Loan Documents.

 

“Material Obligations” means Indebtedness (other than Indebtedness under the Loan Documents) of any one or more of the Parent, the Borrower or any Subsidiary in an aggregate principal amount exceeding $20,000,000.  For purposes of determining Material Obligations, the “principal amount” of the obligations of any Person in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) such Person would be required to pay if such Hedging Agreement were terminated at such time.

 

“Materials” has the meaning assigned to such term in Section 10.1.

 

“Maturity Date” means April 30, 2018.

 

“Mortgages” means the mortgages, deeds of trust, assignments of leases and rents and other security documents (if any) delivered pursuant to this Agreement with respect to Real Property, each in form and substance reasonably satisfactory to the Administrative Agent.

 

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA, and to which the Borrower or an ERISA Affiliate is making, is obligated to make or has made or been obligated to make, contributions on behalf of participants who are or were employed by any of them.

 

“Net Income” means, with respect to any Person for any period, the net income of such Person and its subsidiaries during such period determined on a consolidated basis in accordance with GAAP (without deduction for minority interests).

 

“Net Proceeds” shall mean, with respect to any sale or other disposition of assets or any casualty event or condemnation, the aggregate amount of cash received by the Borrower or any Subsidiary Guarantor, including, (a) any cash received in respect of any non-cash proceeds, but only as and when received, (b) in the case of a casualty, insurance proceeds, and (c) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (i) amounts reserved, if any, for taxes payable with respect to the transaction, (ii) transaction fees, commissions, discounts, costs and out-of-pocket expenses properly attributable to the transaction, (iii) the principal amount of any Indebtedness (other than the Loans) that is secured by assets subject to the transaction and that is repaid in connection therewith, and (iv) any reserve for adjustments in respect to the transaction established in accordance with GAAP.

 

“New Excluded Subsidiary” has the meaning assigned to such term in Section 6.11.

 

  

19

  

“New Included Subsidiary” has the meaning assigned to such term in Section 6.11.

 

“New Subsidiary” has the meaning assigned to such term in Section 6.11.

 

“NMTC Subsidiaries” means Terra GCI Investment Fund, LLC, a Missouri limited liability company, Terra GCI 2 Investment Fund, LLC, a Missouri limited liability company, Terra GCI 2-USB Investment Fund, LLC, a Missouri limited liability company, Terra GCI 3 Investment Fund, LLC, a Missouri limited liability company, each investment fund that becomes a Subsidiary after the Closing Date in connection with a Permitted NMTC Transaction, and each subsidiary of each of the foregoing that is a Subsidiary.

 

“Non-Consenting Lender” has the meaning assigned to such term in Section 10.2(c).

 

“Non-US Lender” has the meaning assigned to such term in Section 3.7(f).

 

“Notes” means, to the extent issued pursuant to Section 2.8(d), promissory notes evidencing the Loans substantially in the form of (a) Exhibit B-1, in the case of any Revolving Loan, (b) Exhibit B-2, in the case of any Delayed Draw Term Loan, (c) Exhibit B-3, in the case of any Swingline Loan or (d) an exhibit attached to the relevant Add-on Term Loan Supplement at the time of delivery thereof, in the case of any Add-on Term Loan.

 

“Obligations” has the meaning assigned to such term in the Security Agreement.

 

“One Month LIBO Rate” means, for any day, the rate per annum appearing on Reuters Page LIBOR01 (or on any successor or substitute page of such service, or any successor to or substitute for such service) as the London interbank offered rate for deposits in dollars at approximately 11:00 a.m., London time, on such day as the rate for dollar deposits of $1,000,000 with a maturity of one month (provided that in the event that such rate is not available at such time for any reason, then the “One Month LIBO Rate” shall be the rate at which dollar deposits of $1,000,000 for a maturity of one month are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, on such day), provided that if the day for which such rate is to be determined is not a Business Day, the One Month LIBO Rate for such day shall be such rate on the next preceding Business Day.

 

“Operating Cash Flow” means, for any Person for any period, (a) Net Income of such Person for such period, plus (b) without duplication and to the extent deducted in determining such Net Income, the sum of (i) Interest Expense for such period, (ii) provision for income taxes for such period, (iii) the aggregate amount attributable to depreciation and amortization for such period, (iv) the aggregate amount of other non-cash charges for such period, (v) the aggregate amount of all non-cash compensation paid to directors, officers and employees, and (vi) the aggregate amount of extraordinary or non-recurring charges during such period, minus (c) without duplication and to the extent added in determining such Net Income, the aggregate amount of extraordinary, non-operating and non-recurring additions to income during such period (including IRUs that do not provide for periodic payments to be made at least semi-annually during the term of such transaction in proportion to the availability of capacity), minus (d) for the portion of such period that shall occur after the fourth anniversary of the AWN Contribution, the amount of Net Income attributable to the minority interests in AWN.

 

  

20

  

“Other Taxes” means any and all current or future stamp or documentary Taxes or any other excise or property Taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, the Loan Documents.

 

“Parent” means GCI, Inc., an Alaska Corporation.

 

“Participant” has the meaning assigned to such term in Section 10.4(d).

 

“Patriot Act” has the meaning assigned to such term in Section 10.13.

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

 

“Permitted Debt Maturity Date” means October 30, 2018.

 

“Permitted Encumbrances” means:

 

(a)           Liens imposed by law for Taxes that are not yet due or are being contested in compliance with Section 6.4;

 

(b)           landlords’, vendors’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 60 days or are being contested in compliance with Section 6.4;

 

(c)           pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

 

(d)           pledges and deposits to secure the performance of bids, government, trade and other similar contracts (other than contracts for the payment of money), leases, subleases, statutory obligations and surety, stay, appeal, indemnity, performance or other similar bonds or obligations and other obligations of a like nature, and deposits or pledges in lieu of such bonds or obligations, or to secure such bonds or obligations, or to secure letters of credit in lieu of or supporting the payment of such bonds or obligations, in each case in the ordinary course of business;

 

(e)           judgment and attachment liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article 8;

 

(f)           easements, zoning restrictions, rights-of-way and similar encumbrances on, and other imperfections of title with respect to, real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of the Borrower and the Subsidiaries;

 

  

21

  

(g)           Liens on the assets of any Subsidiary Guarantor in favor of the Borrower or any other Subsidiary Guarantor, Liens on assets of the Borrower in favor of any Subsidiary Guarantor, and Liens on assets of any Excluded Subsidiary in favor of any other Excluded Subsidiary;

 

(h)           Liens on Margin Stock to the extent that a prohibition on such Liens would violate Regulation U;

 

(i)           Liens in favor of collecting or payor banks or securities intermediaries having a right of setoff, revocation, refund or chargeback with respect to money or instruments of the Parent, the Borrower or any Subsidiary on deposit with or in possession of such bank or in a security account of such security intermediary, or arising under or pursuant to general banking conditions;

 

(j)           Liens representing any interest or title of a licensor, lessor or sublicensor or sublessor, or a licensee, lessee or sublicensee or sublessee, in the property subject to any lease, license or sublicense or concession agreement permitted by this Agreement;

 

(k)           Liens arising from precautionary Uniform Commercial Code financing statements regarding operating leases;

 

(l)           (i) receipt of progress payments and advances from customers in the ordinary course of business to the extent the same creates a Lien on the related inventory and proceeds thereof and (ii) Liens relating to purchase orders and other agreements entered into with customers or suppliers of the Borrower or any Subsidiary in the ordinary course of business;

 

(m)           Liens solely on any cash earnest money deposits made by the Borrower or any Subsidiary in connection with an Investment permitted by Section 7.4;

 

(n)           Liens deemed to exist in connection with Investments permitted by Section 7.4(a) that constitute repurchase obligations;

 

(o)           (i) deposits securing liability to insurance carriers under insurance or self-insurance arrangements in respect of such obligations and (ii) pledges and deposits securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty, liability, director and officer or other insurance to the Parent, the Borrower or any Subsidiary;

 

(p)           Liens securing obligations (other than obligations representing Indebtedness for money borrowed) under reciprocal easement or similar agreements entered into in the ordinary course of business of the Parent, the Borrower or any Subsidiary;

 

  

22

  

(q)           Liens arising out of conditional sale, title retention, consignment or similar arrangements entered into by the Parent, the Borrower or any Subsidiary in the ordinary course of business; and

 

(r)           statutory Liens on the CoBank Equities in favor of CoBank.

 

“Permitted Holders” means (i) Ronald Duncan and his estate, spouse, ancestors, lineal descendants and the trustee of any bona fide trust of which the foregoing are the sole beneficiaries and (ii) the General Communication, Inc. Employee Stock Purchase Plan.

 

“Permitted NMTC Debt” means Indebtedness incurred pursuant to Section 7.1(h).

 

“Permitted NMTC Transactions” means (a) the Existing NMTC Transactions and (b) additional New Markets Tax Credit transactions consummated after the Closing Date on terms and conditions substantially similar to those relating to the Existing NMTC Transactions (except that all debt owed by the relevant investment funds thereunder shall be payable to the Borrower or a Subsidiary Guarantor, the Borrower or such Subsidiary Guarantor, as the case may be, may guarantee or indemnify tax indemnification obligations of the project borrower and Excluded Subsidiaries may invest in such transactions) or otherwise reasonably acceptable to the Administrative Agent.

 

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Platform” shall mean Intralinks or another similar electronic system.

 

“Pledge Agreement” means the Second Amended and Restated Pledge Agreement, substantially in the form of Exhibit F, dated as of the Closing Date, between the Parent and the Administrative Agent, for the benefit of the Secured Parties.

 

“Prime Rate” means the rate of interest per annum publicly announced from time to time by Credit Agricole CIB as its prime commercial lending rate at its principal office in New York City; each change in the Prime Rate being effective from and including the date such change is publicly announced as being effective.  The Prime Rate is not intended to be lowest rate of interest charged by Credit Agricole CIB in connection with extensions of credit to borrowers.

 

“Proposed Change” has the meaning assigned to such term in Section 10.2(c).

 

“Public Lender” shall have the meaning assigned to such term in Section 10.1.

 

  

23

  

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

 

“Real Estate Collateral Requirement” means the requirement that, with respect to each owned Real Property required to be subject to a Mortgage hereunder, the Administrative Agent shall have received (each in form and substance satisfactory to the Administrative Agent):

 

(a) a Mortgage duly executed and delivered by the relevant Loan Party that is the record owner of such Real Property, in form for recording in the recording office of the jurisdiction where such Real Property to be encumbered thereby is situated, in favor of the Administrative Agent for the benefit of the Secured Parties (in such number of copies as the Administrative Agent shall have requested), together with such other instruments as shall be necessary or appropriate (in the reasonable judgment of the Administrative Agent) to create a Lien under applicable law, all of which shall be in form and substance reasonably satisfactory to Administrative Agent, which Mortgage and other instruments shall be effective to create and/or maintain a Lien on such Real Property, subject to no Liens other than Liens permitted under Section 7.2 applicable to such Real Property;

 

(b) to the extent that Lenders would be required by federal law and regulations regarding flood insurance (including the National Flood Insurance Reform Act of 1994) to obtain the same in connection with obtaining such Mortgage: (i) a ‘life of loan’ flood hazard determination, and (ii) as applicable, evidence of flood insurance and an acknowledged borrower notice, for such Real Property;

 

(c) a fully paid policy of title insurance (or marked binding pro forma having the same effect of a title insurance policy) in the form reasonably approved by the Administrative Agent insuring the Lien of the Mortgage encumbering such Real Property as a valid Lien (subject to this clause (c)) on such Real Property and fixtures described therein, which policy of title insurance (or marked binding pro forma having the same effect of a title insurance policy) shall be in an amount reasonably satisfactory to the Administrative Agent and shall (i) be issued by a title insurance company selected by the Borrower and reasonably satisfactory to the Administrative Agent, (ii) include such coinsurance and reinsurance arrangements (with provisions for direct access) as shall be reasonably acceptable to the Administrative Agent, (iii) have been supplemented by such endorsements or affirmative insurance, if available, as shall be reasonably requested by the Administrative Agent, and (iv) contain no exceptions to title other than exceptions for Liens permitted under Section 7.2 and other exceptions reasonably acceptable to the Administrative Agent;

 

(d) evidence reasonably acceptable to the Administrative Agent of payment by the Borrower of all title insurance premiums, search and examination charges, mortgage, filing and recording taxes, fees and related charges required for the recording of such Mortgage;

 

  

24

  

(e) if the Administrative Agent or the Required Lenders reasonably determine that they are required by law or regulation to have appraisals prepared in respect of any such Real Property, the Borrower will cooperate with the Administrative Agent in obtaining appraisals which satisfy the applicable requirements of the Real Estate Appraisal Reform Amendments of the Financial Institution Reform, Recovery and Enforcement Act of 1989, as amended, or any other law or regulation and which shall otherwise be in form and substance reasonably satisfactory to the Administrative Agent, and the Borrower shall pay all reasonable fees and expenses incurred by the Administrative Agent in connection therewith;

 

(f) all such other documents, instruments or items (including UCC fixture filings) as shall be reasonably necessary in the opinion of the Administrative Agent (or its counsel) to create a valid and perfected mortgage Lien on such Real Property subject only to Liens permitted under Section 7.2, including such affidavits and instruments of indemnifications by the Borrower and the relevant Subsidiary as shall be reasonably required to induce such title company to issue the policy or policies (or commitment) and endorsements contemplated in clause (c) above; and

 

(g) customary opinions (addressed to the Administrative Agent and the Lenders) of local counsel for the relevant Loan Party (i) in the state in which such Real Property is located, with respect to the enforceability and perfection of the Mortgage covering such Real Property and any related fixture filings in form and substance reasonably satisfactory to the Administrative Agent and (ii) if requested by the Administrative Agent, in the state in which such Loan Party is organized and formed, with respect to, among other matters, the valid existence, corporate power and authority of such Loan Party in the granting of such Mortgage.

 

“Real Property” means, collectively, all right, title and interest of the Borrower or any Subsidiary in and to any and all parcels of real property owned by the Borrower or any Subsidiary together with all improvements and appurtenant fixtures, easements and other property and rights incidental to the ownership, lease or operation thereof.

 

“Refinancing Condition” means, in connection with any issuance of Replacement Debt in respect of any of the Senior Notes, the following condition shall be required to be satisfied substantially simultaneously with the incurrence of such Replacement Debt:  such Senior Notes shall have been (a) paid in full, (b) defeased in accordance with the terms of the indenture for such Senior Notes, (c) called for redemption in accordance with the indenture for such Senior Notes and an amount (in the form required, if any) as shall be sufficient to pay the entire principal of, premium, if any, and interest on such Senior Notes on the applicable redemption date (the “Segregated Funds”) shall have been (i) irrevocably deposited with the trustee for such Senior Notes, in trust, for the benefit of the holders of the Senior Notes, (ii) irrevocably deposited into an escrow with the Administrative Agent or its designee, such escrow to be on terms and conditions reasonably satisfactory to the Administrative Agent, such escrowed amounts to be used only for the purpose of paying the principal of, premium, if any, and interest on such Senior Notes on the applicable redemption date, or (iii) any combination of clauses (i) and (ii) immediately above, or (d) any combination of clauses (a), (b) or (c) immediately above.

 

  

25

  

“Refinancing Indebtedness” means, with respect to any Indebtedness, any other Indebtedness that renews, refinances or replaces such Indebtedness; provided that (1) the only obligors under such renewal, refinancing or replacement Indebtedness are Persons that were obligors under the Indebtedness being renewed, refinanced or replaced, (2) if the Indebtedness being renewed, refinanced or replaced is subordinated in right of payment to the Obligations, such renewal, refinancing or replacement Indebtedness shall be subordinated in right of payment to the Obligations on terms at least as favorable to the Lenders as those contained in the documentation governing the Indebtedness being renewed, refinanced or replaced, (3) such renewal, refinancing or replacement shall not increase the principal amount of such Indebtedness (other than with respect to any accrued interest, premiums, fees or expenses payable in connection with such renewal, refinancing or replacement, and any original issue discount in connection therewith, provided that the aggregate sum of all such accrued interest, premiums, fees, expenses and original issue discount shall not exceed in the aggregate an amount equal to 10% of the Indebtedness being renewed, refinanced or replaced), (4) such renewal, refinancing or replacement Indebtedness has a final stated maturity date equal to or later than the final stated maturity date of the Indebtedness being renewed, refinanced or replaced and (5) such renewal, refinancing or replacement Indebtedness has a Weighted Average Life to Maturity equal to or longer than the Weighted Average Life to Maturity of the Indebtedness being renewed, refinanced or replaced.

 

“Register” has the meaning assigned to such term in Section 10.4(c).

 

“Regulation T” means Regulation T of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

 

“Regulation U” means Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

 

“Regulation X” means Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

 

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

 

“Replacement Debt” means senior unsecured debt of the Parent that meets the following criteria: (i) such debt constitutes Refinancing Indebtedness, (ii) such debt does not require any payment or prepayment (including without limitation any sinking fund or similar payment) of principal prior to the Permitted Debt Maturity Date other than pursuant to mandatory prepayment requirements not materially more restrictive than those applicable to the Senior Notes, with such changes thereto as shall be reasonably acceptable to the Administrative Agent, and (iii) the affirmative covenants, negative covenants and events of default applicable thereto shall not be more restrictive in substance, when taken as a whole, than those applicable to the Indebtedness being refinanced, with such changes thereto as shall be reasonably acceptable to the Administrative Agent.

 

“Required Lenders” means, at any time, Lenders having Total Credit Exposures representing greater than 50% of the sum of the aggregate Total Credit Exposures of all Lenders.

 

  

26

  

“Required Revolving Lenders” means, at any time, Lenders having Total Revolving Credit Exposures representing greater than 50% of the sum of the aggregate Total Revolving Credit Exposures of all Lenders.

 

“Responsible Officer” means, with respect to any Person, any of the chief executive officer, president, chief financial officer (or similar title) or treasurer (or similar title) of such Person.

 

“Restricted Payment” means, as to any Person, (i) any dividend or other distribution by such Person (whether in cash, securities or other property) with respect to any Equity Interest issued by such Person, (ii) any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, by such Person on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interest or any option, warrant or other right to acquire any such Equity Interest, (iii) any payment of any management, consulting, administrative or other similar fee by such Person to any Affiliate thereof to the extent that such fee is in excess of the amount that such Person could have obtained for similar service on an “arm’s length” basis from an unrelated third party, and (iv) any payment of principal or interest or any purchase, redemption, retirement, acquisition or defeasance of or with respect to any Indebtedness of any Affiliate of such Person.

 

“Revolving Availability Period” means the period from and including the Closing Date to but excluding the earlier of the Maturity Date and the date of termination of the Revolving Commitments.

 

“Revolving Commitment” means, with respect to each Lender having a Revolving Commitment, the commitment of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, in an aggregate outstanding amount not exceeding the amount of such Lender’s Revolving Commitment as set forth on Schedule 1.1A, in the initial Revolving Increase Supplement executed and delivered by such Lender, the Borrower and the Administrative Agent, or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable, as such commitment may be reduced or increased from time to time pursuant to Section 2.5 or pursuant to assignments by or to such Lender pursuant to Section 10.4.  The amount of each Lender’s Revolving Commitment on the Closing Date is set forth on such Schedule 1.1A.  The aggregate amount of the Revolving Commitments on the Closing Date is $150,000,000.

 

“Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of the aggregate outstanding principal amount of such Lender’s Revolving Loans plus its LC Exposure and Swingline Exposure at such time.

 

“Revolving Increase Supplement” means an increase supplement in substantially the form of Exhibit M.

 

“Revolving Lender” means a Lender with a Revolving Commitment.

 

“Revolving Loan” means a Loan referred to in Section 2.1(a) and made pursuant to Section 2.4.

 

  

27

  

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

 

“Secured Parties” means the “Secured Parties” as defined in the Security Agreement.

 

“Security Agreement” means the Second Amended and Restated Security Agreement, substantially in the form of Exhibit E, dated as of the Closing Date, among the Borrower, the Subsidiary Guarantors and the Administrative Agent, for the benefit of the Secured Parties.

 

“Security Documents” means (a) the Security Agreement, (b) the Pledge Agreement, and (c) each other security agreement, instrument or other document executed or delivered pursuant to this Agreement or any agreement referred to in clauses (a) or (b) above to secure any of the Obligations.

 

“Segregated Funds” has the meaning set forth in the defined term Refinancing Condition.

 

“Senior Debt” means, as of any date, the aggregate principal amount of all Indebtedness of the Borrower and the Subsidiaries that would be reflected as liabilities on a consolidated balance sheet of the Borrower and the Subsidiaries as of such date prepared in accordance with GAAP, minus the obligations of AWN in respect of the AWN Preferred Payment to the extent included therein, and minus Permitted NMTC Debt to the extent included therein.

 

“Senior Leverage Ratio” means, as of any date, the ratio of (i) Senior Debt on such date to (ii) Adjusted Operating Cash Flow of the Borrower for the most recently completed four fiscal quarters in respect of which a Compliance Certificate has been delivered in accordance with Section 6.1(c).

 

“Senior Notes” means the 8 5/8% Senior Notes due 2019 of the Parent and the 6 3⁄4% Senior Notes due 2021 of the Parent.

 

“Significant Transaction” means each of the following, regardless of whether any requirement under Section 6.1(e) with respect thereto shall have been satisfied (other than transactions by NMTC Subsidiaries (and not involving the Parent or any of its subsidiaries) to the extent not reasonably expected to result in a Material Adverse Effect):

 

(a)           any transaction referred to in Section 7.3(a)(i),

 

(b)           any transaction referred to in Section 7.3(a)(iii) which is not otherwise permitted by Section 7.3,

 

(c)           any Acquisition by the Parent or any of its subsidiaries other than from the Parent or any of its subsidiaries for which the aggregate consideration payable by the Parent and its subsidiaries is in excess of $100,000,000 (other than the AWN Transaction),

 

  

28

  

(d)           any transaction (i) referred to in Section 7.5(e) which is not otherwise permitted by Section 7.5, and (ii) for which the aggregate consideration payable by the Borrower and the Subsidiaries is in excess of $50,000,000, or

 

(e)           any sale, transfer, lease or other disposition of assets by the Parent or any of its subsidiaries other than to the Parent or any of its subsidiaries for which the aggregate fair market value of the property of the Parent and its subsidiaries subject thereto is in excess of $100,000,000 (other than the AWN Transaction).

 

“State Law” means any state law pertaining to or regulating intrastate and local telecommunications services, or any successor statute or statutes thereto, and all State Regulations pursuant to such State Law.

 

“State PUC” means any state public utility commission or any other state commission, agency, department board or authority with responsibility for regulating intrastate and local telecommunications services.

 

“State Regulations” means all rules, regulations, written policies, orders and decisions of any State PUC.

 

“subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power is or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held by the parent or one or more subsidiaries of the parent.

 

“Subsidiary” means any subsidiary of the Borrower.

 

“Subsidiary Guarantor” means any Subsidiary that is a party to this Agreement and executes and delivers the applicable Security Documents.

 

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

 

“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time.  The Swingline Exposure of any Lender at any time shall be its Applicable Percentage of the total principal amount of Swingline Loans outstanding at such time.

 

“Swingline Interest Period” means, subject to the provisions of Section 2.6(a), with respect to any Swingline Loan requested by the Borrower, the period commencing on the date of Borrowing with respect to such Swingline Loan and ending not in excess of ten days thereafter, as selected by the Borrower in its irrevocable Borrowing Request, provided, however, that (i) if any Swingline Interest Period would otherwise end on a day that is not a Business Day, such Swingline Interest Period shall be extended to the next succeeding Business Day, and (ii) the Borrower shall select Swingline Interest Periods so as not to have more than three different Swingline Interest Periods outstanding at any one time.

 

  

29

  

“Swingline Lender” means Credit Agricole CIB, in its capacity as lender of Swingline Loans hereunder.

 

“Swingline Loan” means a Loan made pursuant to Section 2.10.

 

“Syndication Agent” means Union Bank, N.A., in its capacity as a syndication agent hereunder.

 

“Taxes” means any and all current or future taxes, levies, imposts, duties, deductions, charges or withholdings now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority including any interest, additions to, tax or penalties applicable thereto.

 

“Term Loan” means a Delayed Draw Term Loan or an Add-on Term Loan.

 

“Total Credit Exposure” means, with respect to any Lender at any time, the sum of such Lender’s Revolving Credit Exposure, unused Revolving Commitment, outstanding Delayed Draw Term Loans, unused Delayed Draw Term Commitment, outstanding Add-on Term Loans and unfunded Add-on Term Commitments.

 

“Total Debt” means, (a) as of any date, the aggregate principal amount of all Indebtedness of the Parent and its subsidiaries that would be reflected as liabilities on a consolidated balance sheet of the Parent and its subsidiaries as of such date prepared in accordance with GAAP, minus (b) Permitted NMTC Debt to the extent included therein, plus (c) to the extent not otherwise included therein, the maximum remaining liability (whether or not contingent) of the Parent and its subsidiaries on a consolidated basis for the AWN Preferred Payments.  Notwithstanding anything to the contrary contained in this defined term, for any one period of 45 consecutive days during the term of this Agreement, the Borrower may elect, upon prior written notice to the Administrative Agent, to subtract from Total Debt on any date of calculation thereof during such period an amount equal to the principal portion of the Segregated Funds that, as of such date of calculation, has not been applied to the repayment of the Senior Notes.

 

“Total Leverage Ratio” means, as of any date, the ratio of (i) Total Debt as of such date to (ii) Adjusted Operating Cash Flow of the Parent for the most recently completed four fiscal quarters in respect of which a Compliance Certificate has been delivered in accordance with Section 6.1(c).

 

“Total Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of such Lender’s Revolving Credit Exposure and unused Revolving Commitment.

 

“Transactions” means (i) the execution and delivery by each Loan Party of each Loan Document to which it is a party on the Closing Date, (ii) the initial borrowing of the Loans and the issuance of any Letters of Credit on the Closing Date, (iii) the other transactions contemplated to occur on the Closing Date, and (iv) the payment of premiums, fees, interest, commissions and expenses in connection with each of the foregoing.

 

  

30

  

“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to, in the case of (i) a Borrowing other than a Swingline Borrowing, the LIBO Rate or the Alternate Base Rate or (ii) a Swingline Borrowing, the Alternate Base Rate.

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing (i) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by (ii) the then outstanding principal amount of such Indebtedness.

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

 

Section 1.2. Classification of Loans and Borrowings

 

For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar Revolving Loan”).  Borrowings may also be classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

 

Section 1.3. Terms Generally

 

The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified, (ii) any definition of or reference to any law shall be construed as referring to such law as from time to time amended and any successor thereto and the rules and regulations promulgated from time to time thereunder, (iii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iv) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (v) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.  Any reference to an “applicable Lender” shall mean (i) in the case of Revolving Borrowings, Swingline Loans and Letters of Credit, Revolving Lenders, (ii) in the case of Delayed Draw Term Borrowings, Delayed Draw Term Lenders, and (ii) in the case of Add-on Term Borrowings, Lenders having Add-on Term Commitments pursuant to the Effective Add-on Term Loan Supplement for such Add-on Term Loans.

 

  

31

  

Section 1.4. Accounting Terms; GAAP

 

Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time, provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.  Unless the context otherwise requires, any reference to a fiscal period shall refer to the relevant fiscal period of the Borrower.

 

ARTICLE 2

THE CREDITS

Section 2.1. Commitments and Loans

 

(a) Revolving Loans.  Subject to the terms and conditions set forth herein, each Lender having a Revolving Commitment agrees to make Revolving Loans to the Borrower in dollars from time to time during the Revolving Availability Period in an aggregate principal amount that will not result in such Lender’s Revolving Credit Exposure exceeding such Lender’s Revolving Commitment.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.

 

(b) Delayed Draw Term Loans.  Subject to the terms and conditions set forth herein, each Lender having a Delayed Draw Term Commitment agrees to make Delayed Draw Term Loans to the Borrower in dollars from time to time during the Delayed Draw Term Availability Period in an aggregate principal amount that will not result in such Lender’s Delayed Draw Term Loans exceeding such Lender’s Delayed Draw Term Commitment; provided that, (i) no more than three drawings may be made on the Delayed Draw Term Commitments and (ii) each such drawing must be in an increment of $25,000,000 or the entire unused balance of the Delayed Draw Commitment.  Amounts borrowed under this Section 2.1(b) and repaid or prepaid may not be reborrowed.

 

  

32

  

(c) Add-on Term Commitments.  The Borrower may, at any time at its sole cost, expense and effort, request any one or more of the Lenders (other than a Defaulting Lender), an Affiliate of a Lender (other than a Defaulting Lender) or an Approved Fund of a Lender (other than a Defaulting Lender) (the decision to be within the sole and absolute discretion of such Lender, Affiliate or Approved Fund), or any other Person reasonably satisfactory to the Administrative Agent, to commit to make an Add-on Term Loan, by submitting an Add-on Term Loan Supplement duly executed by the Borrower and each such Lender, Affiliate, Approved Fund or other Person, as the case may be, to the Administrative Agent.  If such an Add-on Term Loan Supplement is in all respects reasonably satisfactory to the Administrative Agent, the Administrative Agent shall execute such Add-on Term Loan Supplement and deliver a copy thereof to the Borrower and each such Lender, Affiliate, Approved Fund or other Person, as the case may be.  Upon execution and delivery of such Add-on Term Loan Supplement by the Administrative Agent, (i) in the case of each such Lender, such Lender’s Add-on Term Commitment with respect thereto shall be in the amount set forth in such Add-on Term Loan Supplement, and (ii) in the case of each such Affiliate, Approved Fund or other Person, such Affiliate, Approved Fund or other Person shall thereupon become a party hereto and shall for all purposes of the Loan Documents be deemed a “Lender” having an Add-on Term Commitment as set forth in such Add-on Term Loan Supplement; provided, however, that:

 

(A)           immediately after giving effect thereto, the sum of the initial principal amount of all Term Loans plus all unfunded Delayed Draw Term Loan Commitments plus the Revolving Commitments shall not exceed $540,000,000;

 

(B)           each such request for Add-on Term Commitments when aggregated with any contemporaneous increases in the Revolving Commitments made pursuant to Section 2.5(d) shall be in an amount not less than $25,000,000 and in an integral multiple of $1,000,000;

 

(C)           the scheduled amortization of each Add-on Term Loan shall not exceed 1.0% of the original principal amount thereof per annum;

 

(D)           each such Affiliate, Approved Fund or other Person shall have delivered to the Administrative Agent and the Borrower all forms, if any, that are required to be delivered by such Affiliate, Approved Fund or other Person pursuant to Section 3.7;

 

(E)           the Borrower shall have delivered to the Administrative Agent for further distribution to each Lender a certificate of a Financial Officer demonstrating compliance on a pro forma basis with the Financial Covenants immediately after giving effect thereto and the Administrative Agent shall have received reasonably detailed projections of the Financial Covenants through the Maturity Date after giving effect to such Add-on Term Loan, such customary certificates, legal opinions and other items as it shall reasonably request in connection with such Add-on Term Commitments;

 

  

33

  

(F)           immediately before and after giving effect to each Add-on Term Loan, there shall not have occurred and be continuing any Default; and

 

(G)           all of the other terms and conditions of each Add-on Term Loan shall be substantially the same as those contained in this Agreement, with such changes thereto as shall be reasonably acceptable to the Administrative Agent.

 

(d) Add-on Term Loans.  Subject to the terms and conditions hereof and the terms and conditions, if any, set forth in the applicable Add-on Term Loan Supplement, each Lender having an Add-on Term Commitment related thereto severally agrees to make a term loan (each an “Add-on Term Loan” and, collectively with the Add-on Term Loan of each other Lender, the “Add-on Term Loans”) to the Borrower on the Add-on Term Borrowing Date referred to therein in a principal amount equal to such Lender’s Add-on Term Commitment reflected in such Add-on Term Loan Supplement.  On and as of the Closing Date no Lender has an Add-on Term Commitment.

 

(e) MFN Applicable Margin.  If as of any date the interest rate margin then applicable to any ABR Add-on Term Loan (the “ABR MFN Margin”) would, without giving effect to this Section 2.1(e), exceed the Applicable Margin applicable to ABR Revolving Borrowings and ABR Delayed Draw Term Borrowings by 0.50% or more, then notwithstanding anything to the contrary contained in the defined term “Applicable Margin”, the Applicable Margin for each ABR Revolving Borrowing, each ABR Delayed Draw Term Borrowing and each Swingline Loan shall instead be equal to the ABR MFN Margin.  If as of any date the interest rate margin then applicable to any Eurodollar Add-on Term Loan (the “Eurodollar MFN Margin”) would, without giving effect to this Section 2.1(e), exceed the Applicable Margin applicable to Eurodollar Revolving Borrowings and Eurodollar Delayed Draw Term Borrowings by 0.50% or more, then notwithstanding anything to the contrary contained in the defined term “Applicable Margin”, the Applicable Margin for each Eurodollar Revolving Borrowing and each Eurodollar Delayed Draw Term Borrowing and for any fee payable under Section 3.3(b)(i) shall instead be equal to the Eurodollar MFN Margin.

 

Section 2.2. Loans and Borrowings

 

(a) Each Revolving Loan shall be made as part of a Borrowing consisting of Revolving Loans made by the Revolving Lenders ratably in accordance with their respective Revolving Commitments, each Delayed Draw Term Loan shall be made as part of a Borrowing consisting of Delayed Draw Term Loans made by the Delayed Draw Term Lenders ratably in accordance with their respective Delayed Draw Term Commitments, and each Add-on Term Loan shall be made as part of a Borrowing consisting of Add-on Term Loans made by the applicable Add-on Term Lenders in accordance with their respective related Add-on Term Commitments.  The failure of any applicable Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder, provided that the Commitments of the applicable Lenders are several, and no Lender shall be responsible for any other Lender’s failure to make Loans as required.

 

  

34

  

(b) Subject to Section 3.4, each Borrowing shall be comprised entirely of Loans of the same Class and Type, in each case as the Borrower may request in accordance herewith; provided that each Swingline Loan shall be an ABR Loan.  Each applicable Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan, provided that any exercise of such option shall not (i) affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement or (ii) increase any cost or expense to the Borrower or impose any additional withholding requirement on the Borrower.

 

(c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in a minimum amount of $1,000,000 and in integral multiples of $500,000.  At the time that each ABR Borrowing is made, such Borrowing shall be in a minimum amount of $1,000,000 and in integral multiples of $500,000, provided that an ABR Revolving Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Revolving Commitments, in an aggregate amount that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.9(e) or in an aggregate amount that is required to finance the reimbursement of a Swingline Loan as contemplated by Section 2.10(c), a Delayed Draw Term Loan may be in an aggregate amount that is equal to the entire unused balance of the total Delayed Draw Term Commitments, and an ABR Add-on Term Borrowing may be in an aggregate amount that is equal to the entire unused applicable Add-on Term Commitments.  Each Swingline Loan shall be in an amount that is agreed upon by the Borrower, the Administrative Agent and the Swingline Lender.  Borrowings of more than one Type may be outstanding at the same time, provided that there shall not at any time be more than a total of 10 Eurodollar Borrowings outstanding.

 

(d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.

 

Section 2.3. Requests for Borrowings

 

(a) To request a Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone or e-mail (i) in the case of a Eurodollar Borrowing, not later than 2:00 p.m., New York City time, three Business Days before the date of the proposed Borrowing or (ii) in the case of an ABR Borrowing, not later than 2:00 p.m., New York City time, on the date of the proposed Borrowing.  Each such telephonic or e-mail borrowing request shall be irrevocable and shall be confirmed by no later than 3:00 p.m., New York City time, on the date of such request by hand delivery, e-mail or facsimile to the Administrative Agent of a copy of a written Borrowing Request signed by the Borrower.  Each such telephonic or e-mail borrowing request and written Borrowing Request shall specify the following information in compliance with Section 2.2:

 

(i) the aggregate amount of the requested Borrowing;

 

(ii) the date of such Borrowing, which shall be a Business Day;

 

  

35

  

(iii) whether such Borrowing is to be a Revolving Borrowing, a Delayed Draw Term Borrowing or an Add-on Term Borrowing;

 

(iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

 

(v) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and

 

(vi) the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.4.

 

(b) If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.  Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each applicable Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

 

Section 2.4. Funding of Borrowings

 

(a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 4:00 p.m., New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders; provided that Swingline Loans shall be made as provided in Section 2.10.  Subject to Section 5.2, the Administrative Agent will make such Loans available to the Borrower by promptly crediting or otherwise transferring the amounts so received, in like funds, to an account of the Borrower designated by the Borrower in the applicable Borrowing Request, provided that ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.9(e) shall be remitted by the Administrative Agent to the Issuing Bank.

 

(b) Unless the Administrative Agent shall have received notice from a Lender prior to 3:00 p.m., New York City time, on the date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.4(a) or Section 2.9(e) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender agrees to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.  If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.  If such Lender’s share of such Borrowing is not made available to the Administrative Agent by such Lender within three Business Days after the date of such Borrowing, the Administrative Agent shall give notice of such fact to the Borrower and the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum otherwise applicable to such Borrowing, on demand, from the Borrower.  Nothing herein shall be deemed to limit the rights of the Administrative Agent or the Borrower against any Defaulting Lender.

 

  

36

  

Section 2.5. Termination, Reduction and Increase of Commitments

 

(a) Unless previously terminated, the Revolving Commitments shall terminate on the Maturity Date. Unless previously terminated, the Delayed Draw Term Commitments shall terminate on April 30, 2014.

 

(b) The Borrower may at any time terminate, or from time to time reduce, the Revolving Commitments or Delayed Draw Term Commitments, provided that (i) the Borrower shall not terminate or reduce the Revolving Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.7, the sum of the Revolving Credit Exposures would exceed the total Revolving Commitments, (ii) the Borrower shall not terminate or reduce the Delayed Draw Term Commitments if, after giving effect to any concurrent prepayment of the Delayed Draw Term Loans in accordance with Section 2.7, the sum of the Delayed Draw Term Loans would exceed the total Delayed Draw Term Commitments, (iii) each such reduction of the Revolving Commitments shall be in a minimum amount of $5,000,000 and in integral multiples of $1,000,000, and (iv) there shall be no more than three (3) reductions of the Delayed Draw Term Commitments (unless the Administrative Agent otherwise agrees), and each such reduction of the Delayed Draw Term Commitments shall be in a minimum amount of $5,000,000 and in integral multiples of $1,000,000.

 

(c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce Commitments under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof.  Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant to this Section shall be irrevocable, provided that a notice of termination of Commitments delivered by the Borrower may state that such notice is conditioned upon the occurrence or non-occurrence of any event specified therein (including the effectiveness of other credit facilities), in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.  Each reduction, and any termination, of Commitments shall be permanent, and each such reduction shall be made ratably among the applicable Lenders (other than a Defaulting Lender) in accordance with their respective applicable Commitments.

 

(d) The Borrower may at any time and from time to time, at its sole cost, expense and effort, request any one or more of the Lenders (other than a Defaulting Lender), an Affiliate of a Lender (other than a Defaulting Lender) or an Approved Fund of a Lender (other than a Defaulting Lender) to increase its Revolving Commitment or to provide a new Revolving Commitment, as the case may be (the decision to be within the sole and absolute discretion of such Lender, Affiliate or Approved Fund), or any other Person reasonably satisfactory to the Administrative Agent, the Issuing Bank and the Swingline Lender to provide a new Revolving Commitment, by submitting a Revolving Increase Supplement duly executed by the Borrower and each such Lender, Affiliate, Approved Fund or other Person, as the case may be, to the Administrative Agent.  If such Revolving Increase Supplement is in all respects reasonably satisfactory to the Administrative Agent, the Administrative Agent shall execute such Revolving Increase Supplement and deliver a copy thereof to the Borrower and each such Lender, Affiliate, Approved Fund or other Person, as the case may be.  Upon execution and delivery of such Revolving Increase Supplement by the Administrative Agent, (i) in the case of each such Lender, such Lender’s Revolving Commitment shall be increased to the amount set forth in such Revolving Increase Supplement, (ii) in the case of each such Affiliate, Approved Fund or other Person, such Affiliate, Approved Fund or other Person shall thereupon become a party hereto and shall for all purposes of the Loan Documents be deemed a “Lender” having a Revolving Commitment as set forth in such Revolving Increase Supplement, and (iii) in each case, the Revolving Commitment of such Lender, Affiliate, Approved Fund or such other Person, as the case may be, shall be as set forth in the applicable Revolving Increase Supplement; provided, however, that:

 

  

37

  

(A)           immediately after giving effect thereto, the aggregate Revolving Commitments shall not exceed $300,000,000;

 

(B)           immediately after giving effect thereto, the sum of the initial principal amount of all Term Loans plus all unfunded Delayed Draw Term Loan Commitments plus the Revolving Commitments shall not exceed $540,000,000;

 

(C)           each such increase when aggregated with any contemporaneous Add-on Term Loans or Add-on Term Commitments made pursuant to Section 2.1(c) shall be in an amount not less than $25,000,000 and in an integral multiple of $1,000,000;

 

(D)           if Revolving Loans would be outstanding immediately after giving effect to each such increase, then simultaneously with such increase (1) each such Lender, each such Affiliate, Approved Fund or other Person and each other Lender shall be deemed to have entered into a master assignment and acceptance agreement, in form and substance substantially similar to Exhibit A, pursuant to which each such other Lender shall have assigned to each such Lender and each such Affiliate, Approved Fund or other Person a portion of its Revolving Loans necessary to reflect proportionately the Revolving Commitments as adjusted in accordance with this Section 2.5(d), and (2) in connection with such assignment, each such Lender and each such Affiliate, Approved Fund or other Person shall pay to the Administrative Agent, for the account of the other Lenders, such amount as shall be necessary to appropriately reflect the assignment to it of Revolving Loans, and in connection with such master assignment each such other Lender may treat the assignment of Eurodollar Borrowings as a prepayment of such Eurodollar Borrowings for purposes of Section 3.6; and

 

  

38

  

(E)           each such Affiliate, Approved Fund or other Person shall have delivered to the Administrative Agent and the Borrower all forms, if any, that are required to be delivered by such Affiliate, Approved Fund or other Person pursuant to Section 3.7.

 

Section 2.6. Repayment of Loans

 

(a) The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each applicable Lender (i) the unpaid principal amount of each Loan (other than each Swingline Loan) on the Maturity Date, and (ii) the unpaid principal amount of each Swingline Loan on the earliest to occur of the last day of the Swingline Interest Period applicable thereto, the tenth Business Day immediately preceding the Maturity Date, and the date on which the Swingline Loans shall become due and payable pursuant to the provisions hereof, whether by acceleration or otherwise, provided that on each date that a Revolving Borrowing is made, the Borrower shall repay all Swingline Loans then outstanding.

 

(b) The unpaid principal amount of each Add-on Term Loan shall be payable in such amounts and on such dates, if any, as shall be set forth in the applicable Effective Add-on Term Loan Supplement.

 

Section 2.7. Prepayment of Loans

 

(a) The Borrower shall have the right at any time and from time to time to prepay any Revolving Borrowing in whole or in part, or prepay the Term Loans, in whole or in part, subject to the requirements of this Section.  Each voluntary or mandatory prepayment of Term Loans under this Section 2.7 shall be applied (i) pro rata among each Term Loan then outstanding, and (ii) for each Term Loan, to reduce the remaining installments payable thereon pro rata.

 

(b) In the event of any partial reduction or termination of the Revolving Commitments, then (i) at or prior to the date of such reduction or termination, the Administrative Agent shall notify the Borrower and the applicable Lenders of the sum of the Revolving Credit Exposures after giving effect thereto and (ii) if such sum would exceed the total Revolving Commitments after giving effect to such reduction or termination, then the Borrower shall, on the date of such reduction or termination, prepay Revolving Borrowings in an amount sufficient to eliminate such excess.  To the extent that the Revolving Borrowings have been prepaid in full and the Revolving Credit Exposure still exceeds the Revolving Commitments as a result of the LC Exposure, the Borrower shall cash collateralize, on terms and conditions in accordance with the provisions set forth in Section 2.9(i) of this Agreement, outstanding Letters of Credit in a principal amount sufficient to eliminate the excess Revolving Credit Exposure. In the event of any partial reduction or termination of the Delayed Draw Term Commitments, then (i) at or prior to the date of such reduction or termination, the Administrative Agent shall notify the Borrower and the applicable Lenders of the sum of the Delayed Draw Term Loans after giving effect thereto and (ii) if such sum would exceed the total Delayed Draw Term Commitments after giving effect to such reduction or termination, then the Borrower shall, on the date of such reduction or termination, prepay Delayed Draw Term Borrowings in an amount sufficient to eliminate such excess.

 

  

39

  

(c) Upon the occurrence of each Amortization Event, and thereafter on each Compliance Certificate Delivery Date until such time, if any, as an Amortization Termination Event shall have occurred, the Borrower shall prepay the Term Loans (subject to Section 2.7(e) below), by an amount equal to the percentage set forth below adjacent to the calendar year in which the Compliance Certificate Reference Date shall have occurred multiplied by the sum of the original principal amount of each Term Loan:

 

	
Calendar Year

	
Percentage

	
2014

	
1.250%

	
2015

	
1.875%

	
2016

	
3.125%

	
2017

	
3.750%

For purposes of this Section 2.7(c), the following terms have the following meanings:

 

“Amortization Event” means the delivery of the second consecutive Higher-leverage Compliance Certificate.

 

“Amortization Termination Event” means, at any time following the last Amortization Event, if any, the delivery of the second consecutive Lower-leverage Compliance Certificate.

 

“Higher-leverage Compliance Certificate” means a Compliance Certificate delivered in accordance with Section 6.1(c) indicating that the Senior Leverage Ratio exceeded 2.25:1.00 at the Compliance Certificate Reference Date for such Compliance Certificate.

 

“Lower-leverage Compliance Certificate” means a Compliance Certificate delivered in accordance with Section 6.1(c) other than a Higher-leverage Compliance Certificate.

 

(d) The Borrower shall prepay the Term Loans in an amount equal to 100% of the Net Proceeds in excess of $25,000,000 in the aggregate during any fiscal year in respect of Affected Sales; provided that, no prepayment shall be required to the extent that such Net Proceeds are used within 12 months of receipt thereof to purchase assets to be used in the business of the Borrower or any of its Subsidiaries.  “Affected Sale” means any sale or other disposition of assets (other than cash) or any casualty event or condemnation of property of the Borrower or any Subsidiary (other than sales and dispositions to the Borrower or a Subsidiary Guarantor or in the ordinary course of business of the Borrower or such Subsidiary) in each case occurring at any time that the Senior Leverage Ratio, as set forth in the Compliance Certificate most recently delivered, is greater than 2.25:1.00.

 

  

40

  

(e) The Borrower shall notify the Administrative Agent (and, in the case of the prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by facsimile) of any prepayment hereunder (i) in the case of a prepayment of a Eurodollar Borrowing, not later than 2:00 p.m., New York City time, three Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Borrowing (other than a Swingline Loan), not later than 2:00 p.m., New York City time, on the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 3:00 p.m., New York City time, on the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid, provided that, if a notice of prepayment is given in connection with a conditional notice of termination of Commitments as contemplated by Section 2.5, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.5.  Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof.  Each partial prepayment of any Borrowing under Section 2.7(a) shall (i) with respect to Eurodollar Borrowings, be in a minimum amount of $1,000,000 and in integral multiples of $100,000, and (ii) with respect to ABR Borrowings, be in a minimum amount of $500,000 and in integral multiples of $100,000.  Prepayments shall be accompanied by accrued interest to the extent required by Section 3.1.

 

Section 2.8. Evidence of Debt

 

(a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the debt of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

 

(b) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

 

(c) The entries made in the accounts maintained pursuant to paragraphs (a) or (b) of this Section shall be, absent demonstrable error, prima facie evidence of the existence and amounts of the obligations recorded therein, provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.

 

(d) Any Lender may request that the Loans made by it be evidenced by a Note.  In such event, the Borrower shall prepare, execute and deliver to such Lender, a Note payable to such Lender.  In addition, if requested by a Lender, its Note may be made payable to such Lender and its registered assigns in which case all Loans evidenced by such Note and interest thereon shall at all times (including after assignment pursuant to Section 10.4) be represented by one or more Notes in like form payable to the payee named therein and its registered assigns.

 

  

41

  

Section 2.9. Letters of Credit

 

(a) General.  Subject to the terms and conditions set forth herein and in Section 2.12(d), the Borrower may request the issuance of Letters of Credit denominated in dollars for its own account (or for the account of any Subsidiary other than NMTC Subsidiaries), in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the period from the Closing Date to the third day prior to the Maturity Date.  In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Bank, the terms and conditions of this Agreement shall control.  Upon satisfaction of the conditions in Section 5 on the Closing Date, in each case automatically and without further action on the part of any Person, (i) each Existing Letter of Credit will be deemed to be a Letter of Credit issued hereunder for all purposes of the Loan Documents and (ii) each Lender that has issued an Existing Letter of Credit shall be deemed to have granted to each other Lender with a Revolving Commitment, and each other such Lender shall be deemed to have acquired from such issuer, a participation in each Existing Letter of Credit equal to such other Lender’s Applicable Percentage of (A) the aggregate amount available to be drawn under such Existing Letter of Credit and (B) the aggregate amount of any reimbursement obligation in respect of any LC Disbursement in respect thereof.  With respect to each Existing Letter of Credit (x) if, prior to the Closing Date, the relevant issuer sold a participation therein to a Lender with a Revolving Commitment, such issuer and Lender agree that such participation shall be automatically canceled upon consummation of the Closing Date, and (y) if, prior to the Closing Date, the relevant issuer sold a participation therein to any bank or financial institution that is not a Lender with a Revolving Commitment, such issuer shall procure the termination of such participation on or prior to the Closing Date.

 

(b) Notice of Issuance; Amendment; Renewal; Extension; Certain Conditions.  To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or send by facsimile (or transmit by e-mail, with attachments thereto, if any, in .pdf format) to the Issuing Bank and the Administrative Agent (not later than two Business Days before the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Bank, the Borrower also shall submit a letter of credit application on the Issuing Bank’s standard form in connection with any request for a Letter of Credit.  A Letter of Credit shall be issued, amended, renewed or extended only if (and, upon issuance, amendment, renewal or extension of each Letter of Credit, the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed $25,000,000 and (ii) the total Revolving Credit Exposures shall not exceed the total Revolving Commitments.

 

  

42

  

(c) Expiration Date.  Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date that is one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is three days prior to the Maturity Date, provided that any Letter of Credit may provide for the automatic renewal thereof for additional periods of lengths not to exceed one year (which shall in no event extend beyond the date that is three days prior to the Maturity Date).

 

(d) Participations.  By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the applicable Revolving Lenders, the Issuing Bank hereby grants to each Revolving Lender, and each such Revolving Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Revolving Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit.  In consideration and in furtherance of the foregoing, each such Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Revolving Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the Borrower for any reason.  Each such Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Revolving Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever; provided, however, that no Revolving Lender shall be obligated to make any payment to the Administrative Agent for any wrongful LC Disbursement made by the Issuing Bank as a result of acts or omissions constituting willful misconduct or gross negligence on the part of the Issuing Bank.

 

  

43

  

(e) Reimbursement.  If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, then the Issuing Bank shall notify the Borrower to reimburse the Issuing Bank therefor, in which case the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement and any accrued interest thereon not later than 2:00 p.m., New York City time, on the date that such LC Disbursement is made, if the Borrower shall have received notice of such LC Disbursement prior to 1:00 p.m., New York City time, on such date, or if such notice has not been received by the Borrower prior to such time on such date, then not later than 2:00 p.m., New York City time, on (A) the Business Day that the Borrower receives such notice, if such notice is received prior to 1:00 p.m., New York City time, on the day of receipt or (B) the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time on the day of receipt, provided that, if the LC Disbursement is equal to or greater than $1,000,000, the Borrower may, subject to the conditions of borrowing set forth herein, request in accordance with Section 2.3 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan.  If the Borrower fails to make such payment when due (or if any such reimbursement payment is required to be refunded to the Borrower for any reason), the Issuing Bank may notify the Administrative Agent that the Issuing Bank is requesting that the applicable Lenders make an ABR Revolving Borrowing in an amount equal to such LC Disbursement and any accrued interest thereon, in which case (1) the Administrative Agent shall notify each applicable Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of such ABR Revolving Borrowing, and (2) each Lender shall, whether or not any Default shall have occurred and be continuing, any representation or warranty shall be accurate, any condition to the making of any loan hereunder shall have been fulfilled, or any other matter whatsoever, make the Loan to be made by it under this paragraph by wire transfer of immediately available funds to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders, (A) on such date, in the event that such Lender shall have received notice of such ABR Revolving Borrowing prior to 1:00 p.m., New York City time, or (B) if such notice has not been received by such Lender prior to such time on such date, then not later than 2:00 p.m., New York City time, on (x) the Business Day that such Lender receives such notice, if such notice is received prior to 1:00 p.m., New York City time, on the day of receipt or (y) the Business Day immediately following the day that such Lender receives such notice, if such notice is not received prior to such time on the day of receipt.  Such Loans shall, for all purposes hereof, be deemed to be an ABR Revolving Borrowing referred to in Section 2.1(a) and made pursuant to Section 2.4, and the Lenders’ obligations to make such Loans shall be absolute and unconditional.  The Administrative Agent will make such Loans available to the Issuing Bank by promptly crediting or otherwise transferring the amounts so received, in like funds, to the Issuing Bank for the purpose of repaying in full the LC Disbursement and all accrued interest thereon.  An ABR Borrowing pursuant to this Section 2.9(e) made when the conditions to an ABR Borrowing are not satisfied under Section 5.2 shall not be deemed to have satisfied the Borrower’s reimbursement obligation with respect to an LC Disbursement for purposes of determining whether or not an Event of Default exists under clause (a) of Article 8.

 

(f) Obligations Absolute.  Except as provided below, to the fullest extent permitted by law, the Borrower’s obligations to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein or herein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder.  Neither any Credit Party nor any of their respective Related Parties shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the Issuing Bank shall be liable to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower or any Subsidiary that are caused by the Issuing Bank’s failure to exercise care when determining whether (x) drafts and other documents presented under a Letter of Credit issued by it comply with the terms thereof, or (y) to pay under any Letter of Credit.  The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination.  In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

 

  

44

  

(g) Disbursement Procedures.  The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit issued by it.  The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by facsimile) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the applicable Lenders with respect to any such LC Disbursement.

 

(h) Interim Interest.  If the Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 3.1(b) shall apply.  Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (d) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.

 

(i) Cash Collateral.  If (x) any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders demanding the deposit of cash collateral pursuant to this paragraph, or (y) the maturity of the Revolving Loans has been accelerated, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the applicable Lenders, an amount in cash equal to the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in paragraph (h) or (i) of Article 8.  Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Section 2.9.  The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account.  Such deposit shall not bear interest, nor shall the Administrative Agent be under any obligation whatsoever to invest the same, provided, however, that, at the request of the Borrower, such deposit shall be invested by the Administrative Agent in direct short-term obligations of, or short-term obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, in each case maturing no later than the expiry date of the Letter of Credit giving rise to the relevant LC Exposure.  Interest or profits, if any, on such investments shall accumulate in such account.  Moneys in such account shall be applied by the Administrative Agent as follows: first, to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed, second, if there be any excess, to be held for the satisfaction of the reimbursement obligations (contingent or otherwise) of the Borrower for the LC Exposure at such time, third, if there be any excess, to reduce the Revolving Credit Exposure of all of the Lenders pro rata, and fourth, if there be any excess and if the maturity of the Loans has been accelerated (but subject to the consent of Lenders with LC Exposure representing greater than 50% of the total LC Exposure), to satisfy other obligations of the Borrower under this Agreement.  If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount and any interest thereon (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived.

 

  

45

  

Section 2.10. Swingline Loans

 

(a) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrower from time to time in dollars during the Revolving Availability Period, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $5,000,000 or (ii) the sum of the total Revolving Credit Exposures exceeding the total Revolving Commitments; provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan.  Notwithstanding the foregoing, the Swingline Lender shall not be required to make a Swingline Loan if (i) any Revolving Lender shall be a Defaulting Lender, (ii) any Revolving Lender shall have notified the Swingline Lender and the Borrower in writing at least one Business Day prior to the date of Borrowing with respect to such Swingline Loan that the conditions set forth in Section 5.2 have not been satisfied and such conditions remain unsatisfied as of the requested time of the making of such Swingline Loan or (iii) the Lenders have not made the initial Revolving Loan.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.

 

(b) To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request by telephone (confirmed by telecopy), not later than 3:00 p.m., New York City time, on the day of a proposed Swingline Loan.  Each such notice shall be irrevocable and shall specify (i) the aggregate principal amount to be borrowed, (ii) the requested date of such Borrowing, and (iii) the amount of, and the length of the Swingline Interest Period for, each Swingline Loan, provided, however, that no such Swingline Interest Period shall end after the Business Day immediately preceding the Maturity Date.  The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower.  The Swingline Lender shall make each Swingline Loan available to the Borrower by means of a credit to the general deposit account of the Borrower with the Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.9(e), by remittance to the Issuing Bank) by 3:30 p.m., New York City time, on the requested date of such Swingline Loan.

 

  

46

  

(c) The Swingline Lender may by written notice given to the Administrative Agent not later than 11:00 a.m., New York City time, on any Business Day notify the Administrative Agent that the Swingline Lender is requesting that each Lender, and the Administrative Agent may (with the consent of Required Lenders) or shall (at the request of Required Lenders) by written notice given to the Swingline Lender not later than 11:00 a.m., New York City time, on any Business Day require that each Lender, at the option of the Borrower, (i) make a Revolving Loan in an amount equal to its pro rata Revolving Commitment with respect to the outstanding principal balance of, and accrued and unpaid interest on, the Swingline Loans, or (ii) acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding.  Such notice shall specify the aggregate amount of Swingline Loans in which Lenders will participate.  In either such case (i) the Administrative Agent shall notify each Lender of the details thereof and of the amount of such Lender’s Revolving Loan or participation interest, as the case may be, and (ii) each Lender shall, whether or not any Default shall have occurred and be continuing, any representation or warranty shall be accurate, any condition to the making of any Loan hereunder shall have been fulfilled, or any other matter whatsoever, make the Revolving Loan required to be made by it, or purchase the participation required to be purchased by it, under this paragraph by wire transfer of immediately available funds to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders, (A) in the event that such Lender receives such notice prior to 12:00 noon, New York City time, on any Business Day, by no later than 3:00 p.m., New York City time, on such Business Day, or (B) in the event that such Lender receives such notice at or after 12:00 noon, New York City time, on any Business Day, by no later than 1:00 p.m. New York City time on the immediately succeeding Business Day.  Any Loans made pursuant to this paragraph (c) shall, for all purposes hereof, be deemed to be Revolving Loans referred to in Section 2.1 and made pursuant to Section 2.4(a), and the Lenders’ obligations to make such Loans shall be absolute and unconditional.  The Administrative Agent will make such Loans, or the amount of such participations, as the case may be, available to the Swingline Lender by promptly crediting or otherwise transferring the amounts so received, in like funds, to the Swingline Lender.  Each Lender shall also be liable for an amount equal to the product of its pro rata Revolving Commitment and any amounts paid by the Borrower pursuant to this Section 2.10 that are subsequently rescinded or avoided, or must otherwise be restored or returned.  Such liabilities shall be absolute and unconditional and without regard to the occurrence of any Default or the compliance by the Borrower with any of its obligations under the Loan Documents.  Whenever the Administrative Agent is reimbursed by the Borrower, for the account of the Swingline Lender, for any payment in connection with Swingline Loans and such payment relates to an amount previously paid by a Lender pursuant to this Section, the Administrative Agent will promptly pay over such payment to such Lender.  The purchase of participations in a Swingline Loan or the making by the Lenders of a Revolving Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof.

 

  

47

  

Section 2.11. Payments Generally; Pro Rata Treatment; Sharing of Setoffs

 

(a) Each Loan Party shall make each payment required to be made by it hereunder or under any other Loan Document (whether of principal of Loans, LC Disbursements, interest or fees, or of amounts payable under Sections 3.5, 3.6, 3.7 or 10.3, or otherwise) prior to 2:00 p.m., New York City time (or, in the case of Swingline Loans, 3:00 p.m., New York City time), on the date when due, in immediately available funds, without setoff or counterclaim.  Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Administrative Agent at its office at 1301 Avenue of the Americas, New York, New York, or such other office as to which the Administrative Agent may notify the other parties hereto, except payments to be made to the Issuing Bank or the Swingline Lender as expressly provided herein and except that payments pursuant to Sections 3.5, 3.6, 3.7 and 10.3 shall be made directly to the Persons entitled thereto and payments made pursuant to other Loan Documents shall be made to the Persons specified therein.  The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof.  If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.  All payments hereunder shall be made in dollars.

 

(b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal of Loans, unreimbursed LC Disbursements, interest, fees and commissions then due hereunder (after giving effect to all applicable grace periods and/or cure periods, if any), such funds shall be applied (i) first, towards payment of interest, fees and commissions then due hereunder ratably among the parties entitled thereto in accordance with the amounts of interest, fees and commissions then due to such parties and (ii) second, towards payment of principal of Loans and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal of Loans and unreimbursed LC Disbursements then due to such parties.

 

(c) If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of, or interest on, any of its Loans or participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other applicable Lender, then the applicable Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements and Swingline Loans of other applicable Lenders to the extent necessary so that the benefit of all such payments shall be shared by the applicable Lenders ratably in accordance with the aggregate amount of principal of, and accrued interest on, their respective Loans and participations in LC Disbursements and Swingline Loans, provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply).  Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation.

 

  

48

  

(d) Unless the Administrative Agent shall have received notice from a Loan Party prior to the date on which any payment is due to the Administrative Agent for the account of the applicable Credit Parties hereunder that such Loan Party will not make such payment, the Administrative Agent may assume that such Loan Party has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to such Credit Parties the amount due.  In such event, if such Loan Party has not in fact made such payment, then each such Credit Party severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Credit Party with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

 

(e) If any Credit Party shall fail to make any payment required to be made by it pursuant to Section 2.4(b) or 2.9(e), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Credit Party to satisfy such Credit Party’s obligations under such Sections until all such unsatisfied obligations are fully paid.

 

Section 2.12. Defaulting Lenders

 

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

 

(a) fees shall cease to accrue on the unfunded portion of any Revolving Commitment and any Delayed Draw Term Commitment of such Defaulting Lender pursuant to Section 3.3(a);

 

(b) the Commitments and Total Credit Exposure of such Defaulting Lender shall not be included in determining whether all Lenders or the Required Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 10.2); provided that (i) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender which affects such Defaulting Lender differently than other affected Lenders shall require the consent of such Defaulting Lender, and (ii) any waiver, amendment or modification that would increase the Commitments of such Lender, or postpone the final maturity date of any payment of principal owed to such Lender, shall require the consent of such Defaulting Lender;

 

  

49

  

(c) if any Swingline Exposure or LC Exposure exists at the time a Revolving Lender becomes a Defaulting Lender then:

 

(i) all of such Swingline Exposure and LC Exposure shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages to the extent (A) immediately after giving effect thereto, the sum of all non-Defaulting Lenders’ Revolving Credit Exposure would not exceed the total of all non-Defaulting Lenders’ Revolving Commitments and (B) the conditions set forth in Section 5.2 are satisfied at such time (for the avoidance of doubt, no Lender’s Revolving Commitment shall be changed as a result of such reallocation);

 

(ii) if the reallocation described in clause (i) above cannot, or can only partially, be effected, within one Business Day following notice by the Administrative Agent, the Borrower shall, after giving effect to any partial reallocation pursuant to clause (i) above, (A) first, prepay such Swingline Exposure and (B) second, cash collateralize such Defaulting Lender’s LC Exposure in accordance with the procedures set forth in Section 2.9(i) for so long as such LC Exposure is outstanding;

 

(iii) to the extent the Borrower cash collateralizes any portion of such Defaulting Lender’s LC Exposure pursuant to this Section 2.12(c), the Borrower shall not be required to pay any fees for the account of such Defaulting Lender pursuant to Section 3.3(b) with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;

 

(iv) if the LC Exposure of such non-Defaulting Lender is reallocated pursuant to this Section 2.12(c), then the fees payable to the Lenders pursuant to Section 3.3(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; and

 

(v) the Administrative Agent shall promptly notify the Lenders of any reallocation described in this Section 2.12(c);

 

(d) so long as any Revolving Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend, extend or increase any Letter of Credit, unless it is satisfied that the related exposure will be 100% covered by the Revolving Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 2.12(c), and participating interests in any such newly issued or increased Letter of Credit or newly made Swingline Loan shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.12(c)(i) (and Defaulting Lenders shall not participate therein); and

 

  

50

  

(e) any amount payable to such Defaulting Lender hereunder (whether on account of principal, interest, fees or otherwise and including any amount that would otherwise be payable to such Defaulting Lender pursuant to Section 2.11(c) but excluding Section 3.9) shall, in lieu of being distributed to such Defaulting Lender, be retained by the Administrative Agent in a segregated account and, subject to any applicable requirements of law, be applied at such time or times as may be reasonably determined by the Administrative Agent (i) first, to the payment of any amounts then owing by such Defaulting Lender to the Administrative Agent hereunder, (ii) second, pro rata, to the payment of any amounts then owing by such Defaulting Lender to the Issuing Bank or Swingline Lender hereunder, (iii) third, to the extent requested by the Issuing Bank or Swingline Lender, held in such account as cash collateral for future funding obligations of the Defaulting Lender in respect of any existing or future participating interest in any Swingline Loan or Letter of Credit, (iv) fourth, to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, (v) fifth, if so determined by the Administrative Agent and the Borrower, held in such account as cash collateral for future funding obligations of the Defaulting Lender in respect of any Loans under this Agreement, (vi) sixth, to the payment of any amounts owing to the Lenders or the Issuing Bank or Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, Issuing Bank or Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement, (vii) seventh, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement, and (viii) eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if such payment is (x) a prepayment of the principal amount of any Loans or reimbursement obligations in respect of LC Disbursements in respect of which a Defaulting Lender has funded its participation obligations and (y) made at a time when the conditions set forth in Section 5.2 are satisfied, such payment shall be applied solely to prepay the Loans of, and reimbursement obligations owed to, all non-Defaulting Lenders pro rata prior to being applied to the prepayment of any Loans, or reimbursement obligations owed to, any Defaulting Lender.

 

ARTICLE 3

INTEREST, FEES, YIELD PROTECTION, ETC.

Section 3.1. Interest

 

(a) The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Margin.  The Loans comprising each Eurodollar Borrowing shall bear interest at the LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin.  The Loans comprising each Swingline Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Margin for the Swingline Interest Period in effect for such Borrowing.

 

(b) Notwithstanding the foregoing, if any principal of or interest on any Loan, any reimbursement obligation in respect of any LC Disbursement or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to 2% plus the rate applicable to ABR Revolving Loans as provided in the preceding paragraph of this Section.  In addition, notwithstanding the foregoing, if an Event of Default under Sections 8(a), (b), (h), (i) or (j) has occurred and is continuing, then, so long as such Event of Default is continuing, all outstanding principal of each Loan and all unreimbursed reimbursement obligations in respect of all LC Disbursements shall, without duplication of amounts payable under the preceding sentence, bear interest, after as well as before judgment, at a rate per annum equal to 2% plus the rate otherwise applicable to such Loan or LC Disbursement, as the case may be, as provided in the preceding paragraph of this Section.  In addition, notwithstanding the foregoing, if an Event of Default (other than an Event of Default under Sections 8(a), (b), (h), (i) or (j)) has occurred and is continuing, then, if the Administrative Agent or the Required Lenders request, so long as such Event of Default is continuing, all outstanding principal of each Loan and all unreimbursed reimbursement obligations in respect of all LC Disbursements shall, without duplication of amounts payable under the preceding sentence, bear interest, after as well as before judgment, at a rate per annum equal to 2% plus the rate otherwise applicable to such Loan or LC Disbursement, as the case may be, as provided in the preceding paragraph of this Section.

 

  

51

  

(c) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan, provided that (i) interest accrued pursuant to paragraph (b) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment, and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

 

(d) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  The applicable Alternate Base Rate and the applicable LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent demonstrable error.

 

Section 3.2. Interest Elections

 

(a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request or designated by Section 2.3 and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request or designated by Section 2.3.  Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section.  The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the applicable Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.  This Section shall not apply to Swingline Borrowings, which may not be converted or continued.

 

(b) To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone or e-mail by the time that a Borrowing Request would be required under Section 2.3 if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election.  Each such telephonic or e-mail Interest Election Request shall be irrevocable and shall be confirmed by no later than 3:00 p.m., New York City time, on the date of such request by hand delivery, e-mail or facsimile to the Administrative Agent of a copy of a written Interest Election Request signed by the Borrower.

 

  

52

  

(c) Each telephonic, e-mail and written Interest Election Request shall specify the following information:

 

(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) of this paragraph shall be specified for each resulting Borrowing);

 

(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

 

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

 

(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

 

If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

 

(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each applicable Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

 

(e)           If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period, such Borrowing shall be converted to a Eurodollar Borrowing with an Interest Period of one month.  Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing, (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

 

  

53

  

Section 3.3. Fees

 

(a) The Borrower agrees to pay to the Administrative Agent for the account of each Lender having a Revolving Commitment, a commitment fee, which shall accrue at a rate per annum equal to the Commitment Fee Rate on the daily amount of the unused Revolving Commitment (provided that Swingline Loans shall not be deemed to be a use of the Revolving Commitments for the purpose of the calculation of such commitment fee) during the period from and including the Closing Date to but excluding the date on which such Revolving Commitment terminates (it being understood that LC Exposure constitutes a use of the Revolving Commitment).  The Borrower agrees to pay to the Administrative Agent for the account of each Lender having a Delayed Draw Term Commitment, an undrawn fee, which shall accrue at a rate per annum equal to Commitment Fee Rate on the daily amount of the unused Delayed Draw Term Commitment during the period from and including the Closing Date to but excluding the date on which such Delayed Draw Term Commitment terminates.  Accrued commitment fees and undrawn fees shall be payable in arrears on the last day of March, June, September and December of each year, each date on which the applicable Commitments are permanently reduced and on the date on which the applicable Commitments terminate, commencing on the first such date to occur after the Closing Date.  All commitment fees and undrawn fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

 

(b) The Borrower agrees to pay to (i) the Administrative Agent for the account of each Revolving Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at rate per annum equal to the Applicable Margin (with respect to Eurodollar Borrowings) on the daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Closing Date to but excluding the later of the date on which such Lender’s Revolving Commitment terminates and the date on which such Lender ceases to have any LC Exposure and (ii) to the Issuing Bank for its own account a fronting fee, which shall accrue at a rate per annum equal to 0.25% on the daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) with respect to each Letter of Credit during the period from and including the Closing Date to but excluding the later of the date of termination of the Revolving Commitments and the date on which there ceases to be any such LC Exposure, as well as the Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder.  Accrued participation fees and fronting fees shall be payable in arrears on the last day of March, June, September and December of each year, commencing on the first such date to occur after the Closing Date; provided that all such fees shall be payable on the date on which the Revolving Commitments terminate and any such fees accruing after the date on which the Revolving Commitments terminate shall be payable on demand.  Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within ten days after demand.  All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

 

(c) The Borrower agrees to pay to each Credit Party, for its own account, the fees and other amounts payable in connection herewith in the amounts and at the times separately agreed upon between the Borrower and such Credit Party.

 

  

54

  

(d) All fees and other amounts payable hereunder shall be paid on the dates due, in immediately available funds to the Administrative Agent for distribution, in the case of commitment fees, undrawn fees, and participation fees, to the Lenders.  Fees paid hereunder shall not be refundable under any circumstances.

 

Section 3.4. Alternate Rate of Interest

 

If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

 

(a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the LIBO Rate, as applicable, for such Interest Period; or

 

(b) the Administrative Agent is advised by the Required Lenders that the LIBO Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining its Loan included in such Borrowing for such Interest Period;

 

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or facsimile as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist (and the Administrative Agent shall give such notice promptly upon having actual knowledge that such circumstances no longer exist), (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.

 

Section 3.5. Increased Costs; Illegality

 

(a) If any Change in Law shall:

 

(i) subject any Lender to any tax of any kind whatsoever with respect to this Agreement, any Eurodollar Loans made by such Credit Party or any Letter of Credit or participations therein, or change the basis of taxation of payments to such Lender in respect thereof (other than relating to Taxes, which shall be governed exclusively by Section 3.7, or the imposition of, or any change in the rate of, any Excluded Taxes payable by a Credit Party);

 

(ii) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Credit Party; or

 

(iii) impose on any Credit Party or the London interbank market any other condition affecting this Agreement, any Eurodollar Loans made by such Credit Party or any Letter of Credit or participations therein,

 

  

55

  

and the result of any of the foregoing shall be to increase the cost to such Credit Party, by an amount which such Credit Party reasonably deems to be material, of making or maintaining any Eurodollar Loan or the cost to such Credit Party, by an amount which such Credit Party reasonably deems to be material, of issuing, participating in or maintaining any Letter of Credit hereunder or to increase the cost to such Credit Party or to reduce the amount of any sum received or receivable by such Credit Party, by an amount which such Credit Party reasonably deems to be material, hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Credit Party such additional amount or amounts as will compensate such Credit Party for such additional costs incurred or reduction suffered.

 

(b) If any Credit Party determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Credit Party’s capital or on the capital of such Credit Party’s holding company, if any, as a consequence of this Agreement or the Loans made, the Letters of Credit issued or the participations therein held, by such Credit Party to a level below that which such Credit Party or such Credit Party’s holding company could have achieved but for such Change in Law (taking into consideration such Credit Party’s policies and the policies of such Credit Party’s holding company with respect to capital adequacy), by an amount reasonably deemed by such Credit Party to be material, then from time to time the Borrower will pay to such Credit Party such additional amount or amounts as will compensate such Credit Party or such Credit Party’s holding company for any such reduction suffered.

 

(c) A certificate of a Credit Party setting forth in reasonable detail the calculation of the amount or amounts necessary to compensate such Credit Party or its holding company, as applicable, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Credit Party the amount shown as due on any such certificate within 10 Business Days after receipt thereof.

 

(d) Failure or delay on the part of any Credit Party to demand compensation pursuant to this Section shall not constitute a waiver of such Credit Party’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Credit Party pursuant to this Section for any increased costs or reductions incurred more than nine months prior to the date that such Credit Party notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Credit Party’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine month period referred to above shall be extended to include the period of retroactive effect thereof.

 

(e) Notwithstanding any other provision of this Agreement, if, after the Closing Date any Change in Law shall make it unlawful for any Lender to make or maintain any Eurodollar Loan or to give effect to its obligations as contemplated hereby with respect to any Eurodollar Loan, then, by written notice to the Borrower and to the Administrative Agent:

 

(i) such Lender may declare that Eurodollar Loans will not thereafter (for the duration of such unlawfulness) be made by such Lender hereunder (or be continued for additional Interest Periods) and ABR Loans will not thereafter (for such duration) be converted into Eurodollar Loans, whereupon any request for a Eurodollar Borrowing or to convert an ABR Borrowing to a Eurodollar Borrowing or to continue a Eurodollar Borrowing, as applicable, for an additional Interest Period shall, as to such Lender only, be deemed a request for an ABR Loan (or a request to continue an ABR Loan as such for an additional Interest Period or to convert a Eurodollar Loan into an ABR Loan, as applicable), unless such declaration shall be subsequently withdrawn; and

 

  

56

  

(ii) such Lender may require that all outstanding Eurodollar Loans made by it be converted to ABR Loans, in which event all such Eurodollar Loans shall be automatically converted to ABR Loans, as of the effective date of such notice as provided in the last sentence of this paragraph.

 

In the event any Lender shall exercise its rights under (i) or (ii) of this paragraph, all payments and prepayments of principal that would otherwise have been applied to repay the Eurodollar Loans that would have been made by such Lender or the converted Eurodollar Loans of such Lender shall instead be applied to repay the ABR Loans made by such Lender in lieu of, or resulting from the conversion of, such Eurodollar Loans, as applicable.  For purposes of this paragraph, a notice to the Borrower by any Lender shall be effective as to each Eurodollar Loan made by such Lender, if lawful, on the last day of the Interest Period currently applicable to such Eurodollar Loan; in all other cases such notice shall be effective on the date of receipt by the Borrower.

 

Section 3.6. Break Funding Payments

 

In the event of (a) the payment or prepayment (voluntary or otherwise) of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, or (c) the failure by the Borrower to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.7(e) and is revoked in accordance therewith), then, in any such event, the Borrower shall compensate each Lender in an amount equal to the excess, if any, of (i) the amount of interest that would have accrued on the principal amount of such Loan had such event not occurred, at the LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan) excluding, however, the Applicable Margin included therein, if any, over (ii) the amount of interest (as reasonably determined by such Lender) that would accrue on such principal amount for such period at the interest rate that such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market.  A certificate of any Lender setting forth in reasonable detail the calculations of any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

 

  

57

  

Section 3.7. Taxes

 

(a) Any and all payments by or on account of any obligation of any Loan Party hereunder and under any other Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes, provided that, if such Loan Party shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that, after making all required deductions (including deductions applicable to additional sums payable under this Section), the applicable Credit Party receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Loan Party shall make such deductions and (iii) such Loan Party shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

 

(b) In addition, the Loan Parties shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

 

(c) The Borrower shall indemnify each Credit Party, within ten days after written demand therefor (which demand shall set forth the amount and the reasons therefor in reasonable detail), for the full amount of any Indemnified Taxes or Other Taxes (whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority) paid by such Credit Party on or with respect to any payment by or on account of any obligation of any Loan Party under the Loan Documents (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable out-of-pocket expenses arising therefrom or with respect thereto (in the event that the Borrower is not in default of its obligations under this Section 3.7, excluding penalties and interest to the extent attributable to the actions or omissions of such Credit Party), whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate setting forth the amount of such payment or liability and the reasons therefor in reasonable detail delivered to the Borrower by a Credit Party, or by the Administrative Agent on its own behalf or on behalf of a Credit Party, shall be conclusive absent manifest error.  If the Borrower reasonably believes that Indemnified Taxes or Other Taxes were not correctly or legally asserted, the applicable Credit Party or Transferee will reasonably cooperate with the Borrower to obtain a refund of such Indemnified Taxes or Other Taxes for the benefit of the Borrower, provided that the Borrower shall reimburse the applicable Credit Party for reasonable out-of-pocket expenses arising from such cooperation.  Each Credit Party agrees that promptly after it receives written notice of any Indemnified Taxes or Other Taxes imposed or asserted on it, it shall endeavor to give notice thereof to the Borrower, provided that such Credit Party shall have no liability to the Borrower for the failure to give any such notice.

 

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

 

(e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the relevant Loan Party is located, or under any treaty to which such jurisdiction is a party, with respect to payments under the Loan Documents shall deliver to the Borrower (with a copy to the Administrative Agent), such properly completed and executed documentation prescribed by applicable law and reasonably requested by the Borrower from time to time as will permit such payments to be made without withholding or at a reduced rate.

 

  

58

  

(f) Without limiting the generality of the foregoing, (i) each Lender (and, in the case of a pass-through entity, each of its beneficial owners) that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) (a “Non-US Lender”) shall to the extent it is legally able to do so deliver to the Borrower and the Administrative Agent (or, in the case of a Participant, to the Borrower and to the Lender from which the related participation shall have been purchased) (A) two accurate and complete copies of IRS Form W-8BEN, (B) two accurate and complete copies of IRS Form W-8ECI, (C) in the case of a Non-US Lender claiming exemption from United States federal withholding Tax under Section 881(c) of the Code with respect to payments of “portfolio interest,” (x) a certificate to the effect that such Non-US Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the meaning of sections 871(h)(3)(B) and 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code, and (y) duly completed copies of IRS Form W-8BEN, or (D) any subsequent versions or successors to such forms, in each case properly completed and duly executed by such Non-US Lender claiming complete exemption from, or a reduced rate of, United States federal withholding Tax on all payments by the Borrower or any Loan Party under any Loan Document, and (ii) each Lender (and, in the case of a non-United States pass-through entity, each of its beneficial owners) that is a United States person (as such term is defined in Section 7701(a)(30) of the Code) shall deliver to the Borrower and the Administrative Agent two accurate and complete copies of IRS Form W-9, or any subsequent versions or successors to such form. The forms referred to in clauses (i) and (ii) shall be delivered by each Lender on or before the date it becomes a party to this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation).  In addition, each Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such Lender.  Each Lender shall promptly notify the Borrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the United States taxing authorities for such purpose).

 

(g) If a Credit Party determines, in its sole discretion, that it has received a refund of or credit against any Taxes or Other Taxes as to which it has been indemnified by a Loan Party or with respect to which a Loan Party has paid additional amounts pursuant to this Section 3.7, it shall pay to the Loan Party an amount equal to such refund or credit (but only to the extent of indemnity payments made, or additional amounts paid, by the Loan Party under this Section 3.7 with respect to Taxes or Other Taxes giving rise to such refund or credit), net of all out-of-pocket expenses of the Credit Party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund or credit); provided that the Loan Party, upon the request of the Credit Party agrees to repay the amount paid over to the Loan Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Credit Party in the event the Credit Party is required to repay such refund to such Governmental Authority. This paragraph shall not be construed to require the Credit Party to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Loan Party or any other Person.

 

  

59

  

(h) If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent 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 paragraph (h), “FATCA” shall include any amendments made to FATCA after the Closing Date.

 

Section 3.8. Mitigation Obligations

 

If any Credit Party requests compensation under Section 3.5, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Credit Party pursuant to Section 3.7, then such Credit Party shall use reasonable efforts to designate a different lending office for funding or booking its Loans or Letters of Credit (or any participation therein) hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the good faith judgment of such Credit Party, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Sections 3.5 or 3.7, as applicable, in the future and (ii) would not subject such Credit Party to any unreimbursed cost or expense and would not otherwise be materially disadvantageous to such Credit Party.  The Borrower hereby agrees to pay all reasonable costs and out of pocket expenses incurred by any Credit Party in connection with any such designation or assignment.

 

Section 3.9. Replacement of Lenders

 

If (i) any Credit Party requests compensation under Section 3.5, or the Borrower is required to pay any additional amount to any Credit Party or any Governmental Authority for the account of any Credit Party pursuant to Section 3.7, (ii) any Lender with an unused Commitment is a Defaulting Lender, or (iii) any Lender notifies the Borrower pursuant to Section 3.5(e) that it is unlawful for such Lender to make or maintain Eurodollar Loans, then the Borrower may, at its sole expense and effort, upon notice to such Credit Party and the Administrative Agent, require such Credit Party to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 10.4), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Credit Party, if a Credit Party accepts such assignment); provided that (a) the Borrower shall have received the prior written consent of the Administrative Agent (and if a Revolving Commitment is being assigned, the Issuing Bank and the Swingline Bank), which consents shall not unreasonably be withheld, conditioned or delayed, (b) such Credit Party shall have received payment of an amount equal to the outstanding principal of its Loans and funded participations in LC Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts), (c) unless the Administrative Agent otherwise agrees, the Borrower, the Defaulting Lender (if any) or such assignee shall have paid to the Administrative Agent the processing and recordation fee specified in Section 10.4(b) and (d) in the case of any such assignment resulting from a claim for compensation under Section 3.5 or payments required to be made pursuant to Section 3.7, such assignment will result in a reduction in such compensation or payments.  A Credit Party shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Credit Party or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

 

  

60

  

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

The Parent represents and warrants to the Credit Parties that:

 

Section 4.1. Organization; Powers

 

Each of the Parent, the Borrower and the Subsidiaries (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite corporate or other organizational power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required by applicable law.

 

Section 4.2. Authorization; Enforceability

 

The Transactions to be entered into by each Loan Party are within the corporate, partnership or other analogous powers of such Loan Party to the extent it is a party thereto and have been duly authorized by all necessary corporate, partnership or other analogous and, if required, equity holder action.  Each Loan Document has been duly executed and delivered by each Loan Party to the extent it is a party thereto and constitutes a legal, valid and binding obligation thereof, enforceable against such Loan Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law) and the implied covenants of good faith and fair dealing.

 

  

61

  

Section 4.3. Governmental Approvals; No Conflicts

 

The Transactions (i) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (a) such as have been or prior to or concurrently with the consummation of the Transactions will be obtained or made and are or prior to or concurrently with the consummation of the Transactions will be in full force and effect (except such consents, approvals, registrations or filings which will be required at the time, if any, of the exercise of remedies under the Loan Documents by the Administrative Agent and the Lenders), (b) notices, if any, required to be filed with the FCC or any applicable State PUC after the consummation of the Transactions and (c) consents, approvals, registrations, filings or actions which the failure to obtain or make would not reasonably be expected to result in a Material Adverse Effect, (ii) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) or any order of any Governmental Authority (subject to compliance with any applicable law or regulation which, upon the exercise of remedies hereunder by the Administrative Agent and the Lenders, requires filing with or approval of a Governmental Authority), except, in the case of any such applicable law or regulation, for such violations that would not reasonably be expected to result in a Material Adverse Effect, (iii) will not violate or result in a default under any material indenture, agreement or other instrument binding upon the Parent, the Borrower or any Subsidiary or its assets (other than the Loan Documents), or give rise to a right thereunder to require any payment to be made by the Parent, the Borrower or any Subsidiary, or result in a default under any indenture for the Senior Notes, except for such violations, defaults and payments that would not reasonably be expected to result in a Material Adverse Effect and (iv) will not result in the creation or imposition of any Lien on any asset of the Parent, the Borrower or any of the Subsidiaries (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect), other than, with respect to each Loan Party, Liens permitted by Section 7.2 and each Security Document to which such Loan Party is a party.

 

Section 4.4. Financial Condition

 

The Parent has heretofore furnished to the Administrative Agent and the Lenders the following:

 

(a) the consolidated balance sheets and related consolidated statements of income, cash flows and shareholders’ equity of (i) the Parent and its subsidiaries and (ii) the Borrower and the Subsidiaries, each as of and for the fiscal year ended December 31, 2012, reported on by Grant Thornton LLP, a registered independent public accounting firm; and

 

(b) with respect to the Borrower and the Subsidiaries, forecasts of financial performance through and including the Maturity Date (the “Forecasts”).

 

The financial statements referred to above (other than the Forecasts) present fairly, in all material respects, the financial position and results of operations and cash flows of such Persons as of such dates and for the indicated periods in accordance with GAAP, subject in the case of the quarter-end statements to year-end audit adjustments and the absence of footnotes.  The Forecasts have been prepared in good faith by the Parent and based on assumptions believed to be reasonable at the time they were made, it being understood that forecasts by their nature are uncertain and no assurance is being given that the results reflected in such forecasted financial information will be achieved.  Since December 31, 2012, there has been no material adverse change in the business, assets, operations or financial condition of the Borrower and the Subsidiaries taken as a whole.

 

  

62

  

Section 4.5. Properties

 

(a) Each of the Parent, the Borrower and the Subsidiaries has good title to, or valid leasehold interests in, all its real and tangible personal property, except as would not reasonably be expected to have a Material Adverse Effect.

 

(b) Each of the Parent, the Borrower and the Subsidiaries owns, or is entitled to use, all United States trademarks, trade names, copyrights, patents and trade secrets material to its business, and the use thereof by the Parent, the Borrower and the Subsidiaries does not infringe upon the rights of any other Person, except for any such failure to own or be entitled to use or infringements that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

 

Section 4.6. Litigation and Environmental Matters

 

(a) There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Parent, threatened against (i) the Parent or any of its subsidiaries that would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) the Parent, the Borrower or any of the Subsidiaries that relate to the execution, delivery, validity or enforceability of any Loan Document or the performance of any of the Transactions by any of the parties thereto.

 

(b) Except for the Disclosed Matters and except with respect to any other matters that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, neither the Parent nor any of its subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received written notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.

 

Section 4.7. Compliance with Laws and Agreements

 

Each of the Parent and its subsidiaries is in compliance with all laws, regulations (including the Communications Act and State Law) and orders of any Governmental Authority (including the FCC and State PUCs) applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except, in each case, where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.  No Default has occurred and is continuing.

 

Section 4.8. Franchises, FCC, State PUC and Certain Copyright Matters

 

(a) The Borrower and each Subsidiary possesses, or has the right to use, all Authorizations, and possesses, or has rights under, agreements with public utilities and microwave transmission companies, satellite communications companies, pole attachment, use access or rental agreements and utility easements, including all licenses and permits, to: (i) operate the Communications Business, except to the extent the absence thereof or failure to be in compliance therewith would not reasonably be expected to have a Material Adverse Effect, and (ii) consummate the Transactions.  The Borrower and the Subsidiaries are in compliance with all such Authorizations, agreements, easements, licenses and permits with no known conflict with the valid rights of others, except to the extent such noncompliance or conflict would not reasonably be expected to have a Material Adverse Effect.  No event has occurred which would permit the revocation or termination of any such Authorization, right, agreement, easement, license or permit which would reasonably be expected to have a Material Adverse Effect.

 

  

63

  

(b) The Parent and each subsidiary thereof (i) have each duly and timely filed or caused to be filed (A) all registration statements for the operation of the Communications Business and other filings which are required to be filed under the Communications Act and under State Law applicable to them and the Transactions, and (B) all reports, applications, documents, instruments and information required to be filed (1) with the FCC and State PUCs, as applicable, pursuant to all FCC rules, regulations and requests and State Law applicable to them, or (2) pursuant to any Authorization, in each case, the failure of which to file would reasonably be expected to have a Material Adverse Effect, and (ii) is in compliance with the Communications Act and State Law (including, the rules and regulations of the FCC and State PUCs) and all Authorizations, the failure with which to comply would reasonably be expected to have a Material Adverse Effect.  The Parent and each subsidiary thereof has recorded or deposited with and paid to the United States Copyright Office and the Register of Copyrights all notices, statements of account, royalty fees and other documents and instruments required under the Copyright Act, the failure of which to record, deposit or pay would reasonably be expected to have a Material Adverse Effect.  To the knowledge of the Parent, as of the Closing Date neither the Borrower nor any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) has any material liability to any Person for copyright infringement under the Copyright Act as a result of its business operations.

 

(c) The Borrower and the Subsidiaries own or lease all of the property, plant and equipment necessary to operate the Communications Business.

 

(d) As of the Closing Date, the Borrower and the Subsidiaries, collectively, hold all material Authorizations required in connection with the Transactions and with the operation of the Communications Business and each such Authorization is validly issued and in full force and effect, unimpaired in any material respect by any act or omission by the Borrower or any Subsidiary.  All such Authorizations are renewable by their terms or in the ordinary course of business without the need to (i) comply with any special qualification procedures not otherwise generally applicable to providers of one or more services similar to the Communications Business in the State of Alaska, or (ii) to pay any amounts other than immaterial amounts, routine fees, and amounts in respect of rebuild obligations, except to the extent such renewal would not reasonably be expected to have a Material Adverse Effect.

 

(e) To the best of the Parent’s knowledge, except as set forth in Schedule 4.8, neither the Parent nor any subsidiary thereof is a party to any investigation, notice of violation, order or complaint issued by or before the FCC, any State PUC or any Franchise authority which would reasonably be expected to have a Material Adverse Effect.  Except for such proceedings that affect the communications industry or the other businesses of the Parent and its subsidiaries generally or as set forth in Schedule 4.8, there are no proceedings by or before the FCC, any State PUC or any Franchise authority which would reasonably be expected to have a Material Adverse Effect.  Except as set forth in Schedule 4.8, the Parent has no knowledge of (i) any impending or threatened investigation, notice of violation, order, complaint or proceeding before the FCC, any State PUC or any Franchise authority that would reasonably be expected to have a Material Adverse Effect, (ii) any pending or threatened non-renewal, expiration, termination or revocation of any Authorization that would reasonably be expected to have a Material Adverse Effect, or (iii) has any reasonable basis to expect that any Authorization the absence of which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, will not be renewed in the ordinary course.

 

  

64

  

Section 4.9. Investment Company Status

 

None of the Parent, the Borrower nor any of the Subsidiaries (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

 

Section 4.10. Taxes

 

Each of the Parent, the Borrower and the Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (i) Taxes that are being contested in good faith by appropriate proceedings and for which the Parent, the Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves to the extent required by GAAP or (ii) to the extent that the failure to do so would not reasonably be expected to result in a Material Adverse Effect.

 

Section 4.11. ERISA

 

No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, would reasonably be expected to result in a Material Adverse Effect.  The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $1,000,000 the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $1,000,000 the fair market value of the assets of all such underfunded Plans.

 

Section 4.12. Disclosure

 

As of the Closing Date, the Parent has disclosed to the Credit Parties all agreements, instruments and corporate or other restrictions to which it or the Borrower or any Subsidiary is subject, and all other matters known to it, that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect.  None of the reports, financial statements, certificates or other information concerning the Parent, the Borrower or any Subsidiary (other than the projections, budgets or other estimates, or information of a general economic or industry nature and, in the case of NMTC Subsidiaries, only to extent of the Parent’s actual knowledge) furnished by or on behalf of the Parent, the Borrower or any Subsidiary to any Credit Party in connection with the negotiation of the Loan Documents or delivered thereunder (as modified or supplemented by other information so furnished), taken as a whole, contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; provided that, with respect to projected financial information, the Parent represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time they were made, it being understood that projections by their nature are uncertain and no assurance is being given that the results reflected in such projected financial information will be achieved.

 

  

65

  

Section 4.13. Subsidiaries

 

Schedule 4.13 sets forth, as of the Closing Date, the name of, the chief executive office of, and the ownership interest of (i) the Parent in the Borrower, and (ii) the Borrower in each of its subsidiaries (other than the NMTC Subsidiaries) and identifies each Subsidiary that is a Subsidiary Guarantor or an NMTC Subsidiary.

 

Section 4.14. Insurance

 

Schedule 4.14 sets forth a description of all insurance maintained by or on behalf of the Parent, the Borrower and the Subsidiaries (other than NMTC Subsidiaries) on the Closing Date.  As of the Closing Date, all premiums in respect of such insurance that are due and payable have been paid.

 

Section 4.15. Labor Matters

 

Except for the Disclosed Matters and except as would not be reasonably likely to result in a Material Adverse Effect, (i) there are no strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending or, to the knowledge of the Borrower, threatened, (ii) the hours worked by and payments made to employees of the Borrower and the Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters, (iii) all material payments due from the Borrower or any Subsidiary, or for which any claim may be made against the Borrower or any Subsidiary, 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 the Borrower or such Subsidiary and (iv) the consummation of the Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which the Borrower or any Subsidiary is bound.

 

Section 4.16. Solvency

 

Immediately after the consummation of each Transaction on the Closing Date, (i) the fair value of the assets of the Borrower and the Subsidiaries, taken as a whole, at a fair valuation, will exceed their debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair salable value of the property of the Borrower and the Subsidiaries, taken as a whole, will be greater than the amount that will be required to pay the probable liability of their debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) each of the Borrower and the Subsidiary Guarantors will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) each of the Borrower and the Subsidiary Guarantors will not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted following such date.

 

  

66

  

Section 4.17. Federal Reserve Regulations

 

None of the Parent, the Borrower nor any of the Subsidiaries (other than NMTC Subsidiaries) is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock.  Immediately before and immediately after giving effect to the making of each Loan and the issuance of each Letter of Credit, Margin Stock will constitute less than 25% of the Borrower’s assets as determined in accordance with Regulation U.

 

Section 4.18. Use of Proceeds

 

The Borrower represents and warrants that it will use the proceeds of (a) the Revolving Loans, Delayed Draw Term Loans and Letters of Credit for purposes permitted by Section 6.14 and (b) each Add-on Term Loan, if any, in accordance with the Effective Add-on Term Loan Supplement applicable thereto. No part of the proceeds of any Loan or any Letter of Credit has been or will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately (i) to purchase, acquire or carry any Margin Stock, or (ii) for any other purpose, in either case that entails a violation of any of the regulations of the Board, including Regulations T, U and X.

 

Section 4.19. USA PATRIOT Act, OFAC and Other Regulations

 

(a) No Loan Party, any of its subsidiaries or, to the knowledge of Parent, any of the respective officers, directors, brokers or agents of such Loan Party or any such subsidiary (i) has violated any Anti-Terrorism Laws or (ii) has engaged in any transaction, investment, undertaking or activity that conceals the identity, source or destination of the proceeds from any category of prohibited offenses designated by the Organization for Economic Co-operation and Development’s Financial Action Task Force on Money Laundering.

 

(b) No Loan Party, any of its subsidiaries or, to the knowledge of Parent, any of the respective officers, directors, brokers or agents of such Loan Party or any such subsidiary that is acting or benefiting in any capacity in connection with the Loans or the Letters of Credit is a Blocked Person.

 

(c) No Loan Party, any of its subsidiaries or, to the knowledge of Parent, any of the respective officers, directors, brokers or agents of such Loan Party or any such subsidiary that is acting or benefiting in any capacity in connection with the Loans or the Letters of Credit (i) conducts any business or engages in making or receiving any contribution of goods, services or money to or for the benefit of any Blocked Person, provided that this clause (i) shall not apply to the provision of telecommunication services in the ordinary course of business, (ii) deals in, or otherwise engages in any transaction related to, any property or interests in property blocked pursuant to any Anti-Terrorism Law or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

 

  

67

  

ARTICLE 5

CONDITIONS

Section 5.1. Initial Conditions.

 

This Agreement shall not become effective, and the Existing Credit Agreement shall remain in full force and effect, until the date on which each of the following conditions is satisfied (or waived in accordance with Section 10.2):

 

(a) Restatement. The Administrative Agent (or its counsel) shall have received this Agreement, executed and delivered by Lenders under the Existing Credit Agreement as in effect immediately prior to the Closing Date (each an “Existing Lender”) constituting all Lenders under and as defined in the Existing Credit Agreement as in effect immediately prior to the Closing Date, by all Lenders hereunder and from each Loan Party.

 

(b) Security Documents. The Administrative Agent shall have received (i) the Security Agreement, executed and delivered by the Borrower and each Subsidiary Guarantor, (ii) the Pledge Agreement, executed and delivered by the Parent, and (iii) each other Loan Document, executed and delivered by each Loan Party signatory thereto.

 

(c) Ownership Structure.  The Administrative Agent shall have received a certificate of the Borrower, dated the Closing Date, attaching the organizational chart of GCI and all of its subsidiaries as of the Closing Date.  The organizational structure of GCI on the Closing Date shall be satisfactory to the Administrative Agent.

 

(d) Pro Forma Balance Sheet. The Administrative Agent shall have received a consolidated pro forma balance sheet for the Parent reflecting the Transactions (based on the projections previously delivered to the Lenders), and reasonably detailed projections of the Financial Covenants through the Maturity Date.

 

(e) Fees. The Arrangers shall have received on or before the Closing Date all fees required to be paid by the Borrower (including those to be passed on to the Lenders), and all reasonable out-of-pocket expenses required to be paid by the Borrower (including reasonable fees, disbursements and other charges of counsel to the Administrative Agent and the Arrangers).

 

(f) Solvency Certificate. The Administrative Agent shall have received a solvency certificate signed by a Financial Officer on behalf of the Borrower substantially in the form of Exhibit J.

 

(g) Lien Searches. The Administrative Agent shall have received the results of a recent lien search in each of the jurisdictions in which Uniform Commercial Code financing statements, or other filings or recordations should be made to evidence or perfect security interests in the Collateral, and such search shall reveal no liens on any of the Collateral, except for Liens permitted by Section 7.2 or liens to be discharged prior to or on the Closing Date.

 

  

68

  

(h) Closing Certificate. The Administrative Agent shall have received a certificate of each of the Loan Parties, dated the Closing Date, substantially in the form of Exhibit H, with appropriate insertions and attachments.

 

(i) Financial Officer Certificate.  The Administrative Agent shall have received a certificate of the Parent, dated the Closing Date and signed by a Financial Officer of the Parent: (i) setting forth reasonably detailed calculations demonstrating that (A) the Total Leverage Ratio does not exceed 5.50:1.00, and (B) the Senior Leverage Ratio does not exceed 2.00:1.00, each on a pro forma basis immediately after giving effect to the Transactions occurring on the Closing Date, (ii) certifying that no Material Adverse Effect has occurred, and no material adverse effect on the performance of the Borrower and the Subsidiaries (other than NMTC Subsidiaries), taken as a whole, has occurred, in either case since December 31, 2012, (iii) certifying compliance with the conditions set forth in paragraphs (a) and (b) of Section 5.2, (iv) either (A) attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by each Loan Party and the validity against each Loan Party of the Loan Documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect, or (B) stating that no such consents, licenses or approvals are so required, (v) certifying that the performance by each Loan Party of its obligations under each Loan Document to which it is a party does not (A) violate any applicable law, statute, rule or regulations or (B) conflict with, or result in a default or event of default under, any material agreement of any Loan Party, including, without limitation, any instrument or agreement (1) governing any debt or equity (or warrant or option with respect thereto) of GCI and its subsidiaries, and (2) that would constitute a material contract of any Loan Party, and (vi) attaching a true, correct and complete copy of the AWN Contribution Agreement.

 

(j) Legal Opinions. The Administrative Agent shall have received the following executed legal opinions: (i) the legal opinion of Sherman & Howard L.L.C., special counsel to the Loan Parties, substantially in the form of Exhibit G-1; (ii) the legal opinion of Davis Wright Tremaine LLP, special Alaska counsel to the Loan Parties, substantially in the form of Exhibit G-2; and (iii) the legal opinion of the Borrower by Tina Pidgeon, special internal FCC counsel to the Loan Parties, and Mark Moderow, special internal Alaska regulatory counsel to the Loan Parties, substantially in the form of Exhibit G-3.

 

(k) Pledged Stock; Stock Powers. The Administrative Agent shall have received the certificates, if any, representing the certificated shares of Equity Interests pledged on the Closing Date pursuant to the Security Documents, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof.

 

(l) Filings, Registrations and Recordings. Each Uniform Commercial Code financing statement required by the Security Documents to be filed in order to create in favor of the Administrative Agent, for the benefit of the Lenders, a perfected Lien on the Collateral described therein with the priority provided for in the Security Documents, shall have been delivered to the Administrative Agent in proper form for filing.

 

  

69

  

(m) No Default. No Default shall have occurred and be continuing.

 

(n) Release of Existing Mortgages.  Substantially simultaneously with the satisfaction of each of the other conditions set forth in this Section 5.01, the Administrative Agent shall have executed and delivered to the Borrower, at the sole cost and expense of the Borrower, such documentation as may be necessary to release each Existing Mortgage (and, by its execution and delivery of this Agreement by each party hereto, each such party hereby authorizes and directs the Administrative Agent so to do).

 

(o) Repayment of Existing Loans.  The Borrower shall have, contemporaneously with the effectiveness of this Agreement, repaid all Existing Revolving Loans and all Existing Add-on Term Loans, in each case together with all accrued and unpaid interest thereon, and paid all accrued and unpaid fees under the Existing Credit Agreement.

 

(p) Due Diligence.  The Administrative Agent shall have completed its reasonable due diligence with respect to the existing New Markets Tax Credit transactions consummated by GCI and its subsidiaries prior to the Closing Date (the “Existing NMTC Transactions”) and with respect to the AWN Transaction.

 

(q) Restructuring of Existing NMTC Transactions.  All debt owed to the Parent in connection with the Existing NMTC Transactions shall have been contributed to the Borrower or a Subsidiary Guarantor, and the Borrower shall have agreed to indemnify GCI for its obligations under the guaranties by GCI of Unicom, Inc.’s tax indemnification obligations in connection with the Existing NMTC Transactions, in each case, on terms and conditions reasonably satisfactory to the Administrative Agent.

 

The Administrative Agent shall notify the Borrower and the Credit Parties of the Closing Date and such notice shall be conclusive and binding.

 

Section 5.2. Conditions to Future Credit Events

 

The obligation of each Lender to make a Loan on the occasion of any Borrowing (other than a continuation or conversion of an existing Borrowing), and of the Issuing Bank to issue, amend, renew or extend a Letter of Credit, is subject to the satisfaction of the following conditions:

 

(a) The representations and warranties of the Loan Parties set forth in the Loan Documents shall be true and correct in all material respects on and as of the date of such Borrowing or the date of such issuance, amendment, renewal or extension, as applicable (except (i) to the extent that such representations and warranties relate to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date and (ii) that any representation and warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects without further qualification); and

 

(b) at the time of and immediately after giving effect to such Borrowing or such issuance, amendment, renewal or extension, as applicable, no Default shall or would exist.

 

  

70

  

Each such Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section.

 

ARTICLE 6

AFFIRMATIVE COVENANTS

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees and other amounts payable hereunder (other than contingent or indemnification obligations not then due) shall have been paid in full in cash and all Letters of Credit have expired (or have been cash collateralized or otherwise provided for in full in a manner reasonably satisfactory to the Issuing Bank) and all LC Disbursements have been reimbursed, the Parent covenants and agrees with the Credit Parties that:

 

Section 6.1. Financial Statements and Other Information

 

The Parent will furnish or cause to be furnished to the Administrative Agent:

 

(a) within 120 days after the end of each fiscal year, (i) the Parent’s audited consolidated balance sheet and related consolidated statements of income, cash flows and shareholders’ equity, and (ii) the Borrower’s audited consolidated balance sheet and related consolidated statements of income, cash flows and shareholders’ equity, in each case set forth in this paragraph (a) as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Grant Thornton LLP or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial position and results of operations of (x) in the case of the financial statements referred to in clause (i) above, the Parent on a consolidated basis in accordance with GAAP consistently applied, and (y) in the case of the financial statements referred to in clause (ii) above, the Borrower on a consolidated basis in accordance with GAAP consistently applied;

 

(b) within 60 days after the end of each of the first three fiscal quarters of each fiscal year, (i) the Parent’s consolidated balance sheet and related consolidated statements of income and cash flows, and (ii) the Borrower’s consolidated balance sheet and related consolidated statements of income and cash flows, in each case set forth in this paragraph (b) as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by a Financial Officer as presenting fairly in all material respects the financial position and results of operations of (x) in the case of the financial statements referred to in clause (i) above, the Parent on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes, and (y) in the case of the financial statements referred to in clause (ii) above, the Borrower on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

 

  

71

  

(c) concurrently with any delivery of financial statements under paragraph (a) or (b) above, a Compliance Certificate signed by a Financial Officer of the Parent (i) certifying as to whether a Default has occurred and is continuing and, if a Default has occurred and is continuing, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth (A) reasonably detailed calculations demonstrating compliance with the Financial Covenants as of the most recent fiscal quarter end contemplated by such financial statements, (B) the Subsidiary Guarantors as of the date of such Compliance Certificate, and (C) the Excluded Subsidiaries as of the date of such Compliance Certificate, and (iii) containing either a certification that there has been no change to the information about the Loan Parties and their property disclosed in the schedules to the Security Documents or, after the delivery of the first certification delivered pursuant to this subsection, as previously certified, or, if so, specifying all such changes;

 

(d) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries) with the SEC, or with any national securities exchange, as the case may be;

 

(e) at least 5 Business Days prior to the consummation of each transaction constituting a Significant Transaction, the Parent shall have delivered to the Administrative Agent a certificate of the Parent signed by a Financial Officer thereof describing such transaction in reasonable detail and certifying that such Significant Transaction complies with each Section hereof under which such transaction constitutes a Significant Transaction (which shall have attached thereto reasonably detailed backup data and calculations showing such compliance);

 

(f) within 30 days after the beginning of each fiscal year, an annual consolidated forecast for the Borrower and the Subsidiaries for such fiscal year, including projected consolidated statements of income of the Borrower and the Subsidiaries, all in reasonable detail acceptable to the Administrative Agent;

 

(g) promptly such other information with documentation required by bank regulatory authorities under applicable “know your customer” and Anti-Money Laundering rules and regulations (including, without limitation, the Patriot Act), as from time to time may be reasonably requested by the Administrative Agent or such Lender; and

 

(h) concurrently with any delivery of financial statements under paragraph (a) or (b) above, any quarterly or annual financial statements, budgets, or projections previously furnished to ACS with respect to AWN; and

 

(i) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not in possession of the Borrower), or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender (through the Administrative Agent) may reasonably request.

 

  

72

  

Section 6.2. Notices of Material Events

 

The Parent will furnish to the Administrative Agent prompt written notice of the following:

 

(a) the occurrence of any Default;

 

(b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against the Parent or any Affiliate that, in either case, would reasonably be expected to result in a Material Adverse Effect;

 

(c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, would reasonably be expected to result in a Material Adverse Effect;

 

(d) as soon as possible and in no event later than five (5) Business Days after the receipt thereof by the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries), a copy of any notice, summons, citation or other written communication concerning any actual, alleged, suspected or threatened violation of any Environmental Law, or any Environmental Liability of the Parent, the Borrower or any Subsidiary, in each case, which would reasonably be expected to have a Material Adverse Effect;

 

(e) promptly after the furnishing thereof, copies of any statement or report furnished to any holder of debt securities of any Loan Party pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Lenders pursuant to any other clause of this Section 6.2;

 

(f) promptly after the occurrence thereof, notice of (i) the consummation of the Closing (as defined in the AWN Contribution Agreement), (ii) any dissolution of AWN, or (iii) any Drag Along Election (as defined in the AWN Operating Agreement);

 

(g) substantially simultaneously with either the delivery thereof by the Borrower or any Subsidiary to, or the receipt thereof by the Borrower or any Subsidiary from, ACS or any affiliate thereof, (i) any Sale Notice (as defined in the AWN Operating Agreement), (ii) any ROFO Notice (each as defined in the AWN Operating Agreement) with respect to property having a value in excess of $50,000,000, (iii) any notice of an event of Withdrawal (as defined in the AWN Operating Agreement), or (iv) any notice with respect to AWN, the AWN Transaction or any AWN Document of an event that would reasonably be expected to result in a Material Adverse Effect; and

 

(h) any other development that results in, or would reasonably be expected to result in, a Material Adverse Effect.

 

Each notice delivered under this Section (other than paragraph (e)) shall be accompanied by a statement of a Financial Officer or other Responsible Officer of the Parent setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

 

  

73

  

Section 6.3. Existence; Conduct of Business

 

The Parent will, and will cause the Borrower and each Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to, do or cause to be done all things reasonably necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business, except, in each case, as otherwise permitted by Section 7.3.

 

Section 6.4. Payment and Performance of Obligations

 

The Parent will, and will cause each subsidiary thereof (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to, pay or perform (before the same shall become delinquent or in default) its obligations, including Tax liabilities, that, if not paid or performed, would reasonably be expected to result in a Material Adverse Effect, except where (i) the validity or amount thereof is being contested in good faith by appropriate proceedings, (ii) the Parent or such subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (iii) the failure to make payment pending such contest would not reasonably be expected to result in a Material Adverse Effect.

 

Section 6.5. Maintenance of Properties

 

The Parent will cause the Borrower and each Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to, keep and maintain all tangible property material to the conduct of their businesses, taken as a whole, in good working order and condition, ordinary wear and tear (and damage caused by casualty) excepted.

 

Section 6.6. Books and Records; Inspection Rights

 

The Parent will, and will cause the Borrower and each Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities.  The Parent will, and will cause the Borrower and each Subsidiary (other than NMTC Subsidiaries) to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times as reasonably requested

 

Section 6.7. Compliance with Laws

 

The Parent will, and will cause each subsidiary thereof to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

 

  

74

  

Section 6.8. Environmental Compliance

 

The Parent will, and will cause each subsidiary thereof to, use and operate all of its facilities and property in compliance with all Environmental Laws, keep all necessary permits, approvals, certificates, licenses and other authorizations relating to environmental matters in effect and remain in compliance therewith, and handle all Hazardous Materials in compliance with all applicable Environmental Laws, except where noncompliance with any of the foregoing would not reasonably be expected to have a Material Adverse Effect.

 

Section 6.9. Insurance

 

The Parent will, and will cause the Borrower and each Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to, self-insure or maintain, with financially sound and reputable insurance companies, (i) adequate insurance for its insurable properties, all to such extent and against such risks, including fire, casualty, business interruption and other risks insured against by extended coverage, as is customary with companies in the same or similar businesses operating in the same or similar locations and (ii) such other insurance as is required pursuant to the terms of any Security Document.

 

Section 6.10. Casualty and Condemnation

 

The Borrower will furnish to the Administrative Agent and the Lenders prompt written notice of any casualty or other insured damage to any property owned or held by or on behalf of the Borrower or any Subsidiary (other than NMTC Subsidiaries) with a fair market value immediately prior to such casualty or insured damage of at least $5,000,000, or the commencement of any action or proceeding for the taking of any property or interest therein with a fair market value immediately prior to such taking of at least $5,000,000, under power of eminent domain or by condemnation or similar proceeding.

 

Section 6.11. Additional Subsidiaries

 

If any Subsidiary (other than a NMTC Subsidiary or a subsidiary of an Excluded Subsidiary) is formed or acquired after the Closing Date (each a “New Subsidiary”), and remains a Subsidiary for not less than ten Business Days, not later than the tenth Business Day after the date on which such New Subsidiary is formed or acquired, the Borrower will (a) provide written notice thereof, in reasonable detail, to the Administrative Agent, (b) designate in such notice whether such New Subsidiary is an “Excluded Subsidiary” (in which event such New Subsidiary shall be a “New Excluded Subsidiary”), provided that in the event the Borrower designates such New Subsidiary as not a New Excluded Subsidiary or fails to make any such designation, such New Subsidiary shall irrevocably be deemed not to be an “Excluded Subsidiary” (in which event such New Subsidiary shall be a “New Included Subsidiary”), (c) if such New Subsidiary is a New Included Subsidiary, (i) cause such New Subsidiary to execute and deliver a completed Guarantee Supplement and become a party to each applicable Security Document in the manner provided therein, and (ii) promptly take or cause such New Subsidiary to take such actions to create and perfect Liens on such New Subsidiary’s assets (other than Excluded Collateral) to secure the Obligations as the Administrative Agent or the Required Lenders shall reasonably request, and (d) if any Equity Interests issued by such New Subsidiary are owned or held by or on behalf of the Borrower or any Subsidiary (other than an Excluded Subsidiary) or any loans, advances or other debt is owed or owing by such New Subsidiary to the Borrower or any Subsidiary (other than an Excluded Subsidiary), the Borrower will cause such Equity Interests and promissory notes and other instruments evidencing such loans, advances and other debt to be pledged pursuant to the Security Documents.

 

  

75

  

Section 6.12. Information Regarding Collateral.

 

The Parent will furnish to the Administrative Agent prompt written notice of any change in (i) the legal name or jurisdiction of incorporation or formation of any Loan Party, (ii) the location of the chief executive office of any Loan Party or its principal place of business, (iii) the identity or organizational structure of any Loan Party such that a filed financing statement becomes misleading or (iv) the Federal Taxpayer Identification Number or company organizational number of any Loan Party.  The Parent agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the Uniform Commercial Code or otherwise that are required in order for the Administrative Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral.

 

Section 6.13. Further Assurances

 

The Parent will, and will cause the Borrower and each Subsidiary Guarantor to, execute any and all further documents, mortgages, deeds of trust, financing statements, agreements (including guarantee agreements and security agreements) and instruments, and take all such further actions (including the filing and recording of financing statements and other documents), that the Administrative Agent may reasonably request, to grant, preserve, protect or perfect (including as a result of any change in applicable law) Liens on all Collateral (other than Excluded Collateral) of the Borrower and each Subsidiary Guarantor, including the Liens created or intended to be created by the Security Documents or the validity or priority of any such Lien, all at the expense of the Parent, the Borrower or any Subsidiary, and in that connection the Borrower will, and will cause each of its Subsidiaries to, grant to the Administrative Agent security interests and Mortgages in all of its owned Real Property (except to the extent constituting Excluded Collateral) acquired after the Closing Date and satisfy the Real Estate Collateral Requirement with respect to each such Real Property within 90 days after the date such Real Property is so acquired.  The Parent also agrees to provide to the Administrative Agent, from time to time upon request, evidence reasonably satisfactory to the Administrative Agent as to the perfection and priority of the Liens created or intended to be created by the Security Documents.  For the avoidance of doubt, the Loan Parties will not be required to register any trademarks or copyrights.

 

Section 6.14. Use of Proceeds

 

(a) The proceeds of the Loans and the Letters of Credit will be used only as follows: (i) to reimburse the Issuing Bank in respect of amounts drawn under Letters of Credit, (ii) to pay transaction fees and expenses and (iii) for general corporate purposes not inconsistent with the terms hereof, including the making of Investments permitted by Section 7.4, Acquisitions permitted by Section 7.5 and Restricted Payments permitted by Section 7.8.

 

  

76

  

(b) No part of the proceeds of any Loan or any Letter of Credit will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, to (i) purchase, acquire or carry any Margin Stock, (ii) for any purpose that entails a violation of any of the regulations of the Board, including Regulations T, U and X, (iii) in any manner which would violate any of the foreign asset 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 or (iv) to make a loan to any director or executive officer of the Borrower or any Subsidiary.

 

ARTICLE 7                      

NEGATIVE COVENANTS

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees and other amounts payable hereunder (other than contingent or indemnification obligations not then due) shall have been paid in full in cash and all Letters of Credit have expired (or have been cash collateralized or otherwise provided for in full in a manner reasonably satisfactory to the Issuing Bank) and all LC Disbursements have been reimbursed, the Parent covenants and agrees with the Credit Parties that:

 

Section 7.1. Indebtedness

 

The Parent will not, and will not permit the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to, create, incur, assume or permit to exist any Indebtedness, except each of the following:

 

(a) Indebtedness under the Loan Documents;

 

(b) Indebtedness existing on the Closing Date and set forth in Schedule 7.1, and Refinancing Indebtedness with respect thereto;

 

(c) Indebtedness (i) of the Borrower owed to any Subsidiary Guarantor, (ii) of any Subsidiary Guarantor owed to the Borrower or any other Subsidiary Guarantor, and (iii) of any Excluded Subsidiary owed to any other Excluded Subsidiary;

 

(d) Guarantees (i) by the Borrower of Indebtedness of any Subsidiary Guarantor, (ii) by any Subsidiary Guarantor of Indebtedness of the Borrower or any other Subsidiary Guarantor, and (iii) by any Excluded Subsidiary of Indebtedness of the Borrower or any Subsidiary;

 

(e) Indebtedness (whether secured or unsecured) of the Parent, the Borrower or any Subsidiary under Hedging Agreements permitted by Section 7.12;

 

  

77

  

(f) unsecured Indebtedness of the Parent not in excess of $750,000,000 in aggregate principal amount in respect of the Senior Notes;

 

(g) unsecured Indebtedness of the Parent that constitutes Replacement Debt in respect of any of the Senior Notes, provided that (i) the Refinancing Condition shall have been satisfied, and (ii) immediately before and immediately after the incurrence thereof, no Default shall or would exist;

 

(h) Indebtedness (whether secured or unsecured) of Excluded Subsidiaries (other than AWN) in an aggregate principal amount not to exceed $300,000,000 at any one time outstanding in connection with Permitted NMTC Transactions, provided that (i) immediately before and immediately after the incurrence thereof, no Default shall or would exist, and (ii) all such Indebtedness incurred after the Closing Date shall have a final stated maturity date that is no earlier than the Permitted Debt Maturity Date;

 

(i) Indebtedness (whether secured or unsecured) of one or more of the Excluded Subsidiaries not in excess of $50,000,000 in aggregate principal amount at any one time outstanding, provided that immediately before and immediately after the incurrence thereof, no Default shall or would exist;

 

(j) Indebtedness (whether secured or unsecured) of one or more of the Excluded Subsidiaries (other than AWN) not in excess of $100,000,000 in aggregate principal amount at any one time outstanding, provided that (i) immediately before and immediately after the incurrence thereof, no Default shall or would exist, and (ii) all such Indebtedness incurred after the Closing Date shall (X) be Approved Debt, or (Y) have a final stated maturity date that is no earlier than the Permitted Debt Maturity Date;

 

(k) the AWN Preferred Payments;

 

(l) Capital Lease Obligations pursuant to transponder leases in an aggregate principal amount not to exceed $80,000,000 at any one time outstanding, provided that immediately before and immediately after the incurrence thereof, no Default shall or would exist;

 

(m) Capital Lease Obligations of the Borrower or any one or more of the Subsidiary Guarantors to any one or more of the Excluded Subsidiaries in an aggregate principal amount not to exceed $50,000,000 at any one time outstanding, provided that (i) each such Capital Lease Obligation shall be on an “arm’s length” basis, and (ii) immediately before and immediately after giving effect to the incurrence of each such Capital Lease Obligation, no Default shall or would exist;

 

(n) Capital Lease Obligations in an aggregate principal amount not to exceed $10,000,000 at any one time outstanding, provided that immediately before and immediately after the incurrence thereof, no Default shall or would exist;

 

(o) Indebtedness (whether secured or unsecured) of the Parent, the Borrower or any of the Subsidiaries (other than AWN) in an aggregate principal amount not to exceed $20,000,000 at any one time outstanding, provided that immediately before and immediately after the incurrence thereof, no Default shall or would exist;

 

  

78

  

(p) unsecured Indebtedness of the Parent, the Borrower or any of the Subsidiaries (other than AWN), provided that (i) immediately before and immediately after the incurrence thereof, no Default shall or would exist, (ii) all such Indebtedness incurred after the Closing Date shall (X) be Approved Debt, or (Y) have a final stated maturity date that is no earlier than the Permitted Debt Maturity Date, (iii) unless otherwise agreed to in writing by the Administrative Agent (the decision to be within the sole and absolute discretion of the Administrative Agent), such Indebtedness (other than Indebtedness incurred by Excluded Subsidiaries) is on terms and conditions no more restrictive than those governing the Indebtedness incurred under the Loan Documents, and (iv) immediately after giving effect thereto, the Total Leverage Ratio would not exceed 5.50:1.00;

 

(q) Indebtedness of the Borrower and the Subsidiaries (other than AWN) incurred after the Closing Date in respect of Investments made after the Closing Date and permitted by Section 7.4(h); and

 

(r) obligations of the Borrower or any of the Subsidiaries owed to the Borrower or any of the Subsidiaries under services agreements for the provision of network capacity to the extent characterized as Capital Lease Obligations.

 

Section 7.2. Liens

 

The Parent will not, and will not permit the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, except:

 

(a) Liens created under the Loan Documents;

 

(b) Permitted Encumbrances;

 

(c) any Lien on any property or asset of the Parent, the Borrower or any Subsidiary to the extent existing on the Closing Date and set forth in Schedule 7.2, provided that (i) such Lien shall not apply to any other property or asset of the Parent, the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the Closing Date and any extensions, renewals and replacements thereof that do not increase the amount thereof;

 

(d) (i) Liens to secure the Indebtedness permitted by Section 7.1(e), (l), (m), (n), (o) or (r) and (ii) Liens (other than Liens on Collateral) to secure the Indebtedness permitted by Section 7.1(h), (i) or (j);

 

(e) any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the Closing Date prior to the time such Person became or becomes a Subsidiary, provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as applicable, (ii) such Lien shall not apply to any other property or assets of the Borrower or any Subsidiary, and (iii) such Lien shall secure only the Indebtedness and other obligations that it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as applicable, and any Refinancing Indebtedness in respect of such Indebtedness;

 

  

79

  

(f) any encumbrance or restriction (including, without limitation, put and call agreements and transfer restrictions, but not other Liens) with respect to the Equity Interest of any joint venture or similar arrangement created pursuant to the joint venture or similar agreements with respect to such joint venture or similar arrangement;

 

(g) other Liens securing obligations in an aggregate amount not exceeding $5,000,000 at any one time outstanding; and

 

(h) Liens on the assets and property of the Parent (other than any Lien on any Equity Interest issued by the Borrower).

 

Section 7.3. Fundamental Changes

 

(a) The Parent will not, and will not permit the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of related transactions) all or substantially all of its assets (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, provided that both immediately before and after giving effect thereto, no Event of Default shall or would exist:

 

(i) the Parent may merge or consolidate with any Person, provided that (A) the Parent shall be the surviving entity thereof, (B) the Parent shall have satisfied the notice requirements in Section 6.1(e) with respect thereto, and (C) immediately after giving effect thereto, the Loan Parties shall be in compliance on a pro forma basis with all Financial Covenants as of the most recent fiscal quarter end (assuming, for purposes of the Financial Covenants, that all mergers, acquisitions and dispositions consummated since the first day of such fiscal quarter, had occurred on the first day of such fiscal quarter);

 

(ii) the Borrower may merge or consolidate with any Subsidiary Guarantor, provided that the Borrower shall be the surviving entity;

 

(iii) the Borrower may merge or consolidate with any other Person, provided that (A) the Borrower shall be the surviving entity, (B) the Parent shall have satisfied the requirements in Section 6.1(e) with respect thereto, and (C) immediately after giving effect thereto, the Loan Parties shall be in compliance on a pro forma basis with all Financial Covenants as of the most recent fiscal quarter end (assuming, for purposes of the Financial Covenants, that all mergers, acquisitions and dispositions consummated since the first day of such fiscal quarter, had occurred on the first day of such fiscal quarter);

 

(iv) (A) any Subsidiary may merge or consolidate with or into the Borrower in a transaction in which the Borrower is the surviving Person, (B) any Subsidiary Guarantor may merge or consolidate with or into any Subsidiary in a transaction in which a Subsidiary Guarantor is the surviving Person, and (C) any Excluded Subsidiary may merge or consolidate with or into any other Subsidiary (including another Excluded Subsidiary) in a transaction in which such other Subsidiary is the surviving Person;

 

  

80

  

(v) any Subsidiary may merge or consolidate with any other Person, provided that (A) immediately after giving effect thereto, no Default shall or would exist, and (B) either (1)(a) such Subsidiary is the surviving Person, and (b) such merger or consolidation is not prohibited by Section 7.5, or (2)(a) such other Person is the surviving Person, and (b)(i) such merger or consolidation is not prohibited by Section 7.7, or (ii) such merger or consolidation is not prohibited by Section 7.5 and such other Person shall become a Subsidiary Guarantor in accordance with Section 6.11;

 

(vi) (A) the Parent may sell, transfer, lease or otherwise dispose of all or substantially all of its assets (other than Equity Interests in the Borrower) to any Person, (B) the Borrower may sell, transfer, lease or otherwise dispose of all or substantially all of its assets to any Subsidiary Guarantor, (C) any Subsidiary Guarantor may sell, transfer, lease or otherwise dispose of all or substantially all of its assets to the Borrower or to any other Subsidiary Guarantor (upon voluntary liquidation or dissolution or otherwise), and (D) any Excluded Subsidiary may sell, transfer, lease or otherwise dispose of all or substantially all of its assets to the Borrower or any Subsidiary (upon voluntary liquidation or dissolution or otherwise);

 

(vii) any Subsidiary may sell, transfer, lease or otherwise dispose of its assets in a transaction that is not otherwise permitted by this Section 7.3(a), provided that such sale, transfer, lease or other disposition is permitted by Section 7.7; and

 

(viii) any Subsidiary may liquidate, wind up or dissolve so long as (A) the assets of any such Subsidiary that is a Subsidiary Guarantor are transferred to the Borrower or another Subsidiary Guarantor, or (B) the assets of any such Subsidiary that is an Excluded Subsidiary are transferred to the Borrower or a Subsidiary.

 

(b) The Parent will not, and will not permit any subsidiary thereof (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to, engage in any business other than businesses of the type conducted by the Parent, the Borrower and the Subsidiaries on the Closing Date and businesses which are now, or which in the future shall have become, reasonably related thereto or a reasonable extension thereof.

 

Section 7.4. Investments

 

The Borrower will not, and will not permit any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to, purchase, hold or acquire (including pursuant to any merger) any Equity Interest, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, or make or permit to exist any Guarantee of any obligations of, any other Person (all of the foregoing, “Investments”), except:

 

(a) Investments in Cash Equivalents;

 

  

81

  

(b) Investments existing on the Closing Date and set forth on Schedule 7.4, and Investments in CoBank Equities;

 

(c) Investments by any Person in existence at the time such Person becomes a Subsidiary, provided such Investment was not made in connection with or anticipation of such Person becoming a Subsidiary;

 

(d) Investments permitted by Section 7.3 or 7.5;

 

(e) Investments (i) made by the Borrower in any Subsidiary Guarantor, (ii) made by any Subsidiary Guarantor in the Borrower or any other Subsidiary Guarantor, or (iii) made by any Excluded Subsidiary in any other Excluded Subsidiary;

 

(f) loans, advances and Guarantees of Indebtedness permitted by Section 7.1;

 

(g) Guarantees by the Borrower or any Subsidiary to the extent that, immediately before and immediately after giving effect thereto (i) no Default shall or will exist, and (ii) the Senior Leverage Ratio shall not and would not be greater than 2.25:1.00;

 

(h) Investments (other than Guarantees) by the Borrower and the Subsidiaries to the extent that immediately before and immediately after giving effect thereto no Default shall or would exist, and

 

(i) immediately before and immediately after giving effect thereto the Senior Leverage Ratio is not and would not be greater than 2.25:1.00, or

 

(ii) immediately after giving effect thereto (1) the aggregate outstanding principal balance of all debt Investments made pursuant to this Section 7.4(h)(ii) since the Closing Date would not exceed $10,000,000, and (2) the aggregate amount of all other Investments made pursuant to this Section 7.4(h)(ii) since the Closing Date would not exceed $10,000,000;

 

(i) Investments under Hedging Agreements permitted hereunder;

 

(j) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for any sale of assets permitted under Section 7.7;

 

(k) Investments arising out of the receipt by the Borrower or any Subsidiary of Restricted Payments permitted under Section 7.8;

 

(l) the AWN Contribution and loans to AWN pursuant to the AWN Line of Credit, provided that, in each case, immediately before and immediately after the consummation thereof, no Event of Default shall or would exist;

 

(m) Investments pursuant to Permitted NMTC Transactions;

 

  

82

  

(n) Investments received in connection with the bankruptcy or reorganization of suppliers and customers of the Borrower or any Subsidiary in settlement of obligations and disputes;

 

(o) Investments in Excluded Subsidiaries to the extent funded with the proceeds of a concurrent distribution from one or more Excluded Subsidiaries; and

 

(p) loans and advances to employees in the ordinary course of business not in excess of $5,000,000 in aggregate principal amount outstanding at any one time.

 

Section 7.5. Acquisitions

 

The Borrower will not, and will not permit any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to (i) purchase or otherwise acquire (in any one transaction or any series of related transactions and, including by merger, consolidation or otherwise) (1) all or substantially all of the property of any Person or (2) any business or division of any Person, or (ii) cause any Person to become a subsidiary thereof (each of the transactions described in clauses (i) and (ii) immediately above, an “Acquisition”), except:

 

(a) Acquisitions by (i) the Borrower from any Subsidiary Guarantor, and (ii) any Subsidiary Guarantor from the Borrower or any other Subsidiary;

 

(b) Acquisitions by any Excluded Subsidiary from any other Excluded Subsidiary;

 

(c) (i) Acquisition of the AWN Purchased Assets by the Borrower or any Subsidiary for aggregate consideration not in excess of $100,000,000, provided that, immediately before and immediately after giving effect thereto, no Event of Default shall or would exist, and (ii) the Acquisition of the AWN Purchased Assets by AWN from the Borrower or any Subsidiary;

 

(d) Persons may become NMTC Subsidiaries in connection with Permitted NMTC Transactions; and

 

(e) other Acquisitions by the Borrower or any Subsidiary, if each of the following conditions is met:

 

(i) immediately before and immediately after giving effect thereto no Default shall or would exist;

 

(ii) immediately after giving effect thereto the Parent shall have satisfied the requirements in Section 6.1(e) with respect thereto, if any;

 

(iii) the Board of Directors of the Person to be acquired shall not have indicated publicly its opposition to the consummation of such transaction (which opposition has not been publicly withdrawn);

 

  

83

  

(iv) all transactions in connection therewith shall be consummated in accordance with all applicable requirements of law (including, without limitation, all State Law and State Regulations);

 

(v) with respect to any such transaction involving consideration to be paid by the Borrower and the Subsidiaries in excess of $50,000,000, unless the Administrative Agent shall otherwise agree, the Parent shall have provided the Administrative Agent and the Lenders with historical financial statements of the Person or business to be acquired to the extent available;

 

(vi) immediately after giving effect thereto, the Loan Parties shall be in compliance on a pro forma basis with all Financial Covenants as of the most recent fiscal quarter end (assuming, for purposes of the Financial Covenants, that all mergers, acquisitions and dispositions consummated since the first day of such fiscal quarter, had occurred on the first day of such fiscal quarter); and

 

(vii) (A) immediately before and immediately after giving effect to such transaction, the Senior Leverage Ratio is not and would not be greater than 2.25:1.00, or (B) immediately after giving effect thereto, the aggregate consideration paid by the Borrower and the Subsidiaries pursuant to this Section 7.5(e)(vii)(B) since the Closing Date would not exceed $10,000,000.

 

Section 7.6. Sale and Lease-Back Transactions

 

The Borrower will not, and will not permit any of the Subsidiaries (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to, enter into any arrangement, directly or indirectly, with any Person whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property being sold or transferred, unless (a) the sale or transfer of such property is permitted by Section 7.7, and (b) any Liens arising in connection with its use of such property are permitted by Section 7.2.

 

Section 7.7. Dispositions

 

The Borrower will not, and will not permit any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to, sell, transfer, lease or otherwise dispose (including pursuant to a merger) of any asset (other than cash and Cash Equivalents), including any Equity Interest, and the Borrower will not and will not permit any Subsidiary to, issue any Equity Interest, except:

 

(a) (i) sales, transfers, leases and other dispositions of used or surplus equipment or other obsolete or, in the reasonable judgment of Borrower, unnecessary assets, (ii) the licensing of intellectual property by the Borrower to any Subsidiary Guarantor, (iii) the substantially contemporaneous exchange of equipment by any Subsidiary for property of a like kind, to the extent that the equipment received by such Subsidiary in such exchange is of a value equivalent to the value of the equipment exchanged (provided, that after giving effect to such exchange, the value of the property subject to perfected first priority Liens in favor of the Administrative Agent under the Security Documents is not materially reduced), and (iv) the sale, transfer or other disposition of property and inventory in the ordinary course of business;

 

  

84

  

(b) sales, transfers, leases and other dispositions (i) made by the Borrower to any Subsidiary Guarantor, (ii) made by any Subsidiary to the Borrower or any Subsidiary Guarantor, and (iii) made by any Excluded Subsidiary to any other Excluded Subsidiary;

 

(c) Liens permitted by Section 7.2, sales, transfers, leases and other dispositions permitted by Section 7.3, Investments permitted by Section 7.4, sale and leaseback transactions permitted by Section 7.6, and Restricted Payments permitted by Section 7.8;

 

(d) the sale, transfer, lease and other disposition or abandonment of intellectual property that is, in the reasonable judgment of the Parent, no longer economically practicable to maintain or useful in the conduct of the business of the Borrower and the Subsidiary Guarantors taken as a whole;

 

(e) the sale or discount, in each case without recourse and in the ordinary course of business, of overdue accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof consistent with customary industry practice (and not part of any bulk sale or financing of receivables);

 

(f) the AWN Contribution, provided that, immediately before and immediately after giving effect thereto, no Event of Default shall exist or would occur;

 

(g) issuances of Equity Interests (i) by the Borrower to the Parent, (ii) by any Subsidiary to the Borrower or any Subsidiary Guarantor, and (iii) by any Excluded Subsidiary to the Borrower or any Subsidiary;

 

(h) issuances of Equity Interests by AWN to GCI Wireless and ACS or its affiliate as contemplated by the AWN Contribution Agreement;

 

(i) other issuances of Equity Interests by any Subsidiary to the extent arising out of (i) an Investment by the Borrower or any other Subsidiary permitted by Section 7.4, (ii) a sale, transfer or other disposition by the Borrower or any Subsidiary permitted by Section 7.7(j), or (iii) a Restricted Payment made by the Borrower or any Subsidiary permitted by Section 7.8; and

 

(j) other sales, transfers, leases and other dispositions of assets by the Borrower or any Subsidiary and issuances of Equity Interests by a Subsidiary, if each of the following conditions is met:

 

(i) immediately before and immediately after giving effect thereto, no Default shall exist or would occur;

 

(ii) immediately after giving effect thereto, the Parent shall have satisfied the requirements in Section 6.1(e) with respect thereto, if any;

 

  

85

  

(iii) the aggregate consideration received by the Borrower and the Subsidiaries in connection therewith shall not be less than the fair market value of the property transferred by the Borrower and the Subsidiaries in connection therewith;

 

(iv) the terms thereof shall be “arm’s length”; and

 

(v) the fair market value of all property of the Borrower and the Subsidiaries sold, transferred, leased or otherwise disposed of, and Equity Interests issued, pursuant to this Section 7.7(j) would not exceed (A) $50,000,000 in any one fiscal year, or (B) $100,000,000 in the aggregate since the Closing Date.

 

Section 7.8. Restricted Payments

 

The Borrower will not, and will not permit any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to, declare or make, or agree to pay for or make, directly or indirectly, any Restricted Payment, except:

 

(a) the Borrower may declare and pay dividends and other distributions with respect to its Equity Interests payable solely in perpetual common Equity Interests;

 

(b) (i) any Subsidiary may declare and make Restricted Payments to the Borrower or any Subsidiary Guarantor, and (ii) any Excluded Subsidiary may declare and pay Restricted Payments to the Borrower or any Subsidiary;

 

(c) any Subsidiary that is not a wholly-owned Subsidiary may declare and pay cash dividends to its equity holders generally so long as the Borrower (or a Subsidiary thereof which owns the equity interests in the Subsidiary paying such dividend) receives at least its proportional share thereof (based upon its relative holding of the equity interests in the Subsidiary paying such dividend and taking into account the relative preferences, if any, of the various classes of Equity Interests issued by such Subsidiary);

 

(d) the Borrower or any Subsidiary may declare and pay Restricted Payments to the Parent in cash, provided that (i) the Parent shall use the proceeds of each such Restricted Payment to pay a regularly scheduled cash payment of interest on the Senior Notes or the Replacement Debt, (ii) no such Restricted Payment shall be made before the date that is 30 days prior to the due date (without giving effect to any grace period) of such regularly scheduled cash interest payment, (iii) no such Restricted Payment shall, when aggregated with all other Restricted Payments made pursuant to this Section 7.8(d) with respect to any such regularly scheduled cash interest payment, exceed the amount of such regularly scheduled cash interest payment, and (iv) immediately before and immediately after giving effect thereto, no Default shall or would exist;

 

(e) the Borrower may declare and pay Restricted Payments in cash to the Parent in an amount that, during any fiscal year, would not exceed the portion of the income taxes payable by the Parent in such fiscal year attributable to the Borrower and its Subsidiaries;

 

(f) AWN may make the AWN Preferred Payments; and

 

  

86

  

(g) the Borrower or any Subsidiary may declare and pay other Restricted Payments in cash, provided that (i) immediately before and immediately after giving effect thereto no Default shall or would exist, and (ii)(A) immediately before and after giving effect thereto the Senior Leverage Ratio shall not and would not be greater than 2.25:1.00, or (B) immediately after giving effect thereto, the amount of all Restricted Payments made pursuant to this Section 7.8(g)(ii)(B) would not exceed $5,000,000 in the aggregate since the Closing Date.

 

Section 7.9. Prepayments

 

The Parent will not, and will not allow any subsidiary thereof to, (a) prepay any interest owing under the Senior Notes or Replacement Debt, other than in connection with the prepayment of such Indebtedness with Refinancing Indebtedness, (b) voluntarily prepay any principal in respect of the Senior Notes or Replacement Debt, other than in connection with the prepayment of such Indebtedness with Refinancing Indebtedness, or (c) make any AWN Preferred Payment except in accordance with the requirements of, and at the time set for, such payment in the AWN Operating Agreement.

 

Section 7.10. Transactions with Affiliates

 

The Parent will not permit the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to, sell, transfer, lease or otherwise dispose of (including pursuant to a merger) any property or assets to, or purchase, lease or otherwise acquire (including pursuant to a merger) any property or assets from, or otherwise engage in any other transactions with, any Affiliate thereof, except (a) as set forth on Schedule 7.10, (b) for general corporate services in the ordinary course of business, including the provision of insurance, (c) transactions between the Borrower and any Subsidiary Guarantor, between Subsidiary Guarantors or between Excluded Subsidiaries, (d) transactions between any Loan Party and any Excluded Subsidiary at prices and on terms and conditions not less favorable to such Loan Party than could be obtained on an “arm’s length” basis from unrelated third parties, (e) transactions expressly contemplated by the AWN Operating Agreement, and (f) transactions that are in the ordinary course of business at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an “arm’s length” basis from unrelated third parties, provided that this Section shall not apply to (x) any Restricted Payment made by the Borrower to the Parent to the extent permitted under Section 7.8, or (y) any transaction between or among the Borrower and/or any Subsidiary (and not involving any other Affiliate) to the extent permitted under Sections 7.1, 7.3, 7.4, 7.5, 7.6, 7.7, or 7.8.

 

Section 7.11. Restrictive Agreements

 

The Parent will not, and will not permit the Borrower or any Subsidiary Guarantor to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement binding on the Borrower or such Subsidiary Guarantor that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Subsidiary Guarantor to create, incur or permit to exist any Lien (other than Liens prohibited under any cable television Franchise agreement relating to the Borrower or any Subsidiary Guarantor) upon any of its property or assets (unless such agreement or arrangement does not prohibit, restrict or impose any condition upon the ability of any Loan Party to create, incur or permit to exist any Lien in favor of the Secured Parties created under the Loan Documents), or (b) the ability of any Subsidiary Guarantor to pay dividends or make other distributions with respect to any of its Equity Interests or to make or repay loans or advances to the Borrower or any other Subsidiary Guarantor or to Guarantee Indebtedness of the Borrower or any Subsidiary Guarantor, provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by the Loan Documents, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 7.11 (but shall apply to any amendment or modification expanding the scope of any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary or all or substantially all of its assets pending such sale, provided that such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) the foregoing shall not apply to restrictions or conditions imposed on any Person that becomes a Subsidiary after the Closing Date, provided that (1) such restrictions and conditions exist at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary, and (2) so long as any such restriction or condition exists, such Person shall be an Excluded Subsidiary, (v) clause (a) of this Section shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, and (vi) clause (a) of this Section shall not apply to customary provisions in agreements restricting the assignment of such agreements.

 

  

87

  

Section 7.12. Hedging Agreements

 

The Borrower will not, and will not permit any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to, enter into any Hedging Agreement, other than Hedging Agreements to hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct of its business or the management of its liabilities.

 

Section 7.13. Amendment of Material Documents

 

The Parent will not, and will not permit the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to, amend, supplement or otherwise modify, or waive any of its rights under (a) its certificate of formation, operating agreement or other organizational documents or (b) any AWN Document, in each case other than amendments, modifications or waivers that would not reasonably be expected to adversely affect the Credit Parties, provided that (i) the Parent shall deliver or cause to be delivered to the Administrative Agent a copy of each such amendment, modification or waiver promptly after the execution and delivery thereof, and (ii) no AWN Document shall be amended, supplemented or otherwise modified if the effect thereof would be to (1) increase the amount of any AWN Preferred Payment, (2) cause any AWN Preferred Payment to be or become due and payable at an earlier date (other than an increase in payment frequency), (3) increase the amount of the AWN Contribution, (4) increase the maximum drawable amount under the AWN Line of Credit, or (5) increase the purchase price payable by the Parent and its subsidiaries with respect to the AWN Purchased Assets.

 

  

88

  

Section 7.14. Ownership of Subsidiaries

 

The Parent shall at all times own, directly or indirectly, 100% of the issued and outstanding Equity Interests of the Borrower and each Subsidiary other than Excluded Subsidiaries.  No Excluded Subsidiary may own, directly or indirectly, any Equity Interest issued by any Subsidiary Guarantor.

 

Section 7.15. Interest Coverage Ratio

 

The Parent will not permit the Interest Coverage Ratio to be less than 2.50:1.00 at any time.

 

Section 7.16. Total Leverage Ratio

 

The Parent will not permit the Total Leverage Ratio to be greater than (a) 6.50:1.00 at any time commencing on the Closing Date and ending on June 30, 2014, and (b) 5.95:1.00 at any time thereafter.

 

Section 7.17. Senior Leverage Ratio

 

The Parent will not permit the Senior Leverage Ratio to be greater than 3.00:1.00 at any time.

 

Section 7.18. Capital Expenditures

 

The Borrower will not, and will not permit any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to, make any Capital Expenditure on or after the Closing Date, except:

 

(a) the AWN Transaction and the acquisition of the South Anchorage Distribution Center;

 

(b) Capital Expenditures, provided that immediately before and immediately after giving effect thereto, (i) no Default shall or would exist, and (ii) the Senior Leverage Ratio is not and would not be greater than 2.25:1.00; and

 

(c) other Capital Expenditures, provided that (i) immediately before and immediately after giving effect thereto, no Default shall or would exist, and (ii) immediately after giving effect thereto, the aggregate amount of all Capital Expenditures made by the Borrower and the Subsidiaries (on a consolidated basis) pursuant to this Section 7.18(c) shall not exceed (1) $175,000,000 for the annual period from April 30, 2013 through April 30, 2014, or (2) for each of the following periods (each a “reference period”), the sum of (x) $150,000,000, plus (y) the excess, if any, of the maximum permitted Capital Expenditures for the period immediately preceding such reference period (the “prior period”) over the aggregate sum of all Capital Expenditures made by the Borrower and the Subsidiaries during such prior period: (X) the period from May 1, 2014 through December 31, 2014, and (Y) each calendar year period commencing with the calendar year beginning January 1, 2015.

 

  

89

  

ARTICLE 8

EVENTS OF DEFAULT

If any of the following events (each an “Event of Default”) shall occur:

 

(a) the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

 

(b) the Borrower shall fail to pay any interest on any Loan or on any reimbursement obligation in respect of any LC Disbursement or any fee, commission or any other amount (other than an amount referred to in paragraph (a) of this Article) payable under any Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five Business Days;

 

(c) any representation or warranty made or deemed made by or on behalf of any Loan Party in or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, or in any certificate furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made;

 

(d) (i) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any Security Document, in each case to the extent it is a party thereto, and such failure shall continue unremedied for a period of 10 days after the earlier to occur of (1) the receipt by such Loan Party of written notice thereof from the Administrative Agent or any Lender, or (2) a Responsible Officer of such Loan Party obtaining actual knowledge thereof, or (ii) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in Section 6.3, 6.8, 6.12, 6.13, or 6.14 or in Article 7, or in Article 11;

 

(e) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document to which it is a party (other than those specified in paragraph (a), (b) or (d) of this Article), and such failure shall continue unremedied for a period of 30 days after a Responsible Officer shall have obtained actual knowledge thereof;

 

(f) the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) shall fail to make any payment (whether of principal or interest, and regardless of amount) in respect of any Material Obligations when and as the same shall become due and payable (after giving effect to any applicable grace period);

 

(g) any event or condition occurs that results in any Material Obligations becoming due prior to their scheduled maturity or payment date, or that enables or permits the holder or holders of any Material Obligations or any trustee or agent on its or their behalf to cause any Material Obligations to become due prior to their scheduled maturity or payment date or to require the prepayment, repurchase, redemption or defeasance thereof, prior to their scheduled maturity (in each case after (x) the giving of any applicable notice and (y) giving effect to any applicable grace period), provided that this paragraph (g) shall not apply to (i) Material Obligations owed by any Excluded Subsidiary that constitutes an Unrestricted Subsidiary (as defined in the indenture for any of the Senior Notes), (ii) secured Indebtedness that becomes due solely as a result of the voluntary sale, transfer or other disposition of the property or assets securing such Indebtedness, or (iii) Material Obligations owed by NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect;

 

  

90

  

(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect), or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

 

(i) the Parent, the Borrower or Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in paragraph (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect), or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

 

(j) the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;

 

(k) one or more judgments for the payment of money in an aggregate amount in excess of $20,000,000 shall be rendered against the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect), or any combination thereof (to the extent not fully covered by insurance without taking into account any applicable deductibles) and the same shall remain undischarged or unbonded for a period of 60 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Parent, the Borrower or any Subsidiary (other than NMTC Subsidiaries to the extent not reasonably expected to result in a Material Adverse Effect) to enforce any such judgment;

 

  

91

  

(l) an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred and are continuing, would reasonably be expected to result in a Material Adverse Effect;

 

(m) any Loan Document shall cease, for any reason, to be in full force and effect (other than pursuant to the terms hereof or thereof), or any Loan Party shall so assert in writing;

 

(n) any Lien purported to be created under any Security Document shall cease to be, or shall be asserted by any Loan Party in writing not to be, a valid and, except to the extent otherwise permitted by the applicable Security Document, perfected Lien on any Collateral, with the priority required by the applicable Security Document, except (i) as a result of the sale or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents or (ii) as a result of the Administrative Agent’s failure to maintain possession of any stock certificates, promissory notes or other instruments delivered to it under any Security Document or any foreclosure, distraint, sale or similar proceedings have been commenced with respect to any Collateral;

 

(o) one or more Authorizations of the Borrower or any Subsidiary to own or operate all or any portion of the Communications Business is not renewed, expires, or is terminated, suspended or revoked, and such nonrenewal, expiration, termination, suspension or revocation would reasonably be expected to have a Material Adverse Effect; or

 

(p) a Change in Control shall have occurred;

 

then, and in every such event (other than an event described in paragraph (h) or (i) of this Article with respect to the Borrower), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon such Commitments shall terminate immediately and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of each Loan Party accrued under the Loan Documents, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in paragraph (h) or (i) of this Article, such Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of each Loan Party accrued under the Loan Documents, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower and the Guarantors.

 

 

ARTICLE 9

THE ADMINISTRATIVE AGENT

 

  

92

  

Each Credit Party hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto.

 

The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such Person and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.

 

The Administrative Agent shall not have any duties or obligations except those expressly set forth herein.  Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing by the Required Lenders (or such other number or percentage of the Credit Parties as shall be necessary under the circumstances as provided in Section 10.2), and (c) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower, any of the Subsidiaries or any Loan Party that is communicated to or obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Credit Parties as shall be necessary under the circumstances as provided in Section 10.2) or in the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Parent, the Borrower or a Credit Party (and, promptly after its receipt of any such notice, it shall give each Credit Party and the Borrower notice thereof), and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth therein, (iv) the validity, enforceability, effectiveness or genuineness thereof or any other agreement, instrument or other document or (v) the satisfaction of any condition set forth in Article 5 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

 

The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon.  The Administrative Agent may consult with legal counsel (who may be counsel for the Loan Parties), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

  

93

  

The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent, provided that no such delegation shall serve as a release of the Administrative Agent or waiver by any Loan Party of any rights hereunder.  The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties.  The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent.

 

Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Credit Parties and the Borrower.  Upon any such resignation, the Required Lenders shall have the right, with the consent of the Borrower (which consent shall not be unreasonably withheld, conditioned or delayed), unless an Event of Default shall have occurred and be continuing, in which case no consent of the Borrower shall be required, to appoint a successor from among the Lenders reasonably acceptable to the Borrower.  If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Credit Parties, appoint a successor Administrative Agent reasonably acceptable to the Borrower (which consent shall not be unreasonably withheld, conditioned or delayed), unless an Event of Default shall have occurred and be continuing, in which case no consent of the Borrower shall be required, from among the Lenders or an Affiliate of any such Lender with minimum capital and undivided surplus of not less than $500,000,000.  Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder.  The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed in writing between the Borrower and such successor.  After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 10.3 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.

 

Each Credit Party acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Credit Party or any of their Affiliates and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Credit Party also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Credit Party or any of their Affiliates and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon any Loan Document, any related agreement or any document furnished thereunder.

 

  

94

  

Notwithstanding anything in any Loan Document to the contrary, no Agent (other than the Administrative Agent) or Arranger, in each case acting in such capacity, shall have any duty or obligation under the Loan Documents.

 

Each Lender and the Issuing Bank irrevocably authorizes the Administrative Agent, at its option and in its discretion (i) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (A) upon termination of the Commitments and payment in full of all Obligations (other than contingent or indemnification obligations not then due) and the expiration, termination or cash collateralization of all Letters of Credit, (B) that is sold or otherwise transferred or to be sold or otherwise transferred as part of or in connection with any sale or other transfer permitted under the Loan Documents, or (C) if approved, authorized or ratified in writing by the Required Lenders; and (ii) to release any Subsidiary from its obligations under the Loan Documents if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder. Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release its interest in particular types or items of property, or to release any Loan Party from its obligations under the Loan Documents pursuant to this Section.

 

The use of a Platform in connection with this Agreement or any other Loan Document is provided “as is” and “as available.”  The Agents do not warrant the accuracy or completeness of any electronic communications made on the Platform, or the adequacy of the Platform and expressly disclaim liability for errors or omissions in such electronic 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 any Agent in connection with such electronic communications or the Platform.

 

ARTICLE 10

MISCELLANEOUS

Section 10.1. Notices

 

Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to the last paragraph of this Section 10.1), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:

 

(a) if to any Loan Party, to it at 2550 Denali Street, Suite 1000, Anchorage, Alaska 99503, Attention of John Lowber, Chief Financial Officer (Facsimile No. (907) 868-5676), with a copy to Steven D. Miller, Esq., Sherman & Howard L.L.C., 633 17th Street, Suite 3000, Denver, Colorado  80202, Facsimile No. (303) 298-0940;

 

(b) if to the Administrative Agent, the Issuing Bank or the Swingline Lender, to it at 1301 Avenue of the Americas, New York, New York 10019-6022, Attention of: Media & Communications Group (Facsimile No. (212) 261-3288), with a copy to Bryan Cave, LLP, 1290 Avenue of the Americas, New York, New York 10104, Attention of Matthew P. D’Amico, Esq. (Telephone No. (212) 541-1270, Facsimile No. (212) 904-0502); and

 

  

95

  

(c) if to any other Credit Party, to it at its address (or facsimile number) set forth in its Administrative Questionnaire.

 

Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.  All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

 

Documents required to be delivered pursuant to Section 6.1 and 6.2 may be delivered by e-mail or facsimile.  Promptly after receipt thereof by the Administrative Agent, the Administrative Agent shall post such documents electronically with notice of such posting to each Lender and if so posted, shall be deemed to have been delivered on the date on which such documents are posted on the Platform, if any, to which each Lender has access (whether a commercial, third-party website or whether sponsored by the Administrative Agent).  The Administrative Agent’s obligation to deliver information pursuant to this Section 10.1 may be discharged by posting such information on the Platform in accordance with the remaining provisions of this paragraph.  The Loan Parties hereby acknowledge that (i) the Administrative Agent will make available to the Lenders on a confidential basis materials and/or information provided by or on behalf of the Parent and the Borrower hereunder (collectively, “Materials”) by posting the Materials on the Platform and (ii) 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 Parent or any subsidiary thereof) (each, a “Public Lender”).  The Parent shall mark Materials that the Parent intends to be made available to Public Lenders clearly and conspicuously as “PUBLIC.”  By designating Materials as “PUBLIC,” the Parent authorizes such Materials to be made available to a portion of the Platform designated “Public Investor,” which is intended to contain only information that is either publicly available or not material information (though it may be sensitive and proprietary) with respect to such Person or its securities for purposes of United States Federal and State securities laws.  Any Materials not marked “PUBLIC” shall be treated as if it contains material non-public information with respect to the Parent and the subsidiaries thereof or their securities.  Notwithstanding the foregoing, the Parent is under no obligation to mark any Materials as “PUBLIC.”

 

Section 10.2. Waivers; Amendments

 

(a) No failure or delay by any Credit Party in exercising any right or power under any Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Credit Parties under the Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the making of a Loan or the issuance, amendment, extension or renewal of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether any Credit Party may have had notice or knowledge of such Default at the time.

 

  

96

  

(b) Except as provided in Section 2.1(c) and Section 2.1(d) with respect to Add-on Term Loans and Section 2.5(d) with respect to additional Revolving Commitments, neither any Loan Document nor any provision thereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Parent, the Borrower, the Subsidiary Guarantors and the Required Lenders or by the Parent, the Borrower, the Subsidiary Guarantors and the Administrative Agent with the consent of the Required Lenders, provided that no such agreement shall (i) increase any Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or any reimbursement obligation with respect to an LC Disbursement, or reduce the rate of any interest thereon (other than any waiver of default interest payable pursuant to Section 3.1(b)), or reduce any fees, payable hereunder, without the written consent of each Credit Party directly and adversely affected thereby, (iii) postpone any scheduled principal payment date (other than mandatory prepayments) or postpone any other payment at stated maturity of any Loan or the date of payment of any reimbursement obligation with respect to an LC Disbursement, any interest (other than any waiver of default interest) or any fees payable hereunder, or reduce (other than any waiver of default interest) the amount of, or waive or excuse any such payment, without the written consent of each Credit Party directly and adversely affected thereby, (iv) change any provision hereof in a manner that would alter the pro rata sharing of payments required by Section 2.11(b), the application of mandatory prepayments required by Section 2.7, the application of payments under Section 2.11(b), or the pro rata reduction of Commitments required by Section 2.5(c), without the written consent of each Credit Party directly and adversely affected thereby, provided that, no consent of a Lender shall be required under this clause (iv) if, contemporaneously with the effectiveness of such amendment, the Commitments of such Lender are terminated, and all principal and interest on such Lender’s Loans and all fees and other amounts payable to such Lender hereunder (other than contingent or indemnification obligations not then due) are paid in full, (v) change any of the provisions of this Section or reduce the percentage set forth in the definition of the term “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender (it being understood that an amendment shall not be deemed to change such provisions to the extent it effects an increase or decrease in the commitment of any Lender(s) or in the aggregate amount of the commitments of any Class), (vi) release the Parent or any Subsidiary Guarantor from its Guarantee hereunder (except as expressly provided herein or in the Security Documents), or limit its liability in respect of such Guarantee, without the written consent of each Lender, (vii) release all or substantially all of the Collateral from the Liens of the Loan Documents, without the written consent of each Lender, or (viii) expressly change or waive any condition precedent in Section 5.2 to any Revolving Borrowing without the written consent of Required Revolving Lenders; and provided, further, that (A) no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder without the prior written consent of the Administrative Agent, the Issuing Bank or the Swingline Lender, as applicable, (B) any waiver, amendment or modification of this Agreement that by its terms affects the rights or duties under this Agreement of one Class of Lenders (but not of any other Class of Lenders) may be effected by an agreement or agreements in writing entered into by the Parent, the Borrower, the Subsidiary Guarantors and the requisite percentage in interest of the affected Class of Lenders that would be required to consent thereto under this Section if such Class of Lenders were the only Class of Lenders hereunder at the time and (C) any amendment or modification of defined terms used in the Financial Covenants shall require the consent only of the Borrower and the Required Lenders.

 

  

97

  

(c) In connection with any proposed amendment, modification, waiver or termination (a “Proposed Change”) requiring the consent of all Lenders or all affected Lenders, if the consent of the Required Lenders to such Proposed Change is obtained, but the consent to such Proposed Change of other Lenders whose consent is required is not obtained (any such Lender whose consent is so required but not so obtained being referred to as a “Non-Consenting Lender”), then, so long as the Lender that is acting as Administrative Agent is not a Non-Consenting Lender, the Borrower may, at its sole expense and effort, upon notice to such Non-Consenting Lenders and the Administrative Agent, require each of the Non-Consenting Lenders to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 10.4), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment) and that shall consent to the Proposed Change, provided that (a) the Borrower shall have received the prior written consent of the Administrative Agent (and, if a Revolving Commitment is being assigned, the Issuing Bank and the Swingline Lender), which consent(s) shall not unreasonably be withheld, conditioned or delayed, (b) each Non-Consenting Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it hereunder from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (c) the Borrower or such assignee shall have paid to the Administrative Agent the processing and recordation fee specified in Section 10.4(b).

 

(d) Notwithstanding anything to the contrary contained in this Section, this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent, the Borrower, the Parent and the Subsidiary Guarantors (a) to add one or more additional credit facilities to this Agreement (it being understood that no Lender shall have any obligation to provide or to commit to provide all or any portion of any such additional credit facility) and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Loans and the accrued interest and fees in respect thereof and (b) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders.

 

(e) Further, notwithstanding anything to the contrary contained in this Section, if within sixty (60) days following the Closing Date, the Administrative Agent and the Borrower shall have jointly identified an obvious error or any error or omission of a technical or immaterial nature, in each case, in any provision of any of the Loan Documents, then the Administrative Agent (acting in its sole discretion) and the Borrower shall be permitted to amend such provision and such amendment shall become effective without any further action or consent of any other party to any Loan Document if the same is not objected to in writing by the Required Lenders within five Business Days following receipt of notice thereof.

 

  

98

  

(f) Any Lender may authorize the Administrative Agent to sign any amendment, modification or waiver hereto in any authorization form agreed to by the Borrower and the Administrative Agent and no Lender shall be entitled to see any other Lender’s authorization form.

 

Section 10.3. Expenses; Indemnity; Damage Waiver

 

(a) The Borrower shall pay (i) all reasonable out-of-pocket costs and expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent in connection with the preparation and administration of this Agreement or any amendments, modifications or waivers of the provisions of any Loan Document, (ii) all reasonable out-of-pocket costs and expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder, and (iii) all out-of-pocket costs and expenses incurred by any Credit Party, including the reasonable fees, charges and disbursements of Counsel, in connection with the enforcement or protection of its rights in connection with the Loan Documents during the continuation of an Event of Default, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket costs and expenses incurred during any workout, restructuring or negotiation in respect of such Loans or Letters of Credit.  For purposes of this Section 10.3, “Counsel” means (X) in connection with (1) any workout, restructuring or similar negotiation with respect to the Obligations, (2) any Event of Default arising from a failure by the Borrower to pay the principal of, or interest on, any Loan or LC Disbursement when due, (3) any acceleration of the Loans, and/or (4) any filing or proceeding referred to in paragraph (h) or (i) of Article 8, counsel for each Credit Party, or (Y) in all other events, (i) any counsel for the Credit Parties, and (ii) if a conflict exists, reasonably necessary additional counsel for the affected Credit Parties.

 

(b) The Borrower shall indemnify each Arranger, each Credit Party and each Related Party of each Arranger and each Credit Party (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the reasonable fees, charges and disbursements of counsel for the Indemnitees (unless a conflict exists, in which case, reasonable fees, charges and disbursements of reasonably necessary additional counsel for the affected Indemnitees shall be covered), but excluding Taxes which are governed by Section 3.7, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any agreement or instrument contemplated thereby, the performance by the parties to the Loan Documents of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated thereby, (ii) any Loan or Letter of Credit or the use of the proceeds thereof including any refusal of the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Parent, the Borrower or any of the Subsidiaries, or any Environmental Liability related in any way to the Parent, the Borrower or any of the Subsidiaries or (iv) any other actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the bad faith, gross negligence or willful misconduct of such Indemnitee or, in the case of clause (iv) immediately above, to have resulted from a material breach of the obligations of such Indemnitee under the Loan Documents.  Each Indemnitee shall endeavor to give prompt notice to the Borrower of any claim against such Indemnitee that may give rise to an indemnification claim against the Borrower under this Section 10.3, provided however that such Indemnitee shall have no liability to the Borrower for such the failure to give any such notice.

 

  

99

  

(c) To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent an amount equal to the product of such unpaid amount multiplied by a fraction, the numerator of which is such Lender’s Total Credit Exposure and the denominator of which is the aggregate Total Credit Exposure of all Lenders (in each case determined as of the time that the applicable unreimbursed expense or indemnity payment is sought or, in the event that no Lender shall have any Total Credit Exposure at such time, as of the last time at which any Lender had a Total Credit Exposure), provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as applicable, was incurred by or asserted against the Administrative Agent in its capacity as such.  To the extent that the Borrower fails to pay any amount required to be paid by it to the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this Section, each Revolving Lender severally agrees to pay to the Issuing Bank or the Swingline Lender, as applicable, an amount equal to the product of such unpaid amount multiplied by a fraction, the numerator of which is such Revolving Lender’s Revolving Credit Exposure plus the unused portion of its Commitment and the denominator of which is the aggregate Revolving Credit Exposure of all Lenders plus the aggregate unused amount of all Commitments (in each case determined as of the time that the applicable unreimbursed expense or indemnity payment is sought or, in the event that no Revolving Lender shall have any Revolving Credit Exposure or unused Commitment at such time, as of the last time at which any Revolving Lender had any Revolving Credit Exposure or unused Commitment), provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as applicable, was incurred by or asserted against the Issuing Bank or the Swingline Lender, as the case may be, in its capacity as such.

 

(d) To the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct and actual damages) arising out of, in connection with, or as a result of, any Loan Document or any agreement, instrument or other document contemplated thereby, the Transactions or any Loan or any Letter of Credit or the use of the proceeds thereof.

 

(e) All amounts due under this Section shall be payable promptly but in no event later than ten Business Days after written demand therefor.

 

  

100

  

Section 10.4. Successors and Assigns

 

(a) Successors and Assigns Generally.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that no Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of paragraph (b) of this Section, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each Credit Party) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b) Assignments by Lenders.  Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans and obligations in respect of its LC Exposure and Swingline Exposure at the time owing to it); provided that any such assignment shall be subject to the following conditions:

 

(i) Minimum Amounts.

 

(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitments and the Loans and obligations in respect of its LC Exposure and Swingline Exposure at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

 

(B) in any case not described in paragraph (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Acceptance, as of the Trade Date) shall not be less than $2,000,000, in the case of any assignment in respect of a revolving facility, or $1,000,000, in the case of any assignment in respect of a term facility, unless the Administrative Agent consents (such consent not to be unreasonably withheld or delayed) and, so long as no Event of Default has occurred and is continuing, the Borrower consents (in its sole discretion).

 

(ii) Proportionate Amounts.  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 with respect to the Loan or the Commitment assigned, except that this clause (ii) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among such Loans or Commitments on a non-pro rata basis.

 

  

101

  

(iii) Required Consents.  No consent shall be required for any assignment except to the extent required by paragraph (b)(i)(B) of this Section and, in addition:

 

(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (x) an Event of Default has occurred and is continuing at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within 5 Business Days after having received notice thereof;

 

(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of (i) an unfunded or revolving facility if such assignment is to a Person that is not a Lender with a Commitment in respect of such facility, an Affiliate of such Lender or an Approved Fund with respect to such Lender or (ii) a funded term facility to a Person who is not a Lender, an Affiliate of a Lender or an Approved Fund; and

 

(C) the consent of the Issuing Bank (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding) and the Swingline Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment in respect of the revolving facility.

 

(iv) Assignment and Acceptance.  The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $3,500, and the assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

 

(v) No Assignment to Certain Parties.  No such assignment shall be made to any Loan Party, any of its subsidiaries or any of their respective Affiliates.

 

(vi) No Assignment to Natural Persons.  No such assignment shall be made to a natural person.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.5, 3.6, 3.7 and 10.3 with respect to claims arising from facts and circumstances occurring prior to the effective date of such assignment.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section.

 

  

102

  

(c) Register.  The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices in New York, New York a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower and any Lender (with respect to its own interest only), at any reasonable time and from time to time upon reasonable prior notice.

 

(d) Participations.  Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person, any Loan Party, any of its subsidiaries or any of their respective Affiliates) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and each Credit Party shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any  provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso in Section 10.2(b) that directly affects such Participant. Subject to paragraph (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.5, 3.6 and 3.7 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.8 as though it were a Lender, provided such Participant agrees to be subject to Section 2.11(c) as though it were a Lender.

 

(e) Limitations upon Participant Rights.  A Participant shall not be entitled to receive any greater payment under Sections 3.5 or 3.7 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.7 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 3.7(e) and (f) as though it were a Lender.

 

  

103

  

(f) Certain Pledges.  Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

Section 10.5. Survival

 

All covenants, agreements, representations and warranties made by the Loan Parties herein and in the certificates or other instruments prepared or 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 any Loan Document and the making of any Loans and the issuance of any Letter of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that any Credit Party may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any LC Disbursement or any fee or any other amount payable under the Loan Documents is outstanding and unpaid (other than contingent or indemnification obligations not then due) or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated.  The provisions of Sections 3.5, 3.6, 3.7 and 10.3, 10.9, 10.10 and Article 9 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans and the LC Disbursements, the expiration or termination of the Letters of Credit and the termination of the Commitments or the termination of this Agreement or any provision hereof.

 

Section 10.6. Counterparts; Integration; Effectiveness

 

This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which, when taken together, shall constitute a single contract.  This Agreement and any separate letter agreements with respect to fees payable to any Credit Party constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Delivery of an executed counterpart of this Agreement by facsimile transmission or electronic photocopy (i.e., “pdf”) shall be effective as delivery of a manually executed counterpart of this Agreement.

 

Section 10.7. Severability

 

In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction).

 

  

104

  

Section 10.8. Right of Setoff

 

If an Event of Default under Section 8(a) or (f) shall have occurred and be continuing, each of the Lenders and their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to setoff and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by it to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held by it, irrespective of whether or not it shall have made any demand under this Agreement and although such obligations may be unmatured.  Each Lender and Affiliate agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.  The rights of each of the Lenders and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that it may have.

 

Section 10.9. Governing Law; Waiver of Jury Trial

 

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

 

EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR, TO ITS KNOWLEDGE, OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section 10.10. Submission To Jurisdiction; Waivers

 

Each party hereto hereby irrevocably and unconditionally:

 

(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States for the Southern District of New York, and appellate courts from any thereof;

 

  

105

  

(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

 

(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to it at its address set forth in Section 10.1 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

 

(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

 

(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

 

Section 10.11. Headings

 

Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

 

Section 10.12. Interest Rate Limitation

 

Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts that are treated as interest on such Loan under applicable law (collectively the “charges”), shall exceed the maximum lawful rate (the “maximum rate”) that may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all of the charges payable in respect thereof, shall be limited to the maximum rate and, to the extent lawful, the interest and the charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated, and the interest and the charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the maximum rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

 

Section 10.13. Patriot Act

 

Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name, address and tax identification number of the Borrower and other information regarding the Borrower that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the Patriot Act.  This notice is given in accordance with the requirements of the Patriot Act and is effective as to the Lenders and the Administrative Agent.

 

  

106

  

Section 10.14. Confidentiality

 

(a) Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential and the disclosing party will be responsible for any disclosure by such Persons), (ii) to the extent requested by any regulatory authority (including any self-regulatory authority having supervisory jurisdiction over such Person), (iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iv) to any other party to this Agreement, (v) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section, to (A) any assignee under Section 10.4 or pledgee under Section 10.4(f) of or Participant in (or trustee for such assignee, pledge or Participant), or any prospective assignee under Section 10.4 or pledgee under Section 10.4(f) of or Participant in (or trustee for such assignee, pledge or Participant), any of its rights or obligations under this Agreement or (B) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (vii) with the consent of the Borrower or (viii) to the extent such Information (A) becomes publicly available other than as a result of a breach of this Section or an agreement described in clause (vi) above or (B) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis from a source other than the Borrower and the known Affiliates and representatives thereof (other than a source actually known by such disclosing Person to be bound by confidentiality obligations with respect thereof).  For the purposes of this Section, “Information” means all information received from or on behalf of the Borrower relating to the Borrower, any Loan Party or any of their Affiliates or their respective businesses, other than any such information that is available to the Administrative Agent, Issuing Bank or Lender on a non-confidential basis prior to disclosure by or on behalf of the Borrower (other than from a source actually known by such party to be bound by confidentiality obligations).  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

 

(b) EACH LENDER ACKNOWLEDGES THAT CONFIDENTIAL INFORMATION AS DEFINED IN SECTION 10.14 FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE LOAN PARTIES AND THEIR AFFILIATES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

 

  

107

  

(c) ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE LOAN PARTIES OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER, THE OTHER LOAN PARTIES AND THEIR AFFILIATES OR THEIR RESPECTIVE SECURITIES.  ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE DELIVERED TO THE ADMINISTRATIVE AGENT A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW.

 

Section 10.15. Amendment and Restatement

 

The parties to this Credit Agreement agree that, effective upon the Closing Date, the terms and provisions of the Existing Credit Agreement shall be amended, superseded, restated and consolidated in their entirety without a breach in continuity by the terms and provisions of this Credit Agreement and, unless expressly stated to the contrary, each reference to the Existing Credit Agreement in any of the Loan Documents or any other document, instrument or agreement delivered in connection therewith shall mean and be a reference to this Credit Agreement.  This Credit Agreement is not intended to and shall not constitute a novation of the Existing Credit Agreement or the obligations and liabilities thereunder.

 

ARTICLE 11                                

GUARANTEE

Section 11.1. Guarantee; Fraudulent Transfer, Etc.; Contribution

 

(a) Guarantee.  Each Guarantor unconditionally guarantees, jointly with the other Guarantors and severally, as a primary obligor and not merely as a surety, the Obligations (other than Obligations which constitute Excluded Swap Obligations).  Each Guarantor further agrees that the Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Obligation.

 

(b) Guarantee of Payment.  Each Guarantor further agrees that its guarantee hereunder constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Administrative Agent or any other Secured Party to any of the security held for payment of the Obligations or to any balance of any deposit account or credit on the books of the Administrative Agent or any other Secured Party in favor of the Borrower or any other Person.

 

  

108

  

(c) Fraudulent Transfer.  Anything in this Article 11 to the contrary notwithstanding, (i) the obligations of each Subsidiary Guarantor hereunder shall be limited to a maximum aggregate amount equal to the greatest amount that would not render such Subsidiary Guarantor’s obligations hereunder subject to avoidance as a fraudulent transfer, obligation or conveyance under Section 548 of Title 11 of the United States Code or any provisions of applicable state law (collectively, the “Fraudulent Transfer Laws”), in each case after giving effect to all other liabilities of such Subsidiary Guarantor, contingent or otherwise, that are relevant under the Fraudulent Transfer Laws (specifically excluding, however, any liabilities of such Subsidiary Guarantor (A) in respect of intercompany debt owed or owing to the Parent or Affiliates of the Parent to the extent that such debt would be discharged in an amount equal to the amount paid by such Subsidiary Guarantor hereunder and (B) under any Guarantee of senior unsecured debt or Indebtedness subordinated in right of payment to the Obligations, which Guarantee contains a limitation as to maximum amount similar to that set forth in this clause (i), pursuant to which the liability of such Subsidiary Guarantor hereunder is included in the liabilities taken into account in determining such maximum amount) and after giving effect as assets to the value (as determined under the applicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation, contribution, reimbursement, indemnity or similar rights of such Subsidiary Guarantor pursuant to (I) applicable law or (II) any agreement providing for an equitable allocation among such Subsidiary Guarantor and other Affiliates of the Borrower of obligations arising under guarantees by such parties (including the agreements described in Section 11.1(d)) and (ii) the Parent expressly subordinates any and all rights of subrogation, reimbursement, indemnity, exoneration, contribution or any other claim that it may now or hereafter have against the Borrower, any other Loan Party, any other guarantor or any other Person directly or contingently liable for the Obligations, or against or with respect to the property of the Borrower, such other Loan Party, such other guarantor or such other Person, arising from the existence or performance hereof, including, but not limited to, in the event that any money or property shall be transferred to any Credit Party by the Parent pursuant to this Article 11 in reduction of the Obligations or otherwise.

 

(d) Contributions.  In addition to all rights of indemnity and subrogation the Subsidiary Guarantors may have under applicable law (but subject to this paragraph), the Borrower agrees that (i) in the event a payment shall be made by any Subsidiary Guarantor hereunder, the Borrower shall indemnify such Subsidiary Guarantor for the full amount of such payment, and such Subsidiary Guarantor shall be subrogated to the rights of the person to whom such payments shall have been made to the extent of such payment, and (ii) in the event that any assets of any Subsidiary Guarantor shall be sold pursuant to any Loan Document to satisfy any claim of any Secured Party, the Borrower shall indemnify such Subsidiary Guarantor in an amount equal to the greater of the book value or the fair market value of the assets so sold.  Each Subsidiary Guarantor (a “Contributing Subsidiary Guarantor”) agrees (subject to this paragraph) that, in the event a payment shall be made by any other Subsidiary Guarantor hereunder or assets of any other Subsidiary Guarantor shall be sold pursuant to any Loan Document to satisfy a claim of any Secured Party and such other Subsidiary Guarantor (the “Claiming Subsidiary Guarantor”) shall not have been fully indemnified by the Borrower as provided in this paragraph, the Contributing Subsidiary Guarantor shall indemnify the Claiming Subsidiary Guarantor in an amount equal to the amount of such payment or the greater of the book value or the fair market value of such assets, as applicable, in each case multiplied by a fraction of which the numerator shall be the net worth of the Contributing Subsidiary Guarantor on the date hereof and the denominator shall be the aggregate net worth of all the Subsidiary Guarantors on the date hereof (or, in the case of any Subsidiary Guarantor becoming a party hereto pursuant to Section 11.9, the date of the Guarantee Supplement executed and delivered by such Subsidiary Guarantor).  Any Contributing Subsidiary Guarantor making any payment to a Claiming Subsidiary Guarantor pursuant to this paragraph shall be subrogated to the rights of such Claiming Subsidiary Guarantor under this paragraph to the extent of such payment.  Notwithstanding any provision of this paragraph to the contrary, all rights of the Subsidiary Guarantors under this paragraph and all other rights of indemnity, contribution or subrogation under applicable law or otherwise shall be fully subordinated to the payment in full in cash of the Obligations.  No failure on the part of the Borrower or any Subsidiary Guarantor to make the payments required by this paragraph (or any other payments required under applicable law or otherwise) shall in any respect limit the obligations and liabilities of any Subsidiary Guarantor with respect to its obligations under this paragraph, and each Subsidiary Guarantor shall remain liable for the full amount of the obligations of such Subsidiary Guarantor under this paragraph.

 

  

109

  

Section 11.2. Obligations Not Waived

 

To the fullest extent permitted by applicable law, each Guarantor waives presentment to, demand of payment from, and protest to any Loan Party of any of the Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment.  To the fullest extent permitted by applicable law, the obligations of each Guarantor hereunder shall not be affected by (i) the failure of the Administrative Agent or any other Secured Party to assert any claim or demand or to enforce or exercise any right or remedy against the Borrower or any other Guarantor under the provisions of this Agreement or any other Loan Document, or otherwise, (ii) any rescission, waiver, amendment or modification of, or any release from, any of the terms or provisions of this Article 11, any other Loan Document, any Guarantee or any other agreement, including with respect to any other Guarantor under this Article 11, (iii) the failure to perfect any security interest in, or the release of, any of the security held by or on behalf of the Administrative Agent or any other Secured Party, or (iv) any other circumstance that would constitute a surety defense (other than payment in full in cash of all of the Obligations).

 

Section 11.3. Security

 

Each Guarantor authorizes the Administrative Agent and each other Secured Party to (i) take and hold security for the payment of the obligations under the provisions of this Article 11 pursuant to the Security Documents and exchange, enforce, waive and release any such security, (ii) apply such security and direct the order or manner of sale thereof in accordance with the Loan Documents and (iii) release or substitute any one or more endorsees, other Guarantors or other obligors.

 

Section 11.4. No Discharge or Diminishment of Guarantee

 

The obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than the payment in full in cash of the Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Obligations, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise.  Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by the failure of the Administrative Agent or any other Secured Party to assert any claim or demand or to enforce any remedy under this Agreement, any other Loan Document or any other agreement, by any waiver or modification of any provision of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Obligations, or by any other act or omission that may or might in any manner or to any extent vary the risk of any Guarantor or that would otherwise operate as a discharge of any Guarantor as a matter of law or equity (other than the payment in full in cash of all the Obligations).

 

  

110

  

Section 11.5. Defenses of Borrower Waived

 

To the fullest extent permitted by applicable law, each of the Guarantors waives any defense based on or arising out of any defense of the Borrower or any other Loan Party or the unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower or any other Loan Party, other than the payment in full in cash of the Obligations.  The Administrative Agent and the other Secured Parties may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other accommodation with the Borrower or any Guarantor or exercise any other right or remedy available to them against the Borrower or any Guarantor, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Obligations have been fully paid in cash.  Pursuant to applicable law, each Guarantor waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower or any other Guarantor, as applicable, or any security.

 

Section 11.6. Agreement to Pay; Subordination

 

In furtherance of the foregoing and not in limitation of any other right that the Administrative Agent or any other Secured Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Borrower or any other Loan Party to pay any Obligation (other than Excluded Swap Obligations) when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Administrative Agent or such other Secured Party as designated thereby in cash the amount of such unpaid Obligations. Upon payment by any Guarantor of any sums to the Administrative Agent or any Secured Party as provided above, all rights of such Guarantor against the applicable Loan Party arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subordinate and junior in right of payment to the prior payment in full in cash of the Obligations.  In addition, any debt or Lien of the Borrower or any other Loan Party now or hereafter held by any Guarantor is hereby subordinated in right of payment and priority to the prior payment in full in cash of the Obligations and the Liens created under the Loan Documents (provided that, payments on such debt may be made at any time when no Event of Default has occurred and is continuing).  If any amount shall erroneously be paid to any Guarantor on account of (i) such subrogation, contribution, reimbursement, indemnity or similar right or (ii) any such debt of the Borrower or such other Loan Party, such amount shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Administrative Agent to be credited against the payment of the Obligations, whether matured or unmatured, in accordance with the terms of the Loan Documents.

 

  

111

  

Section 11.7. Information

 

Each Guarantor assumes all responsibility for being and keeping itself informed of each Loan Party’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that none of the Administrative Agent or the other Secured Parties will have any duty to advise any of the Guarantors of information known to it or any of them regarding such circumstances or risks.

 

Section 11.8. Termination

 

(a) The guarantees made hereunder (i) shall terminate when all the Obligations have been paid in full in cash, all Letters of Credit have expired and all LC Disbursements have been reimbursed, and the Lenders have no further commitment to lend or otherwise extend credit under this Agreement and (ii) shall continue to be effective or be reinstated, as applicable, if at any time payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored by any Secured Party or any Guarantor upon the bankruptcy or reorganization of any Loan Party or otherwise.

 

(b) If any Equity Interest in any Subsidiary Guarantor is sold, transferred or otherwise disposed of pursuant to a transaction permitted by the Loan Documents and, immediately after giving effect thereto, such Subsidiary Guarantor shall no longer be a Subsidiary, then the obligations of such Subsidiary Guarantor under this Article 11 shall be automatically released.

 

Section 11.9. Additional Guarantors

 

Upon execution and delivery after the date hereof by the Administrative Agent and a Subsidiary of a Guarantee Supplement, such Subsidiary shall become a Subsidiary Guarantor hereunder with the same force and effect as if originally named as a Subsidiary Guarantor herein.  The execution and delivery of any Guarantee Supplement shall not require the consent of any other Loan Party.  The rights and obligations of each Guarantor hereunder shall remain in full force and effect notwithstanding the addition of any new Subsidiary Guarantor as a party to this Agreement.

 

Section 11.10. Keepwell

 

Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Loan Party to honor all of its Guarantee obligations under this Article 11 in respect of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 11.10 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 11.10, or its Guarantee obligations under this Article 11, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount).  The obligations of each Qualified ECP Guarantor under this Section shall remain in full force and effect until such Qualified ECP Guarantor’s obligations under this Article 11 terminate pursuant to Section 11.8.  Each Qualified ECP Guarantor intends that this Section 11.10 constitute, and this Section 11.10 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

  

112

  

 

  

1 If this is in place prior to the Closing Date should refer to applicable credit agreement and ancillary documents.

 

 

113

  

GCI HOLDINGS CREDIT AGREEMENT

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

 

	  	
GCI HOLDINGS, INC.

	  
	  	  	  	  
	  	
By:

	 /s/ Bruce L. Broquet 	  
	  	
Name:

	 Bruce L. Broquet 	  
	  	
Title:

	 Vice President, Finance 	  
	  	  	  	  
	  	
GCI, INC.

	  
	  	  	  	  
	  	
By:

	 /s/ Bruce L. Broquet 	  
	  	
Name:

	 Bruce L. Broquet 	  
	  	
Title:

	 Vice President, Finance 	  
	  	  	  	  
	  	
GCI CABLE, INC.

	  
	  	  	  	  
	  	
By:

	 /s/ Bruce L. Broquet 	  
	  	
Name:

	 Bruce L. Broquet 	  
	  	
Title:

	 Vice President, Finance 	  
	  	  	  	  
	  	
GCI COMMUNICATION CORP.

	  
	  	  	  	  
	  	
By:

	 /s/ Bruce L. Broquet 	  
	  	
Name:

	 Bruce L. Broquet 	  
	  	
Title:

	 Vice President, Finance 	  
	  	  	  	  
	  	
GCI FIBER COMMUNICATION CO., INC.

	  
	  	  	  	  
	  	
By:

	 /s/ Bruce L. Broquet 	  
	  	
Name:

	 Bruce L. Broquet 	  
	  	
Title:

	 Vice President, Finance 	  

 

  

  

	  	  	  	  
	  	
ALASKA UNITED FIBER SYSTEM PARTNERSHIP

	  	  	  	  
	  	
By: GCI Holdings, Inc., its general partner

	  
	  	  	  	  
	  	
By:

	 /s/ Bruce L. Broquet 	  
	  	
Name:

	 Bruce L. Broquet 	  
	  	
Title:

	 Vice President, Finance 	  
	  	  	  	  
	  	
By: GCI Communication Corp., its general partner

	  	  	  	  
	  	
By:

	 /s/ Bruce L. Broquet 	  
	  	
Name:

	 Bruce L. Broquet 	  
	  	
Title:

	 Vice President, Finance 	  
	  	  	  	  
	  	
POTTER VIEW DEVELOPMENT CO., INC.

	  
	  	  	  	  
	  	
By:

	 /s/ Bruce L. Broquet 	  
	  	
Name:

	 Bruce L. Broquet 	  
	  	
Title:

	 Vice President, Finance 	  
	  	  	  	  
	  	
CYCLE30, INC.

	  
	  	  	  	  
	  	
By:

	 /s/ Bruce L. Broquet 	  
	  	
Name:

	 Bruce L. Broquet 	  
	  	
Title:

	 Vice President, Finance 	  
	  	  	  	  

  

  

  

	  	
CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as a Lender, the Swingline Lender, the Issuing Bank, and the Administrative Agent

	  	  	  	  
	  	
By:

	 Gary Herzog 	  
	  	
Name:

	 /s/ Gary Herzog	  
	  	
Title:

	 Managing Director 	  
	  	  	  	  
	  	
By:

	 /s/ Kestrina Budina 	  
	  	
Name:

	 Kestrina Budina 	  
	  	
Title:

	 Director 	  

 

 

 

  

  

  

	  	
SUNTRUST BANK, as Documentation Agent and as a Lender

	  	  	  	  
	  	
By:

	 /s/ Kevin Curtin 	  
	  	
Name:

	 Kevin Curtin 	  
	  	
Title:

	 Director 	  
	  	  	  	  

  

  

  

	  	
UNION BANK, N.A., as Syndication Agent and as a Lender

	  	  	  	  
	  	
By:

	 /s/ Edward Khaymenis 	  
	  	
Name:

	 Edward Khaymenis 	  
	  	
Title:

	 Vice President 	  

  

  

  

	  	
BANK OF AMERICA, N.A., as a Lender

	  	  	  	  
	  	
By:

	 /s/ Ming Lam 	  
	  	
Name:

	 Ming Lam 	  
	  	
Title:

	 Vice President 	  

  

  

  

	  	
WELLS FARGO BANK, N.A., as a Lender

	  	  	  	  
	  	
By:

	 /s/ Chris Clifford 	  
	  	
Name:

	 Chris Clifford 	  
	  	
Title:

	 Vice President 	  

  

  

  

	  	
DEUTSCHE BANK TRUST COMPANY

   AMERICAS, as a Lender

	  	  	  	  
	  	
By:

	 /s/ Anca Trifan 	  
	  	
Name:

	 Anca Trifan 	  
	  	
Title:

	 Managing Director 	  
	  	  	  	  
	  	
By:

	 /s/ Kelvin Ji 	  
	  	
Name:

	 Kelvin Ji 	  
	  	
Title:

	 Vice President 	  

  

  

  

	  	
ROYAL BANK OF CANADA, as a Lender

	  	  	  	  
	  	
By:

	 /s/ Edward Valderrama 	  
	  	
Name:

	 Edward Valderrama  	  
	  	
Title:

	 Authorized Signatory 	  

 

  

  

  

	  	
COBANK, ACB, as a Lender

	  	  	  	  
	  	
By:

	 /s/ Ted Koerner 	  
	  	
Name:

	 Ted Koerner 	  
	  	
Title:

	 Managing Director

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00216-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00216-of-00352.parquet"}]]