Document:

Exhibit

        
Exhibit 10.1

	
	
	 

	AMENDED AND RESTATED 
REVOLVING CREDIT
AND
SECURITY AGREEMENT

	 

	PNC BANK, NATIONAL ASSOCIATION 
(AS LENDER AND AS AGENT)

	 

	WITH

	 

	TECHNICAL CONSUMER PRODUCTS, INC.
TECHNICAL CONSUMER PRODUCTS CANADA, INC.  
(BORROWERS)
BOWMAN LAMPS, LLC  
(SUBSIDIARY GUARANTOR)

	 

	September 29, 2016

	 

TABLE OF CONTENTS 
	
				
	I
	DEFINITIONS.
	1
	

	1.1.
	Accounting Terms
	1
	

	1.2.
	General Terms
	2
	

	1.3.
	Uniform Commercial Code Terms
	28
	

	1.4.
	Certain Matters of Construction
	29
	

	 
	 
	 

	II
	ADVANCES, PAYMENTS.
	30
	

	2.1.
	Revolving Advances
	30
	

	2.2.
	Procedure for Revolving Advances Borrowing.
	31
	

	2.3.
	Disbursement of Advance Proceeds
	33
	

	2.4.
	[Reserved].
	33
	

	2.5.
	Maximum Advances
	33
	

	2.6.
	Repayment of Advances.
	33
	

	2.7.
	Repayment of Excess Advances
	34
	

	2.8.
	Statement of Account
	34
	

	2.9.
	Letters of Credit
	34
	

	2.10.
	Issuance of Letters of Credit.
	35
	

	2.11.
	Requirements For Issuance of Letters of Credit
	35
	

	2.12.
	Disbursements, Reimbursement.
	36
	

	2.13.
	Repayment of Participation Advances.
	37
	

	2.14.
	Documentation
	37
	

	2.15.
	Determination to Honor Drawing Request
	38
	

	2.16.
	Nature of Participation and Reimbursement Obligations
	38
	

	2.17.
	Indemnity
	39
	

	2.18.
	Liability for Acts and Omissions
	39
	

	2.19.
	Additional Payments
	41
	

	2.20.
	Manner of Borrowing and Payment.
	41
	

	2.21.
	Mandatory Prepayments.
	42
	

	2.22.
	Use of Proceeds.
	43
	

	2.23.
	Defaulting Lender.
	43
	

	 
	 
	 

	III
	INTEREST AND FEES.
	44
	

	3.1.
	Interest
	44
	

	3.2.
	Letter of Credit Fees.
	44
	

	3.3.
	Closing Fee and Facility Fee.
	45
	

	3.4.
	Collateral Evaluation Fee and Collateral Monitoring Fee.
	46
	

	3.5.
	Computation of Interest and Fees
	46
	

	3.6.
	Maximum Charges
	46
	

	3.7.
	Increased Costs
	46
	

	3.8.
	Basis For Determining Interest Rate Inadequate or Unfair
	47
	

	3.9.
	Capital Adequacy.
	48
	

	3.10.
	Gross Up for Taxes
	48
	

	3.11.
	Withholding Tax Exemption.
	48
	

	3.12.
	Interest Act (Canada).
	48
	

	
				
	 
	 
	 

	IV
	COLLATERAL:  GENERAL TERMS
	50
	

	4.1.
	Security Interest in the Collateral
	50
	

	4.2.
	Perfection of Security Interest
	50
	

	4.3.
	Disposition of Collateral
	50
	

	4.4.
	Preservation of Collateral
	51
	

	4.5.
	Ownership of Collateral.
	51
	

	4.6.
	Defense of Agent’s and Lenders’ Interests
	51
	

	4.7.
	Books and Records
	52
	

	4.8.
	Financial Disclosure
	52
	

	4.9.
	Compliance with Laws
	52
	

	4.10.
	Inspection of Premises
	53
	

	4.11.
	Insurance
	53
	

	4.12.
	Failure to Pay Insurance
	54
	

	4.13.
	Payment of Taxes
	54
	

	4.14.
	Payment of Leasehold Obligations
	55
	

	4.15.
	Receivables.
	55
	

	4.16.
	Inventory
	58
	

	4.17.
	Maintenance of Equipment
	58
	

	4.18.
	Exculpation of Liability
	58
	

	4.19.
	Environmental Matters.
	58
	

	4.20.
	Financing Statements
	61
	

	 
	 
	 

	V
	REPRESENTATIONS AND WARRANTIES.
	61
	

	5.1.
	Authority
	61
	

	5.2.
	Formation and Qualification.
	61
	

	5.3.
	Survival of Representations and Warranties
	61
	

	5.4.
	Tax Returns
	62
	

	5.5.
	Financial Statements.
	62
	

	5.6.
	Entity Name
	62
	

	5.7.
	O.S.H.A
	62
	

	5.8.
	Solvency; No Litigation, Violation, Indebtedness or Default.
	63
	

	5.9.
	Patents, Trademarks, Copyrights and Licenses
	65
	

	5.10.
	Licenses and Permits
	65
	

	5.11.
	Default of Indebtedness
	65
	

	5.12.
	No Default
	66
	

	5.13.
	No Burdensome Restrictions
	66
	

	5.14.
	No Labor Disputes
	66
	

	5.15.
	Margin Regulations
	66
	

	5.16.
	Investment Company Act
	66
	

	5.17.
	Disclosure
	66
	

	5.18.
	Delivery of CMP Subordinated Payable Documentation
	66
	

	5.19.
	Swaps
	67
	

	5.20.
	Conflicting Agreements
	67
	

	5.21.
	Application of Certain Laws and Regulations
	67
	

	5.22.
	Business and Property of Loan Parties
	67
	

	
				
	5.23.
	Section 20 Subsidiaries
	67
	

	5.24.
	Anti-Terrorism Laws.
	67
	

	5.25.
	Trading with the Enemy
	68
	

	5.26.
	Federal Securities Laws
	68
	

	 
	 
	 

	VI
	AFFIRMATIVE COVENANTS.
	68
	

	6.1.
	Payment of Fees
	68
	

	6.2.
	Conduct of Business and Maintenance of Existence and Assets
	68
	

	6.3.
	Violations
	69
	

	6.4.
	Government Receivables
	69
	

	6.5.
	Financial Covenants.
	69
	

	6.6.
	Execution of Supplemental Instruments
	69
	

	6.7.
	Payment of Indebtedness
	69
	

	6.8.
	Standards of Financial Statements
	69
	

	6.9.
	Federal Securities Laws
	70
	

	 
	 
	 

	VII
	NEGATIVE COVENANTS.
	70
	

	7.1.
	Merger, Consolidation, Acquisition and Sale of Assets.
	70
	

	7.2.
	Creation of Liens
	70
	

	7.3.
	Guarantees
	71
	

	7.4.
	Investments
	71
	

	7.5.
	Loans
	71
	

	7.6.
	Capital Expenditures
	71
	

	7.7.
	Dividends; Management Fees
	71
	

	7.8.
	Indebtedness
	72
	

	7.9.
	Nature of Business
	72
	

	7.10.
	Transactions with Affiliates
	72
	

	7.11.
	Leases
	72
	

	7.12.
	Subsidiaries.
	72
	

	7.13.
	Fiscal Year and Accounting Changes
	72
	

	7.14.
	Pledge of Credit
	72
	

	7.15.
	Amendment of Certificate of Incorporation, By-Laws
	72
	

	7.16.
	Compliance with ERISA
	72
	

	7.17.
	Prepayment of Indebtedness
	73
	

	7.18.
	Anti-Terrorism Laws
	73
	

	7.19.
	Membership/Partnership Interests
	73
	

	7.20.
	Trading with the Enemy Act
	73
	

	7.21.
	Reserved
	73
	

	7.23.
	Subordinated Promissory Note Payments
	74
	

	7.24.
	Payments of TCP Intercompany Loans
	74
	

	 
	 
	 

	VIII
	CONDITIONS PRECEDENT.
	74
	

	8.1.
	Conditions to Initial Advances
	74
	

	8.2.
	Conditions to Each Advance
	77
	

	 
	 
	 

	IX
	INFORMATION AS TO LOAN PARTIES.
	78
	

	
				
	9.1.
	Disclosure of Material Matters
	78
	

	9.2.
	Schedules; Borrowing Base Certificate
	78
	

	9.3.
	Environmental Reports
	78
	

	9.4.
	Litigation
	79
	

	9.5.
	Material Occurrences
	79
	

	9.6.
	Government Receivables
	79
	

	9.7.
	Annual Financial Statements
	79
	

	9.8.
	[Reserved].
	80
	

	9.9.
	Monthly Financial Statements
	80
	

	9.10.
	Other Reports
	80
	

	9.11.
	Additional Information
	80
	

	9.12.
	Projected Operating Budget
	80
	

	9.13.
	Variances From Operating Budget
	80
	

	9.14.
	Notice of Suits, Adverse Events
	81
	

	9.15.
	ERISA Notices and Requests
	81
	

	9.16.
	Additional Documents
	81
	

	 
	 
	 

	X
	EVENTS OF DEFAULT.
	82
	

	10.1.
	Nonpayment
	82
	

	10.2.
	Breach of Representation
	82
	

	10.3.
	Financial Information
	82
	

	10.4.
	Judicial Actions
	82
	

	10.5.
	Noncompliance
	82
	

	10.6.
	Judgments
	82
	

	10.7.
	Bankruptcy
	82
	

	10.8.
	Inability to Pay
	83
	

	10.9.
	Affiliate Bankruptcy
	83
	

	10.10.
	Material Adverse Effect
	83
	

	10.11.
	Lien Priority
	83
	

	10.12.
	CMP Subordinated Payable Default
	83
	

	10.13.
	Cross Default
	83
	

	10.14.
	Breach of Guaranty
	83
	

	10.15.
	Change of Ownership
	83
	

	10.16.
	Invalidity
	84
	

	10.17.
	Licenses
	84
	

	10.18.
	Seizures
	84
	

	10.19.
	Operations
	84
	

	10.20.
	Pension Plans
	84
	

	10.21.
	Subordinated Promissory Note Cross Default
	84
	

	10.22.
	Reportable Compliance Event
	84
	

	10.23.
	TCP Intercompany Loans Cross Default 
	84
	

	 
	 
	 

	XI
	XI LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.
	85
	

	11.1.
	Rights and Remedies.
	85
	

	11.2.
	Agent’s Discretion
	87
	

	11.3.
	Setoff
	87
	

	
				
	11.4.
	Rights and Remedies not Exclusive
	87
	

	11.5.
	Allocation of Payments After Event of Default
	87
	

	 
	 
	 

	XII
	XII WAIVERS AND JUDICIAL PROCEEDINGS.
	88
	

	12.1.
	Waiver of Notice
	88
	

	12.2.
	Delay
	88
	

	12.3.
	Jury Waiver
	88
	

	 
	 
	 

	XIII
	EFFECTIVE DATE AND TERMINATION.
	89
	

	13.1.
	Term
	89
	

	13.2.
	Termination
	89
	

	 
	 
	 

	XIV
	REGARDING AGENT.
	90
	

	14.1.
	Appointment
	90
	

	14.2.
	Nature of Duties
	90
	

	14.3.
	Lack of Reliance on Agent and Resignation
	90
	

	14.4.
	Certain Rights of Agent
	91
	

	14.5.
	Reliance
	91
	

	14.6.
	Notice of Default
	91
	

	14.7.
	Indemnification
	92
	

	14.8.
	Agent in its Individual Capacity
	92
	

	14.9.
	Delivery of Documents
	92
	

	14.10.
	Borrowers’ Undertaking to Agent
	92
	

	14.11.
	No Reliance on Agent’s Customer Identification Program
	92
	

	14.12.
	Other Agreements
	93
	

	 
	 
	 

	XV
	XV MISCELLANEOUS.
	93
	

	15.1.
	Governing Law
	93
	

	15.2.
	Entire Understanding.
	93
	

	15.3.
	Successors and Assigns; Participations; New Lenders.
	96
	

	15.4.
	Application of Payments
	98
	

	15.5.
	Indemnity
	98
	

	15.6.
	Notice
	98
	

	15.7.
	Survival
	100
	

	15.8.
	Severability
	100
	

	15.9.
	Expenses
	101
	

	15.10.
	Injunctive Relief
	101
	

	15.11.
	Consequential Damages
	101
	

	15.12.
	Captions
	101
	

	15.13.
	Counterparts; Facsimile Signatures
	101
	

	15.14.
	Construction
	101
	

	15.15.
	Confidentiality; Sharing Information.
	101
	

	15.16.
	Publicity
	102
	

	15.17.
	Certifications From Banks and Participants; US PATRIOT Act
	102
	

	15.18.
	Concerning the Joint and Several Liability of Borrowers
	102
	

	15.19.
	Anti-Terrorism Laws
	102
	

	
				
	15.20.
	Acknowledgment of Prior Obligations and Continuation Thereof
	102
	

	 
	 
	 

	XVI
	GUARANTY.
	106
	

	16.1.
	Guaranty
	106
	

	16.2.
	Guaranty of Payment
	106
	

	16.3.
	No Discharge or Diminishment of Loan Guaranty.
	106
	

	16.4.
	Defenses Waived
	107
	

	16.5.
	Rights of Subrogation
	108
	

	16.6.
	Reinstatement; Stay of Acceleration
	108
	

	16.7.
	Information
	108
	

	16.8.
	Taxes
	108
	

	16.9.
	Maximum Liability
	108
	

	16.10.
	Contribution
	109
	

	16.11.
	Liability Cumulative
	109
	

AMENDED AND RESTATED REVOLVING CREDIT 
AND 
SECURITY AGREEMENT 
Amended and Restated Revolving Credit and Security Agreement dated as of September 29, 2016 among Technical Consumer Products, Inc., a corporation organized under the laws of the State of Delaware (“TCP”), Technical Consumer Products Canada, Inc., a corporation organized under the Canada Business Corporations Act (“TCP Canada” and, together with TCP and each other Person joined hereto as a borrower from time to time, collectively, the “Borrowers” and each a “Borrower”), Bowman Lamps, LLC, a limited liability company organized under the laws of the State of Ohio, the financial institutions which are now or which hereafter become a party hereto (collectively, the “Lenders” and individually a “Lender”) and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as agent for Lenders (PNC, in such capacity, the “Agent”).  
WHEREAS, Borrowers, Agent and the Lenders are parties to that certain Revolving Credit and Security Agreement dated as of December 11, 2009 (as amended, restated, supplemented or otherwise modified to date, the “Existing Agreement”);
 WHEREAS, the parties hereto desire to amend, restate and modify, but not extinguish, the Existing Agreement (or any Indebtedness evidenced thereby) on the terms set forth herein; and
IN CONSIDERATION of the mutual covenants and undertakings herein contained, Borrowers, Lenders and Agent hereby agree as follows:  
		
	I
	DEFINITIONS.  

1.1.Accounting Terms.  As used in this Agreement, the Other Documents or any certificate, report or other document made or delivered pursuant to this Agreement, accounting terms not defined in Section 1.2 or elsewhere in this Agreement and accounting terms partly defined in Section 1.2 to the extent not defined, shall have the respective meanings given to them under GAAP; provided, however, whenever such accounting terms are used for the purposes of determining compliance with financial covenants in this Agreement, such accounting terms shall be defined in accordance with GAAP as applied in preparation of the audited financial statements of Borrowers for the fiscal year ended December 31, 2015. If there occurs after the Closing Date any change in GAAP that affects in any respect the calculation of any covenant contained in this Agreement or the definition of any term defined under GAAP used in such calculations, Agent, the Required Lenders and Borrowers shall negotiate in good faith to amend the provisions of this Agreement that relate to the calculation of such covenants with the intent of having the respective positions of Lenders and Borrowers and their consolidated Subsidiaries after such change in GAAP conform as nearly as possible to their respective positions as of the Closing Date; provided, that, until any such amendments have been agreed upon, the covenants in this Agreement shall be calculated as if no such change in GAAP had occurred and Borrowers shall provide additional financial statements or supplements thereto, attachments to Compliance Certificates and/or calculations regarding financial covenants as Agent and the Required Lenders may reasonably require in order to provide the appropriate financial information required hereunder with respect to the Borrowers and their consolidated Subsidiaries both reflecting any applicable changes in GAAP and as necessary to demonstrate compliance with the financial covenants before giving effect to the applicable changes in GAAP.  

1.2.General Terms.  For purposes of this Agreement the following terms shall have the following meanings:  
“Accountants” shall have the meaning set forth in Section 9.7 hereof.  

“Advance Rates” shall mean, collectively, the Receivables Advance Rate and the Inventory Advance Rate.  
“Advances” shall mean and include the Revolving Advances and Letters of Credit.  
“Affiliate” of any Person shall mean (a) any Person which, directly or indirectly, is in control of, is controlled by, or is under common control with such Person, or (b) any Person who is a director, managing member, general partner or officer (i) of such Person, (ii) of any Subsidiary of such Person or (iii) of any Person described in clause (a) above.  For purposes of this definition, control of a Person shall mean the power, direct or indirect, (x) to vote 10% or more of the Equity Interests having ordinary voting power for the election of directors of such Person or other Persons performing similar functions for any such Person, or (y) to direct or cause the direction of the management and policies of such Person whether by ownership of Equity Interests, contract or otherwise.  
“Agent” shall have the meaning set forth in the preamble to this Agreement and shall include its successors and assigns.  
“Agent Advances” shall have the meaning set forth in Section 15.2(b) hereof.  
“Agreement” shall mean this Amended and Restated Revolving Credit and Security Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.  
“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the highest of (i) the Base Rate in effect on such day, (ii) the Federal Funds Open Rate in effect on such day plus 0.50% and (iii) the Daily LIBOR Rate plus 1.00%.  
“Amendment No. 1 Effective Date” shall mean December 17, 2010. 
“Amendment No. 2 Effective Date” shall mean April 28, 2011. 
“Amendment No. 3 Effective Date” shall mean July 25, 2013.
“Amendment No. 4 Effective Date” shall mean September 30, 2014.
“Anti-Terrorism Laws” shall mean any Laws relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering or bribery, and any regulation, order, or directive promulgated, issued or enforced pursuant to such Laws, all as amended, supplemented or replaced from time to time.  
“Applicable Law” shall mean all laws, rules and regulations applicable to the Person, conduct, transaction, covenant, Other Document or contract in question, including all applicable common law and equitable principles; all provisions of all applicable state, federal and foreign constitutions, statutes, rules, regulations, treaties, directives and orders of any Governmental Body, and all orders, judgments and decrees of all courts and arbitrators.  
“Applicable Margin” for Revolving Advances shall mean, as of the Closing Date, the applicable percentage specified below:  
	
		
	APPLICABLE MARGIN FOR DOMESTIC RATE LOANS
	APPLICABLE MARGIN FOR EURODOLLAR RATE LOANS

	2.50%
	3.50%

Thereafter, effective as of the first Business Day following receipt by Agent of the final annual financial statements of Borrowers for the fiscal year ending December 31, 2016 required under Section 9.7(b), and thereafter upon receipt of the financial statements of Borrowers required under Section 9.9 for the month-end corresponding to any fiscal quarter end (each day of such delivery, an “Adjustment Date”), the Applicable Margin for each type of Advance shall be adjusted, if necessary, to the applicable percent per annum set forth in the pricing table set forth below corresponding to the Fixed Charge Coverage Ratio for the trailing twelve month period ending on the last day of the most recently completed fiscal quarter prior to the applicable Adjustment Date (each such period, a “Calculation Period”); provided, however, that to the extent any such adjustment would result in a reduction in the then Applicable Margin, such adjustment shall be made only if the requisite level in the table below has been met for at least two consecutive fiscal quarters:  
	
			
	FIXED CHARGE COVERAGE RATIO
	APPLICABLE MARGIN FOR DOMESTIC RATE LOANS
	APPLICABLE MARGIN FOR EURODOLLAR RATE LOANS

	Less than 1.25 to 1.00
	2.50%
	3.50%

	Greater than or equal to 1.25 to 1.00 but less than 1.50 to 1.00
	2.25%
	3.25%

	Greater than or equal to 1.50 to 1.00 but less than 1.75 to 1.00
	2.00%
	3.00%

	Greater than or equal to 1.75 to 1.00
	1.75%
	2.75%

If any Borrower shall fail to deliver the financial statements, certificates and/or other information required under Sections 9.7 or 9.9 by the dates required pursuant to such sections, each Applicable Margin shall be conclusively presumed to equal the highest Applicable Margin specified in the pricing table set forth above until the date of delivery of such financial statements, certificates and/or other information, at which time the rate will be adjusted based upon the Fixed Charge Coverage Ratio reflected in such statements. 
If, as a result of any restatement of, or other adjustment to, the financial statements of any Borrower or for any other reason, the Agent determines that (a) the Fixed Charge Coverage Ratio as previously calculated as of any applicable date was inaccurate, and (b) a proper calculation of the Fixed Charge Coverage Ratio would have resulted in different pricing for any period, then (i) if the proper calculation of the Fixed Charge Coverage Ratio would have resulted in higher pricing for such period, the Borrowers shall automatically and retroactively be obligated to pay to the Agent, promptly upon demand by the Agent, an amount equal to the excess of the amount of interest that should have been paid for such period over the amount of interest actually paid for such period; and (ii) if the proper calculation of the Fixed Charge Coverage Ratio would have resulted in lower pricing for such period, Lenders shall have no obligation to repay interest to the Borrowers; provided, that, if as a result of any restatement or other event a proper calculation of the Fixed Charge Coverage Ratio would have resulted in higher pricing for one or more periods and lower pricing for one or more other periods (due to the shifting of income or expenses from one period to another period or any similar reason), then the amount payable by the Borrowers pursuant to clause (i) above shall be based upon the excess, if any, of the amount of interest that should have been paid for all applicable periods over the amounts of interest actually paid for such periods.  
“Applicable Percentage” shall have the meaning set forth in Section 16.10.  
“Authority” shall have the meaning set forth in Section 4.19(d).  

“Availability Block” shall mean an amount equal to $4,000,000 on the Closing Date, and as may be otherwise modified by the written agreement of the parties hereto from time to time.  
“Base Rate” shall mean the base commercial lending rate of PNC as publicly announced to be in effect from time to time, such rate to be adjusted automatically, without notice, on the effective date of any change in such rate.  This rate of interest is determined from time to time by PNC as a means of pricing some loans to its customers and is neither tied to any external rate of interest or index nor does it necessarily reflect the lowest rate of interest actually charged by PNC to any particular class or category of customers of PNC.  
“Blocked Accounts” shall have the meaning set forth in Section 4.15(h).  
“Blocked Account Bank” shall have the meaning set forth in Section 4.15(h).  
“Blocked Person” shall have the meaning set forth in Section 5.24(b) hereof.  
“Borrowers” shall have the meaning set forth in the preamble to this Agreement and shall extend to all permitted successors and assigns of such Persons.  
“Borrowers’ Account” shall have the meaning set forth in Section 2.8.  
“Borrowing Base Certificate” shall mean a certificate in substantially the form of Exhibit 1.2 duly executed by the President, Chief Financial Officer, Controller, Accounting Manager or Director of Finance of each Borrower and delivered to the Agent, appropriately completed, by which such officer shall certify to Agent the Formula Amount and calculation thereof as of the date of such certificate.  
“Bowman” shall mean Bowman Lamps, LLC, an Ohio limited liability company.
“Business Day” shall mean any day other than Saturday or Sunday or a legal holiday on which commercial banks are authorized or required by law to be closed for business in East Brunswick, New Jersey and, if the applicable Business Day relates to any Eurodollar Rate Loans, such day must also be a day on which dealings are carried on in the London interbank market.  
“Campus” means TCP Campus Drive, LLC, an Ohio limited liability company.
“Capital Expenditures” shall mean expenditures made or liabilities incurred for the acquisition of any fixed assets or improvements, replacements, substitutions or additions thereto which have a useful life of more than one year, including the total principal portion of Capitalized Lease Obligations, which, in accordance with GAAP, would be classified as capital expenditures.  
“Capitalized Lease Obligation” shall mean any Indebtedness of any Borrower represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.  
“Cash Dominion Period” shall mean the period commencing upon the occurrence of a Cash Dominion Triggering Event and ending on the occurrence of a Cash Dominion Satisfaction Event.
“Cash Dominion Satisfaction Event” shall mean the earliest date on which the following conditions precedent have been satisfied: Undrawn Availability is equal to or greater than fifteen percent (15%) of the Maximum Revolving Loan Amount for thirty (30) consecutive days.

“Cash Dominion Triggering Event” shall mean Undrawn Availability is less than fifteen percent (15%) of the Maximum Revolving Loan Amount on any Business Day.

“Cash Management Liabilities” shall have the meaning provided in the definition of “Cash Management Products and Services.

“Cash Management Products and Services” shall mean agreements or other arrangements under which Agent or any Lender or any Affiliate of Agent or a Lender provides any of the following products or services to any Borrower:  (a) credit cards; (b) credit card processing services; (c) debit cards and stored value cards; (d) commercial cards; (e) ACH transactions; and (f) cash management and treasury management services and products, including without limitation controlled disbursement accounts or services, lockboxes, automated clearinghouse transactions, overdrafts, interstate depository network services.  The indebtedness, obligations and liabilities of any Borrower to the provider of any Cash Management Products and Services (including all obligations and liabilities owing to such provider in respect of any returned items deposited with such provider) (the “Cash Management Liabilities”) shall be “Obligations” hereunder, guaranteed obligations under the Guaranty and otherwise treated as Obligations for purposes of each of the Other Documents.  The Liens securing the Cash Management Products and Services shall be pari passu with the Liens securing all other Obligations under this Agreement and the Other Documents, subject to the express provisions of Section 11.5.
“CEA” shall mean the Commodity Exchange Act (7 U.S.C.§1 et seq.), as amended from time to time, and any successor statute.
“CERCLA” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§9601 et seq.  
“CFTC” shall mean the Commodity Futures Trading Commission.
“Change in Law” shall mean the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any Applicable Law; (b) any change in any Applicable Law or in the administration, implementation, interpretation or application thereof by any Governmental Body; or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Body; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, regulations, guidelines, interpretations or directives thereunder or issued in connection therewith (whether or not having the force of Applicable Law) and (y) all requests, rules, regulations, guidelines, interpretations 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 (whether or not having the force of law), 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, issued, promulgated or implemented.
“Change of Control” shall mean (a) any person or group of persons (within the meaning of Section 13(d) or 14(a) of the Exchange Act) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the SEC under the Exchange Act) of 50% or more of the voting Equity Interests of Holdings; (b) during any period of twelve (12) consecutive months, a majority of the members of the board of directors of Holdings cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or (iii) whose election or nomination to that board was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a 

majority of that board; or (c) any merger or consolidation of or with a Borrower or sale of all or substantially all of the property or assets of a Borrower.  
For purposes of this definition, “control of” a Person shall mean the power, direct or indirect (x) to vote 50% or more of the Equity Interests having ordinary voting power for the election of directors (or the individuals performing similar functions) of such Person or (y) to direct or cause the direction of the management and policies of such Person by contract or otherwise.  
“Change of Ownership” shall mean any person or group of persons (within the meaning of Section 13(d) or 14(a) of the Exchange Act) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the SEC under the Exchange Act) of 50% or more of the voting Equity Interests of Holdings; (b) during any period of twelve (12) consecutive months, a majority of the members of the board of directors of Holdings cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or (iii) whose election or nomination to that board was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board; or (c) any merger or consolidation of or with any Borrower or Holdings or sale of all or substantially all of the property or assets of any Borrower or Holdings; provided, that the sale by Holdings of any Equity Interests of any Borrower shall be deemed a sale of substantially all of Holding’s assets.
“Charges” shall mean all taxes, charges, fees, imposts, levies or other assessments, including all net income, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation and property taxes, custom duties, fees, assessments, liens, claims and charges of any kind whatsoever, any interest and any penalties, additions to tax or additional amounts, imposed by any taxing or other authority, domestic or foreign (including the Pension Benefit Guaranty Corporation or any environmental agency or superfund), upon the Collateral, any Borrower or any of its Affiliates, including Shanghai Qiang Ling Electronic Co., Ltd., Zhenjiang Qiang Ling Electronic Co., Ltd., Zhenjiang Qiang Ling Illuminate Co., Ltd., and Yangzhou Qiang Ling Co. Ltd.  
“Closing Date” shall mean September 29, 2016 or such other date as may be agreed to by the parties hereto.
“CMP” shall mean each of Shanghai Qiang Ling Electronic Co., Ltd., Zhenjiang Qiang Ling Electronic Co., Ltd., Zhenjiang Qiang Ling Illuminate Co., Ltd., Yangzhou Qiang Ling Co. Ltd. and Aurora Technologies Limited, each of which is an Affiliate of Borrowers.  
“CMP Subordinated Payable Documentation” shall mean the agreements and documents that describe the business arrangements between any Borrower and CMP, in each case satisfactory in form and substance to Agent, and shall contain the agreement of CMP that it will not materially modify the terms upon which trade credit is made available to any Borrower or the payment terms with respect to any Borrower without the Agent’s prior written consent.  
“CMP Subordination Agreement” shall mean that certain Subordination Agreement, dated as of the Original Closing Date, executed by CMP in favor of the Agent (and acknowledged by the Borrowers), as the same may be amended, restated, supplemented or otherwise modified from time to time, in each case satisfactory in form and substance to Agent.  

“Code” shall mean the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, and any successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect.  
“Collateral” shall mean and include:  
(a)    all Receivables;
(b)    all Equipment;
(c)    all General Intangibles;
(d)    all Inventory;
(e)    all Investment Property;
(f)    [Reserved];
(g)    all Subsidiary Stock;
(h)     the Leasehold Interests; 
(i)     all of each Loan Party’s right, title and interest in and to, whether now owned or hereafter acquired and wherever located, (i) its respective goods and other property including, but not limited to, all merchandise returned or rejected by Customers, relating to or securing any of the Receivables; (ii) all of each Loan Party’s rights as a consignor, a consignee, an unpaid vendor, mechanic, artisan, or other lienor, including stoppage in transit, setoff, detinue, replevin, reclamation and repurchase; (iii) all additional amounts due to Loan Parties from any Customer relating to the Receivables; (iv) other property, including warranty claims, relating to any goods securing the Obligations; (v) all of each Loan Party’s contract rights, rights of payment which have been earned under a contract right, instruments (including promissory notes), documents, chattel paper (including electronic chattel paper), warehouse receipts, deposit accounts, letters of credit and money; (vi) all commercial tort claims (whether now existing or hereafter arising); (vii) if and when obtained by any Loan Party, all real and personal property of third parties in which such Loan Party has been granted a lien or security interest as security for the payment or enforcement of Receivables; (viii) all letter of credit rights (whether or not the respective letter of credit is evidenced by a writing); (ix) all supporting obligations; and (x) any other goods, personal property or real property now owned or hereafter acquired in which a Loan Party has expressly granted a security interest or may in the future grant a security interest to Agent hereunder, or in any amendment or supplement hereto or thereto, or under any other agreement between Agent and Loan Parties; 
(j)     all of each Loan Party’s ledger sheets, ledger cards, files, correspondence, records, books of account, business papers, computers, computer software (owned by a Loan Party or in which it has an interest), computer programs, tapes, disks and documents relating to (a), (b), (c), (d), (e), (f), (g), (h) or (i) of this Paragraph; and 
(k)     all proceeds and products of (a), (b), (c), (d), (e), (f), (g), (h), (i) and (j) in whatever form, including, but not limited to:  cash, deposit accounts (whether or not comprised solely of proceeds), certificates of deposit, insurance proceeds (including hazard, flood and credit insurance), negotiable instruments and other instruments for the payment of money, chattel paper, security agreements, documents, eminent domain proceeds, condemnation proceeds and tort claim proceeds.  

“Commitment Percentage” of any Lender shall mean the percentage set forth below such Lender’s name on the signature page hereof as same may be adjusted upon any assignment by a Lender pursuant to Section 15.3(c) or (d) hereof.  
“Commitment Transfer Supplement” shall mean a document in the form of Exhibit 15.3 hereto, properly completed and otherwise in form and substance satisfactory to Agent by which the Purchasing Lender purchases and assumes a portion of the obligation of Lenders to make Advances under this Agreement.  
“Compliance Certificate” shall mean a compliance certificate to be signed by the President, Chief Financial Officer, Director of Finance or Controller of each Borrower, which shall state that, based on an examination sufficient to permit such officer to make an informed statement, no Default or Event of Default exists, or if such is not the case, specifying such Default or Event of Default, its nature, when it occurred, whether it is continuing and the steps being taken by Borrowers with respect to such default and, such certificate shall have appended thereto calculations which set forth each Borrower’s compliance with the requirements or restrictions imposed by Sections 6.5, 7.4, 7.5, 7.6, 7.7, 7.8 and 7.11.  
“Consents” shall mean all filings and all licenses, permits, consents, approvals, authorizations, qualifications and orders of Governmental Bodies and other third parties, domestic or foreign, necessary to carry on each Borrower’s business or necessary (including to avoid a conflict or breach under any agreement, instrument, other document, license, permit or other authorization) for the execution, delivery or performance of this Agreement, the Other Documents, including any Consents required under all applicable federal, state or other Applicable Law.  
“Consigned Inventory” shall mean Inventory of any Borrower that is in the possession of another Person on a consignment, sale or return, or other basis that does not constitute a final sale and acceptance of such Inventory.  
“Controlled Group” shall mean, at any time, the Borrowers and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control and all other entities which, together with Borrowers, are treated as a single employer under Section 414 of the Code.  
“Covered Entity” shall mean (a) each Borrower, each of each Borrower’s Subsidiaries, all Guarantors and all pledgors of Collateral and (b) each Person that, directly or indirectly, is in control of a Person described in clause (a) above.  For purposes of this definition, control of a Person shall mean the direct or indirect (x) ownership of, or power to vote, 25% or more of the issued and outstanding equity interests having ordinary voting power for the election of directors of such Person or other Persons performing similar functions for such Person, or (y) power to direct or cause the direction of the management and policies of such Person whether by ownership of equity interests, contract or otherwise.
“Customer” shall mean and include the account debtor with respect to any Receivable and/or the prospective purchaser of goods, services or both with respect to any contract or contract right, and/or any party who enters into or proposes to enter into any contract or other arrangement with any Borrower, pursuant to which such Borrower is to deliver any personal property or perform any services.  
“Customs” shall have the meaning set forth in Section 2.11(b) hereof.  
“Daily LIBOR Rate” shall mean, for any day, the rate per annum determined by Agent by dividing (x) the Published Rate by (y) a number equal to 1.00 minus the percentage prescribed by the Federal Reserve 

for determining the maximum reserve requirements with respect to any eurocurrency funding by banks on such day.  
“Default” shall mean an event, circumstance or condition which, with the giving of notice or passage of time or both, would constitute an Event of Default.  
“Default Rate” shall have the meaning set forth in Section 3.1 hereof.  
“Defaulting Lender” shall have the meaning set forth in Section 2.23(a) hereof.  
“Depository Accounts” shall have the meaning set forth in Section 4.15(h) hereof.  
“Designated Lender” shall have the meaning set forth in Section 15.2(b) hereof.  
“Documents” shall have the meaning set forth in Section 8.1(c) hereof.  
“Dollar” and the sign “$” shall mean lawful money of the United States of America.  
“Domestic Rate Loan” shall mean any Advance that bears interest based upon the Alternate Base Rate.  
“Drawing Date” shall have the meaning set forth in Section 2.12(b) hereof.  
“Early Termination Date” shall have the meaning set forth in Section 13.1 hereof.  
“Earnings Before Interest and Taxes” shall mean for any period the sum of (i) net income (or loss) of Borrowers for such period (excluding extraordinary gains and extraordinary losses), plus (ii) all interest expense of Borrowers for such period, plus (iii) all charges against income of Borrowers for such period for federal, state and local taxes.  
“EBITDA” shall mean for any period the sum of (i) Earnings Before Interest and Taxes for such period plus (ii) depreciation expenses for such period, plus (iii) amortization expenses for such period, plus (iv) non-cash expenses for employee share based compensation for such period.  
“Eligibility Date” shall mean, with respect to each Loan Party and each Swap, the date on which this Agreement or any Other Document becomes effective with respect to such Swap (for the avoidance of doubt, the Eligibility Date shall be the date of the execution of such Swap if this Agreement or any Other Document is then in effect with respect to such Loan Party, and otherwise it shall be the date of execution and delivery of this Agreement and/or such Other Document(s) to which such Loan Party is a party).

“Eligible Contract Participant” shall mean an “eligible contract participant” as defined in the CEA and regulations thereunder.
“Eligible Extended Terms Account Debtor” shall mean each of Lowes Companies, Inc., Do It Best Corp., Wal-Mart Stores, Inc., Home Depot, Inc., Dollar General Corporation, and General Electric Company, and such other Persons as the Agent shall from time to time approve in writing as Eligible Extended Terms Account Debtors.  
“Eligible Inventory” shall mean and include Inventory of any Borrower, excluding work in process, valued at the lower of cost or market value, determined on a first-in-first-out basis, which is not, in Agent’s opinion, obsolete, slow moving or unmerchantable and which Agent, in its good faith, reasonable discretion, 

shall not deem ineligible Inventory of the Borrowers, based on such considerations as Agent may from time to time deem appropriate including whether the Inventory is subject to a perfected, first priority security interest in favor of Agent and no other Lien (other than a Permitted Encumbrance).  In addition, Inventory shall not be Eligible Inventory if it (i) does not conform to all standards imposed by any Governmental Body which has regulatory authority over such goods or the use or sale thereof, (ii) is in transit (except as otherwise permitted by the penultimate sentence of this definition), (iii) is located outside the continental United States or at a location that is not otherwise in compliance with this Agreement, (iv) constitutes Consigned Inventory, (v) is the subject of an Intellectual Property Claim; (vi) is subject to a License Agreement or other agreement that limits, conditions or restricts a Borrower’s or Agent’s right to sell or otherwise dispose of such Inventory, unless Agent is a party to a Licensor/Agent Agreement with the Licensor under such License Agreement; or (vii) is situated at a location not owned by a Borrower unless the owner or occupier of such location has executed in favor of Agent a Lien Waiver Agreement.  Eligible Inventory shall include Inventory in-transit with respect to which:  (A) title has passed to a Borrower, (B) such Inventory is insured to the full value thereof pursuant to policies acceptable to Agent and naming Agent as loss payee, (C) Agent shall have in its possession (1) all negotiable bills of lading properly endorsed and (2) all non-negotiable bills of lading issued in Agent’s name, and (D) all of the other requirements hereunder relating to Eligible Inventory are satisfied.  Eligible Inventory shall not include Inventory being acquired pursuant to a trade Letter of Credit to the extent such trade Letter of Credit remains outstanding.  
“Eligible Receivables” shall mean and include with respect to each Borrower, each Receivable of such Borrower arising in the Ordinary Course of Business and which Agent, in its good faith, reasonable judgment, shall deem to be an Eligible Receivable, based on such considerations as Agent may from time to time deem appropriate.  A Receivable shall not be deemed eligible unless such Receivable is subject to Agent’s first priority perfected security interest and no other Lien (other than Permitted Encumbrances), and is evidenced by an invoice or other documentary evidence satisfactory to Agent.  In addition, no Receivable shall be an Eligible Receivable if:  
(a)     it arises out of a sale made by any Borrower to an Affiliate of any Borrower or to a Person controlled by an Affiliate of any Borrower; 
(b)    it is due or unpaid (i) except for Receivables owing from Eligible Extended Terms Account Debtors, more than ninety (90) days after the original invoice date or more than sixty (60) days after the original due date, or (ii) for Receivables owing from Eligible Extended Terms Account Debtors, more than one hundred (100) days after the original invoice date or more than sixty (60) days after the original due date; 
(c)     fifty percent (50%) or more of the Receivables from such Customer are not deemed Eligible Receivables hereunder (such percentage may, in Agent’s sole discretion, be increased or decreased from time to time); 
(d)     any covenant, representation or warranty contained in this Agreement with respect to such Receivable has been breached; 
(e)     the Customer shall (i) apply for, suffer, or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or call a meeting of its creditors, (ii) admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business, (iii) make a general assignment for the benefit of creditors, (iv) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vii) acquiesce to, or fail to have dismissed, any petition which 

is filed against it in any involuntary case under such bankruptcy laws, or (viii) take any action for the purpose of effecting any of the foregoing; 
(f)     the sale is to a Customer outside the continental United States of America, Alaska, Hawaii or Canada, unless the sale is on letter of credit, guaranty or acceptance terms, in each case acceptable to Agent in its sole discretion; 
(g)     the sale to the Customer is on a bill-and-hold, guaranteed sale, sale-and--return, sale on approval, consignment or any other repurchase or return basis or is evidenced by chattel paper; 
(h)     Agent believes, in its good faith, reasonable judgment, that collection of such Receivable is insecure or that such Receivable may not be paid by reason of the Customer’s financial inability to pay; 
(i)     the Customer is the United States of America, any state or any department, agency or instrumentality of any of them, unless a Borrower assigns its right to payment of such Receivable to Agent pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C.  Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et seq.) or has otherwise complied with other applicable statutes or ordinances; 
(j)     the goods giving rise to such Receivable have not been delivered to and accepted by the Customer or the services giving rise to such Receivable have not been performed by Borrowers and accepted by the Customer or the Receivable otherwise does not represent a final sale; 
(k)     the Receivables of the Customer exceed 25% of all Eligible Receivables, to the extent such Receivable exceeds such limit (it being agreed that as of the Closing Date, Receivables from (I) Wal-Mart Stores, Inc. shall not exceed 50% of all Eligible Receivables and (II) Home Depot, Inc. shall not exceed 40% of all Eligible Receivables); 
(l)     the Receivable is subject to any offset, deduction, defense, dispute, or counterclaim, the Customer is also a creditor or supplier of any Borrower or the Receivable is contingent in any respect or for any reason; 
(m)     any Borrower has made any agreement with any Customer for any deduction therefrom, except for discounts or allowances made in the Ordinary Course of Business for prompt payment, all of which discounts or allowances are reflected in the calculation of the face value of each respective invoice related thereto; 
(n)     any return, rejection or repossession of the merchandise has occurred or the rendition of services has been disputed; 
(o)     such Receivable is not payable to any Borrower; or 
(p)     such Receivable is not otherwise satisfactory to Agent as determined in good faith by Agent in the exercise of its discretion in a reasonable manner.  
“Environmental Complaint” shall have the meaning set forth in Section 4.19(d) hereof.  
“Environmental Laws” shall mean all federal, state and local environmental, land use, zoning, health, chemical use, safety and sanitation laws, statutes, ordinances and codes relating to the protection of the environment and/or governing the use, storage, treatment, generation, transportation, processing, handling, production or disposal of Hazardous Substances and the rules, regulations, policies, guidelines, 

interpretations, decisions, orders and directives of federal, state and local governmental agencies and authorities with respect thereto.  
“Equipment” shall mean and include all of each Loan Party’s goods (other than Inventory) whether now owned or hereafter acquired and wherever located including all equipment, machinery, apparatus, motor vehicles, fittings, furniture, furnishings, fixtures, parts, accessories and all replacements and substitutions therefor or accessions thereto.  
“Equity Interests” of any Person shall mean any and all shares, rights to purchase, options, warrants, general, limited or limited liability partnership interests, member interests, participation or other equivalents of or interest in (regardless of how designated) equity of such Person, whether voting or nonvoting, including common stock, preferred stock, convertible securities or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).  
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and the rules and regulations promulgated thereunder.  
“Eurodollar Rate” shall mean for any Eurodollar Rate Loan for the then current Interest Period relating thereto the interest rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by Agent by dividing (i) the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which US dollar deposits are offered by leading banks in the London interbank deposit market), or the rate which is quoted by another source selected by Agent which has been approved by the British Bankers’ Association as an authorized information vendor for the purpose of displaying rates at which US dollar deposits are offered by leading banks in the London interbank deposit market (an “Alternative Source”), at approximately 11:00 a.m., London time two (2) Business Days prior to the first day of such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by the Agent at such time (which determination shall be conclusive absent manifest error)) for an amount comparable to such Eurodollar Rate Loan and having a borrowing date and a maturity comparable to such Interest Period by (ii) a number equal to 1.00 minus the Reserve Percentage.  
The Eurodollar Rate shall be adjusted with respect to any Eurodollar Rate Loan that is outstanding on the effective date of any change in the Reserve Percentage as of such effective date.  The Agent shall give prompt notice to the Borrowers of the Eurodollar Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.  
“Eurodollar Rate Loan” shall mean an Advance at any time that bears interest based on the Eurodollar Rate.  
“Event of Default” shall have the meaning set forth in Article X hereof.  
“Exchange Act” shall have the mean the Securities Exchange Act of 1934, as amended.  
“Excluded Hedge Liability or Liabilities” shall mean, with respect to each Loan Party, each of its Swap Obligations if, and to the extent that, all or any portion of this Agreement or any Other Document that relates to such Swap Obligation (or the guaranty of such Swap Obligation, or the grant by such Loan Party of a security interest in the Collateral to secure such Swap Obligation) is or becomes illegal under the CEA, or any rule, regulation or order of the CFTC, by virtue of such Loan Party’s failure to qualify as an Eligible Contract Participant on the Eligibility Date for such Swap. If a Swap Obligation arises under a master 

agreement governing more than one Swap, this definition shall only include the portion of such Swap Obligation that is attributable to Swaps for which such guaranty or security interest is or becomes illegal.
“Excluded Taxes” shall mean, with respect to Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of any Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income, gross receipts or revenue (or franchise or other taxes imposed in lieu thereof) by the United States of America or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which Lender or such other recipient is located.  
“Executive Order No. 13224” shall mean the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.  
“Existing Agreement” shall have the meaning set forth in the recitals hereto.
“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations thereunder or official interpretations thereof.
“Federal Funds Effective Rate” for any day shall mean the rate per annum (based on a year of 360 days and actual days elapsed and rounded upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the "Federal Funds Effective Rate" as of the date of this Agreement; provided, if such Federal Reserve Bank (or its successor) does not announce such rate on any day, the "Federal Funds Effective Rate" for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced.  
“Federal Funds Open Rate” for any day shall mean the rate per annum (based on a year of 360 days and actual days elapsed) which is the daily federal funds open rate as quoted by ICAP North America, Inc. (or any successor) as set forth on the Bloomberg Screen BTMM for that day opposite the caption “OPEN” (or on such other substitute Bloomberg Screen that displays such rate), or as set forth on such other recognized electronic source used for the purpose of displaying such rate as selected by PNC (an “Alternate Source”) (or if such rate for such day does not appear on the Bloomberg Screen BTMM (or any substitute screen) or on any Alternate Source, or if there shall at any time, for any reason, no longer exist a Bloomberg Screen BTMM (or any substitute screen) or any Alternate Source, a comparable replacement rate determined by the PNC at such time (which determination shall be conclusive absent manifest error); provided however, that if such day is not a Business Day, the Federal Funds Open Rate for such day shall be the “open” rate on the immediately preceding Business Day.  If and when the Federal Funds Open Rate changes, the rate of interest with respect to any advance to which the Federal Funds Open Rate applies will change automatically without notice to any Borrower, effective on the date of any such change.  
“Fixed Charge Coverage Ratio” shall mean and include, with respect to any fiscal period, the ratio of (a) EBITDA minus Unfinanced Capitalized Expenditures made during such period minus cash taxes paid plus one-time cash tax refund in an amount not to exceed $2,000,000 relating to the fiscal year 2015 and received during such period  to (b) all Senior Debt Payments for such period.  

“Flood Laws” shall mean all Applicable Laws relating to policies and procedures that address requirements placed on federally regulated lenders under the National Flood Insurance Reform Act of 1994 and other Applicable Laws related thereto.
“Foreign Subsidiary” of any Person, shall mean any Subsidiary of such Person that is not organized or incorporated in the United States or any State or territory thereof.  
“Formula Amount” shall have the meaning set forth in Section 2.1(a).  
“Funded Debt” shall mean, with respect to any Person, without duplication, all Indebtedness for borrowed money evidenced by notes, bonds, debentures, or similar evidences of Indebtedness that by its terms matures more than one year from, or is directly or indirectly renewable or extendible at such Person’s option under a revolving credit or similar agreement obligating the lender or lenders to extend credit over a period of more than one year from the date of creation thereof, and specifically including Capitalized Lease Obligations, current maturities of long-term debt, revolving credit and short-term debt extendible beyond one year at the option of the debtor, and also including, in the case of any Borrower, the Obligations and, without duplication, Indebtedness consisting of guaranties of Funded Debt of other Persons.  
“GAAP” shall mean generally accepted accounting principles in the United States of America in effect from time to time.  
“General Intangibles” shall mean and include all of each Loan Party’s general intangibles, whether now owned or hereafter acquired, including all payment intangibles, all choses in action, causes of action, corporate or other business records, inventions, designs, patents, patent applications, equipment formulations, manufacturing procedures, quality control procedures, trademarks, trademark applications, service marks, trade secrets, goodwill, copyrights, design rights, software, computer information, source codes, codes, records and updates, registrations, licenses, franchises, customer lists, tax refunds, tax refund claims, computer programs, all claims under guaranties, security interests or other security held by or granted to a Loan Party to secure payment of any of the Receivables by a Customer (other than to the extent covered by Receivables) all rights of indemnification and all other intangible property of every kind and nature (other than Receivables).  
“Governmental Acts” shall have the meaning set forth in Section 2.17.  
“Governmental Body” shall mean any nation or government, any state or other political subdivision thereof or any entity, authority, agency, division or department exercising the legislative, judicial, regulatory or administrative functions of or pertaining to a government.  
“Guaranteed Obligations” shall have the meaning set forth in Section 16.1 hereof.  
“Guarantor” shall mean any Person who may hereafter guarantee payment or performance of the whole or any part of the Obligations (including, without limitation, any Loan Party Guarantors) and “Guarantors” means collectively all such Persons.  
“Guaranty” shall mean any guaranty of the obligations of any Borrower executed by a Guarantor in favor of Agent for its benefit and for the ratable benefit of Lenders, in form and substance satisfactory to the Agent.  
“Hazardous Discharge” shall have the meaning set forth in Section 4.19(d) hereof.  
“Hazardous Substance” shall mean, without limitation, any flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum and petroleum 

products, methane, hazardous materials, Hazardous Wastes, hazardous or Toxic Substances or related materials as defined in CERCLA, the Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.), RCRA, Articles 15 and 27 of the New York State Environmental Conservation Law or any other applicable Environmental Law and in the regulations adopted pursuant thereto.  
“Hazardous Wastes” shall mean all waste materials subject to regulation under CERCLA, RCRA or applicable state law, and any other applicable Federal and state laws now in force or hereafter enacted relating to hazardous waste disposal.  
“Hedge Liabilities” shall have the meaning provided in the definition of “Lender-Provided Interest Rate Hedge”.  
“Holdings” shall mean TCP International Holdings Ltd., a corporation organized under the laws of Switzerland, together with its permitted successors and assigns.    
“Indebtedness” of a Person at a particular date shall mean all obligations of such Person which in accordance with GAAP would be classified upon a balance sheet as liabilities (except capital stock and surplus earned or otherwise) and in any event, without limitation by reason of enumeration, shall include all indebtedness, debt and other similar monetary obligations of such Person whether direct or guaranteed, and all premiums, if any, due at the required prepayment dates of such indebtedness, and all indebtedness secured by a Lien on assets owned by such Person, whether or not such indebtedness actually shall have been created, assumed or incurred by such Person.  Any indebtedness of such Person resulting from the acquisition by such Person of any assets subject to any Lien shall be deemed, for the purposes hereof, to be the equivalent of the creation, assumption and incurring of the indebtedness secured thereby, whether or not actually so created, assumed or incurred.  
“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

“Ineligible Security” shall mean any security which may not be underwritten or dealt in by member banks of the Federal Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.  
“Intellectual Property” shall mean property constituting under any Applicable Law a patent, patent application, copyright, trademark, service mark, trade name, mask work, trade secret or license or other right to use any of the foregoing.  
“Intellectual Property Claim” shall mean the assertion by any Person of a claim (whether asserted in writing, by action, suit or proceeding or otherwise) that any Borrower's ownership, use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other property or asset is violative of any ownership of or right to use any Intellectual Property of such Person.  
“Intercompany Loan Payments” shall have the meaning set forth in Section 7.24 hereof
“Interest Period” shall mean the period provided for any Eurodollar Rate Loan pursuant to Section 2.2(b).  
“Interest Rate Hedge” shall mean an interest rate exchange, collar, cap, swap, adjustable strike cap, adjustable strike corridor or similar agreements entered into by any Borrower or its Subsidiaries in order to provide protection to, or minimize the impact upon, any Borrower, any Guarantor and/or their respective Subsidiaries of increasing floating rates of interest applicable to Indebtedness.  

“Inventory” shall mean and include all of each Loan Party’s now owned or hereafter acquired goods, merchandise and other personal property, wherever located, to be furnished under any consignment arrangement, contract of service or held for sale or lease, all raw materials, work in process, finished goods and materials and supplies of any kind, nature or description which are or might be used or consumed in a Loan Party’s business or used in selling or furnishing such goods, merchandise and other personal property, and all documents of title or other documents representing them.  
“Inventory Advance Rate” shall have the meaning set forth in Section 2.1(a)(y)(ii) hereof.  
“Investment Property” shall mean and include all of each Loan Party’s now owned or hereafter acquired securities (whether certificated or uncertificated), securities entitlements, securities accounts, commodities contracts and commodities accounts.  
“Issuer” shall mean any Person who issues a Letter of Credit and/or accepts a draft pursuant to the terms hereof.  
“Law(s)” shall mean any law(s) (including common law), constitution, statute, treaty, regulation, rule, ordinance, opinion, issued guidance, release, ruling, order, executive order, injunction, writ, decree, bond judgment authorization or approval, lien or award of or any settlement arrangement with any Governmental Body, foreign or domestic.
“Leasehold Interests” shall mean all of each Loan Party’s right, title and interest in and to the premises at the locations identified as leased property on Schedule 4.19.  
“Lender” and “Lenders” shall have the meaning ascribed to such term in the preamble to this Agreement and shall include each Person which becomes a transferee, successor or assign of any Lender.  
“Lender-Provided Interest Rate Hedge” shall mean an Interest Rate Hedge which is provided by any Lender and with respect to which Agent confirms in writing prior to the execution thereof: (a) is documented in a standard International Swap Dealer Association Agreement; (b) provides for the method of calculating the reimbursable amount of the provider’s credit exposure in a reasonable and customary manner; and (c) is entered into for hedging (rather than speculative) purposes.  The debts, liabilities and obligations of any Loan Party to the provider of any Lender-Provided Interest Rate Hedge (the “Hedge Liabilities”) of the Loan Party or Subsidiary thereof that is party to such Lender-Provided Interest Rate Hedge shall, for purposes of this Agreement and all Other Documents be “Obligations” of such Loan Party and of each other Loan Party.  The Liens securing the Hedge Liabilities shall be pari passu with the Liens securing all other Obligations under this Agreement and the Other Documents, subject to the express provisions of Section 11.5 hereof.  
“Letter of Credit Fees” shall have the meaning set forth in Section 3.2.  
“Letter of Credit Borrowing” shall have the meaning set forth in Section 2.12(d).  
“Letter of Credit Sublimit” shall mean $5,000,000.  
“Letters of Credit” shall have the meaning set forth in Section 2.9.  
“Leverage Ratio” shall mean, with respect to Borrowers and their consolidated Subsidiaries, on any date, the ratio of Funded Debt as of such date to EBITDA for the four-fiscal quarter period ending on such date.  

“License Agreement” shall mean any agreement between any Borrower and a Licensor pursuant to which such Borrower is authorized to use any Intellectual Property in connection with the manufacturing, marketing, sale or other distribution of any Inventory of any Borrower or otherwise in connection with any Borrower's business operations.  
“Licensor” shall mean any Person from whom any Borrower obtains the right to use (whether on an exclusive or non-exclusive basis) any Intellectual Property in connection with any Borrower's manufacture, marketing, sale or other distribution of any Inventory or otherwise in connection with any Borrower's business operations.  
“Licensor/Agent Agreement” shall mean an agreement between Agent and a Licensor, in form and content satisfactory to Agent, by which Agent is given the unqualified right, vis-a-vis such Licensor, to enforce Agent’s Liens with respect to and to dispose of any Borrower’s Inventory with the benefit of any Intellectual Property applicable thereto, irrespective of any Borrower’s default under any License Agreement with such Licensor.  
“Lien” shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, security interest, lien (whether statutory or otherwise), Charge, claim or encumbrance, or preference, priority or other security agreement or preferential arrangement held or asserted in respect of any asset of any kind or nature whatsoever including any conditional sale or other title retention agreement, any lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction.  
“Loan Parties” means, collectively, the Borrowers and the Subsidiary Guarantor.  
“Loan Party Guarantors” has the meaning set forth in Section 16.1.  
“Loan Party Guaranty” has the meaning set forth in Section 16.1.  
“Lien Waiver Agreement” shall mean an agreement which is executed in favor of Agent by a Person who owns or occupies premises at which any Collateral may be located from time to time and by which such Person shall waive any Lien that such Person may ever have with respect to any of the Collateral and shall authorize Agent from time to time to enter upon the premises to inspect or remove the Collateral from such premises or to use such premises to store or dispose of such Inventory.  
“Material Adverse Effect” shall mean a material adverse effect on (a) the condition (financial or otherwise), results of operations, assets, business, properties or prospects of any Borrower or any Guarantor, (b) any Borrower’s ability to duly and punctually pay or perform the Obligations in accordance with the terms thereof, (c) the value of the Collateral, or Agent’s Liens on the Collateral or the priority of any such Lien or (d) the practical realization of the benefits of Agent’s and each Lender’s rights and remedies under this Agreement and the Other Documents.  
“Maximum Face Amount” shall mean, with respect to any outstanding Letter of Credit, the face amount of such Letter of Credit including all automatic increases provided for in such Letter of Credit, whether or not any such automatic increase has become effective.  
“Maximum Liability” shall have the meaning set forth in Section 16.9.  
“Maximum Revolving Advance Amount” shall mean $50,000,000.  

“Maximum Undrawn Amount” shall mean with respect to any outstanding Letter of Credit, the amount of such Letter of Credit that is or may become available to be drawn, including all automatic increases provided for in such Letter of Credit, whether or not any such automatic increase has become effective.  
“Modified Commitment Transfer Supplement” shall have the meaning set forth in Section 15.3(d).  
“Multiemployer Plan” shall mean a “multiemployer plan” as defined in Sections 3(37) and 4001(a)(3) of ERISA.  
“Multiple Employer Plan” shall mean a Plan which has two or more contributing sponsors (including any Borrower or any member of the Controlled Group) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.  
“Non-Qualifying Party” shall mean any Loan Party that fails for any reason to qualify as an Eligible Contract Participant.
“Note” shall mean the Amended and Restated Revolving Credit Note.  
“Obligated Party” has the meaning set forth in Section 16.2.  
“Obligations” shall mean and include any and all loans, advances, debts, liabilities, obligations, covenants and duties owing by any Borrower to Lenders or Agent or to any other direct or indirect subsidiary or affiliate of Agent or any Lender with respect to or in connection with this Agreement, any Other Document, or any other agreement, instrument or document arising in connection herewith, therewith or otherwise relating hereto or thereto, of any kind or nature, present or future (including any interest or other amounts accruing thereon after maturity, or after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding relating to any Borrower, whether or not a claim for post-filing or post-petition interest or other amounts is allowed in such proceeding), whether or not evidenced by any note, guaranty or other instrument, whether arising under any agreement, instrument or document (including this Agreement and the Other Documents), whether or not for the payment of money, whether arising by reason of an extension of credit, opening of a letter of credit, loan, equipment lease or guarantee, under any interest or currency Swap, future, option or other similar agreement, or in any other manner, whether arising out of overdrafts or deposit or other accounts or electronic funds transfers (whether through automated clearing houses or otherwise) or out of the Agent’s or any Lenders non-receipt of or inability to collect funds or otherwise not being made whole in connection with depository transfer check or other similar arrangements, whether direct or indirect (including those acquired by assignment or participation), absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, contractual or tortious, liquidated or unliquidated, including, but not limited to, any and all of any Borrower’s Indebtedness and/or liabilities under this Agreement, the Other Documents or under any other agreement between Agent or Lenders and any Borrower with respect to or in connection with this Agreement, any Other Document, or any other agreement, instrument or document arising in connection herewith, therewith or otherwise relating hereto or thereto, and any amendments, extensions, renewals or increases and all costs and expenses of Agent and any Lender incurred in the documentation, negotiation, modification, enforcement, collection or otherwise in connection with any of the foregoing, including but not limited to reasonable attorneys’ fees and expenses and all obligations of any Borrower to Agent or Lenders to perform acts or refrain from taking any action.  It is understood that any obligations of any Borrower in connection with any interest or currency Swap, Hedge Liabilities, Cash Management Liabilities, future, option or other similar agreements to any Lender or an Affiliate thereof shall be deemed to relate to this Agreement and be “Obligations” hereunder.  It is further understood that any obligations of any Borrower arising out of overdrafts or deposit or other accounts or electronic funds transfers (whether through automated clearing houses or otherwise) or out of the Agent’s or 

any Lender’s non-receipt of or inability to collect funds or otherwise not being made whole in connection with a depository transfer check or other similar arrangements with Agent, any Lender or any of their Affiliates shall be deemed to relate to this Agreement and be “Obligations” hereunder.  Notwithstanding anything to the contrary contained in the foregoing (including the definition of Lender-Provided Interest Rate Hedge, but subject to the final sentence of the definition of Excluded Hedge Liabilities), as to each Loan Party, the Obligations shall not include any Excluded Hedge Liabilities of such Loan Party. 
“Ordinary Course of Business” shall mean the ordinary course of Borrowers’ business as conducted on the Closing Date.  
“Original Closing Date” shall mean December 11, 2009.  
“Original Owners” shall mean Ellis Yan, Lillian Yan Irrevocable Stock Trust, dated December 18, 2004, or any other trust over which Ellis Yan has control and of which Ellis Yan or any member of his immediate family is the beneficiary.  
“Other Documents” shall mean the Note, the Questionnaire, the CMP Subordination Agreement, any Guaranty, any Lender-Provided Interest Rate Hedge, the Tax Payment Agreement, and any and all other agreements, instruments and documents, including guaranties, pledges, powers of attorney, consents, interest or currency swap agreements or other similar agreements and all other writings heretofore, now or hereafter executed by any Borrower or any Guarantor and/or delivered to Agent or any Lender in respect of the transactions contemplated by this Agreement.  
“Other Taxes” shall mean any taxes that are not Excluded Taxes.  
“Out-of-Formula Loans” shall have the meaning set forth in Section 15.2(b).  
“Parent” of any Person shall mean a corporation or other entity owning, directly or indirectly at least 50% of the shares of stock or other ownership interests having ordinary voting power to elect a majority of the directors of the Person, or other Persons performing similar functions for any such Person.  
“Participant” shall mean each Person who shall be granted the right by any Lender to participate in any of the Advances and who shall have entered into a participation agreement in form and substance satisfactory to such Lender.  
“Participation Advance” shall have the meaning set forth in Section 2.12(d).  
“Participation Commitment” shall mean each Lender’s obligation to buy a participation of the Letters of Credit issued hereunder.  
“Payee” shall have the meaning set forth in Section 3.10 hereof.  
“Payment Office” shall mean initially Two Tower Center Boulevard, East Brunswick, New Jersey 08816; thereafter, such other office of Agent, if any, which it may designate by notice to Borrowers and to each Lender to be the Payment Office.  
“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or any successor.  
“Pension Benefit Plan” shall mean at any time any employee pension benefit plan (including a Multiple Employer Plan, but not a Multiemployer Plan) which is covered by Title IV of ERISA or is subject to the 

minimum funding standards under Section 412 of the Code and either (i) is maintained by any member of the Controlled Group for employees of any member of the Controlled Group; or (ii) has at any time within the preceding five years been maintained by any entity which was at such time a member of the Controlled Group for employees of any entity which was at such time a member of the Controlled Group.  
“Permitted CMP Payable Amount” shall mean an amount equal to at all times $30,000,000.  
“Permitted Encumbrances” shall mean (a) Liens in favor of Agent for the benefit of Agent and Lenders; (b) Liens for taxes, assessments or other governmental charges not delinquent or being Properly Contested; (c) Liens disclosed in the financial statements referred to in Section 5.5, the existence of which Agent has consented to in writing; (d) deposits or pledges to secure obligations under worker’s compensation, social security or similar laws, or under unemployment insurance; (e) deposits or pledges to secure bids, tenders, contracts (other than contracts for the payment of money), leases, statutory obligations, surety and appeal bonds and other obligations of like nature arising in the Ordinary Course of Business; (f) Liens arising by virtue of the rendition, entry or issuance against a Borrower or any Subsidiary, or any property of a Borrower or any Subsidiary, of any judgment, writ, order, or decree for so long as each such Lien (x) is in existence for less than 20 consecutive days after it first arises or is being Properly Contested and (y) is at all times junior in priority to any Liens in favor of Agent; (g) mechanics’, workers’, materialmen’s or other like Liens arising in the Ordinary Course of Business with respect to obligations which are not due or which are being contested in good faith by a Borrower; (h) Liens placed upon fixed assets hereafter acquired to secure a portion of the purchase price thereof, provided that (x) any such lien shall not encumber any other property of a Borrower and (y) the aggregate amount of Indebtedness secured by such Liens incurred as a result of such purchases during any fiscal year shall not exceed the amount provided for in Section 7.6; (i) other Liens incidental to the conduct of a Borrower’s business or the ownership of its property and assets which were not incurred in connection with the borrowing of money or the obtaining of advances or credit, and which do not in the aggregate materially detract from Agent’s or Lenders’ rights in and to the Collateral or the value of a Borrower’s property or assets or which do not materially impair the use thereof in the operation of a Borrower’s business; (j) Liens disclosed on Schedule 1.2, provided that such Liens shall secure only those obligations which they secure on the Closing Date (and extensions, renewals and refinancings of such obligations permitted by Section 7.8) and shall not subsequently apply to any other property or assets of any Borrower; and (k) Liens securing the Subordinated Promissory Note.  
“Person” shall mean any individual, sole proprietorship, partnership, corporation, business trust, joint stock company, trust, unincorporated organization, association, limited liability company, limited liability partnership, institution, public benefit corporation, joint venture, entity or Governmental Body (whether federal, state, county, city, municipal or otherwise, including any instrumentality, division, agency, body or department thereof).  
“Plan” shall mean any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Benefit Plan), maintained for employees of any Borrower or any member of the Controlled Group or any such Plan to which any Borrower or any member of the Controlled Group is required to contribute on behalf of any of its employees.  
“PNC” shall have the meaning set forth in the preamble to this Agreement and shall extend to all of its successors and assigns.  
“PPSA” means the Personal Property Security Act (Ontario), including the regulations thereto, provided that, if perfection or the effect of perfection or non-perfection or the priority of any Lien created hereunder on the Collateral is governed by the personal property security legislation or other applicable legislation with respect to personal property security in effect in a jurisdiction other than Ontario, “PPSA” 

means the Personal Property Security Act or such other applicable legislation in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.
“Properly Contested” shall mean, in the case of any Indebtedness or Lien, as applicable, of any Person (including any taxes) that is not paid as and when due or payable by reason of such Person’s bona fide dispute concerning its liability to pay same or concerning the amount thereof, (i) such Indebtedness or Lien, as applicable, is being properly contested in good faith by appropriate proceedings promptly instituted and diligently conducted; (ii) such Person has established appropriate reserves as shall be required in conformity with GAAP; (iii) the non-payment of such Indebtedness will not have a Material Adverse Effect and will not result in the forfeiture of any assets of such Person; (iv) no Lien is imposed upon any of such Person’s assets with respect to such Indebtedness unless such Lien is at all times junior and subordinate in priority to the Liens in favor of the Agent (except only with respect to property taxes that have priority as a matter of applicable state law) and enforcement of such Lien is stayed during the period prior to the final resolution or disposition of such dispute; (v) if such Indebtedness or Lien, as applicable, results from, or is determined by the entry, rendition or issuance against a Person or any of its assets of a judgment, writ, order or decree, enforcement of such judgment, writ, order or decree is stayed pending a timely appeal or other judicial review; and (vi) if such contest is abandoned, settled or determined adversely (in whole or in part) to such Person, such Person forthwith pays such Indebtedness and all penalties, interest and other amounts due in connection therewith.  
“Published Rate” shall mean the rate of interest published each Business Day in The Wall Street Journal “Money Rates” listing under the caption “London Interbank Offered Rates” for a one month period (or, if no such rate is published therein for any reason, then the Published Rate shall be the eurodollar rate for a one month period as published in another publication determined by Agent).  
“Purchasing CLO” shall have the meaning set forth in Section 15.3(d) hereof.  
“Purchasing Lender” shall have the meaning set forth in Section 15.3(c) hereof.  
“Qualified ECP Loan Party” shall mean, in respect of any Swap Obligation, (a) each Loan Party that has total assets exceeding $10,000,000 on the Eligibility Date, or (b) such other Person as is qualified to give a “letter of credit or keepwell, support, or other agreement” for purposes of Section 1a(18)(A)(v)(II) of the CEA.    

“Questionnaire” shall mean the Documentation Information Questionnaire and the responses thereto provided by Borrowers and delivered to Agent.  
“RCRA” shall mean the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., as same may be amended from time to time.  
“Real Property” shall mean all of each Borrower’s right, title and interest in and to the owned and leased premises identified on Schedule 4.19 hereto or which is hereafter owned or leased by each Borrower.  
“Receivables” shall mean and include, as to each Borrower, all of such Borrower’s accounts, contract rights, instruments (including those evidencing indebtedness owed to such Loan Party by its Affiliates), documents, chattel paper (including electronic chattel paper), general intangibles relating to accounts, drafts and acceptances, credit card receivables and all other forms of obligations owing to any Borrower arising out of or in connection with the sale or lease of Inventory or the rendition of services, all supporting obligations, 

guarantees and other security therefor, whether secured or unsecured, now existing or hereafter created, and whether or not specifically sold or assigned to Agent hereunder.  
“Receivables Advance Rate” shall have the meaning set forth in Section 2.1(a)(y)(i) hereof.  
“Register” shall have the meaning set forth in Section 15.3(e).  
“Reimbursement Obligation” shall have the meaning set forth in Section 2.12(b)hereof.  
“Release” shall have the meaning set forth in Section 5.7(c)(i) hereof.  
“Reportable Compliance Event” shall mean that any Covered Entity becomes a Sanctioned Person, or is charged by indictment, criminal complaint or similar charging instrument, arraigned, or custodially detained in connection with any Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or has knowledge of facts or circumstances to the effect that it is reasonably likely that any aspect of its operations is in actual or probable violation of any Anti-Terrorism Law.
“Reportable Event” shall mean a reportable event described in Section 4043(c) of ERISA or the regulations promulgated thereunder.  
“Required Lenders” shall mean Lenders holding at least fifty-one percent (51%) of the Advances and, if no Advances are outstanding, shall mean Lenders holding fifty-one percent (51%) of the Commitment Percentages; provided, however, if there are fewer than three (3) Lenders, Required Lenders shall mean all Lenders.  
“Reserve Percentage” shall mean as of any day the maximum percentage in effect on such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as “Eurocurrency Liabilities”.  
“Revolving Advances” shall mean Advances made other than Letters of Credit.  
“Revolving Credit Note” shall mean, collectively, the promissory notes referred to in Section 2.1(a) hereof.  
“Revolving Interest Rate” shall mean an interest rate per annum equal to (a) the sum of the Alternate Base Rate plus the Applicable Margin with respect to Domestic Rate Loans and (b) the sum of (x) the Eurodollar Rate, plus (y) the Applicable Margin with respect to Eurodollar Rate Loans.  
“Sanctioned Country” shall mean a country subject to a sanctions program maintained under any Anti-Terrorism Law.
“Sanctioned Person” shall mean any individual person, group, regime, entity or thing listed or otherwise recognized as a specially designated, prohibited, sanctioned or debarred person, group, regime, entity or thing, or subject to any limitations or prohibitions (including but not limited to the blocking of property or rejection of transactions), under any Anti-Terrorism Law.
“SEC” shall mean the Securities and Exchange Commission or any successor thereto.  

“Section 20 Subsidiary” shall mean the Subsidiary of the bank holding company controlling PNC, which Subsidiary has been granted authority by the Federal Reserve Board to underwrite and deal in certain Ineligible Securities.  
“Securities Act” shall mean the Securities Act of 1933, as amended.  
“Senior Debt Payments” shall mean and include all cash actually expended by any Borrower to make (a) interest payments on any Advances hereunder, plus (b) payments for all fees, commissions and charges set forth herein and with respect to any Advances, plus (c) capitalized lease payments, plus (d) payments with respect to any other Indebtedness for borrowed money (including, without limitation, (i) any cash principal or interest payment made under the Subordinated Promissory Note and (ii) any cash interest payment made to Holdings under any TCP Intercompany Loan, but not including any cash principal payments made to Holdings under any TCP Intercompany Loan). 
“Settlement Date” shall mean the Closing Date and thereafter Wednesday or Thursday of each week or more frequently if Agent deems appropriate unless such day is not a Business Day in which case it shall be the next succeeding Business Day.  
“Subordinated Promissory Note” shall mean that certain Promissory Note, dated as of July 25, 2013, made by TCP in favor of Beacon Point Capital, LLC, in the amount of $21,510,000.
“Subordination Agreement” shall mean that certain Subordination Agreement, dated as of July 25, 2013, among the Agent, Beacon Point Capital, LLC, as the subordinated party, TCP and each Additional Agent (as defined therein), as amended, modified, or supplemented from time to time.
“Subsidiary” of any Person shall mean a corporation or other entity of whose Equity Interests having ordinary voting power (other than Equity Interests having such power only by reason of the happening of a contingency) to elect a majority of the directors of such corporation, or other Persons performing similar functions for such entity, are owned, directly or indirectly, by such Person.  
“Subsidiary Guarantor” shall mean Bowman Lamps, LLC, an Ohio limited liability company.  
“Subsidiary Stock” shall mean all of the issued and outstanding Equity Interests of any Subsidiary owned by any Borrower (not to exceed 65% of the Equity Interests of any Foreign Subsidiary).  
“Swap” shall mean any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.
“Swap Obligation” shall mean, with respect to any Loan Party, any obligation to pay or perform under any swap.
“Tax Payment Agreement” shall mean the Tax Payment Agreement, dated as of the Original Closing Date, among Agent and the stockholders of Borrowers, as the same may from time to time be amended, supplemented or otherwise modified.  
“TCP Intercompany Loans” shall mean (i) an intercompany loan in the amount of $20,000,000 with an interest rate equal to five percent (5%) per annum made by Holdings to TCP, evidenced by a promissory note dated as of Amendment No. 4 Effective Date and (ii) an intercompany loan in the amount of $5,490,000 with an interest rate equal to three percent (3%) per annum made by Holdings to TCP, evidenced by a promissory note dated as of July 25, 2013, each in form and substance satisfactory to Agent and that has been delivered to Agent either endorsed in blank or together with an undated instrument of transfer executed in 

blank by TCP.
“Term” shall have the meaning set forth in Section 13.1 hereof.  
“Termination Event” shall mean (i) a Reportable Event with respect to any Plan or Multiemployer Plan; (ii) the withdrawal of any Borrower or any member of the Controlled Group from a Plan or Multiemployer Plan during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to terminate a Plan in a distress termination described in Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to terminate a Plan or Multiemployer Plan; (v) any event or condition (a) which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or Multiemployer Plan, or (b) that may result in termination of a Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of any Borrower or any member of the Controlled Group from a Multiemployer Plan.  
“Total Availability” at a particular date shall mean an amount equal to (a) the Formula Amount minus (b) the sum of (i) the outstanding amount of Advances plus (ii) fees and expenses for which any Borrower is liable but which have not been paid or charged to Borrowers’ Account.
“Toxic Substance” shall mean and include any material present on the Real Property or the Leasehold Interests which has been shown to have significant adverse effect on human health or which is subject to regulation under the Toxic Substances Control Act (TSCA), 15 U.S.C. §§ 2601 et seq., applicable state law, or any other applicable Federal or state laws now in force or hereafter enacted relating to toxic substances.  “Toxic Substance” includes but is not limited to asbestos, polychlorinated biphenyls (PCBs) and lead-based paints.  
“Trading with the Enemy Act” shall mean the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any enabling legislation or executive order relating thereto.  
“Transferee” shall have the meaning set forth in Section 15.3(d) hereof.  
“Undrawn Availability” at a particular date shall mean an amount equal to (a) the lesser of (i) the Formula Amount or (ii) the Maximum Revolving Advance Amount, minus (b) the sum of (i) the outstanding amount of Advances plus (ii) all amounts due and owing to any Borrower’s trade creditors which are 60 or more days past due (excluding, however, amounts owing to CMP that are more than 60 days past due and are subject to the CMP Subordination Agreement), plus (iii) fees and expenses for which any Borrower is liable but which have not been paid or charged to Borrowers’ Account.  
“Unfinanced Capital Expenditures” shall mean all Capital Expenditures of any Borrower other than those made utilizing financing provided by the applicable seller or third party lenders.  For the avoidance of doubt, Capital Expenditures made by any Borrower utilizing Revolving Advances shall be deemed Unfinanced Capital Expenditures.  
“Uniform Commercial Code” shall have the meaning set forth in Section 1.3 hereof.  
“USA PATRIOT Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107‐56, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.  

“Week” shall mean the time period commencing with the opening of business on a Wednesday and ending on the end of business the following Tuesday.  
1.3    Uniform Commercial Code Terms.  All terms used herein and defined in the Uniform Commercial Code as adopted in the State of New York from time to time (the “Uniform Commercial Code”) shall have the meaning given therein unless otherwise defined herein.  Without limiting the foregoing, the terms “accounts”, “chattel paper”, “commercial tort claims”, “instruments”, “general intangibles”, “goods”, “payment intangibles”, “proceeds”, “supporting obligations”, “securities”, “investment property”, “documents”, “deposit accounts”, “software”, “letter of credit rights”, “inventory”, “equipment” and “fixtures”, as and when used in the description of Collateral shall have the meanings given to such terms in Articles 8 or 9 of the Uniform Commercial Code and when used to define a category or categories of Collateral located in Canada, such terms shall include the equivalent categories or categories of property set forth in the PPSA.  To the extent the definition of any category or type of collateral is expanded by any amendment, modification or revision to the Uniform Commercial Code, such expanded definition will apply automatically as of the date of such amendment, modification or revision.  Notwithstanding the foregoing, and where the context so requires (i) any term defined in this Agreement by reference to the Uniform Commercial Code shall have any extended, alternative, or analogous meaning given to such term in applicable Canadian personal property security and other laws (including, without limitation the Personal Property Security Act of each applicable province of Canada, the Bills of Exchange Act (Canada) and the Depository Bills and Notes Act (Canada)) in all cases for the extension, preservation or betterment of the security and rights of the Collateral, (ii) all references in this Agreement to “Article 8” shall be deemed to refer also to applicable Canadian securities transfer laws (including, without limitation the Securities Transfer Act, 2006 (Ontario), (iii) all references in this Agreement to a financing statement, continuation statement, amendment or termination statement shall be deemed to refer also to the analogous documents used under applicable Canadian personal property security laws, including, without limitation, where applicable, financing change statements, (iv) all references to the United States of America, or to any subdivision, department, agency or instrumentality thereof shall be deemed to refer also to Canada, or to any subdivision, department, agency or instrumentality thereof, and (v) all references to federal or state securities law of the United States shall be deemed to refer also to analogous federal and provincial securities laws in Canada.  

1.4    Certain Matters of Construction.  The terms “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision.  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.  Any pronoun used shall be deemed to cover all genders.  Wherever appropriate in the context, terms used herein in the singular also include the plural and vice versa.  All references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations.  Unless otherwise provided, all references to any instruments or agreements to which Agent is a party, including references to any of the Other Documents, shall include any and all modifications or amendments thereto and any and all extensions or renewals thereof.  All references herein to the time of day shall mean the time in New York, New York.  Unless otherwise provided, all financial calculations shall be performed with Inventory valued on a first-in, first-out basis.  Whenever the words “including” or “include” shall be used, such words shall be understood to mean “including, without limitation” or “include, without limitation”.  A Default or Event of Default shall be deemed to exist at all times during the period commencing on the date that such Default or Event of Default occurs to the date on which such Default or Event of Default is waived in writing pursuant to this Agreement or, in the case of a Default, is cured within any period of cure expressly provided for in this Agreement; and an Event of Default shall “continue” or be “continuing” until such Event of Default has been waived in writing by the Required Lenders.  Any Lien referred to in this Agreement or any of the Other Documents as having been created in favor of Agent, any agreement entered into by Agent pursuant to this 

Agreement or any of the Other Documents, any payment made by or to or funds received by Agent pursuant to or as contemplated by this Agreement or any of the Other Documents, or any act taken or omitted to be taken by Agent, shall, unless otherwise expressly provided, be created, entered into, made or received, or taken or omitted, for the benefit or account of Agent and Lenders.  Wherever the phrase “to the best of Borrower’s knowledge” or words of similar import relating to the knowledge or the awareness of any Borrower are used in this Agreement or Other Documents, such phrase shall mean and refer to (i) the actual knowledge of a senior officer of such Borrower or (ii) the knowledge that a senior officer would have obtained if he had engaged in good faith and diligent performance of his duties, including the making of such reasonably specific inquiries as may be necessary of the employees or agents of such Borrower and a good faith attempt to ascertain the existence or accuracy of the matter to which such phrase relates.  All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or otherwise within the limitations of, another covenant shall not avoid the occurrence of a default if such action is taken or condition exists.  In addition, all representations and warranties hereunder shall be given independent effect so that if a particular representation or warranty proves to be incorrect or is breached, the fact that another representation or warranty concerning the same or similar subject matter is correct or is not breached will not affect the incorrectness of a breach of a representation or warranty hereunder. Notwithstanding anything to the contrary in the foregoing, the Agent and Lenders have agreed to waive each Event of Default arising from the failure of the Loan Parties to comply the Fixed Charge Coverage Ratio Covenant for each fiscal quarter commencing with the fiscal quarter ending December 31, 2015 up to the fiscal quarter immediately preceding the Closing Date.  

IIADVANCES, PAYMENTS.  

2.1    Revolving Advances.  Amount of Revolving Advances.  

(a)Revolving Advances.  Subject to the terms and conditions set forth in this Agreement, including Section 2.1(b), each Lender, severally and not jointly, will make Revolving Advances to Borrowers in aggregate amounts outstanding at any time equal to such Lender’s Commitment Percentage of the lesser of (x) the Maximum Revolving Advance Amount less the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit or (y) an amount equal to the sum of:  

(i)up to 85%, subject to the provisions of Section 2.1(b) hereof (“Receivables Advance Rate”), of Eligible Receivables, plus 

(ii)up to the lesser of (A) 60%, subject to the provisions of Section 2.1(b) hereof, of the value of the Eligible Inventory (“Inventory Advance Rate” and together with the Receivables Advance Rate, collectively, the “Advance Rates”), (B) 85% of the appraised net orderly liquidation value of Eligible Inventory (as evidenced by an Inventory appraisal satisfactory to Agent in its sole discretion exercised in good faith) or (C) $30,000,000 in the aggregate at any one time; provided, however, that in no event shall availability arising from Eligible Inventory in transit exceed $5,000,000, minus 

(iii)the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit, minus 

(iv)the Availability Block, minus 

(v)such reserves as Agent may reasonably deem proper and necessary from time to time.  

The amount derived from the sum of (x) Sections 2.1(a)(y)(i) and (ii) minus (y) Sections 2.1 (a)(y) (iv) and (v) at any time and from time to time shall be referred to as the “Formula Amount”.  The Revolving Advances shall be evidenced by one or more secured promissory notes (collectively, the “Revolving Credit Note”) substantially in the form attached hereto as Exhibit 2.1(a).  
(b)Discretionary Rights.  The Advance Rates may be increased or decreased by Agent at any time and from time to time in the exercise of its reasonable discretion.  Each Borrower consents to any such increases or decreases and acknowledges that decreasing the Advance Rates or increasing or imposing reserves may limit or restrict Advances requested by Borrowers.  The rights of Agent under this subsection are subject to the provisions of Section 15.2(b).  

2.2    Procedure for Revolving Advances Borrowing.  

(a)Borrowers may notify Agent prior to 10:00 a.m. on a Business Day of Borrowers’ request to incur, on that day, a Revolving Advance hereunder.  Should any amount required to be paid as interest hereunder, or as fees or other charges under this Agreement or any other agreement with Agent or Lenders, or with respect to any other Obligation, become due, same shall be deemed a request for a Revolving Advance maintained as a Domestic Rate Loan as of the date such payment is due, in the amount required to pay in full such interest, fee, charge or Obligation under this Agreement or any other agreement with Agent or Lenders, and such request shall be irrevocable.  

(b)Notwithstanding the provisions of subsection (a) above, in the event Borrowers desire to obtain a Eurodollar Rate Loan, Borrowers shall give Agent written notice by no later than 10:00 a.m.  on the day which is three (3) Business Days prior to the date such Eurodollar Rate Loan is to be borrowed, specifying (i) the date of the proposed borrowing (which shall be a Business Day), (ii) the type of borrowing and the amount on the date of such Advance to be borrowed, which amount shall be in an aggregate principal amount that is not less than $500,000 and integral multiples of $500,000 in excess thereof, and (iii) the duration of the first Interest Period therefor.  Interest Periods for Eurodollar Rate Loans shall be for one, two or three months; provided, if an Interest Period would end on a day that is not a Business Day, it shall end on the next succeeding Business Day unless such day falls in the next succeeding calendar month in which case the Interest Period shall end on the next preceding Business Day.  No Eurodollar Rate Loan shall be made available to Borrowers during the continuance of a Default or an Event of Default.  After giving effect to each requested Eurodollar Rate Loan, including those which are converted from a Domestic Rate Loan under Section 2.2(d), there shall not be outstanding more than four (4) Eurodollar Rate Loans, in the aggregate.
  
(c)Each Interest Period of a Eurodollar Rate Loan shall commence on the date such Eurodollar Rate Loan is made and shall end on such date as Borrowers may elect as set forth in subsection (b)(iii) above provided that the exact length of each Interest Period shall be determined in accordance with the practice of the interbank market for offshore Dollar deposits and no Interest Period shall end after the last day of the Term.  

Borrowers shall elect the initial Interest Period applicable to a Eurodollar Rate Loan by their notice of borrowing given to Agent pursuant to Section 2.2(b) or by their notice of conversion given to Agent pursuant to Section 2.2(d), as the case may be.  Borrowers shall elect the duration of each succeeding Interest Period by giving irrevocable written notice to Agent of such duration not later than 10:00 a.m. on the day which is three (3) Business Days prior to the last day of the then current Interest Period applicable to such Eurodollar Rate Loan.  If Agent does not receive timely notice of the Interest Period elected by Borrowers, Borrowers shall be deemed to have elected to convert to a Domestic Rate Loan subject to Section 2.2(d) hereinbelow.  

(d)Provided that no Event of Default shall have occurred and be continuing, Borrowers may, on the last Business Day of the then current Interest Period applicable to any outstanding Eurodollar Rate Loan, or on any Business Day with respect to Domestic Rate Loans, convert any such loan into a loan of another type in the same aggregate principal amount provided that any conversion of a Eurodollar Rate Loan shall be made only on the last Business Day of the then current Interest Period applicable to such Eurodollar Rate Loan.  If Borrowers desire to convert a loan, Borrowers shall give Agent written notice by no later than 10:00 a.m. (i) on the day which is three (3) Business Days’ prior to the date on which such conversion is to occur with respect to a conversion from a Domestic Rate Loan to a Eurodollar Rate Loan, or (ii) on the day which is one (1) Business Day prior to the date on which such conversion is to occur with respect to a conversion from a Eurodollar Rate Loan to a Domestic Rate Loan, specifying, in each case, the date of such conversion, the loans to be converted and if the conversion is from a Domestic Rate Loan to any other type of loan, the duration of the first Interest Period therefor.  

(e)At their option and upon written notice given prior to 10:00 a.m. (New York time) at least three (3) Business Days’ prior to the date of such prepayment, Borrowers may prepay the Eurodollar Rate Loans in whole at any time or in part from time to time with accrued interest on the principal being prepaid to the date of such repayment.  Borrowers shall specify the date of prepayment of Advances which are Eurodollar Rate Loans and the amount of such prepayment.  In the event that any prepayment of a Eurodollar Rate Loan is required or permitted on a date other than the last Business Day of the then current Interest Period with respect thereto, Borrowers shall indemnify Agent and Lenders therefor in accordance with Section 2.2(f) hereof.  

(f)Borrowers shall indemnify Agent and Lenders and hold Agent and Lenders harmless from and against any and all losses or expenses that Agent and Lenders may sustain or incur as a consequence of any prepayment, conversion of or any default by any Borrower in the payment of the principal of or interest on any Eurodollar Rate Loan or failure by any Borrower to complete a borrowing of, a prepayment of or conversion of or to a Eurodollar Rate Loan after notice thereof has been given, including, but not limited to, any interest payable by Agent or Lenders to lenders of funds obtained by it in order to make or maintain its Eurodollar Rate Loans hereunder.  A certificate as to any additional amounts payable pursuant to the foregoing sentence submitted by Agent or any Lender to Borrowers shall be conclusive absent manifest error.  Notwithstanding any other provision hereof, if any Applicable Law or any change therein or in the interpretation or application thereof, shall make it unlawful for any Lender (for purposes of this subsection (g), the term “Lender” shall include any Lender and the office or branch where any Lender or any corporation or bank controlling such Lender makes or maintains any Eurodollar Rate Loans) to make or maintain its Eurodollar Rate Loans, the obligation of Lenders to make Eurodollar Rate Loans hereunder shall forthwith be cancelled and Borrowers shall, if any affected Eurodollar Rate Loans are then outstanding, promptly upon request from Agent, either pay all such affected Eurodollar Rate Loans or convert such affected Eurodollar Rate Loans into loans of another type.  If any such payment or conversion of any Eurodollar Rate Loan is made on a day that is not the last day of the Interest Period applicable to such Eurodollar Rate Loan, Borrowers shall pay Agent, upon Agent’s request, such amount or amounts as may be necessary to compensate Lenders for any loss or expense sustained or incurred by Lenders in respect of such Eurodollar Rate Loan as a result of such payment or conversion, including (but not limited to) any interest or other amounts payable by Lenders to lenders of funds obtained by Lenders in order to make or maintain such Eurodollar Rate Loan.  A certificate as to any additional amounts payable pursuant to the foregoing sentence submitted by Lenders to Borrowers shall be conclusive absent manifest error.  

2.3    Disbursement of Advance Proceeds.  All Advances shall be disbursed from whichever office or other place Agent may designate from time to time and, together with any and all other Obligations of Borrowers to Agent or Lenders, shall be charged to Borrowers’ Account on Agent’s books.  During the Term, 

Borrowers may use the Revolving Advances by borrowing, prepaying and reborrowing, all in accordance with the terms and conditions hereof.  The proceeds of each Revolving Advance requested by Borrowers or deemed to have been requested by Borrowers under Section 2.2 hereof shall, with respect to requested Revolving Advances to the extent Lenders make such Revolving Advances, be made available to Borrowers on the day so requested by way of credit to Borrowers’ operating account at PNC, or such other bank as Borrowers may designate following notification to Agent, in immediately available federal funds or other immediately available funds or, with respect to Revolving Advances deemed to have been requested by Borrowers, be disbursed to Agent to be applied to the outstanding Obligations giving rise to such deemed request.  

2.4     [Reserved].  

2.5    Maximum Advances.  The aggregate balance of Revolving Advances outstanding at any time shall not exceed the lesser of (a) the Maximum Revolving Advance Amount or (b) the Formula Amount less, in each case, the aggregate Maximum Undrawn Amount of all issued and outstanding Letters of Credit.  

2.6    Repayment of Advances.  

(a)The Advances shall be due and payable in full on the last day of the Term subject to earlier prepayment as herein provided.  

(b)Borrowers recognize that the amounts evidenced by checks, notes, drafts or any other items of payment relating to and/or proceeds of Collateral may not be collectible by Agent on the date received.  In consideration of Agent’s agreement to conditionally credit Borrowers’ Account as of the next Business Day following the Agent’s receipt of those items of payment, Borrowers agree that, in computing the charges under this Agreement, all items of payment shall be deemed applied by Agent on account of the Obligations one (1) Business Day after (i) the Business Day Agent receives such payments via wire transfer or electronic depository check or (ii) in the case of payments received by Agent in any other form, the Business Day such payment constitutes good funds in Agent’s account.  Agent is not, however, required to credit Borrowers’ Account for the amount of any item of payment which is unsatisfactory to Agent and Agent may charge Borrowers’ Account for the amount of any item of payment which is returned to Agent unpaid.  The Loan Parties further agree that at any time during a Cash Dominion Period there shall be a monthly float charge payable to Agent for Agent’s sole benefit, in an amount equal to (y) the face amount of all items of payment received during the prior month (including items of payment received by Agent as a wire transfer or electronic depository check) multiplied by (z) the Revolving Interest Rate with respect to Domestic Rate Loans for one (1) Business Day.

(c)All payments of principal, interest and other amounts payable hereunder, or under any of the Other Documents shall be made to Agent at the Payment Office not later than 1:00 P.M. (New York time) on the due date therefor in lawful money of the United States of America in federal funds or other funds immediately available to Agent.  Agent shall have the right to effectuate payment on any and all Obligations due and owing hereunder by charging Borrowers’ Account or by making Advances as provided in Section 2.2 hereof.  

(d)Borrowers shall pay principal, interest, and all other amounts payable hereunder, or under any related agreement, without any deduction whatsoever, including, but not limited to, any deduction for any setoff or counterclaim.  

2.7    Repayment of Excess Advances.  The aggregate balance of Advances outstanding at any time in excess of the maximum amount of Advances permitted hereunder shall be immediately due and payable without the necessity of any demand, at the Payment Office, whether or not a Default or Event of Default has occurred.  

2.8    Statement of Account.  Agent shall maintain, in accordance with its customary procedures, a loan account (“Borrowers’ Account”) in the name of Borrowers in which shall be recorded the date and amount of each Advance made by Agent and the date and amount of each payment in respect thereof; provided, however, the failure by Agent to record the date and amount of any Advance shall not adversely affect Agent or any Lender.  Each month, Agent shall send to Borrowers a statement showing the accounting for the Advances made, payments made or credited in respect thereof, and other transactions between Agent and Borrowers, during such month.  The monthly statements shall be deemed correct and binding upon Borrowers in the absence of manifest error and shall constitute an account stated between Lenders and Borrowers unless Agent receives a written statement of Borrowers’ specific exceptions thereto within thirty (30) days after such statement is received by Borrowers.  The records of Agent with respect to the loan account shall be conclusive evidence absent manifest error of the amounts of Advances and other charges thereto and of payments applicable thereto.  

2.9    Letters of Credit.  Subject to the terms and conditions hereof, Agent shall issue or cause the issuance of standby and/or trade Letters of Credit (“Letters of Credit”) for the account of Borrowers; provided, however, that Agent will not be required to issue or cause to be issued any Letters of Credit to the extent that the issuance thereof would then cause the sum of (i) the outstanding Revolving Advances plus (ii) the Maximum Undrawn Amount of all outstanding Letters of Credit to exceed the lesser of (x) the Maximum Revolving Advance Amount or (y) the Formula Amount.  The Maximum Undrawn Amount of all outstanding Letters of Credit shall not exceed in the aggregate at any time the Letter of Credit Sublimit.  All disbursements or payments related to Letters of Credit shall be deemed to be Domestic Rate Loans consisting of Revolving Advances and shall bear interest at the Revolving Interest Rate for Domestic Rate Loans; Letters of Credit that have not been drawn upon shall not bear interest.  

2.10    Issuance of Letters of Credit.  

(a)Borrowers may request Agent to issue or cause the issuance of a Letter of Credit by delivering to Agent, at the Payment Office, prior to 10:00 a.m. (New York time), at least five (5) Business Days’ prior to the proposed date of issuance, Agent’s form of Letter of Credit Application (the “Letter of Credit Application”) completed to the satisfaction of Agent; and, such other certificates, documents and other papers and information as Agent may reasonably request.  Borrowers also have the right to give instructions and make agreements with respect to any application, any applicable letter of credit and security agreement, any applicable letter of credit reimbursement agreement and/or any other applicable agreement, any letter of credit and the disposition of documents, disposition of any unutilized funds, and to agree with Agent upon any amendment, extension or renewal of any Letter of Credit.  

(b)Each Letter of Credit shall, among other things, (i) provide for the payment of sight drafts, other written demands for payment, or acceptances of usance drafts when presented for honor thereunder in accordance with the terms thereof and when accompanied by the documents described therein and (ii) have an expiry date not later than twenty-four (24) months after such Letter of Credit’s date of issuance and in no event later than the last day of the Term.  Each standby Letter of Credit shall be subject either to the Uniform Customs and Practice for Documentary Credits as most recently published by the International Chamber of Commerce at the time a Letter of Credit is issued (the “UCP”) or the International Standby Practices (ISP98-International Chamber of Commerce Publication Number 590) (“ISP98 Rules”), and any 

subsequent revision thereof at the time a standby Letter of Credit is issued, as determined by Agent, and each trade Letter of Credit shall be subject to the UCP.  
(c)Agent shall use its reasonable efforts to notify Lenders of the request by Borrowers for a Letter of Credit or an Acceptance hereunder.  

2.11    Requirements For Issuance of Letters of Credit.  Borrowers shall authorize and direct any Issuer to name a Borrower as the “Applicant” or “Account Party” of each Letter of Credit.  If Agent is not the Issuer of any Letter of Credit, Borrowers shall authorize and direct the Issuer to deliver to Agent all instruments, documents, and other writings and property received by the Issuer pursuant to the Letter of Credit and to accept and rely upon Agent’s instructions and agreements with respect to all matters arising in connection with the Letter of Credit, the application therefor or any acceptance therefor.  

(a)    In connection with all Letters of Credit issued or caused to be issued by Agent under this Agreement, Borrowers hereby appoint Agent, or its designee, as its attorney, with full power and authority if an Event of Default shall have occurred, (i) to sign and/or endorse Borrowers’ names upon any warehouse or other receipts, letter of credit applications and acceptances, (ii) to sign each Borrowers’ names on bills of lading; (iii) to clear Inventory through the United States of America Customs Department (“Customs”) in the names of Borrowers or Agent or Agent’s designee, and to sign and deliver to Customs officials powers of attorney in the names of Borrowers for such purpose; and (iv) to complete in Borrowers’ names or Agent’s, or in the name of Agent’s designee, any order, sale or transaction, obtain the necessary documents in connection therewith, and collect the proceeds thereof.  Neither Agent nor its attorneys will be liable for any acts or omissions nor for any error of judgment or mistakes of fact or law, except for Agent’s or its attorney’s gross negligence or willful misconduct.  This power, being coupled with an interest, is irrevocable as long as any Letters of Credit remain outstanding.  

2.12    Disbursements, Reimbursement.  

(a)Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from Agent a participation in such Letter of Credit and each drawing thereunder in an amount equal to such Lender’s Commitment Percentage of the Maximum Face Amount of such Letter of Credit and the amount of such drawing, respectively.  

(b)In the event of any request for a drawing under a Letter of Credit by the beneficiary or transferee thereof, Agent will promptly notify Borrowers.  Provided that it shall have received such notice, Borrowers shall reimburse (such obligation to reimburse Agent shall sometimes be referred to as a “Reimbursement Obligation”) Agent prior to 12:00 Noon, New York time on each date that an amount is paid by Agent under any Letter of Credit (each such date, a “Drawing Date”) in an amount equal to the amount so paid by Agent.  In the event Borrowers fail to reimburse Agent for the full amount of any drawing under any Letter of Credit by 12:00 Noon, New York time, on the Drawing Date, Agent will promptly notify each Lender thereof, and Borrowers shall be deemed to have requested that a Revolving Advance maintained as a Domestic Rate Loan be made by the Lenders to be disbursed on the Drawing Date under such Letter of Credit, subject to the amount of the unutilized portion of the lesser of Maximum Revolving Advance Amount or the Formula Amount and subject to Section 8.2 hereof.  Any notice given by Agent pursuant to this Section 2.12(b) may be oral if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.  

(c)Each Lender shall upon any notice pursuant to Section 2.12(b) make available to Agent an amount in immediately available funds equal to its Commitment Percentage of the amount of the drawing, whereupon the participating Lenders shall (subject to Section 2.12(d)) each be deemed to have made a 

Revolving Advance maintained as a Domestic Rate Loan to Borrowers in that amount.  If any Lender so notified fails to make available to Agent the amount of such Lender’s Commitment Percentage of such amount by no later than 2:00 p.m., New York time on the Drawing Date, then interest shall accrue on such Lender’s obligation to make such payment, from the Drawing Date to the date on which such Lender makes such payment (i) at a rate per annum equal to the Federal Funds Effective Rate during the first three days following the Drawing Date and (ii) at a rate per annum equal to the rate applicable to Revolving Loans maintained as Domestic Rate Loans on and after the fourth day following the Drawing Date.  Agent will promptly give notice of the occurrence of the Drawing Date, but failure of Agent to give any such notice on the Drawing Date or in sufficient time to enable any Lender to effect such payment on such date shall not relieve such Lender from its obligation under this Section 2.12(c), provided that such Lender shall not be obligated to pay interest as provided in Section 2.12(c) (i) and (ii) until and commencing from the date of receipt of notice from Agent of a drawing.  

(d)With respect to any unreimbursed drawing that is not converted into a Revolving Advance maintained as a Domestic Rate Loan to Borrowers in whole or in part as contemplated by Section 2.12(b), because of a Borrower’s failure to satisfy the conditions set forth in Section 8.2 (other than any notice requirements) or for any other reason, Borrowers shall be deemed to have incurred from Agent a borrowing (each a “Letter of Credit Borrowing”) in the amount of such drawing.  Such Letter of Credit Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the rate per annum applicable to Revolving Advance maintained as a Domestic Rate Loan.  Each Lender’s payment to Agent pursuant to Section 2.12(c) shall be deemed to be a payment in respect of its participation in such Letter of Credit Borrowing and shall constitute a “Participation Advance” from such Lender in satisfaction of its Participation Commitment under this Section 2.12.  

(e)Each Lender’s Participation Commitment shall continue until the last to occur of any of the following events:  (x) Agent ceases to be obligated to issue or cause to be issued Letters of Credit hereunder; (y) no Letter of Credit issued or created hereunder remains outstanding and uncancelled and (z) all Persons (other than the Borrowers) have been fully reimbursed for all payments made under or relating to Letters of Credit.  

2.13    Repayment of Participation Advances.  

(a)Upon (and only upon) receipt by Agent for its account of immediately available funds from Borrowers (i) in reimbursement of any payment made by the Agent under the Letter of Credit with respect to which any Lender has made a Participation Advance to Agent, or (ii) in payment of interest on such a payment made by Agent under such a Letter of Credit, Agent will pay to each Lender, in the same funds as those received by Agent, the amount of such Lender’s Commitment Percentage of such funds, except Agent shall retain the amount of the Commitment Percentage of such funds of any Lender that did not make a Participation Advance in respect of such payment by Agent.  

(b)If Agent is required at any time to return to Borrowers, or to a trustee, receiver, liquidator, custodian, or any official in any insolvency proceeding, any portion of the payments made by Borrowers to Agent pursuant to Section 2.13(a) in reimbursement of a payment made under the Letter of Credit or interest or fee thereon, each Lender shall, on demand of Agent, forthwith return to Agent the amount of its Commitment Percentage of any amounts so returned by Agent plus interest at the Federal Funds Effective Rate.  

2.14    Documentation.  Borrowers agree to be bound by the terms of the Letter of Credit Application and by Agent’s interpretations of any Letter of Credit issued on behalf of Borrowers and by Agent’s written 

regulations and customary practices relating to letters of credit, though Agent’s interpretations may be different from Borrowers’ own.  In the event of a conflict between the Letter of Credit Application and this Agreement, this Agreement shall govern.  It is understood and agreed that, except in the case of gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment), Agent shall not be liable for any error, negligence and/or mistakes, whether of omission or commission, in following Borrowers’ instructions or those contained in the Letters of Credit or any modifications, amendments or supplements thereto.  

2.15    Determination to Honor Drawing Request.  In determining whether to honor any request for drawing under any Letter of Credit by the beneficiary thereof, Agent shall be responsible only to determine that the documents and certificates required to be delivered under such Letter of Credit have been delivered and that they comply on their face with the requirements of such Letter of Credit and that any other drawing condition appearing on the face of such Letter of Credit has been satisfied in the manner so set forth.  

2.16    Nature of Participation and Reimbursement Obligations.  Each Lender’s obligation in accordance with this Agreement to make the Revolving Advances or Participation Advances as a result of a drawing under a Letter of Credit, and the obligations of Borrowers to reimburse Agent upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Section 2.16 under all circumstances, including the following circumstances:  
(i)any set-off, counterclaim, recoupment, defense or other right which such Lender may have against Agent, Borrowers or any other Person for any reason whatsoever; 

(ii)the failure of Borrowers or any other Person to comply, in connection with a Letter of Credit Borrowing, with the conditions set forth in this Agreement for the making of a Revolving Advance, it being acknowledged that such conditions are not required for the making of a Letter of Credit Borrowing and the obligation of the Lenders to make Participation Advances under Section 2.12; 

(iii)any lack of validity or enforceability of any Letter of Credit; 

(iv)any claim of breach of warranty that might be made by Borrowers or any Lender against the beneficiary of a Letter of Credit, or the existence of any claim, set-off, recoupment, counterclaim, cross-claim, defense or other right which Borrowers or any Lender may have at any time against a beneficiary, any successor beneficiary or any transferee of any Letter of Credit or the proceeds thereof (or any Persons for whom any such transferee may be acting), Agent or any Lender or any other Person, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between Borrowers or any Subsidiaries of Borrowers and the beneficiary for which any Letter of Credit was procured); 

(v)the lack of power or authority of any signer of (or any defect in or forgery of any signature or endorsement on) or the form of or lack of validity, sufficiency, accuracy, enforceability or genuineness of any draft, demand, instrument, certificate or other document presented under or in connection with any Letter of Credit, or any fraud or alleged fraud in connection with any Letter of Credit, or the transport of any property or provisions of services relating to a Letter of Credit, in each case even if Agent or any of Agent’s Affiliates has been notified thereof; 

(vi)payment by Agent under any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Letter of Credit; 

(vii)the solvency of, or any acts or omissions by, any beneficiary of any Letter of Credit, or any other Person having a role in any transaction or obligation relating to a Letter of Credit, or the existence, nature, quality, quantity, condition, value or other characteristic of any property or services relating to a Letter of Credit; 

(viii)any failure by the Agent or any of Agent’s Affiliates to issue any Letter of Credit in the form requested by Borrowers, unless the Agent has received written notice from Borrowers of such failure within three (3) Business Days after the Agent shall have furnished Borrowers a copy of such Letter of Credit and such error is material and no drawing has been made thereon prior to receipt of such notice; 

(ix)any Material Adverse Effect on any Borrower or any Guarantor;

(x)any breach of this Agreement or any Other Document by any party thereto;

(xi)the occurrence or continuance of an insolvency proceeding with respect to any Borrower or any Guarantor;

(xii)the fact that a Default or Event of Default shall have occurred and be continuing; 

(xiii)the fact that the Term shall have expired or this Agreement or the Obligations hereunder shall have been terminated; and 

(xiv)any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.  

2.17    Indemnity.  In addition to amounts payable as provided in Section 15.5, the Borrowers hereby agree to protect, indemnify, pay and save harmless Agent and any of Agent’s Affiliates that have issued a Letter of Credit from and against any and all claims, demands, liabilities, damages, taxes, penalties, interest, judgments, losses, costs, charges and expenses (including reasonable fees, expenses and disbursements of counsel and allocated costs of internal counsel) which the Agent or any of Agent’s Affiliates may incur or be subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit, other than as a result of (A) the gross negligence or willful misconduct of the Agent as determined by a final and non-appealable judgment of a court of competent jurisdiction or (b) the wrongful dishonor by the Agent or any of Agent’s Affiliates of a proper demand for payment made under any Letter of Credit, except if such dishonor resulted from any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Governmental Body (all such acts or omissions herein called “Governmental Acts”).  

2.18    Liability for Acts and Omissions.  As between Borrowers and Agent and Lenders, Borrowers assume all risks of the acts and omissions of, or misuse of the Letters of Credit by, the respective beneficiaries of such Letters of Credit.  In furtherance and not in limitation of the respective foregoing, Agent shall not be responsible for:  (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for an issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged (even if Agent shall have been notified thereof); (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) the failure of the beneficiary of any such Letter of Credit, or any other party to which such Letter of Credit may be transferred, to comply fully with any conditions required in order to draw upon such Letter of Credit or 

any other claim of Borrowers against any beneficiary of such Letter of Credit, or any such transferee, or any dispute between or among any Borrower and any beneficiary of any Letter of Credit or any such transferee; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, facsimile, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of Agent, including any governmental acts, and none of the above shall affect or impair, or prevent the vesting of, any of Agent’s rights or powers hereunder.  Nothing in the preceding sentence shall relieve Agent from liability for Agent’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment) in connection with actions or omissions described in such clauses (i) through (viii) of such sentence.  In no event shall Agent or Agent’s Affiliates be liable to the any Borrower for any indirect, consequential, incidental, punitive, exemplary or special damages or expenses (including without limitation attorneys’ fees), or for any damages resulting from any change in the value of any property relating to a Letter of Credit.  
Without limiting the generality of the foregoing, Agent and each of its Affiliates (i) may rely on any oral or other communication believed in good faith by Agent or such Affiliate to have been authorized or given by or on behalf of the applicant for a Letter of Credit, (ii) may honor any presentation if the documents presented appear on their face substantially to comply with the terms and conditions of the relevant Letter of Credit; (iii) may honor a previously dishonored presentation under a Letter of Credit, whether such dishonor was pursuant to a court order, to settle or compromise any claim of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to the same extent as if such presentation had initially been honored, together with any interest paid by Agent or its Affiliates; (iv) may honor any drawing that is payable upon presentation of a statement advising negotiation or payment, upon receipt of such statement (even if such statement indicates that a draft or other document is being delivered separately), and shall not be liable for any failure of any such draft or other document to arrive, or to conform in any way with the relevant Letter of Credit; (v) may pay any paying or negotiating bank claiming that it rightfully honored under the laws or practices of the place where such bank is located; and (vi) may settle or adjust any claim or demand made on Agent or its Affiliate in any way related to any order issued at the applicant’s request to an air carrier, a letter of guarantee or of indemnity issued to a carrier or any similar document (each an “Order”) and honor any drawing in connection with any Letter of Credit that is the subject of such Order, notwithstanding that any drafts or other documents presented in connection with such Letter of Credit fail to conform in any way with such Letter of Credit.  
In furtherance and extension and not in limitation of the specific provisions set forth above, any action taken or omitted by Agent under or in connection with the Letters of Credit issued by it or any documents and certificates delivered thereunder, if taken or omitted in good faith and without gross negligence (as determined by a court of competent jurisdiction in a final non-appealable judgment), shall not put Agent under any resulting liability to any Borrower or any Lender.  
2.19    Additional Payments.  Any sums expended by Agent or any Lender due to any Borrower’s failure to perform or comply with its obligations under this Agreement or any Other Document including Borrowers’ obligations under Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6.1 hereof, may be charged to Borrowers’ Account as a Revolving Advance and added to the Obligations.  

2.20    Manner of Borrowing and Payment.  

(a)Each borrowing of Revolving Advances shall be advanced according to the applicable Commitment Percentages of Lenders.  

(b)Each payment (including each prepayment) by Borrowers on account of the principal of and interest on the Revolving Advances, shall be applied to the Revolving Advances pro rata according to the applicable Commitment Percentages of Lenders.  Except as expressly provided herein, all payments (including prepayments) to be made by Borrowers on account of principal, interest and fees shall be made without set off or counterclaim and shall be made to Agent on behalf of the Lenders to the Payment Office, in each case on or prior to 1:00 P.M., New York time, in Dollars and in immediately available funds.  

i.Notwithstanding anything to the contrary contained in Sections 2.20(a) and (b) hereof, commencing with the first Business Day following the Closing Date, each borrowing of Revolving Advances shall be advanced by Agent and each payment by Borrowers on account of Revolving Advances shall be applied first to those Revolving Advances advanced by Agent.  On or before 1:00 P.M., New York time, on each Settlement Date commencing with the first Settlement Date following the Closing Date, Agent and Lenders shall make certain payments as follows:  (I) if the aggregate amount of new Revolving Advances made by Agent during the preceding Week (if any) exceeds the aggregate amount of repayments applied to outstanding Revolving Advances during such preceding Week, then each Lender shall provide Agent with funds in an amount equal to its applicable Commitment Percentage of the difference between (w) such Revolving Advances and (x) such repayments and (II) if the aggregate amount of repayments applied to outstanding Revolving Advances during such Week exceeds the aggregate amount of new Revolving Advances made during such Week, then Agent shall provide each Lender with funds in an amount equal to its applicable Commitment Percentage of the difference between (y) such repayments and (z) such Revolving Advances.  

ii.Each Lender shall be entitled to earn interest at the applicable Revolving Interest Rate on outstanding Advances which it has funded.  

iii.Promptly following each Settlement Date, Agent shall submit to each Lender a certificate with respect to payments received and Advances made during the Week immediately preceding such Settlement Date.  Such certificate of Agent shall be conclusive in the absence of manifest error.  

(c)If any Lender or Participant (a “benefited Lender”) shall at any time receive any payment of all or part of its Advances, or interest thereon, or receive any Collateral in respect thereof (whether voluntarily or involuntarily or by set-off) in a greater proportion than any such payment to and Collateral received by any other Lender, if any, in respect of such other Lender’s Advances, or interest thereon, and such greater proportionate payment or receipt of Collateral is not expressly permitted hereunder, such benefited Lender shall purchase for cash from the other Lenders a participation in such portion of each such other Lender’s Advances, or shall provide such other Lender with the benefits of any such Collateral, or the proceeds thereof, as shall be necessary to cause such benefited Lender to share the excess payment or benefits of such Collateral or proceeds ratably with each of the other Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.  Each Lender so purchasing a portion of another Lender’s Advances may exercise all rights of payment (including rights of set-off) with respect to such portion as fully as if such Lender were the direct holder of such portion.  

(d)Unless Agent shall have been notified by telephone, confirmed in writing, by any Lender that such Lender will not make the amount which would constitute its applicable Commitment 

Percentage of the Advances available to Agent, Agent may (but shall not be obligated to) assume that such Lender shall make such amount available to Agent on the next Settlement Date and, in reliance upon such assumption, make available to Borrowers a corresponding amount.  Agent will promptly notify Borrowers of its receipt of any such notice from a Lender.  If such amount is made available to Agent on a date after such next Settlement Date, such Lender shall pay to Agent on demand an amount equal to the product of (i) the daily average Federal Funds Rate (computed on the basis of a year of 360 days) during such period as quoted by Agent, times (ii) such amount, times (iii) the number of days from and including such Settlement Date to the date on which such amount becomes immediately available to Agent.  A certificate of Agent submitted to any Lender with respect to any amounts owing under this paragraph (e) shall be conclusive, in the absence of manifest error.  If such amount is not in fact made available to Agent by such Lender within three (3) Business Days after such Settlement Date, Agent shall be entitled to recover such an amount, with interest thereon at the rate per annum then applicable to such Revolving Advances hereunder, on demand from Borrowers; provided, however, that Agent’s right to such recovery shall not prejudice or otherwise adversely affect Borrowers’ rights (if any) against such Lender.  

2.21    Mandatory Prepayments.  

(a)Subject to Section 4.3 hereof, when any Borrower sells or otherwise disposes of any Collateral other than Inventory in the Ordinary Course of Business, Borrowers shall repay the Advances in an amount equal to the net proceeds of such sale (i.e., gross proceeds less the reasonable costs of such sales or other dispositions), such repayments to be made promptly but in no event more than one (1) Business Day following receipt of such net proceeds, and until the date of payment, such proceeds shall be held in trust for Agent.  The foregoing shall not be deemed to be implied consent to any such sale otherwise prohibited by the terms and conditions hereof.  Such repayments shall be applied to the Advances in such order as Agent may determine, subject to Borrowers’ ability to reborrow Revolving Advances in accordance with the terms hereof.  

(b)In addition, if at any time the sum of the outstanding Revolving Advances and the Maximum Undrawn Amount of all outstanding Letters of Credit exceeds the lesser of (a) the Maximum Revolving Advance Amount or (b) the Formula Amount, the amount of such excess shall be immediately due and payable.  

2.22    Use of Proceeds.  

(a)Borrowers shall apply the proceeds of Advances to (i) pay fees and expenses relating to this transaction, (ii) provide for its working capital needs and reimburse drawings under Letters of Credit and (iii) make scheduled payments under the Subordinated Promissory Note.  

(b)Without limiting the generality of Section 2.22(a) above, neither any Borrower, any Guarantor nor any other Person which may in the future become party to this Agreement or the Other Documents as Borrower or Guarantor, intends to use nor shall they use any portion of the proceeds of the Advances, directly or indirectly, for any purpose in violation of the Trading with the Enemy Act.  

2.23    Defaulting Lender.  

(a)Notwithstanding anything to the contrary contained herein, in the event any Lender (x) has refused (which refusal constitutes a breach by such Lender of its obligations under this Agreement) to make available its portion of any Advance or (y) notifies either Agent or Borrowers that it does not intend to make available its portion of any Advance (if the actual refusal would constitute a breach by such Lender 

of its obligations under this Agreement) (each, a “Lender Default”), all rights and obligations hereunder of such Lender (a “Defaulting Lender”) as to which a Lender Default is in effect and of the other parties hereto shall be modified to the extent of the express provisions of this Section 2.23 while such Lender Default remains in effect.  

(b)Advances shall be incurred pro rata from Lenders (the “Non-Defaulting Lenders”) which are not Defaulting Lenders based on their respective Commitment Percentages, and no Commitment Percentage of any Lender or any pro rata share of any Advances required to be advanced by any Lender shall be increased as a result of such Lender Default.  Amounts received in respect of principal of any type of Advances shall be applied to reduce the applicable Advances of each Lender (other than a Defaulting Lender) pro rata based on the aggregate of the outstanding Advances of that type of all Lenders at the time of such application; provided, that, Agent shall not be obligated to transfer to a Defaulting Lender any payments received by Agent for the Defaulting Lender’s benefit, nor shall a Defaulting Lender be entitled to the sharing of any payments hereunder (including any principal, interest or fees).  Amounts payable to a Defaulting Lender shall instead be paid to or retained by Agent.  Agent may hold and, in its discretion, re-lend to a Borrower the amount of such payments received or retained by it for the account of such Defaulting Lender.
  
(c)A Defaulting Lender shall not be entitled to give instructions to Agent or to approve, disapprove, consent to or vote on any matters relating to this Agreement and the Other Documents.  All amendments, waivers and other modifications of this Agreement and the Other Documents may be made without regard to a Defaulting Lender and, for purposes of the definition of “Required Lenders”, a Defaulting Lender shall be deemed not to be a Lender and not to have either Advances outstanding or a Commitment Percentage.  

(d)Other than as expressly set forth in this Section 2.23, the rights and obligations of a Defaulting Lender (including the obligation to indemnify Agent) and the other parties hereto shall remain unchanged.  Nothing in this Section 2.23 shall be deemed to release any Defaulting Lender from its obligations under this Agreement and the Other Documents, shall alter such obligations, shall operate as a waiver of any default by such Defaulting Lender hereunder, or shall prejudice any rights which Borrowers, Agent or any Lender may have against any Defaulting Lender as a result of any default by such Defaulting Lender hereunder.
  
(e)In the event a Defaulting Lender retroactively cures to the satisfaction of Agent the breach which caused a Lender to become a Defaulting Lender, such Defaulting Lender shall no longer be a Defaulting Lender and shall be treated as a Lender under this Agreement.  

IIIINTEREST AND FEES.  

3.1.Interest.  Interest on Advances shall be payable in arrears on the first day of each month with respect to Domestic Rate Loans and, with respect to Eurodollar Rate Loans, at the end of each Interest Period.  Interest charges shall be computed on the actual principal amount of Advances outstanding during the month at a rate per annum equal to the applicable Revolving Interest Rate.  Whenever, subsequent to the date of this Agreement, the Alternate Base Rate is increased or decreased, the Revolving Interest Rate for Domestic Rate Loans shall be similarly changed without notice or demand of any kind by an amount equal to the amount of such change in the Alternate Base Rate during the time such change or changes remain in effect.  The Eurodollar Rate shall be adjusted with respect to Eurodollar Rate Loans without notice or demand of any kind on the effective date of any change in the Reserve Percentage as of such effective date.  Upon and after the occurrence of an Event of Default, and during the continuation thereof, (i) at the option of Agent or at the direction of Required Lenders, the Obligations other than Eurodollar Rate Loans shall bear interest at the Revolving Interest Rate for Domestic Rate Loans plus two (2%) percent per annum and (ii) Eurodollar 

Rate Loans shall bear interest at the Revolving Interest Rate for Eurodollar Rate Loans plus two (2%) percent per annum (as applicable, the “Default Rate”).  

3.2.Letter of Credit Fees.  

(a)Borrowers shall pay (x) to Agent, for the ratable benefit of Lenders, fees for each Letter of Credit for the period from and excluding the date of issuance of same to and including the date of expiration or termination, equal to the average daily face amount of each outstanding Letter of Credit multiplied by a per annum percentage equal to the then Applicable Margin for Eurodollar Rate Loans, such fees to be calculated on the basis of a 360-day year for the actual number of days elapsed and to be payable quarterly in arrears on the first day of each quarter and on the last day of the Term, and (y) to the Issuer, a fronting fee of one quarter of one percent (0.25%) per annum, together with any and all administrative, issuance, amendment, payment and negotiation charges with respect to Letters of Credit and all fees and expenses as agreed upon by the Issuer and the Borrowers in connection with any Letter of Credit, including in connection with the opening, amendment or renewal of any such Letter of Credit and any acceptances created thereunder and shall reimburse Agent for any and all fees and expenses, if any, paid by Agent to the Issuer (all of the foregoing fees, the “Letter of Credit Fees”).  All such charges shall be deemed earned in full on the date when the same are due and payable hereunder and shall not be subject to rebate or pro-ration upon the termination of this Agreement for any reason.  Any such charge in effect at the time of a particular transaction shall be the charge for that transaction, notwithstanding any subsequent change in the Issuer’s prevailing charges for that type of transaction.  All Letter of Credit Fees payable hereunder shall be deemed earned in full on the date when the same are due and payable hereunder and shall not be subject to rebate or pro-ration upon the termination of this Agreement for any reason.  Upon and after the occurrence of an Event of Default, and during the continuation thereof, at the option of Agent or at the direction of Required Lenders, the Letter of Credit Fees described in clause (x) of this Section 3.2(a) shall be increased by an additional two percent (2%) per annum.  

At any time following the occurrence of an Event of Default, at the option of Agent or at the direction of Required Lenders (or, in the case of any Event of Default under Section 10.7, immediately and automatically upon the occurrence of such Event of Default, without the requirement of any affirmative action by any party), or upon the expiration of the Term or any other termination of this Agreement, Borrowers will cause cash to be deposited and maintained in an account with Agent, as cash collateral, in an amount equal to one hundred and five percent (105%) of the Maximum Undrawn Amount of all outstanding Letters of Credit, and Borrowers hereby irrevocably authorizes Agent, in its discretion, on each Borrower’s behalf and in each Borrower’s name, to open such an account and to make and maintain deposits therein, or in an account opened by any Borrower, in the amounts required to be made by such Borrower, out of the proceeds of Receivables or other Collateral or out of any other funds of any Borrower coming into any Lender’s possession at any time.  Agent will invest such cash collateral (less applicable reserves) in such short-term money-market items as to which Agent and Borrowers mutually agree and the net return on such investments shall be credited to such account and constitute additional cash collateral.  No Borrower may withdraw amounts credited to any such account except upon the occurrence of all of the following:  (x) payment and performance in full of all Obligations, (y) the expiration of all Letters of Credit and (z) the termination of this Agreement.  
3.3.Closing Fee and Facility Fee.  

(a)Closing Fee.  Upon the execution of this Agreement, Borrowers shall pay to Agent for the ratable benefit of Lenders a closing fee of $175,000.  

(b)Facility Fee.  If, for any calendar quarter during the Term, the average daily unpaid balance of the Revolving Advances and undrawn amount of any outstanding Letters of Credit for each day of such calendar quarter does not equal the Maximum Revolving Advance Amount, then Borrowers shall pay to Agent for the ratable benefit of Lenders a fee at a rate equal to 0.375% per annum on the amount by which the Maximum Revolving Advance Amount exceeds such average daily unpaid balance.  Such fee shall be payable to Agent in arrears on the first day of each calendar quarter with respect to the previous calendar quarter.  

3.4.Collateral Evaluation Fee and Collateral Monitoring Fee.  

(a)Collateral Evaluation Fee.  Borrowers shall pay Agent a collateral evaluation fee equal to $2,500 per month commencing on the first day of the month following the Closing Date and on the first day of each month thereafter during the Term.  The collateral evaluation fee shall be deemed earned in full on the date when same is due and payable hereunder and shall not be subject to rebate or proration upon termination of this Agreement for any reason.  

(b)Collateral Monitoring Fee.  Borrowers shall pay to Agent on the first day of each month following any month in which Agent performs any collateral monitoring-namely any field examination, collateral analysis or other business analysis, the need for which is to be determined by Agent and which monitoring is undertaken by Agent or for Agent’s benefit-a collateral monitoring fee in an amount equal to $1,000 per day for each person employed to perform such monitoring, plus all costs and disbursements incurred by Agent in the performance of such examination or analysis.  

3.5.Computation of Interest and Fees.  Interest and fees hereunder shall be computed on the basis of a year of 360 days and for the actual number of days elapsed.  If any payment to be made hereunder becomes due and payable on a day other than a Business Day, the due date thereof shall be extended to the next succeeding Business Day and interest thereon shall be payable at the Revolving Interest Rate for Domestic Rate Loans during such extension.  

3.6.Maximum Charges.  In no event whatsoever shall interest and other charges charged hereunder exceed the highest rate permissible under law.  In the event interest and other charges as computed hereunder would otherwise exceed the highest rate permitted under law, such excess amount shall be first applied to any unpaid principal balance owed by Borrowers, and if the then remaining excess amount is greater than the previously unpaid principal balance, Lenders shall promptly refund such excess amount to Borrowers and the provisions hereof shall be deemed amended to provide for such permissible rate.  

3.7.Increased Costs.  In the event that any Applicable Law, or any change therein or in the interpretation or application thereof, or compliance by any Lender (for purposes of this Section 3.7, the term “Lender” shall include Agent or any Lender and any corporation or bank controlling Agent or any Lender) and the office or branch where Agent or any Lender (as so defined) makes or maintains any Eurodollar Rate Loans with any request or directive (whether or not having the force of law) from any central bank or other financial, monetary or other authority, shall:  

(a)subject Agent or any Lender to any tax of any kind whatsoever (other than Excluded Taxes) with respect to this Agreement or any Other Document or change the basis of taxation with respect to Other Taxes of payments to Agent or any Lender of principal, fees, interest or any other amount payable hereunder or under any Other Documents; 

(b)impose, modify or hold applicable any reserve, special deposit, assessment or similar requirement against assets held by, or deposits in or for the account of, advances or loans by, or other credit extended by, any office of Agent or any Lender, including pursuant to Regulation D of the Board of Governors of the Federal Reserve System; or 

(c)impose on Agent or any Lender or the London interbank Eurodollar market any other condition with respect to this Agreement or any Other Document; 

and the result of any of the foregoing is to increase the cost to Agent or any Lender of making, renewing or maintaining its Advances hereunder by an amount that Agent or such Lender deems to be material or to reduce the amount of any payment (whether of principal, interest or otherwise) in respect of any of the Advances by an amount that Agent or such Lender deems to be material, then, in any case Borrowers shall promptly pay Agent or such Lender, upon its demand, such additional amount as will compensate Agent or such Lender for such additional cost or such reduction, as the case may be.  Agent or such Lender shall certify the amount of such additional cost or reduced amount to Borrowers, and such certification shall be conclusive absent manifest error.  
3.8.Basis For Determining Interest Rate Inadequate or Unfair.  In the event that Agent or any Lender shall have determined that:  

(a)reasonable means do not exist for ascertaining the Eurodollar Rate applicable pursuant to Section 2.2 hereof for any Interest Period; or 

(b)Dollar deposits in the relevant amount and for the relevant maturity are not available in the London interbank Eurodollar market, with respect to an outstanding Eurodollar Rate Loan, a proposed Eurodollar Rate Loan, or a proposed conversion of a Domestic Rate Loan into a Eurodollar Rate Loan, 

then Agent shall give Borrowers prompt written or telephonic notice of such determination.  If such notice is given, (i) any such requested Eurodollar Rate Loan shall be made as a Domestic Rate Loan, unless Borrowers shall notify Agent no later than 10:00 a.m. (New York City time) two (2) Business Days prior to the date of such proposed borrowing, that its request for such borrowing shall be cancelled or made as an unaffected type of Eurodollar Rate Loan, (ii) any Domestic Rate Loan or Eurodollar Rate Loan which was to have been converted to an affected type of Eurodollar Rate Loan shall be continued as or converted into a Domestic Rate Loan, or, if Borrowers shall notify Agent, no later than 10:00 a.m. (New York City time) two (2) Business Days prior to the proposed conversion, shall be maintained as an unaffected type of Eurodollar Rate Loan, and (iii) any outstanding affected Eurodollar Rate Loans shall be converted into a Domestic Rate Loan, or, if Borrowers shall notify Agent, no later than 10:00 a.m. (New York City time) two (2) Business Days prior to the last Business Day of the then current Interest Period applicable to such affected Eurodollar Rate Loan, shall be converted into an unaffected type of Eurodollar Rate Loan, on the last Business Day of the then current Interest Period for such affected Eurodollar Rate Loans.  Until such notice has been withdrawn, Lenders shall have no obligation to make an affected type of Eurodollar Rate Loan or maintain outstanding affected Eurodollar Rate Loans and Borrowers shall not have the right to convert a Domestic Rate Loan or an unaffected type of Eurodollar Rate Loan into an affected type of Eurodollar Rate Loan.  
3.9.Capital Adequacy.  

(a)In the event that Agent or any Lender shall have determined that any Applicable Law or guideline regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Body, central bank or comparable agency charged with the 

interpretation or administration thereof, or compliance by Agent or any Lender (for purposes of this Section 3.9, the term “Lender” shall include Agent or any Lender and any corporation or bank controlling Agent or any Lender) and the office or branch where Agent or any Lender (as so defined) makes or maintains any Eurodollar Rate Loans with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on Agent or any Lender’s capital as a consequence of its obligations hereunder to a level below that which Agent or such Lender could have achieved but for such adoption, change or compliance (taking into consideration Agent’s and each Lender’s policies with respect to capital adequacy) by an amount deemed by Agent or any Lender to be material, then, from time to time, Borrowers shall pay upon demand to Agent or such Lender such additional amount or amounts as will compensate Agent or such Lender for such reduction.  In determining such amount or amounts, Agent or such Lender may use any reasonable averaging or attribution methods.  The protection of this Section 3.9 shall be available to Agent and each Lender regardless of any possible contention of invalidity or inapplicability with respect to the Applicable Law or condition.  

(b)A certificate of Agent or such Lender setting forth such amount or amounts as shall be necessary to compensate Agent or such Lender with respect to Section 3.9(a) hereof when delivered to Borrowers shall be conclusive absent manifest error.  

3.10.Gross Up for Taxes.  If any Borrower shall be required by Applicable Law to withhold or deduct any Other Taxes from or in respect of any sum payable under this Agreement or any of the Other Documents to Agent, or any Lender, assignee of any Lender, or Participant (each, individually, a “Payee” and collectively, the “Payees”), (a) the sum payable to such Payee or Payees, as the case may be, shall be increased as may be necessary so that, after making all required withholding or deductions, the applicable Payee or Payees receives an amount equal to the sum it would have received had no such withholding or deductions been made (the “Gross-Up Payment”), (b) such Borrower shall make such withholding or deductions, and (c) such Borrower shall pay the full amount withheld or deducted to the relevant taxation authority or other authority in accordance with Applicable Law.  Notwithstanding the foregoing, such Borrower shall not be obligated to make any portion of the Gross-Up Payment that is attributable to any withholding or deductions that would not have been paid or claimed had the applicable Payee or Payees properly claimed a complete exemption with respect thereto pursuant to Section 3.11 hereof.  

3.11.Withholding Tax Exemption.  

(a)Each Payee that is not incorporated under the Laws of the United States of America or a state thereof (and, upon the written request of Agent, each other Payee) agrees that it will deliver to Borrowers and Agent two (2) duly completed appropriate valid Withholding Certificates (as defined under §1.1441-1(c)(16) of the Income Tax Regulations (“Regulations”)) certifying its status (i.e., U.S. or foreign person) and, if appropriate, making a claim of reduced, or exemption from, U.S. withholding tax on the basis of an income tax treaty or an exemption provided by the Code.  The term “Withholding Certificate” means a Form W-9; a Form W-8BEN; a Form W-8ECI; a Form W-8IMY and the related statements and certifications as required under §1.1441-1(e)(2) and/or (3) of the Regulations; a statement described in §1.871-14(c)(2)(v) of the Regulations; or any other certificates under the Code or Regulations that certify or establish the status of a payee or beneficial owner as a U.S. or foreign person.  

(b)Each Payee required to deliver to Borrowers and Agent a valid Withholding Certificate pursuant to Section 3.11(a) hereof shall deliver such valid Withholding Certificate as follows:  (A) each Payee which is a party hereto on the Closing Date shall deliver such valid Withholding Certificate at least five (5) Business Days prior to the first date on which any interest or fees are payable by Borrowers hereunder for 

the account of such Payee; (B) each Payee shall deliver such valid Withholding Certificate at least five (5) Business Days before the effective date of such assignment or participation (unless Agent in its sole discretion shall permit such Payee to deliver such Withholding Certificate less than five (5) Business Days before such date in which case it shall be due on the date specified by Agent).  Each Payee which so delivers a valid Withholding Certificate further undertakes to deliver to Borrowers and Agent two (2) additional copies of such Withholding Certificate (or a successor form) on or before the date that such Withholding Certificate expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent Withholding Certificate so delivered by it, and such amendments thereto or extensions or renewals thereof as may be reasonably requested by Borrowers or Agent.  

(c)Notwithstanding the submission of a Withholding Certificate claiming a reduced rate of or exemption from U.S. withholding tax required under Section 3.11(b) hereof, Agent shall be entitled to withhold United States federal income taxes at the full 30% withholding rate if in its reasonable judgment it is required to do so under the due diligence requirements imposed upon a withholding agent under §1.1441-7(b) of the Regulations.  Further, Agent is indemnified under §1.1461-1(e) of the Regulations against any claims and demands of any Payee for the amount of any tax it deducts and withholds in accordance with regulations under §1441 of the Code.  

3.12.Interest Act (Canada). For purposes of disclosure pursuant to the Interest Act (Canada), the annual rates of interest or fees to which the rates of interest or fees provided in this Agreement and the other Documents (and stated herein or therein, as applicable, to be computed on the basis of 360 days or any other period of time less than a calendar year) are equivalent are the rates so determined multiplied by the actual number of days in the applicable calendar year and divided by 360 or such other period of time, respectively.

IVCOLLATERAL:  GENERAL TERMS 

4.1.Security Interest in the Collateral.  To secure the prompt payment and performance to Agent and each Lender of the Obligations, each Loan Party hereby assigns, pledges and grants to Agent for its benefit and for the ratable benefit of each Lender a continuing security interest in and to and Lien on all of its Collateral, whether now owned or existing or hereafter acquired or arising and wheresoever located.  Each Loan Party shall mark its books and records as may be necessary or appropriate to evidence, protect and perfect Agent’s security interest and shall cause its financial statements to reflect such security interest.  Each Loan Party shall promptly provide Agent with written notice of all commercial tort claims, such notice to contain the case title together with the applicable court and a brief description of the claim(s).  Upon delivery of each such notice, each Loan Party shall be deemed to hereby grant to Agent a security interest and lien in and to such commercial tort claims and all proceeds thereof. 

4.2.Perfection of Security Interest.  Each Loan Party shall take all action that may be necessary or desirable, or that Agent may request, so as at all times to maintain the validity, perfection, enforceability and priority of Agent’s security interest in and Lien on the Collateral or to enable Agent to protect, exercise or enforce its rights hereunder and in the Collateral, including, but not limited to, (i) immediately discharging all Liens other than Permitted Encumbrances, (ii) obtaining Lien Waiver Agreements, (iii) delivering to Agent, endorsed or accompanied by such instruments of assignment as Agent may specify, and stamping or marking, in such manner as Agent may specify, any and all chattel paper, instruments, letters of credits and advices thereof and documents evidencing or forming a part of the Collateral, (iv) entering into warehousing, lockbox and other custodial arrangements satisfactory to Agent, and (v) executing and delivering financing statements, control agreements, instruments of pledge, mortgages, notices and assignments, in each case in form and substance satisfactory to Agent, relating to the creation, validity, perfection, maintenance or continuation of Agent’s security interest and Lien under the Uniform Commercial Code or other Applicable Law.  By its 

signature hereto, each Loan Party hereby authorizes Agent to file against such Loan Party, one or more financing, continuation or amendment statements pursuant to the Uniform Commercial Code in form and substance satisfactory to Agent (which statements may have a description of collateral which is broader than that set forth herein).  All charges, expenses and fees Agent may incur in doing any of the foregoing, and any local taxes relating thereto, shall be charged to Borrowers’ Account as a Revolving Advance of a Domestic Rate Loan and added to the Obligations, or, at Agent’s option, shall be paid to Agent for its benefit and for the ratable benefit of Lenders immediately upon demand.  

4.3.Disposition of Collateral.  Each Loan Party will safeguard and protect all Collateral for Agent’s general account and make no disposition thereof whether by sale, lease or otherwise except (a) the sale of Inventory in the Ordinary Course of Business and (b) the disposition or transfer of obsolete and worn-out Equipment in the Ordinary Course of Business during any fiscal year having an aggregate fair market value, with respect to all Loan Parties, of not more than $250,000 and only to the extent that (i) the proceeds of any such disposition are used to acquire replacement Equipment which is subject to Agent’s first priority security interest or (ii) the proceeds of which are remitted to Agent to be applied pursuant to Section 2.21.  

4.4.Preservation of Collateral.  Following the occurrence of a Default or Event of Default, in addition to the rights and remedies set forth in Section 11.1 hereof, Agent:  (a) may at any time take such steps as Agent deems necessary to protect Agent’s interest in and to preserve the Collateral, including the hiring of such security guards or the placing of other security protection measures as Agent may deem appropriate; (b) may employ and maintain at any of any Loan Party’s premises a custodian who shall have full authority to do all acts necessary to protect Agent’s interests in the Collateral; (c) may lease warehouse facilities to which Agent may move all or part of the Collateral; (d) may use any Loan Party’s owned or leased lifts, hoists, trucks and other facilities or equipment for handling or removing the Collateral; and (e) shall have, and is hereby granted, a right of ingress and egress to the places where the Collateral is located, and may proceed over and through any of any Loan Party’s owned or leased property.  Each Loan Party shall cooperate fully with all of Agent’s efforts to preserve the Collateral and will take such actions to preserve the Collateral as Agent may direct.  All of Agent’s expenses of preserving the Collateral, including any expenses relating to the bonding of a custodian, shall be charged to Borrowers’ Account as a Revolving Advance maintained as a Domestic Rate Loan and added to the Obligations.  

4.5.Ownership of Collateral.  

(a)With respect to the Collateral, at the time the Collateral becomes subject to Agent’s security interest:  (i) each Loan Party shall be the sole owner of and fully authorized and able to sell, transfer, pledge and/or grant a first priority security interest in each and every item of the its respective Collateral to Agent; and, except for Permitted Encumbrances the Collateral shall be free and clear of all Liens and encumbrances whatsoever; (ii) each document and agreement executed by a Loan Party or delivered to Agent or any Lender in connection with this Agreement shall be true and correct in all material respects; (iii) all signatures and endorsements of any Loan Party that appear on such documents and agreements shall be genuine and each Loan Party shall have full capacity to execute same; and (iv) each Loan Party’s Equipment and Inventory shall be located as set forth on Schedule 4.5 and shall not be removed from such location(s) without the prior written consent of Agent except with respect to the sale of Inventory in the Ordinary Course of Business and Equipment to the extent permitted in Section 4.3 hereof.  

(b)(i) There is no location at which any Loan Party has any Inventory (except for Inventory in transit) other than those locations listed on Schedule 4.5; (ii) Schedule 4.5 hereto contains a correct and complete list, as of the Closing Date, of the legal names and addresses of each warehouse at which Inventory of any Loan Party is stored; none of the receipts received by any Loan Party from any warehouse states that 

the goods covered thereby are to be delivered to bearer or to the order of a named Person or to a named Person and such named Person’s assigns; (iii) Schedule 4.5 hereto sets forth a correct and complete list as of the Closing Date of (A) each place of business of each Loan Party and (B) the chief executive office of each Loan Party; and (iv) Schedule 4.5 hereto sets forth a correct and complete list as of the Closing Date of the location, by state and street address, of all Real Property owned or leased by any Loan Party, together with the names and addresses of any landlords.  

4.6.Defense of Agent’s and Lenders’ Interests.  Until (a) payment and performance in full of all of the Obligations and (b) termination of this Agreement, Agent’s interests in the Collateral shall continue in full force and effect.  During such period no Loan Party shall, without Agent’s prior written consent, pledge, sell (except Inventory in the Ordinary Course of Business and Equipment to the extent permitted in Section 4.3 hereof), assign, transfer, create or suffer to exist a Lien upon or encumber or allow or suffer to be encumbered in any way except for Permitted Encumbrances, any part of the Collateral.  Each Loan Party shall defend Agent’s interests in the Collateral against any and all Persons whatsoever.  At any time following demand by Agent for payment of all Obligations, Agent shall have the right to take possession of the indicia of the Collateral and the Collateral in whatever physical form contained, including:  labels, stationery, documents, instruments and advertising materials.  If Agent exercises this right to take possession of the Collateral, each Loan Party shall, upon demand, assemble it in the best manner possible and make it available to Agent at a place reasonably convenient to Agent.  In addition, with respect to all Collateral, Agent and Lenders shall be entitled to all of the rights and remedies set forth herein and further provided by the Uniform Commercial Code or other Applicable Law.  Each Loan Party shall, and Agent may, at its option, instruct all suppliers, carriers, forwarders, warehousers or others receiving or holding cash, checks, Inventory, documents or instruments in which Agent holds a security interest to deliver same to Agent and/or subject to Agent’s order and if they shall come into a Loan Party’s possession, they, and each of them, shall be held by such Loan Party in trust as Agent’s trustee, and the Loan Parties will immediately deliver them to Agent in their original form together with any necessary endorsement.  

4.7.Books and Records.  Each Loan Party shall (a) keep proper books of record and account in which full, true and correct entries will be made of all dealings or transactions of or in relation to its business and affairs; (b) set up on its books accruals with respect to all taxes, assessments, charges, levies and claims; and (c) on a reasonably current basis set up on its books, from its earnings, allowances against doubtful Receivables, advances and investments and all other proper accruals (including by reason of enumeration, accruals for premiums, if any, due on required payments and accruals for depreciation, obsolescence, or amortization of properties), which should be set aside from such earnings in connection with its business.  All determinations pursuant to this subsection shall be made in accordance with, or as required by, GAAP consistently applied in the opinion of such independent public accountant as shall then be regularly engaged by the Loan Parties.  

4.8.Financial Disclosure.  Each Loan Party hereby irrevocably authorizes and directs all accountants and auditors employed by the Loan Parties at any time during the Term to exhibit and deliver to Agent and each Lender copies of any of the Loan Parties’ financial statements, trial balances or other accounting records of any sort in the accountant’s or auditor’s possession, and to disclose to Agent and each Lender any information such accountants may have concerning each Loan Party’s financial status and business operations.  Each Loan Party hereby authorizes all Governmental Bodies to furnish to Agent and each Lender copies of reports or examinations relating to the Loan Parties, whether made by a Loan Party or otherwise; however, Agent and each Lender will attempt to obtain such information or materials directly from the Loan Parties prior to obtaining such information or materials from such accountants or Governmental Bodies. 
 

4.9.Compliance with Laws.  Each Loan Party shall comply with all Applicable Laws with respect to the Collateral or any part thereof or to the operation of such Loan Party’s business the non-compliance with which could reasonably be expected to have a Material Adverse Effect.  The assets of the Loan Parties at all times shall be maintained in accordance with the requirements of all insurance carriers which provide insurance with respect to the assets of the Loan Parties so that such insurance shall remain in full force and effect.  

4.10.Inspection of Premises.  At all reasonable times, upon reasonable notice (except during the continuance of an Event of Default or Default), Agent and each Lender shall have full access to and the right to audit, check, inspect and make abstracts and copies from each Loan Party’s books, records, audits, correspondence and all other papers relating to the Collateral and the operation of each Loan Party’s business.  Agent, any Lender and their agents may enter upon any of Loan Parties’ premises at any time during business hours and at any other reasonable time, and from time to time, for the purpose of inspecting the Collateral and any and all records pertaining thereto and the operation of each Loan Party’s business.  So long as no Default or Event of Default has occurred, each Loan Party will not be responsible for the costs and expenses of (a) more than two (2) field audits in any calendar year and (b) more than two (2) Inventory appraisals in any calendar year.  

4.11.Insurance.  The assets and properties of the Loan Parties at all times shall be maintained in accordance with the requirements of all insurance carriers which provide insurance with respect to the assets and properties of each Loan Party so that such insurance shall remain in full force and effect.  The Loan Parties shall bear the full risk of any loss of any nature whatsoever with respect to the Collateral.  At the Loan Parties’ own cost and expense in amounts and with carriers acceptable to Agent, the Loan Parties shall (a) keep all their insurable properties and properties in which any Loan Party has an interest insured against the hazards of fire, flood, sprinkler leakage, those hazards covered by extended coverage insurance and such other hazards, and for such amounts, as is customary in the case of companies engaged in businesses similar to the Loan Parties’ including business interruption insurance; (b) maintain a bond in such amounts as is customary in the case of companies engaged in businesses similar to the Loan Parties insuring against larceny, embezzlement or other criminal misappropriation of insured’s officers and employees who may either singly or jointly with others at any time have access to the assets or funds of the Loan Parties either directly or through authority to draw upon such funds or to direct generally the disposition of such assets; (c) maintain public and product liability insurance against claims for personal injury, death or property damage suffered by others; (d) maintain all such worker’s compensation or similar insurance as may be required under the laws of any state or jurisdiction in which a Loan Party is engaged in business; and (e) furnish Agent with (i) copies of all policies (or other evidence satisfactory to Agent of their existence, if they are not yet available) and evidence of the maintenance of such policies by the renewal thereof at least ten (10) days before any expiration date, and (ii) appropriate loss payable endorsements in form and substance satisfactory to Agent, naming Agent as a co-insured and loss payee as its interests may appear with respect to all insurance coverage referred to in clauses (a) and (c) above, and providing (A) that all proceeds thereunder shall be payable to Agent, (B) no such insurance shall be affected by any act or neglect of the insured or owner of the property described in such policy, and (C) that such policy and loss payable clauses may not be cancelled, amended or terminated unless at least ten (10) days’ prior written notice is given to Agent.  In the event of any loss thereunder, the carriers named therein hereby are directed by Agent and the Loan Parties to make payment for such loss to Agent and not to the Loan Parties and Agent jointly.  If any insurance losses are paid by check, draft or other instrument payable to any Loan Party and Agent jointly, Agent may endorse such Loan Party’s name thereon and do such other things as Agent may deem advisable to reduce the same to cash.  Agent is hereby authorized to adjust and compromise claims under insurance coverage referred to in clauses (a) and (b) above.  All loss recoveries received by Agent upon any such insurance may be applied to the Obligations, in such order as Agent in its sole discretion shall determine.  Any surplus shall be paid by Agent 

to the Loan Parties or applied as may be otherwise required by law.  Any deficiency thereon shall be paid by the Loan Parties to Agent, on demand.  Anything hereinabove to the contrary notwithstanding, and subject to the fulfillment of the conditions set forth below, Agent shall remit to the Loan Parties insurance proceeds received by Agent during any calendar year under insurance policies procured and maintained by the Loan Parties which insure the Loan Parties’ insurable properties to the extent such insurance proceeds do not exceed $250,000 in the aggregate during such calendar year or $100,000 per occurrence.  In the event the amount of insurance proceeds received by Agent for any occurrence exceeds $100,000, then Agent shall not be obligated to remit the insurance proceeds to the Loan Parties unless the Loan Parties shall provide Agent with evidence reasonably satisfactory to Agent that the insurance proceeds will be used by the Loan Parties to repair, replace or restore the insured property which was the subject of the insurable loss.  In the event the Loan Parties have previously received (or, after giving effect to any proposed remittance by Agent to the Loan Parties would receive) insurance proceeds which equal or exceed $250,000 in the aggregate during any calendar year, then Agent may, in its sole discretion, either remit the insurance proceeds to the Loan Parties upon the Loan Parties providing Agent with evidence reasonably satisfactory to Agent that the insurance proceeds will be used by the Loan Parties to repair, replace or restore the insured property which was the subject of the insurable loss, or apply the proceeds to the Obligations, as aforesaid.  The agreement of Agent to remit insurance proceeds in the manner above provided shall be subject in each instance to satisfaction of each of the following conditions:  (x) no Event of Default or Default shall then have occurred, and (y) the Loan Parties shall use such insurance proceeds to repair, replace or restore the insurable property which was the subject of the insurable loss and for no other purpose.  

4.12.Failure to Pay Insurance.  If any Loan Party fails to obtain insurance as hereinabove provided, or to keep the same in force, Agent, if Agent so elects, may obtain such insurance and pay the premium therefor on behalf of such Loan Party, and charge the Borrowers’ Account therefor as a Revolving Advance of a Domestic Rate Loan and such expenses so paid shall be part of the Obligations.  

4.13.Payment of Taxes.  Each Loan Party will pay, when due, all taxes, assessments and other Charges lawfully levied or assessed upon such Loan Party or any of the Collateral including real and personal property taxes, assessments and charges and all franchise, income, employment, social security benefits, withholding, and sales taxes.  If any tax by any Governmental Body is or may be imposed on or as a result of any transaction between any Loan Party and Agent or any Lender which Agent or any Lender may be required to withhold or pay or if any taxes, assessments, or other Charges remain unpaid after the date fixed for their payment, or if any written claim is made which, in Agent’s or any Lender’s good faith opinion, may create a valid Lien on the Collateral, Agent may without notice to the Loan Parties pay the taxes, assessments or other Charges and each Loan Party hereby indemnifies and holds Agent and each Lender harmless in respect thereof.  The amount of any payment by Agent under this Section 4.13 shall be charged to the Loan Party’s Account as a Revolving Advance maintained as a Domestic Rate Loan and added to the Obligations and, until the Loan Parties shall furnish Agent with an indemnity therefor (or supply Agent with evidence satisfactory to Agent that due provision for the payment thereof has been made), Agent may hold without interest any balance standing to the Loan Parties’ credit and Agent shall retain its security interest in and Lien on any and all Collateral held by Agent.  

4.14.Payment of Leasehold Obligations.  Each Loan Party shall at all times pay, when and as due, its rental obligations under all leases under which it is a tenant, and shall otherwise comply, in all material respects, with all other terms of such leases and keep them in full force and effect and, at Agent’s request will provide evidence of having done so.  

4.15.Receivables.  

(a)Nature of Receivables.  Each of the Receivables shall be a bona fide and valid account representing a bona fide indebtedness incurred by the Customer therein named, for a fixed sum as set forth in the invoice relating thereto (provided immaterial or unintentional invoice errors shall not be deemed to be a breach hereof) with respect to an absolute sale or lease and delivery of goods upon stated terms of a Borrower, or work, labor or services theretofore rendered by a Borrower as of the date each Receivable is created.  Same shall be due and owing in accordance with the applicable Borrower’s standard terms of sale without dispute, setoff or counterclaim except as may be stated on the accounts receivable schedules delivered by Borrowers to Agent.  

(b)Solvency of Customers.  Each Customer, to the best of each Borrower’s knowledge, as of the date each Receivable is created, is and will be solvent and able to pay all Receivables on which the Customer is obligated in full when due or with respect to such Customers of Borrowers who are not solvent Borrowers have set up on its books and in its financial records bad debt reserves adequate to cover such Receivables.  

(c)Location of Borrowers.  TCP’s chief executive office is located at 325 Campus Drive, Aurora, Ohio 44202, and TCP Canada’s chief executive office is located at BCE Place, 181 Bay Street, Suite 2500, Toronto, Ontario, Canada M5J 2T7.  Until written notice is given to Agent by Borrowers of any other office at which Borrowers keep their records pertaining to Receivables, all such records shall be kept at such executive office.  

(d)Collection of Receivables.  During a Cash Dominion Period, the Borrowers shall instruct their Customers to deliver all remittances upon Receivables (whether paid by check or by wire transfer of funds) to such Blocked Accounts and/or Depository Accounts (and any associated lockboxes) as Agent shall designate from time to time as contemplated by Section 4.15(h) below or as otherwise agreed to from time to time by Agent.  During a Cash Dominion Period, to the extent any Borrower directly receives any remittances upon Receivables, such Borrower shall, at such Borrower’s sole cost and expense, but on Agent’s behalf and for Agent’s account, collect as Agent’s property and in trust for Agent all amounts received on Receivables, and shall not commingle such collections with any Loan Party’s funds or use the same except to pay the Obligations, and shall as soon as possible and in any event no later than one (1) Business Day after the receipt thereof (i) in the case of remittances paid by check, deposit all such remittances in their original form (after supplying any necessary endorsements) and (ii) in the case of remittances paid by wire transfer of funds, transfer all such remittances, in each case, into such Blocked Accounts and/or Depository Accounts.  Each Borrower shall deposit in the Blocked Account and/or Depository Account or, upon request by Agent, deliver to Agent, in original form and on the date of receipt thereof, all checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness.  Prior to the occurrence of a Cash Dominion Triggering Event, payments made by a Borrower’s Customers remitted directly to Agent will be deposited by Agent in the Blocked Accounts, the Loan Parties shall have access to the funds in the Blocked Accounts, and Customer remittances shall only be treated as a repayment of Advances if the Borrowers so elect in a written notice to Agent.

(e)Notification of Assignment of Receivables.  At any time following the occurrence of an Event of Default or a Default, Agent shall have the right to send notice of the assignment of, and Agent’s security interest in and Lien on, the Receivables to any and all Customers or any third party holding or otherwise concerned with any of the Collateral.  Thereafter, Agent shall have the sole right to collect the Receivables, take possession of the Collateral, or both.  Agent’s actual collection expenses, including, but not limited to, stationery and postage, telephone and telegraph, secretarial and clerical expenses and the salaries of any collection personnel used for collection, may be charged to Borrowers’ Account and added to the Obligations.  

(f)Power of Agent to Act on Borrowers’ Behalf.  At any time following the occurrence and during the continuance of a Default or Event of Default, and otherwise (whether or not a Default or Event of Default exists) in connection with the performance by the Agent of ordinary cash management and other services associated with lockboxes and Blocked Accounts, Agent shall have the right to receive, endorse, assign and/or deliver in the name of Agent or any Borrower any and all checks, drafts and other instruments for the payment of money relating to the Receivables, and each Borrower hereby waives notice of presentment, protest and non-payment of any instrument so endorsed.  Each Borrower hereby constitutes Agent or Agent’s designee as such Borrower’s attorney with power (i) to endorse such Borrower’s name upon any notes, acceptances, checks, drafts, money orders or other evidences of payment or Collateral, except that the Agent may make such endorsements in performing ordinary cash management and other services associated with lockboxes and Blocked Accounts whether or not a Default or Event of Default exists; (ii) to sign such Borrower’s name on any invoice or bill of lading relating to any of the Receivables, drafts against Customers, assignments and verifications of Receivables; (iii) to send verifications of Receivables to any Customer; (iv) whether or not a Default or Event of Default exists, to sign such Borrower’s name on all financing statements or any other documents or instruments deemed necessary or appropriate by Agent to preserve, protect, or perfect Agent’s interest in the Collateral and to file same; (v) to demand payment of the Receivables; (vi) to enforce payment of the Receivables by legal proceedings or otherwise; (vii) to exercise all of such Borrower’s rights and remedies with respect to the collection of the Receivables and any other Collateral; (viii) to settle, adjust, compromise, extend or renew the Receivables; (ix) to settle, adjust or compromise any legal proceedings brought to collect Receivables; (x) to prepare, file and sign such Borrower’s name on a proof of claim in bankruptcy or similar document against any Customer; (xi) to prepare, file and sign such Borrower’s name on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with the Receivables; and (xii) to do all other acts and things necessary to carry out this Agreement.  All acts of said attorney or designee are hereby ratified and approved, and said attorney or designee shall not be liable for any acts of omission or commission nor for any error of judgment or mistake of fact or of law, unless done maliciously or with gross (not mere) negligence (as determined by a court of competent jurisdiction in a final non-appealable judgment); this power being coupled with an interest is irrevocable while any of the Obligations remain unpaid.  Agent shall have the right at any time following the occurrence of an Event of Default or Default, to change the address for delivery of mail addressed to any Borrower to such address as Agent may designate and to receive, open and dispose of all mail addressed to any Borrower.
  
(g)No Liability.  Neither Agent nor any Lender shall, under any circumstances or in any event whatsoever, have any liability for any error or omission or delay of any kind occurring in the settlement, collection or payment of any of the Receivables or any instrument received in payment thereof, or for any damage resulting therefrom.  Following the occurrence of an Event of Default or Default, Agent may, without notice or consent from any Borrower, sue upon or otherwise collect, extend the time of payment of, compromise or settle for cash, credit or upon any terms any of the Receivables or any other securities, instruments or insurance applicable thereto and/or release any obligor thereof.  Agent is authorized and empowered to accept, following the occurrence of an Event of Default or Default, the return of the goods represented by any of the Receivables, without notice to or consent by any Borrower, all without discharging or in any way affecting any Borrower’s liability hereunder.  

(h)Establishment of a Lockbox Account, Dominion Account.  All proceeds of Collateral shall be deposited by Borrowers into either (i) a lockbox account, dominion account or such other “blocked account” (“Blocked Accounts”) established at a bank or banks (each such bank, a “Blocked Account Bank”) pursuant to an arrangement with such Blocked Account Bank as may be selected by Borrowers and be acceptable to Agent or (ii) depository accounts (“Depository Accounts”) established at the Agent for the deposit of such proceeds.  Borrowers, Agent and each Blocked Account Bank shall enter into a deposit account 

control agreement in form and substance satisfactory to Agent that is sufficient to give Agent “control” (for purposes of Articles 8 and 9 of the Uniform Commercial Code) over such Blocked Accounts.  At any time during a Cash Dominion Period, Agent shall have the sole and exclusive right to direct, and is hereby authorized to give instructions pursuant to such deposit account control agreements directing, the disposition of funds in the Blocked Accounts and Depository Accounts (any such instructions, an “Activation Notice”) to Agent on a daily basis, either to a deposit account maintained by Agent at PNC or by wire transfer to a deposit account at PNC, which such funds may be applied by Agent to repay the Obligations, and, if an Event of Default has occurred and is continuing, to cash collateralize outstanding Letters of Credit in accordance with Section 3.2 hereof.  Prior to the occurrence of a Cash Dominion Triggering Event, the Loan Parties shall retain the right to direct the disposition of funds in the Blocked Accounts.  In the event that Agent issues an Activation Notice, Agent agrees to rescind such Activation Notice at such time that no Cash Dominion Period shall exist (it being understood that, notwithstanding any such rescission, Agent shall have the right and is authorized to issue an additional Activation Notice if a subsequent Cash Dominion Triggering Event shall have occurred or a Cash Dominion Period shall exist at any time thereafter). All funds deposited in the Blocked Accounts or Depository Accounts shall immediately become subject to the security interest of Agent, for its own benefit and the ratable benefit of the other Secured Parties, and Borrowers shall obtain the agreement by each Blocked Account Bank to waive any offset rights against the funds so deposited.  Neither Agent nor any Lender assumes any responsibility for such blocked account arrangements, including any claim of accord and satisfaction or release with respect to deposits accepted by any Blocked Account Bank thereunder.  During a Cash Dominion Period, Agent shall apply all funds received by it from the Blocked Accounts and/or Depository Accounts to the satisfaction of the Obligations (including the cash collateralization of all Obligations relating to any outstanding Letters of Credit in accordance with the provisions of Section 3.2 hereof) in such order as Agent shall determine in its discretion, subject to Borrowers’ ability to reborrow Revolving Advances in accordance with the terms hereof; provided that, in the absence of any Event of Default, Agent shall apply all such funds representing collection of Receivables first, to the Revolving Advances which are Domestic Rate Loans, and then to Revolving Advances which are LIBOR Rate Loans.  All deposit accounts and investment accounts of each Borrower and its Subsidiaries are set forth on Schedule 4.15(h).  

(i)Adjustments.  No Borrower will, without Agent’s consent, compromise or adjust any Receivables (or extend the time for payment thereof) or accept any material returns of merchandise or grant any additional discounts, allowances or credits thereon except for those compromises, adjustments, returns, discounts, credits and allowances as have been heretofore customary in the business of such Borrower. 
 
4.16.Inventory.  To the extent Inventory held for sale or lease has been produced by a Borrower, it has been and will be produced by such Borrower in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunder.  

4.17.Maintenance of Equipment.  The Equipment shall be maintained in good operating condition and repair (reasonable wear and tear excepted) and all necessary replacements of and repairs thereto shall be made so that the value and operating efficiency of the Equipment shall be maintained and preserved.  No Borrower shall use or operate the Equipment in violation of any law, statute, ordinance, code, rule or regulation.  Borrowers shall have the right to sell Equipment to the extent set forth in Section 4.3 hereof.  

4.18.Exculpation of Liability.  Nothing herein contained shall be construed to constitute Agent or any Lender as any Loan Party’s agent for any purpose whatsoever, nor shall Agent or any Lender be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof.  Neither Agent nor any Lender, whether by anything herein or in any assignment or otherwise, assume any of any Loan Party’s obligations under any 

contract or agreement assigned to Agent or such Lender, and neither Agent nor any Lender shall be responsible in any way for the performance by any Loan Party of any of the terms and conditions thereof.  

4.19.Environmental Matters.  

(a)Each Loan Party shall ensure that the Real Property and all operations and businesses conducted thereon remain in compliance with all Environmental Laws and shall not place or permit to be placed any Hazardous Substances on any Real Property except as permitted by Applicable Law or appropriate governmental authorities.  

(b)The Loan Parties shall establish and maintain a system to assure and monitor continued compliance with all applicable Environmental Laws which system shall include periodic reviews of such compliance.  

(c)The Loan Parties shall (i) employ in connection with the use of the Real Property appropriate technology necessary to maintain compliance with any applicable Environmental Laws and (ii) dispose of any and all Hazardous Waste generated at the Real Property only at facilities and with carriers that maintain valid permits under RCRA and any other applicable Environmental Laws.  Each Loan Party shall use its best efforts to obtain certificates of disposal, such as hazardous waste manifest receipts, from all treatment, transport, storage or disposal facilities or operators employed by such Loan Party in connection with the transport or disposal of any Hazardous Waste generated at the Real Property.  

(d)In the event any Loan Party obtains, gives or receives notice of any Release or threat of Release of a reportable quantity of any Hazardous Substances at the Real Property (any such event being hereinafter referred to as a “Hazardous Discharge”) or receives any notice of violation, request for information or notification that it is potentially responsible for investigation or cleanup of environmental conditions at the Real Property, demand letter or complaint, order, citation, or other written notice with regard to any Hazardous Discharge or violation of Environmental Laws affecting the Real Property or any Loan Party’s interest therein (any of the foregoing is referred to herein as an “Environmental Complaint”) from any Person, including any state agency responsible in whole or in part for environmental matters in the state in which the Real Property is located or the United States Environmental Protection Agency (any such person or entity hereinafter the “Authority”), then the Loan Parties shall, within five (5) Business Days, give written notice of same to Agent detailing facts and circumstances of which the Loan Parties is aware giving rise to the Hazardous Discharge or Environmental Complaint.  Such information is to be provided to allow Agent to protect its security interest in and Lien on the Real Property and the Collateral and is not intended to create nor shall it create any obligation upon Agent or any Lender with respect thereto.  

(e)The Loan Parties shall promptly forward to Agent copies of any request for information, notification of potential liability, demand letter relating to potential responsibility with respect to the investigation or cleanup of Hazardous Substances at any other site owned, operated or used by any Loan Party to dispose of Hazardous Substances and shall continue to forward copies of correspondence between any Loan Party and the Authority regarding such claims to Agent until the claim is settled.  The Loan Parties shall promptly forward to Agent copies of all documents and reports concerning a Hazardous Discharge at the Real Property that the Loan Party is required to file under any Environmental Laws.  Such information is to be provided solely to allow Agent to protect Agent’s security interest in and Lien on the Real Property and the Collateral.  

(f)The Loan Parties shall respond promptly to any Hazardous Discharge or Environmental Complaint and take all necessary action in order to safeguard the health of any Person and to avoid subjecting the Collateral or Real Property to any Lien.  If any Loan Party shall fail to respond 

promptly to any Hazardous Discharge or Environmental Complaint or any Loan Party shall fail to comply with any of the requirements of any Environmental Laws, Agent on behalf of Lenders may, but without the obligation to do so, for the sole purpose of protecting Agent’s interest in the Collateral:  (A) give such notices or (B) enter onto the Real Property (or authorize third parties to enter onto the Real Property) and take such actions as Agent (or such third parties as directed by Agent) deem reasonably necessary or advisable, to clean up, remove, mitigate or otherwise deal with any such Hazardous Discharge or Environmental Complaint.  All reasonable costs and expenses incurred by Agent and Lenders (or such third parties) in the exercise of any such rights, including any sums paid in connection with any judicial or administrative investigation or proceedings, fines and penalties, together with interest thereon from the date expended at the Default Rate for Domestic Rate Loans constituting Revolving Advances shall be paid upon demand by the Loan Parties, and until paid shall be added to and become a part of the Obligations secured by the Liens created by the terms of this Agreement or any other agreement between Agent, any Lender and the Loan Parties.  

(g)Promptly upon the written request of Agent from time to time, the Loan Parties shall provide Agent, at the Loan Parties’ expense, with an environmental site assessment or environmental audit report prepared by an environmental engineering firm acceptable in the reasonable opinion of Agent, to assess with a reasonable degree of certainty the existence of a Hazardous Discharge and the potential costs in connection with abatement, cleanup and removal of any Hazardous Substances found on, under, at or within the Real Property, provided, however, that Borrowers shall not be responsible for the expenses associated with more than one (1) such assessment or audit report for any parcel of Real Property, unless a Default or Event of Default has occurred or Agent in good faith determines that there is a reasonable possibility of a material environmental condition on any of each Borrower’s Real Property.  Any report or investigation of such Hazardous Discharge proposed and acceptable to an appropriate Authority that is charged to oversee the clean-up of such Hazardous Discharge shall be acceptable to Agent.  If such estimates, individually or in the aggregate, exceed $250,000, Agent shall have the right to require the Loan Parties to post a bond, letter of credit or other security reasonably satisfactory to Agent to secure payment of these costs and expenses.  

(h)Each Loan Party shall defend and indemnify Agent and Lenders and hold Agent, Lenders and their respective employees, agents, directors and officers harmless from and against all loss, liability, damage and expense, claims, costs, fines and penalties, including attorney’s fees, suffered or incurred by Agent or Lenders under or on account of any Environmental Laws, including the assertion of any Lien thereunder, with respect to any Hazardous Discharge, the presence of any Hazardous Substances affecting the Real Property, whether or not the same originates or emerges from the Real Property or any contiguous real estate, including any loss of value of the Real Property as a result of the foregoing except to the extent such loss, liability, damage and expense is attributable to any Hazardous Discharge resulting from actions on the part of Agent or any Lender.  Each Loan Party’s obligations under this Section 4.19 shall arise upon the discovery of the presence of any Hazardous Substances at the Real Property, whether or not any federal, state, or local environmental agency has taken or threatened any action in connection with the presence of any Hazardous Substances.  Each Loan Party’s obligation and the indemnifications hereunder shall survive the termination of this Agreement.  

(i)For purposes of Section 4.19 and 5.7, all references to Real Property shall be deemed to include all of each Loan Party’s right, title and interest in and to its owned and leased premises.  

4.20.Financing Statements.  Except as respects the financing statements filed by Agent and the financing statements described on Schedule 1.2, no financing statement covering any of the Collateral or any proceeds thereof is on file in any public office.  

VREPRESENTATIONS AND WARRANTIES.  

Each Loan Party represents and warrants as follows:  
5.1.Authority.  Each Loan Party has full power, authority and legal right to enter into this Agreement and the Other Documents and to perform all its respective Obligations hereunder and thereunder.  This Agreement and the Other Documents have been duly executed and delivered by each Loan Party, and this Agreement and the Other Documents constitute the legal, valid and binding obligation of each Loan Party enforceable in accordance with their terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally.  The execution, delivery and performance of this Agreement and of the Other Documents (a) are within each Loan Party’s corporate powers, have been duly authorized by all necessary corporate action, are not in contravention of law or the terms of any Loan Party’s by-laws, certificate of incorporation or other applicable documents relating to any Loan Party’s formation or to the conduct of any Loan Party’s business or of any material agreement or undertaking to which any Loan Party is a party or by which any Loan Party is bound, (b) will not conflict with or violate any law or regulation, or any judgment, order or decree of any Governmental Body, (c) will not require the Consent of any Governmental Body or any other Person, except those Consents set forth on Schedule 5.1 hereto, all of which will have been duly obtained, made or compiled prior to the Closing Date and which are in full force and effect and (d) will not conflict with, nor result in any breach in any of the provisions of or constitute a default under or result in the creation of any Lien except Permitted Encumbrances upon any asset of any Loan Party under the provisions of any agreement, charter document, instrument, by-law or other instrument to which Loan Party is a party or by which it or its property is a party or by which it may be bound.  

5.2.Formation and Qualification.  

(a)Each Loan Party is duly incorporated and in good standing under the laws of the state listed on Schedule 5.2(a) and is qualified to do business and is in good standing in the states listed on Schedule 5.2(a), which constitute all states in which qualification and good standing are necessary for such Loan Party to conduct its business and own its property and where the failure to so qualify could reasonably be expected to have a Material Adverse Effect.  Each Loan Party has delivered to Agent true and complete copies of its certificate of incorporation and by-laws and will promptly notify Agent of any amendment or changes thereto.  

(b)The only Subsidiaries of the Loan Parties or Holdings are listed on Schedule 5.2(b).
  
5.3.Survival of Representations and Warranties.  All representations and warranties of each Loan Party contained in this Agreement and the Other Documents shall be true at the time of such Loan Party’s execution of this Agreement and the Other Documents, and shall survive the execution, delivery and acceptance thereof by the parties thereto and the closing of the transactions described therein or related thereto.  

5.4.Tax Returns.  Each Loan Party’s federal tax identification number is set forth on Schedule 5.4. Each Loan Party has filed all federal, state and local income and other material tax returns and other reports it is required by law to file and has paid all taxes, assessments, fees and other governmental charges that are due and payable.  There are no current, pending or, to any Borrower’s knowledge, threatened audits, examinations or claims with respect to any taxes that could be reasonably expected to, individually or in the aggregate, result in a Material Adverse Effect.  The provision for taxes on the books of the Loan Parties is adequate for all years not closed by applicable statutes, and for its current fiscal year, and no Loan party has knowledge of any deficiency or additional assessment in connection therewith not provided for on its books.

  
5.5.Financial Statements.  

(a)[Reserved].  

(b)[Reserved].  

(c)The consolidated and consolidating balance sheets of Borrowers, their Subsidiaries and such other Persons described therein (including the accounts of all Subsidiaries for the respective periods during which a subsidiary relationship existed) as of December 31, 2015, and the related statements of income, changes in stockholder’s equity, and changes in cash flow for the period ended on such date, have been prepared in accordance with GAAP, consistently applied (except for changes in application in which such accountants concur) and present fairly the financial position of Borrowers and their Subsidiaries at such date and the results of their operations for such period.  Since December 31, 2015, there has been no change in the condition, financial or otherwise, of any Borrower or any Subsidiary of any Borrower as shown on the consolidated balance sheet as of such date and no change in the aggregate value of machinery, equipment and Real Property owned by any Borrower and any Subsidiary of any Borrower, except changes in the Ordinary Course of Business, none of which individually or in the aggregate has been materially adverse.  

5.6.Entity Name.  No Borrower has been known by any other corporate name in the past five years and no Borrower sells Inventory under any other name except as set forth on Schedule 5.6, nor has any Borrower been the surviving corporation of a merger or consolidation or acquired all or substantially all of the assets of any Person during the preceding five (5) years.  

5.7.O.S.H.A; Environmental Compliance; Flood Laws.  

(a)Each Loan Party has duly complied with, and its facilities, business, assets, property, leaseholds, Real Property and Equipment are in compliance in all material respects with, the provisions of the Federal Occupational Safety and Health Act, the Environmental Protection Act, RCRA and all other Environmental Laws; there have been no outstanding citations, notices or orders of non-compliance issued to any Loan Party or relating to its business, assets, property, leaseholds or Equipment under any such laws, rules or regulations.  The CMP has duly complied with, and its facilities, business, assets, property, leaseholds, property and Equipment are in compliance in all material respects with all applicable environmental laws, and there have been no outstanding citations, notices or orders of non-compliance issued to the CMP or relating to its business, assets, property, leaseholds or equipment under any such laws.  

(b)Each Loan Party has been issued all required federal, state and local licenses, certificates or permits relating to all applicable Environmental Laws.  

(c)(i) There are no visible signs of releases, spills, discharges, leaks or disposal (collectively referred to as “Releases”) of Hazardous Substances at, upon, under or within any Real Property or any premises leased by any Loan Party; (ii) there are no underground storage tanks or polychlorinated biphenyls on the Real Property or any premises leased by a Loan Party; (iii) neither the Real Property nor any premises leased by a Loan Party has ever been used as a treatment, storage or disposal facility of Hazardous Waste; and (iv) no Hazardous Substances are present on the Real Property or any premises leased by a Loan Party, excepting such quantities as are handled in accordance with all applicable manufacturer’s instructions and governmental regulations and in proper storage containers and as are necessary for the operation of the commercial business of such Loan Party or of its tenants.  

(d)All Real Property owned by each Borrower is insured pursuant to policies and other bonds which are valid and in full force and effect and which provide adequate coverage from reputable and financially sound insurers in amounts sufficient to insure the assets and risks of each such Borrower in accordance with prudent business practice in the industry of such Borrower.  Each Borrower has taken all actions required under the Flood Laws and/or requested by Agent to assist in ensuring that each Lender is in compliance with the Flood Laws applicable to the Collateral, including, but not limited to, providing Agent with the address and/or GPS coordinates of each structure located upon any Real Property that will be subject to a mortgage in favor of Agent, for the benefit of Lenders, and, to the extent required, obtaining flood insurance for such property, structures and contents prior to such property, structures and contents becoming Collateral.  Each Loan Party shall take all actions required under the Flood Laws and/or requested by Agent to assist in ensuring that each Lender is in compliance with the Flood Laws applicable to the Collateral, including, but not limited to, providing Agent with the address and/or GPS coordinates of each structure on any real property that will be subject to a mortgage in favor of Agent, for the benefit of Lenders, and, to the extent required, obtaining flood insurance for such property, structures and contents prior to such property, structures and contents becoming Collateral, and thereafter maintaining such flood insurance in full force and effect for so long as required by the Flood Laws

5.8.Solvency; No Litigation, Violation, Indebtedness or Default.  

(a)Each Loan Party is solvent, able to pay its debts as they mature, has capital sufficient to carry on its business and all businesses in which it is about to engage, and (i) as of the Closing Date, the fair present saleable value of its assets, calculated on a going concern basis, is in excess of the amount of its liabilities and (ii) subsequent to the Closing Date, the fair saleable value of its assets (calculated on a going concern basis) will be in excess of the amount of its liabilities, provided that solely for purposes of the calculations in clauses (i) and (ii) above, a portion of the aggregate payables owing at the time of determination to the CMP in an amount of up to the Permitted CMP Payable Amount then in effect shall be treated as equity.  

(b)Except as disclosed in Schedule 5.8(b), no Loan Party has (i) pending or, to any Borrower’s knowledge, threatened, litigation, arbitration, actions or proceedings which involve the possibility of having a Material Adverse Effect, or (ii) liabilities or indebtedness for borrowed money other than the Obligations.  

(c)No Loan Party is not in violation of any applicable statute, law, rule, regulation or ordinance in any respect which could reasonably be expected to have a Material Adverse Effect, nor is any Loan Party in violation of any order of any court, Governmental Body or arbitration board or tribunal. 
 
(d)Neither any Loan Party nor any member of the Controlled Group maintains or contributes to any Plan other than (X) as of the Closing Date, those listed on Schedule 5.8(d) hereto, and (Y) thereafter, as permitted under this Agreement. (i) No Plan has incurred any “accumulated funding deficiency,” as defined in Section 302(a)(2) of ERISA and Section 412(a) of the Code, whether or not waived, and each Loan Party and each member of the Controlled Group has met all applicable minimum funding requirements under Section 302 of ERISA in respect of each Plan; (ii) each Plan which is intended to be a qualified plan under Section 401(a) of the Code as currently in effect has been determined by the Internal Revenue Service to be qualified under Section 401(a) of the Code and the trust related thereto is exempt from federal income tax under Section 501(a) of the Code; (iii) neither any Loan Party nor any member of the Controlled Group has incurred any liability to the PBGC other than for the payment of premiums, and there are no premium payments which have become due which are unpaid; (iv) no Plan has been terminated by the plan administrator thereof nor by the PBGC, and there is no occurrence which would cause the PBGC to institute proceedings under Title IV of ERISA to terminate any Plan; (v) at this time, the current value of the assets of each Plan 

exceeds the present value of the accrued benefits and other liabilities of such Plan and neither any Loan Party nor any member of the Controlled Group knows of any facts or circumstances which would materially change the value of such assets and accrued benefits and other liabilities; (vi) neither any Loan Party nor any member of the Controlled Group has breached any of the responsibilities, obligations or duties imposed on it by ERISA with respect to any Plan; (vii) neither any Loan Party nor any member of a Controlled Group has incurred any liability for any excise tax arising under Section 4972 or 4980B of the Code, and no fact exists which could give rise to any such liability; (viii) neither any Loan Party nor any member of the Controlled Group nor any fiduciary of, nor any trustee to, any Plan, has engaged in a “prohibited transaction” described in Section 406 of the ERISA or Section 4975 of the Code nor taken any action which would constitute or result in a Termination Event with respect to any such Plan which is subject to ERISA; (ix) each Loan Party and each member of the Controlled Group has made all contributions due and payable with respect to each Plan; (x) there exists no event described in Section 4043(b) of ERISA, for which the thirty (30) day notice period has not been waived; (xi) neither any Loan Party nor any member of the Controlled Group has any fiduciary responsibility for investments with respect to any plan existing for the benefit of persons other than employees or former employees of such Loan Party and any member of the Controlled Group; (xii) neither any Loan Party nor any member of the Controlled Group maintains or contributes to any Plan which provides health, accident or life insurance benefits to former employees, their spouses or dependents, other than in accordance with Section 4980B of the Code; (xiii) neither any Loan Party nor any member of the Controlled Group has withdrawn, completely or partially, from any Multiemployer Plan so as to incur liability under the Multiemployer Pension Plan Amendments Act of 1980 and there exists no fact which would reasonably be expected to result in any such liability; and (xiv) no Plan fiduciary (as defined in Section 3(21) of ERISA) has any liability for breach of fiduciary duty or for any failure in connection with the administration or investment of the assets of a Plan.  

5.9.Patents, Trademarks, Copyrights and Licenses.  All patents, patent applications, trademarks, trademark applications, trademark license, service marks, service mark applications, copyrights, copyright applications, tradenames, assumed names and licenses owned or utilized by any Loan Party are set forth on Schedule 5.9. Each patent, patent application, trademark, trademark application, trademark license, service mark, service mark application, copyright and copyright application showed on Schedule 5.9 has been duly registered or filed with all appropriate Governmental Bodies. All patents, patent applications, trademarks, trademark applications, trademark license, service marks, service mark applications, copyrights, copyright applications, design rights, tradenames, assumed names, trade secrets and licenses owned or utilized by any Loan Party are valid and constitute all of the intellectual property rights which are necessary for the operation of its business; and there is no objection to or pending challenge to the validity of any such patent, trademark, copyright, design rights, tradename, trade secret or license and no Loan Party is aware of any grounds for any challenge, except as set forth in Schedule 5.9 hereto.  Each patent, patent application, patent license, trademark, trademark application, trademark license, service mark, service mark application, service mark license, design right, copyright, copyright application and copyright license owned or held by any Loan Party and each trade secret used by any Loan Party consists of original material or property developed by such Loan Party or was lawfully acquired by such Loan Party from the proper and lawful owner thereof.  Each of such items has been maintained so as to preserve the value thereof from the date of creation or acquisition thereof.  With respect to all software used by any Loan Party, such Loan Party is in possession of all source and object codes related to each piece of software or is the beneficiary of a source code escrow agreement, each such source code escrow agreement being listed on Schedule 5.9 hereto.  

5.10.Licenses and Permits.  Except as set forth in Schedule 5.10, each Loan Party (a) is in compliance with and (b) has procured and is now in possession of, all material licenses or permits required by any applicable federal, state, provincial or local law, rule or regulation for the operation of its business in each 

jurisdiction wherein it is now conducting or proposes to conduct business and where the failure to procure such licenses or permits could have a Material Adverse Effect.  

5.11.Default of Indebtedness.  No Loan Party is in default in the payment of the principal of or interest on any Indebtedness or under any instrument or agreement under or subject to which any Indebtedness has been issued and no event has occurred under the provisions of any such instrument or agreement which with or without the lapse of time or the giving of notice, or both, constitutes or would constitute an event of default thereunder (provided that, for the avoidance of doubt, the failure to make any payment under the Subordinated Promissory Note expressly prohibited by the Subordination Agreement shall not constitute a “default in the payment” of such Indebtedness for purposes of this sentence).  

5.12.No Default.  No Loan Party is in default in the payment or performance of any of its contractual obligations and no Default has occurred (provided that, for the avoidance of doubt, the failure to make any payment under the Subordinated Promissory Note expressly prohibited by the Subordination Agreement shall not constitute a “default in the payment or performance” of such contractual obligations for purposes of this sentence).  

5.13.No Burdensome Restrictions.  No Loan Party is party to any contract or agreement the performance of which could have a Material Adverse Effect.  Loan Parties have heretofore delivered to Agent true and complete copies of all material contracts to which any Loan Party is a party or to which it or any of its properties is subject.  No Loan Party has not agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien which is not a Permitted Encumbrance.  

5.14.No Labor Disputes.  No Loan Party is involved in any labor dispute; there are no strikes or walkouts or union organization of any Loan Party’s employees in existence or, to any Borrower’s knowledge, threatened, and no labor contract is scheduled to expire during the Term other than as set forth on Schedule 5.14 hereto.  

5.15.Margin Regulations.  No Loan Party is engaged, nor will any Loan Party engage, principally or as one of its important activities, in the business of extending credit for the purpose of “purchasing” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect.  No part of the proceeds of any Advance will be used for “purchasing” or “carrying” “margin stock” as defined in Regulation U of such Board of Governors.  

5.16.Investment Company Act.  No Loan Party is an “investment company” registered or required to be registered under the Investment Company Act of 1940, as amended, nor is any Loan Party controlled by such a company.  

5.17.Disclosure.  No representation or warranty made by any Loan Party in this Agreement or in any financial statement, report, certificate or any other document furnished in connection herewith contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements herein or therein not misleading.  There is no fact known to any Loan Party or which reasonably should be known to any Loan Party which Loan Parties have not disclosed to Agent in writing with respect to the transactions contemplated by this Agreement which could reasonably be expected to have a Material Adverse Effect.  

5.18.Delivery of CMP Subordinated Payable Documentation.  Agent has received complete copies of the CMP Subordinated Payable Documentation (including all exhibits, schedules and disclosure letters referred to therein or delivered pursuant thereto, if any) and all amendments thereto, waivers relating thereto and other side letters or agreements affecting the terms thereof.  None of such documents and agreements has been amended or supplemented, nor have any of the provisions thereof been waived, except pursuant to a written agreement or instrument which has heretofore been delivered to Agent.  

5.19.Swaps.  No Loan Party is a party to, nor will it be a party to, any swap agreement whereby any Loan Party has agreed or will agree to swap interest rates or currencies unless same provides that damages upon termination following an event of default thereunder are payable on an unlimited “two-way basis” without regard to fault on the part of either party.  

5.20.Conflicting Agreements.  No provision of any mortgage, indenture, contract, agreement, judgment, decree or order binding on any Loan Party or affecting the Collateral conflicts with, or requires any Consent which has not already been obtained to, or would in any way prevent the execution, delivery or performance of, the terms of this Agreement or the Other Documents.  

5.21.Application of Certain Laws and Regulations.  Neither any Loan Party nor any Affiliate of any Loan Party is subject to any law, statute, rule or regulation which regulates the incurrence of any Indebtedness, including laws, statutes, rules or regulations relative to common or interstate carriers or to the sale of electricity, gas, steam, water, telephone, telegraph or other public utility services.  

5.22.Business and Property of Loan Parties.  Upon and after the Closing Date, the Loan Parties do not propose to engage in any business other than the manufacturing and distribution of lighting products and fixtures and activities necessary to conduct the foregoing.  On the Closing Date, each Borrower will own all the property and possess all of the rights and Consents necessary for the conduct of the business of such Borrower.  

5.23.Section 20 Subsidiaries.  No Loan Party intends to use, nor shall any Loan Party use any portion of the proceeds of the Advances, directly or indirectly, to purchase during the underwriting period, or for 30 days thereafter, Ineligible Securities being underwritten by a Section 20 Subsidiary.  

5.24.Anti-Terrorism Laws.  

(a)General.  Neither any Loan Party nor any Affiliate of any Loan Party is in violation of any Anti-Terrorism Law or 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.  

(b)Executive Order No. 13224.  Neither any Loan Party nor any Affiliate of any Loan Party or their respective agents acting or benefiting in any capacity in connection with the Advances or other transactions hereunder, is any of the following (each a “Blocked Person”):  
i.a Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224; 

ii.a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224; 

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

iv.a Person or entity that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order No. 13224; 

v.a Person or entity that is named as a “specially designated national” on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official website or any replacement website or other replacement official publication of such list, or 

vi.a Person or entity who is affiliated or associated with a Person or entity listed above.  

Neither any Loan Party or to the knowledge of the Loan Parties, any of any Loan Party’s agents acting in any capacity in connection with the Advances or other transactions hereunder (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order No. 13224.  
5.25.Trading with the Enemy.  No Loan Party has not engaged, nor does it intend to engage, in any business or activity prohibited by the Trading with the Enemy Act.  

5.26.Federal Securities Laws.  Neither Loan Party nor any of their respective Subsidiaries (i) is required to file periodic reports under the Exchange Act, (ii) has any securities registered under the Exchange Act or (iii) has filed a registration statement that has not yet become effective under the Securities Act.  

VIAFFIRMATIVE COVENANTS.  

Each Loan Party shall, until payment in full of the Obligations and termination of this Agreement:  
6.1.Payment of Fees.  Pay to Agent on demand all usual and customary fees and expenses which Agent incurs in connection with (a) the forwarding of Advance proceeds and (b) the establishment and maintenance of any Blocked Accounts or Depository Accounts as provided for in Section 4.15(h).  Agent may, without making demand, charge Borrowers’ Account for all such fees and expenses.  

6.2.Conduct of Business and Maintenance of Existence and Assets.  (a) Conduct continuously and operate actively its business according to good business practices and maintain all of its properties useful or necessary in its business in good working order and condition (reasonable wear and tear excepted and except as may be disposed of in accordance with the terms of this Agreement), including all licenses, patents, copyrights, design rights, tradenames, trade secrets and trademarks and take all actions necessary to enforce and protect the validity of any intellectual property right or other right included in the Collateral; (b) keep in full force and effect its existence and comply in all material respects with the laws and regulations governing the conduct of its business where the failure to do so could reasonably be expected to have a Material Adverse Effect; and (c) make all such reports and pay all such franchise and other taxes and license fees and do all such other acts and things as may be lawfully required to maintain its rights, licenses, leases, powers and franchises under the laws of the United States or any political subdivision thereof.  

6.3.Violations.  Promptly notify Agent in writing of any violation of any law, statute, regulation or ordinance of any Governmental Body, or of any agency thereof, applicable to any Loan Party which could reasonably be expected to have a Material Adverse Effect.  
6.4.Government Receivables.  Take all steps necessary to protect Agent’s interest in the Collateral under the Federal Assignment of Claims Act, the Uniform Commercial Code and all other applicable state or local statutes or ordinances and deliver to Agent appropriately endorsed, any instrument or chattel paper connected with any Receivable arising out of contracts between any Borrower and the United States, any state or any department, agency or instrumentality of any of them.  
6.5.Financial Covenants.  
(a)[Reserved].  
(b)[Reserved].  
(c)CMP Covenants.  Not permit the aggregate amount of the payable owing from Borrowers and their Subsidiaries to CMP at any time to be less than the Permitted CMP Payable Amount then in effect (with reporting to occur as of the end of each fiscal month during the Term).  
(d)Minimum Undrawn Availability.  Cause to be maintained at all times an Undrawn Availability of not less than $5,000,000.
6.6.Execution of Supplemental Instruments.  Execute and deliver to Agent from time to time, upon demand, such supplemental agreements, statements, assignments and transfers, or instructions or documents relating to the Collateral, and such other instruments as Agent may reasonably request, in order that the full intent of this Agreement may be carried into effect.  
6.7.Payment of Indebtedness.  Pay, discharge or otherwise satisfy at or before maturity (subject, where applicable, to specified grace periods and, in the case of the trade payables, to normal payment practices) all its obligations and liabilities of whatever nature, except when the failure to do so could not reasonably be expected to have a Material Adverse Effect or when the amount or validity thereof is currently being contested in good faith by appropriate proceedings and the Loan Parties shall have provided for such reserves as Agent may reasonably deem proper and necessary, subject at all times to any applicable subordination arrangement in favor of Lenders.  
6.8.Standards of Financial Statements.  Cause all financial statements referred to in Sections 9.7, 9.9, 9.10, 9.11, 9.12 and 9.13 as to which GAAP is applicable to be complete and correct in all material respects (subject, in the case of interim financial statements, to normal year-end audit adjustments) and to be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein (except as concurred in by such reporting accountants or officer, as the case may be, and disclosed therein).  
6.9.Federal Securities Law.  Promptly notify Agent in writing if any Loan Party or any of their respective Subsidiaries (i) is required to file periodic reports under the Exchange Act or any similar Applicable Law in any applicable jurisdiction, (ii) registers any securities under the Exchange Act or any similar Applicable Law in any applicable jurisdiction or (iii) files a registration statement under the Securities Act or any similar Applicable Law in any applicable jurisdiction.  
6.10.Keepwell.  Each Qualified ECP Loan Party, jointly and severally, together with each other Qualified ECP Loan Party, hereby absolutely unconditionally and irrevocably undertakes to provide such 

funds or other support as may be needed from time to time by any Non-Qualifying Loan Party to honor all of such Non-Qualifying Loan Party’s obligations under this Agreement or any Other Document in respect of Swap Obligations (provided, however, that each Qualified ECP Loan Party shall only be liable under this Section 6.10 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 6.10, or otherwise under this Agreement or any Other Document, voidable under applicable law, including applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount).  The obligations of each Qualified ECP Loan Party under this Section 6.10 shall remain in full force and effect until payment in full of the Obligations and termination of this Agreement and the Other Documents.  Each Qualified ECP Loan Party intends that this Section 6.10 constitute, and this Section 6.10 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 CEA.
VIINEGATIVE COVENANTS.  

No Loan Party shall, until satisfaction in full of the Obligations and termination of this Agreement:  
7.1.Merger, Consolidation, Acquisition and Sale of Assets.  
(a)Enter into any merger, consolidation or other reorganization with or into any other Person or acquire all or a substantial portion of the assets or Equity Interests of any Person or permit any other Person to consolidate with or merge with it, except that any Loan Party may merge with and into a Borrower, so long as the Borrower is the surviving entity.  
(b)Sell, lease, transfer or otherwise dispose of any of its properties or assets, except (i) dispositions of Inventory and Equipment to the extent expressly permitted by Section 4.3, and (ii) any other sales or dispositions expressly permitted by this Agreement.  
7.2.Creation of Liens.  Create or suffer to exist any Lien or transfer upon or against any of its property or assets now owned or hereafter acquired, except Permitted Encumbrances.  
7.3.Guarantees.  Become liable upon the obligations or liabilities of any Person by assumption, endorsement or guaranty thereof or otherwise (other than to Lenders) except (a) as disclosed on Schedule 7.3 and (b) the endorsement of checks in the Ordinary Course of Business.  
7.4.Investments.  Purchase or acquire obligations or Equity Interests of, or any other interest in, any Person, except (a) obligations issued or guaranteed by the United States of America or any agency thereof, (b) commercial paper with maturities of not more than 180 days and a published rating of not less than A-1 or P-1 (or the equivalent rating), (c) certificates of time deposit and bankers’ acceptances having maturities of not more than 180 days and repurchase agreements backed by United States government securities of a commercial bank if (i) such bank has a combined capital and surplus of at least $500,000,000, or (ii) its debt obligations, or those of a holding company of which it is a Subsidiary, are rated not less than A (or the equivalent rating) by a nationally recognized investment rating agency, and (d) U.S. money market funds that invest solely in obligations issued or guaranteed by the United States of America or an agency thereof.  
7.5.Loans.  Make advances, loans or extensions of credit to any Person, including any Parent, Subsidiary or Affiliate except with respect to the extension of commercial trade credit in connection with the sale of Inventory in the Ordinary Course of Business.  

7.6.Capital Expenditures.  Contract for, purchase or make any expenditure or commitments for Capital Expenditures in any fiscal year in an aggregate amount in excess of $5,000,000 during each fiscal year.  
7.7.Dividends; Management Fees.  Declare, pay or make any dividend or distribution on any shares of the common stock or preferred stock or other Equity Interests of any Borrower (other than dividends or distributions payable in its stock, or split-ups or reclassifications of its stock) or apply any of its funds, property or assets to the purchase, redemption or other retirement of any common or preferred stock, or of any options to purchase or acquire any such shares of common or preferred stock or other such Equity Interests of any Borrower, or consisting of payments with respect to debt securities issued as a result of the conversion or exchange of any such Equity Interests, or pay any management or similar fees to any of its Affiliates, except that a Borrower may make distributions to its stockholders so long as all of the following conditions are met:  (i) such Borrower shall provide to the Agent, no later than 15 days prior to the proposed date of such distribution, (A) a pro forma Compliance Certificate showing compliance with all covenants addressed therein for the most recently ended 12-month period, after giving effect to such distribution, in form and substance satisfactory to Agent, and (B) a pro forma Borrowing Base Certificate showing at least $8,500,000 of average daily Undrawn Availability for the sixty-day period preceding the proposed distribution date (calculated as if such distribution had been made at the beginning of such sixty-day period), in form and substance satisfactory to Agent, (ii) no Event of Default or Default shall have occurred, either before or after giving effect to such distribution and (iii) after giving effect to such distribution, the sum of (x) the aggregate amount of all distributions made under this Section 7.7 and (y) the aggregate amount of all Intercompany Loan Payments made under Section 7.24 below, shall not exceed $5,000,000 per annum.
7.8.Indebtedness.  Create, incur, assume or suffer to exist any Indebtedness (exclusive of trade debt) except in respect of (i) Indebtedness to Lenders; (ii) Indebtedness incurred for Capital Expenditures permitted under Section 7.6 hereof; (iii) Indebtedness under the CMP Subordinated Payable Documentation; (iv) Indebtedness under the Subordinated Promissory Note; and (v) Indebtedness under the TCP Intercompany Loans.  
7.9.Nature of Business.  Substantially change the nature of the business in which it is presently engaged, nor except as specifically permitted hereby purchase or invest, directly or indirectly, in any assets or property other than in the Ordinary Course of Business for assets or property which are useful in, necessary for and are to be used in its business as presently conducted.  
7.10.Transactions with Affiliates.  Directly or indirectly, purchase, acquire or lease any property from, or sell, transfer or lease any property to, or otherwise enter into any transaction or deal with, any Affiliate, except (x) the TCP Intercompany Loans by Holdings to TCP or (y) any other transaction disclosed to the Agent, which, in each case, is in the Ordinary Course of Business, on an arm’s-length basis on terms and conditions no less favorable than terms and conditions which would have been obtainable from a Person other than an Affiliate.  
7.11.Leases.  Enter as lessee into any lease arrangement for real or personal property (unless capitalized and permitted under Section 7.6 hereof) if after giving effect thereto, aggregate annual rental payments for all leased property would exceed $2,000,000 in any one fiscal year in the aggregate for all Loan Parties.  
7.12.Subsidiaries.  
(a)Form any Subsidiary.  

(b)Enter into any partnership, joint venture or similar arrangement.  
7.13.Fiscal Year and Accounting Changes.  Change its fiscal year from December 31 or make any change (i) in accounting treatment and reporting practices except as required by GAAP or (ii) in tax reporting treatment except as required by law.  
7.14.Pledge of Credit.  Now or hereafter pledge Agent’s or any Lender’s credit on any purchases or for any purpose whatsoever or use any portion of any Advance in or for any business other than the Loan Parties’ businesses as conducted on the Closing Date.  
7.15.Amendment of Certificate of Incorporation, By-Laws.  Amend, modify or waive any term or material provision of its Certificate of Incorporation unless required by law.  
7.16.Compliance with ERISA.  (i) (x) Maintain, or permit any member of the Controlled Group to maintain, or (y) become obligated to contribute, or permit any member of the Controlled Group to become obligated to contribute, to any Plan, other than those Plans disclosed on Schedule 5.8(d) or any other Plan for which Agent has provided its prior written consent, (ii) engage, or permit any member of the Controlled Group to engage, in any non-exempt “prohibited transaction”, as that term is defined in section 406 of ERISA and Section 4975 of the Code, (iii) incur, or permit any member of the Controlled Group to incur, any “accumulated funding deficiency”, as that term is defined in Section 302 of ERISA or Section 412 of the Code, (iv) terminate, or permit any member of the Controlled Group to terminate, any Plan where such event could result in any liability of any Borrower or any member of the Controlled Group or the imposition of a lien on the property of any Borrower or any member of the Controlled Group pursuant to Section 4068 of ERISA, (v) assume, or permit any member of the Controlled Group to assume, any obligation to contribute to any Multiemployer Plan not disclosed on Schedule 5.8(d), (vi) incur, or permit any member of the Controlled Group to incur, any withdrawal liability to any Multiemployer Plan; (vii) fail promptly to notify Agent of the occurrence of any Termination Event, (viii) fail to comply, or permit a member of the Controlled Group to fail to comply, with the requirements of ERISA or the Code or other Applicable Laws in respect of any Plan, (ix) fail to meet, or permit any member of the Controlled Group to fail to meet, all minimum funding requirements under ERISA or the Code or postpone or delay or allow any member of the Controlled Group to postpone or delay any funding requirement with respect of any Plan.  
7.17.Prepayment of Indebtedness.  At any time, directly or indirectly, prepay any Indebtedness (other than to Lenders or as otherwise permitted herein), or repurchase, redeem, retire or otherwise acquire any Indebtedness of Loan Party.  
7.18.Anti-Terrorism Laws.  No Loan Party shall, until satisfaction in full of the Obligations and termination of this Agreement, nor shall it permit any Affiliate or agent to:  
(a)Conduct any business or engage in any transaction or dealing with any Blocked Person, including the making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person.  
(b)Deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order No. 13224.  
(c)Engage in or conspire 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 the Executive Order No. 13224, the USA PATRIOT Act or any other Anti-Terrorism Law.  The Loan Parties shall deliver to Lenders any certification or other evidence requested from time to time by any Lender in its sole discretion, 

confirming their compliance with this Section.  
7.19.Membership/Partnership Interests.  Elect to treat or permit any of its Subsidiaries to (x) treat its limited liability company membership interests or partnership interests, as the case may be, as securities as contemplated by the definition of “security” in Section 8-102(15) and by Section 8-103 of Article 8 of Uniform Commercial Code or (y) certificate its limited liability company membership interests or partnership interests, as the case may be.  
7.20.Trading with the Enemy Act.  Engage in any business or activity in violation of the Trading with the Enemy Act.  
7.21.Reserved.    
7.22.Other Agreements.  Enter into any material amendment, waiver or modification of the CMP Subordinated Payable Documentation or any related agreements.  
7.23.    Subordinated Promissory Note Payments.  At any time, directly or indirectly, pay, prepay, repurchase, redeem, retire or otherwise acquire (for purposes of this Section, “Payment”) any Indebtedness under the Subordinated Promissory Note, except to the extent permitted thereunder and subject to the Subordination Agreement, and so long as, in the case of each Payment (a) no Event of Default or any other default or event of default under any Senior Facility (as defined in the Subordination Agreement) has occurred and is continuing or would occur after giving pro forma effect to the making of such payment(s), (b) TCP was in compliance with the financial covenants set forth in Section 6.5 of this Agreement or each other Senior Facility (as defined in the Subordination Agreement) for the most recently ended fiscal quarter and calendar month, as applicable, after giving pro forma effect to the making of such payment(s) as if such payment were made on the last day of such prior fiscal quarter and calendar month, as applicable; provided, however, the requirements of this clause (b) shall not apply if after giving effect to any Payment the Undrawn Availability is at least $6,000,000, and (c) TCP has delivered a pro forma Borrowing Base Certificate showing at least $6,000,000 of average daily Undrawn Availability for the sixty-day period preceding the applicable date of Payment, calculated as if such distribution had been made no later than the beginning of such sixty-day period, in form and substance reasonably satisfactory to Agent.
7.24.    Payments of TCP Intercompany Loans.  At any time, directly or indirectly, pay or prepay any amount (scheduled or otherwise) or exercise any right of set-off owed to Holdings under any TCP Intercompany Loan, or repurchase, redeem, retire or otherwise acquire such loan or any portion thereof (for purposes of this Section, “Intercompany Loan Payments”), unless (i) no Event of Default has occurred and is continuing on the date of such Intercompany Loan Payment, or would exist after giving effect to such Intercompany Loan Payment, (ii) Borrowers shall provide to the Agent, no later than 15 days prior to the proposed Intercompany Loan Payment, a pro forma Borrowing Base Certificate showing at least $8,500,000 of average daily Undrawn Availability for the sixty-day period preceding the proposed Intercompany Loan Payment date (calculated as if such Intercompany Loan Payment had been made at the beginning of such sixty-day period), and an Undrawn Availability of at least $6,000,000 (calculated after giving effect to such Intercompany Loan Payment), in form and substance satisfactory to Agent, and (iii) after giving effect to such Intercompany Loan Payment, the sum of (x) the aggregate amount of all Intercompany Loan Payments made under this Section 7.24 and (y) the aggregate amount of all distributions made under Section 7.7 above, shall not exceed $5,000,000 per annum.

		
	VIII
	CONDITIONS PRECEDENT.  

8.1.Conditions to Initial Advances.  The agreement of Lenders to make the initial Advances requested to be made on the Closing Date is subject to the satisfaction, or waiver by Agent, immediately prior to or concurrently with the making of such Advances, of the following conditions precedent:  
(a)Note.  Agent shall have received the Note duly executed and delivered by an authorized officer of each Borrower; 
(b)Filings, Registrations and Recordings.  Each document (including any Uniform Commercial Code financing statement) required by this Agreement, any related agreement or under law or reasonably requested by the Agent to be filed, registered or recorded in order to create, in favor of Agent, a perfected security interest in or lien upon the Collateral shall have been properly filed, registered or recorded in each jurisdiction in which the filing, registration or recordation thereof is so required or requested, and Agent shall have received an acknowledgment copy, or other evidence satisfactory to it, of each such filing, registration or recordation and satisfactory evidence of the payment of any necessary fee, tax or expense relating thereto; 
(c)Corporate Proceedings of Borrowers.  Agent shall have received a copy of the resolutions in form and substance reasonably satisfactory to Agent, of the Board of Directors of each Borrower authorizing (i) the execution, delivery and performance of this Agreement, the Notes, any related agreements, (collectively the “Documents”) and (ii) the granting by such Borrower of the security interests in and liens upon the Collateral in each case certified by the Secretary or an Assistant Secretary of such Borrower as of the Closing Date; and, such certificate shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded as of the date of such certificate; 
(d)Incumbency Certificates of Borrowers.  Agent shall have received a certificate of the Secretary or an Assistant Secretary of each Borrower, dated the Closing Date, as to the incumbency and signature of the officers of each Borrower executing this Agreement, the Other Documents, any certificate or other documents to be delivered by it pursuant hereto, together with evidence of the incumbency of such Secretary or Assistant Secretary; 
(e)Certificates.  Agent shall have received a copy of the Articles or Certificate of Incorporation of each Borrower and each Guarantor, and all amendments thereto, certified by the Secretary of State or other appropriate official of its jurisdiction of incorporation together with copies of the By-Laws of each Borrower and all agreements of each Borrower’s shareholders certified as accurate and complete by the Secretary of each Borrower; 
(f)Good Standing Certificates.  Agent shall have received good standing certificates for each Borrower dated not more than 30 days prior to the Closing Date, issued by the Secretary of State or other appropriate official of such Borrower’s jurisdiction of incorporation and each jurisdiction where the conduct of such Borrower’s business activities or the ownership of its properties necessitates qualification; 
(g)Legal Opinion.  Agent shall have received the executed legal opinion of Thompson Hine LLP in form and substance satisfactory to Agent which shall cover such matters incident to the transactions contemplated by this Agreement, the Note, the Other Documents, and related agreements as Agent may reasonably require and Borrower hereby authorizes and directs such counsel to deliver such opinions to Agent and Lenders; 

(h)No Litigation.  (i) No litigation, investigation or proceeding before or by any arbitrator or Governmental Body shall be continuing or threatened against any Borrower or against the officers or directors of any Borrower (A) in connection with this Agreement, the Other Documents or any of the transactions contemplated thereby and which, in the reasonable opinion of Agent, is deemed material or (B) which could, in the reasonable opinion of Agent, have a Material Adverse Effect on any Borrower; and (ii) no injunction, writ, restraining order or other order of any nature materially adverse to any Borrower or the conduct of its business or inconsistent with the due consummation of the Transactions shall have been issued by any Governmental Body; 
(i)Financial Condition Certificates.  Agent shall have received an executed Financial Condition Certificate in the form of Exhibit 8.1(i).  
(j)Collateral Examination.  Agent shall have completed Collateral examinations and received appraisals, the results of which shall be reasonably satisfactory in form and substance to Lenders, of the Receivables, Inventory, General Intangibles, Leasehold Interest and Equipment of each Borrower and all books and records in connection therewith; 
(k)Fees.  Agent shall have received all fees payable to Agent and Lenders on or prior to the Closing Date hereunder, including pursuant to Article III hereof; 
(l)Reserved; 
(m)Insurance.  Agent shall have received in form and substance satisfactory to Agent, certified copies of each Borrower’s casualty insurance policies, together with loss payable endorsements on Agent’s standard form of loss payee endorsement naming Agent as loss payee, and certified copies of each Borrower’s liability insurance policies, together with endorsements naming Agent as a co-insured; 
(n)[Reserved]; 
(o)Payment Instructions.  Agent shall have received written instructions from Borrowers directing the application of proceeds of the initial Advances made pursuant to this Agreement; 
(p)Blocked Accounts.  Agent shall have received duly executed agreements establishing the Blocked Accounts or Depository Accounts with financial institutions acceptable to Agent for the collection or servicing of the Receivables and proceeds of the Collateral; 
(q)Consents.  Agent shall have received any and all Consents necessary to permit the effectuation of the transactions contemplated by this Agreement and the Other Documents; and, Agent shall have received such Consents and waivers of such third parties as might assert claims with respect to the Collateral, as Agent and its counsel shall deem necessary; 
(r)No Adverse Material Change.  (i) since December 31, 2015, there shall not have occurred any event, condition or state of facts which could reasonably be expected to have a Material Adverse Effect and (ii) no representations made or information supplied to Agent or Lenders shall have been proven to be inaccurate or misleading in any material respect; 
(s)Leasehold Agreements.  Agent shall have received landlord, mortgagee or warehouseman agreements satisfactory to Agent with respect to all premises leased by each Borrower at which Inventory and books and records are located; 

(t)Other Documents.  Agent shall have received the executed Other Documents (including without limitation the executed CMP Subordination Agreement), all in form and substance satisfactory to Agent; 
(u)Contract Review.  Agent shall have reviewed all material contracts of each Borrower including leases, union contracts, labor contracts, vendor supply contracts, license agreements and distributorship agreements and such contracts and agreements shall be satisfactory in all respects to Agent; 
(v)Borrowing Base.  Agent shall have received evidence from Borrowers that the aggregate amount of Eligible Receivables and Eligible Inventory is sufficient in value and amount to support Advances in the amount requested by Borrowers on the Closing Date; 
(w)Undrawn Availability.  After giving effect to the initial Advances hereunder, Borrowers shall have Undrawn Availability of at least $5,000,000; and 
(x)Compliance with Laws.  Agent shall be reasonably satisfied that each Borrower is in compliance with all pertinent federal, state, local or territorial regulations, including those with respect to the Federal Occupational Safety and Health Act, the Environmental Protection Act, ERISA and the Trading with the Enemy Act.  
(y)Other.  All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the Transactions shall be satisfactory in form and substance to Agent and its counsel.  
8.2.Conditions to Each Advance.  The agreement of Lenders to make any Advance requested to be made on any date (including the initial Advance), is subject to the satisfaction of the following conditions precedent as of the date such Advance is made:  
(a)Representations and Warranties.  Each of the representations and warranties made by Holdings or any Loan Party in or pursuant to this Agreement, the Other Documents and any related agreements to which it is a party, and each of the representations and warranties contained in any certificate, document or financial or other statement furnished at any time under or in connection with this Agreement, the Other Documents or any related agreement shall be true and correct in all material respects on and as of such date as if made on and as of such date (except for representations and warranties that are limited to a specific date, which shall be true and correct in all material respects as of such earlier date); 
(b)No Default.  No Event of Default or Default shall have occurred and be continuing on such date, or would exist after giving effect to the Advances requested to be made, on such date; provided, however that Agent, in its sole discretion, may continue to make Advances notwithstanding the existence of an Event of Default or Default and that any Advances so made shall not be deemed a waiver of any such Event of Default or Default; and 
(c)Maximum Advances.  In the case of any type of Advance requested to be made, after giving effect thereto, the aggregate amount of such type of Advance shall not exceed the maximum amount of such type of Advance permitted under this Agreement.  
Each request for an Advance by Borrowers hereunder shall constitute a representation and warranty by each Borrower as of the date of such Advance that the conditions contained in this subsection shall have been satisfied.  

		
	IX
	INFORMATION AS TO LOAN PARTIES.  

The Loan Parties shall, until satisfaction in full of the Obligations and the termination of this Agreement:  
9.1.Disclosure of Material Matters.  Immediately upon learning thereof, report to Agent all matters materially affecting the value, enforceability or collectibility of any portion of the Collateral, including any Borrower’s reclamation or repossession of, or the return to any Borrower of, a material amount of goods or claims or disputes asserted by any Customer or other obligor.  
9.2.Schedules; Borrowing Base Certificate.  Deliver to Agent (i) on or before Wednesday of each Week, a Borrowing Base Certificate in form and substance satisfactory to Agent (which shall be calculated as of the last day of the prior Week and which shall not be binding upon Agent or restrictive of Agent’s rights under this Agreement, and (ii) on or before the twentieth (20th) day of each month as and for the prior month (a) accounts receivable ageings inclusive of reconciliations to the general ledger, (b) accounts payable schedules inclusive of reconciliations to the general ledger, and (c) Inventory reports, all of which shall be in form and substance satisfactory to Agent and which shall be calculated as of the last day of the prior month and which shall not be binding upon Agent or restrictive of Agent’s rights under this Agreement.  In addition, Borrowers will deliver to Agent at such intervals as Agent may reasonably require:  (i) confirmatory assignment schedules, (ii) copies of Customer’s invoices, (ii) evidence of shipment or delivery, and (iv) such further schedules, documents and/or information regarding the Collateral as Agent may require including trial balances and test verifications.  Agent shall have the right to confirm and verify all Receivables by any manner and through any medium it considers advisable and do whatever it may deem reasonably necessary to protect its interests hereunder.  The items to be provided under this Section are to be in form satisfactory to Agent and executed by Borrowers and delivered to Agent from time to time solely for Agent’s convenience in maintaining records of the Collateral, and Borrowers’ failure to deliver any of such items to Agent shall not affect, terminate, modify or otherwise limit Agent’s Lien with respect to the Collateral.  
9.3.Environmental Reports.  Furnish Agent, concurrently with the delivery of the financial statements referred to in Sections 9.7 and 9.9, with a Compliance Certificate signed by the President, the Chief Executive Officer or Chief Financial Officer of each Borrower stating, to the best of his knowledge, that the Loan Parties are in compliance in all material respects with all federal, state and local Environmental Laws.  To the extent the Loan Parties are not in compliance with the foregoing laws, the certificate shall set forth with specificity all areas of non-compliance and the proposed action the Loan Parties will implement in order to achieve full compliance.  
9.4.Litigation.  Promptly notify Agent in writing of any claim, litigation, suit or administrative proceeding affecting any Loan Party or CMP whether or not the claim is covered by insurance, and of any litigation, suit or administrative proceeding, which in any such case affects the Collateral or which could reasonably be expected to have a Material Adverse Effect.  
9.5.Material Occurrences.  Promptly notify Agent in writing upon the occurrence of (a) any Event of Default or Default; (b) any event of default under the CMP Subordinated Payable Documentation, or any event which with the giving of notice or lapse of time, or both, would constitute an event of default under the CMP Subordinated Payable Documentation; (b) event, development or circumstance whereby any financial statements or other reports furnished to Agent fail in any material respect to present fairly, in accordance with GAAP consistently applied, the financial condition or operating results of the Loan Parties as of the date of such statements; (d) any accumulated retirement plan funding deficiency which, if such deficiency continued for two plan years and was not corrected as provided in Section 4971 of the Code, could subject the Loan Parties to a tax imposed by Section 4971 of the Code; (e) each and every default by any 

Loan Party which might result in the acceleration of the maturity of any Indebtedness, including the names and addresses of the holders of such Indebtedness with respect to which there is a default existing or with respect to which the maturity has been or  could be accelerated, and the amount of such Indebtedness; and (f) any other development in the business or affairs of any Loan Party or CMP, which could reasonably be expected to have a Material Adverse Effect; in each case describing the nature thereof and the action the Loan Parties propose to take with respect thereto.  
9.6.Government Receivables.  Notify Agent immediately if any of its Receivables arise out of contracts between any Borrower and the United States, any state, or any department, agency or instrumentality of any of them.  
9.7.Annual Financial Statements.  Furnish Agent within one hundred twenty (120) days after the end of each fiscal year of Borrowers and Holdings, final financial statements of each Borrower on a consolidated basis including but not limited to, statements of income and stockholders’ equity and cash flow from the beginning of the current fiscal year to the end of such fiscal year and the balance sheet as at the end of such fiscal year, all prepared in accordance with GAAP applied on a basis consistent with prior practices, and in reasonable detail, and reported upon without qualification (as to Holdings or Borrowers, as the case may be) by an independent certified public accounting firm selected by Borrowers or Holdings, as the case may be, and satisfactory to Agent (the “Accountants”); provided, however, that with respect to the fiscal year ending December 31, 2015, such financial statements shall be furnished to Agent no later than December 31, 2016.  The report of the Accountants shall be accompanied by a statement of the Accountants certifying that, in connection with their audit, either no information came to their attention which to their knowledge caused them to believe that any Borrower had failed to comply with any of the terms, covenants, provisions, or conditions of any of Sections 6.5, 7.4, 7.5, 7.6, 7.7, 7.8 and 7.11 or, if such information came to their attention, specifying such information. In addition, the Borrowers shall deliver a Compliance Certificate along with such reports and final statements.  
9.8.Quarterly Financial Statements.  Furnish Agent (A) within forty-five (45) days after the end of each fiscal quarter, an unaudited balance sheet of Borrowers and CMP on a consolidated basis and unaudited statements of income and stockholders’ equity and cash flow of Borrowers and CMP on a consolidated basis reflecting results of operations from the beginning of the fiscal year to the end of such quarter and for such quarter, prepared on a basis consistent with prior practices and complete and correct in all material respects, subject to normal and recurring year-end adjustments that individually and in the aggregate are not material to Borrowers’ business operations and setting forth in comparative form the respective financial statements for the corresponding date and period in the previous fiscal year; provided, however, that with respect to each fiscal quarter ending in the 2016 fiscal year, such financial statements of CMP shall be furnished to Agent no later than December 31, 2016.  
9.9.[Reserved].  
9.10.Other Reports.  Furnish Agent as soon as available, but in any event within ten  (10) days after the issuance thereof, with (i) copies of such financial statements, reports and returns as Holdings shall send to its stockholders and (ii) copies of all notices, reports, financial statements and other materials sent pursuant to the CMP Subordinated Payable Documentation.  
9.11.Additional Information.  Furnish Agent with such additional information as Agent shall reasonably request in order to enable Agent to determine whether the terms, covenants, provisions and conditions of this Agreement have been complied with by the Loan Parties including, without the necessity of any request by Agent, (a) copies of all environmental audits and reviews, (b) at least thirty (30) days prior thereto, notice of any Loan Party’s opening of any new office or place of business or any Loan Party’s closing 

of any existing office or place of business, and (c) promptly upon any Loan Party’s learning thereof, notice of any labor dispute to which a Loan Party may become a party, any strikes or walkouts relating to any of its plants or other facilities, and the expiration of any labor contract to which a Loan Party is a party or by which a Loan Party is bound.  
9.12.Projected Operating Budget.  Furnish Agent, no later than thirty (30) days prior to the beginning of Borrowers’ fiscal years commencing with fiscal year 2017, a month by month projected operating budget and cash flow of Borrowers on a consolidated and consolidating basis for such fiscal year (including an income statement for each month and a balance sheet as at the end of the last month in each fiscal quarter), such projections to be accompanied by a certificate signed by the Chief Executive Officer or Chief Financial Officer of each Borrower to the effect that such projections have been prepared on the basis of sound financial planning practice consistent with past budgets and financial statements and that such officer has no reason to question the reasonableness of any material assumptions on which such projections were prepared.  
9.13.Variances From Operating Budget.  Furnish Agent, concurrently with the delivery of the financial statements referred to in Section 9.7 and each monthly report, a written report summarizing all material variances from budgets submitted by Borrowers pursuant to Section 9.12.  
9.14.Notice of Suits, Adverse Events.  Furnish Agent with prompt written notice of (i) any lapse or other termination of any Consent issued to a Loan Party by any Governmental Body or any other Person that is material to the operation of a Loan Party’s business, (ii) any refusal by any Governmental Body or any other Person to renew or extend any such Consent; and (iii) copies of any periodic or special reports filed by any Borrower or any Guarantor with any Governmental Body or Person, if such reports indicate any material change in the business, operations, affairs or condition of any Borrower or any Guarantor, or if copies thereof are requested by Lender, and (iv) copies of any material notices and other communications from any Governmental Body or Person which specifically relate to any Borrower or any Guarantor.  
9.15.ERISA Notices and Requests.  Furnish Agent with immediate written notice in the event that (i) any Borrower or any member of the Controlled Group knows or has reason to know that a Termination Event has occurred, together with a written statement describing such Termination Event and the action, if any, which any Borrower or any member of the Controlled Group has taken, is taking, or proposes to take with respect thereto and, when known, any action taken or threatened by the Internal Revenue Service, Department of Labor or PBGC with respect thereto, (ii) any Borrower or any member of the Controlled Group knows or has reason to know that a prohibited transaction (as defined in Sections 406 of ERISA and 4975 of the Code) has occurred together with a written statement describing such transaction and the action which any Borrower or any member of the Controlled Group has taken, is taking or proposes to take with respect thereto, (iii) a funding waiver request has been filed with respect to any Plan together with all communications received by any Borrower or any member of the Controlled Group with respect to such request, (iv) any increase in the benefits of any existing Plan or the establishment of any new Plan or the commencement of contributions to any Plan to which any Borrower or any member of the Controlled Group was not previously contributing shall occur, (v) any Borrower or any member of the Controlled Group shall receive from the PBGC a notice of intention to terminate a Plan or to have a trustee appointed to administer a Plan, together with copies of each such notice, (vi) any Borrower or any member of the Controlled Group shall receive any favorable or unfavorable determination letter from the Internal Revenue Service regarding the qualification of a Plan under Section 401(a) of the Code, together with copies of each such letter; (vii) any Borrower or any member of the Controlled Group shall receive a notice regarding the imposition of withdrawal liability, together with copies of each such notice; (viii) any Borrower or any member of the Controlled Group shall fail to make a required installment or any other required payment under Section 412 of the Code on or before the due date for such installment or payment; (ix) any Borrower or any member of the Controlled Group knows that (a) a Multiemployer Plan has been terminated, (b) the administrator or plan 

sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan, or (c) the PBGC has instituted or will institute proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan.  
9.16.Additional Documents.  Execute and deliver to Agent, upon request, such documents and agreements as Agent may, from time to time, reasonably request to carry out the purposes, terms or conditions of this Agreement.  
XEVENTS OF DEFAULT.  

The occurrence of any one or more of the following events shall constitute an “Event of Default”:  
10.1.Nonpayment.  Failure by any Loan Party to pay any principal or interest on the Obligations when due, whether at maturity or by reason of acceleration pursuant to the terms of this Agreement or by notice of intention to prepay, or by required prepayment or failure to pay any other liabilities or make any other payment, fee or charge provided for herein when due or in any Other Document; 
10.2.Breach of Representation.  Any representation or warranty made or deemed made by any Borrower or any Guarantor in this Agreement, any Other Document or any related agreement or in any certificate, document or financial or other statement furnished at any time in connection herewith or therewith shall prove to have been misleading in any material respect on the date when made or deemed to have been made; 
10.3.Financial Information.  Failure by any Loan Party to (i) furnish financial information when due or when requested, or (ii) permit the inspection of its books or records; 
10.4.Judicial Actions.  Issuance of a notice of Lien, levy, assessment, injunction or attachment against any Borrower’s Inventory or Receivables or against a material portion of any Borrower’s other property; 
10.5.Noncompliance.  Except as otherwise provided for in Sections 10.1, 10.3 and 10.5(ii), (i) failure or neglect of any Borrower or any Guarantor to perform, keep or observe any term, provision, condition, covenant herein contained, or contained in any Other Document or any other agreement or arrangement, now or hereafter entered into between any Borrower or any Guarantor and Agent or any Lender, or (ii) failure or neglect of any Borrower to perform, keep or observe any term, provision, condition or covenant, contained in Sections 4.6, 4.7, 4.9, 6.1, 6.3, 6.4, 9.4 or 9.6 hereof which is not cured within fifteen (15) days from the occurrence of such failure or neglect; 
10.6.Judgments.  Any judgment or judgments are rendered against any Borrower or any Guarantor for an aggregate amount in excess of $350,000 and (i) enforcement proceedings shall have been commenced by a creditor upon such judgment, (ii) there shall be any period of thirty (30) consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, shall not be in effect, or (iii) any such judgment results in the creation of a Lien upon any of the Collateral (other than a Permitted Encumbrance); 
10.7.Bankruptcy.  Any Borrower, CMP or any Guarantor shall (i) apply for, consent to or suffer the appointment of, or the taking of possession by, a receiver, custodian, trustee, liquidator or similar fiduciary of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of creditors, (iii) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vi) acquiesce to, or fail to have dismissed, within thirty (30) days, any 

petition filed against it in any involuntary case under such bankruptcy laws, or (vii) take any action for the purpose of effecting any of the foregoing; 
10.8.Inability to Pay.  Any Borrower, CMP or any Guarantor shall admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business; 
10.9.Affiliate Bankruptcy.  Any Affiliate or any Subsidiary of any Borrower, or any Guarantor, shall (i) apply for, consent to or suffer the appointment of, or the taking of possession by, a receiver, custodian, trustee, liquidator or similar fiduciary of itself or of all or a substantial part of its property, (ii) admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business, (iii) make a general assignment for the benefit of creditors, (iv) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vii) acquiesce to, or fail to have dismissed, within thirty (30) days, any petition filed against it in any involuntary case under such bankruptcy laws, or (viii) take any action for the purpose of effecting any of the foregoing; 
10.10.Material Adverse Effect.  Any change in any Borrower’s or any Guarantor’s results of operations or condition (financial or otherwise) which in Agent’s opinion has a Material Adverse Effect; 
10.11.Lien Priority.  Any Lien created hereunder or provided for hereby or under any related agreement for any reason ceases to be or is not a valid and perfected Lien having a first priority interest; 
10.12.CMP Subordinated Payable Default.  An event of default has occurred under the CMP Subordinated Payable Documentation or the CMP Subordination Agreement, which default shall not have been cured or waived within any applicable grace period; 
10.13.Cross Default.  A default of the obligations of a Loan Party or CMP under any other agreement or agreements with respect to which the Loan Parties’ and CMP’s aggregate obligations exceed $350,000 shall occur, which default is not cured within any applicable grace period and which default, in the case of Indebtedness, has the effect of permitting the acceleration of such Indebtedness; 
10.14.Breach of Guaranty.  Termination or breach of any Guaranty or similar agreement executed and delivered to Agent in connection with the Obligations of any Borrower, or if any Guarantor attempts to terminate, challenges the validity of, or its liability under, any such Guaranty or similar agreement; 
10.15.Change of Ownership.  Any Change of Ownership or Change of Control shall occur; 
10.16.Invalidity.  Any material provision of this Agreement or any Other Document shall, for any reason, cease to be valid and binding on any Borrower or any Guarantor, or any Borrower or any Guarantor shall so claim in writing to Agent or any Lender; 
10.17.Licenses.  (i) Any Governmental Body shall (A) revoke, terminate, suspend or adversely modify any license, permit, patent trademark or tradename of any Borrower, the continuation of which is material to the continuation of any Borrower’s business, or (B) commence proceedings to suspend, revoke, terminate or adversely modify any such license, permit, trademark, tradename or patent and such proceedings shall not be dismissed or discharged within sixty (60) days, or (C) schedule or conduct a hearing on the renewal of any license, permit, trademark, tradename or patent necessary for the continuation of any Borrower’s business and the staff of such Governmental Body issues a report recommending the termination, revocation, suspension or material, adverse modification of such license, permit, trademark, tradename or patent; (ii) any agreement which is necessary or material to the operation of any Borrower’s business shall be revoked or terminated and not replaced by a substitute acceptable to Agent within thirty (30) days after 

the date of such revocation or termination, and such revocation or termination and non-replacement would reasonably be expected to have a Material Adverse Effect; 
10.18.Seizures.  Any Collateral with an aggregate book or fair market value in excess of $100,000, or any material portion of the assets of CMP, shall be seized or taken by a Governmental Body, or any Loan Party or the title and rights of any Loan Party to any material portion of the Collateral (or CMP or the title and rights to any material portion of its assets) shall have become the subject matter of claim, litigation, suit or other proceeding which might, in the opinion of Agent, upon final determination, result in impairment or loss of the security provided by this Agreement or the Other Documents or a Material Adverse Effect; 
10.19.Operations.  The operations of any Borrower’s or CMP’s manufacturing facility are interrupted at any time for more than 5 days during any period of 7 consecutive days (excluding holidays and scheduled shutdowns), unless (a) in the case of a CMP interruption, Borrowers have demonstrated to the Agent’s satisfaction, in Agent’s reasonable discretion, that Borrowers have access to an adequate supply of parts and materials to allow it to continue operating at levels contemplated prior to such interruption, or (b) Borrowers or CMP, as the case may be, shall (i) be entitled to receive for such period of interruption, proceeds of business interruption insurance sufficient to assure that its per diem cash needs during such period is at least equal to its average per diem cash needs for the consecutive three month period immediately preceding the initial date of interruption and (ii) receive such proceeds in the amount described in clause (i) preceding not later than thirty (30) days following the initial date of any such interruption; provided, however, that the provisions of clauses (i) and (ii) of this Section 10.19(b) shall operate to prevent an Event of Default from occurring only to the extent that Borrowers or CMP, as the case may be, shall be receiving the proceeds of business interruption insurance for a period of fewer than thirty (30) consecutive days; or 
10.20.Pension Plans.  An event or condition specified in Sections 7.16 or 9.15 hereof shall occur or exist with respect to any Plan and, as a result of such event or condition, together with all other such events or conditions, any Borrower or any member of the Controlled Group shall incur, or in the opinion of Agent be reasonably likely to incur, a liability to a Plan or the PBGC (or both) which, in the reasonable judgment of Agent, would have a Material Adverse Effect.  
10.21.Subordinated Promissory Note Cross Default.  An event of default by TCP under the Subordinated Promissory Note other than, for the avoidance of doubt, any event of default arising from any failure to make any payment that is expressly prohibited by the Subordination Agreement.
10.22.Reportable Compliance Event.  The occurrence of any Reportable Compliance Event, or any Borrower’s failure to immediately report a Reportable Compliance Event in accordance with Section 15.19 hereof.
10.23.TCP Intercompany Loans Cross Default.  A payment default or any other event of default by TCP under any TCP Intercompany Loan.
XILENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.  
11.1.Rights and Remedies.  
(a)Upon the occurrence of (i) an Event of Default pursuant to Section 10.7 all Obligations shall be immediately due and payable and this Agreement and the obligation of Lenders to make Advances shall be deemed terminated; and, (ii) any of the other Events of Default and at any time thereafter (such default not having previously been cured), at the option of Required Lenders all Obligations shall be immediately due and payable and Lenders shall have the right to terminate this Agreement and to terminate 

the obligation of Lenders to make Advances and (iii) a filing of a petition against any Loan Party in any involuntary case under any state or federal bankruptcy laws, all Obligations shall be immediately due and payable and the obligation of Lenders to make Advances hereunder shall be terminated other than as may be required by an appropriate order of the bankruptcy court having jurisdiction over any Loan Party.  Upon the occurrence of any Event of Default, Agent shall have the right to exercise any and all rights and remedies provided for herein, under the Other Documents, under the Uniform Commercial Code and at law or equity generally, including the right to foreclose the security interests granted herein and to realize upon any Collateral by any available judicial procedure and/or to take possession of and sell any or all of the Collateral with or without judicial process.  Agent may enter any of each Loan Party’s premises or other premises without legal process and without incurring liability to any Loan Party therefor, and Agent may thereupon, or at any time thereafter, in its discretion without notice or demand, take the Collateral and remove the same to such place as Agent may deem advisable and Agent may require such Loan Party to make the Collateral available to Agent at a convenient place.  With or without having the Collateral at the time or place of sale, Agent may sell the Collateral, or any part thereof, at public or private sale, at any time or place, in one or more sales, at such price or prices, and upon such terms, either for cash, credit or future delivery, as Agent may elect.  Except as to that part of the Collateral which is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, Agent shall give the Loan Parties reasonable notification of such sale or sales, it being agreed that in all events written notice mailed to the Loan Parties at least ten (10) days prior to such sale or sales is reasonable notification.  At any public sale Agent or any Lender may bid for and become the purchaser, and Agent, any Lender or any other purchaser at any such sale thereafter shall hold the Collateral sold absolutely free from any claim or right of whatsoever kind, including any equity of redemption and all such claims, rights and equities are hereby expressly waived and released by each Loan Party.  In connection with the exercise of the foregoing remedies, including the sale of Inventory, Agent is granted a perpetual nonrevocable, royalty free, nonexclusive license and Agent is granted permission to use all of each Loan Party’s (a) trademarks, trade styles, trade names, patents, patent applications, copyrights, service marks, licenses, franchises and other proprietary rights which are used or useful in connection with Inventory for the purpose of marketing, advertising for sale and selling or otherwise disposing of such Inventory and (b) Equipment for the purpose of completing the manufacture of unfinished goods.  The cash proceeds realized from the sale of any Collateral shall be applied to the Obligations in the order set forth in Section 11.5 hereof.  Noncash proceeds will only be applied to the Obligations as they are converted into cash.  If any deficiency shall arise, the Loan Parties shall remain jointly and severally liable to Agent and Lenders therefor.  
(b)To the extent that Applicable Law imposes duties on the Agent to exercise remedies in a commercially reasonable manner, each Loan Party acknowledges and agrees that it is not commercially unreasonable for the Agent (i) to fail to incur expenses reasonably deemed significant by the Agent to prepare Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against Customers or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies against Customers and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as the Loan Parties, for expressions of interest in acquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match 

buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (ix) to purchase insurance or credit enhancements to insure the Agent against risks of loss, collection or disposition of Collateral or to provide to the Agent a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by the Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Agent in the collection or disposition of any of the Collateral.  Each Loan Party acknowledges that the purpose of this Section 11.1(b) is to provide non-exhaustive indications of what actions or omissions by the Agent would not be commercially unreasonable in the Agent’s exercise of remedies against the Collateral and that other actions or omissions by the Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 11.1(b).  Without limitation upon the foregoing, nothing contained in this Section11.1(b) shall be construed to grant any rights to any Loan Party or to impose any duties on Agent that would not have been granted or imposed by this Agreement or by Applicable Law in the absence of this Section 11.1(b).  
11.2.Agent’s Discretion.  Agent shall have the right in its sole discretion to determine which rights, Liens, security interests or remedies Agent may at any time pursue, relinquish, subordinate, or modify or to take any other action with respect thereto and such determination will not in any way modify or affect any of Agent’s or Lenders’ rights hereunder.  
11.3.Setoff.  Subject to Section 14.12, in addition to any other rights which Agent or any Lender may have under Applicable Law, upon the occurrence of an Event of Default hereunder, Agent and such Lender shall have a right, immediately and without notice of any kind, to apply each Loan Party’s property held by Agent and such Lender to reduce the Obligations.  
11.4.Rights and Remedies not Exclusive.  The enumeration of the foregoing rights and remedies is not intended to be exhaustive and the exercise of any rights or remedy shall not preclude the exercise of any other right or remedies provided for herein or otherwise provided by law, all of which shall be cumulative and not alternative.  
11.5.Allocation of Payments After Event of Default.  Notwithstanding any other provisions of this Agreement to the contrary, after the occurrence and during the continuance of an Event of Default, all amounts collected or received by the Agent on account of the Obligations (including without limitation any amounts on account of any Hedge Liabilities or Cash Management Liabilities), or any other amounts outstanding under any of the Other Documents or in respect of the Collateral may, at Agent’s discretion, be paid over or delivered as follows:  
FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of the Agent in connection with enforcing its rights and the rights of the Lenders under this Agreement and the Other Documents and any protective advances made by the Agent with respect to the Collateral under or pursuant to the terms this Agreement;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of each of the Lenders to the extent owing to such Lender pursuant to the terms of this Agreement;
FOURTH, to the payment of all of the Obligations consisting of accrued fees and interest;

FIFTH, to the payment of the outstanding principal amount of the Obligations (including Hedge Liabilities, Cash Management Liabilities and the payment or cash collateralization of any outstanding Letters of Credit); 
SIXTH, to all other Obligations and other obligations which shall have become due and payable under the Other Documents or otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH” above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next succeeding category; (ii) each of the Lenders shall receive (so long as it is not a Defaulting Lender) an amount equal to its pro rata share (based on the proportion that the then outstanding Advances, Cash Management Liabilities and Hedge Liabilities held by such Lender bears to the aggregate then outstanding Advances, Cash Management Liabilities and Hedge Liabilities) of amounts available to be applied pursuant to clauses “FOURTH”, “FIFTH” and “SIXTH” above; (iii) notwithstanding anything to the contrary in this Section 11.5, no Swap Obligations of any Non-Qualifying Party shall be paid with amounts received from such Non-Qualifying Party under its guaranty (including sums received as a result of the exercise of remedies with respect to such guaranty) or from the proceeds of such Non-Qualifying Party’s Collateral if such Swap Obligations would constitute Excluded Hedge Liabilities; provided, however, that to the extent possible appropriate adjustments shall be made with respect to payments and/or the proceeds of Collateral from other Loan Parties that are Eligible Contract Participants with respect to such Swap Obligations to preserve the allocation to Obligations otherwise set forth above in this Section 11.5; and (iv) to the extent that any amounts available for distribution pursuant to clause “FIFTH” above are attributable to the issued but undrawn amount of outstanding Letters of Credit, such amounts shall be held by Agent in a cash collateral account and applied (A) first, to reimburse Issuer from time to time for any drawings under such Letters of Credit and (B) then, following the expiration of all Letters of Credit, to all other obligations of the types described in clauses “FIFTH” and “SIXTH” above in the manner provided in this Section 11.5.  Monies and proceeds obtained from a Loan Party shall not be applied to its Excluded Hedge Liabilities, but appropriate adjustments shall be made with respect to amounts obtained from other Loan Parties to preserve the allocations specified above.

		
	XII
	      WAIVERS AND JUDICIAL PROCEEDINGS.  

12.1.Waiver of Notice.  Each Loan Party hereby waives notice of non-payment of any of the Receivables, demand, presentment, protest and notice thereof with respect to any and all instruments, notice of acceptance hereof, notice of loans or advances made, credit extended, Collateral received or delivered, or any other action taken in reliance hereon, and all other demands and notices of any description, except such as are expressly provided for herein.  

12.2.Delay.  No delay or omission on Agent’s or any Lender’s part in exercising any right, remedy or option shall operate as a waiver of such or any other right, remedy or option or of any Default or Event of Default.  

12.3.Jury Waiver.  EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR 

AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.  

XIIIEFFECTIVE DATE AND TERMINATION.  

13.1.Term.  This Agreement, which shall inure to the benefit of and shall be binding upon the respective successors and permitted assigns of each Loan Party, Agent and each Lender, shall become effective on the date hereof and shall continue in full force and effect until September 29, 2020 (the “Term”) unless sooner terminated as herein provided. Borrowers may terminate this Agreement at any time upon ninety (90) days’ prior written notice upon payment in full of the Obligations. In the event the Obligations are prepaid in full prior to the last day of the Term (the date of such prepayment hereinafter referred to as the “Early Termination Date”), Borrowers shall pay to Agent for the benefit of Lenders an early termination fee in an amount equal to (x) 1% of the Maximum Revolving Advance Amount if the Early Termination Date occurs on or after the Closing Date to and including the date immediately preceding March 29, 2017, and (y) $0 if the Early Termination Date occurs on or after March 29, 2017.  
13.2.Termination.  The termination of the Agreement shall not affect any Loan Party’s, Agent’s or any Lender’s rights, or any of the Obligations having their inception prior to the effective date of such termination, and the provisions hereof shall continue to be fully operative until all transactions entered into, rights or interests created or Obligations have been fully and indefeasibly paid, disposed of, concluded or liquidated.  The security interests, Liens and rights granted to Agent and Lenders hereunder and the financing statements filed hereunder shall continue in full force and effect, notwithstanding the termination of this Agreement or the fact that Borrowers’ Account may from time to time be temporarily in a zero or credit position, until all of the Obligations of each Borrower have been indefeasibly paid and performed in full after the termination of this Agreement or each Borrower has furnished Agent and Lenders with an indemnification satisfactory to Agent and Lenders with respect thereto.  Accordingly, each Loan Party waives any rights which it may have under the Uniform Commercial Code to demand the filing of termination statements with respect to the Collateral, and Agent shall not be required to send such termination statements to the Loan Parties, or to file them with any filing office, unless and until this Agreement shall have been terminated in accordance with its terms and all Obligations have been indefeasibly paid in full in immediately available funds.  All representations, warranties, covenants, waivers and agreements contained herein shall survive termination hereof until all Obligations are indefeasibly paid and performed in full.  
XIVREGARDING AGENT.  
14.1.Appointment.  Each Lender hereby designates PNC to act as Agent for such Lender under this Agreement and the Other Documents.  Each Lender hereby irrevocably authorizes Agent to take such action on its behalf under the provisions of this Agreement and the Other Documents and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto and 

Agent shall hold all Collateral, payments of principal and interest, fees (except the fees set forth in Sections 3.3(a) and 3.4), charges and collections (without giving effect to any collection days) received pursuant to this Agreement, for the ratable benefit of Lenders.  Agent may perform any of its duties hereunder by or through its agents or employees.  As to any matters not expressly provided for by this Agreement (including collection of the Note) Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders, and such instructions shall be binding; provided, however, that Agent shall not be required to take any action which exposes Agent to liability or which is contrary to this Agreement or the Other Documents or Applicable Law unless Agent is furnished with an indemnification reasonably satisfactory to Agent with respect thereto.  
14.2.Nature of Duties.  Agent shall have no duties or responsibilities except those expressly set forth in this Agreement and the Other Documents.  Neither Agent nor any of its officers, directors, employees or agents shall be (i) liable for any action taken or omitted by them as such hereunder or in connection herewith, unless caused by their gross (not mere) negligence or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment), or (ii) responsible in any manner for any recitals, statements, representations or warranties made by any Borrower or any officer thereof contained in this Agreement, or in any of the Other Documents or in any certificate, report, statement or other document referred to or provided for in, or received by Agent under or in connection with, this Agreement or any of the Other Documents or for the value, validity, effectiveness, genuineness, due execution, enforceability or sufficiency of this Agreement, or any of the Other Documents or for any failure of any Borrower to perform its obligations hereunder.  Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any of the Other Documents, or to inspect the properties, books or records of any Borrower.  The duties of Agent as respects the Advances to Borrowers shall be mechanical and administrative in nature; Agent shall not have by reason of this Agreement a fiduciary relationship in respect of any Lender; and nothing in this Agreement, expressed or implied, is intended to or shall be so construed as to impose upon Agent any obligations in respect of this Agreement except as expressly set forth herein.  
14.3.Lack of Reliance on Agent and Resignation.  Independently and without reliance upon Agent or any other Lender, each Lender has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of each Borrower and each Guarantor in connection with the making and the continuance of the Advances hereunder and the taking or not taking of any action in connection herewith, and (ii) its own appraisal of the creditworthiness of each Borrower and each Guarantor.  Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before making of the Advances or at any time or times thereafter except as shall be provided by a Borrower pursuant to the terms hereof.  Agent shall not be responsible to any Lender for any recitals, statements, information, representations or warranties herein or in any agreement, document, certificate or a statement delivered in connection with or for the execution, effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of this Agreement or any Other Document, or of the financial condition of any Borrower or any Guarantor, or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement, the Note, the Other Documents or the financial condition of any Borrower, or the existence of any Event of Default or any Default.  
Agent may resign on sixty (60) days’ written notice to each of Lenders and Borrowers and upon such resignation, the Required Lenders will promptly designate a successor Agent reasonably satisfactory to Borrowers.  

Any such successor Agent shall succeed to the rights, powers and duties of Agent, and the term “Agent” shall mean such successor agent effective upon its appointment, and the former Agent’s rights, powers and duties as Agent shall be terminated, without any other or further act or deed on the part of such former Agent.  After any Agent’s resignation as Agent, the provisions of this Article XIV shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.  
14.4.Certain Rights of Agent.  If Agent shall request instructions from Lenders with respect to any act or action (including failure to act) in connection with this Agreement or any Other Document, Agent shall be entitled to refrain from such act or taking such action unless and until Agent shall have received instructions from the Required Lenders; and Agent shall not incur liability to any Person by reason of so refraining.  Without limiting the foregoing, Lenders shall not have any right of action whatsoever against Agent as a result of its acting or refraining from acting hereunder in accordance with the instructions of the Required Lenders.  
14.5.Reliance.  Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype or telecopier message, cablegram, order or other document or telephone message believed by it to be genuine and correct and to have been signed, sent or made by the proper person or entity, and, with respect to all legal matters pertaining to this Agreement and the Other Documents and its duties hereunder, upon advice of counsel selected by it.  Agent may employ agents and attorneys‐in‐fact and shall not be liable for the default or misconduct of any such agents or attorneys‐in‐fact selected by Agent with reasonable care.  
14.6.Notice of Default.  Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder or under the Other Documents, unless Agent has received notice from a Lender or Borrowers referring to this Agreement or the Other Documents, describing such Default or Event of Default and stating that such notice is a “notice of default”.  In the event that Agent receives such a notice, Agent shall give notice thereof to Lenders.  Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders; provided, that, unless and until Agent shall have received such directions, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of Lenders.  
14.7.Indemnification.  To the extent Agent is not reimbursed and indemnified by Borrowers, each Lender will reimburse and indemnify Agent in proportion to its respective portion of the Advances (or, if no Advances are outstanding, according to its Commitment Percentage), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against Agent in performing its duties hereunder, or in any way relating to or arising out of this Agreement or any Other Document; provided that, Lenders shall not be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from Agent’s gross (not mere) negligence or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment).  
14.8.Agent in its Individual Capacity.  With respect to the obligation of Agent to lend under this Agreement, the Advances made by it shall have the same rights and powers hereunder as any other Lender and as if it were not performing the duties as Agent specified herein; and the term “Lender” or any similar term shall, unless the context clearly otherwise indicates, include Agent in its individual capacity as a Lender.  Agent may engage in business with any Borrower as if it were not performing the duties specified herein, and may accept fees and other consideration from any Borrower for services in connection with this Agreement or otherwise without having to account for the same to Lenders.  

14.9.Delivery of Documents.  To the extent Agent receives financial statements required under Sections 9.7, 9.9, 9.12 and 9.13 or Borrowing Base Certificates from Borrower pursuant to the terms of this Agreement which Borrower is not obligated to deliver to each Lender, Agent will promptly furnish such documents and information to Lenders.  
14.10.Borrowers’ Undertaking to Agent.  Without prejudice to its obligations to Lenders under the other provisions of this Agreement, Borrowers hereby undertake with Agent to pay to Agent from time to time on demand all amounts from time to time due and payable by it for the account of Agent or Lenders or any of them pursuant to this Agreement to the extent not already paid.  Any payment made pursuant to any such demand shall pro tanto satisfy the relevant Borrower’s obligations to make payments for the account of Lenders or the relevant one or more of them pursuant to this Agreement.  
14.11.No Reliance on Agent’s Customer Identification Program.  Each Lender acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants or assignees, may rely on the Agent to carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer identification program, or other obligations required or imposed under or pursuant to the USA PATRIOT Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other Anti-Terrorism Law, including any programs involving any of the following items relating to or in connection with any Borrower, its Affiliates or its agents, this Agreement, the Other Documents or the transactions hereunder or contemplated hereby:  (1) any identity verification procedures, (2) any record-keeping, (3) comparisons with government lists, (4) customer notices or (5) other procedures required under the CIP Regulations or such other laws.  
14.12.Other Agreements.  Each of the Lenders agrees that it shall not, without the express consent of Agent, and that it shall, to the extent it is lawfully entitled to do so, upon the request of Agent, set off against the Obligations, any amounts owing by such Lender to any Borrower or any deposit accounts of any Borrower now or hereafter maintained with such Lender.  Anything in this Agreement to the contrary notwithstanding, each of the Lenders further agrees that it shall not, unless specifically requested to do so by Agent, take any action to protect or enforce its rights arising out of this Agreement or the Other Documents, it being the intent of Lenders that any such action to protect or enforce rights under this Agreement and the Other Documents shall be taken in concert and at the direction or with the consent of Agent or Required Lenders.  
XVMISCELLANEOUS.  
15.1.Governing Law.  This Agreement shall be, or shall be deemed to be, governed by and construed in accordance with the laws of the State of New York. Any judicial proceeding brought by or against any Loan Party with respect to any of the Obligations, this Agreement, the Other Documents or any related agreement may be brought in any court of competent jurisdiction in the State of New York, United States of America, and, by execution and delivery of this Agreement, each Loan Party accepts for itself and in connection with its properties, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement. Each Loan Party hereby waives personal service of any and all process upon it and consents that all such service of process may be made by registered mail (return receipt requested) directed to such Loan Party at its address set forth in Section 15.6 and service so made shall be deemed completed five (5) days after the same shall have been so deposited in the mails of the United States of America. Nothing herein shall affect the right to serve process in any manner permitted by law or shall limit the right of Agent or any Lender to bring proceedings against such Loan Party in the courts of any other jurisdiction. Each Loan Party waives any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. Each Loan Party waives the 

right to remove any judicial proceeding brought against such Loan Party in any state court to any federal court. Any judicial proceeding by any Loan Party against Agent or any Lender involving, directly or indirectly, any matter or claim in any way arising out of, related to or connected with this Agreement or any related agreement, shall be brought only in a federal or state court located in the County of New York, State of New York.  
15.2.Entire Understanding.  
(a)This Agreement and the documents executed concurrently herewith contain the entire understanding between the Loan Parties, Agent and each Lender and supersedes all prior agreements and understandings, if any, relating to the subject matter hereof.  Any promises, representations, warranties or guarantees not herein contained and hereinafter made shall have no force and effect unless in writing, signed by each Loan Party’s, Agent’s and each Lender’s respective officers.  Neither this Agreement nor any portion or provisions hereof may be changed, modified, amended, waived, supplemented, discharged, cancelled or terminated orally or by any course of dealing, or in any manner other than by an agreement in writing, signed by the party to be charged.  Each Borrower acknowledges that it has been advised by counsel in connection with the execution of this Agreement and Other Documents and is not relying upon oral representations or statements inconsistent with the terms and provisions of this Agreement.  
(b)The Required Lenders, Agent with the consent in writing of the Required Lenders, and each Loan Party may, subject to the provisions of this Section 15.2(b), from time to time enter into written supplemental agreements to this Agreement or the Other Documents executed by the Loan Parties, for the purpose of adding or deleting any provisions or otherwise changing, varying or waiving in any manner the rights of Lenders, Agent or any Loan Party thereunder or the conditions, provisions or terms thereof of waiving any Event of Default thereunder, but only to the extent specified in such written agreements; provided, however, that no such supplemental agreement shall, without the consent of all Lenders:  
i.increase the Commitment Percentage, the maximum dollar commitment of any Lender or the Maximum Revolving Advance Amount.  
ii.extend the maturity of any Note or the due date for any amount payable hereunder, or decrease the rate of interest or reduce any fee payable by any Loan Party to Lenders pursuant to this Agreement.  
iii.alter the definition of the term Required Lenders or alter, amend or modify this Section 15.2(b).  
iv.release any Collateral during any calendar year (other than in accordance with the provisions of this Agreement) having an aggregate value in excess of $1,000,000.  
v.change the rights and duties of Agent.  
vi.permit any Revolving Advance to be made if after giving effect thereto the total of Revolving Advances outstanding hereunder would exceed the Formula Amount for more than sixty (60) consecutive Business Days or exceed one hundred and ten percent (110%) of the Formula Amount.  
vii.increase the Advance Rates above the Advance Rates in effect on the Closing Date.  
viii.release any Guarantor.  

Any such supplemental agreement shall apply equally to each Lender and shall be binding upon each Loan Party party thereto, Lenders and Agent and all future holders of the Obligations.  In the case of any waiver, the Loan Parties, Agent and Lenders shall be restored to their former positions and rights, and any Event of Default waived shall be deemed to be cured and not continuing, but no waiver of a specific Event of Default shall extend to any subsequent Event of Default (whether or not the subsequent Event of Default is the same as the Event of Default which was waived), or impair any right consequent thereon.  
In the event that Agent requests the consent of a Lender pursuant to this Section 15.2 and such consent is denied, then PNC may, at its option, require such Lender to assign its interest in the Advances to PNC or to another Lender or to any other Person designated by the Agent (the “Designated Lender”), for a price equal to the then outstanding principal amount thereof plus accrued and unpaid interest and fees due such Lender, which interest and fees shall be paid when collected from Borrowers.  In the event PNC elects to require any Lender to assign its interest to PNC or to the Designated Lender, PNC will so notify such Lender in writing within forty five (45) days following such Lender’s denial, and such Lender will assign its interest to PNC or the Designated Lender no later than five (5) days following receipt of such notice pursuant to a Commitment Transfer Supplement executed by such Lender, PNC or the Designated Lender, as appropriate, and Agent.  
Notwithstanding (a) the existence of a Default or an Event of Default, (b) that any of the other applicable conditions precedent set forth in Section 8.2 hereof have not been satisfied or (c) any other provision of this Agreement, Agent may at its discretion and without the consent of the Required Lenders, voluntarily permit the sum of the outstanding Revolving Advances and the Maximum Undrawn Amount at any time to exceed the Formula Amount by up to ten percent (10%) of the Formula Amount for up to sixty (60) consecutive Business Days (the “Out-of-Formula Loans”), provided that such outstanding Advances do not exceed the Maximum Revolving Advance Amount.  If Agent is willing in its sole and absolute discretion to make such Out-of-Formula Loans, such Out-of-Formula Loans shall be payable on demand and shall bear interest at the Default Rate; provided that, if Lenders do make Out-of-Formula Loans, neither Agent nor Lenders shall be deemed thereby to have changed the limits of Section 2.1(a).  For purposes of this paragraph, the discretion granted to Agent hereunder shall not preclude involuntary overadvances that may result from time to time due to the fact that the Formula Amount was unintentionally exceeded for any reason, including, but not limited to, Collateral previously deemed to be either “Eligible Receivables” or “Eligible Inventory”, as applicable, becomes ineligible, collections of Receivables applied to reduce outstanding Revolving Advances are thereafter returned for insufficient funds or overadvances are made to protect or preserve the Collateral.  In the event Agent involuntarily permits the sum of the outstanding Revolving Advances and the Maximum Undrawn Amount to exceed the Formula Amount by more than ten percent (10%), Agent shall use its efforts to have Borrowers decrease such excess in as expeditious a manner as is practicable under the circumstances and not inconsistent with the reason for such excess.  Revolving Advances made after Agent has determined the existence of involuntary overadvances shall be deemed to be involuntary overadvances and shall be decreased in accordance with the preceding sentence.  
In addition to (and not in substitution of) the discretionary Revolving Advances permitted above in this Section 15.2, the Agent is hereby authorized by the Loan Parties and the Lenders, from time to time in the Agent’s sole discretion, (A) after the occurrence and during the continuation of a Default or an Event of Default, or (B) at any time that any of the other applicable conditions precedent set forth in Section 8.2 hereof have not been satisfied, to make Revolving Advances (such Revolving Advances being referred to as “Agent Advances”) to Borrowers on behalf of the Lenders which the Agent, in its reasonable business judgment, deems necessary or desirable (a) to preserve or protect the Collateral, or any portion thereof, (b) to enhance the likelihood of, or maximize the amount of, repayment of the Advances and other Obligations, or (c) to pay any other amount chargeable to any Borrower pursuant to the terms of this Agreement; provided, that at 

any time after giving effect to any such Revolving Advances the outstanding Revolving Advances do not exceed one hundred and ten percent (110%) of the Formula Amount.  
15.3.Successors and Assigns; Participations; New Lenders.  
(a)This Agreement shall be binding upon and inure to the benefit of each Loan Party, Agent, each Lender, all future holders of the Obligations and their respective successors and permitted assigns, except that no Loan Party may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of Agent and each Lender.  
(b)Each Loan Party acknowledges that in the regular course of commercial banking business one or more Lenders may at any time and from time to time sell participating interests in the Advances to other financial institutions (each such transferee or purchaser of a participating interest, a “Participant”).  Each Participant may exercise all rights of payment (including rights of set-off) with respect to the portion of such Advances held by it or other Obligations payable hereunder as fully as if such Participant were the direct holder thereof provided that no Borrower shall be required to pay to any Participant more than the amount which it would have been required to pay to Lender which granted an interest in its Advances or other Obligations payable hereunder to such Participant had such Lender retained such interest in the Advances hereunder or other Obligations payable hereunder and in no event shall a Borrower be required to pay any such amount arising from the same circumstances and with respect to the same Advances or other Obligations payable hereunder to both such Lender and such Participant.  Each Loan Party hereby grants to any Participant a continuing security interest in any deposits, moneys or other property actually or constructively held by such Participant as security for the Participant’s interest in the Advances.  
(c)Any Lender, with the consent of Agent (and, so long as no Default or Event of Default exists, Borrowers) which consent shall not, in either case, be unreasonably withheld or delayed, may sell, assign or transfer all or any part of its rights and obligations under or relating to Revolving Advances under this Agreement and the Other Documents to one or more additional banks or financial institutions and one or more additional banks or financial institutions may commit to make Advances hereunder (each a “Purchasing Lender”), in minimum amounts of not less than $1,000,000, pursuant to a Commitment Transfer Supplement, executed by a Purchasing Lender, the transferor Lender, and Agent and delivered to Agent for recording.  Upon such execution, delivery, acceptance and recording, from and after the transfer effective date determined pursuant to such Commitment Transfer Supplement, (i) Purchasing Lender thereunder shall be a party hereto and, to the extent provided in such Commitment Transfer Supplement, have the rights and obligations of a Lender thereunder with a Commitment Percentage as set forth therein, and (ii) the transferor Lender thereunder shall, to the extent provided in such Commitment Transfer Supplement, be released from its obligations under this Agreement, the Commitment Transfer Supplement creating a novation for that purpose.  Such Commitment Transfer Supplement shall be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Lender and the resulting adjustment of the Commitment Percentages arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations of such transferor Lender under this Agreement and the Other Documents.  Each Loan Party hereby consents to the addition of such Purchasing Lender and the resulting adjustment of the Commitment Percentages arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations of such transferor Lender under this Agreement and the Other Documents.  Each Loan Party shall execute and deliver such further documents and do such further acts and things in order to effectuate the foregoing.  
(d)Any Lender, with the consent of Agent (and, so long as no Default or Event of Default exists, Borrowers) which consent shall not, in either case, be unreasonably withheld or delayed, may directly or indirectly sell, assign or transfer all or any portion of its rights and obligations under or relating to Revolving 

Advances under this Agreement and the Other Documents to an entity, whether a corporation, partnership, trust, limited liability company or other entity that (i) is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and (ii) is administered, serviced or managed by the assigning Lender or an Affiliate of such Lender (a “Purchasing CLO” and together with each Participant and Purchasing Lender, each a “Transferee” and collectively the “Transferees”), pursuant to a Commitment Transfer Supplement modified as appropriate to reflect the interest being assigned (“Modified Commitment Transfer Supplement”), executed by any intermediate purchaser, the Purchasing CLO, the transferor Lender, and Agent as appropriate and delivered to Agent for recording.  Upon such execution and delivery, from and after the transfer effective date determined pursuant to such Modified Commitment Transfer Supplement, (i) Purchasing CLO thereunder shall be a party hereto and, to the extent provided in such Modified Commitment Transfer Supplement, have the rights and obligations of a Lender thereunder and (ii) the transferor Lender thereunder shall, to the extent provided in such Modified Commitment Transfer Supplement, be released from its obligations under this Agreement, the Modified Commitment Transfer Supplement creating a novation for that purpose.  Such Modified Commitment Transfer Supplement shall be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing CLO.  Each Borrower hereby consents to the addition of such Purchasing CLO.  Each Borrower shall execute and deliver such further documents and do such further acts and things in order to effectuate the foregoing.  
(e)Agent shall maintain at its address a copy of each Commitment Transfer Supplement and Modified Commitment Transfer Supplement delivered to it and a register (the “Register”) for the recordation of the names and addresses of each Lender and the outstanding principal, accrued and unpaid interest and other fees due hereunder.  The entries in the Register shall be conclusive, in the absence of manifest error, and each Loan Party, Agent and Lenders may treat each Person whose name is recorded in the Register as the owner of the Advance recorded therein for the purposes of this Agreement.  The Register shall be available for inspection by Borrowers or any Lender at any reasonable time and from time to time upon reasonable prior notice.  Agent shall receive a fee in the amount of $3,500 payable by the applicable Purchasing Lender and/or Purchasing CLO upon the effective date of each transfer or assignment (other than to an intermediate purchaser) to such Purchasing Lender and/or Purchasing CLO.  
(f)Each Loan Party authorizes each Lender to disclose to any Transferee and any prospective Transferee any and all financial information in such Lender’s possession concerning such Loan Party which has been delivered to such Lender by or on behalf of such Loan Party pursuant to this Agreement or in connection with such Lender’s credit evaluation of such Loan Party.  
15.4.Application of Payments.  Agent shall have the continuing and exclusive right to apply or reverse and re-apply any payment and any and all proceeds of Collateral to any portion of the Obligations.  To the extent that any Loan Party makes a payment or Agent or any Lender receives any payment or proceeds of the Collateral for such Loan Party’s benefit, which are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, debtor in possession, receiver, custodian or any other party under any bankruptcy law, common law or equitable cause, then, to such extent, the Obligations or part thereof intended to be satisfied shall be revived and continue as if such payment or proceeds had not been received by Agent or such Lender.  
15.5.Indemnity.  The Loan Parties, jointly and severally, shall indemnify Agent, each Lender and each of their respective officers, directors, Affiliates, attorneys, employees and agents from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever (including fees and disbursements of counsel) which may be imposed on, incurred by, or asserted against Agent or any Lender in any claim, litigation, proceeding or investigation instituted or conducted by any Governmental Body or instrumentality or any other Person with 

respect to any aspect of, or any transaction contemplated by, or referred to in, or any matter related to, this Agreement or the Other Documents, whether or not Agent or any Lender is a party thereto, except to the extent that any of the foregoing arises out of the gross negligence or willful misconduct of the party being indemnified (as determined by a court of competent jurisdiction in a final and non-appealable judgment).  Without limiting the generality of the foregoing, this indemnity shall extend to any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever (including fees and disbursements of counsel) asserted against or incurred by any of the indemnitees described above in this Section 15.5 by any Person under any Environmental Laws or similar laws by reason of any Borrower’s or any other Person’s failure to comply with laws applicable to solid or hazardous waste materials, including Hazardous Substances and Hazardous Waste, or other Toxic Substances.  Additionally, if any taxes (excluding Excluded Taxes, but including Other Taxes) shall be payable by Agent, Lenders or any Loan Party on account of the execution or delivery of this Agreement, or the execution, delivery, issuance or recording of any of the Other Documents, or the creation or repayment of any of the Obligations hereunder, by reason of any Applicable Law now or hereafter in effect, the Loan Parties, jointly and severally, will pay (or will promptly reimburse Agent and Lenders for payment of) all such taxes, including interest and penalties thereon, and will indemnify and hold the indemnitees described above in this Section 15.5 harmless from and against all liability in connection therewith.  
15.6.Notice.  Any notice or request hereunder may be given to a Loan Party or to Agent or any Lender at their respective addresses set forth below or at such other address as may hereafter be specified in a notice designated as a notice of change of address under this Section.  Any notice, request, demand, direction or other communication (for purposes of this Section 15.6 only, a “Notice”) to be given to or made upon any party hereto under any provision of this Loan Agreement shall be given or made by telephone or in writing (which includes by means of electronic transmission (i.e., “e-mail”) or facsimile transmission or by setting forth such Notice on a site on the World Wide Web (a “Website Posting”) if Notice of such Website Posting (including the information necessary to access such site) has previously been delivered to the applicable parties hereto by another means set forth in this Section 15.6) in accordance with this Section 15.6.  Any such Notice must be delivered to the applicable parties hereto at the addresses and numbers set forth under their respective names on Section 15.6 hereof or in accordance with any subsequent unrevoked Notice from any such party that is given in accordance with this Section 15.6.  Any Notice shall be effective:  
(a)In the case of hand-delivery, when delivered; 
(b)If given by mail, four days after such Notice is deposited with the United States Postal Service, with first-class postage prepaid, return receipt requested; 
(c)In the case of a telephonic Notice, when a party is contacted by telephone, if delivery of such telephonic Notice is confirmed no later than the next Business Day by hand delivery, a facsimile or electronic transmission, a Website Posting or an overnight courier delivery of a confirmatory Notice (received at or before noon on such next Business Day); 
(d)In the case of a facsimile transmission, when sent to the applicable party’s facsimile machine’s telephone number, if the party sending such Notice receives confirmation of the delivery thereof from its own facsimile machine; 
(e)In the case of electronic transmission, when actually received; 
(f)In the case of a Website Posting, upon delivery of a Notice of such posting (including the information necessary to access such site) by another means set forth in this Section 15.6; and 

(g)If given by any other means (including by overnight courier), when actually received.  
Any Lender giving a Notice to a Loan Party shall concurrently send a copy thereof to the Agent, and the Agent shall promptly notify the other Lenders of its receipt of such Notice.  
(A)    If to Agent or PNC at:  
PNC Bank, National Association 
1900 East Ninth Street (B7-YB13-09-5)
Cleveland, Ohio 44114 
Attention:    Dean W. Newman, Vice President 
Telephone:    (216) 222-3656 
Facsimile:      (216) 222-9555 

with a copy to:  
PNC Bank, National Association 
PNC Agency Services 
PNC Firstside Center 
500 First Avenue, 4th Floor 
Pittsburgh, Pennsylvania 15219 
Attention:    Lisa Pierce 
Telephone:    (412) 762-6442 
Facsimile:      (412) 762-8672 

with an additional copy to:  
Blank Rome LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attention:    Lawrence F. Flick II
Telephone:      (212) 885-5556 
Facsimile:      (215) 832-5556

(B)    If to a Lender other than Agent, as specified on the signature pages hereof 
(C)    If to any Borrower or the Subsidiary Guarantor:  
Technical Consumer Products, Inc.  
325 Campus Drive 
Aurora, Ohio 44202 
Attention:      Chief Financial Officer
Telephone:      (330) 995-6111
Facsimile:    (330) 995-6188

with a copy to:  
Thompson Hine LLP 
10050 Innovation Drive

Suite 400
Dayton, Ohio 45342-1934
Attention:    Arik A. Sherk 
Telephone:    (936) 443-6757 

15.7.Survival.  The obligations of each Loan Party under Sections 2.2(f),3.7, 3.8, 3.9, 4.19(h), and 15.5 and the obligations of Lenders under Section 14.7, shall survive termination of this Agreement and the Other Documents and payment in full of the Obligations.  
15.8.Severability.  If any part of this Agreement is contrary to, prohibited by, or deemed invalid under Applicable Laws, such provision shall be inapplicable and deemed omitted to the extent so contrary, prohibited or invalid, but the remainder hereof shall not be invalidated thereby and shall be given effect so far as possible.  
15.9.Expenses.  All costs and expenses including reasonable attorneys’ fees (including the allocated costs of in house counsel) and disbursements incurred by Agent on its behalf or on behalf of Lenders (a) in all efforts made to enforce payment of any Obligation or effect collection of any Collateral, or (b) in connection with the entering into, modification, amendment, administration and enforcement of this Agreement or any consents or waivers hereunder and all related agreements, documents and instruments, or (c) in instituting, maintaining, preserving, enforcing and foreclosing on Agent’s security interest in or Lien on any of the Collateral, or maintaining, preserving or enforcing any of Agent’s or any Lender’s rights hereunder and under all related agreements, documents and instruments, whether through judicial proceedings or otherwise, or (d) in defending or prosecuting any actions or proceedings arising out of or relating to Agent’s or any Lender’s transactions with any Borrower, Holdings or any Guarantor or (e) in connection with any advice given to Agent or any Lender with respect to its rights and obligations under this Agreement and all related agreements, documents and instruments, may be charged to Borrowers’ Account and shall be part of the Obligations.  
15.10.Injunctive Relief.  Each Loan Party recognizes that, in the event such Loan Party fails to perform, observe or discharge any of its obligations or liabilities under this Agreement, or threatens to fail to perform, observe or discharge such obligations or liabilities, any remedy at law may prove to be inadequate relief to Lenders; therefore, Agent, if Agent so requests, shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving that actual damages are not an adequate remedy.  
15.11.Consequential Damages.  Neither Agent nor any Lender, nor any agent or attorney for any of them, shall be liable to any Borrower, CMP, Holdings or any Guarantor (or any Affiliate of any such Person) for indirect, punitive, exemplary or consequential damages arising from any breach of contract, tort or other wrong relating to the establishment, administration or collection of the Obligations or as a result of any transaction contemplated under this Agreement or any Other Document.  
15.12.Captions.  The captions at various places in this Agreement are intended for convenience only and do not constitute and shall not be interpreted as part of this Agreement.  
15.13.Counterparts; Facsimile Signatures.  This Agreement may be executed in any number of and by different parties hereto on separate counterparts, all of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement.  Any signature delivered by a party by facsimile transmission shall be deemed to be an original signature hereto.  
15.14.Construction.  The parties acknowledge that each party and its counsel have reviewed this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved 

against the drafting party shall not be employed in the interpretation of this Agreement or any amendments, schedules or exhibits thereto.  
15.15.Confidentiality; Sharing Information.  
(a)Agent, each Lender and each Transferee shall hold all non-public information obtained by Agent, such Lender or such Transferee pursuant to the requirements of this Agreement in accordance with Agent’s, such Lender’s and such Transferee’s customary procedures for handling confidential information of this nature; provided, however, Agent, each Lender and each Transferee may disclose such confidential information (a) to its examiners, Affiliates, outside auditors, counsel and other professional advisors, (b) to Agent, any Lender or to any prospective Transferees, and (c) as required or requested by any Governmental Body or representative thereof or pursuant to legal process; provided, further that (i) unless specifically prohibited by Applicable Law, Agent, each Lender and each Transferee shall use its reasonable best efforts prior to disclosure thereof, to notify Borrowers of the applicable request for disclosure of such non-public information (A) by a Governmental Body or representative thereof (other than any such request in connection with an examination of the financial condition of a Lender or a Transferee by such Governmental Body) or (B) pursuant to legal process and (ii) in no event shall Agent, any Lender or any Transferee be obligated to return any materials furnished by a Loan Party other than those documents and instruments in possession of Agent or any Lender in order to perfect its Lien on the Collateral once the Obligations have been paid in full and this Agreement has been terminated.  
(b)Each Loan Party acknowledges that from time to time financial advisory, investment banking and other services may be offered or provided to each Borrower or one or more of its Affiliates (in connection with this Agreement or otherwise) by any Lender or by one or more Subsidiaries or Affiliates of such Lender and each Loan Party hereby authorizes each Lender to share any information delivered to such Lender by such Loan Party and its Subsidiaries pursuant to this Agreement, or in connection with the decision of such Lender to enter into this Agreement, to any such Subsidiary or Affiliate of such Lender, it being understood that any such Subsidiary or Affiliate of any Lender receiving such information shall be bound by the provisions of this Section 15.15 as if it were a Lender hereunder.  Such authorization shall survive the repayment of the other Obligations and the termination of this Agreement.  
15.16.Publicity.  Each Loan Party and each Lender hereby authorizes Agent to make appropriate announcements of the financial arrangement entered into among the Loan Parties, Agent and Lenders, including announcements which are commonly known as tombstones, in such publications and to such selected parties as Agent shall in its sole and absolute discretion deem appropriate.  
15.17.Certifications From Banks and Participants; US PATRIOT Act.  Each Lender or assignee or participant of a Lender that is not incorporated under the Laws of the United States of America or a state thereof (and is not excepted from the certification requirement contained in Section 313 of the USA PATRIOT Act and the applicable regulations because it is both (i) an affiliate of a depository institution or foreign bank that maintains a physical presence in the United States or foreign country, and (ii) subject to supervision by a banking authority regulating such affiliated depository institution or foreign bank) shall deliver to the Agent the certification, or, if applicable, recertification, certifying that such Lender is not a “shell” and certifying to other matters as required by Section 313 of the USA PATRIOT Act and the applicable regulations:  (1) within 10 days after the Closing Date, and (2) as such other times as are required under the USA PATRIOT Act.   
15.18.     Concerning Joint and Several Liability of Borrowers.
(a)    Each of Borrowers is accepting joint and several liability hereunder in consideration of the financial accommodations to be provided by the Lenders under this Agreement, for the mutual benefit, 

directly and indirectly, of each of Borrowers and in consideration of the undertakings of each of Borrowers to accept joint and several liability for the obligations of each of them.
(b)    Each of Borrowers jointly and severally hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers with respect to the payment and performance of all of the Obligations, it being the intention of the parties hereto that all the Obligations shall be the joint and several obligations of each of Borrowers without preferences or distinction among them.
(c)    If and to the extent that any of Borrowers shall fail to make any payment with respect to any of the Obligations as and when due or to perform any of the Obligations in accordance with the terms thereof, then in each such event, the other Borrowers will make such payment with respect to, or perform, such Obligation. 
(d)    The obligations of each Borrower under the provisions of this Section 15.18 constitute full recourse obligations of such Borrower, enforceable against it to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of this Agreement or any other circumstances whatsoever.
(e)    Except as otherwise expressly provided herein, each Borrower hereby waives notice of acceptance of its joint and several liability, notice of any Advance made under this Agreement, notice of occurrence of any Event of Default, or of any demand for any payment under this Agreement (except as otherwise provided herein), notice of any action at any time taken or omitted by any Lender under or in respect of any of the Obligations, any requirement of diligence and, generally, all demands, notices and other formalities of every kind in connection with this Agreement.  Each Borrower hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by any Lender at any time or times in respect of any default by any Borrower in the performance or satisfaction of any term, covenant, condition or provision of this Agreement, any and all other indulgences whatsoever by any Lender in respect of any of the Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Obligations or in part, at any time or times, of any security for any of the Obligations or the addition, substitution or release, in whole or in part, of any Borrower.  Without limiting the generality of the foregoing, each Borrower assents to any other action or delay in acting or failure to act on the part of any Lender, including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with the applicable laws or regulations thereunder which might, but for the provisions of this Section 15.18, afford grounds for terminating, discharging or relieving such Borrower, in whole or in part, from any of its obligations under this Section 15.18, it being the intention of each Borrower that, so long as any of the Obligations remain unsatisfied, the obligations of such Borrower under this Section 15.18 shall not be discharged except by performance and then only to the extent of such performance.  The Obligations of each Borrower under this Section 15.18 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any Borrower or any Lender.  The joint and several liability of Borrowers hereunder shall continue in full force and effect notwithstanding any absorption, merger, amalgamation or any other change whatsoever in the name, membership, constitution or place of formation of any Borrower or any Lender.  
(f)    The provisions of this Section 15.18 are made for the benefit of the Lenders and their respective successors and assigns, and may be enforced by the Agent from time to time against any of Borrowers as often as occasion therefor may arise and without requirement on the part of any Lender first to marshal any of its claims or to exercise any of its rights against any of the other Borrowers or to exhaust 

any remedies available to it against any of the other Borrowers or to resort to any other source or means of obtaining payment of any of the Obligations or to elect any other remedy.  The provisions of this Section 15.18 shall remain in effect until all the Obligations shall have been paid in full or otherwise fully satisfied.  If at any time, any payment, or any part thereof, made in respect of any of the Obligations, is rescinded or must otherwise be restored or returned by any Lender upon the insolvency, bankruptcy or reorganization of any of Borrowers, or otherwise, the provisions of this Section 15.18 will forthwith be reinstated in effect, as though such payment had not been made.
(g)    Notwithstanding any provision to the contrary contained herein or in any other of the Other Documents, to the extent the joint obligations of a Borrower shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable state or federal law relating to fraudulent conveyances or transfers) then the obligations of each Borrower hereunder shall be limited to the maximum amount that is permissible under applicable law (whether federal or state and including, without limitation, the federal Bankruptcy Code).

(h)    Borrowers hereby agree, as among themselves, that if any Borrower shall become an Excess Funding Borrower (as defined below), each other Borrower shall, on demand of such Excess Funding Borrower (but subject to the next sentence hereof and to subsection (B) below), pay to such Excess Funding Borrower an amount equal to such Borrower’s Pro Rata Share (as defined below and determined, for this purpose, without reference to the properties, assets, liabilities and debts of such Excess Funding Borrower) of such Excess Payment (as defined below).  The payment obligation of any Borrower to any Excess Funding Borrower under this Section 15.18(h) shall be subordinate and subject in right of payment to the prior payment in full of the Obligations of such Borrower under the other provisions of this Agreement, and such Excess Funding Borrower shall not exercise any right or remedy with respect to such excess until payment and satisfaction in full of all of such Obligations.  For purposes hereof, (i) “Excess Funding Borrower” shall mean, in respect of any Obligations arising under the other provisions of this Agreement (hereafter, the “Joint Obligations”), a Borrower that has paid an amount in excess of its Pro Rata Share of the Joint Obligations; (ii) “Excess Payment” shall mean, in respect of any Joint Obligations, the amount paid by an Excess Funding Borrower in excess of its Pro Rata Share of such Joint Obligations; and (iii) “Pro Rata Share”, for the purposes of this Section 15.18(h), shall mean, for any Borrower, the ratio (expressed as a percentage) of (A) the amount by which the aggregate present fair salable value of all of its assets and properties exceeds the amount of all debts and liabilities of such Borrower (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such Borrower hereunder) to (B) the amount by which the aggregate present fair salable value of all assets and other properties of such Borrower and all of the other Borrowers exceeds the amount of all of the debts and liabilities (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such Borrower and the other Borrowers hereunder) of such Borrower and all of the other Borrowers, all as of the Closing Date (if any Borrower becomes a party hereto subsequent to the Closing Date, then for the purposes of this Section 15.18(h) such subsequent Borrower shall be deemed to have been a Borrower as of the Closing Date and the information pertaining to, and only pertaining to, such Borrower as of the date such Borrower became a Borrower shall be deemed true as of the Closing Date) notwithstanding the payment obligations imposed on Borrowers in this Section, the failure of a Borrower to make any payment to an Excess Funding Borrower as required under this Section shall not constitute an Event of Default.
15.19.    Anti-Terrorism Laws.
(a)    Each Borrower represents and warrants that (i) no Covered Entity is a Sanctioned Person and (ii) no Covered Entity, either in its own right or through any third party, (A) has any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any 

Anti-Terrorism Law; (B) does business in or with, or derives any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; or (C) engages in any dealings or transactions prohibited by any Anti-Terrorism Law.
(b)    Each Borrower covenants and agrees that (i) no Covered Entity will become a Sanctioned Person, (ii) no Covered Entity, either in its own right or through any third party, will (B) have any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism Law; (B) do business in or with, or derive any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; (C) engage in any dealings or transactions prohibited by any Anti-Terrorism Law or (D) use the Advances to fund any operations in, finance any investments or activities in, or, make any payments to, a Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law, (iii)the funds used to repay the Obligations will not be derived from any unlawful activity, (iv) each Covered Entity shall comply with  all Anti-Terrorism Laws and (v) the Borrowers shall promptly notify the Agent in writing upon the occurrence of a Reportable Compliance Event.
15.20.     Acknowledgment of Prior Obligations and Continuation Thereof.  Each Borrower hereby: (a) acknowledges and agrees that (i) its obligations owing to Agent and the Lenders, and (ii) the prior grant or grants of Liens in favor of the Agent for the benefit of the Lenders in its properties and assets, whether under the Existing Agreement or under any Other Document to which it is a party, shall also be for the benefit of the Lenders and in respect of the Obligations of such Person under this Agreement and the Other Documents executed in connection herewith to which it is a party; (b) reaffirms (i) all of its obligations owing to Agent and/or the Lenders under the Existing Agreement, and (ii) all prior grants of Liens in favor of Agent under the Existing Agreement and each Other Document; (c) agrees that, except as expressly amended hereby or in a separate amendment thereto, each of the existing Other Documents to which it is a party is and shall remain in full force and effect; and (d) confirms and agrees that all outstanding principal, interest and fees and other Obligations under the Existing Agreement outstanding immediately prior to the Closing Date shall, to the extent not paid on the Closing Date, from and after the Closing Date, be, without duplication, Obligations owing and payable pursuant to this Agreement and the Other Documents as in effect from time to time, shall accrue interest thereon or otherwise be chargeable, as specified in this Agreement, and shall be secured by this Agreement and the Other Documents. 
		
	XVI
	GUARANTY. 

16.1.Guaranty.  Each Loan Party (other than the Borrowers) (together, for purposes of this Article XVI, the “Loan Party Guarantors”) hereby agrees that it is jointly and severally liable for, and, as primary obligor and not merely as surety, absolutely and unconditionally guarantees to the Lenders the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Obligations and all costs and expenses including, without limitation, all court costs and attorneys' and paralegals' fees (including allocated costs of in-house counsel and paralegals) and expenses paid or incurred by the Agent, Issuer and the Lenders in endeavoring to collect all or any part of the Obligations from, or in prosecuting any action against, any other Loan Party, any Guarantor or any other guarantor of all or any part of the Obligations (such costs and expenses, together with the Obligations, collectively the “Guaranteed Obligations”).  Each Loan Party Guarantor further agrees that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal.  All terms of this guaranty (the “Loan Party Guaranty”) apply to and may be enforced by or on behalf of any domestic or foreign branch or Affiliate of any Lender that extended any portion of the Guaranteed Obligations.  

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

any Obligated Party, without affecting or impairing in any way the liability of such Loan Party Guarantor under this Loan Party Guaranty except to the extent the Guaranteed Obligations have been fully and indefeasibly paid in cash.  To the fullest extent permitted by applicable law, each Loan Party Guarantor waives any defense arising out of any such election even though that election may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of such Loan Party Guarantor against an Obligated Party or any security.  
16.5.Rights of Subrogation.  No Loan Party Guarantor will assert any right, claim or cause of action, including, without limitation, a claim of subrogation, contribution or indemnification that it has against any Obligated Party, or any collateral, until each Borrower has fully performed all their obligations to the Agent, Issuer and the Lenders.  
16.6.Reinstatement; Stay of Acceleration.  If at any time any payment of any portion of the Guaranteed Obligations is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, or reorganization of any Borrower or otherwise, each Loan Party Guarantor’s obligations under this Loan Party Guaranty with respect to that payment shall be reinstated at such time as though the payment had not been made and whether or not the Agent, Issuer and the Lenders are in possession of this Loan Party Guaranty.  If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of any Borrower, all such amounts otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations shall nonetheless be payable by the Loan Party Guarantors forthwith on demand by the Lender.  
16.7.Information.  Each Loan Party Guarantor assumes all responsibility for being and keeping itself informed of all of each Borrower’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that each Loan Party Guarantor assumes and incurs under this Loan Party Guaranty, and agrees that neither the Agent nor Issuer or any Lender shall have any duty to advise any Obligated Party of information known to it regarding those circumstances or risks.  
16.8.Taxes.  All payments of the Guaranteed Obligations will be made by each Loan Party Guarantor free and clear of and without deduction for any taxes; provided that if any Loan Party Guarantor shall be required to deduct any 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 Agent, Issuer or any Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Loan Party Guarantor shall make such deductions and (iii) such Loan Party Guarantor shall pay the full amount deducted to the relevant Governmental Body in accordance with Applicable Law.  
16.9.Maximum Liability.  The provisions of this Loan Party Guaranty are severable, and in any action or proceeding involving any state corporate law, or any state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Loan Party Guarantor under this Loan Party Guaranty would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of such Loan Party Guarantor’s liability under this Loan Party Guaranty, then, notwithstanding any other provision of this Loan Party Guaranty to the contrary, the amount of such liability shall, without any further action by the Loan Party Guarantors or the Lenders, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding (such highest amount determined hereunder being the relevant Loan Party Guarantor’s “Maximum Liability”).  This Section with respect to the Maximum Liability of each Loan Party Guarantor is intended solely to preserve the rights of the Lenders to the maximum extent not subject to avoidance under applicable law, and no Loan Party Guarantor nor any other person or entity shall have any right or claim under this 

Section with respect to such Maximum Liability, except to the extent necessary so that the obligations of any Loan Party Guarantor hereunder shall not be rendered voidable under applicable law.  Each Loan Party Guarantor agrees that the Guaranteed Obligations may at any time and from time to time exceed the Maximum Liability of each Loan Party Guarantor without impairing this Loan Party Guaranty or affecting the rights and remedies of the Lenders hereunder, provided that, nothing in this sentence shall be construed to increase any Loan Party Guarantor’s obligations hereunder beyond its Maximum Liability.  
16.10.Contribution.  In the event any Loan Party Guarantor (a “Paying Loan Party Guarantor”) shall make any payment or payments under this Loan Party Guaranty or shall suffer any loss as a result of any realization upon any collateral granted by it to secure its obligations under this Loan Party Guaranty, each other Loan Party Guarantor (each a “Non-Paying Loan Party Guarantor”) shall contribute to such Paying Loan Party Guarantor an amount equal to such Non-Paying Loan Party Guarantor's “Applicable Percentage” of such payment or payments made, or losses suffered, by such Paying Loan Party Guarantor.  For purposes of this Article XVI, each Non-Paying Loan Party Guarantor's “Applicable Percentage” with respect to any such payment or loss by a Paying Loan Party Guarantor shall be determined as of the date on which such payment or loss was made by reference to the ratio of (i) such Non-Paying Loan Party Guarantor's Maximum Liability as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder) or, if such Non-Paying Loan Party Guarantor’s Maximum Liability has not been determined, the aggregate amount of all monies received by such Non-Paying Loan Party Guarantor from the Borrowers after the date hereof (whether by loan, capital infusion or by other means) to (ii) the aggregate Maximum Liability of all the Loan Parties hereunder (including such Paying Loan Party Guarantor) as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder), or to the extent that a Maximum Liability has not been determined for the Borrowers, the aggregate amount of all monies received by such Loan Party Guarantor from the Borrowers after the date hereof (whether by loan, capital infusion or by other means).  Nothing in this provision shall affect any Loan Party Guarantor’s several liability for the entire amount of the Guaranteed Obligations (up to such Loan Party Guarantor’s Maximum Liability).  Each of the Loan Party Guarantors covenants and agrees that its right to receive any contribution under this Loan Party Guaranty from a Non-Paying Loan Party Guarantor shall be subordinate and junior in right of payment to the payment in full in cash of the Guaranteed Obligations.  This provision is for the benefit of each of the Agent, the Issuer, the Lenders and the Borrowers and may be enforced by any one, or more, or all of them in accordance with the terms hereof.  
16.11.Liability Cumulative.  The liability of each Loan Party Guarantor as a guarantor under this Article XVI is in addition to and shall be cumulative with all liabilities of each Loan Party Guarantor to the Agent, the Issuer and the Lenders under this Agreement and the Other Documents to which such Loan Party Guarantor is a party or in respect of any obligations or liabilities of the other Obligated Parties, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.  

074658.13016/7262749v.6
074658.13016/103294822v.8

Each of the parties has signed this Agreement as of the day and year first above written.  
TECHNICAL CONSUMER PRODUCTS, INC.

By:        /s/ Brian Catlett
Name:        Brian Catlett    
Title:          CEO
TECHNICAL CONSUMER PRODUCTS CANADA INC.
By:        /s/ Brian Catlett
Name:        Brian Catlett    
Title:          President
BOWMAN LAMPS, LLC
By:        /s/ Brian Catlett
Name:        Brian Catlett    
Title:          CEO

Signature Page to Amended and Restated Revolving Credit and Security Agreement

PNC BANK, NATIONAL ASSOCIATION, as Lender and as Agent

By:        /s/ Dean Newman
Name:        Dean Newman    
Title:          Vice President

Commitment Percentage:  100% 

074658.13016/7262749v.6
074658.13016/103294822v.8
    

Signature Page to Amended and Restated Revolving Credit and Security Agreement

List of Exhibits and Schedules 
Exhibits 
		
	Exhibit 1.2 
	Borrowing Base Certificate 

		
	Exhibit 2.1(a) 
	Revolving Credit Note 

		
	Exhibit 8.1(i) 
	Financial Condition Certificate 

		
	Exhibit 16.3 
	Commitment Transfer Supplement 

Schedules 

		
	Schedule 1.2 
	Permitted Encumbrances 

		
	Schedule 4.5 
	Equipment and Inventory Locations, and Locations of Chief Executive

		
	                                 
	Offices, Places of Business and Real Property

		
	Schedule 4.15(h) 
	Deposit and Investment Accounts 

		
	Schedule 4.19 
	Real Property 

		
	Schedule 5.1 
	Consents 

		
	Schedule 5.2(a) 
	States of Qualification and Good Standing 

		
	Schedule 5.2(b) 
	Subsidiaries 

		
	Schedule 5.4 
	Federal Tax Identification Number 

		
	Schedule 5.6 
	Prior Names 

		
	Schedule 5.7 
	Environmental 

		
	Schedule 5.8(b) 
	Litigation 

		
	Schedule 5.8(d) 
	Plans 

		
	Schedule 5.9 
	Intellectual Property, Source Code Escrow Agreements 

		
	Schedule 5.10 
	Licenses and Permits 

		
	Schedule 5.14 
	Labor Disputes 

		
	Schedule 7.3 
	Guarantees 

2

Exhibit 1.2

Borrowing Base Certificate 

[on file with Agent]

Exhibit 2.1(a)

FORM OF REVOLVING CREDIT NOTE

SECOND AMENDED AND RESTATED REVOLVING CREDIT NOTE
	
		
	 
	 

	Original principal amount:
$30,000,000
	Original date of execution:
as of December 11, 2009

	

Amended and restated principal amount:
$40,000,000

Second amended and restated 
principal amount:
$50,000,000
	

Date of amendment and restatement:
as of July 25, 2013

Date of second amendment and
restatement:
September 29, 2016

FOR VALUE RECEIVED, the undersigned TECHNICAL CONSUMER PRODUCTS, INC., a Delaware corporation (“TCP”) and TECHNICAL CONSUMER PRODUCTS CANADA INC., a corporation organized under the Canada Business Corporations Act (“TCP Canada”, and together with TCP, collectively the “Borrowers”, and each individually a “Borrower”), hereby promise to pay, jointly and severally, to PNC BANK, NATIONAL ASSOCIATION (“PNC”) and its registered assigns, in immediately available funds, the lesser of FIFTY MILLION DOLLARS ($50,000,000) or the aggregate outstanding principal amount of the Revolving Advances (as defined in the Credit Agreement (as hereinafter defined)) made by PNC to Borrowers pursuant to the Credit Agreement (as hereinafter defined).  Each capitalized term used herein and not otherwise defined herein shall have the meaning ascribed to such term in that certain Amended and Restated Revolving Credit and Security Agreement, dated as of September 29, 2016 (as the same may from time to time be amended, supplemented, restated or otherwise modified, the “Credit Agreement”), among Borrowers, PNC and certain financial institutions party thereto (the “Lenders”) and PNC, as agent for the Lenders (in such capacity, the “Agent”).
Each Borrower promises to pay interest on the unpaid principal amount of each Revolving Advance evidenced hereby from the date of such Revolving Advance until such principal amount is paid in full, at such interest rates, and payable at such times, as are specified in the Credit Agreement.  Each Borrower promises to pay on demand, interest on any overdue principal and, to the extent permitted by law, overdue interest from their due dates at the rate or rates provided in the Credit Agreement.
Both principal and interest in respect of such Revolving Advance denominated in Dollars are payable in lawful money of the United States of America to the Agent at the Payment Office in accordance with the terms of the Credit Agreement.
Each Borrower promises to pay both principal and interest for all Revolving Advances made by the Lender to Borrowers pursuant to the Credit Agreement.  This Second Amended and Restated Revolving Credit Note is one of the Notes referred to in, and is entitled to the benefits of, the Credit Agreement.  The Credit Agreement, among other things, (i) provides for the making of Revolving Advances by PNC to Borrowers from time to time in an aggregate amount not to exceed at any time outstanding the Maximum Revolving Advance Amount, (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity 

hereof and (iii) provides for the amendment or waiver of certain terms of the Credit Agreement, all upon the terms and conditions therein specified.
For purposes of disclosure pursuant to the Interest Act (Canada), the annual rates of interest or fees to which the rates of interest or fees provided in this Second Amended and Restated Revolving Credit Note (and stated herein to be computed on the basis of 360 days or any other period of time less than a calendar year) are equivalent are the rates so determined multiplied by the actual number of days in the applicable calendar year and divided by 360 or such other period of time, respectively.
This Second Amended and Restated Revolving Credit Note amends and restates, and replaces and supersedes, in its entirety, and shall hereafter evidence the indebtedness previously evidenced by, that certain Amended and Restated Revolving Credit Note (the “Original Note”) in the principal amount of $40,000,000, dated as of July 25, 2013, executed by Borrowers and payable to PNC, but shall in no way extinguish, cancel or satisfy any Borrower’s unconditional obligation to repay all indebtedness evidenced by the Original Note.  No novation of the indebtedness evidenced by the Original Note is intended or implied by virtue of the execution of this Second Amended and Restated Revolving Credit Note by Borrowers, nor shall any such novation be deemed to have occurred by virtue thereof, and by their signature below, each Borrower hereto affirms and re-confirms the validity and enforceability of such indebtedness and its continuing obligation to pay such indebtedness in accordance with its terms. 
Each Borrower hereby waives diligence, presentment, demand, protest and notice of any kind whatsoever.  The nonexercise by the holder of any of its rights hereunder in any particular instance shall not constitute a waiver thereof in that or any subsequent instance.  This Second Amended and Restated Revolving Credit Note shall be binding upon the undersigned and its successors and assigns, and shall inure to the benefit of PNC, its registered successors and assigns and all subsequent registered holders of this Second Amended and Restated Revolving Credit Note.58.13074/95158819v.2
THIS SECOND AMENDED AND RESTATED REVOLVING CREDIT NOTE SHALL BE CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAW.  IF ANY PROVISION HEREOF IS IN CONFLICT WITH ANY STATUTE OR RULE OF LAW OF THE STATE OF NEW YORK OR IS OTHERWISE UNENFORCEABLE FOR ANY REASON WHATSOEVER, THEN SUCH PROVISION SHALL BE DEEMED SEPARABLE FROM AND SHALL NOT INVALIDATE ANY OTHER PROVISION OF THIS NOTE.
TECHNICAL CONSUMER PRODUCTS, INC.

By:                        
Name:                        
Title:                        

TECHNICAL CONSUMER PRODUCTS CANADA INC.

By:                        
Name:                        
Title:                        

Exhibit 8.1(i)

FORM OF FINANCIAL CONDITION CERTIFICATE

September ___, 2016

I, ___________, as [Chief Executive Officer] of each of Technical Consumer Products, Inc., a Delaware corporation (“TCP”) and Technical Consumer Products Canada Inc., a corporation organized under the Canada Business Corporations Act (“TCP Canada”, and together with TCP, collectively, the “Borrowers” and each individually, a “Borrower”), hereby certify that:
1)I am the duly elected, qualified and acting [Chief Executive Officer] of each Borrower.  TCP is duly organized, existing and in good standing under the laws of the State of Delaware, and TCP Canada is duly organized, existing and in good standing under the laws of Canada.

2)I am familiar with all of the business and financial affairs of each Borrower, including, without limiting the generality of the foregoing, all of the matters hereinafter described.

3)This Financial Condition Certificate (this “Certificate”) is made and delivered to PNC BANK, NATIONAL ASSOCIATION (“PNC”), as agent for the Lenders (as hereinafter defined) (PNC, in such capacity, “Agent”) pursuant to the terms of that certain Amended and Restated Revolving Credit and Security Agreement, dated as of the date hereof (as amended, restated, replaced, extended, supplemented, or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrowers, each other Person joined thereto as a borrower from time to time, Bowman Lamps, LLC, an Ohio limited liability company, PNC and various other financial institutions named therein or which hereafter become a party thereto as lenders (PNC and such other financial institutions, collectively, the “Lenders”), and Agent, for the purpose of inducing Agent and Lenders, now and from time to time hereafter, to advance monies and extend credit and other financial accommodations to the Borrowers, pursuant to the Credit Agreement, together with all notes, security agreements, mortgages, agreements, instruments, and documents heretofore now and from time to time hereafter executed by or on behalf of the Borrowers and delivered to Agent or Lenders, as the case may be (collectively, the “Loan Documents”). All capitalized terms used and not otherwise defined herein shall have the meanings set forth in the Credit Agreement.  I understand that the Lenders are relying on this Certificate.

4)Immediately following the execution of the Credit Agreement, (a) each Borrower will be able to pay its debts as such debts become due, and (b) each Borrower will not have unreasonably small capital in order to carry on its business.  All undisputed debts owing to third parties by each Borrower are current and not past due.

5)The Credit Agreement was and the Loan Documents were and will be executed and delivered by the Borrowers to the Agent or the Lenders, as the case may be, in good faith and in exchange for reasonably equivalent value and fair consideration.

6)I have reviewed the relevant terms of the Credit Agreement and the Loan Documents 

and have made or have caused to be made under my supervision a review of the transactions and the condition of the Borrowers from the beginning of the accounting period covered by the documents set forth in Paragraph 4 hereof to the date of this Certificate and that such review has not disclosed the existence during such period of any condition or event which constitutes or would constitute a Default or Event of Default under the Credit Agreement or the Loan Documents.
 
[Signature Page Follows]

IN WITNESS WHEREOF, I have executed this Financial Condition Certificate as of the ____ day of September, 2016.
TECHNICAL CONSUMER PRODUCTS, INC.
By:    
Name:    
Title:    
TECHNICAL CONSUMER PRODUCTS CANADA INC.
By:        
Name:    
Title:     

EXHIBIT A

[See attached]

Exhibit 15.3

FORM OF COMMITMENT TRANSFER SUPPLEMENT

COMMITMENT TRANSFER SUPPLEMENT, dated as of _________, 20__, among __________________ (the “Transferor Lender”), ______________ (“Purchasing Lender”), and PNC BANK, NATIONAL ASSOCIATION, as agent for the Lenders under the Credit Agreement (as defined below) (in such capacity, the “Agent”).

W I T N E S S E T H

WHEREAS, this Commitment Transfer Supplement is being executed and delivered in accordance with Section 15.3 of that certain Amended and Restated Revolving Credit and Security Agreement (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”) dated as of September [__], 2016 among Technical Consumer Products, Inc., a corporation organized under the laws of the State of Delaware (“TCP”), Technical Consumer Products Canada Inc., a corporation organized under the Canada Business Corporations Act (“TCP Canada” and, together with TCP and each other Person joined thereto as a borrower from time to time, collectively, the “Borrowers” and each a “Borrower”), Bowman Lamps, LLC, a limited liability company organized under the laws of the State of Ohio, the financial institutions which are now or which hereafter become a party thereto (collectively, the “Lenders” and individually a “Lender”) and Agent.

WHEREAS, Purchasing Lender wishes to become a Lender party to the Credit Agreement; and

WHEREAS, the Transferor Lender is selling and assigning to Purchasing Lender rights, obligations and commitments under the Credit Agreement;

NOW, THEREFORE, the parties hereto hereby agree as follows:

1.    All capitalized terms used herein which are not defined shall have the meanings given to them in the Credit Agreement.

2.    Upon receipt by the Agent of four (4) counterparts of this Commitment Transfer Supplement, to each of which is attached a fully completed Schedule I, and each of which has been executed by the Transferor Lender and Agent, Agent will transmit to Transferor Lender and Purchasing Lender a Transfer Effective Notice, substantially in the form of Schedule II to this Commitment Transfer Supplement (a “Transfer Effective Notice”).  Such Transfer Effective Notice shall set forth, inter alia, the date on which the transfer effected by this Commitment Transfer Supplement shall become effective (the “Transfer Effective Date”), which date unless otherwise noted therein, shall not be earlier than the first Business Day following the date such Transfer Effective Notice is received.  From and after the Transfer Effective Date, Purchasing Lender shall be a Lender party to the Credit Agreement for all purposes thereof.

3.    At or before 12:00 Noon (New York time) on the Transfer Effective Date Purchasing Lender shall pay to Transferor Lender, in immediately available funds, an amount equal to the purchase price, as agreed between Transferor Lender and such Purchasing Lender (the “Purchase Price”), of the portion of the Advances being purchased by such Purchasing Lender (such Purchasing Lender’s “Purchased Percentage”) of the outstanding Advances and other amounts owing to the Transferor Lender under the Credit Agreement, and the Note(s).  Effective upon receipt by Transferor Lender of the Purchase Price from a Purchasing Lender, Transferor Lender hereby irrevocably sells, assigns and transfers to such Purchasing Lender, without recourse, representation or warranty, and Purchasing Lender hereby irrevocably purchases, takes and assumes from Transferor Lender, such Purchasing Lender’s Purchased Percentage of the Advances and other amounts owing 

to the Transferor Lender under the Credit Agreement and the Note(s) together with all instruments, documents and collateral security pertaining thereto.

4.    Transferor Lender has made arrangements with Purchasing Lender with respect to (i) the portion, if any, to be paid, and the date or dates for payment, by Transferor Lender to such Purchasing Lender of any fees heretofore received by Transferor Lender pursuant to the Credit Agreement prior to the Transfer Effective Date and (ii) the portion, if any, to be paid, and the date or dates of payment, by such Purchasing Lender to Transferor Lender of fees or interest received by such Purchasing Lender pursuant to the Credit Agreement from and after the Transfer Effective Date.

5.    (a)    All principal payments that would otherwise be payable from and after the Transfer Effective Date to or for the account of Transferor Lender pursuant to the Credit Agreement and the Note(s) shall, instead, be payable to or for the account of Transferor Lender and Purchasing Lender, as the case may be, in accordance with their respective interests as reflected in this Commitment Transfer Supplement.

(b)    All interest, fees and other amounts that would otherwise accrue for the account of Transferor Lender from and after the Transfer Effective Date pursuant to the Credit Agreement and the Note(s) shall, instead, accrue for the account of, and be payable to, Transferor Lender and Purchasing Lender, as the case may be, in accordance with their respective interests as reflected in this Commitment Transfer Supplement.  In the event that any amount of interest, fees or other amounts accruing prior to the Transfer Effective Date was included in the Purchase Price paid by any Purchasing Lender, Transferor Lender and Purchasing Lender will make appropriate arrangements for payment by Transferor Lender to such Purchasing Lender of such amount upon receipt thereof from Borrowers.

6.    Concurrently with the execution and delivery hereof, Transferor Lender will provide to Purchasing Lender conformed copies of the Credit Agreement and all related documents delivered to Transferor Lender.

7.    Each of the parties to this Commitment Transfer Supplement agrees that at any time and from time to time upon the written request of any other party, it will execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Commitment Transfer Supplement.

8.    By executing and delivering this Commitment Transfer Supplement, Transferor Lender and Purchasing Lender confirm to and agree with each other and Agent and Lenders as follows:  (i) other than the representation and warranty that it is the legal and beneficial owner of the interest being assigned hereby free and clear of any adverse claim, Transferor Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, the Note(s) or any other instrument or document furnished pursuant thereto;  (ii) Transferor Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borrowers or the performance or observance by Borrowers of any of their Obligations under the Credit Agreement, the Note(s) or any other instrument or document furnished pursuant hereto;  (iii)  Purchasing Lender confirms that it has received a copy of the Credit Agreement, together with copies of such financial statements and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Commitment Transfer Supplement; (iv) Purchasing Lender will, independently and without reliance upon Agent, Transferor Lender or any other Lenders and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement;  (v)  Purchasing Lender appoints and authorizes Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement as 

are delegated to the Agent by the terms thereof;  (vi) Purchasing Lender agrees that it will perform all of its respective obligations as set forth in the Credit Agreement to be performed by each as a Lender; and (vii) Purchasing Lender represents and warrants to Transferor Lender, Lenders, Agent and Borrowers that it is either (x) entitled to the benefits of an  income tax treaty with the United States of America that provides for an exemption from the United States withholding tax on interest and other payments made by Borrowers under the Credit Agreement and Other Documents or (y) is engaged in trade or business within the United States of America.

9.    Schedule I hereto sets forth the revised Revolving Commitment Percentages of Transferor Lender and the Revolving Commitment Percentages of Purchasing Lender as well as administrative information with respect to Purchasing Lender.  

10.    This Commitment Transfer Supplement shall, in accordance with Section 5-1401 of the General Obligations Law of the State of New York, be governed by and construed in accordance with the laws of the State of New York.

[Signatures Begin on Next Page]

074658.13074/95158819v.2

IN WITNESS WHEREOF, the parties hereto have caused this Commitment Transfer Supplement to be executed by their respective duly authorized officers on the date set forth above.

[______________________________________]
as Transferor Lender

                            
By:________________________________
Name:_____________________________
Title:______________________________

[______________________________________]
as Purchasing Lender

By:                         
Name:                         
Title:                         

PNC BANK, NATIONAL ASSOCIATION 
as Agent

By:________________________________
Name:_____________________________
Title:______________________________

[Signature Page to Commitment Transfer Supplement ([Name of Borrower])

SCHEDULE I TO COMMITMENT TRANSFER SUPPLEMENT

LIST OF OFFICES, ADDRESSES FOR NOTICES AND COMMITMENT AMOUNTS

	
			
	Transferor Lender
	Revised Revolving Commitment Amount
	$___________

	 
	 
	 

	 
	Revised Revolving Commitment Percentage
	____________%

	 
	 
	 

	 
	 
	 

	
			
	Purchasing Lender 
	Revolving Commitment Amount
	$___________

	 
	 
	 

	 
	Revolving Commitment Percentage
	____________%

	 
	 
	 

	 
	 
	 

	Addresses for Notices for Purchasing Lender
	 
	 

	 
	 
	 

	 
	 
	 

	
			
	Attention:
Telephone:
Fax:
	 
	 

[Commitment Transfer Supplement]

SCHEDULE II TO COMMITMENT TRANSFER SUPPLEMENT

[Form of Transfer Effective Notice]

To:                 , as Transferor Lender and                 , as Purchasing Lender:

The undersigned, as Agent under the Amended and Restated Revolving Credit and Security Agreement (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”) dated as of September [__], 2016 among Technical Consumer Products, Inc., a corporation organized under the laws of the State of Delaware (“TCP”), Technical Consumer Products Canada Inc., a corporation organized under the Canada Business Corporations Act (“TCP Canada” and, together with TCP and each other Person joined thereto as a borrower from time to time, collectively, the “Borrowers” and each a “Borrower”), Bowman Lamps, LLC, a limited liability company organized under the laws of the State of Ohio, the financial institutions which are now or which hereafter become a party thereto (collectively, the “Lenders” and individually a “Lender”) and PNC Bank, National Association, as agent for the Lenders (“Agent”), acknowledges receipt of four (4) executed counterparts of a completed Commitment Transfer Supplement in the form attached hereto.  [Note:  Attach copy of Commitment Transfer Supplement.]  Terms defined in such Commitment Transfer Supplement are used herein as therein defined.

Pursuant to such Commitment Transfer Supplement, you are advised that the Transfer Effective Date will be [Insert date of Transfer Effective Notice].

PNC BANK, NATIONAL ASSOCIATION,                              as Agent

By:                     
Name:_________________________
Title:                     

ACCEPTED FOR RECORDATION
IN REGISTER:

[Commitment Transfer Supplement]

List of Schedules 
Schedules
		
	Schedule 1.2 
	Permitted Encumbrances 

		
	Schedule 4.5 
	Equipment and Inventory Locations and Locations of Chief Executive 

Offices, Places of Business and Real Property   
		
	Schedule 4.15(h) 
	Deposit and Investment Accounts 

		
	Schedule 5.1 
	Consents 

		
	Schedule 5.2(a) 
	States of Qualification and Good Standing 

		
	Schedule 5.2(b) 
	Subsidiaries 

		
	Schedule 5.4 
	Federal Tax Identification Number 

		
	Schedule 5.6 
	Prior Names 

		
	Schedule 5.7 
	Environmental 

		
	Schedule 5.8(b) 
	Litigation 

		
	Schedule 5.8(d) 
	Plans 

		
	Schedule 5.9 
	Intellectual Property, Source Code Escrow Agreements 

		
	Schedule 5.10 
	Licenses and Permits 

		
	Schedule 5.14 
	Labor Disputes 

		
	Schedule 7.3 
	Guarantees 

Schedule 1.2

Permitted Encumbrances

	
						
	No.
	Debtor
	Secured Party
	Jurisdiction
	File No.
	Search Results (presently on record)

	1.
	Technical Consumer Products, Inc.
	PNC Bank, National Association
	Delaware Secretary of State
	20093976153
	Blanket Lien

	2.
	Technical Consumer Products, Inc.
	IBM Credit LLC 
	Delaware Secretary of State
	20112969817
	Leased Equipment

	3.
	Technical Consumer Products, Inc. 
	U.S. Bancorp Equipment Finance, Inc. 
	Delaware Secretary of State
	20113083519
	Leased Equipment

	4.
	Technical Consumer Products, Inc.
	U.S. Bancorp Equipment Finance, Inc
	Delaware Secretary of State
	20114829258
	Leased Equipment

	5.
	Technical Consumer Products, Inc. 
	U.S. Bank Equipment Finance, Inc
	Delaware Secretary of State
	20121485970
	Leased Equipment

	6.
	Technical Consumer Products, Inc.
	U.S. Bank Equipment Finance, Inc
	Delaware Secretary of State
	20121611906
	Leased Equipment

	7.
	Technical Consumer Products, Inc.
	Beacon Point Capital, LLC
	Delaware Secretary of State
	20133118214
	Blanket Lien

	8.
	Technical Consumer Products, Inc.
	Sunbelt Rentals Inc.
	Ohio Secretary of State
	OH00187899027
	Leased Equipment

	9.
	Technical Consumer Products Canada Inc.
	PNC Bank, National Association, as Agent
	Toronto, Ontario
	705255525
	Blanket Lien

	10.
	Bowman Lamps, LLC
	PNC Bank, National Association
	Ohio Secretary of State
	OH00147000682
	Blanket Lien

Schedule 4.5

Equipment and Inventory Locations

Warehouse and Repacking Facilities

	
							
	

 Name of City or Location
	Mailing Address
	County
	State
	

Record Owner of
Real Estate
	

Asset at Locations
	Loan Party

	Aurora, OH
	325 Campus Drive, Aurora, OH  44202
	Portage
	OH
	TCP Campus Drive LLC
	Equipment and Inventory
	Technical Consumer Products, Inc.

	 
	 
	 
	 
	 
	 
	 

	Stockton, CA
	4114 S. Airport Way
Stockton, CA  95206
	San Joaquin
	CA
	Bixby Land Company
	Equipment and Inventory
	Technical Consumer Products, Inc.

	 
	 
	 
	 
	 
	 
	 

	Modesto, CA
	4300 Finch Road
Modesto, CA  95357
	Stanislaus
	CA
	Sierra Pacific Distribution Services, Inc.
	Equipment and Inventory
	Technical Consumer Products, Inc.

	 
	 
	 
	 
	 
	 
	 

	Meadville, PA
	114 W. Poplar Street
PO Box 404
Meadville, PA  16335
	Crawford
	PA
	DIC Tool Co
/Hytron Electric
	Equipment and Inventory
	Technical Consumer Products, Inc.

	 
	 
	 
	 
	 
	 
	 

	Barberton, OH
	24 Brown Street
Barberton, OH 44203
	Summit
	OH
	Glass Surface Systems
	Equipment and Inventory
	Technical Consumer Products, Inc.

Schedule 4.5
(Continued)

Inventory Consignees
	
					
	Name
	Street Address
	County
	State
	Loan Party

	ERI
	1800 Newport Circle, Santa Ana, CA
	Orange
	CA
	Technical Consumer Products, Inc.

	 
	 
	 
	 
	 

	Lighting Systems and Electrical Supply
	20506 Sunshine Lane, Spring, TX
	Harris
	TX
	Technical Consumer Products, Inc.

	 
	 
	 
	 
	 

	Tri-Lite Sales
	1784 Watterson Trail, Louisville, KY
	Jefferson
	KY
	Technical Consumer Products, Inc.

	 
	 
	 
	 
	 

	Monarch Sales
	4632 Crossroads Pk, Liverpool, NY
	Onondaga
	NY
	Technical Consumer Products, Inc.

	 
	 
	 
	 
	 

	Continental Sales/PBLighting
	150 Broad Hollow Rd, Mellville, NY
	Suffolk
	NY
	Technical Consumer Products, Inc.

	 
	 
	 
	 
	 

	TLV Sales
	11846 Dorsett Rd., Maryland Hts., MO
	St. Louis
	MO
	Technical Consumer Products, Inc.

	 
	 
	 
	 
	 

	Yusen & Associates
	44 Sixth Rd, Woburn, MA
	Middlesex
	MA
	Technical Consumer Products, Inc.

	 
	 
	 
	 
	 

	Glenn International
	Rodando Vala Acosto Street, Building #9, Carolina, PR
	 
	Puerto Rico
	Technical Consumer Products, Inc.

	 
	 
	 
	 
	 

	TCP China
	No. 139 Wang Dong Rd., SJ Jing Song Jiang, Shanghai China
	 
	China
	Technical Consumer Products, Inc.

Schedule 4.5
(Continued)

Location of Places of Business 

Technical Consumer Products, Inc. - 

325 Campus Drive, Auroa, OH  44202

Technical Consumer Products Canada Inc. -

BCE Place, 181 Bay Street, Suite 2500, Toronto, Ontario, Canada M5J 2T7

Bowman Lamps, LLC -

325 Campus Drive, Auroa, OH  44202  

Real Property
(Leased and Owned)

Technical Consumer Products, Inc. - 

	
						
	Name of City
or Location
	Mailing Address
	County
	State
	Record Owner of
Real Estate
	Leased or Owned

	Aurora, OH
	325 Campus Drive,
Auroa, OH  44202
	Portage
	OH
	TCP Campus Drive LLC
	Leased

	 
	 
	 
	 
	 
	 

	Stockton, CA
	4114 S. Airport Way, Stockton, CA  95206
	San Joaquin 
	CA
	Bixby Land Company
	Leased

 
Technical Consumer Products Canada Inc. -

None

Bowman Lamps, LLC - 

None

Chief Executive Offices 

Technical Consumer Products, Inc. - 

325 Campus Drive, Auroa, OH  44202

Technical Consumer Products Canada Inc. -

BCE Place, 181 Bay Street, Suite 2500, Toronto, Ontario, Canada M5J 2T7

Bowman Lamps, LLC -

325 Campus Drive, Auroa, OH  44202

Schedule 4.15(h)

Deposit and Investment Accounts

	
						
	Accounts for Technical Consumer Products, Inc.
	 

	 
	 
	 
	 
	 
	 

	Account ID
	Name
	Responder
	Type
	Form
	Signer

	[Account No.]
	General Account
	PNC Bank
	Financial
	Asset
	Brian Catlett

	[Account No.]
	A/P Disbursement
	PNC Bank
	Financial
	Asset
	Brian Catlett

	[Account No.]
	Collection Account
	PNC Bank
	Financial
	Asset
	Brian Catlett

	[Account No.]
	Funding Account
	PNC Bank
	Financial
	Asset
	Brian Catlett

	[Account No.]
	Technical Consumer Products
	PNC Bank
	Financial
	Liability
	Brian Catlett

	 
	 
	 
	 
	 
	 

	Accounts for Technical Consumer Products Canada Inc.
	 
	 
	 
	 

	Account ID
	Name
	Responder
	Type
	Form
	Signer

	[Account No.]
	PNC Technical Consumer Products Canada Inc.
	PNC Bank
	Financial
	Asset
	Brian Catlett

	[Account No.]
	PNC Technical Consumer Products Canada Inc.
	RBC Bank
	Financial
	Asset
	Brian Catlett

	
						
	Accounts for Bowman Lamps, LLC.
	 

	 
	 
	 
	 
	 
	 

	Account ID
	Name
	Responder
	Type
	Form
	Signer

	[Account No.]
	Bowman Lamps, LLC
	PNC Bank
	Financial
	Asset
	Brian Catlett

	
						
	Accounts for TCP Campus Drive, LLC
	 

	 
	 
	 
	 
	 
	 

	Account ID
	Name
	Responder
	Type
	Form
	Signer

	[Account No.]
	PNC TCP Campus Drive, LLC
	PNC Bank
	Financial
	Asset
	Brian Catlett

	[Account No.]
	A/P Disbursement
	PNC Bank
	Financial
	Asset
	Brian Catlett

	[Account No.]
	Bowman Lamps, LLC
	PNC Bank
	Financial
	Asset
	Brian Catlett

Schedule 5.1

Consents

None

Schedule 5.2(a)

States of Qualification and Good Standing

		
	•
	Technical Consumer Products, Inc. is duly incorporated and in good standing under the laws of the State of Delaware.

		
	•
	Technical Consumer Products, Inc. is qualified to do business and is in good standing in the following jurisdictions:

		
	◦
	California

		
	◦
	Georgia

		
	◦
	Missouri

		
	◦
	Ohio

		
	◦
	New Jersey

		
	◦
	New York

		
	◦
	[Texas - to be reinstated post-closing]

		
	•
	Technical Consumer Products Canada Inc. is duly organized and in good standing under the laws of Canada

		
	•
	Bowman Lamps, LLC is duly organized and in good standing under the laws of the State of Ohio.

Schedule 5.2(b)

Subsidiaries

Bowman Lamps, LLC

TCP Campus Drive LLC

Schedule 5.4

Federal Tax Identification Number

Technical Consumer Products, Inc.    34-1967261

Technical Consumer Products Canada Inc.    843270547 (Canadian Tax ID)

Bowman Lamps, LLC    34-1967261*

*  Bowman Lamps, LLC is a pass-through entity that shares the same Federal Tax 
    Identification Number as Technical Consumer Products, Inc. 

Schedule 5.6

Prior Names

Technical Consumer Products, Inc. sells inventory under the name TCP

Schedule 5.7

Environmental

None

Schedule 5.8(b)

Litigation

GE Lighting Solutions, LLC v Technical Consumer Products, Inc.:  

GE Lighting Solutions, LLC (“GE”) sued Technical Consumer Products, Inc. (“TCP”) for alleged infringement of two patents relating to light-emitting diodes.  The district court dismissed the case on the basis of the patents’ invalidity due to indefiniteness.  GE appealed the ruling and oral argument was heard by the Federal Circuit Court of Appeals on Aug. 1, 2016.  No decision has been rendered yet. 

Lighting Science Group v Technical Consumer Products, Inc.: 

Lighting Science Group sued TCP for alleged infringement of three patents relating to light-emitting diodes.  TCP’s response to the complaint is due Sept 29, 2016.  No schedule has been set yet by the Court.

Schedule 5.8(d)

Plans

Technical Consumer Products, Inc. 401(k) Plan

		
	•
	Company match 50% up to 6% of salary (therefore, 3% maximum)

		
	•
	Eligibility the 1st day of the quarter after 90 days

		
	•
	Five year vesting period 

		
	•
	Loan opinion

Technical Consumer Products, Inc. also offers its employees basic

		
	•
	Medical plans

		
	•
	Dental plans

		
	•
	Vision plans

		
	•
	Life insurance

		
	•
	Short and long term disability

		
	•
	Flexible spending accounts

Schedule 5.9

Intellectual Property, Source Code Escrow Agreements

Patents 

	
						
	Country 
	Application Number
	Patent Number
	Title
	Filed Date
	Issue Date

	United States
	08/814,485
	5,865,529
	LED Lamp Having a Spherical Radiating Pattern
	3/10/1997
	2/2/1999

	United States
	08/940,067
	5,930,130
	Inrush Protection Circuit
	9/27/1997
	7/27/1999

	United States
	08/980,564
	5,938,316
	Enhanced Safety Retrofit System for Luminaria
	12/1/1997
	8/17/1999

	United States
	09/067,311
	6,107,755
	Modular, Configurable Dimming Ballast for a Gas-Discharge Lamp
	4/27/1998
	8/22/2000

	United States
	09/302,332
	6,168,299
	Energy Efficient Recessed Lighting Fixture
	4/30/1999
	1/1/2001

	United States
	09/067,352
	6,181,086
	Electronic Ballast with Embedded Network Micro‐Controller
	4/27/1998
	1/30/2001

	United States
	09/243,509
	6,206,545
	Enhanced Safety Retrofit and Manufacturing System for Luminaria
	2/1/1999
	3/27/2001

	United States
	09/063,325
	6,218,787
	Remote Dimming Control System for a Fluorescent Ballast Utilizing Existing Building Wiring
	4/20/1998
	4/17/2001

	United States
	09/677,688
	6,388,396
	Electronic Ballast with Embedded Network Micro‐Controller
	10/2/2000
	5/14/2002

	United States
	09/478,416
	6,390,646
	Fluorescent Table Lamp Having a Modular Support Adapter Using a Replaceable Electronic Ballast
	1/6/2000
	5/21/2002

	United States
	09/434,555
	6,439,740
	Lighting Fixture Having a Screw Lock Lamp Support
	11/7/1999
	8/27/2002

	United States
	09/748,093
	6,459,204
	Dual‐Element 3‐Way Compact Fluorescent Lamp
	12/27/2000
	10/1/2002

	United States
	09/466,028
	6,488,386
	Lighting Fixture Having an Electronic Ballast Replaceable without Rewiring
	12/20/1999
	12/3/2002

	United States
	09/953,550
	6,494,730
	Lamp Socket Locking Insert in Combination with a Medium Screw Lamp Base
	9/17/2001
	12/17/2002

	United States
	09/666,323
	6,531,824
	Universal Electronic Plug‐In Replaceable Fluorescent Lamp Ballast and Adapter
	9/21/2000
	3/11/2003

	United States
	09/955,009
	6,630,780
	Dual Circular Fluorescent Lamp
	9/19/2001
	10/7/2003

	United States
	10/308,255
	6,869,205
	Retrofit Fluorescent Lamp Adaptor
	12/2/2002
	3/22/2005

	
						
	United States
	10/283,589
	7,061,188
	Instant Start Electronic Ballast with Universal AC Input Voltage
	10/30/2002
	6/13/2006

	United States
	10/851,519
	7,141,922
	Dual Spiral Fluorescent Lamp
	3/24/2004
	11/28/2006

	United States
	10/852,939
	7,205,712
	Spiral Cold Cathode Fluorescent Lamp
	5/26/2004
	4/17/2007

	United States
	11/293,551
	7,354,174
	Energy Efficient Festive Lamp
	12/5/2005
	4/8/2008

	United States
	11/049,965
	7,358,656
	Universal Cooling Points for Fluorescent Lamps
	2/4/2005
	4/15/2008

	United States
	11/481,898
	7,619,353
	Compact Fluorescent Springlamp
	7/7/2006
	11/17/2009

	United States
	12/242,303
	8,358,078
	Fluorescent Lamp Dimmer with Multifunction Integrated Circuit
	9/30/2008
	1/22/2013

	United States
	12/773,015
	8,487,551
	Ultra‐High Efficiency Ballast with End of Lamp Life Protection
	5/4/2010
	7/16/2013

	United States
	13/295,868
	8,698,407
	Highly Integrated Non‐Inductive LED Driver
	11/14/2011
	4/15/2014

	United States
	13/353,580
	8,754,583
	Multi‐Level Adaptive Control Circuitry for Deep Phase‐Cut Dimming Compact Fluorescent Lamp
	1/19/2012
	6/17/2014

	United States
	13/473,559
	8,847,498
	Resonant Damping Circuit For TRIAC Dimmable
	5/16/2012
	9/30/2014

	United States
	13/866,652
	8,894,252
	Filament LED Lamp
	4/19/2013
	11/25/2014

	United States
	13/465,832
	8,979,322
	Self‐Locking Trim Ring and Channel for Optic Lens
	5/7/2012
	3/17/2015

	United States
	13/866,577
	9,033,544
	Smooth LED Par Lamp
	4/19/2013
	5/19/2015

	United States
	13/889,027
	9,046,224
	LED Lamp With Controlled Distribution
	5/7/2013
	6/2/2015

	United States
	13/866,546
	9,109,789
	Omni‐Directional LED Lamp
	4/19/2013
	8/18/2015

	United States
	13/889,034
	9,163,824
	Lamp Heat Sink
	5/7/2013
	10/20/2015

	United States
	14/290,359
	9,210,773
	Wireless Light Fixture
	5/29/2014
	12/8/2015

	United States
	14/326,566
	9,265,116
	Constant Voltage and Constant Current Driver Circuit
	7/9/2014
	2/16/2016

	United States
	14/333,618
	9,270,196
	Low‐Cost Self‐Oscillating Driver Circuit
	7/17/2014
	2/23/2016

	United States
	14/333,620
	9,271,353
	Dimming Circuit for a Phase‐Cut TRIAC Dimmer
	7/17/2014
	2/23/2016

	United States
	14/608,335
	9,419,537
	Light Emitting Diode (LED) Driver Having Direct Replacement Capabilities
	1/29/2015
	8/16/2016

	United States
	14/283,719
	9,435,521
	Antenna Element for a Directional Lighting Fixture
	5/21/2014
	9/6/2016

	United States
	14/561,598
	9,439,068
	Dynamic Configuration for a Wireless Peripheral Device
	12/5/2014
	9/6/2016

	
						
	United States
	29/264,522
	D547,569
	Disposable Endcap Display Case
	8/14/2006
	7/31/2007

	United States
	29/313,557
	D635,456
	Recycle Mail Pack
	1/22/2009
	4/5/2011

	United States
	29/416,959
	D674,960
	Heat Sink for PAR Lamps
	3/28/2012
	1/22/2013

	United States
	29/452,684
	D705,456
	LED PAR Lamp
	4/19/2013
	5/20/2014

Patent Applications 

	
						
	Country 
	Application Number
	Patent Number
	Title
	Filed Date
	Issue Date

	United States
	13/866,558
	 
	Three‐Way Omni‐Directional LED Lamp Driver Circuit
	4/19/2013
	 

	United States
	14/289,170
	 
	System and Method Using Single Entry Passkey for Pairing Multiple Peripheral Devices
	5/28/2014
	 

	United States
	14/289,175
	 
	System and Method for Simultaneous Wireless Control of Multiple Peripheral Devices
	5/28/2014
	 

	United States
	14/289,180
	 
	Radio Frequency (RF) Signal Pathway for a Lamp Antenna
	5/28/2014
	 

	United States
	14/594,536
	 
	Low‐Cost Driver Circuit with Improved Power Factor
	1/12/2015
	 

	United States
	14/723,532
	 
	Lighting Device Including Multiple Diffusers for Blending Light
	5/28/2015
	 

	United States
	14/723,553
	 
	Driver Circuit for Providing Constant Voltage to an Auxiliary Circuit
	5/28/2015
	 

	United States
	15/054,737
	 
	Plastic Downlight Fixture Having Interlocking Attachment Features
	2/26/2016
	 

	United States
	15/228,620
	 
	Antenna Element for a Directional Lighting Fixture
	8/4/2016
	 

	
						
	Canada
	2908317
	 
	Smooth LED PAR Lamp
	4/18/2014
	 

	Canada
	2908376
	 
	Three‐Way Omni‐Directional LED Lamp Driver Circuit
	4/18/2014
	 

	Canada
	2908381
	 
	Filament LED Lamp
	4/18/2014
	 

	Canada
	2908417
	 
	Omni‐Directional LED Lamp
	4/18/2014
	 

	Canada
	2912017
	 
	LED Lamp with Controlled Distribution
	4/28/2014
	 

	Canada
	2912230
	 
	Dynamic Configuration for a Wireless Peripheral Device
	11/18/2015
	 

	China
	201380025600.7
	 
	Resonant Damping Circuit for TRIAC Dimmable Driver
	3/21/2013
	 

	China
	201480021630.5
	 
	Omni‐Directional LED Lamp
	4/18/2014
	 

	China
	201480021633.9
	 
	Three‐Way Omni‐Directional LED Lamp Driver Circuit
	4/18/2014
	 

	China
	201480022079.6
	 
	Filament LED Lamp
	4/18/2014
	 

	China
	201480022104.0
	 
	Smooth LED PAR Lamp
	4/18/2014
	 

	China
	201480025390.6
	 
	LED Lamp with Controlled Distribution
	4/28/2014
	 

	China
	201510882848.6
	 
	Dynamic Configuration for a Wireless Peripheral Device
	12/4/2015
	 

	Great Britain
	1516788.5
	 
	Smooth LED PAR Lamp
	4/18/2014
	 

	Great Britain
	1516789.3
	 
	Filament LED Lamp
	4/18/2014
	 

	
						
	Great Britain
	1516790.1
	 
	Omni‐Directional LED Lamp
	4/18/2014
	 

	Great Britain
	1516791.9
	 
	Three‐Way Omni‐Directional LED Lamp Driver Circuit
	4/18/2014
	 

	Great Britain
	1518812.1
	 
	LED Lamp With Controlled Distribution
	4/28/2014
	 

	Great Britain
	1521422.4
	 
	Dynamic Configuration for a Wireless Peripheral Device
	12/4/2015
	 

	Hong Kong
	15106215.9
	 
	Resonant Damping Circuit for TRIAC Dimmable Driver
	3/21/2013
	 

	Japan
	2015‐237811
	 
	Dynamic Configuration for a Wireless Peripheral Device
	12/4/2015
	 

	Japan
	2016‐509116
	 
	Omni‐Directional LED Lamp
	4/18/2014
	 

	Japan
	2016‐509118
	 
	Three‐Way Omni‐Directional LED Lamp Driver Circuit
	4/18/2014
	 

	Japan
	2016‐509120
	 
	Smooth LED PAR Lamp
	4/18/2014
	 

	Japan
	2016‐509121
	 
	Filament LED Lamp
	4/18/2014
	 

	Japan
	2016‐512935
	 
	LED Lamp With Controlled Distribution
	4/28/2014
	 

	WO
	US2015/030719
	 
	Wireless Light Fixture
	5/14/2015
	 

	
						
	WO
	US2015/030726
	 
	Antenna Element for a Directional Lighting Fixture
	5/14/2015
	 

	WO
	US2015/030761
	 
	Master‐Slave Control Arrangement for a Lighting Fixture
	5/14/2015
	 

	WO
	US2015/031028
	 
	Radio Frequency (RF) Signal Pathway for a Lamp Antenna
	5/15/2015
	 

	WO
	US2015/031040
	 
	Dimming Circuit for a Phase‐Cut Triode Alternating Current (TRIAC) Dimmer
	5/15/2015
	 

	WO
	US2015/031322
	 
	Low‐Cost Self‐Oscillating Driver Circuit
	5/18/2015
	 

	WO
	US2015/031323
	 
	Constant Voltage and Constant Current Driver Circuit
	5/18/2015
	 

	WO
	US2015/031484
	 
	System and Method for Simultaneous Wireless Control of Multiple Peripheral Devices
	5/19/2015
	 

	WO
	US2015/031487
	 
	System and Method Using Single Entry Passkey for Pairing Multiple Peripheral Devices
	5/19/2015
	 

	WO
	US2016/012257
	 
	Low‐Cost Driver Circuit with Improved Power Factor
	1/6/2016
	 

	WO
	US2016/013842
	 
	Light Emitting Diode (LED) Driver Having Direct Replacement Capabilities
	1/19/2016
	 

	WO
	US2016/032978
	 
	Lighting Device Including Multiple Diffusers for Blending Light
	5/18/2016
	 

	WO
	US2016/032979
	 
	Driver Circuit for Providing Constant Voltage to an Auxiliary Circuit
	5/18/2016
	 

Trademarks - United States

	
					
	Serial Number
	Registration Number
	Title
	Date of Filing
	Date of Registration

	86/547475
	4,808,547
	COLORSPREE
	02/26/2015
	09/08/2015

	86/547493
	4,812,856
	colorspree smart lighting & dESIGN
	02/26/2015
	09/15/2015

	86/022118
	4,611,051
	CONNECTED & Design
	07/29/2013
	09/23/2014

	86/022217
	4,546,640
	CONNECTED BY TCP & Design
	07/29/2013
	06/10/2014

	86/501372
	4,799,198
	direct8
	01/12/2015
	08/25/2015

	86/501358
	4,799,197
	direct8 & design
	01/12/2015
	08/25/2015

	86/166000
	4,662,226
	elite designer series by tcp & design
	01/15/2014
	12/30/2014

	86/166070
	4,662,227
	elite series by tcp & design
	01/15/2014
	12/30/2014

	85/468472
	4,167,936
	powerlume
	11/09/2022
	07/03/2012

	78/722345
	3,320,489
	pulse plus
	09/28/2005
	10/23/2007

	77/652734
	3,700,285
	Sky Bay
	01/20/2009
	10/20/2009

	86/171700
	4,702,382
	springlamp
	01/22/2014
	03/17/2015

	86/171694
	4,702,381
	springlight
	01/22/2014
	03/17/2015

	86/029986
	4,491,239
	TCP
	08/06/2013
	03/04/2014

	86/415940
	4,879,527
	TCP
	10/06/2014
	01/05/2016

	77/560930
	3,608,546
	TCP & DESIGN
	09/03/2008
	04/21/2009

	85/477499
	4,423,779
	TRUDIM
	11/21/2011
	10/29/2013

	77/860126
	4,191,021
	TRUDIM
	10/29/2009
	08/14/2012

	85/462768
	4,167,475
	TRUSTART
	11/02/2011
	07/03/2012

	78/722254
	3,320,487
	UV Guard
	09/28/2005
	10/23/2007

Trademarks - International

	
					
	Country
	International Reg. No.
	Title
	Date of Filing
	Status

	Colombia
	1223341
	CONNECTED BY TCP & Design
	11/20/2014
	Pending

	European Union 
	1223341
	CONNECTED BY TCP & Design
	11/20/2014
	Pending

	Mexico
	1223341
	CONNECTED BY TCP & Design
	11/20/2014
	Pending

	Switzerland
	1223341
	CONNECTED BY TCP & Design
	11/20/2014
	Pending

	WIPO
	1223341
	CONNECTED BY TCP & Design
	07/03/2014
	 

Copyrights

None.

Licenses

Settlement and License Agreement, dated as of May 17, 2007, between CoolLite International Holdings, Ltd. and Technical Consumers Products, Inc.

Settlement and License Agreement, dated as of December 31, 2013, between Koninklijke Philips N.V. and TCP International Holdings Ltd.

Trademark License Agreement, dated April 18, 2006, among Technical Consumer Products, Inc.; Home Depot U.S.A., Inc.; Home Depot of Canada Inc.; Home Depot Mexico, S. de R.I. de C.V.; Home Depot Puerto Rico, Inc.; and H.D.V.A. Holding Company, Inc.

Challenges To Validity

See Schedule 5.8(b)

Source Code Escrow Agreements

None

Schedule 5.10

Licenses and Permits

None

Schedule 5.14

Labor Disputes

None

Schedule 7.3

Guarantees

NoneExhibit 10.1

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

This First Amendment to Credit Agreement, dated as of September 30, 2016 (this “Agreement”), by and among Affinity Gaming, a Nevada corporation (the “Borrower”), the Subsidiary Guarantors (as defined in the Existing Credit Agreement referred to below) and Credit Suisse AG, Cayman Islands Branch, as administrative agent (in such capacity, the “Administrative Agent”) for (and on behalf of) the Lenders under the Existing Credit Agreement and, after giving effect thereto, the Amended Credit Agreement and as collateral agent (in such capacity, the “Collateral Agent”) for the Secured Parties (as defined under the Existing Credit Agreement and, after giving effect thereto, the Amended Credit Agreement).

 

RECITALS:

 

WHEREAS, reference is hereby made to the Credit Agreement, dated as of July 1, 2016 (the “Original Closing Date”) (as it may be amended, restated, replaced, supplemented or otherwise modified and in effect immediately prior to giving effect to the amendments contemplated by this Agreement, the “Existing Credit Agreement” and the Existing Credit Agreement as modified by this Agreement, the “Amended Credit Agreement”; capitalized terms being used herein and defined in the Amended Credit Agreement and not otherwise defined herein have the meaning as therein defined), among the Borrower, the Issuing Lenders, the Lenders party thereto from time to time, the Administrative Agent, the Collateral Agent and the other parties thereto;

 

WHEREAS, Z Capital (together with its Affiliates and funds managed or advised by it or its affiliates) (the “Sponsor”) and other investors, which may include members of management of the Borrower, intend, directly or indirectly, to acquire (the “Acquisition”) all of the Capital Stock of the Borrower not presently owned by such Persons, all as set forth in that certain Agreement and Plan of Merger (as amended, restated, replaced, supplemented or otherwise modified from time to time (with the consent of the Lead Arrangers (as defined in the Amended Credit Agreement) for periods after the First Amendment Effective Date) to the extent required under the Commitment Letter (as defined in Annex II attached hereto) the “Merger Agreement”) dated as of August 22, 2016, by and among Z Capital Affinity Owner, LLC, a Delaware limited liability company (“AcquisitionCo”), its wholly owned subsidiary Affinity Merger Sub, Inc., a Nevada corporation, and the Borrower;

 

WHEREAS, in connection with the Acquisition, the Borrower will obtain additional Initial Term Loans in an aggregate principal amount of $30,000,000 (the “Additional Initial Term Loans”) from one or more existing Lenders or other Persons eligible to be assignees pursuant to Section 10.6(b) of the Existing Credit Agreement (subject to any applicable consent requirements and the other limitations set forth therein) that, in each case, are or will become Initial Term Lenders on the First Amendment Effective Date (the “Additional Initial Term Lenders”); and

 

WHEREAS, in connection with the Acquisition, the Borrower, the Subsidiary Guarantors, the Required Lenders, the Administrative Agent and the Collateral Agent will make certain amendments to the Existing Credit Agreement and the other Loan Documents (as defined in the Existing Credit Agreement) as set forth herein, substantially concurrently with the closing of the Acquisition and the Additional Initial Term Loans;

 

NOW, THEREFORE, in consideration of the premises and agreements, provisions and covenants herein contained and other good and valuation consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

 

ARTICLE I

 

AMENDMENTS TO EXISTING LOAN DOCUMENTS

 

SECTION 1.                            Consent of Required Lenders.  Each Lender under the Existing Credit Agreement that executes and delivers a lender agreement in substantially the form attached hereto as Annex I (a “Consenting Lender Agreement” and each such Lender a “Consenting Lender”) thereby irrevocably agrees to the amendments to, and waivers and consents under, the Existing Credit Agreement provided for herein and the other amendments, modifications and/or supplements to the other Loan Documents described herein, with respect to all of such Consenting Lender’s Loans and Commitments (in each case, under and as defined in the Existing Credit Agreement).  Such agreement shall be irrevocably binding on such Lender and on any subsequent assignees, transferees, participants, successors and assigns with respect to such Lender’s Loans and Commitments.

 

SECTION 2.                            Additional Initial Term Loans.  Substantially concurrently with the closing of the Acquisition and the First Amendment Effective Date, the Borrower shall incur the Additional Initial Term Loans from the Additional Initial Term Lenders, and each Additional Initial Term Lenders shall make its Additional Initial Term Loans to the Borrower, in a single drawing.  Each Additional Initial Term Lender shall become party to the Existing Credit Agreement and the Amended Credit Agreement by executing a joinder agreement in the form attached hereto as Annex II (a “Additional Initial Term Lender Joinder Agreement”, which shall be deemed a “Joinder Agreement” for purposes of the Existing Credit Agreement and Amended Credit Agreement).  On the date of the Borrowing of the Additional Initial Term Loans, the Additional Initial Term Loans will automatically be deemed, and shall constitute, Initial Term Loans and part of the Initial Term Facility in effect on the Closing Date (on terms and conditions identical to the existing Initial Term Loans), and the Additional Initial Term Lenders will automatically be deemed and shall constitute Initial Term Lenders, and notwithstanding anything to the contrary set forth in Sections 2.2, 2.13 or 2.15, such Additional Initial Term Loans shall be added to (and constitute a part of, be of the same Type as and, at the election of the Borrower, have the same Interest Period as) each Borrowing of outstanding Initial Term Loans on a pro rata basis (based on the relative sizes of such Borrowings), so that each Additional Initial Term Lender providing Additional Initial Term Loans will participate proportionately in each then-outstanding Borrowing of Initial Term Loans; it being acknowledged that the application of this Section 2 may result in Additional Initial Term Loans having Interest Periods (the duration of which may be less than one (1) month) that begin during an Interest Period then applicable to outstanding Initial Term Loans that are Eurodollar Loans and which end on the last day of such Interest Period.  Section 2.3 of the Amended Credit Agreement shall be adjusted as is necessary to provide for the “fungibility” of the Additional Initial Term Loans with the Initial Term Loans, and, it being understood that the amortization payments due and owing to the Lenders (under and as defined in the Existing Credit Agreement) under Section 2.3 of the Amended Credit Agreement shall not be less than the amortization payments due and owing under Section 2.3 of the Existing Credit Agreement, the Lenders hereby authorize the Administrative Agent to make such adjustments.  The parties hereto acknowledge and agree that the Additional Initial Term Loans do not constitute usage of any Incremental Term Facility available to the Borrower under Section 2.25 of the Existing Credit Agreement on the date hereof or Incremental Equivalent Debt.

 

SECTION 3.                            Amended Credit Agreement. The terms and provisions of the Existing Credit Agreement are hereby amended as set forth on Exhibit A attached hereto such that all of the newly inserted and double underscored provisions and any formatting changes reflected therein shall be deemed inserted or made, as applicable, and all of the stricken provisions shall be deemed to be deleted therefrom, immediately and automatically upon the First Amendment Effective Date (as defined below).  Except to

 

 

the extent reflected in the Amended Credit Agreement, Schedules and Exhibits to the Credit Agreement shall remain as in effect under the Existing Credit Agreement.

 

SECTION 4.                            Amendments to Loan Documents.  Each Consenting Lender, by executing a Consenting Lender Agreement, consents to, and authorizes the Borrower, each Subsidiary Guarantor, the Administrative Agent and the Collateral Agent to enter into such amendments, restatements, amendment and restatements, supplements and modifications to the Security Documents and other Loan Documents (as defined in the Existing Credit Agreement) as the Administrative Agent deems reasonably necessary or desirable in connection with this Agreement and the transactions contemplated hereby.

 

SECTION 5.                            Holding Company Election.  On the First Amendment Effective Date, the Borrower shall be deemed to have made a Holding Company Election with respect to AcquisitionCo in accordance with Section 6.15 of the Existing Credit Agreement; provided, however, that the delivery of Collateral constituting Capital Stock of the Borrower shall be subject to Article V hereof.

 

ARTICLE II

 

REPRESENTATION AND WARRANTIES

 

To induce the Lenders party hereto to agree to this Agreement, the Borrower represents to the Administrative Agent and the Lenders that, as of the Agreement Effective Date (as defined below):

 

SECTION 1.                            Existence; Compliance with Law.  Each Group Member (a) (i) is duly organized (or incorporated) and validly existing and (ii) in good standing (or, in the case of any Foreign Subsidiary, the equivalent status in any foreign jurisdiction) under the laws of the jurisdiction of its organization or incorporation, (b) has the requisite organizational power and authority to own and operate its Property, to lease the Property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign entity and in good standing (where such concept is relevant) under the laws of each jurisdiction where its ownership, lease or operation of Property or the conduct of its business requires such qualification and (d) is in compliance with all Laws (including, without limitation, Gaming Regulations and Gaming Permits), except, in each case referred to in this Section 1 (other than clause (a)(i) and (b), in each case, with respect to the Borrower), to the extent that any such failure to be so organized and existing, in good standing or qualified, to have such requisite organizational power and authority or to comply with such Laws, as applicable, would not reasonably be expected to have a Material Adverse Effect.  Each Loan Party is not an EEA Financial Institution.

 

SECTION 2.                            Organizational Power; Authorization; Enforceable Obligations.  Each Loan Party has the corporate or other organizational power and authority to execute, deliver and perform this Agreement.  Each Loan Party has taken all necessary corporate or other organizational action to authorize the execution, delivery and performance of this Agreement.  Each Loan Party has duly executed and delivered this Agreement.  Except as would not reasonably be expected to have a Material Adverse Effect, no consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority (including, without limitation, any Gaming Authority) or any other Person is required in connection with the execution, delivery and performance of this Agreement by any Loan Party party hereto except (i) as required by Article V and (ii) consents, authorizations, filings and notices described in Schedule 1, which consents, authorizations, filings and notices have been or will have been obtained or made (except to the extent not yet required to have been obtained or made) on or prior to the First Amendment Effective Date.  This Agreement constitutes a legal, valid and binding obligation of each Loan Party that is a party hereto, enforceable against each such Loan Party in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar

 

 

laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in an proceeding in equity or at law) and/or principles of good faith and fair dealing.

 

SECTION 3.                            No Legal Bar; No Default.

 

(a)                                 The execution, delivery and performance of this Agreement by each Loan Party party hereto do not violate (i) such Loan Party’s Organizational Documents, (ii) any Law (including, without limitation, Gaming Regulations (except (i) as required by Article V and (ii) consents, authorizations, filings and notices described in Schedule 1, which consents, authorizations, filings and notices have been or will have been obtained or made (except to the extent not yet required to have been obtained or made) on or prior to the First Amendment Effective Date) applicable to such Loan Party or (iii) any Contractual Obligation of such Loan Party except, in each case referred to in clause (ii) or (iii), to the extent that any such violation would not reasonably be expected to have a Material Adverse Effect; and

 

(b)                                 No Default or Event of Default has occurred and is continuing.

 

SECTION 4.                            Loan Document Representations. Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects, in each case on and as of such date as if made on and as of such date, except 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 (provided that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct in all respects).

 

ARTICLE III

 

CONDITIONS TO THE AGREEMENT EFFECTIVE DATE

 

This Agreement shall become effective on the date (the “Agreement Effective Date”) on which each of the following conditions is satisfied or waived:

 

SECTION 1.                            Execution of Counterparts. The Administrative Agent shall have received (a) executed counterparts of this Agreement from each Loan Party and (b) executed Consenting Lender Agreements from Lenders constituting the Required Lenders.

 

SECTION 2.                            No Default or Event of Default; Representations and Warranties True.  Both immediately prior to and immediately after giving effect to this Agreement:

 

(a)                                 no Default or Event of Default shall have occurred and be continuing; and

 

(b)                                 each of the representations and warranties in Article II hereof shall be true and correct in all material respects on and as of the Agreement Effective Date (provided that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct in all respects and any such representation or warranty which by its terms is made as of an earlier date shall be true and correct in all material respects only as such earlier date).

 

SECTION 3.                            Pro Forma Financial Covenant Compliance.  The Borrower and its Restricted Subsidiaries shall be in compliance with the covenant set forth in Section 7.1 of the Existing Credit

 

 

Agreement, determined on a Pro Forma Basis as of June 30, 2016 as if the Additional Initial Term Loans had been outstanding on June 30, 2016.

 

SECTION 4.                            Amendment Fees.  The Borrower shall have paid to the Administrative Agent an amendment fee in immediately available funds, for the account of each Consenting Lender that has delivered its executed signature page to a Consenting Lender Agreement on or prior to 5:00 P.M. New York City time on September 23, 2016 (or such later date as agreed to by Z Capital in its sole discretion), in an amount equal to 0.20% of the sum of the principal amount of such Lender’s Commitments and outstanding Loans, in each case, under and as defined in the Existing Credit Agreement.

 

ARTICLE IV

 

CONDITIONS TO THE FIRST AMENDMENT EFFECTIVE DATE

 

The Amended Credit Agreement shall become effective on the first date, on or after the Agreement Effective Date (the “First Amendment Effective Date”) on which:

 

SECTION 1.                            Additional Initial Term Loans.  The Administrative Agent shall have received executed Additional Initial Term Lender Joinder Agreements from each Additional Initial Term Lender (and, in each case, acknowledged by the Borrower).

 

SECTION 2.                            Representations and Warranties.  Each of (x) the representations and warranties set forth in Sections 4.3(a), 4.3(c), 4.4 (only with respect to the first, second, third and last sentences thereof and only as it relates to this Agreement and the documentation executed by the Borrower and the other Loan Parties in connection therewith), 4.5(a), 4.11, 4.13, 4.17, 4.18 and 4.20 (in the case of OFAC or FCPA, only to the extent the use of proceeds of the Additional Initial Term Loans or Second Lien Initial Term Loans are in violation thereof) of the Amended Credit Agreement shall be true and correct in all material respects (without duplication of any materiality qualifiers therein) (it being understood and agreed that any such representation or warranty which by its terms is made as of an earlier date shall be required to be true and correct in all material respects only as such earlier date and (B) to the extent that any such representation or warranty is qualified by or subject to a “material adverse effect”, “material adverse change” or similar term or qualification, the definition thereof shall be the definition of “Closing Date Material Adverse Effect” (as defined below) for purposes of any such representation and warranty made or deemed made pursuant to this Section 2) and (y) the representations and warranties made by the Borrower with respect to the Borrower and its Subsidiaries or their respective businesses contained in the Merger Agreement as are material to the interests of the Lenders, but only to the extent that the Sponsor has the right to terminate its obligations under the Merger Agreement or to decline to consummate the Acquisition as a result of a breach of such representations and warranties in the Acquisition Agreement shall be true and correct in all material respects (without duplication of any materiality qualifiers therein) on and as of such date.  Since January 1, 2016, no Closing Date Material Adverse Effect shall have occurred and be continuing that would excuse AcquisitionCo from its obligation to consummate the Acquisition under the Merger Agreement.  “Closing Date Material Adverse Effect” means “Company Material Adverse Effect” as defined in the Merger Agreement.

 

SECTION 3.                            Existing Credit Agreement Availability.  As of the First Amendment Effective Date (but immediately prior to giving effect thereto), the Borrower shall (x) not have incurred additional Facilities (under and as defined in the Existing Credit Agreement) in respect of clause (a) of the Incremental Limit (under and as defined in the Existing Credit Agreement) in an aggregate amount in excess of $50,000,000, and (y) have capacity under Section 7.6(h) of the Existing Credit Agreement in an amount not less than $40,000,000.

 

 

SECTION 4.                            Acquisition Closing.  The Acquisition shall have been consummated in all material respects in accordance with the terms of the Merger Agreement substantially concurrently with the First Amendment Effective Date.

 

SECTION 5.                            Legal Opinions.  To the extent reasonably requested by the Administrative Agent, the Administrative Agent shall have received customary legal opinions addressed to the Administrative Agent, the Collateral Agent and the Lenders, board resolutions and officers’ certificates consistent with those delivered on the Closing Date (other than changes to such legal opinion resulting from a Change in Law, change in fact or change to counsel’s form of opinion) reasonably satisfactory to the Administrative Agent.

 

SECTION 6.                            Costs and Expenses.  To the extent invoiced at least three Business Days prior to the First Amendment Effective Date, all of the reasonable and documented out-of-pocket costs and expenses (including the reasonable fees, expenses and disbursements of Latham & Watkins LLP) incurred by the Administrative Agent in connection with the First Amendment Effective Date shall have been, or will be substantially simultaneously, paid.

 

SECTION 7.                            Amendment Fees.  The Borrower shall have paid or shall substantially simultaneously pay to the Administrative Agent an amendment fee in immediately available funds, for the account of each Consenting Lender that has delivered its executed signature page to a Consenting Lender Agreement on or prior to 5:00 P.M. New York City time on September 23, 2016 (or such later date as agreed to by Z Capital in its sole discretion), in an amount equal to 0.20% of the sum of the principal amount of such Lender’s Commitments and outstanding Loans.

 

SECTION 8.                            Approvals.  Other than as set forth in Article V hereof, all necessary Gaming Permits in connection with the First Amendment Transactions shall have been obtained and shall remain in full force and effect upon the consummation of the First Amendment Transactions.

 

ARTICLE V

 

POST-CLOSING REQUIREMENTS

 

SECTION 1.                            Post-Closing Real Property.

 

(a)                                 Borrower shall as soon as practicable, but not later than sixty days (60) after the First Amendment Effective Date (or such later date as the Administrative Agent may determine in its reasonable discretion), deliver or cause to be delivered to the Collateral Agent the following items with respect to any Material Real Estate that is, or is required to be, subject to a Mortgage, each in form and substance reasonably acceptable to the Administrative Agent:

 

(i)                                     an amendment to each applicable Mortgage encumbering such Material Real Estate (the “Mortgage Amendments”) each duly executed and delivered by an authorized officer of each Loan Party party thereto and in form suitable for filing and recording in all filing or recording offices that the Administrative Agent may deem necessary or desirable unless the Administrative Agent is satisfied in its reasonable discretion that Mortgage Amendments are not required in order to secure the applicable Loan Party’s obligations as modified as a result of the making of the Additional Initial Term Loans;

 

 

(ii)                                  such title policy endorsements to existing title policies with respect to such Material Real Estate, each in form and substance reasonably satisfactory to the Administrative Agent; and

 

(b)                                 AcquisitionCo shall (x) obtain as promptly as possible, but in any event within 150 days after the First Amendment Effective Date (as such date may be extended at the sole discretion of the Administrative Agent), all approvals of any Gaming Authority (collectively, the “Gaming Commission Approvals”) required to pledge, or cause to be pledged, the Capital Stock of the Borrower and (y) upon receipt of the Gaming Commission Approvals, be required as promptly as possible, but in any event within five Business Days after such date of receipt, to pledge, and cause to be pledged, the Capital Stock of the Borrower in accordance with the terms of the Guarantee and Collateral Agreement.

 

SECTION 2.                            Collateral Expenses.  The Borrower agrees to pay all fees, costs and expenses incurred in connection with the preparation, execution, filing and recordation of the Mortgage Amendments, including, without limitation, reasonable attorneys’ fees, title insurance premiums, filing and recording fees, title insurance company coordination fees, documentary stamp, mortgage and intangible taxes, if any, and title search charges and other charges incurred in connection with the recordation of the Mortgage Amendments and the other matters described in Section 1 of this Article V.

 

ARTICLE VI

 

VALIDITY OF OBLIGATIONS AND LIENS

 

SECTION 1.                            Validity of Obligations.  The Borrower and each Subsidiary Guarantor acknowledges and agrees that, both before and after giving effect to this Agreement and the Amended Credit Agreement, the Borrower and each Subsidiary Guarantor is, jointly and severally, indebted to the Lenders and the other Secured Parties for the Obligations, without defense, counterclaim or offset of any kind and the Borrower and each other Loan Party hereby ratifies and reaffirms the validity, enforceability and binding nature of such Obligations both before and after giving effect to this Agreement and the Amended Credit Agreement (except as the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally and subject to general principles of equity).

 

SECTION 2.                            Validity of Liens and Loan Documents.  The Borrower and each Subsidiary Guarantor hereby ratifies and reaffirms the validity and enforceability (except as the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally and subject to general principles of equity) of the Liens and security interests granted to the Collateral Agent for the benefit of the Secured Parties to secure any of the Secured Obligations (including after giving effect to the Amended Credit Agreement and the Additional Initial Term Loans) by the Borrower and each Subsidiary Guarantor pursuant to the Loan Documents to which any of the Borrower or such Subsidiary Guarantor is a party and hereby confirms and agrees that notwithstanding the effectiveness of this Agreement and the Amended Credit Agreement and the making of the Additional Initial Term Loans, and except as expressly amended by this Agreement or pursuant to the Amended Credit Agreement, each such Loan Document is, and shall continue to be, in full force and effect and each is hereby ratified and confirmed in all respects, except that, on and after the effectiveness of this Agreement and the Amended Credit Agreement, each reference in the Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” (and each reference in the Credit Agreement to this “Agreement”, “hereunder” or “hereof”) or words of like import shall mean and be a reference to the Amended Credit Agreement.

 

 

ARTICLE VII

 

MISCELLANEOUS

 

SECTION 1.                            Amendment, Modification and Waiver.  This Agreement may not be amended, modified or waived except by an instrument or instruments in writing signed and delivered on behalf of the Borrower and the Administrative Agent (acting at the direction of such Lenders as may be required under Section 10.1 of the Existing Credit Agreement or, after giving effect to the amendments contemplated hereby, the Amended Credit Agreement).

 

SECTION 2.                            Entire Agreement.  This Agreement, the Amended Credit Agreement and the other Loan Documents, the Consenting Lender Agreements and, when executed, the Joinder Agreements, constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all other prior agreements and understandings, both written and verbal, among the parties or any of them with respect to the subject matter hereof.

 

SECTION 3.                            GOVERNING LAW.  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; PROVIDED, THAT (I) THE INTERPRETATION OF THE DEFINITION OF CLOSING DATE MATERIAL ADVERSE EFFECT AND THE DETERMINATION OF WHETHER A CLOSING DATE MATERIAL ADVERSE EFFECT HAS OCCURRED, (II) THE DETERMINATION OF THE ACCURACY OF ANY REPRESENTATION OR WARRANTY SET FORTH IN THE MERGER AGREEMENT AND WHETHER AS A RESULT OF ANY INACCURACY THEREOF THE SPONSOR, BORROWER OR ITS RESPECTIVE APPLICABLE AFFILIATE HAS A RIGHT TO TERMINATE ITS OBLIGATIONS UNDER THE MERGER AGREEMENT OR DECLINE TO CONSUMMATE THE ACQUISITION AND (III) THE DETERMINATION OF WHETHER THE ACQUISITION HAS BEEN CONSUMMATED IN ACCORDANCE WITH THE TERMS OF THE MERGER AGREEMENT AND, IN ANY CASE, ANY CLAIM OR DISPUTE ARISING OUT OF ANY SUCH INTERPRETATION OR DETERMINATION OR ANY ASPECT THEREOF, SHALL IN EACH CASE BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEVADA REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS.

 

SECTION 4.                            SUBMISSION TO JURISDICTION; WAIVERS.  EACH PARTY HERETO AGREES THAT SECTIONS 10.12 AND 10.16 OF THE EXISTING CREDIT AGREEMENT (OR, AFTER GIVING EFFECT TO THE AMENDMENTS CONTEMPLATED HEREBY, THE AMENDED CREDIT AGREEMENT) SHALL APPLY TO THIS AGREEMENT MUTATIS MUTANDIS.

 

SECTION 5.                            Severability.  Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Agreement.

 

SECTION 6.                            Counterparts.  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.  Delivery of an executed signature page to this Agreement by facsimile or other electronic transmission (including portable document format (“.pdf”) or similar format) shall be effective as delivery of a manually executed counterpart hereof.

 

 

SECTION 7.                            Loan Document.  This Agreement shall constitute a “Loan Document” as defined in the Existing Credit Agreement.

 

SECTION 8.                            No Novation.  This Agreement shall not extinguish the obligations for the payment of money outstanding under the Existing Credit Agreement or discharge or release the priority of any Loan Document or any other security therefor. Nothing herein contained shall be construed as a substitution or novation of the obligations outstanding under the Existing Credit Agreement or the instruments, documents and agreements securing the same, which shall remain in full force and effect.  Nothing in this Agreement shall be construed as a release or other discharge of the Borrower or any other Loan Party from any of its obligations and liabilities under the Existing Credit Agreement or the other Loan Documents.

 

[Remainder of page intentionally left blank]

 

 

IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to execute and deliver this Agreement as of the date first written above.

 

	
 
    	
AFFINITY   GAMING
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Walter Bogumil
    
	
 
    	
 
    	
Name: Walter Bogumil
    
	
 
    	
 
    	
Title: Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
AFFINITY GAMING FINANCE CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Walter Bogumil
    
	
 
    	
 
    	
Name: Walter Bogumil
    
	
 
    	
 
    	
Title: Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
AFFINITY GAMING BLACK   HAWK, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Walter Bogumil
    
	
 
    	
 
    	
Name: Walter Bogumil
    
	
 
    	
 
    	
Title: Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HGI-ST. JO, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Walter Bogumil
    
	
 
    	
 
    	
Name: Walter Bogumil
    
	
 
    	
 
    	
Title: Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HGI-MARK TWAIN, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Walter Bogumil
    
	
 
    	
 
    	
Name: Walter Bogumil
    
	
 
    	
 
    	
Title: Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HGI-LAKESIDE, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Walter Bogumil
    
	
 
    	
 
    	
Name: Walter Bogumil
    
	
 
    	
 
    	
Title: Manager
    

 

 

	
 
    	
THE SANDS REGENT, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Walter Bogumil
    
	
 
    	
 
    	
Name: Walter Bogumil
    
	
 
    	
 
    	
Title: Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PLANTATION INVESTMENTS,   LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Walter Bogumil
    
	
 
    	
 
    	
Name: Walter Bogumil
    
	
 
    	
 
    	
Title: Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
DAYTON GAMING, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Walter Bogumil
    
	
 
    	
 
    	
Name: Walter Bogumil
    
	
 
    	
 
    	
Title: Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
FLAMINGO PARADISE   GAMING, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Walter Bogumil
    
	
 
    	
 
    	
Name: Walter Bogumil
    
	
 
    	
 
    	
Title: Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THE PRIMADONNA COMPANY,   LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Walter Bogumil
    
	
 
    	
 
    	
Name: Walter Bogumil
    
	
 
    	
 
    	
Title: Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CALIFORNIA PROSPECTORS,   LTD.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Walter Bogumil
    
	
 
    	
 
    	
Name: Walter Bogumil
    
	
 
    	
 
    	
Title: Manager
    

 

 

Consented to by:

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,

as the Administrative Agent and as the Collateral Agent, and on behalf of the Consenting Lenders

 

 

	
By:
    	
/s/ Robert Hetu
    	
 
    
	
 
    	
Name: Robert Hetu
    	
 
    
	
 
    	
Title: Authorized Signatory
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Nicholas Goss
    	
 
    
	
 
    	
Name: Nicholas Goss
    	
 
    
	
 
    	
Title: Authorized Signatory
    	
 
    

 

 

EXHIBIT A

 

AMENDED CREDIT AGREEMENT

 

 

Execution Version

 

EXHIBIT A TO FIRST AMENDMENT

TO CREDIT AGREEMENT

 

 

$375,000,000

 

CREDIT AGREEMENT

 

dated as of July 1, 2016,

 

as amended by that certain First Amendment to Credit Agreement dated September 30, 2016

 

among

 

AFFINITY GAMING,

 

as Borrower,

 

the Several Lenders and the Issuing Lenders from Time to Time Parties Hereto,

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH

as Administrative Agent and Collateral Agent,

 

FIFTH THIRD BANK,

as Syndication Agent,

 

and

 

CREDIT SUISSE SECURITIES (USA) LLC,

 

MACQUARIE CAPITAL (USA), INC.,

 

and

 

FIFTH THIRD BANK,

as Joint Bookrunners and Joint Lead Arrangers

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 1
    	
DEFINITIONS
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
1.1
    	
Defined Terms
    	
 
    	
1
    
	
1.2
    	
Terms Generally
    	
 
    	
5761
    
	
1.3
    	
Accounting Terms; GAAP
    	
 
    	
5762
    
	
1.4
    	
Reserved
    	
 
    	
5862
    
	
1.5
    	
Cashless Rollovers
    	
 
    	
5862
    
	
1.6
    	
Certain Calculations   and Tests
    	
 
    	
5862
    
	
1.7
    	
Effectuation of First Amendment Transactions
    	
 
    	
6064
    
	
1.8
    	
Timing of Payment of   Performance
    	
 
    	
6064
    
	
1.9
    	
Times of Day
    	
 
    	
6065
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 2
    	
AMOUNT AND TERMS OF   COMMITMENTS
    	
 
    	
6065
    
	
 
    	
 
    	
 
    	
 
    
	
2.1
    	
Term Commitments
    	
 
    	
6065
    
	
2.2
    	
Procedure for Term Loan   Borrowing
    	
 
    	
6065
    
	
2.3
    	
Repayment of Term Loans
    	
 
    	
6065
    
	
2.4
    	
Revolving Commitments
    	
 
    	
6165
    
	
2.5
    	
Procedure for Revolving   Loan Borrowing
    	
 
    	
6166
    
	
2.6
    	
[Reserved.]
    	
 
    	
6166
    
	
2.7
    	
[Reserved.]
    	
 
    	
6166
    
	
2.8
    	
Repayment of Loans
    	
 
    	
6166
    
	
2.9
    	
Commitment Fees, etc.
    	
 
    	
6267
    
	
2.10
    	
Termination or   Reduction of Revolving Commitments
    	
 
    	
6368
    
	
2.11
    	
Optional Prepayments
    	
 
    	
6368
    
	
2.12
    	
Mandatory Prepayments
    	
 
    	
6468
    
	
2.13
    	
Conversion and   Continuation Options
    	
 
    	
6671
    
	
2.14
    	
Minimum Amounts and   Maximum Number of Eurodollar Tranches
    	
 
    	
6772
    
	
2.15
    	
Interest Rates and   Payment Dates
    	
 
    	
6772
    
	
2.16
    	
Computations of   Interest and Fees
    	
 
    	
6873
    
	
2.17
    	
Inability to Determine   Interest Rate
    	
 
    	
6873
    
	
2.18
    	
Pro Rata Treatment and   Payments
    	
 
    	
6974
    
	
2.19
    	
Increased Costs
    	
 
    	
7177
    
	
2.20
    	
Taxes
    	
 
    	
7378
    
	
2.21
    	
Indemnity
    	
 
    	
7681
    
	
2.22
    	
Illegality
    	
 
    	
7682
    
	
2.23
    	
Mitigation of Costs;   Change of Lending Office
    	
 
    	
7782
    
	
2.24
    	
Replacement of Lenders
    	
 
    	
7782
    
	
2.25
    	
Incremental Loans
    	
 
    	
7783
    
	
2.26
    	
Defaulting Lenders
    	
 
    	
8288
    
	
2.27
    	
Cash Collateral
    	
 
    	
8490
    
	
2.28
    	
Extensions of Term   Loans and Revolving Commitments
    	
 
    	
8591
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 3
    	
LETTERS OF CREDIT
    	
 
    	
8995
    
	
 
    	
 
    	
 
    	
 
    
	
3.1
    	
L/C Commitment
    	
 
    	
8995
    
	
3.2
    	
Procedure for Issuance   of Letter of Credit
    	
 
    	
9096
    
	
3.3
    	
Fees and Other Charges
    	
 
    	
9197
    
	
3.4
    	
L/C Participations
    	
 
    	
9197
    
	
3.5
    	
Reimbursement   Obligation of the Borrower
    	
 
    	
9298
    
					

 

i

 

TABLE OF CONTENTS

(continued)

 

	
3.6
    	
Obligations Absolute
    	
 
    	
9298
    
	
3.7
    	
Letter of Credit   Payments
    	
 
    	
9399
    
	
3.8
    	
Applicability of ISP98   and UCP; Reporting; Applications
    	
 
    	
94100
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 4
    	
REPRESENTATIONS AND   WARRANTIES
    	
 
    	
94100
    
	
 
    	
 
    	
 
    	
 
    
	
4.1
    	
Financial Condition
    	
 
    	
94100
    
	
4.2
    	
No Change
    	
 
    	
95101
    
	
4.3
    	
Existence; Compliance   with Law
    	
 
    	
95101
    
	
4.4
    	
Organizational Power;   Authorization; Enforceable Obligations
    	
 
    	
95101
    
	
4.5
    	
No Legal Bar
    	
 
    	
96102
    
	
4.6
    	
No Material Litigation
    	
 
    	
96102
    
	
4.7
    	
Use of Proceeds
    	
 
    	
96102
    
	
4.8
    	
Ownership of Property;   Liens
    	
 
    	
96102
    
	
4.9
    	
Intellectual Property
    	
 
    	
96102
    
	
4.10
    	
Taxes
    	
 
    	
97103
    
	
4.11
    	
Federal Reserve   Regulations
    	
 
    	
97103
    
	
4.12
    	
ERISA
    	
 
    	
97103
    
	
4.13
    	
Investment Company Act
    	
 
    	
98104
    
	
4.14
    	
Subsidiaries
    	
 
    	
98104
    
	
4.15
    	
Environmental Matters
    	
 
    	
98104
    
	
4.16
    	
Accuracy of   Information, Etc.
    	
 
    	
99105
    
	
4.17
    	
Security Documents
    	
 
    	
99105
    
	
4.18
    	
Solvency
    	
 
    	
99106
    
	
4.19
    	
Labor Matters
    	
 
    	
100106
    
	
4.20
    	
PATRIOT Act; OFAC;   FCPA; Sanctions
    	
 
    	
100106
    
	
4.21
    	
Gaming Matters
    	
 
    	
100106
    
	
4.22
    	
Insurance
    	
 
    	
100107
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 5
    	
CONDITIONS PRECEDENT
    	
 
    	
101107
    
	
 
    	
 
    	
 
    	
 
    
	
5.1
    	
Conditions to Initial Extension   of Credit
    	
 
    	
101107
    
	
5.2
    	
Conditions to Each   Extension of Credit
    	
 
    	
103109
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 6
    	
AFFIRMATIVE COVENANTS
    	
 
    	
103110
    
	
 
    	
 
    	
 
    	
 
    
	
6.1
    	
Financial Statements
    	
 
    	
104110
    
	
6.2
    	
Certificates; Other   Information
    	
 
    	
105111
    
	
6.3
    	
Payment of Taxes
    	
 
    	
106113
    
	
6.4
    	
Conduct of Business and   Maintenance of Existence, etc.; Compliance with Laws
    	
 
    	
106113
    
	
6.5
    	
Maintenance of   Property; Insurance
    	
 
    	
107113
    
	
6.6
    	
Books and Records;   Inspection of Property; Discussions
    	
 
    	
107113
    
	
6.7
    	
Notices
    	
 
    	
108114
    
	
6.8
    	
Additional Collateral,   Etc
    	
 
    	
108115
    
	
6.9
    	
Further Assurances
    	
 
    	
111117
    
	
6.10
    	
Use of Proceeds
    	
 
    	
111118
    
	
6.11
    	
Nature of Business
    	
 
    	
111118
    
	
6.12
    	
End of Fiscal Year
    	
 
    	
111118
    
	
6.13
    	
Lender Calls
    	
 
    	
112118
    
	
6.14
    	
Maintenance of Ratings
    	
 
    	
112118
    
	
6.15
    	
Holding   Company Election 112[Reserved]
    	
 
    	
119
    
	
6.16
    	
Unrestricted Subsidiaries
    	
 
    	
112119
    
					

 

 

TABLE OF CONTENTS

(continued)

 

	
SECTION 7
    	
NEGATIVE COVENANTS
    	
 
    	
113120
    
	
 
    	
 
    	
 
    	
 
    
	
7.1
    	
Financial Covenant
    	
 
    	
113120
    
	
7.2
    	
Indebtedness
    	
 
    	
115122
    
	
7.3
    	
Liens
    	
 
    	
118125
    
	
7.4
    	
Fundamental Changes
    	
 
    	
121128
    
	
7.5
    	
Dispositions of Property
    	
 
    	
122130
    
	
7.6
    	
Restricted Payments
    	
 
    	
126133
    
	
7.7
    	
Investments
    	
 
    	
128136
    
	
7.8
    	
Optional Payments of   Certain Indebtedness; Modifications of Certain Agreements and Instruments
    	
 
    	
132140
    
	
7.9
    	
Transactions with   Affiliates
    	
 
    	
133141
    
	
7.10
    	
Restrictive Agreements
    	
 
    	
134143
    
	
7.11
    	
Limitation on   Activities of Holdings
    	
 
    	
135143
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 8
    	
EVENTS OF DEFAULT
    	
 
    	
137145
    
	
 
    	
 
    	
 
    	
 
    
	
8.1
    	
Events of Default
    	
 
    	
137145
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 9
    	
THE AGENTS
    	
 
    	
140148
    
	
 
    	
 
    	
 
    	
 
    
	
9.1
    	
Appointment
    	
 
    	
140148
    
	
9.2
    	
Delegation of Duties
    	
 
    	
140148
    
	
9.3
    	
Exculpatory Provisions
    	
 
    	
140149
    
	
9.4
    	
Reliance by the Agents
    	
 
    	
141150
    
	
9.5
    	
Non-Reliance on Agents   and Other Lenders
    	
 
    	
141150
    
	
9.6
    	
Indemnification
    	
 
    	
142151
    
	
9.7
    	
Agent in Its Individual   Capacity
    	
 
    	
143151
    
	
9.8
    	
Successor Agents
    	
 
    	
143152
    
	
9.9
    	
Authorization to   Execute other Loan Documents; Collateral
    	
 
    	
144153
    
	
9.10
    	
Lead Arrangers
    	
 
    	
145154
    
	
9.11
    	
Administrative Agent   May File Proofs of Claim; Credit Bidding
    	
 
    	
145154
    
	
9.12
    	
Cash Management   Agreements and Secured Hedge Agreements
    	
 
    	
146155
    
	
9.13
    	
Acknowledgement and   Consent to Bail-In of EEA Financial Institutions
    	
 
    	
146155
    
	
 
    	
 
    	
 
    	
 
    
	
SECTION 10
    	
MISCELLANEOUS
    	
 
    	
147156
    
	
 
    	
 
    	
 
    	
 
    
	
10.1
    	
Amendments and Waivers
    	
 
    	
147156
    
	
10.2
    	
Notices
    	
 
    	
149158
    
	
10.3
    	
No Waiver; Cumulative   Remedies
    	
 
    	
150159
    
	
10.4
    	
Survival of   Representations and Warranties
    	
 
    	
150159
    
	
10.5
    	
Payment of Expenses;   Indemnification
    	
 
    	
151160
    
	
10.6
    	
Successors and Assigns;   Participations and Assignments
    	
 
    	
153162
    
	
10.7
    	
Adjustments; Set-off
    	
 
    	
163172
    
	
10.8
    	
Counterparts
    	
 
    	
163172
    
	
10.9
    	
Severability
    	
 
    	
163173
    
	
10.10
    	
Integration; Survival
    	
 
    	
164173
    
	
10.11
    	
GOVERNING LAW
    	
 
    	
164173
    
	
10.12
    	
Submission to   Jurisdiction; Waivers
    	
 
    	
164173
    
	
10.13
    	
Acknowledgments
    	
 
    	
165174
    
	
10.14
    	
Confidentiality
    	
 
    	
165174
    
	
10.15
    	
Release of Collateral   and Guarantee Obligations; Subordination of Liens
    	
 
    	
166175
    
	
10.16
    	
Waivers of Jury Trial
    	
 
    	
167176
    
	
10.17
    	
USA PATRIOT ACT
    	
 
    	
167176
    
					

 

 

TABLE OF CONTENTS

(continued)

 

	
10.18
    	
Lender Action
    	
 
    	
167176
    
	
10.19
    	
Marshalling; Payments   Set Aside
    	
 
    	
167177
    
	
10.20
    	
Interest Rate   Limitation
    	
 
    	
167177
    
	
10.21
    	
Application of Gaming   Regulations
    	
 
    	
168177
    
	
10.22
    	
Intercreditor Agreement
    	
 
    	
178
    
	
10.2210.23
    	
No Advisory or Fiduciary   Relationship
    	
 
    	
168178
    
	
10.2310.24
    	
Conflicts
    	
 
    	
169179
    
	
10.24
    	
Post-Closing   Covenants.
    	
 
    	
169
    

 

 

APPENDICES:

 

A-1                            Initial Revolving Commitments 

A-2                            Initial Term Commitments

A-3                            Closing Date L/C Commitments

 

SCHEDULES:

 

4.1(a)                Historical Annual Financial Statement Disclosures

4.1(b)                Historical Quarterly Financial Statement Disclosures

4.4                               Consents, Authorizations, Filings and Notices

4.8                               Excepted Property; Owned or Leased Property

4.14                        Subsidiaries

4.17(a)         UCC Filing Jurisdictions

7.2(c)                 Existing Indebtedness

7.3(f)                  Existing Liens

7.5(f)                  Certain Dispositions

7.7                               Existing Investments

7.9                               Existing Transactions with Affiliates

7.10                        Existing Negative Pledge Clauses

10.24                 Post-Closing Matters

 

EXHIBITS:

 

A-1                            Form of Notice of Borrowing

A-2                            Form of Conversion/Continuation Notice

B                                       Form of Guarantee and Collateral Agreement

C                                       Form of Compliance Certificate

D-1                            Form of Closing Certificate

D-2                            Form of Officer’s Certificate

E                                        Form of Assignment and Assumption

F                                         Form of Exemption Certificate

G                                       Form of Solvency Certificate

H                                      Form of Prepayment Notice

I                                           Form of Promissory Note

J                                           Form of Joinder Agreement

K                                       Form of Intercreditor Agreement[Reserved]

L                                        [Reserved]

M                                    Form of Affiliated Lender Assignment Agreement

N                                       Form of Intercompany Subordination Agreement

 

 

CREDIT AGREEMENT, dated as of July 1, 2016 (as amended by the First Amendment, this “Agreement”), among AFFINITY GAMING, a Nevada corporation, the several banks and other financial institutions or Persons from time to time parties to this Agreement as lenders (collectively, the “Lenders”), Credit Suisse AG, Cayman Islands Branch (“CS”), as administrative agent (in such capacity, together with its successors and permitted assigns, the “Administrative Agent”) and collateral agent (in such capacity, together with its successors and permitted assigns, the “Collateral Agent”), Fifth Third Bank, as syndication agent (in such capacity, the “Syndication Agent”), and Credit Suisse Securities (USA) LLC (“Credit Suisse”), Macquarie Capital (USA), Inc. and Fifth Third Bank, as joint bookrunners (in such capacities, the “Joint Bookrunners”) and as joint lead arrangers (in such capacities, the “Lead Arrangers”).

 

PRELIMINARY STATEMENTS

 

1.                                      Whereas, pursuant to that certain Credit Agreement, dated as of July 1, 2016 (the “Existing Credit Agreement”), by and among the Borrower, the Lenders party thereto from time to time (the “Existing Lenders”) and CS, as Administrative Agent and Collateral Agent, the Existing Lenders extended certain credit facilities to the Borrower;

 

2.                                      Whereas, the Borrower (i) has requested that (A) the Additional Initial Term Lenders (as defined in the First Amendment) extend, on the Acquisition Closing Date, the Additional Initial Term Loans (as defined in the First Amendment) in an aggregate principal amount of $30,000,000 and (B) the Existing Lenders constituting Required Lenders under the Existing Credit Agreement, the Administrative Agent and the other persons party to the First Amendment amend the Existing Credit Agreement in the form hereof, which amendment shall become effective on the First Amendment Effective Date as provided in the First Amendment and (ii) intends to make a Holdings Company Election (as defined in the Existing Credit Agreement) in order to designate Holdings as its direct parent holding company effective on the Acquisition Closing Date;

 

1.             The Borrower (as defined herein) has requested that the Lenders extend credit to (i) the Borrower in the form of Initial Term Loans in an initial aggregate principal amount equal to $300,000,000, available in Dollars, and (ii) to the Borrower in the form of Initial Revolving Commitments in an initial aggregate principal amount of $75,000,000 available in Dollars.

 

2.             The proceeds of the Initial Term Loans and the initial Revolving Borrowing, together with cash on hand, will be used to finance the Transaction Expenses and to consummate the Refinancing.

 

3.                             NOW, THEREFORENow, therefore, in consideration of the premises and the covenants and agreements hereinafter set forthcontained herein, the parties hereto hereby agree as follows:

 

SECTION 1     DEFINITIONS

 

1.1                               Defined Terms. As used in this Agreement, the terms listed in this Section shall have the respective meanings set forth in this Section.

 

“ABR” means, for any day, a fluctuating rate per annum equal to the greatest of (i) the Prime Rate for Dollars, (ii) the Federal Funds Effective Rate plus 1⁄2 of 1.00%, (iii) the one-month reserve adjusted Eurodollar Base Rate determined on such day plus 1.00% and (iv) with respect to the

 

 

Initial Term Loans only, 2.00%. Notwithstanding the foregoing, ABR will be deemed to be 0% per annum if the ABR calculated pursuant to the foregoing provisions would otherwise be less than 0% per annum.

 

“ABR Loans” means Loans the rate of interest applicable to which is based upon the ABR.

 

“Acceptable Intercreditor Agreement” means an intercreditor agreement in substantially the form of Exhibit K hereto or in such othersuch form as is reasonably satisfactory to the Administrative Agent.

 

“Acquisition” has the meaning specified in the First Amendment.

 

“AcquisitionCo” has the meaning specified in the First Amendment.

 

“Acquisition Closing Date” means the date on which the conditions precedent to the funding of the Additional Initial Term Loans shall have been satisfied or waived by the Additional Initial Term Lenders and the Additional Initial Term Loans shall have been funded.

 

“Additional Debt Requirements” means the following requirements:

 

(i)                                     such Indebtedness shall not be the obligation of, or subject to any guarantee by, any Person who is not also a Loan Party (or who becomes a Loan Party concurrently with the incurrence or issuance of such Indebtedness);

 

(ii)                                  the obligations of the applicable Loan Party in respect of such Indebtedness shall not be secured by (x) any Lien on any Property in which the Collateral Agent does not have a Lien (or Property in which the Collateral Agent is not granted a Lien concurrently with the grant of a Lien securing such Indebtedness) or (y) any perfected Lien on any Property in which the Collateral Agent does not have a perfected Lien (or Property in which a Lien in favor of the Collateral Agent is not perfected concurrently with the perfection of a Lien securing such Indebtedness);

 

(iii)                               such Indebtedness shall not (x) provide for any final maturity date prior to the Latest Term Loan Maturity Date (other than revolving Indebtedness and customary bridge loans with a maturity date of not longer than one year; provided that any loans, notes, securities or other Indebtedness (other than revolving Indebtedness) which are exchanged for or otherwise replace such bridge loans shall be subject to the requirement of this clause (iii)(x)) or the Latest Revolving Maturity Date (in the case of revolving Indebtedness), in each case, as of the date of the issuance or incurrence, as applicable, thereof, (y) have a shorter Weighted Average Life to Maturity than the then-existing Term Loans (other than revolving Indebtedness and customary bridge loans with a maturity date of not longer than one year; provided that any loans, notes, securities or other Indebtedness (other than revolving Indebtedness) which are exchanged for or otherwise replace such bridge loans shall be subject to the requirement of this clause (iii)(y)) or require scheduled amortization or mandatory commitment reduction (in the case of revolving Indebtedness) prior to the Latest Revolving Maturity Date as of the date of the issuance or incurrence thereof, as applicable, and (z) in the case of Indebtedness that is unsecured or is secured by Liens that are junior in priority to the Liens securing the Initial Facilities (it being understood that any such Indebtedness that is junior in right of security shall be pari passu with the Second Lien Facility (to the extent any such Second Lien Facility is junior in right of security on the same basis as the Second Lien Facility in effect on the Acquisition Closing Date) or junior to the Second Lien Facility), provide for any mandatory repayment, redemption or sinking fund prior to the date that is 91 days after the Latest Term Loan Maturity Date as of the date of issuance or incurrence, as applicable,

 

2

 

thereof, other than mandatory repayments or redemptions from asset sales, casualty or condemnation events or excess cash flow to the extent that prepayments are made first to the Initial Term Loans and to other Indebtedness secured by Liens that are pari passu with the Lien securing the Initial Facilities (to the extent required by the Loan Documents or the terms of such other Indebtedness) or such prepayments are declined by any holder of such Term Loans or such other Indebtedness;

 

(iv)                              in the case of any such Indebtedness in the form of term loans that are pari passu with the Initial Term Loans in right of payment and with respect to security (other than customary bridge loans, mezzanine debt, notes or other securities), the Effective Yield applicable thereto shall not be more than 0.50% per annum higher than the Effective Yield in respect of the Initial Term Loans unless the Effective Yield with respect to the Initial Term Loans is adjusted to be equal to the Effective Yield applicable to such Indebtedness, minus 0.50% per annum; and

 

(v)                                 the other material covenants, terms and conditions (excluding (1) pricing, interest rate margins, rate floors, discounts, premiums, fees, and prepayment or redemption terms and premiums and (2) covenants or other provisions applicable only to periods after the Latest Term Loan Maturity Date (in the case of term loans or notes) or the Latest Revolving Maturity Date (in the case of revolving Indebtedness), in each case, at the time of incurrence or issuance of such Indebtedness) applicable to such Indebtedness shall not be materially more restrictive (when taken as a whole) than the terms and conditions of the Loan Documents (when taken as a whole), as reasonably determined by the Borrower, unless such terms and conditions constitute then-current market terms for the applicable type of Indebtedness; provided that such terms shall not be deemed to be more restrictive solely as a result of the inclusion in the documentation governing such Indebtedness of any Previously Absent Financial Maintenance Covenant so long as the Administrative Agent shall have been given prompt written notice thereof and this Agreement is amended to include such Previously Absent Financial Maintenance Covenant for the benefit of each Facility to the extent applicable in the documentation governing such Indebtedness (but if the applicable Previously Absent Financial Maintenance Covenant is a “springing” financial maintenance covenant applicable only to revolving Indebtedness, the Previously Absent Financial Maintenance Covenant shall be automatically included in this agreement only for the benefit of each Revolving Facility and not for the benefit of any Facility in respect of Term Loans hereunder); provided, further, that any Indebtedness in the form of (A) term loans that are pari passu with the Initial Term Loans in right of payment and with respect to security may provide for the ability of the holders thereof to decline to participate in any voluntary prepayments of such term loans and/or to receive on a pro rata or less than pro rata basis any mandatory prepayments of such term loans or (B) revolving loans that are pari passu with the Initial Revolving Loans in right of payment and with respect to security may provide for the lenders thereof to elect lesser payments or commitment reductions in respect of such revolving loans; and

 

(vi)                              in the case of any Specified Junior Debt described in clause (i) of the definition thereof, any Specified Second Lien Incremental Debt or any Indebtedness incurred under clauses (h)(i)(2), (i)(i) or (r) (with respect to Incremental Equivalent Debt described in clause (i) of the definition thereof) of Section 7.2, except as otherwise agreed by the providers of such Indebtedness in connection with an acquisition or other Investment permitted hereunder, after giving effect thereto on a Pro Forma Basis, no Event of Default has occurred or is continuing or would result therefrom.

 

“Additional Lender” has the meaning specified in Section 2.25(d).

 

“Additional/Replacement Revolving Commitments” has the meaning specified in Section 2.25.

 

3

 

“Additional/Replacement Revolving Facility” means each Class of Additional/Replacement Revolving Commitments established pursuant to Section 2.25.

 

“Additional/Replacement Revolving Loans” means any revolving loans made under an Additional/Replacement Revolving Facility.

 

“Administrative Agent” has the meaning specified in the preamble hereto.

 

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly to direct or cause the direction of the management and policies of such Person, in either case whether by contract or otherwise. No Person shall be an “Affiliate” of Holdings or any Subsidiary thereof solely because it is an unrelated portfolio company of any InvestorSponsor and none of the Administrative Agent, the Lead Arrangers, any Lender (other than any Investor Affiliated Lender or Debt Fund Affiliate) or any of their respective Affiliates shall be considered an Affiliate of Holdings or any Subsidiary thereof.

 

“Affiliated Lender” has the meaning specified in Section 10.6(c)(i).

 

“Affiliated Lender Assignment Agreement” has the meaning specified in Section 10.6(c)(i)(B).

 

“Agent-Related Persons” means each Agent, together with its Related Parties.

 

“Agent Fee Letter” means the Agent Fee Letter dated as of May 25, 2016, among the Borrower, the Administrative Agent and Credit Suisse.

 

“Agents” means the collective reference to the Collateral Agent and the Administrative Agent.

 

“Agreement” has the meaning specified in the preamble hereto.

 

“ALTA” means the American Land Title Association.

 

“Applicable Commitment Fee Rate” means, for any day, 0.50%; provided that, for any period ending on and after the financial statements and Compliance Certificate are delivered with respect to the fiscal quarter ending September 30, 2016, the Applicable Commitment Fee Rate shall be reduced to 0.375% per annum if the First Lien Leverage Ratio for the Test Period ending the last day of the applicable fiscal quarter shall be less than or equal to 3.50:1.00, such decrease shall become effective as of the second Business Day immediately following the date on which financial statements to be delivered pursuant to Section 6.1(a) or (b), as applicable, and the Compliance Certificate with respect to such period are delivered; provided, further, that, if the Borrower shall fail to deliver financial statements within any of the time periods specified in Section 6.1(a) or (b), as applicable, and the Compliance Certificate with respect thereto, the Applicable Commitment Fee Rate from such date they were due, to but not including the second Business Day following the date the Borrower delivers to the Administrative Agent such financial statements and Compliance Certificate, shall conclusively equal 0.50%.

 

“Applicable Indebtedness” has the meaning specified in the definition of the term “Weighted Average Life to Maturity”.

 

4

 

“Applicable Margin” means, for any day, (a) with respect to the Initial Term Loans that are (i) ABR Loans, 3.00% and (ii) Eurodollar Loans, 4.00% and (b) with respect to the Revolving Loans that are (i) ABR Loans, 3.00% and (ii) Eurodollar Loans, 4.00%; provided that for any period ending on and after the financial statements and Compliance Certificate are delivered with respect to the fiscal quarter ending September 30, 2016, the Applicable Margin with respect to the Initial Revolving Loans shall be the rate set forth below opposite the applicable First Lien Leverage Ratio as of the last day of such period:

 

	
First Lien Leverage 
    	
 
    	
Initial Revolving Loans
    	
 
    
	
Ratio
    	
 
    	
ABR Loans
    	
 
    	
Eurodollar Loans
    	
 
    
	
> 3.50:1.00
    	
 
    	
3.00
    	
%
    	
4.00
    	
%
    
	
<   3.50:1.00 but > 3.00:1.00
    	
 
    	
2.75
    	
%
    	
3.75
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
<   3.00:1.00
    	
 
    	
2.50
    	
%
    	
3.50
    	
%
    

 

Changes in the Applicable Margin resulting from a change in the First Lien Leverage Ratio shall become effective on the second Business Day after delivery to the Administrative Agent of financial statements pursuant to Section 6.1(a) or (b), as applicable, and the Compliance Certificate with respect thereto. Notwithstanding anything to the contrary set forth in this Agreement (including the determination of the Applicable Margin based on the above grid), if the Borrower shall fail to deliver financial statements within any of the time periods specified in Section 6.1(a) or (b), as applicable, and the Compliance Certificate with respect thereto, the Applicable Margin from such date they were due, to but not including the second Business Day following the date the Borrower delivers to the Administrative Agent such financial statements and Compliance Certificate shall conclusively equal the highest possible Applicable Margin set forth in the grid above for such Type of Loans.

 

“Application” means an application, in such form as the relevant Issuing Lender may specify from time to time, requesting such Issuing Lender to open a Letter of Credit.

 

“Approved Fund” has the meaning specified in Section 10.6(b).

 

“Asset Sale” means any Disposition (or series of related Dispositions) of Property by any Group Member in reliance on clause (e), (f), (s), (y) or (bb) of Section 7.5.

 

“Asset Sale/Recovery Event Prepayment Percentage” means 100%.

 

“Assignee” has the meaning specified in Section 10.6(b).

 

“Assignment and Assumption” means an Assignment and Assumption, substantially in the form of Exhibit E, or such other form approved by the Administrative Agent and the Borrower.

 

“Available Amount” means, at any time (the “Available Amount Reference Time”), an amount equal at such time to (a) the sum (which shall not be less than zero) of, without duplication:

 

5

 

(i)                                     $10,000,00020,000,000;

 

(ii)                                  Retained Excess Cash Flow;

 

(iii)                               the net cash proceeds of any Investment made by a Group Member using the Available Amount received by a Group Member in connection with the Disposition of such Investment to any Person (other than a Group Member) during the period from and including the Business Day immediately following the Closing Date through and including the Available Amount Reference Time;

 

(iv)                              (x) the amount of any Investment by a Group Member that was made using the Available Amount in any Unrestricted Subsidiary that has been re-designated as a Restricted Subsidiary or that has been merged, amalgamated or consolidated with or into a Group Member and (y) the Fair Market Value of the assets of any Unrestricted Subsidiary that has been transferred, conveyed or otherwise distributed to a Group Member, in each case of clauses (x) and (y), during the period from and including the Business Day immediately following the Closing Date and at or prior to the Available Amount Reference Time, such amount not to exceed the amount of the Investment that was made using the Available Amount by the Group Members in such Unrestricted Subsidiary;

 

(v)                                 to the extent not applied to prepay Specified Junior Debt in accordance with the terms thereof, the aggregate amount of any Retained Declined Proceeds during the period from and including the Business Day immediately following the Closing Date through and including the Available Amount Reference Time; and

 

(vi)                              the aggregate principal amount of any Indebtedness or Disqualified Capital Stock of a Group Member issued after the Acquisition Closing Date (other than to any other Group Member or an employee stock ownership plan or trust established by a Group Member), which has been converted into or exchanged for Qualified Capital Stock of any Parent Company, together with the Fair Market Value of any Cash Equivalents, marketable securities or other property received by a Group Member upon such exchange or conversion, during the period from and including the Business Day immediately following the Acquisition Closing Date through and including the Available Amount Reference Time; and

 

minus (b) the sum of, without duplication, the aggregate amount of any Investments, Restricted Payments and Restricted Debt Payments made by the Group Members using the Available Amount pursuant to clause (d)(ii) of the definition of Permitted Acquisition or Section 7.6(g)(iii), 7.6(g)(iv), 7.7(cc)(i), 7.8(a)(iv)(C) or 7.8(a)(iv)(D) after the Closing Date and prior to the Available Amount Reference Time.

 

“Available Amount Reference Time” has the meaning specified in the definition of the term “Available Amount”.

 

“Available Equity Amount” means, at any time (the “Available Equity Amount Reference Time”), an amount equal to, without duplication, (a) the aggregate amount of cash, together with the Fair Market Value of any Cash Equivalents, marketable securities or other property received by a Group Member (other than amounts received from any other Group Member) from contributions in respect of, or issuance of, Qualified Capital Stock of the Borrower or any Parent Company, in each case during the period from and including the Business Day immediately following the Closing Date through and including the Available Equity Amount Reference Time and excluding (i) any Cure Amount and (ii) the Available Excluded Contribution Amount, minus (b) the aggregate amount of any Investments, Restricted Payments or Restricted Debt Payments made by the Group Members in reliance on the Available Equity Amount pursuant to clause (d)(ii) of the definition of Permitted Acquisition, Section

 

6

 

7.6(g)(ii), 7.7(cc)(ii) or 7.8(a)(iv)(B) after the Closing Date and prior to the Available Equity Amount Reference Time.

 

“Available Equity Amount Reference Time” has the meaning specified in the definition of the term “Available Equity Amount”.

 

“Available Excluded Contribution Amount” means, at any time (the “Available Excluded Contribution Reference Time”), an amount equal to, without duplication, (a) the aggregate amount of cash, together with the Fair Market Value of any Cash Equivalents, marketable securities or other property received by a Group Member (other than amounts received from any other Group Member) from contributions in respect of, or issuance of, Qualified Capital Stock of the Borrower or any Parent Company, in each case during the period from and including the Business Day immediately following the Closing Date through and including the Available Excluded Contribution Reference Time and excluding (i) any Cure Amount and (ii) the Available Equity Amount, minus (b) the aggregate amount of any Investments, Restricted Payments or Restricted Debt Payments made by the Group Members in reliance on the Available Excluded Contribution Amount pursuant to clause (d)(ii) of the definition of Permitted Acquisition, Section 7.6(g)(i), 7.7(cc)(iii) or 7.8(a)(iv)(A) after the Closing Date and prior to the Available Excluded Contribution Reference Time.

 

“Available Excluded Contribution Reference Time” has the meaning specified in the definition of the term “Available Excluded Contribution Amount”.

 

“Available Revolving Commitment” means, as to any Revolving Lender at any time, an amount equal to the excess, if any, of (a) such Lender’s Revolving Commitment then in effect over (b) such Lender’s Revolving Extensions of Credit then outstanding.

 

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

 

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

 

“Bankruptcy Code” means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et seq.) and the regulations issued from time to time thereunder.

 

“Bankruptcy Proceedings” has the meaning specified in Section 10.6(e).

 

“Benefited Lender” has the meaning specified in Section 10.7(a).

 

“Board” means the Board of Governors of the Federal Reserve System of the United States (or any successor).

 

“Bona Fide Debt Fund” means with respect to any Company Competitor, any debt fund, investment vehicle, regulated bank entity or unregulated lending entity that is (a) primarily engaged in, or advises funds or other investment vehicles that are primarily engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course of business and (b) managed, sponsored or advised by any person that is controlling, controlled by or under common control with the relevant Company Competitor or affiliate thereof, but only to the extent that no personnel involved with the investment in the relevant Company Competitor (i) makes (or has the right to

 

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make or participate with others in making) investment decisions on behalf of, or otherwise cause the direction of the investment policies of, such debt fund, investment vehicle, regulated bank entity or unregulated entity or (ii) has access to any information (other than information that is publicly available) relating to Holdings, the Borrower and/or any entity that forms part of any of their respective businesses (including any of their respective subsidiaries); it being understood and agreed that the term “Bona Fide Debt Fund” shall not include any Disqualified Institution that qualifies under clauses (b) or (c) of the definition thereof (with respect to the Persons described in clause (b) of the definition thereof).

 

“Borrower” means, Affinity Gaming, a Nevada corporation, together with any Successor Borrower.

 

“Borrower Materials” has the meaning specified in Section 6.2.

 

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

 

“Borrowing Date” means any Business Day specified by the Borrower as a date on which the Borrower requests the relevant Lenders to make Loans hereunder satisfying the applicable notice requirements set forth in Section 2.

 

“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close; provided that when used in connection with a Eurodollar Loan denominated in Dollars, 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, the aggregate of, without duplication, (a) all expenditures by the Group Members during such period that, in conformity with GAAP, are or are required to be included as additions during such period to property, plant or equipment reflected in the consolidated balance sheet of the Group Members and (b) all fixed asset additions financed through Capital Lease Obligations incurred by the Group Members and recorded on the balance sheet in accordance with GAAP during such period.

 

“Capital Lease Obligations” means, as to any Person, 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, to the extent such obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP; provided that, notwithstanding the foregoing, in no event will any lease that would have been categorized as an operating lease as determined in accordance with GAAP prior to giving effect to the Financial Accounting Standards Board Accounting Standard Update 2016-02, Leases (Topic 842), issued in February 2016, or any other changes in GAAP subsequent to the Closing Date be considered a capital lease for purposes of this definition.

 

“Capital Stock” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, and any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

 

“Cash Collateralize” means to pledge and deposit with or deliver to the applicable Agent, for the benefit of the Agents, any Issuing Lender and the Lenders, as collateral for L/C

 

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Obligations or obligations of Lenders to fund participations in respect thereof (as the context may require), cash or deposit account balances or, if the applicable Agent and each applicable Issuing Lender benefiting from such collateral agrees in its sole discretion, other credit support, in each case pursuant to documentation in form and substance reasonably satisfactory to the applicable Agent and applicable Issuing Lender (which documents are hereby consented to by the Lenders). “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

 

“Cash Equivalents” means (a) direct obligations issued by, or unconditionally guaranteed by, the United States government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits having maturities of one year or less from the date of acquisition issued by any commercial bank organized under the laws of the United States or any state thereof having combined capital and surplus of not less than $500,000,000; (c) commercial paper of an issuer rated at least A-1 by S&P or P-1 by Moody’s, or carrying an equivalent rating by a nationally recognized rating agency if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within one year from the date of acquisition; (d) fully collateralized repurchase obligations of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than thirty days with respect to securities issued or fully guaranteed or insured by the United States government; (e) marketable securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory, the securities of which state, commonwealth, territory, political subdivision or taxing authority (as the case may be) are rated at least A-1 by S&P or P-1 by Moody’s; (f) securities with maturities of one year or less from the date of acquisition backed by standby letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this definition; (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of any of clauses (a) through (f) of this definition; and (h) other short-term investments utilized by Foreign Subsidiaries in accordance with the normal investment practices for cash management in investments of a type analogous to the foregoing.

 

“Cash Management Document” means any certificate, agreement or other document executed by any Group Member or Holdings in respect of the Cash Management Obligations.

 

“Cash Management Obligation” means any direct or indirect liability, contingent or otherwise, of any Group Member or Holdings in respect of cash management services (including treasury services, depository, overdraft, credit or debit card, automated clearing house services, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting, trade finance services, funds transfer and other cash management arrangements) provided by any Agent, any Lead Arranger, any Lender or any Affiliate of any of them (whether or not such Person subsequently ceases to be an Agent, Lead Arranger, Lender or any Affiliate thereof), including obligations for the payment of fees, interest, charges, expenses, attorneys’ fees and disbursements in connection therewith; provided that, in the case that such Cash Management Obligations are provided by a Person that is not the Administrative Agent or any of its Affiliates, such Person shall have designated such cash management services as “Cash Management Obligations” in writing to the Administrative Agent.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption of any Law, (b) any change in any Law or (c) the making or issuance of any new request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street

 

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Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued, but solely to the extent they would have been included if they had been imposed under applicable increased cost provisions.

 

“Change of Control” means:

 

(a)                                 at any time prior to a Qualifying IPO, the failure by the Permitted Holders to own and control, directly or indirectly, Capital Stock of Holdings representing at least a majority of the aggregate ordinary voting power of Holdings; and/or

 

(ab)                          at any time on and after a Qualifying IPO, any Person, entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act, but excluding any employee benefit plan of such Person, entity or “group” and their respective Subsidiaries and any Person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), other than the Permitted Holders, (i) is or becomes the beneficial owner (within the meaning of SEC Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of more than 50the greater of (i) 35% of the total then-outstanding Capital Stock of the BorrowerHoldings entitled to vote for members of the board of directors (or equivalent governing body) of the Borrower or (ii) shall have obtained the power to elect a majority of the Borrower’sHoldings and (ii) the percentage of the total then-outstanding Capital Stock of Holdings entitled to vote for members of the board of directors (or equivalent governing body) then held, directly or indirectly, by the Permitted Holders; and/or

 

(bc)                           if a Holding Company Election has been made, Holdings (or if Holdings has merged or consolidated with or into another Person as permitted by Section 7.4 and 7.11, the Person surviving such merger or consolidation) shall cease to own, directly or indirectly, 100% of the Capital Stock of the Borrower that is not held by the Management Investors (provided that the Management Investors shall not hold more than 5% of the Capital Stock of the Borrower).

 

“Charge” means any fee, loss, charge, expense, cost, accrual or reserve of any kind.

 

“Chattel Paper” has the meaning specified in the Guarantee and Collateral Agreement.

 

“Claims” has the meaning specified in the definition of the term “Environmental Claims”.

 

“Class” means, when used in reference to any Loan or Borrowing, whether such Loan, or the Loans comprising such Borrowing, are Initial Revolving Loans, Initial Term Loans or Other Loans (of a Class), and, when used in reference to any Commitment, refers to whether such Commitment is an Initial Term Commitment, Initial Revolving Commitment or Other Commitment (of a Class) and, when used in reference to any Lender, refers to whether such Lender has a Loan or Commitment of such Class.

 

“Closing Date” means the date on which the conditions precedent set forth in Section 5.1 shall have been satisfied or waived and the initial Loans hereunder shall have been funded, which date is July 1, 2016.

 

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“Code” means the Internal Revenue Code of 1986 and any regulations promulgated thereunder.

 

“Collateral” means any and all Property of any Loan Party subject to (or purported to be subject to) a Lien under any Security Document and any and all other Property of any Loan Party now existing or hereafter acquired that is or becomes subject (or purported to be subject) to a Lien pursuant to any Security Document to secure the Secured Obligations.

 

“Collateral Agent” has the meaning specified in the preamble hereto.

 

“Commercial Tort Claims” has the meaning specified in the Guarantee and Collateral Agreement.

 

“Commitment” means with respect to each Lender (to the extent applicable), such Lender’s Initial Term Commitment, Initial Revolving Commitment, Other Commitment and/or any combination thereof, as the context requires.

 

“Committed Reinvestment Amount” has the meaning specified in the definition of the term “Reinvestment Prepayment Amount”.

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).

 

“Commonly Controlled Entity” means any trade or business, whether or not incorporated, that together with a Group Member is under common control or treated as a single employer within the meaning of Section 414 of the Code or Section 4001 of ERISA.

 

“Commonly Controlled Plan” has the meaning specified in Section 4.12(b).

 

“Company Competitor” means any competitor of the Borrower and/or any of its Subsidiaries.

 

“Compliance Certificate” means a certificate duly executed by a Responsible Officer substantially in the form of Exhibit C.

 

“Consolidated Current Assets” means, at any date, all amounts (other than cash and Cash Equivalents, prepaid income taxes, income taxes receivable, current deferred income taxes and the current portion of deferred financing fees) that would, in conformity with GAAP, be set forth opposite the caption “total current assets” (or any like caption) on a consolidated balance sheet of the Group Members at such date.

 

“Consolidated Current Liabilities” means, at any date, all amounts that would, in conformity with GAAP, be set forth opposite the caption “total current liabilities” (or any like caption) on a consolidated balance sheet of the Group Members at such date, but excluding (a) the current portion of any Indebtedness of the Group Members, (b) the current portion of all income taxes payable and current deferred income taxes, (c) the current portion of deferred revenue and (d) without duplication, all Indebtedness consisting of revolving loans, to the extent otherwise included therein.

 

“Consolidated EBITDA” means, with respect to any Person for any period, the sum (without duplication) of:

 

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(a)                                 Consolidated Net Income for such period; plus

 

(b)                                 without duplication and to the extent already deducted (and not added back) in arriving at Consolidated Net Income, the sum of:

 

(i)                                     taxes based on income or profits or capital, including federal, foreign, state, franchise, excise and similar taxes and foreign withholding taxes and foreign unreimbursed value added taxes of such Person and excise and sales tax expense payable or accrued (but excluding amounts paid or accrued in a prior period) during such period (including in respect of repatriated funds and any penalties and interest related to such taxes or arising from any tax examinations and including pursuant to any tax sharing arrangement or as a result of any tax distribution),

 

(ii)                                  total interest expense and, to the extent not reflected in total interest expense, amortization of debt discount and debt issuance costs, and commissions, discounts and other fees and charges associated with Indebtedness or other financing activities, any cash dividends paid or payable in respect of Disqualified Capital Stock (other than to such Person or any Loan Party) and losses on hedge agreements and other derivative instruments,

 

(iii)                               depreciation and amortization expense (excluding amortization of prepaid cash expenses that were paid in a prior period),

 

(iv)                              Non-Cash Charges,

 

(v)                                 (i) management, monitoring, transaction and advisory fees to the InvestorsSponsor paid in cash to the extent permitted under Section 7.9(d) to be paid hereunder or accrued (it being understood that an item may not be added back both as an accrual and a cash payment) during such period (but excluding fees that were paid in cash or accrued in another period), (ii) consulting and/or operational consulting fees to the InvestorsSponsor paid in cash to the extent permitted under Section 7.9(d) to be paid hereunder or accrued (it being understood that an item may not be added back both as an accrual and a cash payment) during such period (but excluding fees that were paid in cash or accrued in another period) in an aggregate amount for each period not to exceed the greater of $4,000,0005,000,000 and 5.0% of Consolidated EBITDA for such period and (iii) expenses (including legal expenses) and indemnities related to the services provided in respect of such fees in clauses (v)(i) and (v)(ii) hereof to the InvestorsSponsor paid in cash to the extent permitted under Section 7.9(d) to be paid hereunder or accrued during such period (but excluding expenses or indemnities that were paid in cash or accrued in another period);

 

(vi)                              (x) Transaction Expenses and (y) any transaction fees, costs and expenses incurred (1) in connection with the consummation of any transaction (or any transaction proposed and not consummated), whether or not permitted under this Agreement, including any issuance or offering of Capital Stock, any Investment, any Disposition, any recapitalization, any acquisition, merger, consolidation or amalgamation or any incurrence, repayment, refinancing, amendment or modification of Indebtedness (including any amortization or write-off of debt issuance or deferred financing costs, premiums and prepayment penalties) or any similar transaction and/or (2) in connection

 

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with any Qualifying IPO (whether or not consummated) (including Public Company Costs),

 

(vii)                           any Charge that is actually reimbursed or reimbursable by one or more third parties pursuant to indemnification or reimbursement provisions or similar agreements or insurance; provided that the relevant Person in good faith expects to receive reimbursement for such fee, cost, expense or reserve within the next four fiscal quarters (it being understood that to the extent any reimbursement amount is not actually received within such fiscal quarters, such reimbursement amount shall be deducted in calculating Consolidated EBITDA for such fiscal quarters),

 

(viii)                        (x) any Charge incurred as a result of, in connection with or pursuant to any management equity plan, profits interest or stock option plan or any other management or employee benefit plan or agreement (including any 401K plan), any pension plan (including any post-employment benefit scheme to which the relevant pension trustee has agreed), any stock subscription or shareholder agreement, any employee benefit trust, any employee benefit scheme or any similar equity plan or agreement (including any deferred compensation arrangement) and (y) any Charge incurred in connection with the rollover, acceleration or payout of Capital Stock held by management of such Person (or any Parent Company), in each case under this clause (y), to the extent that any cash Charge is funded with a capital contribution or the Net Cash Proceeds of a sale or issuance of Qualified Capital Stock of such Person (or any Parent Company) contributed to such Person,

 

(ix)                              [Reserved],the amount of any Charge incurred or accrued in connection with any single or one-time event, including in connection with (x) acquisitions consummated after the Acquisition Closing Date and (y) the closing or consolidation of any facility during such period, and, in respect to this clause (b)(ix), in an aggregate amount for such period not to exceed, in the aggregate with amounts added back pursuant to clause (b)(x) and clause (e) below for such period, 25% of Consolidated EBITDA for such period (calculated before giving effect to such add-back),

 

(x)                                 any Charge attributable to the undertaking and/or implementation of cost savings initiatives, operating expense reductions, transition, opening and/or pre-opening expenses, business optimization and other restructuring (including tax restructuring) and integration Charges (including any Charge attributable to inventory optimization programs, software development costs, any Charge attributable to the closure or consolidation of any facility and/or discontinued operations, Charge relating to entry into a new market, consulting fees, signing costs, retention or completion bonus, relocation expenses, severance payments, Charge associated with any modification to any pension and post-retirement employee benefit plan, Charge associated with new systems design, implementation costs and project startup costs) in an aggregate amount for such period not to exceed, in the aggregate with amounts added back pursuant to clause (b)(ix) above and clause (e) below for such period, 25% of Consolidated EBITDA for such period (calculated before giving effect to such add-back),

 

(xi)                              any earn-out obligation expense incurred in connection with the First Amendment Transactions, any acquisition and/or other Investment permitted under

 

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Section 7.7 and/or any acquisition or other Investment completed prior to the Closing Date, in each case, which is paid or accrued during such period,

 

(xii)                           the amount of any expense or deduction associated with any Restricted Subsidiary that is attributable to any non-controlling interest and/or minority interest of any third party, and

 

(xiii)                        all expenses of the Borrower and its Subsidiaries related to the environmental remediation of contamination originating at Clark County Assessor’s Parcel No. 237-08-301-002 in Primm, Nevada in an aggregate amount for all periods during the term of this Agreement not to exceed $5,000,000; plus

 

(c)                                  to the extent not otherwise included in the determination of Consolidated Net Income for such period, the amount of any proceeds of any business interruption insurance policy received during such period in an amount representing the earnings for the applicable period that such proceeds are intended to replace whether or not then received; provided the relevant Person in good faith expects to receive such amount within the next four fiscal quarters (it being understood that, to the extent any such amount is not actually received within such fiscal quarters, such amount shall be deducted in calculating Consolidated EBITDA for such fiscal quarters); plus

 

(d)                                 to the extent not included in Consolidated Net Income for such period, cash actually received (or any netting arrangement resulting in reduced cash expenditures) during such period, so long as the non-cash gain relating to the relevant cash receipt or netting arrangement was deducted in the calculation of Consolidated EBITDA pursuant to clause (g) below for any previous period and not added back; plus

 

(e)                                  without duplication of amounts added back pursuant to other clauses in this definition, the amount of any expected “run-rate” cost savings, operating expense reductions, other operating improvements and synergies (including, for the avoidance of doubt, the First Amendment Transactions) (collectively, “Expected Cost Savings”) (net of actual amounts realized) that are reasonably identifiable and factually supportable (in the good faith determination of such Person) related to any permitted Investment, Disposition, operating improvement, restructuring, cost savings initiative, any similar initiative and/or specified transaction (any such operating improvement, restructuring, cost savings initiative or similar initiative or specified transaction, a “Cost Saving Initiative”); provided that, (x) such Expected Cost Savings are reasonably expected to be realized within 18 months of the consummation of the event giving rise thereto and shall not exceed, in the aggregate with amounts added back pursuant to clauseclauses (b)(ix) and (b)(x) above, 25% of Consolidated EBITDA for such period (calculated before giving effect to any such Expected Cost Savings to be added back pursuant to this clause (e)); plus

 

(f)                                   without duplication of amounts added back pursuant to other clauses in this definition, other amounts and adjustments reflected in the Projections; minus

 

(g)                                  any amount which, in the determination of Consolidated Net Income for such period, has been included for any non cash income or non cash gain, all as determined in accordance with GAAP (provided that if any non-cash income or non-cash gain represents an accrual or deferred income in respect of potential cash items in any future period, such Person may determine not to deduct the relevant non-cash gain or income in the then-current period); minus

 

(h)                                 the amount of any cash payment made during such period in respect of any Non-Cash Charge that is accounted for in a prior period which was added to Consolidated Net Income to

 

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determine Consolidated EBITDA for such prior period and which does not otherwise reduce Consolidated Net Income for the current period.

 

“Consolidated First Lien Debt” means, as to any Person as of any date of determination, Consolidated Total Debt outstanding on such date that is secured by a Lien which is on at least an equal priority basis (but without regard to the control of remedies) with the Liens securing the Initial Facilities.

 

“Consolidated Net Income” means, with respect to any Person (the “Subject Person”) for any period, the net income (or loss) of such Subject Person, determined on a consolidated basis in accordance with GAAP excluding, without duplication:

 

(a)                                 any impairment charge (including any Charge relating to the impairment of goodwill and other assets) and asset write-off and/or write-down and the amortization of intangibles (including software and goodwill),

 

(b)                                 any gain or loss from any extraordinary, unusual or nonrecurring items for such period (including any costs associated with and/or payment of any actual or prospective legal settlement, fine, judgment or order),

 

(c)                                  any net gain or loss attributable to any asset disposition (including asset retirement costs) or of returned or surplus assets outside the ordinary course of business,

 

(d)                                 any realized or unrealized net gain or loss in respect of (x) any obligation under any Hedge Agreement as determined in accordance with GAAP and/or (y) any other derivative instrument pursuant to, in the case of this clause (y), Financial Accounting Standards Board’s Accounting Standards Codification No. 815-Derivatives and Hedging,

 

(e)                                  any realized or unrealized foreign currency exchange net gain or loss (including any currency re-measurement of Indebtedness, any net gain or loss resulting from Hedge Agreements for currency exchange risk associated with the foregoing or any other currency related risk and any gain or loss resulting from intercompany Indebtedness),

 

(f)                                   the cumulative effect of a change in accounting principles during such period, to the extent included in such net income (loss),

 

(g)                                  the after-tax effect of any net income (or loss) for such period attributable to the early extinguishment of Indebtedness (or any cancellation of Indebtedness),

 

(h)                                 solely for purposes of calculating Excess Cash Flow, the income (or deficit) of any Person accrued prior to the date it becomes a Restricted Subsidiary of such Subject Person or is merged into or consolidated with such Subject Person (or a Restricted Subsidiary thereof),

 

(i)                                     (i) the income of any Person (other than a Restricted Subsidiary of the Subject Person) in which any other Person (other than the Subject Person or any of its Restricted Subsidiaries) has a joint interest, except to the extent of the amount of dividends or distributions or other payments (including any ordinary course dividend, distribution or other payment) paid in cash (or to the extent converted into cash) to the Subject Person or any of its Restricted Subsidiaries by such Person during such period or (ii) the loss of any Person (other than a Restricted Subsidiary of the Subject Person) in which any other Person (other than the Subject Person or any of its Restricted Subsidiaries) has a joint interest, and

 

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(j)                                    the effects of adjustments (including the effects of such adjustments pushed down to such Subject Person and its Restricted Subsidiaries) in component amounts required or permitted by GAAP and related authoritative pronouncements (including to property and equipment, lease, software, goodwill, in-process research and development, other intangible assets, deferred revenue and debt line items) resulting from the application of purchase or recapitalization accounting, as the case may be, in relation to any consummated acquisition or similar Investment or the amortization or write-off of any amounts thereof and, for the avoidance of doubt, the impact of GAAP-required purchase accounting treatment of deferred revenue from software licenses and other contracts acquired in the Transactions or any other consummated acquisitions.

 

Notwithstanding the foregoing, for purposes of calculating the Available Amount, to the extent the same would otherwise be included in Consolidated Net Income, there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Capital Stock, any repurchases and redemptions of Capital Stock, any capital contributions with respect to Capital Stock or any sale of the Capital Stock of an Unrestricted Subsidiary, in each case, to the extent such amounts increase the Available Equity Amount, Available Excluded Contribution Amount or represent a Cure Amount.

 

“Consolidated Secured Debt” means, as to any Person as of any date of determination, Consolidated Total Debt outstanding on such date that is secured by a Lien on any asset or property of any Group Member.

 

“Consolidated Total Assets” means, as of any date of determination, the total amount of all assets of the Group Members, determined on a consolidated basis in accordance with GAAP, as shown on the most recent balance sheet delivered pursuant to Section 6.1(a) or (b), as applicable.

 

“Consolidated Total Debt” means, as to any Person at any date of determination, the aggregate principal amount of Indebtedness of such Person outstanding on such date, determined on a consolidated basis in accordance with GAAP (but excluding the effects of any discounting of Indebtedness resulting from the application of purchase or recapitalization accounting in connection with the Transactions and/or the First Amendment Transactions or any acquisition or similar Investment)), consisting of (i) Indebtedness for borrowed money (including Reimbursement Obligations that have not been reimbursed within three Business Days and the outstanding principal balance of all Indebtedness of such Person represented by notes, bonds and similar instruments), (ii) Capital Lease Obligations, (iii) purchase money Indebtedness and (iv) Guarantee Obligations of such Person in respect of Indebtedness described in the foregoing clauses (i) through (iii), but without duplication of any such amounts to the extent already included in Consolidated Total Debt of the Group Members; provided that “Consolidated Total Debt” shall be calculated to exclude any Indebtedness of such Person if, upon or prior to the maturity thereof, such Person has irrevocably deposited with the proper Person in trust or escrow the necessary funds (or evidences of indebtedness) for the payment, redemption or satisfaction of such Indebtedness.

 

“Consolidated Working Capital” means, at any date, (a) Consolidated Current Assets on such date less (b) Consolidated Current Liabilities on such date.

 

“Contract Consideration” has the meaning specified in the definition of the term “Excess Cash Flow”.

 

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“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its Property is bound.

 

“Corrective Extension Agreement” has the meaning specified in Section 2.28(e).

 

“Cost Saving Initiative” has the meaning specified in the definition of the term “Consolidated EBITDA”.

 

“Credit Agreement Refinancing Commitments” means the Credit Agreement Refinancing Term Commitments and/or the Credit Agreement Refinancing Revolving Commitments, as the context requires.

 

“Credit Agreement Refinancing Debt” has the meaning specified in Section 7.2(a)(ii).

 

“Credit Agreement Refinancing Revolving Commitments” means revolving commitments established in reliance on Section 7.2(a)(ii) that are evidenced by the Loan Documents.

 

“Credit Agreement Refinancing Revolving Facility” means each Class of Credit Agreement Refinancing Revolving Commitments.

 

“Credit Agreement Refinancing Revolving Loans” means the revolving loans made pursuant to the Credit Agreement Refinancing Revolving Commitments.

 

“Credit Agreement Refinancing Term Commitments” means commitments to make term loans established in reliance on Section 7.2(a)(ii) that are evidenced by the Loan Documents.

 

“Credit Agreement Refinancing Term Facility” means each Class of Credit Agreement Refinancing Term Loans.

 

“Credit Agreement Refinancing Term Loans” means the term loans made pursuant to the Credit Agreement Refinancing Term Commitments.

 

“Credit Suisse” has the meaning specified in the introductory paragraph.

 

“CS” has the meaning specified in the introductory paragraph.

 

“Curable Period” has the meaning specified in Section 7.1(b).

 

“Cure Amount” has the meaning specified in Section 7.1(b).

 

“Cure Right” has the meaning specified in Section 7.1(b).

 

“Debt Fund Affiliate” means any Affiliate of an Investorthe Sponsor (other than a natural person) that is a bona fide debt fund or investment vehicle that is either primarily engaged in, or advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit or securities in the ordinary course, but only to the extent that no personnel involved with the investment in any equity fund which has a direct or indirect equity investment in Holdings or any Group Member makes (or has the right to make

 

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or participate with others in making) investment decisions on such Affiliate’s behalf as it pertains to debt investments in Holdings or any Group Member.

 

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

“Declined Proceeds” has the meaning specified in Section 2.12(e).

 

“Default” means any of the events specified in Section 8.1, whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

 

“Default Rate” means an interest rate per annum equal to (a) in the case of overdue principal or interest of any Loan, 2.00% per annum plus the rate otherwise applicable to such Loan as provided in Section 2.15(a) or (b), as applicable, and (b) in the case of fees, 2.00% plus the rate applicable to Revolving Loans that are ABR Loans as provided in Section 2.15(b), in each case, to the fullest extent permitted by applicable Laws.

 

“Defaulting Lender” means, subject to Section 2.26(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder, or (ii) pay to the Administrative Agent, any Issuing Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit) within two Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent or any Issuing Lender in writing that it does not intend to comply with such Lender’s funding obligations hereunder, or has made a public statement to that effect, (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other Federal or state regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in such Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender; provided, further, that the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulator with respect to a Lender or its affiliate under the Dutch Financial Supervision Act 2007 (as amended from time to time and including any successor legislation) shall not be deemed an event described in clause (d) above or (e) a Lender has, or has a direct or indirect parent company that has, become the subject of a Bail-In Action. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under clauses (a) through (e) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.26(b)) upon delivery of written notice of such determination to the Borrower, each Issuing Lender and each Lender.

 

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“Designated Non-Cash Consideration” means the Fair Market Value of non-cash consideration received by any Group Member in connection with a Disposition pursuant to Section 7.5(e) that is designated as Designated Non-Cash Consideration pursuant to a certificate of a Responsible Officer of the Borrower delivered to the Administrative Agent, setting forth the basis of such valuation (which amount will be reduced by (i) the Fair Market Value of the portion of the non-cash consideration converted to cash within 180 days following the consummation of the applicable Disposition and (ii) the amount of Cash Equivalents received by the Group Members in connection with a subsequent sale of such Designated Non-Cash Consideration, which Cash Equivalents are received within one year following the consummation of the applicable Disposition).

 

“Disposition” means, with respect to any Property, any sale, license, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof (including any sale, assignment, transfer or other disposal, with or without recourse of any notes or accounts receivable or any rights and claims associated therewith); provided that “Disposition” shall not be deemed to include any issuance by any Parent Company of any of its Capital Stock or, prior to the Holding Company Election, by the Borrower, to another Person. The terms “Dispose” and “Disposed of” shall have correlative meanings.

 

“Disqualified Capital Stock” means Capital Stock that, by its terms (or by the terms of any security or other Capital Stock into which it is convertible or for which it is exchangeable) or upon the happening of any event or condition, (a) requires the payment of any dividends (other than dividends payable solely in shares of Qualified Capital Stock) prior to the date that is 91 days after the Latest Term Loan Maturity Date or, if later, the latest scheduled maturity date of any Specified Junior Debt as of the date of issuance, (b) matures or is mandatorily redeemable or subject to mandatory repurchase or redemption or repurchase or redemption at the option of the holders thereof (other than solely for Qualified Capital Stock), in each case in whole or in part and whether upon the occurrence of any event, pursuant to a sinking fund obligation on a fixed date or otherwise (including as the result of a failure to maintain or achieve any financial performance standards), prior to the date that is 91 days after the Latest Term Loan Maturity Date or, if later, the latest scheduled maturity date of any Specified Junior Debt as of the date of issuance (other than (i) upon payment in full of the Obligations (other than indemnification and other contingent obligations not yet due and owing) or (ii) upon a “change in control”, asset sale or casualty, condemnation or similar event; provided that any payment required upon the occurrence of any event described in this clause (ii) is subordinated in right of payment to the Obligations on terms reasonably satisfactory to the Administrative Agent) or (c) are convertible or exchangeable, automatically or at the option of any holder thereof, into any Indebtedness, Capital Stock or other assets other than Qualified Capital Stock; provided that, in each case, if such Capital Stock is issued to any plan for the benefit of any Employee of a Group Member (or Parent Company) or by any such plan to such Employee, such Capital Stock shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by a Group Member in order to satisfy applicable statutory or regulatory obligations so long as such repurchase is permitted by the terms of Section 7.6; provided, further, that any Capital Stock held by any present or former Employees (or any affiliates, spouses, former spouses, other immediate family members, successors, executors, administrators, heirs, legatees or distributees of any Employee) of a Group Member (or Parent Company) upon the death, disability, engaging in competitive activity or termination of employment of such Employee or pursuant to any equity subscription, shareholder, employment or other agreement shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by a Group Member so long as such repurchase is permitted by the terms of Section 7.6.

 

“Disqualified Institution” means (a) any Person that is or becomes a Company Competitor and is identified in writing to the Lead Arrangers or, after the Closing Date, to the Administrative Agent, (b) any other Person identified in writing to the Lead Arrangers on or prior to June 16, 2016, and (c) any Affiliate of any of the Persons described in clauses (a) and (b) (other than a

 

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Bona Fide Debt Fund of a Person described in clause (a)) identified in writing to the Administrative Agent as such not less than three (3) Business Days prior to such date or that is reasonably identifiable solely on the basis of its name as an Affiliate of any such Person; provided that “Disqualified Institutions” shall exclude any Person that the Borrower has designated as no longer being a “Disqualified Institution” by written notice delivered to the Administrative Agent from time to time.

 

“Dollars” and “$” means dollars in lawful currency of the United States.

 

“Domestic Subsidiary” means any direct or indirect Subsidiary of the Borrower incorporated or organized under the laws of the US, any state thereof or the District of Columbia.

 

“DQ List” has the meaning specified in Section 10.6(j)(iv).

 

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

 

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

 

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

 

“Effective Yield” means, as to any Indebtedness, the effective yield on such Indebtedness in the reasonable determination of the Administrative Agent in consultation with the Borrower and consistent with generally accepted financial practices, taking into account the applicable interest rate margins, any interest rate floors (the effect of which floors shall be determined in a manner set forth in the proviso below) or similar devices, any amendment to the relevant interest rate margins and interest rate floors prior to the applicable date of determination and all upfront or similar fees or original issue discount (converted to yield assuming the shorter of (i) the weighted average life of the applicable Indebtedness at the time such Indebtedness was incurred and (ii) a four-year life and, in each case, without any present value discount) generally paid or payable to the providers of such Indebtedness, but excluding any arrangement, commitment, amendment, structuring and underwriting fees paid or payable to the arrangers (or their Affiliates) of such Indebtedness in their capacities as such (regardless of whether any such fees are paid to or shared in whole or part with any lender) and any other fee (including, if applicable, ticking fees) not generally paid to all lenders ratably; provided that with respect to any Indebtedness that includes a “LIBOR floor” that is higher than the “LIBOR floor” then applicable to the Initial Term Loan, (1) to the extent that the Reference Rate on the date that the Effective Yield is being calculated is less than such higher floor, the amount of the difference between the two floors shall be deemed added to the interest rate margin for such Indebtedness for the purpose of calculating the Effective Yield and (2) to the extent that the Reference Rate on the date that the Effective Yield is being calculated is greater than such higher floor, then the floor shall be disregarded in calculating the Effective Yield.

 

“Employee” means, with respect to any Person, any director, officer, employee, member of management, manager or consultant of such Person.

 

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“Engagement Letter” means the Engagement Letter dated as of May 25, 2016, among the Borrower and the Lead Arrangers.

 

“Environmental Claims” means any and all actions, suits, orders, decrees, demands, demand letters, claims, liens, notices of noncompliance, violation or potential responsibility or investigation (other than internal reports prepared by the Borrower or any of its Subsidiaries (a) in the ordinary course of such Person’s business or (b) as required in connection with a financing transaction or an acquisition or disposition of real estate) or proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereinafter, “Claims”), including (i) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, (ii) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive or other equitable relief relating to the presence, release or threatened release of Hazardous Materials or arising from alleged injury or threat of injury to human health or safety to the extent relating to human exposure to Hazardous Materials or arising from alleged injury or threat of injury to the environment including ambient air, surface water, groundwater, land surface, subsurface strata, and natural resources, and (iii) any and all Claims by any third party regarding environmental liabilities or obligations assumed or assigned by contract or operation of law.

 

“Environmental Laws” means any applicable Federal, state, foreign or local statute, law, rule, regulation, ordinance, code and rule of common law now or hereafter in effect and in each case as amended, and any binding judicial or administrative interpretation thereof, including any binding judicial or administrative order, consent decree or judgment, relating to the protection of the environment, including ambient air, surface water, groundwater, land surface, subsurface strata, and natural resources, or of human health or safety to the extent relating to human exposure to Hazardous Materials.

 

“Equity Contribution” has the meaning specified in the First Amendment.

 

“ERISA” means the Employee Retirement Income Security Act of 1974 and any regulations promulgated thereunder.

 

“ERISA Event” means any (a) Reportable Event, (b) the withdrawal or partial withdrawal from a Single Employer Plan subject to Section 4063 of ERISA or Multiemployer Plan during a plan year in which a Group Member was a substantial employer, as defined in Section 4001(a)(2) of ERISA or a substantial cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA, (c) the failure by a Group Member or any Commonly Controlled Entity to make when due required contributions to a Multiemployer Plan or Single Employer Plan or the filing pursuant to Section 412 of the Code or Section 302 of ERISA of an application for a waiver of the minimum funding standard, (d) any liability with respect to the withdrawal or partial withdrawal (as such terms are defined in Part I of Subtitle E of Title IV of ERISA) from any Multiemployer Plan, (e) the incurrence by a Group Member of any liability under Title IV of ERISA with respect to the termination of any Single Employer Plan or Multiemployer Plan; (f) the institution of proceedings to terminate a Single Employer Plan or a Multiemployer Plan by the PBGC or the imposition of any Lien in favor of the PBGC on a Single Employer Plan has arisen; (g) the receipt of any notice concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, “insolvent” (within the meaning of Section 4245 of ERISA) or in “at risk” (within the meaning of Section 430 of the Code or Section 303 of ERISA), “critical” or “endangered” status (within the meaning of Section 432 of the Code or Section 305 of ERISA); or (h) the occurrence

 

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of a nonexempt prohibited transaction (within the meaning of Section 4975 of the Code or Section 406 of ERISA) which results in material liability to any Group Member.

 

“E-System” means any electronic system, including Intralinks®, ClearPar® and SyndTrak® and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent, any of its Affiliates or agents or any other Person, providing for access to data protected by passcodes or other security system.

 

“Eurocurrency Reserve Requirements” means, with respect to any Interest Period and for any Eurodollar Loan, a rate per annum equal to the aggregate, without duplication, of the maximum rates (expressed as a decimal number) (rounded up, if necessary, to the nearest 1/100 of 1%) of reserve requirements (including basic, supplemental, marginal and emergency reserves) in effect on any day to which any Lender is subject to any regulations of the Board or other Governmental Authority having jurisdiction with respect thereto dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as “eurocurrency liabilities” in Regulation D of the Board) maintained by a member bank of the United States Federal Reserve System. Eurodollar Loans shall be deemed to constitute Eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemption or offsets that may be available from time to time to any Lender under Regulation D. The Eurocurrency Reserve Requirement shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

 

“Eurodollar Base Rate” means, for any Interest Period with respect to a Eurodollar Loan or any ABR Loan based upon the ABR determined pursuant to clause (iii) of the definition thereof, (x) the rate determined by the Administrative Agent to be the offered rate appearing on the page of the Reuters Screen LIBOR01 (or any successor thereto), which displays the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other Person that takes over the administration of that rate) (the “LIBO Rate”) for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period or, if the rate mentioned in sub-clause (x) does not appear on such page or service or if such page or service is not available, then (y) the rate per annum determined by the Administrative Agent to be the offered rate on such other page or other service which displays the LIBO Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period or, if the rates in clauses (x) and (y) are not available, then (z) the Interpolated Rate, in each case, by 11:00 A.M. (London, England time) two Business Days prior to the first day of such Interest Period; provided that, in no event shall the Eurodollar Base Rate be less than 0%.

 

“Eurodollar Loan” means Loans (other than ABR Loans) the rate of interest applicable to which is based upon the Eurodollar Rate. Eurodollar Loans shall be denominated in Dollars.

 

“Eurodollar Rate” means, for any Interest Period with respect to any Eurodollar Loan, the greater of (a) the rate per annum obtained by dividing (i) Eurodollar Base Rate for such Interest Period by (ii) a percentage equal to 100% minus the Eurodollar Reserve Requirements and (b) solely with respect to the Initial Term Loans, 1.00% per annum.

 

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

 

“Event of Default” means any of the events specified in Section 8.1; provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

 

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“Excess Cash Flow” means, for any period, an amount equal to:

 

(a)                                 Consolidated Net Income for such period; plus

 

(b)                                 if there was a net decrease (other than any such decrease arising from (i) the acquisition or Disposition of any Person by any Group Member, (ii) the reclassification during such period of current assets to long term assets and current liabilities to long term liabilities, (iii) the application of purchase and/or recapitalization accounting and (iv) the effect of any fluctuation in the amount of accrued and contingent obligations under any Hedge Agreement) in Consolidated Working Capital during such period, the amount of such net decrease; plus

 

(c)                                  an amount equal to the amount of all Non-Cash Charges (including, without limitation, depreciation and amortization) to the extent deducted in arriving at such Consolidated Net Income; plus

 

(d)                                 cash payments received in respect of Hedging Agreements during such period to the extent not included in arriving at such Consolidated Net Income; plus

 

(e)                                  tax expense of the Group Members in respect of federal, foreign, state, franchise, excise and similar taxes on income, profits and capital and foreign withholding taxes and foreign unreimbursed value added taxes and excise and sales tax (including in respect of repatriated funds and any penalties and interest related to such taxes or arising from any tax examinations and including pursuant to any tax sharing arrangement or as a result of any tax distribution), to the extent deducted in arriving at such Consolidated Net Income; minus

 

(f)                                   the sum, without duplication, of:

 

(i)                                     the aggregate principal amount of (1) all mandatory prepayments and scheduled repayments of any Indebtedness of the Group Members during such period (other than (x) any mandatory prepayment required pursuant to Section 2.12(a) due to the incurrence of Indebtedness, (y) any mandatory prepayment required pursuant to Section 2.12(b) due to an Asset Sale or Recovery Event (except to the extent the proceeds of such Asset Sale or Recovery Event increased Consolidated Net Income) and (z) any mandatory prepayment required pursuant to Section 2.12(c) due to the existence of Excess Cash Flow or of loans pursuant to Section 2.12(c) of the Second Lien Term Loan Agreement (or any equivalent provisions in any Second Lien Facility)) and (2) all voluntary prepayments of Indebtedness of the Group Members during such period (other than (x) any voluntary prepayment deducted from the amount of any mandatory prepayment required pursuant to Section 2.12(c) pursuant to clause (ii) thereof and (y) any voluntary prepayment of revolving Indebtedness, except to the extent any related commitment is permanently reduced in connection with such prepayment), in each case of clauses (1) and (2), other than such prepayments or repayments funded with the proceeds of the incurrence of long-term Indebtedness (other than revolving Indebtedness) by the Group Members,

 

(ii)                                  without duplication of amounts deducted (whether pursuant to clause (viii) below or other clauses) in any other period, the amount of Capital Expenditures made in cash during such period by the Group Members and, at the election of the Borrower, after such period and prior to the date of the applicable Excess Cash Flow payment, in each case, other than Capital Expenditures financed with the incurrence of long term Indebtedness (other than revolving Indebtedness) by the Group Members,

 

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(iii)                               if there was a net increase (other than any such increase arising from (1) the acquisition or Disposition of any Person by any Group Member, (2) the reclassification during such period of current assets to long term assets and current liabilities to long term liabilities, (3) the application of purchase and/or recapitalization accounting and (4) the effect of any fluctuation in the amount of accrued and contingent obligations under any Hedge Agreement) in Consolidated Working Capital during such period, the amount of such net increase,

 

(iv)                              cash payments by the Group Members during such period in respect of long-term liabilities or other obligations of the Group Members other than Indebtedness (other than cash payments in respect of claims offset by receivables from insurance companies) and in each case to the extent not deducted in determining Consolidated Net Income,

 

(v)                                 without duplication of amounts deducted (whether pursuant to clause (viii) below or other clauses) in any other period, the amount of Permitted Acquisitions and Investments made in cash during such period and, at the election of the Borrower, after such period and prior to the date of the applicable Excess Cash Flow payment, pursuant to Section 7.7, in each case, other than (A) Investments described in Section 7.7 (a), (b), (h), (i), (k), (s) and  (t) and (u), (B) Investments among the Group Members and (C) the portion, if any, of Investments and Permitted Acquisitions funded with the proceeds of the incurrence of long term Indebtedness (other than revolving Indebtedness) by the Group Members,

 

(vi)                              without duplication of amounts deducted in any other period, permitted Restricted Payments made in cash during such period and, at the election of the Borrower, after such period and prior to the date of the applicable Excess Cash Flow payment, pursuant to Section 7.6, in each case, to the extent not already deducted from Consolidated Net Income and other than (A) Restricted Payments described in Section 7.6(a)(iv), (e)(i), (g),  or (i) and (B) Restricted Payments funded with the proceeds of the incurrence of long term Indebtedness (other than revolving Indebtedness) by the Group Members,

 

(vii)                           the aggregate amount of any premium, make-whole or penalty payments actually paid in cash by the Group Members during such period that are required to be made in connection with any prepayment of Indebtedness, in each case, to the extent permitted to be paid hereunder and not already deducted from Consolidated Net Income,

 

(viii)                        without duplication of amounts deducted from Excess Cash Flow in other periods, at the election of the Borrower, (A) the aggregate consideration required to be paid in cash by the Group Members pursuant to binding contracts (the “Contract Consideration”) entered into prior to or during such period and (B) any planned cash expenditures by the Group Members (the “Planned Expenditures”), in the case of each of clauses (A) or (B), relating to Permitted Acquisitions, Investments and/or Capital Expenditures to be consummated or made after such period and prior to the date of the applicable Excess Cash Flow payment; provided that to the extent the aggregate amount of cash (excluding any cash constituting proceeds of the incurrence of long term Indebtedness (other than revolving Indebtedness) by the Group Member) actually utilized to finance such Permitted Acquisitions, Investments and/or Capital Expenditures after such period and prior to the date of the applicable Excess Cash Flow payment is less than the Contract Consideration, the amount of such shortfall shall be added to the succeeding calculation of Excess Cash Flow,

 

(ix)                              the amount of taxes based on income or profits or capital, including federal, foreign, state, franchise, excise and similar taxes and foreign withholding taxes and

 

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foreign unreimbursed value added taxes of the Group Members and excise and sales tax expense (including in respect of repatriated funds and any penalties and interest related to such taxes or arising from any tax examinations and including pursuant to any tax sharing arrangement or as a result of any tax distribution, but net of any refunds of any taxes described in this clause (f)(ix)) paid in cash during such period,

 

(x)                                 cash payments made in respect of Hedging Agreements during such period to the extent not deducted in arriving at such Consolidated Net Income, and

 

(xi)                              without duplication to the extent already deducted in calculating Excess Cash Flow, the amount of all non-cash credits to the extent included in arriving at Consolidated Net Income and cash Charges paid to the extent attributable to Charges excluded in calculating Consolidated Net Income in the current or prior periods.

 

Notwithstanding anything to the contrary herein, for purposes of calculating Excess Cash Flow for the fiscal year ending December 31, 2016, the Excess Cash Flow period for such fiscal year shall commence on July 1, 2016 and end on December 31, 2016.

 

“Excess Cash Flow Percentage” means 50%; provided that the Excess Cash Flow Percentage for any fiscal year with respect to which Excess Cash Flow is measured shall be reduced to (a) 25%, if the First Lien Leverage Ratio as of the last day of such fiscal year is equal to or less than 3.50:1.00, and (b) 0%, if the First Lien Leverage Ratio as of the last day of such fiscal year is equal to or less than 3.00:1.00.

 

“Excluded Assets” means each of the following:

 

(a)                                 the Capital Stock of (i) any first-tier Foreign Subsidiary of a Loan Party and (ii) any first-tier FSHCO of a Loan Party, in each case, in excess of 65% of the issued and outstanding voting Capital Stock and 100% of the issued and outstanding non-voting Capital Stock of any such Person,

 

(b)                                 any owned or leasehold interest in real estate that is not Material Real Estate,

 

(c)                                  any interest in any partnership, joint venture or non-Wholly-Owned Subsidiary which cannot be pledged without (i) the consent of one or more third parties other than Holdings or a Group Member (after giving effect to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) or any similar provisions of any relevant jurisdiction or any other applicable Law) or (ii) giving rise to a “right of first refusal”, a “right of first offer” or a similar right permitted or otherwise not prohibited by the terms of this Agreement that may be exercised by any third party other than Holdings or a Group Member in accordance with the Organizational Documents (and/or shareholders’ or similar agreement) of such partnership, joint venture or non-Wholly-Owned Subsidiary,

 

(d)                                 the Capital Stock of (i) any Immaterial Subsidiary, (ii) any not-for-profit Subsidiary, (iii) any Subsidiary that is subject to regulation as an insurance company (and any Subsidiary thereof), (iv) any special purpose entity used for any permitted securitization or receivables facility or financing and (v) any Unrestricted Subsidiary,

 

(e)                                  any Margin Stock,

 

(f)                                   any Property, the grant of a security interest in which, would (i) require any governmental consent, approval, license or authorization that has not been obtained (including under any

 

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applicable Gaming Regulations), (ii) be prohibited by applicable Law (including under any applicable Gaming Regulations), except, in each case of clause (i) above and this clause (ii), to the extent such requirement or prohibition would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9- 409 of the UCC (or any successor provision or provisions) or any similar provisions of any relevant jurisdiction or any other applicable Law; it being understood that the term “Excluded Asset” shall not include proceeds or receivables arising out of any asset described in clause (f)(i) or clause (f)(ii) unless such proceeds or receivables independently constitute “Excluded Assets” hereunder or (iii) result in material and adverse tax consequences to any Loan Party (as reasonably determined by the Borrower in consultation with the Administrative Agent),

 

(g)                                  (i) any foreign Intellectual Property (and Intellectual Property relating only to Foreign Subsidiaries) and (ii) any intent-to-use Trademark application prior to the filing and acceptance of a “Statement of Use”, “Amendment to Allege Use” or similar notice and/or filing with respect thereto, only to the extent, if any, that, and solely during the period if any, in which, the grant of a security interest therein may impair the validity or enforceability of such intent-to-use Trademark application under applicable Law,

 

(h)                                 any Commercial Tort Claims with a value (as reasonably estimated by the Borrower) of less than $5,000,000,

 

(i)                                     [Reserved],

 

(j)                                    any asset that may not be encumbered or pledged as collateral pursuant to applicable Gaming Regulations (including, to the extent prohibited by applicable Gaming Regulations, Gaming Permits and slot machines of the Guarantors operating in the State of Missouri (which on the Closing Date are HGI-St. Jo, LLC and HGI-Mark Twain, LLC)), except, in the case of this clause (j), to the extent such requirement or prohibition would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) or any similar provisions of any relevant jurisdiction or any other applicable Law; it being understood that the term “Excluded Asset” shall not include proceeds or receivables arising out of any asset described in clause (j) unless such proceeds or receivables independently constitute “Excluded Assets” hereunder,

 

(k)                                 any general intangibles or other rights arising under any Contractual Obligation as to which the grant of a security interest would (i) constitute a violation of a restriction in favor of a counterparty to such Contractual Obligation (other than Holdings or a Group Member) or result in the cancellation, abandonment, invalidation or unenforceability of any right of the relevant Loan Party, unless and until any required consents shall have been obtained, (ii) result in a breach, termination (or a right of termination) or default under such Contractual Obligation (including pursuant to any “change of control” or similar provision) or (iii) permit any third party (other than Holdings or a Group Member) to amend any rights, benefits and/or obligations of the relevant Loan Party in respect of the relevant asset or permit such third party to require any Loan Party or any Subsidiary of the Borrower to take any action materially adverse to the interests of such subsidiary or Loan Party; provided, however, that any such asset will only constitute an “Excluded Asset” under clause (i) or clause (ii) above to the extent such violation, cancellation, abandonment, invaldition, unenforceability, breach, termination (or right of termination) or default would not be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9- 409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable Law; provided, further, that any such asset shall cease to constitute an “Excluded Asset” at such time as the condition causing such violation, cancellation, abandonment, invaldition, unenforceability, breach, termination (or right of termination) or default or right to amend or require other actions no longer exists and to the extent severable, the security interest granted under the

 

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applicable Security Document shall attach immediately to any portion of such general intangible or other right that does not result in any of the consequences specified in clauses (i) through (iii) above,

 

(l)                                     any cash or Cash Equivalents maintained in or credited to any deposit account or securities account that are comprised of (i) funds specifically and exclusively used or to be used for payroll and payroll taxes and other employee benefit payments to or for the benefit of any Loan Party’s employees, (ii) funds specifically and exclusively used or to be used to pay Taxes required to be collected, remitted or withheld (including withholding Taxes (including the employer’s share thereof)) and (iii) any other funds which any Loan Party is permitted or otherwise not prohibited by the terms of this Agreement to hold as an escrow or fiduciary for the benefit of another Person in the ordinary course of business, and

 

(m)                             any asset with respect to which the Administrative Agent and the Borrower have reasonably determined that the cost, burden, difficulty or consequence (including any effect on the ability of the relevant Loan Party to conduct its operations and business in the ordinary course of business) of obtaining or perfecting a security interest therein outweighs the benefit of a security interest to the relevant Secured Parties afforded thereby.

 

“Excluded Subsidiary” means:

 

(a)                                 any Subsidiary that is not a Wholly-Owned Subsidiary on any date such Subsidiary would otherwise be required to become a Guarantor pursuant to the requirements of Section 6.8 (for so long as such Subsidiary is not a Wholly-Owned Subsidiary),

 

(b)                                 any Subsidiary that is prohibited by (x) subject to clause (g) below, applicable Law or (y) Contractual Obligation from guaranteeing the Obligations (and for so long as such restriction is in effect); provided that, in the case of clause (y), such Contractual Obligation existed on the Closing Date or, with respect to any Subsidiary acquired by the Borrower or a Restricted Subsidiary after the Closing Date, on the date such Subsidiary is so acquired (and was not created in anticipation of such acquisition),

 

(c)                                  (i) any direct or indirect Foreign Subsidiary or (ii) any Domestic Subsidiary that is (A) a FSHCO or (B) a direct or indirect Subsidiary of a Foreign Subsidiary or a FSHCO,

 

(d)                                 any Immaterial Subsidiary,

 

(e)                                  any Subsidiary with respect to which, in the reasonable judgment of the Administrative Agent and the Borrower (confirmed in writing by notice to the Borrower), the cost of providing a Guarantee outweighs the benefits to be obtained by the Lenders therefrom,

 

(f)                                   any Unrestricted Subsidiary,

 

(g)                                  any Subsidiary that would require any consent, approval, license or authorization from any Governmental Authority to provide a Guarantee (including any regulatory consent, approval, license or authorization and any consent, approval, license or authorization under any financial assistance, corporate benefit, thin capitalization, capital maintenance, liquidity maintenance or similar legal principle), unless such consent, approval, license or authorization has been received; provided that the Borrower shall, or shall cause the relevant Group Member, to use commercially reasonable efforts to obtain any such consent, approval, license or authorization relating to the Gaming Business, and

 

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(h)                                 any not-for-profit Subsidiary, any Subsidiary that is subject to regulation as an insurance company (and any Subsidiary thereof), and any special purpose entity used for any permitted securitization or receivables facility or financing.

 

“Excluded Swap Obligation” means, with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the guaranty of such Loan Party of, or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder (determined after giving effect to Section 2.9 of the Guarantee and Collateral Agreement and any other “keepwell”, support or other agreement for the benefit of such Loan Party) at the time the guaranty of such Loan Party or the grant of such security interest becomes effective with respect to such Swap Obligation. If any Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guaranty or security interest is or becomes illegal.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender or Issuing Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan, Commitment or Letter of Credit pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan, Commitment or Letter of Credit (other than pursuant to an assignment request by the Borrower under Section 2.24) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.20, amounts with respect to such Taxes were payable either to such Recipient’s assignor immediately before such Recipient became a party hereto or to such Recipient immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.20(e) or Section 2.20(f) and (d) any U.S. federal withholding Taxes imposed under FATCA.

 

“Existing Credit Agreement” means that certain Credit Agreement, dated May 9, 2012, among the Borrower, Deutsche Bank Trust Company Americas, as administrative agent and as collateral agent, the other agents party thereto and the lenders from time to time party thereto, as the same has been amended or supplemented prior to the Closing Date

 

“Existing Notes” means those certain 9% senior notes due 2018 and issued pursuant to that certain Indenture, dated May 9, 2012, by and among the Borrower, Affinity Gaming Finance Corp., the guarantors party thereto, U.S. Bank, National Association, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, registrar, transfer agent and authenticating agent, as the same has been amended or supplemented prior to the Closing Date.

 

“Existing Revolving Commitments” has the meaning specified in Section 2.28(a)(ii).

 

“Existing Revolving Class” has the meaning specified in Section 2.28(a)(ii).

 

“Existing Revolving Loans” has the meaning specified in Section 2.28(a)(ii).

 

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“Existing Term Loan Class” has the meaning specified in Section 2.28(a)(i).

 

“Expected Cost Savings” has the meaning specified in the definition of the term “Consolidated EBITDA”.

 

“Extended Loans/Commitments” means the Extended Term Loans, Extended Revolving Loans and/or Extended Revolving Commitments.

 

“Extended Revolving Commitments” has the meaning specified in Section 2.28(a)(ii).

 

“Extended Revolving Facility” means each Class of Extended Revolving Commitments established pursuant to Section 2.28(a)(ii).

 

“Extended Revolving Loans” has the meaning specified in Section 2.28(a)(ii).

 

“Extended Term Facility” means each Class of Extended Term Loans made pursuant to Section 2.28.

 

“Extended Term Loans” has the meaning specified in Section 2.28(a)(i).

 

“Extending Lender” has the meaning specified in Section 2.28(b).

 

“Extension Agreement” has the meaning specified in Section 2.28(c).

 

“Extension Date” has the meaning specified in Section 2.28(d).

 

“Extension Election” has the meaning specified in Section 2.28(b).

 

“Extension Request” means, collectively, Term Loan Extension Requests and Revolving Extension Requests.

 

“Extension Series” means all Extended Term Loans or Extended Revolving Commitments (as applicable) that are established pursuant to the same Extension Agreement (or any subsequent Extension Agreement to the extent such Extension Agreement expressly provides that the Extended Term Loans or Extended Revolving Commitments, as applicable provided for therein are intended to be a part of any previously established Extension Series) and that provide for the same interest margins, extension fees, if any, and amortization schedule (if any).

 

“Facility” means any of the Initial Term Facility, the Initial Revolving Facility and/or any Other Facility, as the context requires. “Facilities” shall mean all of the forgoing collectively then existing.

 

“Facility Termination Date” means the date as of which all of the following shall have occurred: (a) the Commitments have terminated, (b) all Obligations have been paid in full (other than (i) contingent indemnification obligations as to which no claim has been asserted and (ii) other contingent liabilities as to which no claim has been asserted) and (c) all Letters of Credit have terminated or expired (other than Letters of Credit which have been Cash Collateralized).

 

“Fair Market Value” means, with respect to any asset or group of assets on any date of determination, the price in cash obtainable in a sale of such asset at such date of determination assuming a sale by a willing seller to a willing purchaser dealing at arm’s length and arranged in an orderly

 

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manner over a reasonable period of time having regard to the nature and characteristics of such asset, as determined in good faith by the Borrower.

 

“FATCA” means Sections 1471 through 1474 of the Code (effective as of the date hereof) (or any amended or successor version that is substantively comparable) and any current or future regulations or official interpretations thereof and any intergovernmental agreements and agreements entered into pursuant to Section 1471(b)(1) of the Code, and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code.

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that if such day 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.

 

“Fee Letters” means the Agent Fee Letter and the Side Fee Letter.

 

“Fee Payment Date” means (a) the last Business Day of each of March, June, September and December, commencing with September 30, 2016, and (b) the last day of the Revolving Commitment Period.

 

“Financial Condition Covenant” has the meaning specified in Section 7.1(b).

 

“Financial Requirements” has the meaning specified in Section 6.1.

 

“First Amendment” means that certain First Amendment to Credit Agreement, dated as of September 30, 2016, by and among the Borrower, the other Guarantors party thereto, the Lenders party thereto and CS, as Administrative Agent.

 

“First Amendment Arrangers” means, collectively, CS, Credit Suisse, Citizens Bank, N.A and Fifth Third Bank.

 

“First Amendment Effective Date” means the Acquisition Closing Date.

 

“First Amendment Transactions” means, collectively, (a) the Equity Contribution, (b) the entry into the First Amendment, (c) the Acquisition, (d) the funding of the Second Lien Initial Term Loans, (e) the consummation of any other transactions in connection with the foregoing and (f) the payment of the fees and expenses incurred in connection with any of the foregoing (including the related Transaction Expenses).

 

“First Lien Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated First Lien Debt as of the last day of the most recently ended Test Period to (b) Consolidated EBITDA for the most recently ended Test Period, in each case, of the Group Members on a consolidated basis.

 

“Fixed Amounts” has the meaning specified in Section 1.6(e).

 

“Fixed Incremental Amount” means (a) $70,000,00050,000,000 minus, to the extent previously or simultaneously incurred, (b)(i) the aggregate principal amount of all Incremental Facilities

 

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and/or Incremental Equivalent Debt incurred or issued in reliance on the Fixed Incremental Amount and (ii) the aggregate principal amount of Specified Second Lien Incremental Debt”Incremental Facilities” and “Incremental Equivalent Debt” (each as defined in the Second Lien Term Loan Agreement or any equivalent term under any documentation governing any Second Lien Facility), in each case, incurred or issued in reliance on clause (a) in the proviso of the definition of “Specifiedthe Fixed Incremental Amount (as defined in the Second Lien Incremental Debt”Term Loan Agreement (or equivalent provision under any other documentation governing any Second Lien Facility)).

 

“Foreign Disposition” has the meaning specified in Section 2.12(h).

 

“Foreign Pension Plan” means any plan, fund (including any super-annuation fund) or other similar program that is not subject to the law of the United States of America (including, without limitation, ERISA or the Code) and that is established or maintained outside of the United States of America by any Group Member primarily for the benefit of employees of such Group Member residing outside the United States of America, which plan, fund, or similar program provides or results in retirement income, a deferral of income in contemplation of retirement, or payments to be made upon termination of employment.

 

“Foreign Recovery Event” has the meaning specified in Section 2.12(h).

 

“Foreign Subsidiary” means any direct or indirect Subsidiary that is not a Domestic Subsidiary.

 

“Former Lender” shall have the meaning provided in Section 10.6(k).

 

“Fronting Exposure” means, at any time there is a Defaulting Lender with respect to any Issuing Lender, such Defaulting Lender’s Revolving Percentage of the outstanding L/C Obligations with respect to Letters of Credit issued by such Issuing Lender other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Revolving Lenders or Cash Collateralized in accordance with the terms hereof.

 

“FSHCO” means any direct or indirect Domestic Subsidiary, (a) substantially all of the assets of which consist of Capital Stock and/or Indebtedness of one or more direct or indirect Foreign Subsidiaries or (b) that is treated as a disregarded entity for United States federal income tax purposes, that has no material assets other than Capital Stock and/or Indebtedness of one or more direct or indirect Foreign Subsidiaries.

 

“Funding Office” means the office specified from time to time by the Administrative Agent as its funding office by notice to the Borrower and the Lenders.

 

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

 

“Gaming Authorities” shall mean the Governmental Authorities charged with the administration and enforcement of the Gaming Regulations.

 

“Gaming Business” and “Gaming Businesses” shall mean the businesses and operations of the Borrower and its Subsidiaries with respect to, and the properties and assets of the Borrower and its Subsidiaries used in connection with, any casinos (including riverboat and hotel casinos and all gaming devices therein), or other gaming businesses and other lines of business incidental thereto,

 

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including, but not limited to, the manufacture, sale or distribution of liquor or alcoholic beverages related to the foregoing gaming businesses, now or in the future owned by the Borrower or any of its Subsidiaries or in which the Borrower or any of its Subsidiaries has an interest either through a joint venture or as a party to a management agreement.

 

“Gaming Collateral” shall mean all “Collateral,” as defined in the Guarantee and Collateral Agreement, the creation of a Lien on which is subject to the approval of any Gaming Authority.

 

“Gaming Permits” shall mean, collectively, every license, permit, consent, approval, registration, finding of suitability, waiver, exemption or other authorization required to own, operate or otherwise conduct or own an interest in an entity or manage an entity which owns, operates or otherwise conducts, casino, gaming or liquor operations granted or issued by any Gaming Authority and any other applicable Governmental Authorities.

 

“Gaming Regulations” shall mean the laws, rules, regulations and orders applicable to the ownership or conduct of Gaming Businesses or casino and gaming activities of the Borrower or any of its Subsidiaries in any jurisdiction, as in effect from time to time, including the policies, interpretations and administration thereof by the Gaming Authorities, and applicable Liquor Laws.

 

“Governmental Authority” means any nation or government, any state, province or other political subdivision thereof and any agency, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government and, as to any Lender, any securities exchange and any self-regulatory organization (including the National Association of Insurance Commissioners) including any supra- national bodies such as the European Union or the European Central Bank.

 

“Group Member” means each of the Borrower and each Restricted Subsidiary.

 

“Guarantee and Collateral Agreement” means the Guarantee and Collateral Agreement to be executed and delivered by the Borrower and each Subsidiary Guarantor, substantially in the form of Exhibit B.

 

“Guarantee Obligations” means, as to any Person, without duplication, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other monetary obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other monetary obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance of such Indebtedness or other monetary obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other monetary obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other monetary obligation or any other Person, whether or not such Indebtedness or other monetary obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien); provided that the term “Guarantee Obligations” shall not include endorsements for collection or deposit, in either case, in the ordinary course of business, or customary and reasonable indemnity obligations in effect on the

 

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Closing Date or entered into in connection with any acquisition, Disposition or other transaction permitted under this Agreement (other than such obligations with respect to Indebtedness). The amount of any Guarantee Obligation shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof (including by reference to the Fair Market Value of the property encumbered by a Lien securing any such amount, as applicable), in respect of which such Guarantee Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.

 

“Guarantors” means the collective reference to the Subsidiary Guarantors and any other Person who becomes a party to the Guarantee and Collateral Agreement (including, for the avoidance of doubt, upon the completion of a Holding Company Election, Holdings).

 

“Hazardous Materials” means (a) any petroleum or petroleum products, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, toxic mold, chlorofluorcarbons, lead-based paint, and radon gas; (b) any chemicals, wastes, materials or substances defined as or included in the definition of “hazardous substances,” “hazardous waste,” “hazardous materials,” “extremely hazardous waste,” “restricted hazardous waste,” “toxic substances,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of similar import, under any Environmental Law; and (c) any other chemical, waste, material or substance which is prohibited, limited or regulated by or with respect to which liability is imposed under any Environmental Law.

 

“Hedge Agreements” means all agreements with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions, in each case, entered into by a Group Member; provided that no phantom stock or similar plan providing for payments only on account of services provided by former Employees of the Group Members (or any Parent Company) shall constitute Hedge Agreements.

 

“Hedge Counterparty” means any Person that is a party to a Hedge Agreement that was any Agent, any Lead Arranger, any Lender or any Affiliate of any of them at the time any such Hedge Agreement was entered into, in each case in its capacity as party to a Hedge Agreement.

 

“Holding Company Election” means any election by the Borrower, made in writing and delivered to the Agents, to impose a direct parent holding company for the shares of the Borrower (which imposition may be effected via a newly-formed Subsidiary of the Borrower becoming such holding company via a share exchange or in any other manner). In the eventOn and as of the Acquisition Closing Date, the Borrower has made a Holding Company Election is made, the Borrower shall comply with Section 6.15 andand designates Holdings shall execute and deliver the documentation required therebyas the direct holding company for its shares.

 

“Holdings” means, any direct parent holding company of the Borrower that has become a Guarantor upon the completion of a Holding Company Election pursuant to Section 6.15 and any successor thereto pursuant to Section 7.11. Z Capital Affinity Owner, LLC, a Delaware limited liability company.

 

“Immaterial Subsidiary” means, at any date of determination, any Restricted Subsidiary (i) whose total assets (on a consolidated basis with its Subsidiaries) as of the last day of the Test Period most recently ended on or prior to the date of determination were less than 5% of the Consolidated Total Assets of the Group Members at such date (based upon the financial statements pursuant to Section 6.1(a) or (b) most recently delivered on or prior to such date) and (ii) whose gross revenues (on

 

33

 

a consolidated basis with its Subsidiaries) for such Test Period were less than 5% of the consolidated gross revenues of the Group Members for such period, in each case determined in accordance with GAAP; provided that a Subsidiary shall not be permitted to be an Immaterial Subsidiary if (i) the aggregate amount of gross revenue for all Immaterial Subsidiaries exceeds 10% of the consolidated gross revenues of the Group Members as of the last day of the Test Period most recently ended on or prior to the date of determination or (ii) the aggregate amount of total assets for all Immaterial Subsidiaries exceeds 10% of the aggregate amount of Consolidated Total Assets of the Borrower and its Restricted Subsidiaries as of the last day of the Test Period most recently ended on or prior to the date of determination.

 

“Impacted Loans” has the meaning specified in Section 2.17.

 

“Increased Revolving Commitment” has the meaning specified in Section 2.25(a).

 

“Increasing Revolving Commitment Lender” has the meaning specified in Section 2.25(e)(ii).

 

“Incremental Agreement” has the meaning specified in Section 2.25(e)(i).

 

“Incremental Commitments” means, collectively, the Incremental Term Commitments, the Increased Revolving Commitments and/or the Additional/Replacement Revolving Commitments, as the context requires.

 

“Incremental Equivalent Debt” means (i) Indebtedness in the form of notes or loans (or commitments in respect thereof) in lieu of loans (or commitments) under an Incremental Facility, which notes or loans may, at the election of the Borrower, be unsecured or secured by the Collateral on a pari passu or junior basis with Liens securing the Initial Facilities; provided that (w) the aggregate outstanding amount thereof, together with the aggregate outstanding amount of Incremental Loans provided under the Second Lien Term Loan Agreement or any equivalent term under documentation governing any Second Lien Facility, does not exceed the Incremental Limit, (x) the Borrower shall be in compliance with the financial covenant set forth in Section 7.1, determined on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Incremental Equivalent Debt had been outstanding on the last day of such Test Period for testing compliance therewith (assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and any subsequent funding of the term debt borrowed or issued thereunder), (y) for any Incremental Equivalent Debt incurred in lieu of Incremental Facilities pursuant to clause (e) of the Incremental Limit, (1) if such Incremental Equivalent Debt is secured by the Collateral on a pari passu basis with the then-existing Facilities, the First Lien Leverage Ratio would not exceed 4.20:1.00 and,  (2) if such Incremental Equivalent Debt is unsecured or secured by the Collateral on a junior basis to the then-existing Facilities, the Secured Leverage Ratio would not exceed 5.25:1.00 and (3) if such Incremental Equivalent Debt is unsecured, the Total Leverage Ratio would not exceed 5.25:1.00 (in each case under this clause (y), determined on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Incremental Equivalent Debt had been outstanding on the last day of such Test Period for testing compliance therewith and assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and any subsequent funding of the term debt borrowed or issued thereunder) provided that the testing of any ratios under this sub-clause (y) shall be subject to Section 1.6(c), and (z) the Additional Debt Requirements are satisfied; and (ii) any Permitted Refinancing Debt in respect thereof.

 

“Incremental Facilities” has the meaning specified in Section 2.25(a).

 

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“Incremental Facility Closing Date” has the meaning specified in Section 2.25(e)(i).

 

“Incremental Limit” means:

 

(a)                                 the Fixed Incremental Amount, plus

 

(b)                                 in the case of any Incremental Facility or Incremental Equivalent Debt that effectively replaces any Revolving Commitment terminated pursuant to Section 2.24 or any Term Loan repaid pursuant to clause (c) of Section 2.24, an amount equal to the relevant terminated Revolving Commitment or Term Loans so prepaid, plus

 

(c)                                  in the case of any Incremental Facility or Incremental Equivalent Debt that effectively extends the Maturity Date with respect to any Class of Loans and/or Commitments hereunder, an amount equal to the portion of the relevant Class of Loans or Commitments that will be replaced by such Incremental Facility or Incremental Equivalent Debt, plus

 

(d)                                 (i) the amount of any optional prepayment of any Loan in accordance with Section 2.11 and/or the amount of any permanent reduction of any Commitment (other than any such Loan or Commitment incurred pursuant to clause (e) below) and (ii) the amount paid in cash in respect of any reduction in the outstanding amount of any Term Loan (other than any Term Loan incurred in reliance on clause (e) below) resulting from any assignment of such Term Loan to (and/or purchase of such Term Loan by) Holdings or any Group Member so long as the relevant prepayment or assignment and/or purchase was not funded with the proceeds of any long-term Indebtedness (other than revolving Indebtedness) incurred by the Group Members, plus

 

(e)                                  an unlimited amount so long as, in the case of this clause (e), after giving effect to the relevant Incremental Facility or Incremental Equivalent Debt (assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and subsequent funding of the term debt borrowed or issued thereunder) on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Incremental Facility had been outstanding on the last day of such Test Period for testing compliance therewith, the First Lien Leverage Ratio does not exceed 4.20:1.00 (it being understood that any incurrence of Incremental Equivalent Debt in reliance on this clause (e) shall instead be governed by the ratios set forth in clause (i)(y) of the definition of Incremental Equivalent Debt); plus

 

(f)                                   solely for purposes of determining how much Indebtedness may be outstanding under this definition of “Incremental Limit,” but not for purposes of determining how much Indebtedness may then be incurred thereunder, amounts previously incurred in reliance on the “Incremental Limit” that otherwise reduced the Fixed Incremental Amount;

 

it being understood and agreed that unless the Borrower otherwise notifies the Administrative Agent, that (x) the Borrower shall be deemed to have used amounts under clauses (b) through (d) prior to utilization of amounts under clause (a) or (e), and (y) if all or any portion of the Incremental Facility and/or Incremental Equivalent Debt would be permitted under clause (e) of this definition on the applicable date of determination, such Incremental Facility and/or Incremental Equivalent Debt shall be deemed to have been incurred in reliance on clause (e) of this definition prior to the utilization of any amount available under clause (a).

 

“Incremental Loans” has the meaning specified in Section 2.25(a).

 

“Incremental Revolving Loans” has the meaning specified in Section 2.25(a).

 

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“Incremental Term Commitment” has the meaning specified in Section 2.25(a).

 

“Incremental Term Facility” means each Class of Incremental Term Loans made pursuant to Section 2.25.

 

“Incremental Term Loans” has the meaning specified in Section 2.25(a).

 

“Incurrence-Based Amounts” has the meaning specified in Section 1.6(e).

 

“Indebtedness” means, with respect to any Person at any date, without duplication: (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of Property or services (other than (i) trade payables, accrued expenses, current accounts and similar obligations incurred in the ordinary course of such Person’s business (including on an inter-company basis), (ii) any earnout obligation until such obligation becomes a liability on the balance sheet (excluding the footnotes thereto) of such Person in accordance with GAAP and has not been paid within thirty (30) days after becoming due and payable, (iii) any such obligations under ERISA, (iv) prepaid or deferred revenue arising in the ordinary course of business or (v) purchase price holdbacks arising in the ordinary course of business in respect of a portion of the purchase price of an asset to satisfy warrants or other unperformed obligations of the seller of such asset) which purchase price is due more than six (6) months from the date of the incurrence of the obligation in respect thereof and evidenced by a note or similar written instrument, (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments to the extent the same would appear as a liability on the balance sheet (excluding the footnotes thereto) of such Person in accordance with GAAP, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to Property acquired by such Person, (e) net obligations with respect to Hedge Agreements, (f) all Capital Lease Obligations of such Person, (f) the face amount of any letter of credit issued for the account of such Person or as to which such Person is otherwise liable for reimbursement of drawings, (h) all obligations of such Person in respect of Disqualified Capital Stock, (i) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (h) above, and (j) the obligations of a third Person referred to in clauses (a) through (h) above secured by a Lien on any asset of such first Person, whether or not such Indebtedness is assumed by such first Person valued at the lesser of (x) the aggregate unpaid amount of such Indebtedness secured by such Lien and (y) the Fair Market Value of the property encumbered thereby. For the avoidance of doubt, notwithstanding anything to the contrary set forth herein, (1) intercompany advances in the ordinary course of business in respect of operating costs (such as cash management obligations, royalty fees and transfer pricing) shall not constitute Indebtedness and (2) obligations which would otherwise constitute Indebtedness but which have been cash collateralized or amounts for the repayment thereof placed in escrow shall not constitute Indebtedness to the extent of such cash collateral or escrowed amounts.

 

“Indemnified Liabilities” has the meaning specified in Section 10.5(b).

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

 

“Indemnitee” has the meaning specified in Section 10.5(b).

 

“Initial Facilities” means the Initial Revolving Facility and the Initial Term Facility.

 

“Initial Revolving Commitments” means, as to any Lender, the obligation of such Lender, if any, to make Initial Revolving Loans and participate in Letters of Credit in an aggregate

 

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principal and/or face amount not to exceed the amount set forth opposite such Lender’s name on Appendix A-1 or, as the case may be, in the Assignment and Assumption (or Joinder Agreement, as the case may be) pursuant to which such Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof. The aggregate amount of the Initial Revolving Commitments on the Closing Date is $75,000,000.

 

“Initial Revolving Facility” means the Initial Revolving Commitments and the Initial Revolving Loans made thereunder.

 

“Initial Revolving Loans” has the meaning specified in Section 2.4.

 

“Initial Term Facility” means the Initial Term Commitments and the Initial Term Loans made thereunder.

 

“Initial Term Lender” means each Lender that has an Initial Term Commitment or that holds an Initial Term Loan.

 

“Initial Term Loan” has the meaning specified in Section 2.1.

 

“Initial Term Commitment” means, as to any Lender, the obligation of such Lender, if any, to make an Initial Term Loan to the Borrower in a principal amount not to exceed the amount set forth opposite such Lender’s name on Appendix A-2 or, as the case may be, in the Assignment and Assumption (or Joinder Agreement, as the case may be) pursuant to which such Lender became a party hereto. The aggregate amount of the Initial Term Commitments on the Closing Date is $300,000,000.

 

“Initial Term Maturity Date” means July 1, 2023.

 

“Insurance Policies” shall mean the insurance policies and coverages required to be maintained by each Group Member pursuant to Section 6.5 and all renewals and extensions thereof.

 

“Insurance Requirements” shall mean, collectively, all provisions of the Insurance Policies, all requirements of the issuer of any of the Insurance Policies and all orders, rules, regulations and any other requirements of the National Board of Fire Underwriters (or any other body exercising similar functions) binding upon each Group Member.

 

“Intellectual Property” means the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including copyrights and copyright applications, domain names, patents and patent applications, trademarks and trademark applications, trade names, technology, trade secrets, know-how and processes, including the right to receive all proceeds and damages therefrom.

 

“Intercompany Subordination Agreement” means an intercompany subordination agreement, in substantially the form of Exhibit N hereto, or otherwise in form and substance reasonably satisfactory to the Administrative Agent.

 

“Intercreditor Agreement” means the Intercreditor Agreement, dated as of the Acquisition Closing Date, among the Administrative Agent, as agent for the First Lien Obligations (as defined therein), the Second Lien Agent, as agent for the Second Lien Obligations (as defined therein), the Borrower and the other Loan Parties from time to time party thereto.

 

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“Interest Charges” has the meaning specified in Section 10.20.

 

“Interest Payment Date” means (a) as to any ABR Loan, the last Business Day of each of March, June, September and December to occur while such Loan is outstanding, commencing with September 30, 2016, and the final maturity date of such Loan, (b) as to any Eurodollar Loan having an Interest Period of three months or less, the last day of such Interest Period and (c) as to any Eurodollar Loan having an Interest Period longer than three months, each date occurring at three month intervals and the last day of such Interest Period.

 

“Interest Period” means, as to any Eurodollar Loan, (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six months thereafter, or (with the consent of each affected Lender under the relevant Facility) twelve months thereafter, as selected by the Borrower in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six or (with the consent of each affected Lender under the relevant Facility) twelve months thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not later than 11:00 A.M. on the date that is three (3) Business Days prior to the last day of the then current Interest Period with respect thereto; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

 

(i)                                     if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

 

(ii)                                  no Interest Period may extend beyond the scheduled Revolving Termination Date or beyond the date final payment is due on the Term Loans; and

 

(iii)                               any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month.

 

“Interpolated Rate” means, in relation to any Eurodollar Loan, the rate per annum determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the applicable Eurodollar Base Rate for the longest period (for which the applicable Eurodollar Base Rate is available for the applicable currency) that is shorter than the Interest Period of that Eurodollar Loan and (b) the applicable Eurodollar Base Rate for the shortest period (for which such Eurodollar Base Rate is available for the applicable currency) that exceeds the Interest Period of that Eurodollar Loan, in each case, as of 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period.

 

“Investments” means, as to any Person, (a) the purchase or other acquisition of Capital Stock or debt or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee Obligation with respect to any obligation of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person or (c) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such Person. The amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment, but giving effect to any Returns. If a Group Member sells or otherwise

 

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disposes of any Capital Stock of any Restricted Subsidiary or any Restricted Subsidiary issues any Capital Stock, in either case, such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of the Borrower, the Group Members shall be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Capital Stock and all other Investments in such Restricted Subsidiary retained. For purposes of the definition of “Unrestricted Subsidiary” and Section 7.7, (i) “Investments” shall include the portion (proportionate to the Borrower’s direct or indirect equity interest in such Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of the Borrower at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon redesignation of such Subsidiary as a Restricted Subsidiary, the Group Members shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to (x) the Borrower’s direct or indirect “Investment” in such Subsidiary at the time of such redesignation, less (y) the Fair Market Value of the net assets of such Subsidiary at the time of redesignation allocable to Borrower’s direct or indirect equity interest in such Subsidiary, and (ii) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer.

 

“Investors” means any of Z Capital and/or Silver Point.

 

“Investor Affiliated Lender” means any InvestorSponsor or any Affiliate of the InvestorsSponsors (excluding any Debt Fund Affiliate, any Loan Party and any of their respective Subsidiaries).

 

“Issuing Lenders” means (a) the Administrative Agent or any of its Affiliates, (b) Fifth Third Bank and (c) any other Revolving Lender (agreeing to be an Issuing Lender in its sole discretion) from time to time selected by the Borrower and reasonably acceptable to the Administrative Agent. In the event that there is more than one Issuing Lender at any time, references herein and in the other Loan Documents to the Issuing Lender shall be deemed to refer to the Issuing Lender in respect of the applicable Letter of Credit or to all Issuing Lenders, as the context requires.

 

“Joinder Agreement” means an agreement substantially in the form of Exhibit J. 

 

“Joint Bookrunners” has the meaning specified in the preamble hereto.

 

“Latest Maturity Date” means, at any date of determination, the latest date that is a maturity or expiration date applicable to any Loan or Commitment hereunder at such time, determined after giving effect to any extension of the maturity dates hereunder and assuming, in the case of any maturity or expiration date that is determined by reference to the satisfaction or non-satisfaction of any condition, that such maturity date is to occur on the latest of the dates specified therefor.

 

“Latest Revolving Maturity Date” means, as of any date of determination, the latest maturity or expiration date applicable to any Revolving Commitment or, in each case, any Revolving Loans pursuant thereto, determined after giving effect to any extension of the maturity dates hereunder and assuming, in the case of any maturity or expiration date that is determined by reference to the satisfaction or non-satisfaction of any condition, that such maturity date is to occur on the latest of the dates specified therefor.

 

“Latest Term Loan Maturity Date” means, as of any date of determination, the latest maturity or expiration date applicable to any Term Loan hereunder, determined after giving effect to any extension of the maturity dates hereunder and assuming, in the case of any maturity or expiration date

 

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that is determined by reference to the satisfaction or non-satisfaction of any condition, that such maturity date is to occur on the latest of the dates specified therefore.

 

“Laws” or “laws” means, collectively, all international, federal, state, local or foreign law, statute or ordinance, treaty, common law, or any rule, code and administrative or judicial authority, regulation, judgment, order, writ, injunction, decree, arbitration award, agency requirement, license or permit of, or agreement with, any Governmental Authority, including any Gaming Regulations.

 

“L/C Commitment” means with respect to each Issuing Lender, the commitment of such Issuing Lender to issue Letters of Credit pursuant to Section 3.1. The amount of each Issuing Lender’s L/C Commitment as of the Closing Date is set forth on Appendix A-3 under the caption “L/C Commitment.” The L/C Commitments are part of, and not in addition to, the Revolving Commitments. On the Closing Date the aggregate L/C Commitments of all of the Issuing Lenders is $10,000,000.

 

“L/C Obligations” means, at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired Dollar amount of the then outstanding Letters of Credit and (b) the aggregate Dollar amount of drawings under Letters of Credit that have not then been reimbursed. The amount of such L/C Obligations shall equal the maximum amount that may be payable by the Issuing Lenders thereupon or pursuant thereto.

 

“L/C Participants” means, collectively, all Revolving Lenders other than the applicable Issuing Lender.

 

“LCA Election” has the meaning specified in Section 1.6(c). 

 

“LCA Test Time” has the meaning specified in Section 1.6(c).

 

“Lead Arrangers” hasmeans, collectively, (i) prior to the First Amendment Effective Date, the meaning specified in the preamble hereto and (ii) after the First Amendment Effective Date, (A) in respect of the First Amendment, the First Amendment Arrangers and (B) in respect of the Second Lien Facility, Citizens Bank, N.A., Credit Suisse, CS and Fifth Third Bank.

 

“Leaseholds” of any Person shall mean all the right, title and interest of such Person as lessee, sublessee or licensee in, to and under leases, subleases or licenses of land, improvements and/or fixtures.

 

“Lenders” has the meaning specified in the preamble hereto, and each of their respective successors and assigns as permitted hereunder.

 

“Letters of Credit” has the meaning specified in Section 3.1(a).

 

“License Revocation” shall mean the revocation, denial, failure to renew or suspension of, or the appointment of a receiver, supervisor or similar official with respect to, any material Gaming Permit or other material casino, gambling or gaming license issued by any Gaming Authority covering any Material Gaming Facility or relating to the ownership, management or operation thereof.

 

“Lien” means any mortgage, pledge, hypothecation, collateral assignment, encumbrance, lien (statutory or other), charge or other security interest or any other security agreement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title thereof, and any capital lease having substantially the same

 

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economic effect as any of the foregoing); provided that in no event shall an operating lease be deemed to be a Lien.

 

“Limited Condition Acquisition” means any acquisition or similar Investment by any Group Member or any merger of the Borrower permitted by the final paragraph of Section 7.4 that is not conditioned on the availability of, or on obtaining, third party financing, other than any acquisition of, or similar Investment in, any Unrestricted Subsidiary.

 

“Liquor Laws” shall mean all laws, rules, regulations and ordinances relating to the manufacture, sale or distribution of liquor or alcoholic beverages.

 

“Loan” means any loan made by any Lender pursuant to this Agreement.

 

“Loan Documents” means, collectively, this Agreement, the Security Documents, the Intercreditor Agreement, the Applications, the Fee Letters, the Intercompany Subordination Agreement, each intercreditor or subordination agreement entered into in connection with the Obligations, the Notes (if any), any Incremental Agreement, each Joinder Agreement, each Extension Agreement, each Refinancing Agreement, the First Amendment and any other document related to this Agreement designated in writing by the Borrower and the Administrative Agent as a “Loan Document”.

 

“Loan Parties” means the Borrower and each Guarantor.

 

“Majority Facility Lenders” means, with respect to any Facility, the holders of more than 50% of the aggregate unpaid principal amount of the Term Loans with respect to such Facility or the Revolving Extensions of Credit outstanding under such Facility (or, in the case of any Revolving Facility, prior to any termination of the Commitments under such Facility, the holders of more than 50% of the Commitments under such Facility), as applicable; provided that the Loans and Commitments (and the Revolving Extensions of Credit) of any Defaulting Lender and any Lender that is an Investor Affiliated Lender shall be excluded for the purposes of making a determination of Majority Facility Lenders.

 

“Management Investors” means the current and former officers, directors, employees and other members of the management of the Company and its subsidiaries whose equity is being rolled over under the Merger Agreement in an amount not to exceed 5.0% of the total equity capitalization of the Borrower.

 

“Material Acquisition” means any Permitted Acquisition or similar Investment, in each case, the aggregate consideration for which exceeds $80,000,000.

 

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, financial condition or results of operations of the Group Members, taken as a whole, (b) the ability of the Loan Parties, taken as a whole, to perform their payment obligations under the Loan Documents or (c) the rights and remedies (taken as a whole) of the Administrative Agent, the Collateral Agent or the Lenders under the Loan Documents.

 

“Material Gaming Facility” shall mean any gaming facility (including any hotel/casino or other gaming or gambling operation) the absence, loss, closing or partial closing of which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

“Material Real Estate” means (i) any fee-owned real property of a Loan Party located in the United States having a Fair Market Value (together with improvements thereof) (as reasonably

 

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determined by the Borrower after taking into account any liabilities with respect thereto that impact such Fair Market Value) in excess of $2,500,000 as of the Closing Date (or, if later, the date of acquisition thereof), (ii) any Leasehold subject to a ground lease, the Fair Market Value of which is in excess of $2,500,000 as of the Closing Date (or, if later, the date of leasing thereof), (iii) any Leasehold (other than ground leases) for which the aggregate annual rental payments are in excess of $2,500,000 as of the Closing Date (or, if later, the date of leasing thereof) and (iv) any fee-owned real property or Leasehold that was subject to a “Mortgage” under the Existing Credit Agreement.

 

“Maximum Second Lien Principal Amount” means (a) $95,000,000 plus (b) the aggregate principal amount, but in no event to exceed $50,000,000, of “Incremental Facilities” and “Incremental Equivalent Debt” (each as defined in the Second Lien Term Loan Agreement or any equivalent term under any documentation governing any Second Lien Facility), in each case, incurred or issued in reliance on the Fixed Incremental Amount (as defined in the Second Lien Term Loan Agreement (or equivalent provision under any other documentation governing any Second Lien Facility)).

 

“Maximum Rate” has the meaning specified in Section 10.20.

 

“Merger” has the meaning specified in the First Amendment.

 

“Merger Agreement” has the meaning specified in the First Amendment.

 

“Merger Partner” has the meaning specified in the last paragraph of Section 7.4.

 

“Minimum Collateral Amount” means, at any time, as to Cash Collateral consisting of cash or deposit account balances, an amount equal to 103% of the Fronting Exposure of all Issuing Lenders with respect to Letters of Credit issued and outstanding at such time.

 

“Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.

 

“Mortgage” means any mortgage, leasehold mortgage, deed of trust, leasehold deed of trust, hypothec or other similar document made by any Loan Party in favor of, or for the benefit of, the Collateral Agent for the benefit of the Secured Parties, in form and substance reasonably satisfactory to the Administrative Agent and the Borrower (taking into account the law of the jurisdiction in which such mortgage, leasehold mortgage, deed of trust, leasehold deed of trust, hypothec or similar document is to be recorded).

 

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 3(37) of ERISA or Section 4001(a)(3) of ERISA, and to which any Group Member or any Commonly Controlled Entity is making, is obligated to make or has made or been obligated to make during the past six years, contributions on behalf of participants who are or were employed by any of them.

 

“Net Cash Proceeds” means:

 

(a)                                 in connection with any Asset Sale or any Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents (including any such proceeds received (x) by way of deferred payment of principal pursuant to a note or installment receivable, purchase price adjustment receivable, earn-out payment or otherwise or (y) in respect of any non-cash proceeds (with respect to this clause (y), to the extent such cash or Cash Equivalent proceeds are received within twelve months from the original date of receipt of such non-cash proceeds), but, in each case, only as and when received and valued at

 

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the principal amount thereof when received in the case of notes or other debt securities and valued at the Fair Market Value when received in the case of other non-cash proceeds) of such Asset Sale or Recovery Event received by any Group Member, net of (i) reasonable brokers’ fees and commissions, attorneys’ fees, accountants’ fees, investment banking fees, consulting fees and other reasonable fees and expenses (including legal fees and expenses and, in the case of a Recovery Event, costs in connection with the adjustment, settlement or collection of any claims in respect thereof or, if such Recovery Event is a taking, costs of putting any affected property in a safe and secured position) actually incurred by the Group Members in connection therewith, (ii) the principal amount, premium or penalty, if any, interest and other amounts required to be paid or prepaid or otherwise becomes due or would be in default on any Indebtedness secured by a Lien expressly permitted hereunder on any asset which is the subject of such Asset Sale or Recovery Event (other than the Obligations, Obligations (or any similar term) under and as defined in any Second Lien Facility, any Indebtedness secured by a Lien that is pari passu with or expressly subordinated to the Lien securing the Obligations and in the case of an Asset Sale, Indebtedness assumed by the purchaser in any Asset Sale), (iii) taxes paid or reasonably estimated to be payable by any Group Member as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements and tax distributions) and (iv) any escrow or reserve for any indemnification payments (fixed or contingent) attributable to seller’s indemnities and representations and warranties to purchaser in respect of the applicable Asset Sale undertaken by the Group Members or other liabilities in connection with such Asset Sale (provided that, upon release of any such escrow or reserve to any Group Member, the amount released shall be considered Net Cash Proceeds); provided that, in the case of any Asset Sale by a non-Wholly-Owned Restricted Subsidiary or Recovery Event with respect to assets of a non-Wholly-Owned Restricted Subsidiary, the pro rata portion of the net cash proceeds thereof attributable to minority interests and not available for distribution to or for the account of the Borrower or a Wholly-Owned Restricted Subsidiary as a result thereof shall not be included in Net Cash Proceeds; and

 

(b)                                 in connection with any issuance or sale of Capital Stock, debt securities or instruments or the incurrence of Indebtedness, in each case, the proceeds thereof in the form of cash and Cash Equivalents (including any such proceeds received (when received) (x) by way of deferred payment of principal pursuant to a note or installment receivable, purchase price adjustment receivable, earn-out payment or otherwise or (y) in respect of any non-cash proceeds (with respect to this clause (y), to the extent such cash or Cash Equivalent proceeds are received within twelve months from the original date of receipt of such non-cash proceeds) received from such issuance or incurrence, net of taxes and customary transaction costs, attorneys’ fees, investment banking fees, accountants’ fees, consulting fees, underwriting discounts and commissions, placement fees and other fees and expenses (including legal fees and expenses) actually incurred in connection therewith.

 

”Non-Cash Charges” means any non-cash Charges, (x) excluding amortization of a prepaid cash item that was paid in a prior period and any non-cash Charge in respect of an item that was included in Consolidated Net Income in a prior period and (y) including the excess of GAAP rent expense over actual cash rent paid, including the benefit of lease incentives (in the case of a charge); provided that if any non-cash Charge represents an accrual or reserve for a potential cash item in a future period, (i) the Borrower may elect not to add back such non-cash Charge in the current period and (ii) to the extent the Borrower elects to add back such non-cash Charge, the cash payment in respect thereof in such future period shall be subtracted from Consolidated EBITDA to such extent).

 

“Non-Consenting Lender” has the meaning assigned to such term in Section 2.24.

 

“Non-Defaulting Lender” means, as to any Facility, a Lender thereunder that is not a Defaulting Lender.

 

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“Non-Guarantor Subsidiary” means any Restricted Subsidiary of the Borrower which is not a Subsidiary Guarantor.

 

“Non-U.S. Lender” has the meaning specified in Section 2.20(e). 

 

“Nonrenewal Notice” has the meaning specified in Section 3.1(a). 

 

“Note” means any promissory note evidencing any Loan.

 

“Notice of Intent to Cure” has the meaning specified in Section 7.1(b).

 

“Obligations” means the unpaid principal of and interest on (including interest accruing after the maturity of the Loans, and Reimbursement Obligations and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower or any other Loan Party, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans, the Reimbursement Obligations and all other obligations and liabilities (excluding, for the avoidance of doubt, all Cash Management Obligations) of the Borrower and the other Loan Parties to the Administrative Agent, the Collateral Agent, any Issuing Lender or any Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document, the Letters of Credit, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including all fees, charges and disbursements of counsel to the Administrative Agent, the Collateral Agent, any Issuing Lender or any Lender that are required to be paid by the Borrower or any other Loan Party pursuant hereto) or otherwise.

 

“OFAC” has the meaning specified in Section 4.20.

 

“Organizational Documents” means (a) with respect to any corporation or unlimited liability company, its certificate or articles of incorporation, amalgamation or organization and its by- laws, (b) with respect to any limited partnership, its certificate of limited partnership and its partnership agreement, (c) with respect to any general partnership, its partnership agreement, (d) with respect to any limited liability company, its articles of organization or certificate of formation, and its operating agreement, and (e) with respect to any other form of entity, such other organizational documents required by local Laws or customary under such jurisdiction to document the formation and governance principles of such type of entity. In the event that any term or condition of this Agreement or any other Loan Document requires any Organizational Document to be certified by a secretary of state or similar governmental official, the reference to any such “Organizational Document” shall only be to a document of a type customarily certified by such governmental official.

 

“Other Applicable Indebtedness” has the meaning specified in Section 2.12(f).

 

“Other Commitments” means any Incremental Term Commitments, any Credit Agreement Refinancing Term Commitments and/or any Other Revolving Commitments, as the context requires.

 

“Other Connection Taxes” means, with respect to any Recipient or the Collateral Agent, Taxes imposed as a result of a present or former connection between such Recipient or the Collateral Agent and the jurisdiction imposing such Tax (other than any such connection arising solely from the Recipient or the Collateral Agent having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in

 

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any other transaction pursuant to or enforced this Agreement or any other Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“Other Facility” means any Incremental Term Facility, any Credit Agreement Refinancing Term Facility, any Extended Term Facility and/or any Other Revolving Facility, as the context requires.

 

“Other Loans” means any Incremental Term Loans, any Credit Agreement Refinancing Term Loans, any Extended Term Loans and/or any Other Revolving Loans, as the context requires.

 

“Other Revolving Commitments” means any Additional/Replacement Revolving Commitments, any Credit Agreement Refinancing Revolving Commitments and/or any Extended Revolving Commitments, as the context requires.

 

“Other Revolving Facility” means any Additional/Replacement Revolving Facility, any Credit Agreement Refinancing Revolving Facility and/or any Extended Revolving Facility and, in each case, any letters or credit issued and swing line loans made thereunder, as the context requires.

 

“Other Revolving Loans” means any Additional/Replacement Revolving Loans, any Credit Agreement Refinancing Revolving Loans and/or any Extended Revolving Loans, as the context requires.

 

“Other Taxes” means any and all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement or any other Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.24).

 

“Outstanding Amount” means (a) with respect to the Term Loans, Revolving Loans, and Other Revolving Loans on any date, the outstanding principal amount thereof in Dollars after giving effect to any borrowings and prepayments or repayments of Term Loans, Revolving Loans or Other Revolving Loans, as the case may be, occurring on such date; and (b) with respect to any L/C Obligations on any date, the outstanding amount thereof on such date after giving effect to any and all transactions on such date.

 

“Overnight Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate and (b) an overnight rate determined by the Administrative Agent or any Issuing Lender, as the case may be, in accordance with banking industry rules on interbank compensation.

 

“Parent Company” means, if any Holding Company Election has been made, (a) Holdings and (b) any other Person of which the Borrower is an indirect Wholly-Owned Subsidiary.

 

“PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

 

“Participant” has the meaning specified in Section 10.6(h).

 

“Participant Register” has the meaning specified in Section 10.6(h).

 

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“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA.

 

“Permitted Acquisition” means any acquisition by a Group Member, whether by purchase, merger, amalgamation or otherwise, of all or substantially all of the assets, of any Person, or of all or substantially all of the assets constituting a division, product line or business line of any Person or of the majority (or any greater portion) of the outstanding Capital Stock of any Person (and, in any event, including any Investment in (x) any Restricted Subsidiary the effect of which is to increase such Group Member’s equity ownership in such Restricted Subsidiary or (y) any joint venture for the purpose of increasing such Group Member’s ownership interest in such joint venture) (each, a “Proposed Acquisition”), if such Proposed Acquisition complies with the following criteria:

 

(a)                                 subject to Section 1.6(c), no Event of Default shall be in effect immediately prior or after giving effect to such Proposed Acquisition or would result therefrom;

 

(b)                                 any acquired Person shall become a Guarantor to the extent required by and otherwise comply with the provisions of Section 6.8 within the time periods specified therein;

 

(c)                                  after giving effect to the consummation of such acquisition, the Group Members shall be in compliance with Section 6.11; and

 

(d)                                 the aggregate amount of Proposed Acquisitions by Loan Parties in assets that are not (or do not become) owned by a Loan Party or in Capital Stock in Persons that do not become Loan Parties upon consummation of such acquisition (together with the aggregate amount of Investments by Loan Parties in Non-Guarantor Subsidiaries pursuant to Section 7.7(c)(iv) and Investments by Loan Parties in Persons that are not Loan Parties pursuant to Section 7.7(q)(i)) shall not exceed the sum of (i) the greater of (x) $18,750,000 and (y) 25% of Consolidated EBITDA as of the last day of the most recently ended Test Period, plus (ii) amounts otherwise available under Section 7.7; provided, that (x) this clause (d) shall not apply to any acquisition to the extent (1) any such consideration is financed with capital contributions with respect to Qualified Capital Stock of the Borrower or any Parent Company or proceeds of any issuance of Qualified Capital Stock by the Borrower or any Parent Company, in each case contributed to a Loan Party, or (2) the Person so acquired (or the Person owning the assets so acquired) becomes a Subsidiary Guarantor even though such Person owns Capital Stock in Persons that are not otherwise required to become Subsidiary Guarantors, if, in the case of this clause (2), at least 70% of the Consolidated EBITDA of the Person(s) acquired in such acquisition (or the Persons owning the assets so acquired) (for this purpose and for the component definitions used in the definition of “Consolidated EBITDA”, determined on a consolidated basis for such Person(s) and their respective Restricted Subsidiaries) is generated by Person(s) that will become Subsidiary Guarantors (i.e., disregarding any Consolidated EBITDA generated by Restricted Subsidiaries of such Persons that are not (or will not become) Subsidiary Guarantors) and (y) in the event that the amount available under this clause (d) is reduced as a result of any acquisition of any Restricted Subsidiary that does not become a Loan Party or any assets that are not transferred to a Loan Party and such Restricted Subsidiary subsequently becomes a Loan Party or such assets are subsequently transferred to a Loan Party, as the case may be, the amount available under this clause (d) shall be increased on a dollar for dollar basis as a result thereof.

 

“Permitted Cure Security” means common or preferred equity (having such terms as are reasonably acceptable to the Administrative Agent, it being agreed that any Qualified Capital Stock shall be deemed to be reasonably acceptable to the Administrative Agent) of the Borrower or any Parent Company.

 

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“Permitted Holders” means (a) the InvestorsSponsors and then-current and former officers, directors, employees and other members of the management of the Company and its subsidiaries and (b) any Person with which one or more InvestorsSponsors form a “group” (within the meaning of Section 14(d) of the Exchange Act) so long as, in the case of this clause (b), the InvestorsSponsors beneficially own more than 50% of the relevant voting Capital Stock beneficially owned by the group.

 

“Permitted Liens” means Liens permitted pursuant to Section 7.3.

 

“Permitted Refinancing Debt” means Refinancing Debt that satisfies the Refinancing Debt Requirements.

 

“Permitted Sale Leaseback Transaction” means any Sale Leaseback Transaction in respect of property consisting of equipment or capital assets for cash consideration in an amount not less than the Fair Market Value thereof so long as the Borrower shall comply with Section 2.12(b).

 

“Person” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

 

“Plan” means at a relevant time, any employee benefit plan (other than a Multiemployer Plan) as defined in Section 3(3) of ERISA which is sponsored, maintained or contributed to by, or required to be contributed to by, any Group Member or with respect to which any Group Member has or could reasonably be expected to have liability, contingent or otherwise, under ERISA.

 

“Planned Expenditures” has the meaning specified in the definition of the term “Excess Cash Flow”.

 

“Platform” has the meaning specified in Section 6.2.

 

“Pledged Securities” has the meaning specified in the Guarantee and Collateral Agreement.

 

“Previously Absent Financial Maintenance Covenant” means, at any time (x) any financial maintenance covenant that is not included in this Agreement at such time and (y) any financial maintenance covenant that is included in this Agreement at such time but with covenant levels in this Agreement that are less restrictive on Group Members.

 

“Prime Rate” means the rate of interest per annum announced from time to time by CS as its prime rate in effect at its principal office in New York City. The prime rate is a rate set by CS based upon various factors including CS’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such rate

 

“Pro Forma Basis” or “pro forma effect” means, with respect to any determination of the Total Leverage Ratio, the Secured Leverage Ratio, the First Lien Leverage Ratio, the Consolidated EBITDA and Consolidated Total Assets (including component definitions of each of the foregoing), that each Subject Transaction with respect to any test or covenant for which such determination is being made shall be deemed to have occurred as of the first day of the applicable Test Period (or, in the case

 

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of Consolidated Total Assets (or with respect to any determination pertaining to the balance sheet, including the acquisition of cash and Cash Equivalents), as of the last day of such Test Period) and that:

 

(a)                                 (i) in the case of (A) any Disposition of all or substantially all of the Capital Stock of any Restricted Subsidiary or any division and/or product line of the Borrower or any Restricted Subsidiary, (B) any designation of a Restricted Subsidiary as an Unrestricted Subsidiary and (C) the implementation of any Cost Saving Initiative, income statement items (whether positive or negative and including any items giving rise to Expected Cost Savings) attributable to the property or Person subject to such Subject Transaction, shall be excluded as of the first day of the applicable Test Period with respect to any test or covenant for which the relevant determination is being made and (ii) in the case of (A) any Permitted Acquisition or other permitted Investment described in the definition of the term “Subject Transaction” and/or (B) the designation of an Unrestricted Subsidiary as a Restricted Subsidiary, income statement items (whether positive or negative) attributable to the property or Person subject to such Subject Transaction shall be included as of the first day of the applicable Test Period with respect to any test or covenant for which the relevant determination is being made; it being understood that any pro forma adjustment described in this Agreement may be applied to any such test or covenant solely to the extent that such adjustment is consistent with (and subject to the limitations set forth in) the definition of the term “Consolidated EBITDA”;

 

(b)                                 any retirement or repayment of Indebtedness (other than normal fluctuations in revolving Indebtedness incurred for working capital purposes) shall be deemed to have occurred as of the first day of the applicable Test Period with respect to any test or covenant for which the relevant determination is being made;

 

(c)                                  any Indebtedness incurred by any Group Member in connection therewith shall be deemed to have occurred as of the first day of the applicable Test Period with respect to any test or covenant for which the relevant determination is being made; provided that, (i) if such Indebtedness has a floating or formula rate, such Indebtedness shall have an implied rate of interest for the applicable Test Period for purposes of this definition determined by utilizing the rate that is or would be in effect with respect to such Indebtedness at the relevant date of determination (taking into account any interest hedging arrangements applicable to such Indebtedness), (ii) interest on any Capital Lease Obligations shall be deemed to accrue at an interest rate reasonably determined by the Borrower to be the rate of interest implicit in such obligation in accordance with GAAP and (iii) interest on any Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate or other rate shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen by the Borrower; and

 

(d)                                 for purposes of determining Consolidated Total Assets, the acquisition of any asset (including cash and Cash Equivalents), whether pursuant to any Subject Transaction or any Person becoming a Subsidiary or merging, amalgamating or consolidating with or into the Borrower or any of its Subsidiaries, or the Disposition of any asset (including cash and Cash Equivalents), described in the definition of the term “Subject Transaction” shall be deemed to have occurred as of the last day of the applicable Test Period with respect to any test or covenant for which such calculation is being made.

 

“Projections” means the financial projections and pro forma financial statements of the Borrower and its Subsidiaries included in that certain Confidential Information Memorandum dated June 2016, relating to the Borrower and its Subsidiaries and the Transactions (or a supplement thereto).

 

“Property” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Capital Stock.

 

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“Proposed Acquisition” has the meaning specified in the definition of the term “Permitted Acquisition”.

 

“Public Company Costs” means Charges associated with, or in anticipation of, or preparation for, compliance with the requirements of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith and Charges relating to compliance with the provisions of the Securities Act and the Exchange Act (and in the case of any Law, any similar Law under any other applicable jurisdiction), as applicable to companies with equity or debt securities held by the public, the rules of national securities exchange companies with listed equity or debt securities, directors’, managers’ and/or employees’ compensation, fees and expense reimbursement, disbursements, Charges relating to investor relations, shareholder meetings and reports to shareholders or debtholders, directors’ and officers’ insurance and other executive costs, legal and other professional fees and listing fees.

 

“Public Lender” has the meaning specified in Section 6.2.

 

“Purchasing Borrower Party” means Holdings or any Group Member, in each case, that becomes an Assignee pursuant to Section 10.6(c).

 

“Qualified Capital Stock” means any Capital Stock that is not Disqualified Capital Stock.

 

“Qualifying IPO” means the issuance by any Parent Company of its common Capital Stock in an underwritten primary public offering (other than a public offering pursuant to a registration statement on Form S-8 or otherwise in respect of an employee stock purchase program) pursuant to an effective registration statement filed with the SEC in accordance with the Securities Act (whether alone or in connection with a secondary public offering) or in a firm commitment underwritten offering (or series of related offerings of securities to the public pursuant to a final prospectus) made pursuant to the Securities Act.

 

“Qualified Person” shall mean, with respect to any Lender party to this Agreement on the Closing Date or that becomes a Lender pursuant to any provision hereof (whether pursuant to Section 2.25, Section 10.6 or otherwise), any Person which shall not have been found unsuitable under the Gaming Regulations of any Gaming Authority.

 

“Recipient” means the Administrative Agent, any Lender and any Issuing Lender, as applicable.

 

“Recovery Event” means any settlement of or payment in respect of any property, casualty or other insurance claim (other than business interruption insurance) or any condemnation or similar proceeding relating to any asset of any Group Member.

 

“Reference Rate” means the Eurodollar Base Rate for such day determined by the Administrative Agent on such date with reference to an Interest Period of one month.

 

“Refinanced Debt” means the applicable Indebtedness refinanced, extended, renewed or replaced by such Refinancing Debt.

 

“Refinancing” has the meaning specified in Section 5.1(c).

 

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“Refinancing Agreement” means any agreement establishing and setting forth the terms of a Credit Agreement Refinancing Facility.

 

“Refinancing Debt” means Indebtedness issued, incurred or otherwise obtained in exchange for or as a replacement of (including by entering into alternative financing arrangements in respect of such exchange or replacement (in whole or in part), either by adding or replacing lenders, creditors, agents, borrowers and/or guarantors, or after the original instrument giving rise to such Indebtedness has been terminated and including, by entering into any new credit agreement, loan agreement, note purchase agreement, indenture or other agreement) any Refinanced Debt, or the net proceeds of which are incurred for the purpose of extending, refinancing, renewing, replacing, redeeming, repurchasing, defeasing, restructuring, repaying or refunding such Refinanced Debt (or amending or modifying such Refinanced Debt to effectuate any of the foregoing).

 

“Refinancing Debt Requirements” means, with respect to any Refinancing Debt, the following requirements:

 

(a)                                 the principal amount of such Refinancing Debt does not exceed the principal amount of the Refinanced Debt except by an amount equal to the unpaid accrued interest and premium thereon, defeasance costs, underwriting discounts and other reasonable amounts paid and fees, commissions and expenses (including upfront fees, original issue discount and initial yield payments) incurred in connection with the incurrence of such Refinancing Debt, an amount equal to any existing commitments unutilized under such Refinanced Debt and any other amounts permitted to be incurred pursuant to Section 7.2 (provided that any such additional amounts shall satisfy the other requirements set forth in this definition and with such additional amounts constituting a utilization of the relevant basket or exception pursuant to which such amounts are permitted and, if such Refinancing Debt is secured, the Lien securing such Refinancing Debt is permitted under Section 7.3);

 

(b)                                 (i) neither the Borrower nor any Restricted Subsidiary shall be an obligor or guarantor of such Refinancing Debt except to the extent that such Person was such an obligor or guarantor in respect of the Refinanced Debt at the time of the incurrence of such Refinancing Debt or such Borrower or Restricted Subsidiary becomes an obligor or guarantor of the Refinanced Debt at such time and (ii) such Refinancing Debt is not secured by any Property not securing (or of the type required to secure) the Refinanced Debt or such Property becomes Collateral for the Refinanced Debt at the time of incurrence of such Refinancing Debt;

 

(c)                                  such Refinancing Debt shall (1) either (x) have a Weighted Average Life to Maturity at least equal to (and no shorter than) the Weighted Average Life to Maturity of the Refinanced Debt (unless such Refinancing Debt is revolving Indebtedness) or (y) have a Weighted Average Life to Maturity at least equal to (and no shorter than) the Weighted Average Life to Maturity of the Initial Term Loans; provided that, if such Refinanced Debt had a maturity date that is at least 91 days after the maturity date of the Initial Term Loans, then such new maturity date must be at least 91 days following the maturity date of the Initial Term Loans and (2) have a final maturity date equal to or later than (and if such Refinancing Debt is revolving Indebtedness, does not require scheduled amortization or mandatory commitment reduction prior to) the final maturity date of the Refinanced Debt;

 

(d)                                 in the case of any Credit Agreement Refinancing Debt, such Refinancing Debt may be pari passu with or junior to any then-existing Class of Loans in right of payment and may be pari passu with or junior to such Class of Loans with respect to security (it being understood that any Indebtedness that is junior in right of security shall be pari passu with the Second Lien Facility (to the extent any such Second Lien Facility is junior in right of security on the same basis as the Second Lien Facility in effect on the Acquisition Closing Date) or junior to the Second Lien

 

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Facility) or unsecured; provided that any Refinancing Debt that is pari passu with or junior to any then- existing Class of Loans with respect to security and is documented in a separate agreement or agreements shall be subject to an Acceptable Intercreditor Agreement;

 

(e)                                  if the Refinanced Debt is (i) secured, (x) such Refinancing Debt shall only be secured on the same or subordinated basis (including relative priority) as the Refinanced Debt (but may be unsecured) and (y) in the case of any Credit Agreement Refinancing Debt, shall only have (1) a Lien on Property constituting Collateral in which the Collateral Agent has a Lien or in which the Collateral Agent is granted a Lien concurrently with the incurrence or issuance of such Refinancing Debt and (2) a perfected Lien on any Property constituting Collateral in which the Collateral Agent has a perfected Lien or as to which a Lien in favor of the Collateral Agent is perfected concurrently with the incurrence or issuance of such Refinancing Debt, and shall be subject to intercreditor arrangements on terms reasonably acceptable to the Administrative Agent and (ii) subordinated in right of payment to the Obligations, the Refinancing Debt is subordinated in right of payment to the Obligations on terms not materially less favorable (taken as a whole) to the Lenders as those contained in the documentation governing such Refinanced Debt (as reasonably determined by the Borrower);

 

(f)                                   such Refinancing Debt has covenants, terms and conditions (including, if applicable, as to collateral, but excluding (1) as to subordination, interest rates (including through fixed interest rates), interest rate margins, rate floors, fees, funding discounts, original issue discounts and redemption or prepayment terms and premiums and any other matter set forth in clauses (a) through (e) above and (2) covenants or other provisions applicable only to periods after the Latest Term Loan Maturity Date (if such Refinancing Debt constitutes term loans or notes) or the Latest Revolving Maturity Date (if such Refinancing Debt constitutes revolving Indebtedness), in each case, at the time of the incurrence or issuance of such Indebtedness), taken as a whole, are not materially more restrictive (when taken as a whole) than the terms and conditions of the Refinanced Debt, as reasonably determined by the Borrower, unless such terms and conditions constitute then-current market terms for the applicable type of Refinancing Debt; provided that such terms and conditions shall not be deemed to be more restrictive solely as a result of the inclusion in the documentation governing such Refinancing Debt of a Previously Absent Financial Maintenance Covenant, so long as the Administrative Agent shall have been given prompt written notice thereof and this Agreement is amended to include such Previously Absent Financial Maintenance Covenant for the benefit of each Facility to the extent applicable in the documentation governing such Refinancing Debt (but if the applicable Previously Absent Financial Maintenance Covenant is a “springing” financial maintenance covenant applicable only to revolving Indebtedness, the Previously Absent Financial Maintenance Covenant shall be automatically included in this agreement only for the benefit of each Revolving Facility and not for the benefit of any Facility in respect of Term Loans hereunder); provided, further, that in the case of Credit Agreement Refinancing Debt in the form of (x) term loans that are pari passu with the Initial Term Loans in right of payment and with respect to security, the holders thereof may decline to participate in any voluntary prepayments and/or to receive on a pro rata or less than pro rata basis any mandatory prepayments, and (y) revolving loans that are pari passu with the Initial Revolving Loans in right of payment and with respect to security may provide for the lenders thereof to elect lesser payments or commitment reductions in respect of such revolving loans;

 

(g)                                  in the case of any Credit Agreement Refinancing Revolving Facility, (i) the borrowing and repayment (except (x) payments of interest and fees at different rates in respect of any then-existing Revolving Commitments and such Refinancing Debt (and related outstandings), (y) repayments required on the maturity date of any then-existing Revolving Commitments and (z) repayments made in connection with any permanent repayment and termination of commitments (subject to clause (iv) below) in respect of such Refinancing Debt) after the incurrence or issuance of such Refinancing Debt shall be made on a pro rata basis with the then-existing Revolving Facility,

 

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(ii) all letters of credit shall be participated on a pro rata basis by all Revolving Lenders of the applicable Class, (iii) assignments and participations of such Refinancing Debt shall be governed by the assignment and participation provisions set forth in Section 10.6 and (iv) no termination of Commitments in respect of such Refinancing Debt and no repayment thereof accompanied by a corresponding permanent reduction in such Commitments shall be permitted unless (x) such Class of Commitments in respect of such Refinancing Debt is the earliest maturing Class of then-existing Revolving Commitments or (y) such termination or repayment (and corresponding reduction) is accompanied by at least a pro rata termination or permanent repayment (and corresponding pro rata permanent reduction), as applicable, of all then-existing Revolving Loans or Revolving Commitments and any other then-outstanding Permitted Refinancing Debt; and

 

(h)                                 if such Refinancing Debt is Credit Agreement Refinancing Debt, the Administrative Agent, the institutions providing such Refinancing Debt and the Borrower have consented to such Refinancing Debt.

 

“Register” has the meaning specified in Section 10.6(b)(iv).

 

“Regulation U” means Regulation U of the Board as in effect from time to time. “Reimbursement Obligation” means the obligation of the Borrower to reimburse an Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit issued by such Issuing Lender.

 

“Reinvestment Deferred Amount” means with respect to any Reinvestment Event, the aggregate Net Cash Proceeds received by any Group Member or any Subsidiary thereof for its own account in connection therewith that are not paid to the Administrative Agent pursuant to Section 2.12(b) as a result of the delivery of a Reinvestment Notice.

 

“Reinvestment Event” means any Asset Sale or Recovery Event in respect of which a Loan Party has delivered a Reinvestment Notice.

 

“Reinvestment Notice” means a written notice signed on behalf of the Borrower by a Responsible Officer stating that the Group Members (directly or indirectly through a Subsidiary) intend and expect to use all or a specified portion of the Net Cash Proceeds of an Asset Sale or Recovery Event in a manner useful in their business (including Permitted Acquisitions).

 

“Reinvestment Prepayment Amount” means, with respect to any Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any amount contractually committed to be expended prior to the relevant Reinvestment Prepayment Date within six months from the Reinvestment Prepayment Date (a “Committed Reinvestment Amount”), or actually expended prior to such date, in each case, to acquire or repair assets useful in the Group Members’ business (including in connection with a Permitted Acquisition).

 

“Reinvestment Prepayment Date” means, with respect to any Reinvestment Event, the date occurring 548 days after such Reinvestment Event.

 

“Rejection Notice” has the meaning specified in Section 2.12(e).

 

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“Related Parties” means, as to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, attorneys-in-fact, trustees, administrators, managers, advisors, representatives and successors and assigns of such Person and of such Person’s Affiliates.

 

“Repayment Amount” means the amount of any installment (including the payment due on the maturity date thereof) of Term Loans scheduled to be repaid on any date.

 

“Reportable Event” means, with respect to any Single Employer Plan, any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period has been waived by the PBGC in accordance with the regulations thereunder.

 

“Repricing Transaction” means (a) the incurrence by any Loan Party of any Indebtedness (i) having an Effective Yield that is less than the Effective Yield for the Initial Term Loans, but excluding Indebtedness incurred in connection with a Change of Control, Qualifying IPO or Material Acquisition and (ii) the proceeds of which are used substantially concurrently to prepay (or, in the case of a conversion, deemed to prepay or replace) (including as a result of a mandatory prepayment required pursuant to Section 2.12(a)), in whole or in part, outstanding principal of the Initial Term Loans or (b) any amendment, consent or other modification of this Agreement that has the primary purpose of reducing the Effective Yield for the Initial Term Loans, except for a reduction in connection with a Change of Control, Qualifying IPO or Material Acquisition; provided, that if any such amendment, consent or other modification is being sought in connection with one or more Incremental Facilities that are to be used for the purpose of funding all or a portion of the purchase price for a Permitted Acquisition or other Material Acquisition, such amendment, consent or other modification shall be deemed not to be for the primary purpose of reducing the Effective Yield for the Initial Term Loans.

 

“Required Lenders” means, as of any date of determination, Lenders holding more than 50% of the sum of the (a) Total Outstandings (with the aggregate outstanding amount of each Lender’s risk participation and funded participation in L/C Obligations being deemed “held” by such Lender for purposes of this definition), (b) aggregate unused Term Commitments, if any, then outstanding and (c) aggregate unused Revolving Commitments; provided that the unused Term Commitments, Revolving Commitments of, and the portion of the Total Outstandings held or deemed held by any Defaulting Lender or Lenders that are Investor Affiliated Lenders shall be excluded for purposes of making a determination of Required Lenders.

 

“Responsible Officer” means the chief executive officer, president, chief financial officer (or similar title), chief operating officer, controller or treasurer (or similar title) of Holdings or a Group Member, with respect to financial matters (including execution of any Compliance Certificate or related financial condition delivery), the chief financial officer (or similar title), controller (or similar title) or treasurer (or similar title) of the Borrower, with respect to any document delivered on the Closing Date, including any secretary or assistant secretary or any other individual or similar official thereof with substantially equivalent responsibilities on behalf of a Loan Party and, solely for purposes of notices given pursuant to Section 2, any other officer of the applicable Loan Party so designated by any of the foregoing officers in a notice to the Administrative Agent. Any document delivered hereunder that is signed by a Responsible Officer of any Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party, and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

 

“Restricted Debt” means, collectively, the Subordinated Debt and Indebtedness that is secured by a Lien (other than Indebtedness among the Group Members and their respective Subsidiaries) that is expressly junior and subordinated to the Lien securing the Obligations (including Indebtedness

 

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incurred under any Second Lien Facility), in each case, having an individual outstanding principal amount in excess of $10,000,000.

 

“Restricted Debt Payment” has the meaning specified in Section 7.8(a).

 

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Capital Stock of the Borrower (or, solely for the purposes of Section 7.11, Holdings), or any payment (whether in cash, securities or other property), including any purchase, redemption, retirement, defeasance, acquisition, cancellation or termination for value (including any sinking fund payment or similar deposit) of any such Capital Stock, or on account of any return of capital to the holders of Capital Stock of the Borrower (or, solely for the purposes of Section 7.11, Holdings).

 

“Restricted Subsidiary” means any Subsidiary that is not an Unrestricted Subsidiary. Unless explicitly set forth to the contrary, a reference to a “Restricted Subsidiary” means a Restricted Subsidiary of the Borrower.

 

“Retained Declined Proceeds” has the meaning specified in Section 2.12(e).

 

“Retained Excess Cash Flow” means, at any date of determination, an amount equal to the aggregate cumulative amount, which shall in no event be less than zero, of Excess Cash Flow for all fiscal years ending after the Closing Date (or in the case of the fiscal year ending December 31, 2016, the amount of Excess Cash Flow attributable to the period from and including July 1, 2016 through and including December 31, 2016) with respect to which the Borrower has delivered an annual Compliance Certificate, commencing with the fiscal year ending December 31, 2016, and prior to the Available Amount Reference Time that has not and is not required to be applied to the prepayment of the Term Loans pursuant to Section 2.12(c) minus the amount by which such required prepayments under Section 2.12(c) have been or will be reduced pursuant to Section 2.12(c)(ii), Section 2.12(e) and Section 2.12(h).

 

“Returns” means, with respect to any Investment of any Person and without duplication (including as a result of such amount being included in Consolidated Net Income of such Person), any repayments, interest, returns, profits, distributions, income and similar amounts actually received in cash by such Person in respect of such Investment not in excess of the amount of the original Investment by such Person.

 

“Revolving Commitment Period” means the period after the Closing Date to, but excluding, the Revolving Termination Date.

 

“Revolving Commitments” means the Initial Revolving Commitments and/or the Other Revolving Commitments, as the context requires.

 

“Revolving Extension Request” has the meaning specified in Section 2.28(a)(ii). “Revolving Extensions of Credit” means, as to any Revolving Lender at any time, an amount equal to the sum of (a) the Outstanding Amount of all Revolving Loans held by such Lender and (b) such Lender’s Revolving Percentage of the L/C Obligations then outstanding.

 

“Revolving Facility” means the Initial Revolving Facility and/or any Other Revolving Facility and the Initial Revolving Loans and/or Other Revolving Loans and Letters of Credit or letters of credit established in connection with any Other Revolving Facility made thereunder.

 

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“Revolving Lender” means each Lender that has a Revolving Commitment or that holds Revolving Loans.

 

“Revolving Loans” means the Initial Revolving Loan and/or Other Revolving Loans, as the context requires.

 

“Revolving Percentage” means, as to any Revolving Lender at any time, the percentage which such Lender’s Revolving Commitment then constitutes of the aggregate Revolving Commitments of all Lenders or, at any time after the Revolving Commitments shall have expired or terminated, the percentage which the aggregate Outstanding Amount of such Lender’s Revolving Loans constitutes of the aggregate Outstanding Amount of the Revolving Loans; provided that, in the event that the Revolving Loans are paid in full prior to the reduction to zero of the Revolving Extensions of Credit, the Revolving Percentage of any Revolving Lender shall be determined by dividing (x) such Lender’s Revolving Percentage of the L/C Obligations then outstanding by (y) all of the L/C Obligations then outstanding.

 

“Revolving Termination Date” means, in the case of the Initial Revolving Commitments, July 1, 2021 and, in the case of any Other Revolving Commitments, the date established in the applicable Incremental Agreement, Extension Agreement or Refinancing Agreement or, in any case, such earlier date as the Revolving Commitments are terminated in accordance with the terms hereof.

 

“Sale Leaseback Transaction” means any arrangement with any Person providing for the leasing by any Group Member of real or personal property which has been or is to be sold or transferred by such Group Member to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of such Group Member.

 

“Same Day Funds” means, with respect to disbursements and payments in Dollars, immediately available funds.

 

“S&P” means Standard & Poor’s Ratings Group, Inc., or any successor to the rating agency business thereof.

 

“SEC” means the Securities and Exchange Commission (or successors thereto or an analogous Governmental Authority).

 

“Second Lien Facility” means the credit facility governed by the Second Lien Term Loan Agreement and one or more debt facilities or other financing arrangements (including indentures) providing for loans or other long-term indebtedness that increase, replace or refinance such credit facility, including any such replacement or refinancing facility or indenture that increases or decreases the amount permitted to be borrowed thereunder (including, for the avoidance of doubt, any “Incremental Equivalent Debt” under and as defined in the Second Lien Term Loan Agreement) or alters the maturity thereof and whether by the same or any other agent, lender or group of lenders, and any amendments, supplements, modifications, extensions, renewals, restatements, amendments and restatements or refundings thereof or any such indentures or credit facilities that replace or refinance such credit facility (or any subsequent replacement thereof), in each case to the extent permitted or not restricted by this Agreement.

 

“Second Lien Initial Term Loans” means the “Loans” as defined in the Second Lien Term Loan Agreement.

 

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“Second Lien Term Loan Agreement” means the Second Lien Term Loan Agreement, dated as of [ ], 201[_], among, inter alios, the Borrower, Citizens Bank, N.A., as administrative agent and collateral agent, and the lenders from time to time party thereto.

 

“Secured Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Secured Debt as of the last day of the most recently ended Test Period to (b) Consolidated EBITDA for the most recently ended Test Period, in each case, of the Group Members on a consolidated basis.

 

“Secured Obligations” means all Obligations, together with (a) all Cash Management Obligations owing to the Administrative Agent, the Collateral Agent, any Lead Arranger, any Lender or any Affiliate of any of the foregoing (or Person who was any of the foregoing at the time of the incurrence thereof) and (b) all obligations of the Loan Parties and any other Group Members under Specified Hedge Agreements; provided that Cash Management Obligations and obligations of the Loan Parties and the other applicable Group Members under Specified Hedge Agreements shall cease to constitute Secured Obligations on and after the Facility Termination Date; provided, further, that as to any Guarantor, Secured Obligations shall not include Excluded Swap Obligations in respect of such Guarantor.

 

“Secured Parties” means, collectively, the Lenders, the Administrative Agent, the Collateral Agent, any Issuing Lender, any Hedge Counterparty, any other holder from time to time of any of the Secured Obligations (in their capacities as holders thereof) and, in each case, their respective successors and permitted assigns.

 

“Security Documents” means the collective reference to the Guarantee and Collateral Agreement, the Mortgages and all other security documents hereafter delivered to the Collateral Agent purporting to grant a Lien on any Property of any Loan Party to secure the Secured Obligations.

 

“Side Fee Letter” means the Side Fee Letter dated as of May 25, 2016, among the Borrower and Fifth Third Bank.

 

“Single Employer Plan” means any (a) Plan and (b) employee benefit plan as defined in Section 3(3) of ERISA which is sponsored, maintained or contributed to by, or required to be contributed to by a Commonly Controlled Entity that, in each case, is (i) covered by Title IV of ERISA and (ii) is not a Multiemployer Plan.

 

“Silver Point” means SPH Manager LLC and each of its Affiliates and any funds, partnerships or other investment vehicles managed or controlled by it or its Affiliates, but not including, however, any of their operating portfolio companies.

 

“Solvent” means, with respect to any Person, that (i) the sum of the debt (including contingent liabilities) of such Person does not exceed the fair value of the assets of such Person; (ii) the capital of such Person is not unreasonably small in relation to the business of such Person contemplated as of the date of determination; (iii) such Person does not intend to incur, or believe that it will incur, debts (including current obligations and contingent liabilities) beyond its ability to pay such debts as they mature in the ordinary course of business; and (iv) the present fair saleable value of the assets (on a going concern basis) of such Person is not less than the amount that will be required to pay the probable liabilities of such Person on its debts as they become absolute and matured in the ordinary course of business. For the purposes hereof, the amount of any contingent liability at any time shall be computed

 

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as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“Specified Existing Revolving Class” has the meaning specified in Section 2.28(a)(ii). 

 

“Specified Hedge Agreement” means any Hedge Agreement (a) entered into by (i) any Group Member or Holdings and (ii) any Hedge Counterparty at the time such Hedge Agreement was entered into, as counterparty and (b) that has been designated by the Borrower, by notice to the Administrative Agent, as a Specified Hedge Agreement. The designation of any Hedge Agreement as a Specified Hedge Agreement shall not create in favor of the Lender or Affiliate thereof that is a party thereto (in its capacity as such) any rights in connection with the management or release of any Collateral or of the obligations of any Guarantor under the Guarantee and Collateral Agreement.

 

“Specified Junior Debt” means (i) loans, notes or other long-term Indebtedness that is junior to the Initial Facilities in right of payment or in right of security or that is unsecured; provided that (A) the Additional Debt Requirements are satisfied, (B) (1) if such Indebtedness is secured by a Lien, the Secured Leverage Ratio would not exceed 5.25:1.00 determined on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Indebtedness had been outstanding on the last day of such Test Period for testing compliance therewith (and assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and any subsequent funding of the term debt borrowed or issued thereunder) and (2) if such Indebtedness is unsecured, the Total Leverage Ratio would not exceed 5.25:1.00 determined on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Indebtedness had been outstanding on the last day of such Test Period for testing compliance therewith (and assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and any subsequent funding of the term debt borrowed or issued thereunder), (C) the Borrower shall be in compliance with the financial covenant set forth in Section 7.1, determined on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Specified Junior Debt had been outstanding on the last day of such Test Period for testing compliance therewith (assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and any subsequent funding of the term debt borrowed or issued thereunder) and (D) the final maturity date thereof shall not be earlier than 91 days after the Latest Term Loan Maturity Date at the time of incurrence or issuance thereof; and (ii) any Indebtedness under the Second Lien Facility and (iii) any Permitted Refinancing Debt in respect thereofof clauses (i) and (ii) hereof.

 

“Specified Junior Debt Facility” means any one or more debt facilities or other financing arrangements (including any credit agreement, loan agreement, note purchase agreement, indenture or other agreement) providing for Specified Junior Debt.

 

“Specified Second Lien Facility” means any Specified Junior Debt Facility in the form of a secured term loan that is junior to the Initial Facilities in right of security.

 

“Specified Second Lien Incremental Debt” means (i) any “incremental facility” (or any equivalent term) or “incremental equivalent debt” (or any equivalent term) under and as defined in any Specified Second Lien Facility; provided that (A) the Additional Debt Requirements are satisfied, (B) the Borrower shall be in compliance with the financial covenant set forth in Section 7.1, determined on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Specified Junior Debt had been outstanding on the last day of such Test Period for testing compliance therewith (assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and any subsequent funding of the term debt borrowed or issued thereunder) and (C) the final maturity date thereof shall not be earlier than 91

 

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days after the Latest Term Loan Maturity Date at the time of incurrence or issuance thereof and provided, further, that the aggregate outstanding principal amount thereof does not exceed:

 

(a)           the Fixed Incremental Amount, plus

 

(b)           in the case of any Specified Second Lien Incremental Debt that effectively extends the maturity date with respect to any class of loans and/or commitments under such Specified Second Lien Facility, an amount equal to the portion of the relevant class of loans or commitments that will be replaced by such Specified Second Lien Incremental Debt, plus

 

(c)           (i) the amount of any optional prepayment of any Loan in accordance with Section 2.11 and/or the amount of any permanent reduction of any Commitment and/or the amount of any optional prepayment of any loan under such Specified Second Lien Facility (in each case other than any such Loan or Commitment incurred pursuant to clause (e) of the definition of “Incremental Limit” and any loan incurred pursuant to clause (d) below) and (ii) the amount paid in cash in respect of any reduction in the outstanding amount of any Term Loan or any loan under such Specified Second Lien Facility (other than any Term Loan incurred in reliance on clause (e) of the definition of “Incremental Limit” and any loan incurred in reliance on clause (d) below) resulting from any assignment of such Term Loan or loan to (and/or purchase of such Term Loan or loan by) Holdings or any Group Member so long as the relevant prepayment or assignment and/or purchase was not funded with the proceeds of any long-term Indebtedness (other than revolving Indebtedness) incurred by the Group Members, plus

 

(d)           an unlimited amount so long as, in the case of this clause (d), after giving effect to the relevant Specified Second Lien Incremental Debt (assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and subsequent funding of the term debt borrowed or issued thereunder) on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Specified Second Lien Incremental Debt had been outstanding on the last day of such Test Period for testing compliance therewith, the Total Leverage Ratio does not exceed 5.25:1.00; plus

 

(e)           solely for purposes of determining how much Indebtedness may be outstanding under this definition of “Specified Second Lien Incremental Debt,” but not for purposes of determining how much Indebtedness may then be incurred thereunder, amounts previously incurred in reliance on the “Specified Second Lien Incremental Debt” that otherwise reduced the Fixed Incremental Amount;

 

it being understood and agreed that, (I) unless the Borrower otherwise notifies the Administrative Agent, if all or any portion of the Specified Second Lien Incremental Debt would be permitted under clause (d) of this definition on the applicable date of determination, such Specified Second Lien Incremental Debt shall be deemed to have been incurred in reliance on clause (d) of this definition prior to the utilization of any amount available under any other clause of the foregoing proviso and (II) the Borrower may elect from time to time to reclassify any portion of any Specified Second Lien Incremental Debt incurred under clauses (a) through (c) above as incurred under clause (d) above, so long as the Borrower is in compliance with clause (d) above at the time of such reclassification; and (ii) any Permitted Refinancing Debt in respect thereof.

 

“Sponsor” means Z Capital.

 

“Subject Person” has the meaning specified in the definition of the term “Consolidated Net Income”.

 

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“Subject Transaction” means (a) the Transactions and the First Amendment Transactions, (b) any Permitted Acquisition or similar permitted Investment, (c) any Disposition of all or substantially all of the assets or Capital Stock of any Subsidiary (or any business unit, line of business or division of the Borrower or Restricted Subsidiary) not prohibited by this Agreement, (d) the designation of a Restricted Subsidiary as an Unrestricted Subsidiary or an Unrestricted Subsidiary as a Restricted Subsidiary in accordance this Agreement, (e) any incurrence or repayment of Indebtedness, (f) the implementation of any Cost Savings Initiative and/or (g) any other event that by the terms of the Loan Documents requires pro forma compliance with a test or covenant hereunder or requires such test or covenant to be calculated on a pro forma basis.

 

“Subordinated Debt” means Indebtedness for borrowed money incurred by any Group Member from a Person other than Holdings or another Group Member that is subordinated in right of payment to the prior payment of the Obligations under the Loan Documents.

 

“Subsidiary” means, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a direct or indirect Subsidiary or Subsidiaries of the Borrower; provided that in determining the percentage of ownership interests of any Person controlled by another Person, no ownership interest in the nature of a director’s “qualifying share” or shares required to be held by a resident of the relevant jurisdiction of the former Person shall be deemed to be outstanding.

 

“Subsidiary Guarantor” means (a) on the Closing Date, each Subsidiary of the Borrower (other than any such Subsidiary that is an Excluded Subsidiary on the Closing Date) and (b) thereafter, each Subsidiary of the Borrower that becomes a guarantor of the Obligations pursuant to the terms of this Agreement, in each case, until such time as the relevant Subsidiary is released from its guaranty of the Obligations of the Borrower in accordance with the terms hereof.

 

“Substitute Lender” shall have the meaning provided in Section 10.6(k).

 

“Successor Borrower” has the meaning specified in the last paragraph of Section 7.4. 

 

“Successor Holdings” has the meaning specified in Section 7.11.

 

“Swap Obligations” means, with respect to any guarantee of the Secured Obligations, 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.

 

“Syndication Agent” has the meaning specified in the preamble hereto.

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments or other similar charges imposed by any federal, state, local or foreign governmental authority responsible for administering taxes or otherwise having the power to assess and impose the payment, deduction or withholding of such amounts, including any interest, additions to tax or penalties applicable thereto.

 

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“Term Commitment” means the Initial Term Commitment, any Incremental Term Commitment, and/or any Credit Agreement Refinancing Term Commitment, as the context requires.

 

“Term Lender” means, at any time, any lender that has a Term Commitment or a Term Loan at such time.

 

“Term Loan” means an Initial Term Loan, an Incremental Term Loan, an Extended Term Loan and/or a Credit Agreement Refinancing Term Loan, as the context requires.

 

“Term Loan Claim” has the meaning specified in Section 10.6(e).

 

“Term Loan Extension Request” has the meaning specified in Section 2.28(a)(i).

 

“Test Period” means, as of any date of determination, the most recently completed four consecutive fiscal quarters of the Borrower ending on or prior to such date for which financial statements pursuant to Section 6.1(a) or (b) have been delivered; provided that prior to the first date the financial statements pursuant to Section 6.1(a) or (b) have been delivered, the Test Period in effect shall be the period of four consecutive fiscal quarters of the Borrower ended March 31, 2016.

 

“Total Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Total Debt as of the last day of the most recently ended Test Period to (b) Consolidated EBITDA for the most recently ended Test Period, in each case, of the Group Members on a consolidated basis.

 

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.

 

“Trade Date” has the meaning specified in Section 10.6(j).

 

“Transaction Expenses” means any fees, premiums, expenses and other transaction costs (including original issue discount and upfront fees) incurred or paid by any Sponsor, any Management Investor, Holdings, the Borrower, or any Subsidiary in connection with the Transactions and the First Amendment Transactions, including any transaction fees payable to the Sponsor in connection with the Acquisition and the financing thereof.

 

“Transactions” means, collectively, (a) the funding of the Initial Term Loans on the Closing Date, (b) the Refinancing, (c) the consummation of any other transactions in connection with the foregoing and (d) the payment of the fees and expenses incurred in connection with any of the foregoing (including the Transaction Expenses).

 

“Transferee” means any Assignee or Participant.

 

“Trigger Date” has the meaning specified in Section 2.12(b).

 

“Type” means, as to any Loan, its classification as an ABR Loan or a Eurodollar Loan. 

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or any other state the laws of which are required to be applied in connection with the creation or perfection of security interests.

 

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“United States” and “US” means the United States of America.

 

“Unrestricted Subsidiary” means any Subsidiary designated (or redesignated) by the Borrower as an Unrestricted Subsidiary hereunder after the Closing Date in accordance with Section 6.16 and any Subsidiary of an Unrestricted Subsidiary.

 

“U.S. Lender” has the meaning specified in Section 2.20(f).

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (a) the sum of the products obtained by multiplying (i) 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 (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment by (b) the then outstanding principal amount of such Indebtedness; provided that for purposes of determining the Weighted Average Life to Maturity of any Indebtedness being refinanced or any Indebtedness that is being modified, refinanced, refunded, renewed, replaced or extended (the “Applicable Indebtedness”), the effects of any amortization or prepayments made on such Applicable Indebtedness vis-à-vis the amortization schedule prior to the date of the applicable modification, refinancing, refunding, renewal, replacement or extension shall be disregarded.

 

“Wholly-Owned” means, with respect to a Subsidiary of a Person, a Subsidiary of such Person all of the outstanding Capital Stock of which (other than (x) director’s qualifying shares and (y) shares issued to foreign nationals to the extent required by applicable Law) are owned by such Person and/or by one or more wholly-owned Subsidiaries of such Person.

 

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

 

“Withdrawal Period” shall have the meaning provided in Section 10.6(l).

 

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

 

“Z Capital” means, collectively, Z Capital Partners LLC and James J. Zenni Jr. and each of their Affiliates and any funds, partnerships or other investment vehicles managed or controlled by them or their Affiliates, but not including, however, any of their operating portfolio companies.

 

1.2          Terms Generally. Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto. 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.” The word “or” shall not be exclusive. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein or in any Loan Document (including any Loan Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, amended and restated, supplemented or otherwise modified or extended, replaced or refinanced (subject to any

 

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restrictions or qualifications on such amendments, restatements, amendment and restatements, supplements or modifications or extensions, replacements or refinancings set forth herein), (b) any reference to any Law in any Loan Document shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing, superseding or interpreting such Law, (c) any reference herein or in any Loan Document to any Person shall be construed to include such Person’s successors and permitted assigns, (d) the words “herein,” “hereof” and “hereunder,” and words of similar import, when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision hereof, (e) all references herein or in any Loan Document to Articles, Sections, clauses, paragraphs, Exhibits and Schedules shall be construed to refer to Articles, Sections, clauses and paragraphs of, and Exhibits and Schedules to, such Loan Document, (f) in the computation of periods of time in any Loan Document from a specified date to a later specified date, the word “from” means “from and including”, the words “to” and “until” mean “to but excluding” and the word “through” means “to and including”, (g) the words “asset” and “property”, when used in any Loan Document, 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 and (h) the terms “license” and “lease” shall include sublicense and sublease, respectively.

 

1.3          Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature (i) 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 (including any definition) 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, and (ii) shall not give effect to any election made by the Borrower or any of its Subsidiaries under Accounting Standards Codification 825-10 (or any other Financial Accounting Standard having a similar result or effect) to value Indebtedness or other liabilities of any such Person or any Subsidiary of any such Person at “fair value.”

 

1.4          Reserved.

 

1.5          Cashless Rollovers. Notwithstanding anything to the contrary contained in this Agreement or in any other Loan Document, to the extent that any Lender extends the maturity date of, or replaces, renews or refinances, any of its then-existing Loans with any Other Loans or Credit Agreement Refinancing Debt (including under a new credit facility), in each case, to the extent such extension, replacement, renewal or refinancing is effected by means of a “cashless roll” by such Lender, such extension, replacement, renewal or refinancing shall be deemed to comply with any requirement hereunder or any other Loan Document that such payment be made “in Dollars”, “in immediately available funds”, “in Same Day Funds”, “in cash” or any other similar requirement.

 

1.6          Certain Calculations and Tests.

 

(a)           Any financial ratios required to be satisfied in order for a specific action to be permitted under this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one decimal place more than the number of decimal places by which

 

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such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding up if there is no nearest number).

 

(b)           Notwithstanding anything to the contrary herein, but subject to Sections 1.6(c), (d) and (e), all financial ratios and tests (including the Total Leverage Ratio, the Secured Leverage Ratio, the First Lien Leverage Ratio and the amount of Consolidated Total Assets and Consolidated EBITDA) contained in this Agreement that are calculated with respect to any Test Period during which any Subject Transaction occurs shall be calculated with respect to such Test Period and such Subject Transaction on a Pro Forma Basis. Further, if since the beginning of any such Test Period and on or prior to the date of any required calculation of any financial ratio or test (x) any Subject Transaction has occurred or (y) any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into any Group Member since the beginning of such Test Period has consummated any Subject Transaction, then, in each case, any applicable financial ratio or test shall be calculated on a Pro Forma Basis for such Test Period as if such Subject Transaction had occurred at the beginning of the applicable Test Period (or, in the case of Consolidated Total Assets (or with respect to any determination pertaining to the balance sheet, including the acquisition of cash and Cash Equivalents), as of the last day of such Test Period); provided that notwithstanding anything to the contrary in this clause (b) or clauses (c), (d) or (e) of this Section 1.6, when calculating the First Lien Leverage Ratio for purposes of determining actual compliance (and not compliance on a Pro Forma Basis) with the financial covenant in Section 7.1, the “Applicable Commitment Fee Rate” and the “Applicable Margin”, the events described in this Section 1.6 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect.

 

(c)           Notwithstanding anything to the contrary herein (including in connection with any calculation made on a Pro Forma Basis), to the extent that the terms of this Agreement require (i) compliance with any financial ratio or test (including any First Lien Leverage Ratio test, any Secured Leverage Ratio test and/or any Total Leverage Ratio test) and/or any cap expressed as a percentage of Consolidated EBITDA and/or Consolidated Total Assets or (ii) the absence of a Default or Event of Default (or any type of Default or Event of Default) as a condition to (A) the consummation of any transaction in connection with any acquisition or similar Investment (including the assumption or incurrence of Indebtedness), (B) the making of any Restricted Payment and/or (C) the making of any Restricted Debt Payment, in each case in connection with a Limited Condition Acquisition, at the election of the Borrower (the “LCA Election”), the determination of whether the relevant condition is satisfied may be made at the time (the “LCA Test Time”) of (or on the basis of the financial statements for the most recently ended Test Period at the time of) the execution of the definitive agreement with respect to such Limited Condition Acquisition.   If the Borrower has made an LCA Election, then in connection with any calculation of any financial ratio or basket availability following such LCA Test Time and prior to the earlier of the date on which such Limited Condition Acquisition is consummated or the definitive agreement with respect thereto is terminated, any such financial ratio or test or cap shall be calculated (and tested) (x) on a Pro Forma Basis assuming such Limited Condition Acquisition and other Subject Transactions in connection therewith have been consummated and (y) additionally, solely for purposes of calculating a financial ratio or basket availability under Section 7.6, on a standalone basis without giving effect to such Limited Condition Acquisition and the other Subject Transactions in connection therewith..

 

(d)           For purposes of determining the permissibility of any action, change, transaction or event that requires a calculation of any financial ratio or test (including any First Lien Leverage Ratio test, any Secured Leverage Ratio test, any Total Leverage Ratio test and/or the amount of Consolidated EBITDA or Consolidated Total Assets), such financial ratio or test shall be calculated at the time (subject to clause (c) above) such action is taken, such change is made, such transaction is consummated or such event occurs, as the case may be, and no Default or Event of Default shall be

 

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deemed to have occurred solely as a result of a change in such financial ratio or test occurring after the time such action is taken, such change is made, such transaction is consummated or such event occurs, as the case may be.

 

(e)           Notwithstanding anything to the contrary herein, unless the Borrower otherwise notifies the Administrative Agent, with respect to any amounts incurred or transactions entered into (or consummated) in reliance on a provision of this Agreement) that does not require compliance with a financial ratio or test (including any First Lien Leverage Ratio test, any Secured Leverage Ratio test and/or any Total Leverage Ratio test) (any such amounts, the “Fixed Amounts”) substantially concurrently with any amounts incurred or transactions entered into (or consummated) in reliance on a provision of this Agreement that requires compliance with a financial ratio or test (including any First Lien Leverage Ratio test, any Secured Leverage Ratio test and/or any Total Leverage Ratio test) (any such amounts, the “Incurrence-Based Amounts”), it is understood and agreed that the Fixed Amounts shall be disregarded in the calculation of the financial ratio or test applicable to the Incurrence-Based Amounts.

 

(f)            For purposes of determining compliance at any time with Sections 7.2 (other than clauses (a)(i), (a)(ii) and (a)(iv) and clause (r) thereof), 7.3 (other than clauses (h) and (r) thereof), 7.5, 7.7, 7.8 and 7.9, in the event that any Indebtedness, Lien, Disposition, Investment, Restricted Debt Payment and/or Affiliate transaction meets the criteria of more than one of the categories permitted pursuant to any clause of such Sections, the Borrower, in its sole discretion, may, from time to time, classify or reclassify such transaction or item (or portion thereof) and will only be required to include the amount and type of such transaction or item (or portion thereof) in any one category. Further, it is understood and agreed that any Indebtedness, Lien, Disposition, Restricted Payment, Investment, Restricted Debt Payment and/or Affiliate transaction need not be permitted solely by reference to one category of permitted Indebtedness, Lien, Disposition, Restricted Payment, Investment, Restricted Debt Payment and/or Affiliate transaction under Sections 7.2, 7.3, 7.5, 7.6, 7.7, 7.8 and 7.9, respectively, but may instead be permitted in part under any combination thereof.

 

1.7          Effectuation of First Amendment Transactions. Each of the representations and warranties contained in this Agreement (and all corresponding definitions) is made after giving effect to the First Amendment Transactions, unless the context otherwise requires.

 

1.8          Timing of Payment of Performance. (a) If any payment hereunder (other than payments on Eurodollar Loans or as otherwise expressly provided herein) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day. If any payment on a Eurodollar Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any extension of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate during such extension.

 

(b) When performance of any covenant, duty or obligation in respect of any deliverable (other than payment of an obligation as described in clause (a) above) is required on a day which is not a Business Day, the date on which such performance is required shall be extended to the immediately succeeding Business Day.

 

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1.9          Times of Day. Unless otherwise specified herein, all references herein to times of day shall be references to New York City time (daylight or standard, as applicable).

 

SECTION 2          AMOUNT AND TERMS OF COMMITMENTS

 

2.1          Term Commitments. Subject to the terms and conditions hereof, each Initial Term Lender severally agrees to make a term loan (an “Initial Term Loan”) in Dollars to the Borrower on the Closing Date in an amount not to exceed the amount of the Initial Term Commitment of such Lender. The Initial Term Loans may from time to time be Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 2.2 and 2.13. Each Lender’s Initial Term Commitment shall terminate immediately and without further action on the Closing Date after giving effect to the funding of such Lender’s Initial Term Commitment on such date. Amounts repaid or prepaid with respect to Term Loans may not be reborrowed.

 

2.2          Procedure for Term Loan Borrowing. The Borrower shall give the Administrative Agent notice, substantially in the form of Exhibit A-1 hereto (which notice must be received by the Administrative Agent not later than 11:00 A.M. one (1) Business Day prior to the Closing Date or any Incremental Facility Closing Date (or, in the case of Eurodollar Loans on any Incremental Facility Closing Date, three Business Days prior thereto (unless waived by the Administrative Agent))) requesting that the applicable Term Lenders make the applicable Term Loans on the Closing Date or any Incremental Facility Closing Date and specifying (i) the aggregate principal amount to be borrowed, (ii) the requested Borrowing Date and (iii) whether such Term Loans being incurred are to be made as ABR Loans or, to the extent permitted hereunder, Eurodollar Loans and, if Eurodollar Loans, the initial Interest Period applicable thereto. Upon receipt of such borrowing notice the Administrative Agent shall promptly notify each applicable Term Lender thereof. Not later than 1:00 P.M. on the Closing Date or any Incremental Facility Closing Date each Term Lender shall make available to the Administrative Agent at the Funding Office an amount in immediately available funds equal to the Term Loan or Term Loans to be made by such Lender.

 

2.3          Repayment of Term Loans. The Initial Term Loan of each Term Lender shall be payable in equal consecutive quarterly installments, commencing on September 30, 2016, on the last Business Day of each of March, June, September and December thereafter, in an amount equal to one quarter of one percent (0.25%) of the Initial Term Loans funded on the Closing Date (as adjusted to reflect any prepayments thereof in accordance with the applicable Sections of this Agreement), with the remaining balance thereof payable on the Initial Term Maturity Date.

 

2.4          Revolving Commitments. Subject to the terms and conditions hereof, each Revolving Lender with Initial Revolving Commitments severally agrees to make revolving loans (“Initial Revolving Loans”) in Dollars to the Borrower from time to time during the Revolving Commitment Period for the Initial Revolving Commitments in an aggregate principal amount at any one time outstanding which, when added to such Lender’s Revolving Percentage of the L/C Obligations then outstanding, after giving effect to the making of such Initial Revolving Loans, does not exceed the amount of such Lender’s Initial Revolving Commitment. During the Revolving Commitment Period the Borrower may use the Revolving Commitments by borrowing, prepaying the Revolving Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans or ABR Loans, in each case, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 2.5 and 2.13.

 

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2.5          Procedure for Revolving Loan Borrowing. (a) The Borrower may borrow under the Revolving Commitments during the Revolving Commitment Period on any Business Day; provided that the Borrower shall give the Administrative Agent notice in writing, substantially in the form of Exhibit A-1 hereto (which notice must be received by the Administrative Agent in the case of (i) Eurodollar Loans denominated in Dollars after the Closing Date, prior to 11:00 A.M. three Business Days prior to the requested Borrowing Date and (ii) Eurodollar Loans on the Closing Date and ABR Loans, in each case, denominated in Dollars prior to 11:00 A.M. one Business Day prior to the requested Borrowing Date, in each case, specifying (A) the aggregate principal amount and Type of Revolving Loans to be borrowed, (B) the requested Borrowing Date and (C) in the case of Eurodollar Loans, the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Period therefor. Each borrowing by the Borrower under the Revolving Commitments shall be in an amount equal to $1,000,000 or a whole multiple of $100,000 in excess thereof (or, if the then aggregate Available Revolving Commitments are less than $1,000,000, such lesser amount). Upon receipt of any such notice from the Borrower, the Administrative Agent shall promptly notify each Revolving Lender thereof. Each Revolving Lender will make the amount of its pro rata share of each borrowing available to the Administrative Agent for the account of the Borrower at the Funding Office prior to 1:00 P.M., on the Borrowing Date requested by the Borrower in funds immediately available to the Administrative Agent. Such borrowing will thereupon promptly be made available to the Borrower at the account of the Borrower so notified to the Administrative agent with the aggregate of the amounts made available to the Administrative Agent by the Revolving Lenders and in like funds as received by the Administrative Agent.

 

(b)           If no election as to the Type of a Revolving Loan is specified, then the requested Loan shall be an ABR Loan. If no Interest Period is specified with respect to any requested Eurodollar Loan, the Interest Period with respect to such requested Loan shall be for one month from the Borrowing Date.

 

2.6          [Reserved.]

 

2.7          [Reserved.]

 

2.8          Repayment of Loans. (a) The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of the appropriate Revolving Lender the then unpaid principal amount of each Revolving Loan of such Revolving Lender made to the Borrower outstanding on the Revolving Termination Date (or on such earlier date on which the Loans become due and payable pursuant to Section 8.1); and (ii) to the Administrative Agent for the account of the appropriate Term Lender the principal amount of each outstanding Term Loan of such Term Lender made to the Borrower in installments according to the amortization schedule set forth in Section 2.3 or, in the case of any Term Loans other than the Initial Term Loans, as set forth in the related Incremental Agreement, Extension Agreement or Refinancing Agreement (or, in each case, on such earlier date on which the Loans become due and payable pursuant to Section 8.1). The Borrower hereby further agrees to pay interest on the unpaid principal amount of the Loans made to the Borrower from time to time outstanding from the date hereof until payment in full thereof at the rates per annum, and on the dates, set forth in Section 2.15.

 

(b)           Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Borrower to such Lender resulting from each Loan of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.

 

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(c)                                  (i) The Administrative Agent, on behalf of the Borrower, shall maintain the Register pursuant to Section 10.6(b)(iv), and a subaccount therein for each Term Lender, in which shall be recorded (A) the amount of each Term Loan made hereunder, the Type of such Term Loan and each Interest Period applicable thereto, (B) the amount of any principal, interest and fees, as applicable, due and payable or to become due and payable from the Borrower to each Term Lender hereunder and (C) the amount of any sum received by the Administrative Agent hereunder from the Borrower and each Term Lender’s share thereof; and (ii) the Administrative Agent, on behalf of the Borrower, shall maintain the Register pursuant to Section 10.6(b)(iv), and a subaccount therein for each Revolving Lender, in which shall be recorded (A) the amount of each Revolving Loan made hereunder, the Type of such Revolving Loan and each Interest Period applicable thereto, (B) the amount of any principal, interest and fees, as applicable, due and payable or to become due and payable from the Borrower to each Revolving Lender hereunder and (C) the amount of any sum received by the Administrative Agent hereunder from the Borrower and each Revolving Lender’s share thereof. The Register shall be available for inspection by the Borrower, any Lender (but only, in the case of a Lender, at the Administrative Agent’s office and with respect to any entry relating to such Lender’s Commitments, Loans, L/C Obligations and other Obligations) or, upon the written request of the Borrower to the Administrative Agent, any Gaming Authority specified by the Borrower in such notice, in each case, at any reasonable time and from time to time upon reasonable prior notice.

 

(d)                                 The entries made in the Register and the accounts of each Lender maintained pursuant to Section 2.8(c) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded (absent manifest error); provided, however, that the failure of the Administrative Agent or any Lender to maintain the Register or any such account, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans made to the Borrower by such Lender or the other obligations of the Borrower to such Lender in accordance with the terms of this Agreement.

 

(e)                                  Any Lender may request that the Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in the form attached hereto as Exhibit I.

 

2.9                               Commitment Fees, etc. (a) The Borrower agrees to pay to the Administrative Agent for the account of each Revolving Lender a commitment fee for the period from and including the Closing Date to but excluding the last day of the Revolving Commitment Period, computed at the Applicable Commitment Fee Rate on the average daily amount of the Available Revolving Commitment of such Lender during the period for which payment is made, payable quarterly in arrears on each Fee Payment Date.

 

(b)                                 The Borrower agrees to pay on the Closing Date to the Administrative Agent, for the benefit of each Lender party to this Agreement as a Lender on the Closing Date, (i) as fee compensation for the funding of such Lender’s Term Loan, a closing fee in an amount equal to 0.50% of the stated principal amount of such Lender’s Term Loan, payable, at the election of the Lead Arrangers following consultation with the Borrower, to the Administrative Agent, for the benefit of each such Lender, from the proceeds of its Term Loan as and when funded on the Closing Date or in the form of original issue discount and (ii) as fee compensation for the availability of such Lender’s Revolving Commitment, a closing fee in an amount equal to 0.50% of the aggregate principal amount of such Lender’s Revolving Commitment, payable to the Administrative Agent, for the benefit of such Lender, on the Closing Date. Such closing fees shall be in all respects fully earned, due and payable on the Closing Date and non-refundable and non-creditable thereafter.

 

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(c)                                  The Borrower agrees to pay to (i) CS or its Affiliates the fees in the amounts and on the dates as set forth in any fee agreements including, without limitation under the Agent Fee Letter and (ii) Fifth Third Bank the fees in the amounts and on the dates as set forth in any fee agreements including, without limitation under the Side Fee Letter.

 

2.10                        Termination or Reduction of Revolving Commitments. The Borrower shall have the right, upon not less than three Business Days’ notice by the Borrower to the Administrative Agent (or such shorter period as to which the Administrative Agent may agree), to terminate the Revolving Commitments or, from time to time, to reduce the amount of the Revolving Commitments; provided that no such termination or reduction of such Revolving Commitments shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Loans made on the effective date thereof, the total Revolving Extensions of Credit would exceed the total Revolving Commitments. Any such partial reduction shall be in an amount equal to $1,000,000, or a whole multiple thereof, and shall reduce permanently the Revolving Commitments then in effect. It being understood and agreed that, subject to Section 2.28(a)(ii), the Borrower may allocate any voluntary termination or reduction of Commitments among Classes of Commitments at the Borrower’s direction.

 

2.11                        Optional Prepayments. The Borrower may at any time and from time to time prepay the Revolving Loans or the Term Loans, in whole or in part, subject to Section 2.18(e) and Section 2.21, without premium or penalty, upon notice by the Borrower in substantially the form of Exhibit H hereto delivered to the Administrative Agent no later than 11:00 A.M. three Business Days prior thereto, in the case of Eurodollar Loans, and no later than 11:00 A.M. one Business Day prior to, in the case of ABR Loans, which notice shall specify (i) the date and amount of prepayment, (ii) the Class of Loans which will be prepaid and (iii) whether the prepayment is of Eurodollar Loans or ABR Loans; provided that if a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.21. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein (provided that such notice may be conditioned on receiving the proceeds of any transaction), together with accrued interest (except in the case of any prepayment of a Revolving Loan that is an ABR Loan not made in connection with a permanent reduction or termination of the Revolving Commitments) to such date on the amount prepaid. Partial prepayments of Term Loans and Revolving Loans shall be in an aggregate principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof, and shall be subject to the provisions of Section 2.18. Subject to Section 2.18(e), each prepayment of the Term Loans pursuant to this Section 2.11 shall be applied to the Repayment Amounts as directed by the Borrower. Each prepayment of the Loans pursuant to this Section 2.11 shall be applied to Classes of Term Loans as directed by the Borrower (including, for the avoidance of doubt, the Borrower may (i) prepay Term Loans of an Existing Term Loan Class without any requirement to prepay Extended Term Loans that were converted or exchanged from such Existing Term Loan Class and (ii) prepay Extended Term Loans without any requirement to prepay Term Loans of an Existing Term Loan Class that were converted or exchanged for such Extended Term Loans). In the event that the Borrower does not specify the order in which to apply prepayments to reduce Repayment Amounts or as between Classes of Term Loans, the Borrower shall be deemed to have elected that such proceeds be applied to reduce the installments in direct order of maturity on a pro-rata basis among Term Loan Classes.

 

2.12                        Mandatory Prepayments. (a) If any Indebtedness (including Credit Agreement Refinancing Debt, but excluding any other Indebtedness permitted to be incurred in accordance

 

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with Section 7.2) shall be incurred by a Group Member, the Borrower shall pay an amount equal to 100% of the Net Cash Proceeds of such Indebtedness within three Business Days of the date of receipt thereof to the Administrative Agent to be applied to the Term Loans in accordance with clause (g) of this Section 2.12.

 

(b)                                 If on any date any Group Member shall for its own account receive Net Cash Proceeds in excess (but only to the extent of such excess) of $2,500,000 from any Asset Sale or Recovery Event then, unless a Reinvestment Notice shall be delivered in respect thereof, the Borrower shall pay an amount equal to the Asset Sale/Recovery Event Prepayment Percentage of such Net Cash Proceeds within five Business Days of the date of receipt thereof to the Administrative Agent to be applied to the Term Loans in accordance with clause (g) of this Section 2.12; provided that notwithstanding the foregoing, (i) on each Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event shall be paid to the Administrative Agent to be applied to the Term Loans in accordance with clause (g) of this Section 2.12 and (ii) on the date (the “Trigger Date”) that is six months after any such Reinvestment Prepayment Date, an amount equal to the portion of any Committed Reinvestment Amount with respect to the relevant Reinvestment Event not actually expended by such Trigger Date shall be paid to the Administrative Agent to be applied to the Term Loans in accordance with clause (g) of this Section 2.12.

 

(c)                                  Within five Business Days after financial statements have been delivered pursuant to Section 6.1(a) (commencing with the financial statements to be delivered with respect to the fiscal year ending December 31, 2016), the Borrower shall pay to the Administrative Agent to be applied to the Term Loans in accordance with clause (g) of this Section 2.12 an amount equal to the (i) the Excess Cash Flow Percentage of Excess Cash Flow for such preceding fiscal year (or in the case of the fiscal year ending December 31, 2016, for the period commencing on July 1, 2016 and ending on December 31, 2016) minus (ii) at the election of the Borrower, the sum of (without duplication of any amounts so deducted from Excess Cash Flow in any prior or subsequent years) (wv) the aggregate principal amount of any Loans voluntarily prepaid pursuant to Section 2.11 prior to such date (but solely, in the case of the prepayment of any Revolving Loans, to the extent accompanied by a permanent reduction in the relevant Revolving Commitments), (xw) the aggregate principal amount of any Incremental Equivalent Debt or Credit Agreement Refinancing Debt, in each case under this clause (xw), that is secured by a Lien on a pari passu basis with the Facilities, voluntarily prepaid prior to such date (but solely, in the case of the prepayment of any revolving loans, to the extent accompanied by a permanent reduction in the relevant revolving commitments) and, (x) the aggregate principal amount of any loans, incremental loans, “Incremental Equivalent Debt” or any “Credit Agreement Refinancing Debt” (each as defined in the Second Lien Term Loan Agreement), in each case under this clause (x), that is secured by a Lien on a pari passu basis with the Second Lien Initial Term Loans under any Second Lien Facility voluntarily prepaid (to the extent such voluntary prepayments under the Second Lien Facility are permitted by the terms of this Agreement), (y) the amount of any voluntary reduction in the outstanding amount of any Term Loans resulting from any purchase or assignment made in accordance with Section 10.6(c) of this Agreement (including in connection with any Dutch auction) prior to such date and, in each case under this clause (y), based upon the actual amount of cash paid by Holdings or any Group Member in connection with the relevant purchase or assignment and (z) the amount of any reduction in the outstanding amount of any loans under the Second Lien Term Loan Agreement resulting from any purchase or assignment made in accordance with Section 10.6(c) of the Second Lien Term Loan Agreement (including in connection with any Dutch auction) (or equivalent provision under any other document governing any Second Lien Facility) (to the extent such reductions under the Second Lien Facility are permitted by the terms of this Agreement) prior to such date and, in each case under this clause (z), based upon the actual amount of cash paid by Holdings or any Group Member in connection with the relevant purchase or assignment, and, in each case of clauses (v), (w), (x), (y) and (yz) to the extent that the

 

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relevant prepayments were not financed with the proceeds of long-term Indebtedness (other than revolving Indebtedness) of the Group Members; provided that if the difference between clauses (i) and (ii) for any fiscal year is less than or equal to $2,500,000, then no payment shall be required under this clause (c) for such fiscal year.

 

(d)                                 The Borrower shall immediately prepay the Revolving Loans to the extent necessary so that the Revolving Extensions of Credit of all Lenders shall not at any time exceed the Revolving Commitments then in effect. To the extent that after such prepayments, the Revolving Extensions of Credit of all Lenders exceed the Revolving Commitments then in effect, the Borrower shall Cash Collateralize outstanding L/C Obligations to eliminate such excess.

 

(e)                                  The Borrower shall notify the Administrative Agent in writing of any mandatory prepayment of Obligations required to be made pursuant to clauses (a), (b) and (c) of this Section 2.12 (including the amount of such prepayment so required) by 11:00 A.M. at least three (3) Business Days on the date of such prepayment. The Administrative Agent will promptly notify each applicable Lender of the contents of the Borrower’s prepayment notice and of such applicable Lender’s pro rata share of the prepayment. Each appropriate Lender may reject all (but not a portion) of its share of any mandatory prepayment made pursuant to clauses (a), (b) and (c) (such declined amounts, the “Declined Proceeds”) of Term Loans by providing written notice (each, a “Rejection Notice”) to the Administrative Agent and the Borrower no later than 5:00 p.m. one (1) Business Day after the date of such Lender’s receipt of notice from the Administrative Agent regarding such prepayment. Each Rejection Notice from a given Lender shall specify the principal amount of the mandatory prepayment of Term Loans to be rejected by such Lender. If a Lender fails to deliver a Rejection Notice to the Administrative Agent within the time frame specified above or such Rejection Notice fails to specify the principal amount of the Term Loans to be rejected, any such failure will be deemed an acceptance of the total amount of such mandatory repayment of Term Loans. Any Declined Proceeds shall be first, applied by the Borrower to any mandatory prepayments required under any corresponding provision of other Indebtedness secured by Liens that are pari passu with the Lien securing the Initial Facilities (to the extent required by the terms of such Indebtedness) (and the Borrower shall deliver prompt notice of any such application to the Administrative Agent) and second, if any Declined Proceeds remain, applied by the Borrower to any mandatory prepayments required under Section 2.12 of the Second Lien Term Loan Agreement or any equivalent term under any documentation governing any Second Lien Facility (and the Borrower shall deliver prompt notice of any such application to the Administrative Agent). In the event any lenders under any Second Lien Facility elect to decline receipt of such Declined Proceeds in accordance with the terms of the Second Lien Term Loan Agreement (or any documentation governing any Second Lien Facility), such amounts may be retained by the Borrower (“Retained Declined Proceeds”).

 

(f)                                   If, at any time the Borrower would be required to prepay the Term Loans pursuant to clause (b) or (c) above, the Borrower is required to offer to prepay or repurchase any Incremental Equivalent Debt or Credit Agreement Refinancing Debt (other than any Credit Agreement Refinancing Term Loans) that is pari passu with the Term Loans in right of payment and with respect to security pursuant to the terms of the documentation governing such Indebtedness in connection with the circumstances described in clause (b) or (c), as applicable (such Indebtedness, the “Other Applicable Indebtedness”), then the Borrower may apply the amounts required to be prepaid or used to repurchase on a pro rata basis (determined on the basis of the aggregate outstanding principal amount of the Term Loans and the Other Applicable Indebtedness at such time; provided that the portion of such prepayment allocated to any Other Applicable Indebtedness shall not exceed the amount required to be allocated to such Other Applicable Indebtedness pursuant to the terms thereof, and the remaining amount, if any, shall be allocated to the Term Loans in accordance with the terms hereof) to the prepayment of the Term Loans and the prepayment or repurchase of the Other Applicable Indebtedness, and the amount of the

 

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prepayment of the Term Loans that would have otherwise been required pursuant to such clause (b) or (c) shall be reduced accordingly on a dollar-for-dollar basis; provided that, to the extent the holders thereof decline to have such Other Applicable Indebtedness prepaid or repurchased, the declined amount shall promptly be applied to prepay the Term Loans in accordance with the terms hereof.

 

(g)                                  Except as otherwise provided in any Incremental Agreement, any Extension Agreement or any Refinancing Agreement for less than ratable prepayment of any Incremental Term Facility, Extended Term Facility or Credit Agreement Refinancing Facility, each prepayment of Term Loans pursuant to clauses (a), (b) and (c) of this Section 2.12 shall be applied ratably to each Class of Term Loans then outstanding (provided that any prepayment of Term Loans with the Net Cash Proceeds of any Permitted Refinancing Debt and/or any Incremental Term Facility incurred for the purpose of refinancing or replacing such Term Loans shall be applied to the applicable Class of Term Loans being refinanced or replaced). With respect to each Class of Term Loans, all prepayments accepted under this Section 2.12 shall be applied against the remaining scheduled installments of principal due in respect of such Class of Term Loans as directed by the Borrower (or, in the absence of direction from the Borrower, to the remaining scheduled amortization payments in respect of such Class of Term Loans in direct order of maturity), and each such prepayment shall be paid to the Term Lenders of such Class pro rata according to the respective amounts due to such Term Lenders. The amount of such mandatory prepayments shall be applied on a pro rata basis to the then outstanding Term Loans being prepaid irrespective of whether such outstanding Term Loans are ABR Loans or Eurodollar Rate Loans; provided that if no Lenders exercise the right to waive a given mandatory prepayment of the Term Loans pursuant to Section 2.12(e), then, such mandatory prepayment shall be applied first to the then outstanding Term Loans that are ABR Loans and then to the then outstanding Term Loans that are Eurodollar Loans in a manner that minimizes the amount of any payments required to be made by the Borrower pursuant to Section 2.21.

 

(h)                                 Notwithstanding any other provisions of this Section 2.12, to the extent that (i) any of or all the Net Cash Proceeds of any Asset Sale by a Foreign Subsidiary (a “Foreign Disposition”), the Net Cash Proceeds of any Recovery Event from a Foreign Subsidiary (a “Foreign Recovery Event”), or Excess Cash Flow is prohibited or delayed by applicable local Law from being repatriated to the United States (the Borrower hereby agreeing to cause the applicable Foreign Subsidiary (and, if applicable, its parent entities) to use commercially reasonable efforts to take actions required by the applicable local Law to permit such repatriation) or (ii) the Borrower has determined in good faith that repatriation of any of or all the Net Cash Proceeds of any Foreign Disposition, any Foreign Recovery Event or Excess Cash Flow would have a material adverse tax cost consequence with respect to such Net Cash Proceeds or Excess Cash Flow, the portion of such Net Cash Proceeds or Excess Cash Flow so affected will not be required to prepay Term Loans; provided that if and to the extent any such repatriation ceases to be prohibited or delayed by the applicable local Law or such material adverse tax cost consequence ceases to exist, in each case, at any time during the one (1) year period immediately following the date the related prepayment under this Section 2.12 was required to be made, such repatriation will be promptly effected and such repatriated Net Cash Proceeds or Excess Cash Flow will be promptly (and in any event not later than five (5) Business Days after such repatriation) be offered to be applied (net of additional taxes payable or reserved against as a result thereof) to the prepayment of the Term Loans pursuant to this Section 2.12 to the extent provided herein.

 

2.13                        Conversion and Continuation Options. (a) The Borrower may elect from time to time to convert Eurodollar Loans to ABR Loans by giving the Administrative Agent prior notice substantially in the form of Exhibit A-2 hereto of such election no later than 11:00 A.M. on the third Business Day preceding the proposed conversion date; provided that if any Eurodollar Loan is so converted on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.21. The Borrower may elect

 

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from time to time to convert ABR Loans to Eurodollar Loans by giving the Administrative Agent prior irrevocable notice substantially in the form of Exhibit A-2 hereto of such election no later than 11:00 A.M. on the third Business Day preceding the proposed conversion date (which notice shall specify the length of the initial Interest Period therefor); provided that no ABR Loan under a particular Facility may be converted into a Eurodollar Loan when any Event of Default has occurred and is continuing to the extent the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower. Upon receipt of any such notice, the Administrative Agent shall promptly notify each relevant Lender thereof.

 

(b)                                 Any Eurodollar Loan may be continued as such by the Borrower giving irrevocable notice to the Administrative Agent, in accordance with the applicable provisions of the term “Interest Period” set forth in Section 1.1 and no later than 11:00 A.M. on the third Business Day preceding the proposed continuation date, of the length of the next Interest Period to be applicable to such Loans; provided that if any Eurodollar Loan is so continued on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.21 and; provided, further, that no Eurodollar Loan denominated in Dollars under a particular Facility may be continued as such when any Event of Default has occurred and is continuing to the extent the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower; provided, further, that (x) if such continuation is not permitted pursuant to the preceding proviso such Loans shall be automatically converted to ABR Loans on the last day of such then expiring Interest Period and (y) if the Borrower shall fail to give any required notice as described above in this paragraph, such Loans shall be automatically converted to ABR Loans. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

 

2.14                        Minimum Amounts and Maximum Number of Eurodollar Tranches. Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions, continuations and optional prepayments of Eurodollar Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that (a) after giving effect thereto, the aggregate principal amount of Eurodollar Loans comprising each tranche of Eurodollar Loans shall be equal to a minimum of $1,000,000 or a whole multiple of $100,000 in excess thereof and (b) no more than eight tranches of Eurodollar Loans shall be outstanding at any one time (it being understood that such number may be increased at any time at the Administrative Agent’s discretion).

 

2.15                        Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin.

 

(b)                                 Each ABR Loan shall bear interest at a rate per annum equal to the ABR plus the Applicable Margin.

 

(c)                                  Notwithstanding clauses (a) and (b) above, at any time when an Event of Default under Section 8.1(a) exists with respect to any principal, interest or fees, to the extent the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, the Borrower shall pay interest on the applicable past due amounts hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws. Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

 

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(d)                                 Subject to Section 2.15(c), interest shall be payable by the Borrower in arrears on each Interest Payment Date.

 

(e)                                  If, as a result of any restatement of or other adjustment to the financial statements delivered pursuant to Sections 6.1(a) or (b), (x) the First Lien Leverage Ratio as calculated by the Borrower as of any applicable date was inaccurate and (y) a proper calculation of the First Lien Leverage Ratio would have resulted in a different Applicable Margin, Applicable Commitment Fee Rate or Excess Cash Flow Percentage for any period then: (i) if the proper calculation of the First Lien Leverage Ratio would have resulted in a higher Applicable Margin, Applicable Commitment Fee Rate or Excess Cash Flow Percentage for such period, the Borrower shall automatically and retroactively be obligated to pay to the Administrative Agent, for the benefit of the applicable Lenders, promptly on demand by the Administrative Agent, an amount equal to the excess of the amount that should have been paid for such period over the amount actually paid for such period (and no Default or Event of Default shall have been deemed to occur solely as a result of such underpayment upon payment of such additional amounts) and (ii) if the proper calculation of the First Lien Leverage Ratio would have resulted in a lower Applicable Margin, Applicable Commitment Fee Rate or Excess Cash Flow Percentage for such period, neither the Administrative Agent nor any Lender shall have any obligation to repay any amount to the Borrower.

 

2.16                        Computations of Interest and Fees. (a) All computations of interest and of fees shall be made by the Administrative Agent on the basis of a year of 360 days and, in the case of ABR Loans 365/366 days, in each case, for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest and fees are payable. Each determination of an interest rate or the amount of a fee hereunder shall be made by the Administrative Agent (including determinations of a Eurodollar Rate or ABR in accordance with the definitions of “Eurodollar Rate” and “ABR”, respectively) and shall be conclusive, binding and final for all purposes, absent manifest error.

 

(b)                                 The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of each determination of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a change in the ABR or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of the effective date and the amount of each such change in interest rate. The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate or fee pursuant to Section 2.15(a) and Section 2.15(b).

 

2.17                        Inability to Determine Interest Rate. If prior to the commencement of any Interest Period for any Eurodollar Loan:

 

(a)                                 the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or

 

(b)                                 the Administrative Agent shall have received notice from the Majority Facility Lenders in respect of the relevant Facility that by reason of any changes arising after the date of this Agreement the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as certified by such Lenders) of making or maintaining their affected Loans during such Interest Period,

 

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the Administrative Agent shall give email or telephonic notice thereof to the Borrower and the relevant Lenders as soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans under the relevant Facility requested to be made on the first day of such Interest Period shall be made as ABR Loans, (y) any Loans under the relevant Facility that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans under the relevant Facility shall be converted, on the last day of the then-current Interest Period with respect thereto, to ABR Loans. Until such notice has been withdrawn by the Administrative Agent (which action the Administrative Agent will take promptly after the conditions giving rise to such notice no longer exist), no further Eurodollar Loans under the relevant Facility shall be made or continued as such, nor shall the Borrower have the right to convert Loans under the relevant Facility to Eurodollar Loans.

 

Notwithstanding the foregoing, in the case of a pending request for a Eurodollar Loan as to which the Administrative Agent has made the determination described in clause (a) of the first sentence of this Section, the Administrative Agent, in consultation with the Borrower and the relevant Lenders, may establish an alternative interest rate that reflects the all-in-cost of funds to the Lenders for funding Loans in the applicable currency and amount, and with the same Interest Period as the Eurodollar Loan requested to be made, converted or continued, as the case may be (the “Impacted Loans”), in which case, such alternative rate of interest shall apply with respect to the Impacted Loans until (x) the Administrative Agent revokes the notice delivered with respect to the Impacted Loans under clause (a) of the first sentence of this Section, (y) the Required Lenders notify the Administrative Agent and the Borrower that such alternative interest rate does not adequately and fairly reflect the cost to such Lenders of funding the Impacted Loans, or (z) any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for such Lender or its applicable lending office to make, maintain or fund Loans whose interest is determined by reference to such alternative rate of interest or to determine or charge interest rates based upon such rate or any Governmental Authority has imposed material restrictions on the authority of such Lender to do any of the foregoing and provides the Administrative Agent and the Borrower written notice thereof.

 

2.18                        Pro Rata Treatment and Payments. (a) Each payment (excluding voluntary and mandatory prepayments which shall be applied in accordance with Section 2.11 and Section 2.12(g), respectively) in respect of principal, interest or fees in respect of Term Loans shall be applied to the amounts of such obligations owing to such Class of Term Lenders, pro rata according to the respective amounts then due and owing to such Class of Term Lenders. Amounts repaid or prepaid on account of the Term Loans may not be reborrowed. Principal prepayments (other than voluntary and mandatory prepayments which shall be applied in accordance with Section 2.11 and Section 2.12(g), respectively) of the Term Loans shall be applied to reduce the installments thereof in direct order of maturity.

 

(b)                                 Except as otherwise provided herein, each borrowing by the Borrower from the Lenders hereunder, each payment by the Borrower on account of any commitment fee and any reduction of a Class of Revolving Commitments of the Lenders shall be made pro rata according to the respective Revolving Percentages of the relevant Lenders. Except as otherwise provided herein, each payment (including prepayments) by the Borrower on account of principal of and interest on any Class of Revolving Loans shall be made pro rata according to the respective outstanding principal amounts of the Revolving Loans then held by the Revolving Lenders with respect to such Classes. Each payment in respect of Reimbursement Obligations in respect of any Letter of Credit shall be made to the Issuing Lender that issued such Letter of Credit.

 

(c)                                  Payments. The Borrower shall make each payment (other than Issuing Lender fronting fees which shall be paid directly to the Issuing Bank) under any Loan Document not later than

 

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2:00 P.M. on the day when due to the Administrative Agent by wire transfer to an account or by such other means to such other address as Administrative Agent shall have notified the Borrower in writing within a reasonable time prior to such payment in immediately available Dollars and without setoff (except as provided in Section 2.20) or counterclaim. All payments received by the Administrative Agent after 2:00 P.M. shall be deemed received on the next Business Day (in the Administrative Agent’s sole discretion) and any applicable interest shall continue to accrue. The Administrative Agent shall promptly distribute to each Lender any payments received by the Administrative Agent on behalf of such Lender.

 

(d)                                 Advancing Payments.

 

(i)                                     Unless the Administrative Agent shall have been notified in writing by any Lender prior to a borrowing that such Lender will not make the amount that would constitute its share of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent on demand, such amount with interest thereon, at a rate equal to the greater of (i) the Overnight Rate and (ii) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, for the period until such Lender makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this paragraph shall be presumptively correct in the absence of manifest error. If such Lender’s share of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days after such Borrowing Date, 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 applicable to ABR Loans under the relevant Facility, 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. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such borrowing.

 

(ii)                                  Unless the Administrative Agent shall have been notified in writing by the Borrower prior to the date of any payment due to be made by the Borrower hereunder that the Borrower will not make such payment to the Administrative Agent, the Administrative Agent may assume that the Borrower is making such payment, and the Administrative Agent may, but shall not be required to, in reliance upon such assumption, make available to the relevant Lenders their respective pro rata shares of a corresponding amount. If such payment is not made to the Administrative Agent by the Borrower within three Business Days after such due date, the Administrative Agent shall be entitled to recover, on demand, from each relevant Lender to which any amount was made available pursuant to the preceding sentence, such amount with interest thereon at the rate per annum equal to the daily average Overnight Rate. Nothing herein shall be deemed to limit the rights of the Administrative Agent or any Lender against the Borrower.

 

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(e)                                  Prepayment Premium. In the event that, prior to the six month anniversary of the Acquisition Closing Date, a Repricing Transaction occurs, the Borrower shall pay to the Administrative Agent, for the ratable account of each of the applicable Term Lenders, (x) in the case of a Repricing Transaction described in clause (a) of the definition thereof, a prepayment premium of 1.00% of the amount of the Initial Term Loans being prepaid in connection with such Repricing Transaction and (y) in the case of a Repricing Transaction described in clause (b) of the definition thereof, an amount equal to 1.00% of the aggregate amount of the applicable Initial Term Loans outstanding immediately prior to such amendment that are subject to an effective pricing reduction pursuant to such Repricing Transaction. Any payment required to be made by the Borrower pursuant to this clause (e) shall be made on the same date as the prepayment, repayment, refinancing or repricing giving rise to requirement for payment to be made under this clause (e) occurs.

 

(f)                                   Application of Payments During an Event of Default. Notwithstanding anything herein to the contrary but subject to the Intercreditor Agreement, following the occurrence and during the continuance of an Event of Default, and notice thereof to the Administrative Agent by the Borrower or the Required Lenders, all payments received on account of the Secured Obligations shall, subject to Sections 2.26 and 2.27, be applied by the Administrative Agent as follows:

 

first, to payment of that portion of the Secured Obligations constituting fees, indemnities, expenses and other amounts payable to the Agents in their capacities as such;

 

second, to payment of that portion of the Secured Obligations constituting fees, indemnities and other amounts (other than principal, reimbursement obligations in respect of drawings under Letters of Credit, interest and Letters of Credit fees) payable to the Lenders (including fees and disbursements and other charges of counsel) arising under the Loan Documents, ratably among them in proportion to the respective amounts described in this clause second payable to them;

 

third, to payment of that portion of the Secured Obligations constituting accrued and unpaid Letters of Credit fees, interest on the Loans and interest on unreimbursed borrowings under Letters of Credit, ratably among the Lenders in proportion to the respective amounts described in this clause third payable to them;

 

fourth, (A) to payment of that portion of the Secured Obligations constituting unpaid principal of the Loans, unreimbursed borrowings under Letters of Credit and amounts owing with respect to Specified Hedge Agreements (unless such payments are made with the proceeds of guarantees and collateral which do not support the Specified Hedge Agreements) and Cash Management Documents and (B) to Cash Collateralize that portion of L/C Obligations comprising the undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized by the Borrower pursuant to Section 2.27, ratably among the Lenders and the Issuing Lenders in proportion to the respective amounts described in this clause fourth payable to them; provided that (x) any such amounts applied pursuant to subclause (B) above shall be paid to the Administrative Agent for the ratable account of the applicable Issuing Lenders to Cash Collateralize such L/C Obligations, (y) subject to Section 3.5 or 2.27, amounts used to Cash Collateralize the aggregate amount of Letters of Credit pursuant to this clause fourth shall be used to satisfy drawings under such Letters of Credit as they occur and (z) upon the expiration of any Letter of Credit, the pro rata share of Cash Collateral shall be distributed in accordance with this clause fourth;

 

fifth, to the payment in full of all other Secured Obligations (other than Secured Obligations under the Specified Hedge Agreements to the extent of any payments made with the proceeds of guarantees and collateral which do not support the Specified Hedge Agreements), in each case, ratably

 

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among the Agents and the Lenders based upon the respective aggregate amounts of all such Secured Obligations owing to them in accordance with the respective amounts thereof then due and payable; and 

 

finally, the balance, if any, after all Secured Obligations have been paid in full, to the Borrower or as otherwise required by Law or any applicable subordination or intercreditor agreement.

 

If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Secured Obligations, if any, in the order set forth above.

 

2.19                        Increased Costs. (a) If any Change in Law shall:

 

(i)                                     impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the Eurodollar Rate) or any Issuing Lender;

 

(ii)                                  subject the Administrative Agent, any Lender or any Issuing Lender to any Taxes (other than (A) Indemnified Taxes, (B) Excluded Taxes and (C) Other Connection Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

 

(iii)                               impose on any Lender or any Issuing Lender any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the actual cost to such Lender, the Administrative Agent or any Issuing Lender by an amount that is material of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender, such Issuing Lender or the Administrative Agent of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender, Issuing Lender or the Administrative Agent hereunder (whether of principal, interest or any other amount) then from time to time, after submission by such Lender, Issuing Lender or the Administrative Agent, as applicable, to the Borrower of the certificate contemplated by clause (c) of this Section 2.19, the Borrower will, within ten Business Days after the Borrower’s receipt of such certificate, pay to such Lender, Issuing Lender or Administrative Agent, as the case may be, such additional amount or amounts as will compensate such Lender, Issuing Lender or Administrative Agent, as the case may be, for such additional actual costs incurred or actual reduction suffered; provided that the Borrower shall not be liable for such compensation if (x) the relevant Change in Law occurs on a date prior to the date such Person becomes a party hereto, (y) such Person invokes Section 2.22 or (z) in the case of any request for reimbursement under clause (iii) of this Section 2.19(a) resulting from a market disruption, (A) the relevant circumstances do not generally affect the banking market or (B) the applicable request has not been made by Lenders constituting Required Lenders.

 

(b)                                 If any Lender or Issuing Lender determines that any Change in Law affecting such Lender or Issuing Lender or any lending office of such Lender or such Lender’s or Issuing Lender’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the actual rate of return on such Lender’s or Issuing Lender’s capital or on the capital of such Lender’s or Issuing Lender’s holding company, if any, as a consequence of this Agreement, the

 

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Commitments of such Lender or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by any Issuing Lender, to a level below that which such Lender or Issuing Lender or such Lender’s or Issuing Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or Issuing Lender’s policies and the policies of such Lender’s or Issuing Lender’s holding company with respect to capital adequacy), then from time to time, after submission by such Lender to the Borrower (with a copy to the Administrative Agent) of the certificate contemplated by clause (c) of this Section 2.19, the Borrower will pay within ten Business Days after the Borrower’s receipt of such request to such Lender or Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or Issuing Lender or such Lender’s or Issuing Lender’s holding company for any such reduction suffered.

 

(c)                                  The Administrative Agent, any Issuing Lender or any Lender requesting compensation under this Section 2.19 shall be required to deliver a certificate to the Borrower that (i) sets forth the amount or amounts necessary to compensate the Administrative Agent, such Lender or Issuing Lender or its holding company, as the case may be, (ii) sets forth, in reasonable detail (consistent with the detail provided by such Person to similarly situated borrowers), the manner in which such amounts were determined and (iii) certifies that such Person is generally charging such amounts to similarly situated borrowers under comparable syndicated credit facilities, which certificate shall be conclusive absent manifest error. Failure or delay on the part of Administrative Agent, any Lender or Issuing Lender to demand compensation pursuant to this Section shall not constitute a waiver of Administrative Agent’s, such Lender’s or Issuing Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate the Administrative Agent, a Lender or Issuing Lender pursuant to this Section for any increased costs incurred or reductions suffered more than six months prior to the date that the Administrative Agent, such Lender or Issuing Lender, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions, and of the Administrative Agent’s, such Lender’s or Issuing Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect thereof).

 

2.20                        Taxes. (a) For purposes of this Section 2.20, the term “applicable law” includes FATCA.

 

(b)                                 All payments made to a Recipient by or on behalf of the Borrower or any Guarantor under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

 

(c)                                  Except as otherwise provided in this Agreement, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law or, at the option of the Administrative Agent, reimburse the Administrative Agent or the relevant Lender for the payment of such Other Taxes in accordance with Section 2.20(g) below.

 

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(d)                                 Whenever any Indemnified Taxes are payable by the Borrower, as promptly as practicable thereafter, the Borrower shall send to the Administrative Agent for the account of the Administrative Agent or the relevant Lender, as the case may be, a certified copy of an original official receipt received by the Borrower showing payment thereof if such receipt is obtainable, or, if not, other reasonable evidence of payment.

 

(e)                                  Each Recipient that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) (a “Non-U.S. Lender”) shall 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) (i) two accurate, complete and executed copies of IRS Form W-8ECI, W-8EXP, W-8BEN or W-8BEN-E (claiming benefits under an applicable treaty) or W- 8IMY (together with any applicable underlying forms) (or any successor or other applicable forms), or, (ii) in the case of a Non-U.S. Lender claiming exemption from United States federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, (A) a certificate substantially in the form of Exhibit F to the effect that such Non-U.S. Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 871(h)(3)(B) or Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (B) two accurate, complete and executed copies of IRS Form W-8BEN or W-8BEN-E, or any subsequent versions or successors to such forms, in each case properly completed and duly executed by such Non-U.S. Lender. Such forms shall be delivered by each Non-U.S. 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) and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent.

 

(i)                                     Each Non-U.S. Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Non-U.S. Lender becomes a party under this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation) and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent, executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made. Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall not be required to deliver any form, certification or other similar information pursuant to this paragraph if in a Non-U.S. Lender’s reasonable judgment such completion, execution or delivery of such form, certification or similar information would subject such Non-U.S. Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Non-U.S. Lender.

 

(ii)                                  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

 

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such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (ii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

(iii)                               In addition, each Non-U.S. Lender shall deliver such forms as necessary promptly upon the obsolescence or invalidity of any form previously delivered by such Non-U.S. Lender pursuant to this Section 2.20(e) or 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).

 

(f)                                   Each Recipient that is a United States person (as such term is defined in Section 7701(a)(30) of the Code) (a “U.S. Lender”) shall 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) two accurate, complete and executed copies of IRS Form W-9, or any subsequent versions or successors to such form certifying that such Lender is exempt from U.S. federal backup withholding tax. Such forms shall be delivered by each U.S. 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 U.S. Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such U.S. Lender or shall promptly notify the Borrower at any time it determines that it is no longer in a position to provide any previously delivered certifications to the Borrower (or any other form of certification adopted by the United States taxing authorities for such purpose).

 

(g)                                  The Borrower shall indemnify each Recipient, within ten Business Days after receipt of the certificate described in the succeeding sentence, for the full amount of any Indemnified Taxes (including any Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable out-of-pocket expenses arising therefrom or with respect thereto, whether or not such Taxes are correctly or legally imposed or asserted by the relevant Governmental Authority; provided that, if the Borrower reasonably believes that such Taxes were not correctly or legally asserted, the Administrative Agent or such Lender, as applicable, will use reasonable efforts to cooperate with the Borrower to challenge such Taxes or obtain a refund of such Taxes (which refund, when received, shall be repaid to the Borrower in accordance with Section 2.20(h)) so long as such efforts would not, in the sole determination of the Administrative Agent or such Lender, result in any additional out-of-pocket costs or expenses not reimbursed by the Borrower or be otherwise materially disadvantageous to the Administrative Agent or such Lender, as applicable; provided, further, that the Borrower shall not be obligated to make payment to the Lender or the Administrative Agent (as the case may be) for penalties and interest attributable to any Indemnified Taxes or Other Taxes arising from the gross negligence or willful misconduct of the Lender or the Administrative Agent. In connection with any request for indemnification under this Section 2.20(g), the relevant Lender or Administrative Agent, as applicable, shall deliver a certificate to the Borrower setting forth, in reasonable detail, the basis and calculation of the amount of the relevant payment or liability, which certificate shall be conclusive absent manifest error. Notwithstanding anything to the contrary contained in this Section 2.20(g), the Borrower shall not be required to indemnify the Administrative Agent or any Lender pursuant to this Section 2.20(g) for any amount to the extent the Administrative Agent or such Lender fails to notify the Borrower of the relevant possible indemnification claim within twelve months after the Administrative Agent or such Lender receives written notice from the applicable taxing authority of the specific tax assessment giving rise to such indemnification claim and provided that any delay in such notice did not materially adversely prejudice the Borrower.

 

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(h)                                 If any Recipient determines, in its sole discretion exercised in good faith, that it has received a credit or refund of any Taxes as to which it has been indemnified by an indemnifying party or with respect to which an indemnifying party has paid additional amounts pursuant to this Section, it shall pay over an amount equal to such credit or refund to such indemnifying party (but only to the extent of indemnity payments made, or additional amounts paid, by such indemnifying party under this Section with respect to the Taxes giving rise to such credit or refund), net of all reasonable out-of- pocket expenses (including Taxes) of such Recipient and without interest (other than any interest paid by the relevant Governmental Authority with respect to such credit or refund); provided that the indemnifying party, upon the request of such Recipient, agrees to repay the amount paid over to such indemnifying party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such Recipient in the event such Recipient is required to repay such credit or refund to such Governmental Authority. This Section 2.20(h) shall not be construed to require any Recipient to make available its tax returns (or any other information relating to its Taxes which it deems confidential) to the Borrower or any other Person.

 

(i)                                     Each Lender shall severally indemnify the Administrative Agent, within ten Business Days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.6 relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this clause (i). The agreements in this clause (i) shall survive the resignation and/or replacement of the Administrative Agent.

 

(j)                                    The Administrative Agent shall deliver to the Borrower on or before the date on which it becomes the Administrative Agent under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower) (x) an accurate and complete signed copy of IRS Form W-8ECI with respect to any amounts payable to the Administrative Agent for its own account and (y) an accurate and complete signed copy of IRS Form W-8IMY with respect to any amounts payable to the Administrative Agent for the account of others, certifying that it is a “U.S. branch,” that the payments its receives for the account of others are not effectively connected with the conduct of its trade or business within the United States and that it is using such form as evidence of its agreement with the Borrower to be treated as a U.S. person with respect to such payments (and the Borrower and the Administrative Agent agree to so treat the Administrative Agent as a U.S. person with respect to such payments as contemplated by, and in accordance with, Section 1.1441-1(b)(2)(iv) of the United States Treasury Regulations).

 

(k)                                 The agreements in this Section shall survive the Facility Termination Date.

 

2.21                        Indemnity. The Borrower agrees to indemnify each Lender for, and to hold each Lender harmless from, the actual loss or actual expense (other than lost profits, including the Applicable Margin) that such Lender may actually sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans after the Borrower has given a notice requesting the same in accordance with

 

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the provisions of this Agreement, (b) default by the Borrower in making any prepayment of or conversion from Eurodollar Loans after the Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment, conversion or continuation of Eurodollar Loans on a day that is not the last day of an Interest Period with respect thereto (including as a result of Section 2.24 hereof). For purposes of calculating amounts payable by the Borrower under this Section 2.21, each Lender shall be deemed to have funded each Eurodollar Loan made by it at the Eurodollar Rate (excluding the impact of clause (b) of the definition of “Eurodollar Rate”) for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Loan was in fact so funded; provided that, for the avoidance of doubt, the Borrower shall not be obligated to compensate any Lender under this Section 2.21 for any loss of anticipated profits. Any Lender requesting compensation under this Section 2.21 shall deliver a certificate to the Borrower that sets forth any amount or amounts that such Lender is entitled to receive pursuant to this Section 2.21, the basis therefor and, in reasonable detail (consistent with the detail provided by such Lender to similarly situated borrowers), the manner in which such amount or amounts were determined. The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) Business Days after receipt thereof. This Section shall not apply with respect to Taxes, which shall be governed by Sections 2.19 and 2.20.

 

2.22                        Illegality. Notwithstanding any other provision herein, if any Lender reasonably determines that any Change in Law has made it unlawful for such Lender or its applicable lending office to make or maintain Eurodollar Loans as contemplated by this Agreement, such Lender shall promptly give notice thereof to the Administrative Agent and the Borrower, and (a) the commitment of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert ABR Loans to Eurodollar Loans shall be suspended during the period of such illegality and (b) such Lender’s Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically to ABR Loans on the respective last days of the then current Interest Periods with respect to such Loans; provided that if such notice relates to the unlawfulness or asserted unlawfulness of charging interest based on clause (iii) of the definition of ABR, then all Base Rate Loans shall be determined based on the definition of the term “ABR” without giving effect to such clause (iii).

 

2.23                        Mitigation of Costs; Change of Lending Office. If any Recipient requests compensation under Section 2.19, requires the Borrower to pay any Taxes or additional amounts to any Recipient or any Governmental Authority for the account of any Recipient pursuant to Section 2.20 or gives a notice of illegality pursuant to Section 2.22, then such Recipient shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Recipient, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.19 or 2.20, as the case may be, in the future or mitigate the impact of Section 2.22, and (ii) would not subject such Recipient to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Recipient in any material respect.

 

2.24                        Replacement of Lenders. If (a) any Lender requests reimbursement for amounts owing pursuant to Section 2.19 or Section 2.20 or gives a notice of illegality pursuant to Section 2.22, (b) any Lender is a Defaulting Lender, (c) any Lender is incurring or is reasonably expected to incur costs which are or would be material in amount and are associated with a Gaming Authority’s investigation of whether or not such Lender is a Qualified Person, or (d) in connection with any proposed amendment, waiver, extension or consent requiring the consent of

 

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“each Lender” or “each Lender directly affected thereby” (or any other Class or group of Lenders other than the Required Lenders) with respect to which the Required Lenders’ consent (or the consent of Lenders holding loans or commitments of such Class or lesser group representing more than 50% of the sum of the total loans and unused commitments of such Class or lesser group at such time) has been obtained, as applicable, including in connection with any Repricing Transaction, any Lender is a non-consenting Lender (each such Lender described in this clause (d), a “Non-Consenting Lender”), then the Borrower may, upon notice to such Lender and the Administrative Agent, (i) terminate the applicable Commitments of such Lender and repay all Obligations of the Borrower owing to such Lender relating to the applicable Loans and participations held by such Lender as of such termination date or (ii) replace such Lender by requiring such Recipient to assign and delegate (and such Recipient shall be obligated to assign and delegate), all of its interests, rights and obligations under this Agreement to a Qualified Person who is a Person eligible to be an assignee pursuant to Section 10.6(b); provided that (w) such replacement does not conflict with any Law, (ii) the replacement Lender shall purchase all Loans and other Obligations owing to such replaced Lender on or prior to the date of replacement at par, (iii) the Borrower shall be liable to such replaced Lender under Section 2.21 (as though Section 2.21 were applicable) if any Eurodollar Loan owing to such replaced Recipient shall be purchased other than on the last day of the Interest Period relating thereto, (iv) the replacement Lender, if not already a Lender, shall be reasonably satisfactory to the Administrative Agent to the extent that an assignment to such replacement financial institution of the rights and obligations being acquired by it would otherwise require the consent of the Administrative Agent pursuant to Section 10.6(b) and (v) any such replacement shall not be deemed to be a waiver of any rights that the Borrower, the Administrative Agent or any other Lender shall have against the replaced Lender.

 

2.25                        Incremental Loans.

 

(a)                                 The Borrower may at any time or from time to time after the Closing Date, by written notice delivered to the Administrative Agent (whereupon the Administrative Agent shall promptly deliver a copy to each of the Lenders), request (i) one or more additional Classes of term loans and/or additional commitments of any existing Class of Term Loans (the commitments in respect of any such new Class or increase, “Incremental Term Commitments” and loans made thereunder, “Incremental Term Loans”) and/or (ii) one or more additional Classes of Revolving Commitments (the commitments of any such new Class, “Additional/Replacement Revolving Commitments”) and/or increases in the amount of Revolving Commitments of any existing Class (any such increased commitments, “Increased Revolving Commitments” and, together with any Incremental Term Commitment and Additional/Replacement Revolving Commitments, collectively, “Incremental Facilities”; and the loans under such Increased Revolving Commitments and Additional/Replacement Revolving Commitments, “Incremental Revolving Loans” and, together with any Incremental Term Loans, “Incremental Loans”); provided that:

 

(i)                                     there shall be no more than three (3) separate Classes of Revolving Commitments under the Revolving Facility;

 

(ii)                                  no Event of Default shall have occurred and be continuing or would exist after giving effect to such Incremental Commitments (subject, in the case of any Incremental Term Commitments are being used to finance a Limited Condition Acquisition, to Section 1.6(c));

 

(iii)                               subject to Section 1.6(c), the conditions of Section 5.2(a) shall be satisfied (it being understood that all references to “such date” or similar language in such Section 5.2(a) shall be deemed to refer to the effective date of such Incremental Agreement);

 

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provided that, if the proceeds of any Incremental Term Commitments are being used to finance a Limited Condition Acquisition, (A) the reference in Section 5.2(a) to the accuracy of the representations and warranties shall refer to the accuracy of the representations and warranties that would constitute “Specified Representations” (the definition of which shall be agreed by the Borrower and the lenders providing such Indebtedness) and the representations and warranties in the relevant acquisition agreement the breach of which would permit the buyer to terminate its obligations thereunder or decline to consummate such Limited Condition Acquisition and (B) the reference to “Material Adverse Effect” in the Specified Representations shall be understood for this purpose to refer to “Material Adverse Effect” or similar definition as defined in the main transaction agreement governing such Limited Condition Acquisition;

 

(iv)                              the Borrower and its Restricted Subsidiaries shall be in compliance with the covenant set forth in Section 7.1, determined on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any Incremental Term Loans or Incremental Revolving Loans, as applicable, available under such Incremental Commitments had been outstanding on the last day of such fiscal quarter of the Borrower for testing compliance therewith, and, in each case, assuming the full utilization of any unfunded revolving commitments provided simultaneously thereunder and any subsequent funding of the term debt borrowed or issued thereunder; and

 

(v)                                 to the extent reasonably requested by the Administrative Agent, the Administrative Agent shall have received customary legal opinions addressed to the Administrative Agent, the Collateral Agent and the Lenders, board resolutions and officers’ certificates consistent with those delivered on the Closing Date (other than changes to such legal opinion resulting from a Change in Law, change in fact or change to counsel’s form of opinion) reasonably satisfactory to the Administrative Agent and, within 60 days (or such longer period as the Administrative Agent may agree to) after the closing date of such Incremental Facilities, completion by the Borrower and the other Credit Parties of such other actions relating to any Material Real Estate that is, or is required to be, subject to a Mortgage (or the Mortgages entered into in connection therewith) as the Administrative Agent may reasonably request in connection with such Incremental Facilities.

 

(b)                                 Each Incremental Facility shall be in an aggregate principal amount that is not less than $10,000,000 (provided that such amount may be less than $10,000,000 if such amount represents all remaining availability under the limit set forth below) (and in minimum increments of $5,000,000 in excess thereof), and the aggregate principal amount of all Incremental Facilities shall not exceed the Incremental Limit.

 

(c)                                  (i) Any Incremental Term Loans (A)(1) shall be pari passu with any then-existing Class of Term Loans in right of payment and in right of security, (2) shall not be the obligation of, or subject to any guarantee by any Person who is not also a Loan Party (or who becomes a Loan Party concurrently with the effectiveness thereof), and (3) shall not be secured by (x) a Lien on any Property in which the Collateral Agent does not have a Lien (or in which the Collateral Agent does not obtain a Lien concurrently with the effectiveness thereof) or (y) a perfected Lien on any Property in which the Collateral Agent does not have a perfected Lien (or in which the Collateral Agent does not obtain a perfected Lien concurrently with the effectiveness thereof); (B) shall not mature earlier than the maturity with respect to the Initial Term Loans; (C) shall not have a shorter Weighted Average Life to Maturity than the Initial Term Loans; (D) shall have a maturity date (subject to clause (B)), an amortization schedule (subject to clause (C)), and interest rates (including through fixed interest rates), interest margins, rate floors, upfront fees, funding discounts and original issue discounts as determined

 

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by the Borrower and the lenders providing the Incremental Term Loans; provided that, in the event that the Effective Yield for any such Incremental Term Loans is greater than the Effective Yield for the Initial Term Loans by more than 0.50%, then the Applicable Margins for the Initial Term Loans shall be increased to the extent necessary so that the Effective Yield for the Initial Term Loans is equal to the Effective Yield for the Incremental Term Loans minus 0.50%; (E) shall, to the extent any then-existing Term Loans require ratable prepayment, share ratably with such existing Term Loans, subject to the right of the Borrower to direct the application of voluntary prepayments and unless the Borrower and the lenders providing the Incremental Term Loans elect to share in such prepayments on a less than pro rata basis; and (F) may otherwise have terms and conditions different from those of the Initial Term Loans; provided that (x) except with respect to matters contemplated by clauses (B), (C), (D) and (E) above or terms applicable only after the Initial Term Maturity Date, any differences shall not be materially more restrictive (when taken as a whole) than the terms and conditions of the Loan Documents (when taken as a whole), as reasonably determined by the Borrower, unless such differences are consistent with then- current market terms for the applicable type of Indebtedness and (y) the documentation governing any Incremental Term Loans may include any Previously Absent Financial Maintenance Covenant so long as the Administrative Agent shall have been given prompt written notice thereof and this Agreement is amended to include such Previously Absent Financial Maintenance Covenant for the benefit of each Facility.

 

(i)                                     The Increased Revolving Commitments shall be treated the same as the Initial Revolving Commitments in effect on the Closing Date (including with respect to maturity date thereof) and shall be considered to be part of the Initial Revolving Facility in effect on the Closing Date (it being understood that, if required to obtain Increased Revolving Commitments, the interest rate margins, rate floors and undrawn commitment fees on the Initial Revolving Commitments as in effect on the Closing Date may be increased and additional upfront or similar fees may be payable to the lenders providing the Increased Revolving Commitments) and shall be effected as an increase in the Initial Revolving Commitments.

 

(ii)                                  Any Additional/Replacement Revolving Commitments (A)(1) shall be pari passu with any then-existing Class of Revolving Commitments in right of payment and in right of security, (2) shall not be the obligation of, or subject to any guarantee by any Person who is not also a Loan Party (or who becomes a Loan Party concurrently with the effectiveness thereof), and (3) shall not be secured by (x) a Lien on any Property in which the Collateral Agent does not have a Lien (or in which the Collateral Agent obtains a Lien concurrently with the effectiveness thereof) or (y) a perfected Lien on any Property in which the Collateral Agent does not have a perfected Lien (or in which a Lien in favor of the Collateral Agent is perfected concurrently with the effectiveness thereof); (B) shall not mature earlier than, and shall require no scheduled amortization prior to, the Revolving Termination Date applicable to the Revolving Facility on the Closing Date and shall require no mandatory commitment reduction prior to the Revolving Termination Date applicable to the Revolving Facility on the Closing Date; (C) shall have interest rates (including through fixed interest rates), interest margins, rate floors, upfront fees, undrawn commitment fees, funding discounts, original issue discounts, and premiums (including prepayment premiums) as determined by the Borrower and the lenders of providing such Additional/Replacement Revolving Commitments; (D) may include provisions relating to letters of credit issued thereunder, which issuances shall be on terms substantially similar (except for the overall size of such subfacilities, the fronting fees payable in connection therewith and the identity of the letter of credit issuer, which shall be determined by the Borrower, the lenders of such commitments and the applicable letter of credit issuers, which shall be specified in the applicable Incremental Agreement) to the terms relating to Letters of Credit with respect to

 

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the Revolving Commitments or otherwise reasonably acceptable to the Administrative Agent and (E) may otherwise have terms and conditions different from those of the Initial Revolving Facility; provided that (x) except with respect to matters contemplated by clauses (B), (C) and (D) above or terms applicable only after the Revolving Termination Date applicable to the Initial Revolving Facility, any differences shall not be materially more restrictive (when taken as a whole) than the terms and conditions of the Loan Documents (when taken as a whole), as reasonably determined by the Borrower, unless such differences shall be consistent with then-current market terms for the applicable type of Indebtedness and (y) the documentation governing any Additional/Replacement Revolving Commitments may include any Previously Absent Financial Maintenance Covenant so long as the Administrative Agent shall have been given prompt written notice thereof and this Agreement is amended to include such Previously Absent Financial Maintenance Covenant for the benefit of each Facility; provided, further, however, that if the applicable Previously Absent Financial Maintenance Covenant is a “springing” financial maintenance covenant applicable only to revolving Indebtedness, the Previously Absent Financial Maintenance Covenant shall be automatically included in this agreement only for the benefit of each Revolving Facility (and not for the benefit of any Facility in respect of Term Loans hereunder).

 

(d)                                 Each notice from the Borrower pursuant to this Section 2.25 shall be given in writing and shall set forth the requested amount and proposed terms of the relevant Incremental Facility. Incremental Facilities may be provided, subject to the prior written consent of the Borrower (not to be unreasonably withheld), by any existing Lender (it being understood that no existing Lender will have an obligation to provide any portion of any Incremental Facility) or by any other Person eligible to be an assignee pursuant to Section 10.6(b), subject to any applicable consent requirements and the other limitations set forth therein (any such other lender being called an “Additional Lender”); provided that any Additional Lender shall execute and deliver a Joinder Agreement.

 

(e)                                  (i)                                     Incremental Commitments shall become effective under this Agreement pursuant to an amendment (an “Incremental Agreement”) to this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower, each Lender agreeing to provide such Commitment, if any, each Additional Lender (who shall, upon the effectiveness thereof, become a Lender for all purposes in connection with this Agreement), if any, and the Administrative Agent. The Incremental Agreement may, subject to Section 2.25(c), without the consent of any other Lender, effect such amendments to this Agreement and the other Loan Documents as may be necessary, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the provisions of this Section 2.25 (including, in connection with any Increased Revolving Commitments, to reallocate Revolving Extensions of Credit on a pro rata basis among the relevant Revolving Lenders). The effectiveness of any Incremental Agreement shall be subject to the satisfaction on the date thereof (each, an “Incremental Facility Closing Date”) and the occurrence of any extension of credit thereunder shall be subject to only the satisfaction of such conditions as the parties thereto shall agree and as set forth in this Section 2.25. The Borrower will use the proceeds of the Incremental Facilities for any purpose not prohibited by this Agreement.

 

(ii)                                  Upon the effectiveness of any Increased Revolving Commitments pursuant to this Section 2.25, each Lender with a Revolving Commitment of such Class immediately prior to such increase will automatically and without further act be deemed to have assigned to each Lender providing a portion of the Increased Revolving Commitments (each, an “Increasing Revolving Commitment Lender”), and each such Increasing Revolving Commitment Lender will automatically and without further act be deemed to have assumed a portion of such Lender’s participations hereunder in outstanding Letters of Credit such that, after giving effect to each such deemed assignment and assumption of participations, the percentage of the aggregate outstanding participations hereunder in Letters of Credit held by

 

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each Lender with a Revolving Commitment of such Class (including each such Increasing Revolving Commitment Lender) will equal the percentage of the aggregate Revolving Commitments of such Class of all Lenders represented by such Lender’s Revolving Commitment of such Class. If, on the date of such increase, there are any Revolving Loans of such Class outstanding, such Revolving Loans shall, on or prior to the effectiveness of such Increased Revolving Commitments, be prepaid from the proceeds of additional Revolving Loans made hereunder (reflecting such Increased Revolving Commitments of such Class), which prepayment shall be accompanied by accrued interest on the Revolving Loans of such Class being prepaid and any costs incurred by any Lender in accordance with Section 2.21. The Administrative Agent and the Lenders hereby agree that the minimum borrowing, pro rata borrowing and pro rata payment requirements contained elsewhere in this Agreement shall not apply to the transactions effected pursuant to the immediately preceding sentence.

 

(iii)                               Upon the effectiveness of any Additional/Replacement Revolving Commitments, then (A) the borrowing and repayment (except (x) payments of interest and fees at different rates in respect of any then-existing Revolving Commitments and such Additional/Replacement Revolving Commitments (and, in each case, related outstandings), (y) repayments required on the maturity date of any then-existing Revolving Commitments and (z) repayments made in connection with any permanent repayment and termination of Commitments (subject to clause (D) below) of Incremental Revolving Loans in respect thereof) after the effective date of such Additional/Replacement Revolving Commitments shall be made on a pro rata basis with the then-existing Revolving Facility, (B) all letters of credit shall be participated by all Revolving Lenders of such Additional/Replacement Revolving Commitments on a pro rata basis with all Revolving Lenders of the then-existing Revolving Facility, (C) assignments and participations of Additional/Replacement Revolving Commitments (and the related outstandings) shall be governed by the assignment and participation provisions set forth in Section 10.6 and (D) no termination of Additional/Replacement Revolving Commitments and no repayment of Incremental Loans in respect thereof accompanied by a corresponding permanent reduction in the related Additional/Replacement Revolving Commitments shall be permitted unless (x) such Class of Additional/Replacement Revolving Commitments are the earliest maturing Class of Revolving Commitments or (y) such termination or repayment (and corresponding reduction) is accompanied by at least a pro rata termination or permanent repayment (and corresponding pro rata permanent reduction), as applicable, of all then-existing Revolving Commitments (and, in each case, related outstandings).

 

(iv)                              On the date of the Borrowing of any Incremental Term Loans that will be of the same Class as any then-existing Class of Term Loans, and notwithstanding anything to the contrary set forth in Sections 2.2, 2.13 or 2.15, such Incremental Term Loans shall be added to (and constitute a part of, be of the same Type as and, at the election of the Borrower, have the same Interest Period as) each Borrowing of outstanding Term Loans of such Class on a pro rata basis (based on the relative sizes of such Borrowings), so that each Term Lender providing such Incremental Term Loans will participate proportionately in each then-outstanding Borrowing of Term Loans of such Class; it being acknowledged that the application of this clause (e)(iv) may result in new Incremental Term Loans having Interest Periods (the duration of which may be less than one (1) month) that begin during an Interest Period then applicable to outstanding Eurodollar Loans of the relevant Class and which end on the last day of such Interest Period. The Incremental Agreement effectuating any Incremental Term Loans that will be of the same Class as any then-existing Class of Term Loans shall make such adjustments to Section 2.3 (or to the corresponding provisions of the

 

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applicable Incremental Agreement, Refinancing Agreement or Extension Agreement) to as are necessary to provide for the “fungibility” of such Incremental Term Loans with such then- existing Class of Term Loans.

 

(f)                                   No Lender shall be obligated to provide any Incremental Facility unless it so agrees and the Borrower shall not be obligated to offer any existing Lender the opportunity to provide any Incremental Facility. No Incremental Facility nor any Incremental Loan (nor the creation, provision or implementation thereof) shall require the approval of any existing Lender other than in its capacity, if any, as a lender providing all or a part of any Incremental Commitment or Incremental Loan or, in the circumstances described in Section 2.25(d), in its capacity as an Issuing Lender.; provided that any Affiliated Lender providing an Incremental Facility shall be subject to the same restrictions set forth in Section 10.6(c) as they would otherwise be subject to with respect to any purchase by or assignment to such Affiliated Lender of Term Loans.

 

(g)                                  Effective on the date of effectiveness of any Increased Revolving Commitments or Additional/Replacement Revolving Commitments, the L/C Commitments shall increase by an amount, if any, agreed upon by Administrative Agent, the applicable Issuing Lenders, if applicable, and the Borrower.

 

(h)                                 This Section 2.25 shall supersede any provisions in Section 10.1 to the contrary. For the avoidance of doubt, any provision of this Section 2.25 may be amended with the consent of the Required Lenders; provided that no such amendment shall require any Lender to provide any Incremental Commitment without such Lender’s consent.

 

2.26                        Defaulting Lenders. (a) Notwithstanding anything herein to the contrary, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:

 

(i)                                     Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 10.1 unless otherwise agreed by the Borrower and the Administrative Agent.

 

(ii)                                  Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 8 or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 10.7 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the applicable Issuing Lender(s) hereunder; third, to Cash Collateralize the Issuing Lenders’ Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.27; fourth, as the Borrower may request (so long as no Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the Issuing Lenders’ future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.27; sixth, to the payment of any amounts owing to the Lenders or the applicable Issuing Lenders as a result of any judgment of a court of competent jurisdiction obtained by

 

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any Lender or the applicable Issuing Lenders against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Event of Default exists, 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, eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or amounts outstanding under any Letter of Credit in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans or Letter of Credit draws were made at a time when the conditions set forth in Section 5.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and the amounts outstanding under any Letters of Credit owed to, all the Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or amounts outstanding under any Letters of Credit owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations are held by the Lenders pro rata in accordance with the Commitments under the applicable Facility without giving effect to Section 2.26(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this clause (ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

(iii)                               No Defaulting Lender shall be entitled to receive any commitment fees payable under Section 2.9 or fees in connection with Letters of Credit as provided in Section 3.3 (except to the extent that the Defaulting Lender has provided Cash Collateral pursuant to Section 2.27 with respect to its participation in such Letter of Credit) for any period during which such Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to such Defaulting Lender); provided that if the L/C Obligations of the Non-Defaulting Lenders are reallocated pursuant to the clause (iv) below, then the fees payable to the Lenders pursuant to Section 3.3 shall be adjusted in accordance with such Non-Defaulting Lenders’ Revolving Percentages and the Borrower shall not be required to pay any fees to the Defaulting Lender pursuant to Section 3.3 with respect to such Defaulting Lender’s L/C Obligations during the period that such Defaulting Lender’s L/C Obligations are reallocated, or if any Defaulting Lender’s L/C Obligations are neither Cash Collateralized nor reallocated pursuant to the requirements of clause (iv) below, then, without prejudice to any rights or remedies of the Issuing Lenders or any Lender hereunder, all fees payable under Section 3.3 with respect to such Defaulting Lender’s L/C Obligations shall be payable to the applicable Issuing Lenders until such L/C Obligations are Cash Collateralized and/or reallocated.

 

(iv)                              All or any part of such Defaulting Lender’s participation in L/C Obligations shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Revolving Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that (x) the conditions set forth in Section 5.2 are satisfied at the time of such reallocation (and, unless the Borrower shall have otherwise notified the Administrative Agent at such time, the Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time) and (y) such reallocation does not cause the sum of the aggregate Outstanding Amount of the Revolving Loans of any Non-Defaulting Lender, plus such Lender’s Revolving Percentage of the Outstanding Amount of all L/C Obligations at such time to exceed such Lender’s Revolving Commitment. Subject to each party hereunder’s acknowledgment of the provisions set forth in Section 9.13, no reallocation hereunder shall constitute a waiver or release of any claim of

 

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any party hereunder against a Defaulting Lender arising from such Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non- Defaulting Lender’s increased exposure following such reallocation; provided, that, notwithstanding anything to the contrary herein, such acknowledgment shall not constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender.

 

(v)                                 If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under law Cash Collateralize the Issuing Lender’s Fronting Exposure in accordance with the procedures set forth in Section 2.27.

 

(b)                                 If the Borrower, the Administrative Agent and each Issuing Lender agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), such Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit to be held pro rata by the Lenders in accordance with the Commitments under the applicable Facility (without giving effect to Section 2.26(a)(iv), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while such Lender was a Defaulting Lender; provided, further, that, except to the extent otherwise expressly agreed in writing by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from such Lender’s having been a Defaulting Lender.

 

(c)                                  So long as any Revolving Lender is a Defaulting Lender, no Issuing Lender shall be required to issue, extend, renew or amend (including any increase) any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

 

2.27                        Cash Collateral (a)  If required pursuant to Section 3.1(a) or Section 8.1, the Borrower shall promptly Cash Collateralize the then outstanding amount of all L/C Obligations in an amount not less than the Minimum Collateral Amount. At any time that there shall exist a Defaulting Lender, promptly upon the written request of the Administrative Agent or any applicable Issuing Lender (with a copy to the Administrative Agent), the Borrower shall Cash Collateralize all Fronting Exposure of such Issuing Lender with respect to such Defaulting Lender (determined after giving effect to Section 2.26(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.

 

(b)                                 The Borrower and, to the extent provided by any Lender, such Lender, hereby grants to (and subject to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the applicable Issuing Lenders and the applicable Lenders, and agrees to maintain, a first priority security interest (subject to ordinary course Liens of the depositing bank holding such Cash Collateral) in all such Cash Collateral, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and all proceeds of the foregoing, as security for the obligations to which such Cash Collateral may be applied pursuant to clause (c) of this Section 2.27. If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person (subject to ordinary course Liens of the depositing bank holding such Cash Collateral) other than the Administrative Agent as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower will, promptly upon demand by the Administrative Agent,

 

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pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).

 

(c)                                  Notwithstanding anything herein to the contrary, Cash Collateral provided under this Section 2.27, Section 3.1, Section 8.1 or otherwise in respect of Letters of Credit shall be applied to the satisfaction of the specific L/C Obligations, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligations) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

 

(d)                                 Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of the Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following compliance with Section 10.6), or (ii) the determination by the Administrative Agent and each Issuing Lender that there exists excess Cash Collateral; provided that (A) Cash Collateral furnished by or on behalf of the Borrower shall not be released during the continuance of a Default under Section 8.1(a) or (f) or an Event of Default (and following application as provided in this Section may be otherwise applied in accordance with Section 8.1) and (B) the Person providing Cash Collateral and the applicable Issuing Lender(s) may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations hereunder and provided further that to the extent that such Cash Collateral was provided by the Borrower, such Cash Collateral shall remain subject to the security interest granted pursuant to the Loan Documents.

 

2.28                        Extensions of Term Loans and Revolving Commitments.

 

(a)                                 (i)  The Borrower may, at any time and from time to time, request that all or a portion of each Term Loan of any Class (an “Existing Term Loan Class”) be converted or exchanged to extend the scheduled final maturity date(s) of any payment of principal with respect to all or a portion of any principal amount of such Term Loans (any such Term Loans which have been so extended, “Extended Term Loans”) and to provide for other terms consistent with this Section 2.28. Prior to entering into any Extension Agreement with respect to any Extended Term Loans, the Borrower shall provide written notice to the Administrative Agent (who shall provide a copy of such notice to each of the Lenders of the applicable Existing Term Loan Class, with such request offered equally to all such Lenders of such Existing Term Loan Class) (a “Term Loan Extension Request”) setting forth the proposed terms of the Extended Term Loans to be established, which terms shall be substantially similar to the Term Loans of the Existing Term Loan Class, or otherwise not materially more restrictive than the terms of such Existing Term Loan Class, taken as a whole (as reasonably determined by the Borrower), except that (w) the scheduled final maturity date shall be extended and all or any of the scheduled amortization payments of all or a portion of any principal amount of such Extended Term Loans may be delayed to later dates than the scheduled amortization of principal of the Term Loans of such Existing Term Loan Class (with any such delay resulting in a corresponding adjustment to the scheduled amortization payments reflected in Section 2.3 or in the Extension Agreement or the Incremental Agreement or the Refinancing Agreement, as the case may be, with respect to the Existing Term Loan Class of Term Loans from which such Extended Term Loans were extended, in each case, as more particularly set forth in Section 2.28(c) below), (x)(A) the interest rates (including through fixed interest rates), interest margins, rate floors, upfront fees, funding discounts, original issue discounts and prepayment premiums with respect to the Extended Term Loans may be different than those for the Term Loans of such Existing Term Loan Class and/or (B) additional fees and/or premiums may be payable to the Lenders providing such Extended Term Loans in addition to any of the items contemplated by the preceding clause (A), in each case, to the extent provided in the applicable

 

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Extension Agreement, (y) the Extension Agreement may provide for other covenants and terms that apply to any period after the Latest Term Loan Maturity Date with respect to the then-existing Term Loans and such terms and conditions that constitute then-current market terms for the applicable type of Indebtedness and (z) any provisions applicable to such Extended Term Loans that also expressly apply to (and for the benefit of) the Existing Term Loan Class may be more favorable to the Lenders providing such Extended Term Loans than those originally applicable to the Existing Term Loan Class; provided that any Class of Extended Term Loans may participate on a pro rata basis or a less than pro rata basis (but not greater than a pro rata basis) in any voluntary or mandatory repayment or prepayment (but, for purposes of clarity, not scheduled amortization payments) in respect of the Term Loans, in each case as specified in the relevant Extension Agreement. No Lender shall have any obligation to agree to have any of its Term Loans of any Existing Term Loan Class exchanged or converted into Extended Term Loans pursuant to any Term Loan Extension Request. Any Extended Term Loans of any Extension Series shall constitute a separate Class of Term Loans from the Existing Term Loan Class of Term Loans from which they were extended; provided that in no event shall there be more than ten Classes of Term Loans outstanding at any time.

 

(ii)                                  The Borrower may, at any time and from time to time, request that all or a portion of the Revolving Commitments of any Class existing at the time of such request (each, an “Existing Revolving Commitment” and any related Revolving Loans under any such facility, “Existing Revolving Loans”; each Existing Revolving Commitment and related Existing Revolving Loans together being referred to as an “Existing Revolving Class”) be converted or exchanged to extend the termination date thereof and the scheduled maturity date(s) of any payment of principal with respect to all or a portion of any principal amount of Existing Revolving Loans related to such Existing Revolving Commitments (any such Existing Revolving Commitments which have been so extended, “Extended Revolving Commitments” and any related Revolving Loans, “Extended Revolving Loans”) and to provide for other terms consistent with this Section 2.28. Prior to entering into any Extension Agreement with respect to any Extended Revolving Commitments, the Borrower shall provide a notice to the Administrative Agent (who shall provide a copy of such notice to each of the Lenders of the applicable Class of Existing Revolving Commitments, with such request offered equally to all Lenders of such Class) (a “Revolving Extension Request”) setting forth the proposed terms of the Extended Revolving Commitments to be established thereunder, which terms shall be substantially similar to those applicable to the Existing Revolving Commitments from which they are to be extended (the “Specified Existing Revolving Class”) or otherwise not materially more restrictive than the terms of such Existing Revolving Class, taken as a whole (as reasonably determined by the Borrower), except that (x) all or any of the final maturity dates of such Extended Revolving Commitments may be delayed to later dates than the final maturity dates of the Existing Revolving Commitments of the Specified Existing Revolving Class, (y)(A) the interest rates, interest margins, rate floors, upfront fees, funding discounts, original issue discounts and prepayment premiums with respect to the Extended Revolving Commitments may be different than those for the Existing Revolving Commitments of the Specified Existing Revolving Class and/or (B) additional fees and/or premiums may be payable to the Lenders providing such Extended Revolving Commitments in addition to or in lieu of any of the items contemplated by the preceding clause (A), and (z) the Extension Agreement may provide for other covenants and terms that apply to any period after the Latest Revolving Maturity Date or such terms and conditions that constitute then- current market terms for the applicable type of Indebtedness; provided that notwithstanding anything to the contrary in this Section 2.28, or otherwise, (I) the borrowing and repayment (except (1) payments of interest and fees at different rates in respect of any Existing Revolving Commitments and such Extended Revolving Commitments (and related outstandings), (2) repayments required on the maturity date of any Existing Revolving Commitments and such Extended Revolving Commitments and (3) repayments made in connection with any permanent repayment and termination of commitments (subject to clause (IV) below) of the Extended Revolving Loans under any Extended Revolving Commitments shall be made on a pro rata basis with any borrowings and repayments of the Existing Revolving Loans of the Specified

 

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Existing Revolving Class (the mechanics for which may be implemented through the applicable Extension Agreement and may include technical changes related to the borrowing and repayment procedures of the Specified Existing Revolving Class), (II) all letters of credit shall be participated on a pro rata basis by all Lenders with Extended Revolving Commitments and Existing Revolving Commitments, (III) assignments and participations of Extended Revolving Commitments and Extended Revolving Loans shall be governed by the assignment and participation provisions set forth in Section 10.6 and (IV) no termination of Extended Revolving Commitments and no repayment of Extended Revolving Loans accompanied by a corresponding permanent reduction in the related Extended Revolving Commitments shall be permitted unless (A) such Extended Revolving Loans have the earliest maturity date of all Revolving Loans or (B) such termination or repayment (and corresponding reduction) is accompanied by at least a pro rata termination or permanent repayment (and corresponding pro rata permanent reduction), as applicable, of the Existing Revolving Loans or Existing Revolving Commitments, as the case may be. No Lender shall have any obligation to agree to have any of its Revolving Loans or Revolving Commitments of any Existing Revolving Class converted or exchanged into Extended Revolving Loans or Extended Revolving Commitments pursuant to any Extension Request. Any Extended Revolving Commitments of any Extension Series shall constitute a separate Class of revolving commitments from Existing Revolving Commitments of the Specified Existing Revolving Class and from any other Existing Revolving Commitments (together with any other Extended Revolving Commitments so established on such date); provided that in no event shall there be more than three Classes of revolving commitments outstanding at any one time.

 

(b)                                 The Borrower shall provide the applicable Extension Request to the Administrative Agent at least five Business Days (or such shorter period as the Administrative Agent may determine in its reasonable discretion) prior to the date on which Lenders under the Existing Class are requested to respond, and shall agree to such procedures, if any, as may be established by, or acceptable to, the Administrative Agent, in each case acting reasonably, to accomplish the purpose of this Section 2.28. Any Lender (an “Extending Lender”) wishing to have all or a portion of its Term Loans and/or Revolving Commitments of an Existing Class subject to such Extension Request converted or exchanged into Extended Loans/Commitments shall notify the Administrative Agent (an “Extension Election”) on or prior to the date specified in such Extension Request of the amount of its Term Loans and/or Revolving Commitments (and/or any earlier extended Extended Revolving Commitments) which it has elected to convert or exchange into Extended Loans/Commitments (subject to any minimum denomination requirements imposed by the Administrative Agent). In the event that the aggregate amount of Term Loans and/or Revolving Commitments subject to Extension Elections exceeds the amount of Extended Loans/Commitments requested pursuant to the Extension Request, the Term Loans, and/or Revolving Commitments, as applicable, subject to Extension Elections shall be converted to or exchanged to Extended Loans/Commitments on a pro rata basis (subject to such rounding requirements as may be established by the Administrative Agent) based on the amount of Term Loans and/or Revolving Commitments included in each such Extension Election or as may be otherwise agreed to in the applicable Extension Agreement. Notwithstanding the conversion of any Existing Revolving Commitment into an Extended Revolving Commitment, unless expressly agreed by the holders of each affected Existing Revolving Commitment of the Specified Existing Revolving Class, such Extended Revolving Commitment shall not be treated more favorably than all Existing Revolving Commitments of the Specified Existing Revolving Class for purposes of the obligations of a Revolving Lender in respect of Letters of Credit under Section 3, except that the applicable Extension Agreement may provide that the last day for issuing Letters of Credit may be extended and the related obligations to issue Letters of Credit may be continued (pursuant to mechanics to be specified in the applicable Extension Agreement) so long as the applicable Issuing Lenders have consented to such extensions (it being understood that no consent of any other Lender shall be required in connection with any such extension).

 

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(c)                                  Extended Loans/Commitments shall be established pursuant to an amendment (an “Extension Agreement”) to this Agreement (which notwithstanding anything to the contrary set forth in Section 10.1, shall not require the consent of any Lender other than the Extending Lenders with respect to the Extended Loans/Commitments established thereby) executed by the Borrower, the Administrative Agent and the Extending Lenders. In addition to any terms and changes required or permitted by Section 2.28(a), each Extension Agreement in respect of Extended Term Loans shall amend the scheduled amortization payments pursuant to Section 2.3 or the applicable Incremental Agreement or Extension Agreement with respect to the Existing Class of Term Loans from which the Extended Term Loans were exchanged to reduce each scheduled Repayment Amount for the Existing Class in the same proportion as the amount of Term Loans of the Existing Class is to be reduced pursuant to such Extension Agreement (it being understood that the amount of any Repayment Amount payable with respect to any individual Term Loan of such Existing Class that is not an Extended Term Loan shall not be reduced as a result thereof). In connection with any Extension Agreement, the Borrower shall deliver an opinion of counsel reasonably acceptable to the Administrative Agent as to the enforceability of such Extension Agreement, this Agreement as amended thereby and such other customary matters as reasonably requested by the Administrative Agent, and such of the other Loan Documents (if any) as may be amended thereby (in the case of such other Loan Documents as contemplated by the immediately preceding sentence).

 

(d)                                 Notwithstanding anything to the contrary contained in this Agreement, (i) on any date on which any Existing Term Loan Class or Class of Existing Revolving Commitments is converted or exchanged to extend the related scheduled maturity date(s) in accordance with clause (a) above (an “Extension Date”), (A) in the case of the existing Term Loans of each Extending Lender, the aggregate principal amount of such existing Term Loans shall be deemed reduced by an amount equal to the aggregate principal amount of Extended Term Loans so converted or exchanged by such Lender on such date, and the Extended Term Loans shall be established as a separate Class of Term Loans (together with any other Extended Term Loans so established on such date), and (B) in the case of the Existing Revolving Commitments of each Extending Lender under any Specified Existing Revolving Class, the aggregate principal amount of such Existing Revolving Commitments shall be deemed reduced by an amount equal to the aggregate principal amount of Extended Revolving Commitments so converted or exchanged by such Lender on such date, and such Extended Revolving Commitments shall be established as a separate Class of revolving commitments from the Specified Existing Revolving Class and from any other Existing Revolving Commitments (together with any other Extended Revolving Commitments so established on such date) and (ii) if, on any Extension Date, any Existing Revolving Loans of any Extending Lender are outstanding under the Specified Existing Revolving Class, such Existing Revolving Loans (and any related participations) shall be deemed to be converted or exchanged to Extended Revolving Loans (and related participations) of the applicable Class in the same proportion as such Extending Lender’s Specified Existing Revolving Commitments to Extended Revolving Commitments of such Class.

 

(e)                                  In the event that the Administrative Agent determines in its sole discretion that the allocation of Extended Term Loans of a given Extension Series or the Extended Revolving Commitments of a given Extension Series, in each case, to a given Lender was incorrectly determined as a result of manifest administrative error in the receipt and processing of an Extension Election timely submitted by such Lender in accordance with the procedures set forth in the applicable Extension Agreement, then the Administrative Agent, the Borrower and such affected Lender may (and hereby are authorized to), in their sole discretion and without the consent of any other Lender, enter into an amendment to this Agreement and the other Loan Documents (each, a “Corrective Extension Agreement”) within fifteen days following the effective date of such Extension Agreement, as the case may be, which Corrective Extension Agreement shall (i) provide for the conversion or exchange and extension of Term Loans under the Existing Term Loan Class or Existing Revolving Commitments (and

 

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related Revolving Extensions of Credit), as the case may be, in such amount as is required to cause such Lender to hold Extended Term Loans or Extended Revolving Commitments (and related Revolving Extensions of Credit) of the applicable Extension Series into which such other Term Loans or commitments were initially converted or exchanged, as the case may be, in the amount such Lender would have held had such administrative error not occurred and had such Lender received the minimum allocation of the applicable Loans or Commitments to which it was entitled under the terms of such Extension Agreement, in the absence of such error, (ii) be subject to the satisfaction of such conditions as the Administrative Agent, the Borrower and such Lender may agree (including conditions of the type required to be satisfied for the effectiveness of an Extension Agreement described in Section 2.28(c)), and (iii) effect such other amendments of the type (with appropriate reference and nomenclature changes) described in the penultimate sentence of Section 2.28(c).

 

(f)                                   No conversion or exchange of Loans or Commitments pursuant to any Extension Agreement in accordance with this Section 2.28 shall constitute a voluntary or mandatory payment or prepayment for purposes of this Agreement.

 

(g)                                  This Section 2.28 shall supersede any provisions in Section 10.1 to the contrary. For the avoidance of doubt, any of the provisions of this Section 2.28 may be amended with the consent of the Required Lenders; provided that no such amendment shall require any Lender to provide any Extended Loans/Commitments without such Lender’s consent.

 

SECTION 3                               LETTERS OF CREDIT

 

3.1                               L/C Commitment.

 

(a)                                 Subject to the terms and conditions hereof, each Issuing Lender, in reliance on the agreements of the other Revolving Lenders set forth in Section 3.4(a), agrees to issue standby and/or trade letters of credit (“Letters of Credit”) for the account of the Borrower (provided that any Letter of Credit may be for the benefit of Holdings or any other Group Member) on any Business Day prior to the end of the Revolving Commitment Period in Dollars; provided that neither the Administrative Agent or any of its Affiliates shall have any obligation to issue trade Letters of Credit and provided, further, that no Issuing Lender shall have any obligation to issue any Letter of Credit if, after giving effect to such issuance, (i) (x) the L/C Obligations would exceed the aggregate L/C Commitments of all Issuing Lenders or (y) unless the applicable Issuing Lender consents, the aggregate L/C Obligations in respect of all Letters of Credit issued by such Issuing Lender exceed such Issuing Lender’s L/C Commitment, (ii) the aggregate amount of the Available Revolving Commitments would be less than zero or (iii) the Available Revolving Commitment of any Revolving Lender would be less than zero. Each Letter of Credit shall expire no later than the earlier of (x) the first anniversary of its date of issuance unless otherwise agreed by the Issuing Lender in its sole discretion and (y) the date that is five Business Days prior to the Revolving Termination Date; provided that, if requested by the Borrower and accepted by the applicable Issuing Lender in its sole and absolute discretion, a Letter of Credit issued by such Issuing Lender may provide for the renewal thereof for additional one year periods containing an expiry date of more than twelve months after the date of issuance (which shall in no event extend beyond the date referred to in clause (y) above (unless, at least five Business Days prior to the notice period for the then current expiry date, such Borrower shall Cash Collateralize the L/C Obligations with respect to such Letter of Credit in an amount not less than the Minimum Collateral Amount applicable to such Letter of Credit)); provided, however, that (1) any such Letter of Credit shall permit such Issuing Lender to prevent any such renewal at least once in each twelve month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof (the “Nonrenewal Notice”) not later than a number of days in each such twelve month period to be agreed upon at the time

 

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such Letter of Credit is issued, (2) such Issuing Lender shall not (x) permit any such renewal if such Issuing Lender has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its renewed form under the terms hereof (by reason of the provisions of Section 3.1(b) or otherwise) or (y) be obligated to permit such renewal if it has received notice (which may be in writing or by telephone (if immediately confirmed in writing)) on or before the day that is seven Business Days before the date of the Nonrenewal Notice from the Administrative Agent, the Majority Facility Lenders in respect of the Revolving Facility or the Borrower that one or more of the applicable conditions set forth in Section 5.2 is not then satisfied and, in each such case, directing such Issuing Lender not to permit such renewal.

 

(b)                                 No Issuing Lender shall at any time be obligated to issue any Letter of Credit if (i) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such Issuing Lender from issuing such Letter of Credit, or any Law applicable to such Issuing Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Issuing Lender shall prohibit, or request that such Issuing Lender refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Issuing Lender with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such Issuing Lender is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such Issuing Lender any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such Issuing Lender in good faith deems material to it, (ii) the issuance of such Letter of Credit would violate one or more policies of such Issuing Lender applicable to letters of credit generally, (iii) except as otherwise agreed by the Administrative Agent and such Issuing Lender, such Letter of Credit is in an initial stated amount less than $10,000, (iv) such Letter of Credit is to be denominated in a currency other than Dollars, (v) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder or (vi) any Revolving Lender is at such time a Defaulting Lender, unless such Issuing Lender has entered into arrangements, including reallocation of such Lender’s Revolving Percentage of the outstanding L/C Obligations pursuant to Section 2.26(a)(iv) or the delivery of Cash Collateral with the Borrower or such Lender to eliminate such Issuing Lender’s actual or potential Fronting Exposure (after giving effect to Section 2.26(a)(iv)) with respect to such Lender arising from either the Letter of Credit then proposed to be issued or such Letter of Credit and all other L/C Obligations as to which such Issuing Lender has actual or potential Fronting Exposure, as it may elect in its sole discretion. In addition, no Issuing Lender shall be under any obligation to amend or extend any Letter of Credit if (A) such Issuing Lender would have no obligation at such time to issue the Letter of Credit in its amended form under the terms hereof or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment thereto.

 

3.2                               Procedure for Issuance of Letter of Credit. The Borrower may from time to time request that the relevant Issuing Lender issue a Letter of Credit by delivering to such Issuing Lender, not later than 1:00 p.m. on the third Business Day prior to the requested date of issuance of such Letter of Credit to be denominated in Dollars (or such other time as the applicable Issuing Lender may agree in a particular circumstance in its sole discretion), at its address for notices specified to the Borrower by such Issuing Lender an Application therefor, with a copy to the Administrative Agent, completed to the reasonable satisfaction of such Issuing Lender, and such other certificates, documents and other papers and information as such Issuing Lender may reasonably request. Upon receipt of any Application, the relevant Issuing Lender will process such Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue the Letter of Credit requested thereby by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed to by such Issuing Lender and such Borrower. Such Issuing Lender shall furnish a copy of such Letter of Credit to the Borrower promptly

 

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following the issuance thereof. Each Issuing Lender shall promptly furnish to the Administrative Agent, which shall in turn promptly furnish to the relevant Lenders, notice of the issuance of each Letter of Credit issued by it (including the amount thereof).

 

3.3          Fees and Other Charges. (a) The Borrower will pay a fee on each outstanding Letter of Credit, at a per annum rate equal to the Applicable Margin then in effect with respect to Eurodollar Loans under the Revolving Facility on the face amount of such Letter of Credit, which fees shall be shared ratably among the Revolving Lenders and payable quarterly in arrears on each Fee Payment Date after the issuance date. In addition, the Borrower shall pay to each Issuing Lender for its own account a fronting fee equal to 0.125% on the aggregate face amount of all outstanding Letters of Credit issued by it to such Borrower (but in no event less than $500 per annum for each such Letter of Credit), payable quarterly in arrears on each Fee Payment Date after the issuance date.

 

(b)           In addition to the foregoing fees, the Borrower shall pay or reimburse each Issuing Lender for such customary fees and expenses as are incurred or charged by such Issuing Lender in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit requested by the Borrower (which fees and expenses shall have been agreed to from time to time by the Borrower and the relevant Issuing Lender).

 

3.4          L/C Participations.  (a)  Each Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce such Issuing Lender to issue Letters of Credit, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from such Issuing Lender, on the terms and conditions set forth below, for such L/C Participant’s own account and risk an undivided interest equal to such L/C Participant’s Revolving Percentage in such Issuing Lender’s obligations and rights under and in respect of each Letter of Credit issued by it and the amount of each draft paid by such Issuing Lender thereunder. Each L/C Participant agrees with each Issuing Lender that, if a draft is paid prior to the Revolving Termination Date under any Letter of Credit issued by it for which such Issuing Lender is not reimbursed in full by the Borrower on the date due therefor in accordance with the terms of this Agreement, such L/C Participant shall pay to the Administrative Agent for the account of such Issuing Lender upon demand an amount equal to such L/C Participant’s Revolving Percentage of the amount of such draft, or any part thereof, that is not so reimbursed. Each L/C Participant’s obligation to pay such amount shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such L/C Participant may have against any Issuing Lender, the Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 5, (iii) any adverse change in the financial condition of the Borrower, (iv) any breach of this Agreement or any other Loan Document by the Borrower, any other Loan Party or any other L/C Participant or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

 

(b)           If any amount required to be paid by any L/C Participant to the Administrative Agent for the account of any Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion of any payment made by such Issuing Lender under any Letter of Credit is paid to the Administrative Agent for the account of such Issuing Lender within three Business Days after the date such payment is due, such L/C Participant shall pay to the Administrative Agent for the account of such Issuing Lender on demand an amount equal to the sum of (x) the product of (i) such amount, times (ii) the Overnight Rate during the period from and including the date such payment is required to the date on which such payment is immediately available to such Issuing Lender, times (iii) a fraction the

 

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numerator of which is the number of days that elapse during such period and the denominator of which is 360, plus (y) any reasonable administrative, processing or similar fees customarily charged by such Issuing Lender in connection with the foregoing. If any such amount required to be paid by any L/C Participant pursuant to Section 3.4(a) is not made available to the Administrative Agent for the account of the relevant Issuing Lender by such L/C Participant within three Business Days after the date such payment is due, such Issuing Lender shall be entitled to recover from such L/C Participant, on demand, such amount with interest thereon calculated from such due date at the rate per annum applicable to ABR Loans under the Revolving Facility. A certificate of the relevant Issuing Lender submitted to any relevant L/C Participant with respect to any amounts owing under this Section shall be presumptively correct in the absence of manifest error.

 

(c)           Whenever, at any time after any Issuing Lender has made payment under any Letter of Credit and has received from any L/C Participant its pro rata share of such payment in accordance with Section 3.4(a) such Issuing Lender receives any payment related to such Letter of Credit (whether directly from the Borrower or otherwise, including proceeds of collateral applied thereto by such Issuing Lender), or any payment of interest on account thereof, such Issuing Lender will distribute to the Administrative Agent for the account of such L/C Participant its pro rata share thereof; provided, however, that in the event that any such payment received by such Issuing Lender shall be required to be returned by such Issuing Lender, such L/C Participant shall return to the Administrative Agent for the account of such Issuing Lender the portion thereof previously distributed by such Issuing Lender to it.

 

(d)           Until each L/C Participant reimburses the applicable Issuing Lender for any amount drawn under any Letter of Credit, interest in respect of such L/C Participant’s Revolving Percentage of such amount shall be solely for the account of such Issuing Lender.

 

3.5          Reimbursement Obligation of the Borrower. The Borrower agrees to reimburse each Issuing Lender in respect of any drawing under a Letter of Credit following notice of any drawing under a Letter of Credit. Not later than 11:00 a.m. on the second Business Day immediately succeeding the date of any payment by the relevant Issuing Lender under a Letter of Credit, the Borrower shall reimburse such Issuing Lender in an amount equal to the amount of such drawing as set forth above; provided that the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.5 that such reimbursement be financed with a borrowing of ABR Loans or Eurodollar Loans in Dollars in an equivalent amount and, to the extent so financed, the Borrower’s obligation to reimburse such Issuing Lender shall be discharged and replaced by the resulting ABR Loans or Eurodollar Loans, as applicable. Each such payment shall be made to such Issuing Lender at its address for notices specified to the Borrower and in immediately available funds whether cash on hand or proceeds of Revolving Loans as described in the proviso of the preceding sentence. Interest shall be payable on any such amounts from the date on which the relevant draft is paid until payment in full at a rate equal to the rate applicable to ABR Loans under the Revolving Facility.

 

3.6          Obligations Absolute. The Borrower’s obligations under this Section 3 shall be absolute and unconditional under any and all circumstances and irrespective of (i) any setoff, counterclaim or defense to payment that such Borrower may have or have had against any Issuing Lender, any beneficiary or transferee of a Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting) or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction; (ii) the enforceability, validity or genuineness of documents (including any draft, demand, certificate or other document presented under any Letter of Credit) or of any endorsements thereon, even though such

 

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documents shall in fact prove to be unenforceable, invalid, insufficient, fraudulent or forged, or any statement therein being untrue or inaccurate in any respect, or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit; (iii) any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee; (iv) any payment by the applicable Issuing Lender under such Letter of Credit against presentation of a draft or certificate that does not comply strictly with the terms of such Letter of Credit; or any payment made by the applicable Issuing Lender under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including arising in connection with any proceeding under any Debtor Relief Laws; (v) any exchange, release or nonperfection of any collateral, or any release or amendment or waiver of or consent to departure from any guarantee, for all or any of the Obligations of the Borrower in respect of such Letter of Credit; or (vi) any other events or circumstances whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower. The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will promptly notify the applicable Issuing Lender. The Borrower shall be conclusively deemed to have waived any such claim against any Issuing Lender and its correspondents unless such notice is given as aforesaid.

 

3.7          Letter of Credit Payments.

 

(a)           If any draft shall be presented for payment under any Letter of Credit, the relevant Issuing Lender shall promptly notify the Borrower of the date and amount thereof; provided that failure (or delay) to so notify shall not relieve the Borrower of its obligation to reimburse the Issuing Lender hereunder.

 

(b)           In paying any drawing under a Letter of Credit, the applicable Issuing Lender shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by such Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any document or the authority of the Person executing or delivering any document. None of the applicable Issuing Lender, its Related Parties nor any of the respective correspondents, participants or assignees of such Issuing Lender shall be liable to any Revolving Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the requisite Revolving Lenders; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Application. The Borrower hereby assumes all risks of the acts of omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided that this assumption is not intended to, and shall not, preclude the Borrower from pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the applicable Issuing Lender, its Related Parties nor any of the respective correspondents, participants or assignees of such Issuing Lender shall be liable or responsible for any of the matters described in Section 3.6; provided that, notwithstanding anything in such clauses to the contrary, the Borrower may have a claim against such Issuing Lender, and such Issuing Lender may be liable to the Borrower, to the extent, but only to the extent, of any direct (as opposed to indirect, special, punitive, consequential or exemplary) damages suffered by the Borrower which a court of competent jurisdiction determines in a final nonappealable judgment were caused by such Issuing Lender’s bad faith, gross negligence or willful misconduct or such Issuing Lender’s willful or grossly negligent failure to pay under any Letter of Credit

 

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after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit or other material breach of this Agreement by such Issuing Lender. In furtherance and not in limitation of the foregoing (but subject to the provisos therein), the applicable Issuing Lender may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and such Issuing Lender shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

 

3.8                               Applicability of ISP98 and UCP; Reporting; Applications.

 

(a)           Unless otherwise expressly agreed by the applicable Issuing Lender and the Borrower when a Letter of Credit is issued, the rules of the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each Letter of Credit.

 

(b)           Not later than the third Business Day following the last day of each month (or at such other intervals as the Administrative Agent and the applicable Issuing Lender shall agree), each Issuing Lender shall provide to the Administrative Agent a schedule of the Letters of Credit issued by it, in form and substance reasonably satisfactory to the Administrative Agent, showing the date of issuance of each Letter of Credit, the account party, the original face amount (if any), the expiration date, and the reference number of any Letter of Credit outstanding at any time during such month, and showing the aggregate amount (if any) payable by the Borrower to such Issuing Lender during such month.

 

(c)           To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Section 3, the provisions of this Section 3 shall apply.

 

SECTION 4          REPRESENTATIONS AND WARRANTIES

 

To induce the Agents and the Lenders to enter into this Agreement and to make the Loans and issue or participate in the Letters of Credit, the Borrower hereby represents and warrants (as to itself and each of its Restricted Subsidiaries) to the Agents and each Lender, on the dates and to the extent required pursuant to Section 5.1 or 5.2 hereof, as applicable:

 

4.1          Financial Condition. (a) The audited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at December 31, 2013, December 31, 2014 and December 31, 2015, and the related consolidated statements of income and of cash flows for the fiscal years ended on such dates, reported on by and accompanied by an unqualified report from Ernst & Young LLP, present fairly in all material respects the financial condition of the Borrower and its consolidated Subsidiaries as at such date in accordance with GAAP consistently applied, and the results of its operations and its cash flows for the respective fiscal years then ended, except in each case as otherwise disclosed on Schedule 4.1(a) hereto.

 

(b)           The unaudited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at March 31, 2016, and the related consolidated statements of income and of cash flows for the fiscal quarters ended on such date, present fairly in all material respects the financial condition of the Borrower and its consolidated Subsidiaries as at such date, and the results of its operations and its cash flows for the fiscal quarter then ended, in accordance with GAAP consistently applied, except in each case (i) as otherwise disclosed on Schedule 4.1(b) hereto and (ii) subject to changes resulting from audit, normal year-end audit adjustments and to the absence of footnotes.

 

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(c)           The Borrower has furnished to the Administrative Agent the Borrower’s pro forma consolidated balance sheet and related pro forma consolidated statement of income as of the last day of and for the fiscal quarter ended March 31, 2016, prepared giving effect to the Transactions as if the Transactions had occurred on such date (in the case of such balance sheet) or at the beginning of such period (in the case of such statement of income). Such pro forma consolidated balance sheet and consolidated statement of income have been prepared in good faith by the Borrower based on assumptions believed to be reasonable by the Borrower at the time furnished, it being understood that no such pro forma financial statement is required to include adjustments for purchase accounting (including adjustments of the type contemplated by Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations (formerly SFAS 141R)).

 

4.2          No Change. Since December 31, 2015, there has been no event, development or circumstance, either individually or in the aggregate, that has had or would reasonably be expected to have a Material Adverse Effect.

 

4.3          Existence; Compliance with Law. Each Group Member (a) (i) is duly organized (or incorporated) and validly existing and (ii) in good standing (or, in the case of any Foreign Subsidiary, the equivalent status in any foreign jurisdiction) under the laws of the jurisdiction of its organization or incorporation, (b) has the requisite organizational power and authority to own and operate its Property, to lease the Property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign entity and in good standing (where such concept is relevant) under the laws of each jurisdiction where its ownership, lease or operation of Property or the conduct of its business requires such qualification and (d) is in compliance with all Laws (including, without limitation, Gaming Regulations and Gaming Permits), except, in each case referred to in this Section 4.3 (other than clause (a)(i) and (b), in each case, with respect to the Borrower), to the extent that any such failure to be so organized and existing, in good standing or qualified, to have such requisite organizational power and authority or to comply with such Laws, as applicable, would not reasonably be expected to have a Material Adverse Effect. Each Loan Party is not an EEA Financial Institution.

 

4.4          Organizational Power; Authorization; Enforceable Obligations. Each Loan Party has the corporate or other organizational power and authority to execute, deliver and perform the Loan Documents to which it is a party and, in the case of the Borrower, to borrow or have Letters of Credit issued hereunder. Each Loan Party has taken all necessary corporate or other organizational action to authorize the execution, delivery and performance of the Loan Documents to which it is a party and, in the case of the Borrower, to authorize the extensions of credit on the terms and conditions of this Agreement. Each Loan Party has duly executed and delivered each Loan Document to which it is a party. Except as would not reasonably be expected to have a Material Adverse Effect, no consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority (including, without limitation, any Gaming Authority) or any other Person is required in connection with the extensions of credit hereunder or the execution, delivery and performance of any Loan Document by any Loan Party party thereto, except (i) consents, authorizations, filings and notices described in Schedule 4.4, which consents, authorizations, filings and notices have been obtained or made (except to the extent not yet required to have been obtained or made), each of which is in full force and effect, (ii) the filings referred to in Section 4.17, (iii) the consent or approval of the applicable Gaming Authorities of the pledge of any Gaming Collateral and any other Gaming Business pursuant to the Guarantee and Collateral Agreement and other informational filings with and under Nevada Gaming Commission Regulation 8.130 and other notices required to be delivered to the applicable Gaming Authorities pursuant to applicable Gaming Regulations in connection with such pledge of such Gaming Collateral, and (iv) the approval of one or more Gaming Authorities that may be required

 

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in connection with foreclosure and the exercise of rights and remedies under the Loan Documents. This Agreement constitutes, and each other Loan Document upon execution will constitute, a legal, valid and binding obligation of each Loan Party that is a party thereto, enforceable against each such Loan Party in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in an proceeding in equity or at law) and/or principles of good faith and fair dealing.

 

4.5          No Legal Bar. The execution, delivery and performance of this Agreement and the other Loan Documents by each Loan Party party hereto or thereto, the issuance of Letters of Credit, the borrowings hereunder and the use of the proceeds thereof and the granting and perfection of the Liens contemplated thereunder, do not violate (a) such Loan Party’s Organizational Documents, (b) any Law (including, without limitation, Gaming Regulations) applicable to such Loan Party or (c) any Contractual Obligation of such Loan Party except, in each case referred to in clause (b) or (c), to the extent that any such violation would not reasonably be expected to have a Material Adverse Effect.

 

4.6          No Material Litigation. No litigation, proceeding or investigation of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Borrower, threatened in writing, against any Group Member or against any of their Properties or revenues which, taken as a whole, would reasonably be expected to have a Material Adverse Effect.

 

4.7          Use of Proceeds. The Borrower shall use the proceeds of each Loan and Letter of Credit hereunder solely for the purposes provided in Section 6.10.

 

4.8          Ownership of Property; Liens. Except as set forth in Schedule 4.8, each Group Member has good and indefeasible title in fee simple to, or a valid leasehold or subleasehold interest in, all its real property, and good title to, or a valid leasehold interest in or right to use, all its Property (other than Intellectual Property), in each case, that are necessary for the operation of their respective businesses as currently conducted and as proposed to be conducted, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect, and none of such Property is subject to any Lien other than Permitted Liens. As of the Closing Date, except as set forth in Schedule 4.8, no real property is owned by any Loan Party in fee simple or leased by any Loan Party.

 

4.9          Intellectual Property. Each Group Member owns, or has a valid right to use, all Intellectual Property necessary for the conduct of its business as currently conducted free and clear of all Liens (other than Permitted Liens) without, to the knowledge of the Borrower, conflict with the rights of any other Person, except where the failure to do so or such conflict would not reasonably be expected to have a Material Adverse Effect. To the knowledge of the Borrower, no holding, injunction, decision or judgment has been rendered by any Governmental Authority and no Group Member has entered into any settlement stipulation or other agreement (except license agreements in the ordinary course of business) which would limit, cancel or question the validity of any Group Member’s rights in any Intellectual Property owned by such Group Member in any respect that would reasonably be expected to have a Material Adverse Effect. To the knowledge of the Borrower, no claim has been asserted, is pending or is threatened by any Person challenging or questioning the use by any Group Member of any Intellectual Property or the validity of any Intellectual Property, or alleging any infringement, misappropriation or violation by any Group Member of any Intellectual Property of any Person, except in each case as would not reasonably be expected to have a Material Adverse Effect. To the knowledge of the Borrower, the operation of the respective businesses of each Group Member as currently

 

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conducted does not infringe upon, misappropriate or otherwise violate any rights held by any Person, except for such infringements, misappropriations or violations that would not reasonably be expected to have a Material Adverse Effect. To the knowledge of the Borrower, except as would not reasonably be expected to have a Material Adverse Effect, no Person is infringing, misappropriating or violating any Intellectual Property owned by any Group Member, and no Group Member has made or threatened to make any claim relating to the foregoing. Each Group Member has taken all actions that in the exercise of their reasonable business judgment should be taken to protect the Intellectual Property necessary for the conduct of its business as currently conducted, including Intellectual Property that is confidential in nature, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect.

 

4.10        Taxes. Except as would not reasonably be expected to result in a Material Adverse Effect, (a) each Group Member has filed or caused to be filed all federal income tax returns and all other tax returns (including tax returns to be filed in foreign jurisdictions) that are required to be filed and has paid all Taxes shown to be due and payable on said returns other than those (i) not yet delinquent or (ii) contested in good faith and as to which adequate reserves have been provided in accordance with GAAP and (b) each Group Member has paid all other Taxes imposed on it or any of its Property by any Governmental Authority responsible for administering taxes, or such taxes are being contested in good faith and have provided adequate reserves in accordance with GAAP for the payment of all such Taxes.

 

4.11        Federal Reserve Regulations. No part of the proceeds of any Loans, and no other extensions of credit hereunder, will be used for any purpose that violates Regulation T, U or X.

 

4.12        ERISA. (a) Except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (i) no ERISA Event has occurred or is expected to occur; (ii) there are no pending or, to the knowledge of any Group Member, claims, actions or lawsuits or action by any Governmental Authority, participant or beneficiary with respect to any Plan threatened in writing; (iii) there are no violations of the fiduciary responsibility rules with respect to any Plan; (iv) no Group Member has engaged in any non-exempt “prohibited transaction,” as defined in Section 406 of ERISA or Section 4975 of the Code, in connection with any Plan, that would subject any Group Member to a tax on prohibited transactions imposed by Section 502(i) of ERISA or Section 4975 of the Code; and (v) each Plan has complied with the applicable provisions of ERISA and the Code. The present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Single Employer Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Single Employer Plan allocable to such accrued benefits by an amount that, if required to be paid as of such date by the Borrower and its Subsidiaries, would reasonably be expected to have a Material Adverse Effect. As of the date hereof, no Group Member participates in a Multiemployer Plan.

 

(b)           No Group Member has incurred, and no Group Member reasonably expects to incur, any liability under ERISA or the Code with respect to any plan within the meaning of Section 3(3) of ERISA which is subject to Title IV of ERISA that is maintained by a Commonly Controlled Entity (other than a Group Member) (a “Commonly Controlled Plan”) merely by virtue of being treated as a single employer under Title IV of ERISA with the sponsor of such plan that would reasonably be expected to have a Material Adverse Effect and result in a direct obligation of such Group Member to pay money.

 

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(c)           Except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect: (i) each Foreign Pension Plan is in compliance and in good standing in all respects with all laws, regulations and rules applicable thereto, and the respective requirements of the governing documents for such Foreign Pension Plan, and each Foreign Pension Plan that is required to be registered has been registered and has been maintained in good standing with applicable regulatory authorities; (ii) with respect to each Foreign Pension Plan maintained or contributed to by a Group Member (A) that is required by applicable to law to be funded in a trust or other funding vehicle, such Foreign Pension Plan is in compliance with applicable law regarding funding requirements, and (B) that is not required by applicable law to be funded in a trust or other funding vehicle, reserves have been established where required by ordinary accounting practices in the jurisdiction in which such Foreign Pension Plan is maintained; and (iii) no actions or proceedings have been taken or instituted to terminate or wind-up a Foreign Pension Plan with respect to which any Group Member could reasonably be expected to have any liability. The accrued benefit obligations of each Foreign Pension Plan (based on the assumptions used to fund such Foreign Pension Plan) do not exceed the assets of such Foreign Pension Plan by an amount that, if required to be paid immediately, would reasonably be expected to have a Material Adverse Effect.

 

4.13        Investment Company Act. No Loan Party is required to be registered as an “investment company” under and within the meaning of the Investment Company Act of 1940.

 

4.14        Subsidiaries. (a)  The Subsidiaries listed on Schedule 4.14 constitute all the Subsidiaries of the Borrower as of the Closing Date. Schedule 4.14 sets forth as of the Closing Date the name and jurisdiction of incorporation of each Subsidiary and, as to each Subsidiary, the percentage of each class of Capital Stock owned by any Loan Party. All Capital Stock of each Group Member has been validly issued, are (as applicable) fully paid and nonassessable and are free and clear of all Liens other than Permitted Liens.

 

(b)           As of the Closing Date, except as set forth on Schedule 4.14, there are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments of any nature (other than compliance with any requirements of any applicable Gaming Regulations) to which the Borrower or any of its Subsidiaries is a party relating to any Capital Stock of any Group Member.

 

4.15        Environmental Matters. Other than exceptions to any of the following that would not reasonably be expected to have a Material Adverse Effect:

 

(a)           No Group Member, nor any of their respective businesses or operations nor any real property currently owned by any Group Member, nor to the knowledge of the Borrower any real property currently leased or operated by the Group Members or any real property formerly owned, leased or operated by any Group Member, are subject to any outstanding Environmental Claim or any order (unilateral or consent), consent decree, or settlement agreement with any Person relating to any Environmental Law or Environmental Claim;

 

(b)           No Group Member has received any letter or request for information under Section 104 of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9604) or any comparable state law;

 

(c)           To the knowledge of the Borrower, there are and have been, no conditions or occurrences that would reasonably be expected to form the basis of an Environmental Claim against any Group Member or any real property currently owned, leased or operated by the Group Members or any such claim arising out of the ownership, lease or operation by the Group Members of any real property

 

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formerly owned, lease or operated by the Group Members but no longer owned, leased or operated by the Group Members;

 

(d)           Each Group member is in compliance with all Environmental Laws and all permits issued under such Environmental Laws; and

 

(e)           Hazardous Materials have not at any time been generated, used, treated or stored on, or transported to or from, or released on or from, any real property owned, leased or operated by the Group Members or, to the knowledge of the Borrower, any property adjoining or adjacent to any real property, where such generation, use, treatment, storage, transportation or release would reasonably be expected to give rise to an Environmental Claim against the Group Members.

 

4.16        Accuracy of Information, Etc.. All written information (other than the Projections, other forward-looking information and information of a general economic or industry nature) concerning any Group Member or any of their respective Subsidiaries that has been made available by the Borrower or their respective representatives and made available to the Agents or any Lead Arranger or Lender in connection with the Transactions, the First Amendment Transactions or this Agreement, when taken as a whole, did not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements were made (after giving effect to all supplements and updates thereto from time to time). The Projections, when taken as a whole, have been prepared in good faith based upon assumptions believed by the Borrower to be reasonable at the time furnished (it being recognized that such Projections are not to be viewed as facts and are subject to significant uncertainties and contingencies, many of which are beyond the Borrower’s control, that no assurance can be given that any particular financial projections will be realized, that actual results may differ from projected results and that such differences may be material).

 

4.17        Security Documents. (a) The Guarantee and Collateral Agreement is effective to create in favor of the Collateral Agent for the benefit of the Secured Parties, a legal and valid security interest in the Collateral described therein (subject, in the case of the Pledged Securities described in the Guarantee and Collateral Agreement, to the receipt of any approvals required by the applicable Gaming Authorities (including those described in Section 10.24) in order to pledge any of the Gaming Collateral of any entity licensed by or registered with such Gaming Authorities). In the case of (i) the Pledged Securities described in the Guarantee and Collateral Agreement, when any stock certificates or notes, as applicable, representing such Pledged Securities are delivered to the Collateral Agent and subject to the receipt of any approvals required by the applicable Gaming Authorities (including those described in Section 10.24) in order to pledge any of the Gaming Collateral of any entity licensed by or registered with such Gaming Authorities and (ii) the other Collateral described in the Guarantee and Collateral Agreement, when financing statements in appropriate form are filed in the offices specified on Schedule 4.17(a), the Collateral Agent shall have a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral (including any proceeds of any item of Collateral) (to the extent a security interest in such Collateral can be perfected through the filing of financing statements under the Laws of the jurisdictions in which the offices specified on Schedule 4.17(a) are located and through the delivery of the Pledged Securities required to be delivered on the Closing Date), as security for the Secured Obligations.

 

(b)           Upon the execution and delivery of any Mortgage to be executed and delivered pursuant to Section 6.8(b), such Mortgage shall be effective to create in favor of the Collateral Agent for the benefit of the Secured Parties a legal and valid Lien on the mortgaged property described therein and

 

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proceeds thereof; and when such Mortgage is filed in the recording office designated by the Borrower, such Mortgage shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such mortgaged property and the proceeds thereof, as security for the Secured Obligations (as defined in the relevant Mortgage).

 

4.18        Solvency. On the Acquisition Closing Date, immediately after giving effect to the First Amendment Transactions and the incurrence and repayment of all Indebtedness and obligations being incurred and repaid in connection herewith and therewith on the Acquisition Closing Date, the Borrower and its Subsidiaries, on a consolidated basis, are Solvent.

 

4.19        Labor Matters. No strike, stoppage, lockout, slowdown or dispute with the employees of any Group Member exists or, to the knowledge of the Borrower, has been threatened in writing, there are no unfair labor practice complaints pending or, to the knowledge of the Borrower, threatened in writing against any of Group Member, and there is no violation by any Group Member of the Fair Labor Standards Act or any other applicable federal, state or foreign wage and hour laws, in each case of this Section 4.19, which have had, or would reasonably be expected to have, a Material Adverse Effect.

 

4.20        PATRIOT Act; OFAC; FCPA; Sanctions.

 

(a)           To the extent applicable and to its knowledge, each Group Member is in compliance, in all material respects, with (i) the Trading with the Enemy Act and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto (collectively, “OFAC”), and (ii) the PATRIOT Act. No Borrower will directly or, to its knowledge, indirectly, use any part of the proceeds of the Loans for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977.

 

(b)           No Group Member, and, to the knowledge of the Borrower, no Affiliate of any Group Member, (i) is a person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or transactions prohibited by Section 2 of such executive order, or is otherwise associated with any such person in any manner violative of Section 2, (iii) is a person on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order or (iv) is a person resident in a country that is subject to a sanctions program identified on the list maintained and published by the European Union and available at http://eeas.europa.eu/cfsp/sanctions/consol-list_en.htm (or equivalent page thereto as otherwise published from time to time by the European Union). The Borrower will not directly or, to its knowledge, indirectly, use any part of the proceeds of the Loans to finance the activities of any Person described in clauses (i) through (iv) above.

 

4.21        Gaming Matters. Neither the Borrower nor any of its Restricted Subsidiaries has received any written notice or other written communications from any Gaming Authority regarding (i) any revocation, withdrawal, suspension, termination or modification of, or the imposition of any material conditions with respect to, any Gaming Permit, or (ii) any other limitations on the conduct of business by the Borrower or any of its Restricted Subsidiaries, except, in each case, where any such revocation, withdrawal, suspension, termination,

 

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modification, imposition or limitation could not reasonably be expected to result in, either individually or in the aggregate, a Material Adverse Effect.

 

4.22                        Insurance. The properties of the Borrower and its Restricted Subsidiaries are insured with financially sound and reputable insurance companies, in such amounts (after giving effect to any self-insurance reasonable and customary for similarly situated Persons engaged in the same or similar businesses as the Borrower and its Restricted Subsidiaries) with such deductibles and covering such risks and liabilities as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower or its Restricted Subsidiaries operate. All insurance maintained by the Group Members is in full force and effect, all premiums have been duly paid, no Group Member has received notice of violation, invalidity or cancellation thereof, and the use, occupancy and operation thereof comply with all Insurance Requirements, and there exists no default under any Insurance Requirement, in each case, except as could not reasonably be expected to result in a Material Adverse Effect.

 

SECTION 5                               CONDITIONS PRECEDENT

 

5.1                               Conditions to Initial Extension of Credit. The obligations of each Lender to make Initial Term Loans and Revolving Loans to be made on the Closing Date shall be subject to the satisfaction (or waiver by the Lead Arrangers), of the following conditions precedent:

 

(a)                                 Credit Agreement; Security Documents. The Administrative Agent (or its counsel) shall have received from each Loan Party party thereto a counterpart signed by such Loan Party (or written evidence satisfactory to the Administrative Agent (which may include a copy transmitted by facsimile or other electronic method) that such party has signed a counterpart) of (i) this Agreement, (ii) any Notes requested by any Lender hereunder pursuant to Section 2.8(e) at least three (3) Business Days prior to the Closing Date, (iii) the Guarantee and Collateral Agreement and Intellectual Property security agreements to be executed and delivered on the Closing Date and (iv) the Intercompany Subordination Agreement.

 

(b)                                 Reserved.

 

(c)                                  Consummation of the Refinancing; Extinguishment of Liens. Substantially concurrently with the initial incurrence of the Loans, (i) all Indebtedness under the Existing Credit Agreement shall have been repaid in full (together with all fees and other amounts owing thereon) and all commitments thereunder shall have been terminated and all liens securing the obligations under the Existing Credit Agreement shall have been terminated (or arrangements reasonably satisfactory to the Administrative Agent for such termination shall have been made), (ii) all of the Existing Notes shall have been redeemed (or the Borrower shall have provided irrevocable notice to the trustee therefor for the redemption thereof and set aside (or substantially simultaneously with the initial incurrence of the Loans will have set aside from the proceeds thereof) cash and cash equivalents sufficient to pay the redemption price thereof) and (iii) the Group Members shall have (x) no third party Indebtedness for borrowed money outstanding as of the Closing Date other than under the Initial Facilities, ordinary course Capital Lease Obligations, purchase money Indebtedness, equipment financings, letters of credit, surety bonds and short-term working capital facilities and any other Indebtedness listed on Schedule 7.2(c) and (y) no other third party Indebtedness other than Indebtedness permitted by Section 7.2 (collectively, the “Refinancing”).

 

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(d)                                 Solvency Certificate. The Administrative Agent shall have received a solvency certificate signed by the chief financial officer (or other officer with reasonably equivalent responsibilities) of the Borrower, substantially in the form of Exhibit G hereto.

 

(e)                                  Insurance. Administrative Agent shall have received evidence of insurance complying with the requirements of Section 6.5 and certificates naming Collateral Agent as an additional insured and/or loss payee to the extent required pursuant to such Section 6.5.

 

(f)                                   Closing Certificate. The Administrative Agent shall have received (i) a closing certificate of the Borrower dated the Closing Date substantially in the form of Exhibit D-1 certifying as to the matters set forth therein and (ii) an officer’s certificate of each Loan Party dated the Closing Date, substantially in the form of Exhibit D-2, with appropriate insertions and attachments.

 

(g)                                  Legal Opinions. The Administrative Agent shall have received executed customary legal opinions of (i) Morrison & Foerster LLP, in its capacity as special New York counsel to the Loan Parties, (ii) Lewis Roca Rothgerber Christie LLP, local counsel to the Loan Parties organized under the laws of Nevada and Colorado and special gaming counsel to the Loan Parties in Nevada, Colorado and Iowa and (iii) Lathrop & Gage, special gaming counsel to the Loan Parties in Missouri.

 

(h)                                 Pledged Stock; Stock Powers; Pledged Notes. Subject to clause (iii) below, the Collateral Agent shall have received (i) the certificates, if any, representing the shares of the Pledged Stock (as defined in the Guarantee and Collateral Agreement) (other than Pledged Stock constituting Gaming Collateral, the delivery of which is subject to clause (iii) below) required to be delivered to the Collateral Agent pursuant to the Guarantee and Collateral Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof, (ii) any Pledged Notes (as defined in the Guarantee and Collateral Agreement) required to be delivered to the Collateral Agent pursuant to the Guarantee and Collateral Agreement endorsed (without recourse) in blank (or accompanied by an transfer form endorsed in blank) by the pledgor thereof and (iii) to the extent the Loan Parties have received any approvals required by the applicable Gaming Authorities (including those described in Section 10.24 in order to pledge the Pledged Stock constituting Gaming Collateral of any entity licensed by or registered with such Gaming Authorities), the certificates, if any, and all of the remaining Gaming Collateral, if any, referred to in the Guarantee and Collateral Agreement required to be delivered to the Collateral Agent pursuant to the Guarantee and Collateral Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof.

 

(i)                                     Filings, Registrations and Recordings. The Collateral Agent shall have received evidence that all financing statements under the Uniform Commercial Code in the jurisdiction of organization of each Loan Party have been filed or are otherwise in a form appropriate for filing.

 

(j)                                    Financial Statements. The Lead Arrangers shall have received (i) the financial statements of the Borrower and its Subsidiaries referred to in Section 4.1(a) and 4.1(b) and (ii) a pro forma consolidated balance sheet and related pro forma consolidated statement of income of the Borrower referred to in Section 4.1(c).

 

(k)                                 PATRIOT Act. At least three Business Days prior to the Closing Date, the Administrative Agent shall have received from each of the Loan Parties documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act, reasonably requested by any Lender, in each case, at least ten days prior to the Closing Date.

 

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(l)                                     Approvals. Other than as set forth in Section 10.24, all necessary Gaming Permits in connection with the Transactions, including without limitation, the transactions contemplated by the Loan Documents, shall have been obtained and shall remain in full force and effect, and all applicable waiting periods shall have expired without any action being taken by any competent authority which restrains, enjoins, prevents or imposes materially adverse conditions upon the consummation of the Transactions. In addition, there shall not exist any judgment, order, injunction or other restraint, and there shall be no pending litigation or proceeding by any Governmental Authority, prohibiting, enjoining or imposing materially adverse conditions upon the Transactions, or on the consummation thereof.

 

(m)                             Fees. All (i) fees required to be paid by the Borrower on the Closing Date pursuant to the Fee Letters and (ii) fees and expenses required to be paid by the Borrower on the Closing Date pursuant to the Engagement Letter, to the extent invoiced at least three Business Days prior to the Closing Date shall, in each case, upon the initial Borrowing under the Facilities, have been, or will be substantially simultaneously, paid (which amounts may be offset against the proceeds of the Facilities, at the election of the Borrower).

 

(n)                                 Material Adverse Effect. Since December 31, 2015, no Material Adverse Effect shall have occurred. 

 

For purposes of determining whether the conditions specified in this Section 5.1 have been satisfied, by funding the Loans hereunder, the Administrative Agent and each Lender shall be deemed to have consented to, approved or accepted, or to be satisfied with, each document or other matter required hereunder to be consented to or approved by or acceptable or satisfactory to the Administrative Agent or such Lender, as the case may be.

 

5.2                               Conditions to Each Extension of Credit. The agreement of each Lender to make any Loan (which, for the avoidance of doubt, shall not include any Incremental Loans advanced to the extent not otherwise required by the Incremental Lenders (other than in respect of the absence of any Event of Default under Section 8.1(a) or (f)) or of the Issuing Lender to issue, amend, renew or extend any Letter of Credit (other than any amendment or modification of a Letter of Credit which does not increase the face amount or extend the expiration date thereof), in each case, is subject to the satisfaction (or waiver in accordance with Section 10.1) of the following conditions precedent:

 

(a)                                 Representations and Warranties. Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects, in each case on and as of such date as if made on and as of such date, except 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 (provided that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct in all respects).

 

(b)                                 No Default. No Default or Event of Default shall have occurred and be continuing on such date or shall occur immediately after giving effect to the extensions of credit requested to be made on such date.

 

(c)                                  Borrowing Notice. The Administrative Agent shall have received a notice of borrowing in accordance with Section 2.5 and substantially in the form of Exhibit A-1 hereto, a letter of credit application or such other request for borrowing as may be required under the terms hereof.

 

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Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower under this Section 5.2 shall constitute a representation and warranty by the Borrower as of the date of such extension of credit that the conditions contained in this Section 5.2 have been satisfied (unless such condition was waived in accordance with Section 10.1 hereof).

 

SECTION 6                               AFFIRMATIVE COVENANTS

 

Until the Facility Termination Date, the Borrower shall and (to the extent relevant) shall cause each of the Restricted Subsidiaries to:

 

6.1                               Financial Statements. Furnish to the Administrative Agent for delivery to each Lender (which may be delivered to the Lenders via posting the E-System to the extent provided in the paragraph below):

 

(a)                                 within 105 days (or, if the Borrower is no longer required to publicly file its financial statements with the SEC, 120 days)  after each fiscal year of the Borrower, commencing with the fiscal year ended December 31, 2016, a copy of the audited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such year and the related audited consolidated statements of income, cash flows and changes in shareholder equity for such year, in each case, setting forth in comparative form the figures as of the end of and for the previous year, reported on without qualification arising out of the scope of the audit or “going concern” or like qualification (except for any such qualification pertaining to the maturity of any Facility, the Second Lien Facility and/or any Specified Junior Debt Facility occurring within the four fiscal quarter period following the relevant audit opinion or any anticipated breach of any financial covenant under any Facility, the Second Lien Facility and/or Specified Junior Debt Facility), by Ernst & Young LLP or other independent certified public accountants of nationally recognized standing;

 

(b)                                 as soon as available, but in any event not later than 60 days after the end of each of the first three quarterly periods of each fiscal year of the Borrower, commencing with the fiscal quarter ending June 30, 2016, the unaudited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such quarter and the related unaudited consolidated statements of income and of cash flows for such quarter and the portion of the fiscal year through the end of such quarter, in each case, setting forth in each case in comparative form the figures as of the end of and for the corresponding period in the previous year, certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year-end audit adjustments and the absence of footnotes); and

 

(c)                                  simultaneously with the delivery of each set of consolidated financial statements referred to in Sections 6.1(a) and 6.1(b) above, a summary of the pro forma adjustments necessary to eliminate the accounts of Unrestricted Subsidiaries (if any) from such consolidated financial statements. 

 

All such financial statements shall be prepared in reasonable detail and shall fairly present, in all material respects, the consolidated financial position of the Borrower and its Subsidiaries as at the dates indicated therein and its income and cash flows for the periods indicated therein in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountant and disclosed therein and except, in the case of the financial statements referred to in clause (b), for customary year-end adjustments and the absence of footnotes) (collectively, the “Financial Requirements”).

 

Documents required to be delivered pursuant to this Section 6.1 and Section 6.2 may be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date (i) on which the

 

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Borrower (or a representative thereof) posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed in Section 10.2; (ii) on which such documents are delivered by the Borrower (or a representative thereof) to the Administrative Agent for posting on Borrower’s behalf on an E-System to which each Lender and the Administrative Agent have access; or (iii) on which executed certificates or other documents are faxed to the Administrative Agent (or electronically mailed to an address provided by the Administrative Agent); provided that the Borrower shall notify the Administrative Agent (by facsimile or electronic mail) of the posting of any such documents pursuant to clause (i) above and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and in any event, shall have no responsibility to monitor compliance by the Borrower with any such request by a Lender for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

 

Notwithstanding the foregoing, the obligations in clauses (a) and (b) of this Section 6.1 and clause (c) of Section 6.2 may be satisfied with respect to any financial statements of the Borrower and its consolidated Subsidiaries by furnishing to the Administrative Agent (A) the applicable financial statements of the Borrower (or any Parent Company) or (B) the Borrower (or any Parent Company’s), as applicable, Form 10-K or 10-Q, as applicable, filed with the SEC or any securities exchange, in each case, within the time periods specified in such paragraphs; provided that, with respect to each of clauses (A) and (B), (i) such financial statements shall be accompanied by consolidating information that summarizes in reasonable detail the differences between the information relating to any Parent Company, on the one hand, and the information relating to the Borrower and its consolidated Subsidiaries on a standalone basis, on the other hand, which consolidating information shall be certified by a Responsible Officer of the Borrower as having been fairly presented in all material respects and (ii) to the extent such statements are in lieu of statements required to be provided under Section 6.1(a), such statements shall be accompanied by a report of Ernst & Young LLP or other independent certified public accountants of nationally recognized standing satisfying the applicable requirements set forth in Section 6.1(a).

 

6.2                               Certificates; Other Information. Furnish to the Administrative Agent for delivery to each Lender:

 

(a)                                 concurrently with the delivery of any financial statements pursuant to Sections 6.1(a) and (b), a Compliance Certificate from a Responsible Officer of the Borrower (i) certifying that all such financial statements are consistent with the Financial Requirements, (ii) certifying that such Responsible Officer has obtained no knowledge of any existing Default or Event of Default except as specified in such certificate, (iii) setting forth a reasonably detailed calculation of Consolidated EBITDA of the Group Members for the Test Period ended as of the last day of the relevant fiscal quarter or fiscal year of the Borrower, as the case may be, and the Total Leverage Ratio and the First Lien Leverage Ratio as of the last day of the relevant fiscal quarter or fiscal year of the Borrower, as the case may be, (iv) if such Compliance Certificate is being delivered in connection with financial statements delivered under Section 6.1(a), (x) a calculation of Excess Cash Flow with respect to the relevant fiscal year, and (y) calculation demonstrating the Available Amount, the Available Equity Amount and the Available Excluded Contribution Amount, in each case, as of the last day of such reporting period, (v) listing of each Unrestricted Subsidiary as of the last day of such reporting period and of any new Subsidiary of the Borrower formed or acquired during such reporting period and (vi) setting forth management’s discussion and analysis of the important operational and financial developments of Borrower and the Restricted Subsidiaries during such fiscal quarter or fiscal year, as applicable;

 

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(b)                                 no later than 105 days following the first day of each fiscal year of the Borrower, commencing with a budget for the fiscal year ending December 31, 2017, an annual budget (including forecasted balance sheets, statements of income and loss and statements of cash flows), together with such supporting information as the Administrative Agent may reasonably request, such projected financial budget to be prepared for such fiscal year (and, in the case of the statements of income and loss, on a quarterly basis) in form customarily prepared by the Borrower;

 

(c)                                  promptly after the same are available, copies of (i) all financial statements and reports that the Borrower or any Parent Company sent or made generally to such Person’s security holders acting in such capacity and (ii) all regular and periodic reports, filed by the Borrower or any Parent Company with the SEC, in each case of this Section 6.2(c), to the extent not already provided pursuant to Section 6.1 or any other clause of this Section 6.2;

 

(d)                                 promptly, such additional financial and other information as the Administrative Agent (for its own account or upon the reasonable request from any Lender) may from time to time reasonably request regarding the financial condition or business of the Group Members, as well as any information required by the USA Patriot Act; provided, however, that no Group Member shall be required to disclose or provide any information (a) that constitutes non-financial trade secrets or non- financial proprietary information of such Person or any of its Subsidiaries or any of their respective customers and/or suppliers, (b) in respect of which disclosure to the Administrative Agent or any Lender (or any of their respective representatives) is prohibited by any applicable Law (including any applicable Gaming Regulations), (c) that is subject to attorney-client or similar privilege or constitutes attorney work product or (d) in respect of which such Group Member owes confidentiality obligations to any third party (provided such confidentiality obligations were not entered into in contemplation of the requirements of this Section 6.2(d)); provided, further, that in the event that any Group Member does not provide information in reliance on the preceding clause (c) or (d) due to confidentiality or waiver concerns, such Group Member shall provide notice to the Administrative Agent that such information is being withheld and shall use its commercially reasonable efforts to communicate the applicable information in a way that would not violate the applicable obligation or risk waiver of such privilege.

 

The Borrower hereby acknowledges that (a) the Agents may, but shall not be obligated to, make available to the Lenders and the Issuing Lenders materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on Debt Domain, IntraLinks, SyndTrak or another E-System (the “Platform”) and (b) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to the Borrower or its Subsidiaries, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrower hereby agrees that (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC”, the Borrower shall be deemed to have authorized the Agents, the Issuing Lenders and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower, its subsidiaries or their respective securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information as defined in Section 10.14, they shall be treated as set forth in Section 10.14); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information”; and (z) the Agents shall treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information” (provided, however, that in any event, the Borrower shall be deemed to have authorized the Agents, the Issuing Lenders and the Lenders to treat any information delivered pursuant to Sections 6.1(a), 6.1(b) and, unless otherwise specified by the

 

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Borrower in writing to the Administrative Agent, 6.2(a) as not containing any material non-public information with respect to the Borrower, its subsidiaries or their respective securities for purposes of United States Federal and state securities laws and to make such information available to Public Lenders).

 

6.3                               Payment of Taxes. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its federal and other (including foreign) material Taxes upon it or its Property, except (a) where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves required in conformity with GAAP with respect thereto have been provided on the books of the applicable Group Member or (b) to the extent that failure to pay or satisfy such obligations would not reasonably be expected to have a Material Adverse Effect.

 

6.4                               Conduct of Business and Maintenance of Existence, etc.; Compliance with Laws. (a) Preserve, renew and keep in full force and effect (i) its legal existence and (ii) good standing (or the equivalent thereof) under the laws of the jurisdiction of its organization, (b) take all reasonable action to maintain all rights, privileges, permits (including Gaming Permits), licenses and franchises necessary or desirable in the normal conduct of its business and (c) comply with all Laws except, in each case referred to in clause (a) and (b), as otherwise permitted by Section 7.4, 7.5 or 7.11 and, in each case referred to in this Section 6.4 (other than clause (a)(i) with respect to the Borrower), to the extent that failure to do any of the foregoing would not, in the aggregate, reasonably be expected to have a Material Adverse Effect

 

6.5                               Maintenance of Property; Insurance. (a) Keep all Property material to the conduct of its business in reasonably good working order and condition, ordinary wear and tear excepted except where a failure to do so, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

 

(b)                                 Except where the failure to do so would not reasonably be expected to have a Material Adverse Effect, maintain insurance with insurance companies that the Borrower believes (in the good faith judgment of the management of the Borrower) are financially sound and responsible at the time the relevant coverage is placed or renewed on all its material Property in at least such amounts (after giving effect to any self-insurance which the Borrower believes (in the good faith judgment of management of the Borrower) is reasonable and prudent in light of the size and nature of its business) and against at least such risks as the Borrower believes (in the good faith judgment of the management of the Borrower) is reasonable and prudent in light of the size and nature of its business. The Borrower shall use commercially reasonable efforts to ensure that all such insurance shall, to the extent customary, provide that no cancellation thereof shall be effective until at least 30 days (or, in the case failure to pay any premiums thereunder, 10 days) after receipt by the Administrative Agent of written notice thereof. All such insurance shall, to the extent customary, name the Collateral Agent as additional insured or loss payee, as applicable

 

6.6                               Books and Records; Inspection of Property; Discussions. (a) Keep proper books of records and account in which entries that are full, true and correct in all material respects and permit the preparation of consolidated financial statements in conformity with GAAP shall be made of all material dealings and transactions in relation to its business, assets and activities, (b) permit representatives of the Administrative Agent to visit and inspect any of its properties at which the principal financial records and executive officers of the Group Members are located (in the case of any real property lease, to the extent permitted in the relevant lease agreement) and examine and make copies and abstracts from any of its financial and accounting books and records, upon reasonable prior notice and during normal business hours, (c) permit representatives

 

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of the Administrative Agent to have reasonable discussions regarding the business, operations, properties and financial condition of the Group Members with Responsible Officers of the Group Members and their independent public accountants (provided that a Responsible Officer of the Borrower shall be given notice and an opportunity to participate during such discussion with such independent public accountants) upon reasonable prior notice and during normal business hours; provided that (i) excluding any such visits and inspections during the continuation of an Event of Default (x) the Administrative Agent shall not exercise the rights set forth in clauses (b) and (c) more than one time (in the aggregate) in any calendar year and (y) only one (in the aggregate) such visit set forth in clauses (b) and (c) shall be at the Borrower’s expense and (ii) that when an Event of Default exists, the Administrative Agent (or any of its representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and upon reasonable advance notice. Notwithstanding anything to the contrary in this Section 6.6, no Group Member will be required to disclose or permit the inspection or discussion of, any document, information or other matter (1) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by Law (including any applicable Gaming Regulations) or any binding agreement not entered not in contemplation of avoiding such inspection and disclosure rights, (2) that is subject to attorney client or similar privilege or constitutes attorney work product, (3) in respect of which any Group Member owes confidentiality obligations to any third party not entered into in contemplation avoiding such inspection and disclosure or (4) that constitutes non- financial trade secrets or non-financial proprietary information of a Group Member or any Subsidiary thereof and/or any customers and/or suppliers of the foregoing; provided that in the event that any Group Member does not provide any information requested in connection with an examination or a discussion permitted under this Section 6.6 in reliance on the preceding clause (2) or (3) due to confidentiality or waiver concerns, such Person shall provide notice to the Administrative Agent that such information is being withheld and shall use its commercially reasonable efforts to communicate the applicable information in a way that would not violate the applicable obligation or risk waiver of such privilege.

 

6.7                               Notices. Promptly upon a Responsible Officer of any Loan Party obtaining knowledge thereof, give notice to the Administrative Agent (who shall promptly notify each Lender) of:

 

(a)                                 the occurrence of any Default or Event of Default;

 

(b)                                 any litigation, investigation or proceeding (including any Environmental Claim or under Environmental Law or by any Gaming Authority) or any development or significant change with respect to such litigation, investigation or proceeding which may exist at any time between Holdings, the Borrower or any of its Subsidiaries and any other Person, which ligation, investigation or proceeding, would reasonably be expected to be adversely determined, and, if so determined, would reasonably be expected to result in a Material Adverse Effect;

 

(c)                                  the occurrence of any ERISA Event or any event that occurred or failed to occur with respect to a Foreign Pension Plan that would reasonably be expected to result in a Material Adverse Effect; and

 

(d)                                 any other development or event that has had or would reasonably be expected to have a Material Adverse Effect.

 

In addition, the Borrower shall give notice to the Administrative Agent of any proposed change (i) in any Loan Party’s corporate or company name, (ii) in the jurisdiction of incorporation or organization of any

 

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Loan Party or (iii) any Loan Party’s organizational identification number, in each case, prior to the effectiveness thereof (or such later date as may be agreed by the Collateral Agent in its reasonable discretion).

 

Each notice pursuant to this Section 6.7 shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the Group Members or the relevant Subsidiary proposes to take with respect thereto (or, in the case of any notice provided pursuant to clause (b), such other non-privileged information as may be reasonably available to the Loan Parties to enable the Lenders to evaluate such matters).

 

6.8                               Additional Collateral, Etc. (a) Subject to applicable Gaming Regulations and the terms herein, with respect to any personal property (including, without limitation any Capital Stock) or Intellectual Property (in each case, other than assets expressly excluded from the Collateral pursuant to the Security Documents) acquired or created after the Closing Date by any Loan Party (other than Instruments, Certificated Securities, Securities and Chattel Paper, which are referred to in the last sentence of this paragraph (a)) as to which the Collateral Agent for the benefit of the Secured Parties does not have a perfected Lien, promptly, but in any case within the later of (i) the receipt of all requisite approvals under the applicable Gaming Regulations and (ii) sixty days (in each case, which period may be extended by the Administrative Agent in its reasonable discretion) or, in the case of any Intellectual Property, if later, concurrently with the delivery of the first Compliance Certificate after such acquisition or creation, (i) execute and deliver to the Collateral Agent such amendments to the Guarantee and Collateral Agreement or such other documents as the Collateral Agent reasonably requests, if any, as are necessary to grant to the Collateral Agent for the benefit of the Secured Parties a security interest in such Property and (ii) take all actions reasonably requested by the Collateral Agent or required by the Security Documents to grant to the Collateral Agent for the benefit of the Secured Parties a perfected security interest (to the extent required by the Security Documents) in such property, including, without limitation, the filing of UCC financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be reasonably requested by the Collateral Agent. Any Instrument, Certificated Security (other than in respect of the Capital Stock of any Subsidiary which is addressed in clause (c) below), Security or Chattel Paper in excess of $2,500,000 shall be promptly, in any event, within the later of (i) the receipt of all requisite approvals under the applicable Gaming Regulations and (ii) sixty days of the receipt thereof, delivered to the Collateral Agent indorsed in a manner reasonably satisfactory to the Collateral Agent to be held as Collateral pursuant to the relevant Security Document; provided that if the pledge of the Capital Stock of any Subsidiary acquired or created after the Closing Date requires approval under applicable Gaming Regulations, the Borrower shall be required to pledge such Capital Stock only if the requisite approvals from the applicable Gaming Authorities are obtained after the exercise of its commercially reasonable efforts to obtain such approvals (and the Borrower agrees to use its commercially reasonable efforts to obtain such approvals).

 

(b)                                 With respect to any Material Real Estate acquired or leased after the Closing Date by any Loan Party (i) within ten Business Days (which period may be extended by the Collateral Agent in its reasonable discretion) of such acquisition, give notice of such acquisition to the Collateral Agent and, if requested by the Collateral Agent and subject to the Borrower’s use of commercially reasonable efforts to obtain consent of the lessor to grant a mortgage in any Leasehold that constitutes Material Real Estate, within ninety days (which period may be extended by the Collateral Agent in its reasonable discretion) thereafter, execute and deliver a Mortgage in favor of the Collateral Agent for the benefit of the Secured Parties, covering such real property, (ii) if reasonably requested by the Collateral Agent provide the Lenders with a lenders’ title insurance policy with extended coverage covering such

 

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Mortgaged real property in an amount reasonably specified by the Collateral Agent (but not to exceed the market value thereof) as well as a current ALTA survey thereof, together with a surveyor’s certificate unless the title insurance policy referred to above shall not contain an exception for any matter shown by a survey (except to the extent an existing survey has been provided and specifically incorporated into such title insurance policy) and such customary flood certificates and insurance and environmental reports as shall be reasonably required by the Collateral Agent in form and substance reasonably satisfactory to the Collateral Agent and (iii) if requested by the Collateral Agent, deliver to the Collateral Agent a customary legal opinion with respect to the enforceability of such Mortgage, which opinion shall be in form and substance reasonably satisfactory to the Collateral Agent. Notwithstanding the foregoing, the Loan Parties shall only be required to use commercially reasonable efforts to obtain any necessary third party consents to the granting of any Mortgage in respect of a Leasehold (including any Leasehold subject to a Mortgage under the Existing Credit Agreement), and any failure to obtain such consent after use of such efforts (and thus otherwise comply with the requirements of clauses (i) through (iv) of this Section 6.8(b) in such Leasehold) shall not constitute a Default or Event of Default.

 

(c)                                  With respect to (i) any new Domestic Subsidiary (other than an Excluded Subsidiary) that is created or acquired after the Closing Date by any Loan Party, (ii) any Unrestricted Subsidiary that is designated as a Restricted Subsidiary (other than an Excluded Subsidiary) and (iii) any formerly Excluded Subsidiary which ceases to be an Excluded Subsidiary, promptly, but in any case within the later of (x) the receipt of all requisite approvals under the applicable Gaming Regulations and (y) sixty days of such creation, acquisition or change (which period may be extended by the Administrative Agent in its reasonable discretion), (A) give notice of such acquisition, creation or change to the Collateral Agent and, if requested by the Collateral Agent, execute and deliver to the Collateral Agent such amendments or joinders to the Guarantee and Collateral Agreement or such other documents as the Collateral Agent reasonably deems necessary to grant to the Collateral Agent for the benefit of the Secured Parties a perfected security interest (to the extent required by the Security Documents) in the Capital Stock of such new Subsidiary that is owned by such Loan Party, (B) deliver to the Collateral Agent the certificates, if any, representing such Capital Stock (and any Capital Stock of its Subsidiaries required to be delivered by the Security Documents), together with undated stock powers, in blank, executed and delivered by a duly authorized officer of such Loan Party, (C) cause such Subsidiary (1) to become a party to the Guarantee and Collateral Agreement and (2) to take such actions necessary or advisable to grant to the Collateral Agent for the benefit of the Secured Parties a perfected security interest (to the extent required by the Security Documents) in the Collateral described in the Guarantee and Collateral Agreement with respect to such Subsidiary, including, without limitation, the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement and (iv) deliver such Lien searches, customary legal opinions, authorizing resolutions and other corporate documents relating to such Subsidiary as reasonably requested by the Collateral Agent.

 

(d)                                 Notwithstanding anything to the contrary herein or in any other Loan Document, it is understood and agreed that:

 

(i)                                     any Lien required to be granted from time to time pursuant to this Section 6.8 shall be subject to the exceptions and limitations set forth in the Intercreditor Agreement and the applicable Security Documents,

 

(ii)                                  (A) perfection by control shall not be required with respect to assets requiring perfection through control agreements or other control arrangements, including deposit accounts, securities accounts and commodities accounts (other than control of Pledged

 

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Securities) and (B) no blocked account agreement, deposit account control agreement or similar agreement shall be required for any deposit account or securities account,

 

(iii)                               no Loan Party shall be required to seek any landlord lien waiver, bailee letter, estoppel, warehouseman waiver or other collateral access or similar letter or agreement (other than use of commercially reasonable efforts to obtain any consents referenced in Section 6.8(b) above),

 

(iv)                              no action outside of the US shall be required in order to create or perfect any security interest in any asset of any Loan Party, and no non-US law security agreement, non-US law pledge agreement or non-US law Intellectual Property filing, search or schedule shall be required with respect to any asset of any Loan Party,

 

(v)                                 in no event will the Collateral include any Excluded Asset,

 

(vi)                              no action shall be required to perfect any Lien with respect to (A) any vehicle or other asset subject to a certificate of title, (B) letter-of-credit rights, and/or (C) fixtures, unless, in the case of clauses (A) and (B), to the extent that a security interest therein can be perfected by filing a UCC-1 financing statement and, in the case of clause (C), unless otherwise covered by a Mortgage required to be delivered hereunder,

 

(vii)                           any joinder or supplement to the Collateral and Guarantee Agreement and/or any other Loan Document executed by any Restricted Subsidiary that is required to become a Loan Party pursuant to Section 6.8(c) may, with the consent of the Administrative Agent (not to be unreasonably withheld, delayed or conditioned), include such schedules (or updates to schedules) as may be necessary to qualify any representation or warranty set forth in any Loan Document to the extent necessary to ensure that such representation or warranty is true and correct to the extent required thereby or by the terms of any other Loan Document,

 

(viii)                        if there is a conflict between any Security Document and this Agreement, then, to the extent permitted by law, the provisions of this Agreement will take priority over the provisions of such Security Document, and

 

(ix)                              the Administrative Agent shall not require the granting of a security interest, or require the perfection of a security interest granted in, those assets as to which the cost, burden, difficulty or consequence (including any effect on the ability of the relevant Loan Party to conduct its operations and business in the ordinary course of business) of obtaining or perfecting a security interest therein outweighs the benefit of a security interest to the relevant Secured Parties afforded thereby, as reasonably determined by the Borrower and the Administrative Agent.

 

6.9                               Further Assurances. Subject to the limitations set forth herein and in the Security Documents and subject to the applicable Gaming Regulations, from time to time the Loan Parties shall execute and deliver, or cause to be executed and delivered, such additional instruments, certificates or documents, and take all such actions, as the Administrative Agent or the Collateral Agent may reasonably request for the purposes of implementing or effectuating the provisions of this Agreement and the other Loan Documents, or of renewing the rights of the Secured Parties with respect to the Collateral as to which the Collateral Agent, for the ratable benefit of the Secured Parties, has a perfected Lien pursuant hereto or thereto, including, without limitation, filing any financing or continuation statements or financing change statements under the Uniform

 

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Commercial Code (or other similar laws) in effect in any United States jurisdiction with respect to the security interests created by the Security Documents.

 

6.10                        Use of Proceeds.

 

(a)                                 Use of Proceeds. The Borrower shall use (i) the proceeds of the Initial Term Loans on the Closing Date solely to pay the obligations outstanding under the Existing Credit Agreement and Existing Notes and, to the extent of any remaining proceeds of Initial Term Loans after application thereto, Transaction Expenses, (ii) the proceeds of the Revolving Loans for general corporate purposes (including (x) the Transaction Expenses and (y) any transaction not prohibited by this Agreement); provided, however, the Outstanding Amount of Revolving Loans (excluding, for the avoidance of doubt, any outstanding Letters of Credit) on the Acquisition Closing Date shall not exceed an aggregate amount of $20,000,000, (iii) Letters of Credit for general corporate purposes; (iv) the proceeds of the Incremental Term Loans for general corporate purposes (including any transaction not prohibited by this Agreement) subject to any limitations specified in the applicable Incremental Agreement; and (v) the proceeds of the Additional/Replacement Revolving Loans for general corporate purposes (including any transaction not prohibited by this Agreement) subject to any limitations specified in the applicable Incremental Agreement; (vi) the proceeds of the Additional Initial Term Loans (as defined in the First Amendment) on the Acquisition Closing Date to pay the obligations under the Merger Agreement and the Transaction Expenses and, in each case,  of this Section 6.10, in compliance with Section 4.11 and the last sentence of each of clauses (a) and (b) of Section 4.20.

 

6.11                        Nature of Business.  Fundamentally and substantively engage in the type of business, taken as a whole, as the business conducted by the Group Members, taken as a whole, on the Closing Date and any business reasonably related to, necessary for, in support or anticipation of, ancillary or complementary to or in preparation for (or required by a Gaming Authority to be developed, constructed, improved or acquired in connection with licensing approval for) any such business, and such other lines of business to which the Administrative Agent may consent.

 

6.12                        End of Fiscal Year. Maintain a fiscal year end of December 31 of each year; provided, however, that any Group Member may, upon written notice to, and consent by, the Administrative Agent, change the financial reporting convention specified above to any other financial reporting convention reasonably acceptable to the Administrative Agent, in which case, the Borrower and the Administrative Agent will, and are hereby authorized by the Lenders to, make any adjustments to this Agreement and the other Loan Documents that are necessary in order to reflect such change in financial reporting.

 

6.13                        Lender Calls. Following each delivery of financial statements pursuant to Section 6.1(a) and (b), to the extent requested by the Administrative Agent, the Borrower shall participate, and cause key management personnel of the Borrower to participate, in a conference call with the Administrative Agent and the Lenders to provide discussion and analysis with respect to the financial condition and results of operations of the Group Members at a time to which the Borrower Representative and the Administrative Agent shall mutually agree.

 

6.14                        Maintenance of Ratings. Use commercially reasonable efforts to maintain a public corporate credit rating of the Borrower and public rating of the Facilities from S&P and a public corporate family rating of the Borrower and public rating of the Facilities from Moody’s; provided that in no event shall the Borrower be required to maintain any specific rating with any such agency.

 

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6.15 Holding Company Election. The Borrower may, at its option following the Closing Date, deliver a written notice to the Administrative Agent informing the Administrative Agent that a Holding Company Election has been made. Within sixty days (or such longer period as the Administrative Agent may agree to) of the date of such notice (the “Joinder Date”), the Borrower shall cause Holdings to become a party to this Agreement (and agrees that the representations and warranties set forth in Sections 4.3, 4.4, 4.5, 4.10, 4.11, 4.13, 4.17(a) and 4.20 shall be applicable to it from and after such Joinder Date and to abide by Sections 6.3, 6.4, 6.7, 6.8(c), 6.9 and 7.11 of this Agreement and any other Section of this Agreement that is expressly applicable to Holdings), and the Guarantee and Collateral Agreement, in each case, pursuant to joinder documentation reasonably satisfactory to the Borrower and the Administrative Agent (which joinder documentation may make such technical amendments and modifications to the Loan Documents as the Administrative Agent and the Borrower determine to be necessary in order to implement the Holding Company Election with Holdings as a customary passive parent guarantor) and to deliver to the Administrative Agent the items set forth in clauses (f)(ii), (g), (h) (with respect to the Capital Stock of the Borrower, subject to any necessary Gaming Authority approvals), (i) and (k) of Section 5.1.

 

6.15                        [Reserved].

 

6.16                        Unrestricted Subsidiaries.

 

(a)                                 The Loan Parties shall only designate or redesignate a Subsidiary as an Unrestricted Subsidiary after the Closing Date by written notice from the Borrower to the Administrative Agent if such designation or redesignation is in compliance with the following conditions: (i) immediately before and after such designation (or redesignation), (x) no Event of Default shall have occurred and be continuing or shall exist after giving effect to such designation and (y) the Borrower shall be in compliance with the Financial Condition Covenant on a Pro Forma Basis (for purposes of such compliance at any time prior to September 30, 2016, the maximum First Lien Leverage Ratio permitted under the Financial Condition Covenant shall be deemed to be 5.75:1.00), (ii) no Subsidiary may be designated (or redesignated) as an Unrestricted Subsidiary if, after such designation (or redesignation), it would be a “Restricted Subsidiary” for the purpose of any Specified Junior Debt Facility, any Incremental Facility or any Incremental Equivalent Debt, (iii) the designation (or redesignation) of any Subsidiary as an Unrestricted Subsidiary shall constitute an Investment by the applicable Group Members therein at the date of designation (or redesignation) in an amount equal to the Fair Market Value of the Group Members’ Investment therein, and (iv) the Borrower shall have delivered to the Administrative Agent an officer’s certificate executed by a Responsible Officer of the Borrower, certifying compliance with the requirements of the preceding clauses (i) through (iii); provided, that no Unrestricted Subsidiary that has been designated as a Restricted Subsidiary may again be designated as an Unrestricted Subsidiary.

 

(b)                                 The Loan Parties shall only designate an Unrestricted Subsidiary as Restricted Subsidiary after the Closing Date by written notice from the Borrower to the Administrative Agent if (i) immediately before and after such designation, (x) no Event of Default shall have occurred and be continuing or shall exist after giving effect to such designation and (y) the Borrower shall be in compliance with the Financial Condition Covenant on a Pro Forma Basis (for purposes of such compliance at any time prior to September 30, 2016, the maximum First Lien Leverage Ratio permitted under the Financial Condition Covenant shall be deemed to be 5.75:1.00), (ii) the incurrence at the time of designation of any Indebtedness or Liens of such Subsidiary existing at such time is permitted under Sections 7.2 and 7.3, respectively, and (iii) the Borrower shall have delivered to the Administrative

 

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Agent an officer’s certificate executed by a Responsible Officer of the Borrower, certifying compliance with the requirements of the preceding clauses (i) and (ii).

 

SECTION 7                               NEGATIVE COVENANTS

 

Until the Facility Termination Date, the Borrower shall not, nor shall the Borrower permit any Restricted Subsidiaries to, directly or indirectly:

 

7.1                               Financial Covenant.

 

(a)                                 Commencing with September 30, 2016, permit the First Lien Leverage Ratio for any Test Period set forth below to be greater than the ratio set forth opposite such Test Period below:

 

	
Test Period Date
    	
 
    	
First Lien Leverage
   Ratio
    
	
 
    	
 
    	
 
    
	
September 30, 2016 through June 30, 2017
    	
 
    	
5.75:1.00
    
	
 
    	
 
    	
 
    
	
September 30, 2017
    	
 
    	
5.50:1.00
    
	
 
    	
 
    	
 
    
	
December 31, 2017 through September 30,   2018
    	
 
    	
5.25:1.00
    
	
 
    	
 
    	
 
    
	
December 31, 2018 through September 30,   2019
    	
 
    	
5.00:1.00
    
	
 
    	
 
    	
 
    
	
December 31, 2019 through September 30,   2020
    	
 
    	
4.75:1.00
    
	
 
    	
 
    	
 
    
	
December 31, 2020 and thereafter
    	
 
    	
4.50:1.00
    

 

(b)                                 Certain Cure Rights.

 

(i)                                     Financial Condition Covenant. Notwithstanding anything to the contrary contained herein, in the event the Group Members fail to comply with the requirements of the covenant as set forth in Section 7.1(a) (the “Financial Condition Covenant”) as at the last day of any fiscal quarter (a fiscal quarter ending on such day, a “Curable Period”), at any time during such Curable Period and until the expiration of the 15th Business Day subsequent to the date the certificate calculating the Financial Condition Covenant is required to be delivered pursuant to Section 6.2(a) with respect to the Test Period ending on the last day of such Curable Period, the Borrower shall have the right (the “Cure Right”) to issue Permitted Cure Securities for cash or otherwise receive cash contributions in respect of Permitted Cure Securities (such proceeds received by the Borrower as a result of such issuance, or such other cash contributions, the “Cure Amount”). Upon the receipt by the Borrower of cash in an amount equal to the Cure Amount pursuant to the exercise of such Cure Right, the Financial Condition Covenant shall be recalculated giving effect to the following pro forma adjustments:

 

(A)                               Consolidated EBITDA for the Curable Period shall be increased, solely for the purpose of measuring the Financial Condition Covenant, and disregarded for any other purpose under this Agreement (including determining the Applicable

 

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Margin, the Applicable Commitment Fee Rate, the availability of any baskets and step- downs and for determining whether any financial ratio-based condition has been satisfied), by an amount equal to the Cure Amount; and

 

(B)                               if, after giving effect to the foregoing recalculations, the Group Members shall then be in compliance with the requirements of the Financial Condition Covenant, the Group Members shall be deemed to have satisfied the requirements of the Financial Condition Covenant as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or default of the Financial Condition Covenant which had occurred (or would have occurred) shall be deemed cured for purposes of Section 7.1.

 

(ii)                                  Limitations on Exercise of Cure Right, etc. Notwithstanding anything herein to the contrary, (A) in no event shall the Borrower be entitled to exercise the Cure Right more than twice in any consecutive four quarter period or more than five times during the term of this Agreement, (B) the Cure Amount shall be no greater than the amount which, if added to Consolidated EBITDA for the Curable Period, would cause the Group Members to be in compliance with the Financial Condition Covenant for the Test Period ending on the last day of such Curable Period; provided that if the Cure Right is exercised prior to the date financial statements are required to be delivered for such Curable Period, then the Cure Amount shall be equal to the amount reasonably determined by the Borrower in good faith that is required for purposes of complying with the Financial Condition Covenant for such Test Period, (C) to the extent a fiscal quarter for which the Financial Condition Covenant is initially recalculated as a result of a Cure Right is included in the calculation of the Financial Condition Covenant in a subsequent fiscal period, the Cure Amount shall be included in the amount of Consolidated EBITDA for such fiscal quarter when calculating the Financial Condition Covenant for such subsequent fiscal period and (D) there shall be no pro forma or other reduction of Indebtedness by the Cure Amount for purposes of determining compliance with the Financial Condition Covenant for the fiscal quarter in respect of which such Cure Amount was made (other than, with respect to any future period, to the extent of any portion of such Cure Amount that is actually applied to repay Indebtedness). Upon the Administrative Agent’s receipt of a notice from the Borrower that it intends to exercise the Cure Right (the “Notice of Intent to Cure”), then, until the 15th Business Day subsequent to the date the certificate calculating such Financial Condition Covenant is required to be delivered pursuant to Section 6.2(a) to which such Notice of Intent to Cure relates, neither the Administrative Agent nor the Collateral Agent (nor, in each case, any sub-agent therefor) nor any Lender shall exercise the right to accelerate the Loans or terminate the Commitments, and neither the Administrative Agent nor the Collateral Agent (nor, in each case, any sub-agent therefor) nor any Lender shall exercise any right to foreclose on or take possession of the Collateral or exercise any other right or remedy under the Loan Documents, in each case, solely on the basis of a breach of the Financial Condition Covenant in respect of the period ending on the last day of such fiscal quarter and the ensuing Event of Default having occurred and being continuing under Section 8.1(c)(ii); provided that, without limiting the generality of Section 5.2, after the Administrative Agent’s receipt of a Notice of Intent to Cure, no Revolving Lender or Issuing Lender shall be required to make any Revolving Loan or issue any Letter of Credit hereunder if an Event of Default under Section 8.1(c)(ii) exists solely on the basis of a breach of the Financial Condition Covenant unless and until the Cure Amount is actually received.

 

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7.2                               Indebtedness. Create, issue, incur, assume, or suffer to exist any Indebtedness, except:

 

(a)                                 (i) the Secured Obligations, (ii) any Indebtedness incurred to refinance, extend, renew, or replace the Obligations; provided that the Refinancing Debt Requirements are satisfied (such Indebtedness, the “Credit Agreement Refinancing Debt”), (iii) Indebtedness under any Hedge Agreements (other than any Hedge Agreement entered into for speculative purposes), (iv) (A) anyso long as the Second Lien Term Loan Agreement is initially entered into, and the Second Lien Initial Term Loans are initially borrowed in connection with the consummation of the Acquisition on or about the Acquisition Closing Date, Indebtedness of the Borrower or any Subsidiary Guarantor incurred in respect of any Second Lien Facility in an aggregate principal amount that does not exceed the Maximum Second Lien Principal Amount; provided that such Indebtedness is secured only by Liens permitted under Section 7.3(h) and (B) any other Specified Junior Debt and (B) any Specified Second Lien Incremental Debt and (v) any “cash management obligations” or Indebtedness in respect of a “specified hedge agreement” (or, in each case, any equivalent term) under anythe Second Lien Term Loan Agreement and/or any other Specified Junior Debt Facility.  

 

(b)                                 Indebtedness of any Group Member owing to Holdings or any other Group Member to the extent constituting an Investment permitted by Section 7.7; provided that any Indebtedness of a Loan Party to any Restricted Subsidiary shall be subordinated to the Obligations pursuant to the Intercompany Subordination Agreement or otherwise on terms reasonably satisfactory to the Collateral Agent;

 

(c)                                   Indebtedness listed on Schedule 7.2(c) and any Indebtedness incurred to refinance, extend, renew, or replace such Indebtedness; provided that the Refinancing Debt Requirements are satisfied;

 

(d)                                  Indebtedness consisting of Capital Lease Obligations and purchase money Indebtedness in an aggregate principal amount not to exceed the greater of (x) $20,000,000 and (y) 26.66% of Consolidated EBITDA as of the last day of the most recently ended Test Period, at any one time outstanding;

 

(e)                                  Guarantee Obligations of Indebtedness of any Group Member so long as such Indebtedness is permitted under this Section 7.2; provided that (i) Guarantee Obligations by a Loan Party of Indebtedness of any Non-Guarantor Subsidiary shall be subject to Section 7.7 and (ii) Guarantee Obligations permitted under this clause (e) shall be subordinated to the Obligations to the same extent as the terms of the Indebtedness so guaranteed;

 

(f)                                   Indebtedness of the Borrower or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn by the Borrower or such Restricted Subsidiary in the ordinary course of business against insufficient funds so long as such Indebtedness is promptly repaid;

 

(g)                                  additional Indebtedness of a Group Member in an aggregate principal amount (for the Group Members) not to exceed the greater of (x) $15,000,000 and (y) 20.0% of Consolidated EBITDA as of the last day of the most recently ended Test Period, at any one time outstanding;

 

(h)                                 (i) (1) Indebtedness of any Person that becomes a Restricted Subsidiary after the date hereof and assumed in connection with a Permitted Acquisition or similar Investment permitted

 

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under this Agreement and (2) Indebtedness incurred to finance a Permitted Acquisition or similar Investment permitted under this Agreement, provided that:

 

(A)                               (x) if such Indebtedness is secured by a Lien that is pari passu with the Lien securing the Initial Facilities, the First Lien Leverage Ratio does not exceed 4.20:1.00 and,  (y) if such Indebtedness is unsecured or secured by a Lien that is junior to the Lien securing the Initial Facilities, the Secured Leverage Ratio does not exceed 5.25:1.00 and (z) if such Indebtedness is unsecured, the Total Leverage Ratio does not exceed 5.25:1.00; provided that the testing of any ratios under this sub- clause (h)(i)(A) shall be subject to Section 1.6(c);

 

(B)                               in the case of Indebtedness described in clause (2), the Additional Debt Requirements are satisfied;

 

(C)                               after giving effect to the incurrence or assumption of such Indebtedness, the Borrower shall be in compliance with the financial covenant set forth in Section 7.1, determined on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Indebtedness had been outstanding on the last day of such Test Period for testing compliance therewith (assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and any subsequent funding of the term debt borrowed or issued thereunder); provided that the testing of any ratios under this sub-clause (h)(i)(C) shall be subject to Section 1.6(c);

 

(D)                               the aggregate principal amount of Indebtedness incurred in reliance on this Section 7.2(h) by Non-Guarantor Subsidiaries (together with the aggregate amount of Indebtedness incurred by Non-Guarantor Subsidiaries pursuant to clause (i) below) shall not exceed (i) the greater of (x) $18,750,000 and (y) 25% of Consolidated EBITDA at any one time outstanding; and

 

(E)                               in the case of the Indebtedness described in clause (1), such  Indebtedness exists at the time such Person becomes a Restricted Subsidiary and is not created in contemplation of or in connection with such Person becoming a Restricted Subsidiary; and

 

(ii)                                  any Indebtedness incurred to refinance, extend, renew, or replace Indebtedness incurred under clause (i) above; provided that the Refinancing Debt Requirements are satisfied;

 

(i)                                     (i) additional Indebtedness of the Group Members; provided that (1) after giving effect to the incurrence of such Indebtedness on a Pro Forma Basis, (A) if such Indebtedness is secured by a Lien that is pari passu with the Lien securing the Initial Facilities, the First Lien Leverage Ratio does not exceed 4.20:1.00 and,  (B) if such Indebtedness is unsecured or secured by a Lien that is junior to the Lien securing the Initial Facilities, the Secured Leverage Ratio does not exceed 5.25:1.00 and (C) if such Indebtedness is unsecured, the Total Leverage Ratio does not exceed 5.25:1.00, (2) after giving effect to the incurrence of such Indebtedness, the Borrower shall be in compliance with the financial covenant set forth in Section 7.1, determined on a Pro Forma Basis as of the last day of the most recently ended Test Period as if any such Incremental Equivalent DebtIndebtedness had been outstanding on the last day of such Test Period for testing compliance therewith (assuming the full utilization of any unfunded revolving commitment provided simultaneously thereunder and any subsequent funding of the term debt borrowed or issued thereunder), (3) the Additional Debt Requirements are satisfied and, (4) the testing of any ratios under this sub-clause (i)(i) shall be

 

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subject to Section 1.6(c), and (5) the aggregate principal amount of Indebtedness incurred in reliance on this Section 7.2(i) by Non-Guarantor Subsidiaries (together with the aggregate amount of Indebtedness incurred or assumed by Non-Guarantor Subsidiaries pursuant to clause (h) above) shall not exceed (i) the greater of (x) $15,000,000 and (y) 20% of Consolidated EBITDA at any one time outstanding; and (ii) any Indebtedness incurred to refinance, extend, renew, or replace Indebtedness incurred under clause (i) above; provided that the Refinancing Debt Requirements are satisfied;

 

(j)                                    Indebtedness incurred by a Group Member in the form of customary obligations under indemnification, incentive, non-compete, deferred compensation, or other similar arrangements in the ordinary course of business (including in connection with the Transactions and/or First Amendment Transactions, any Permitted Acquisition or any other Investment permitted hereunder and including to any current or former Employees of the Borrower or any Parent Company);

 

(k)                                 Indebtedness in respect of (i) statutory obligations, bids, leases, governmental contracts, trade contracts, performance, surety, stay, customs, appeal, performance and/or return of money bonds, completion guarantees and similar obligations not in connection with money borrowed, in each case, provided in the ordinary course of business or consistent with past practice, including those incurred to secure health, safety and environmental obligations in the ordinary course of business or consistent with past practice and (ii) letters of credit, bank guarantees, surety bonds, performance bonds or similar instruments to support any of the foregoing;

 

(l)                                     Indebtedness in respect of any bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities or surety bonds, performance bonds or similar instruments entered into or incurred in the ordinary course of business in respect of workers compensation claims, unemployment insurance, other types of social security, pension obligations, vacation pay, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims or similar obligations;

 

(m)                             Indebtedness in respect of overdraft facilities, employee credit card programs, netting services, automatic clearinghouse arrangements and other cash management and similar arrangements and in respect of incentive, supplier finance or similar programs, in each case, in the ordinary course of business;

 

(n)                                 Indebtedness in respect of any bankers’ acceptances, bank guarantees, letters of credit or similar instruments or facilities entered into in the ordinary course of business;

 

(o)                                 Indebtedness of a Group Member consisting of (i) obligations to pay insurance premiums, (ii) take or pay obligations contained in supply agreements and (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements, in each case, in the ordinary course of business;

 

(p)                                 Indebtedness incurred in connection with any Permitted Sale Leaseback Transaction in an aggregate principal amount not to exceed the greater of (x) $5,000,000 and (y) 6.67% of Consolidated EBITDA as of the last day of the most recently ended Test Period, at any one time outstanding;

 

(q)                                 [Reserved];

 

(r)                                    Incremental Equivalent Debt;

 

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(s)                                   Indebtedness supported by a letter of credit in a principal amount not to exceed the face amount of such letter of credit;

 

(t)                                    Guarantee Obligations incurred in the ordinary course of business in respect of obligations to or of suppliers, customers, franchisees, lessors, licensees, sublicensees or distribution partners to the extent constituting an Investment permitted under Section 7.7(l);

 

(u)                                 Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of a Group Member pursuant to any such agreement;

 

(v)                                 Indebtedness consisting of promissory notes issued by a Group Member to any stockholder of the Borrower or any Parent Company or any current or former Employee of the Borrower, any Subsidiary of the Borrower or of any Parent Company (or any affiliates, spouses, former spouses, other immediate family members, successors, executors, administrators, heirs, legatees or distributees of any such Employee) to finance the purchase or redemption of Capital Stock of the Borrower or any Parent Company permitted by Section 7.6(b); and

 

(w)                               Agreement; and to the extent constituting Indebtedness, obligations arising under the Merger

 

(x)                                 (w) unfunded pension fund and other employee benefit plan obligations and liabilities incurred by the Group Members and their Subsidiaries in the ordinary course of business to the extent that the unfunded amounts, obligations and/or liabilities would not, individually or in the aggregate (and when taken together with other events) cause an Event of Default under Section 8.1(g).

 

Premiums, interest, fees and expenses incurred in connection with an obligation described in clauses (a) through (w) above shall not, themselves, be deemed to be included as Indebtedness for purposes of calculating the baskets set forth above.

 

7.3                               Liens. Create, incur, assume or suffer to exist any Lien upon any of its Property, whether now owned or hereafter acquired, except for:

 

(a)                                 Liens for Taxes, assessments or governmental charges or claims, which (i) are not yet due, (ii) are being contested in good faith by appropriate proceedings diligently conducted and as to which adequate reserves are maintained on the books of such Group Member to the extent required by GAAP or (iii) do not in the aggregate materially detract from the value of the Borrower’s or such Restricted Subsidiary’s property or assets or materially impair the use thereof in the operation of the business of the Borrower or such Restricted Subsidiary;

 

(b)                                 landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens, in each case, arising in the ordinary course of business which (i) are not overdue for a period of more than sixty days, (ii) are being contested in good faith by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the Group Members, as the case may be, to the extent required by GAAP or (iii) do not in the aggregate materially detract from the value of the Borrower’s or such Restricted Subsidiary’s property or assets or materially impair the use thereof in the operation of the business of the Borrower or such Restricted Subsidiary;

 

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(c)                                  Liens incurred in the ordinary course of business arising out of pledges, deposits or statutory trusts in connection with workers’ compensation, unemployment insurance and other social security legislation and deposits securing liability insurance carriers under insurance or self-insurance arrangements;

 

(d)                                 pledges, deposits and other Liens to secure the performance of bids, tenders, contracts (other than for Indebtedness), leases, subleases, statutory obligations, surety and appeal bonds, performance bonds, government contracts and other obligations of a like nature, in each case, incurred in the ordinary course of business;

 

(e)                                  easements, zoning restrictions, minor defects or irregularities in title, rights-of-way, licenses, covenants, restrictions and other similar encumbrances incurred in the ordinary course of business that, in the aggregate, do not materially detract from the value of the Property subject thereto or materially interfere with the ordinary conduct of the business of the Group Members, taken as a whole;

 

(f)                                   Liens (i) in existence on the date hereof listed on Schedule 7.3(f) and any modification, replacement, refinancing, renewal or extension thereof; provided that (x) no such Lien extends to any additional property other than (A) after-acquired property that is affixed or incorporated into the property covered by such Lien or financed by Indebtedness permitted under Section 7.2 and (B) proceeds and products thereof, accessions thereto and improvements thereon (it being understood that individual financings of the type permitted under Section 7.2(d) or (p) provided by any lender may be cross-collateralized to other financings of such type provided by such lender or its affiliates) and (y) any such modification, replacement, refinancing, renewal or extension of the obligations secured or benefited by such Liens, if the same constitute Indebtedness, is permitted by Section 7.2 and (ii) securing Indebtedness permitted by Sections 7.2(a)(ii);

 

(g)                                  Liens securing Indebtedness of a Group Member incurred pursuant to Section 7.2(d) or (p); provided that (x) such Liens shall be created within 270 days after the acquisition of the assets financed by such Indebtedness and (y) such Liens do not at any time encumber any Property of the Group Members other than the Property financed by such Indebtedness and the proceeds and products thereof, accessions thereto and improvements thereon (it being understood that individual financings of the type permitted under Section 7.2(d) or (p) provided by any lender may be cross- collateralized to other financings of such type provided by such lender or its affiliates);

 

(h)                                 Liens securing Indebtedness permitted under (i) Section 7.2(a)(i) and (ii) Section 7.2(a)(iv) and (v); provided that, in the case of clause (ii) of this Section 7.3(h), such Liens are subject to the terms of the Intercreditor Agreement or an Acceptable Intercreditor Agreement, as applicable;

 

(i)                                     any interest or title of a licensor, sublicensor, lessor or sublessor under any license or lease entered into by a Group Member in the ordinary course of its business and covering only the assets so leased or licensed, and any financing statement filed in connection with any such lease or license so long as such Liens do not interfere in any material respects with the business of the Group Members, taken as a whole;

 

(j)                                   Liens arising from judgments or decrees in circumstances not constituting an Event of Default under Section 8.1(h) and any pledge and/or deposit securing any settlement of litigation;

 

(k)                                 Liens on (i) property or assets acquired pursuant to an acquisition permitted under Section 7.7 (and the proceeds thereof) and not created in contemplation thereof (so long as such Lien attaches only to such property or assets so acquired and initially subject to such Lien and such Lien

 

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secures only that Indebtedness permitted under Section 7.2(h)(i)(1) and (h)(ii) (with respect to Indebtedness pursuant to (h)(i)(1)) (it being understood that individual financings of the type permitted under Section 7.2(d) or (p) provided by any lender may be cross-collateralized to other financings of such type provided by such lender or its affiliates)) and (ii) securing Indebtedness permitted under Section 7.2(h)(i)(2) and (h)(ii) (with respect to Indebtedness pursuant to (h)(i)(2)); provided that any Lien incurred in reliance on this clause (k)(ii) is subject to an Acceptable Intercreditor Agreement;

 

(l)                                     Liens arising out of customary conditional sales, installment sales, title retention, consignment or similar arrangements for the sale or purchase by a Group Member of goods through third parties in the ordinary course of business or by operation of law under Article 2 of the UCC (or any similar Law under any jurisdiction);

 

(m)                             licenses of Intellectual Property granted by a Group Member in the ordinary course of business that do not constitute a disposition of all substantial rights in such Intellectual Property;

 

(n)                                 rights of setoff or bankers’ liens of banks or other financial institutions where the Group Members maintain deposits in the ordinary course of business;

 

(o)                                 ground leases (under which a Group Member is the tenant) in respect of real property on which facilities owned or leased by the Group Members are located;

 

(p)                                 Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

 

(q)                                 Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of the Group Members to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of the Group Members or (iii) relating to purchase orders and other agreements entered into with customers of the Group Members in the ordinary course of business;

 

(r)                                    Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;

 

(s)                                   [Reserved];

 

(t)                                    other Liens with respect to obligations the principal amount of which do not exceed the greater of (x) $15,000,000 and (y) 20% of Consolidated EBITDA as of the last day of the most recently ended Test Period, at any one time outstanding;

 

(u)                                 Liens (to the extent subject to an Acceptable Intercreditor Agreement) securing Indebtedness permitted under Section 7.2(r);

 

(v)                                 Liens securing Indebtedness permitted pursuant to Section 7.2(i) to the extent subject to an Acceptable Intercreditor Agreement;

 

(w)                               precautionary or purported Liens evidenced by the filing of UCC financing statements or similar financing statements under applicable Law relating solely to (i) operating leases or consignment or bailee arrangements entered into in the ordinary course of business and/or (ii) accounts receivable sold in the ordinary course of business as permitted under this Agreement and pursuant to

 

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arrangements that are non-recourse to Holdings or any Group Member (except for customary representations, warranties, reporting and receivables servicing covenants and indemnities in connection therewith);

 

(x)                                 (i) Liens on Capital Stock of joint ventures or Unrestricted Subsidiaries securing capital contributions to, or obligations of, such Persons and (ii) customary rights of first refusal and tag, drag and similar rights in joint venture agreements and agreements with respect to non-Wholly-Owned Subsidiaries;

 

(y)                                 Liens disclosed in any mortgage policy delivered pursuant to Section 6.8(b) with respect to any Material Real Estate and any replacement, extension or renewal thereof; provided that no such replacement, extension or renewal Lien shall cover any property other than the property that was subject to such Lien prior to such replacement, extension or renewal (and additions thereto, improvements thereon and the proceeds thereof);

 

(z)                                  Liens on cash and Cash Equivalents used to satisfy or discharge Indebtedness; provided such satisfaction or discharge is permitted hereunder;

 

(aa)                          Liens solely on any cash earnest money deposits made by the Group Members in connection with any letter of intent or purchase agreement with respect to any Investment permitted hereunder;

 

(bb)                          Liens on securities that are the subject of repurchase agreements constituting Investments permitted under Section 7.7 arising out of such repurchase transaction; and

 

(cc)                            Liens (i) in favor of any Loan Party and/or (ii) granted by any non-Loan Party in favor of any Restricted Subsidiary that is not a Loan Party, in each case of the foregoing clauses (i) and (ii), securing intercompany Indebtedness permitted under Section 7.2.

 

7.4                               Fundamental Changes. Consummate any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its Property or business, except that:

 

(a)                                 (i) any Restricted Subsidiary may be merged, amalgamated, liquidated or consolidated with or into the Borrower (provided that the Borrower (including any Successor Borrower pursuant to the last paragraph of this Section 7.4) shall be the continuing or surviving corporation) or (ii) any Subsidiary may be merged, amalgamated, liquidated or consolidated with or into any Restricted Subsidiary (provided that if one of the parties to such merger, amalgamation or consolidation is a Subsidiary Guarantor, either (x) such Subsidiary Guarantor shall be the continuing or surviving corporation or (y) simultaneously with such transaction, the continuing or surviving corporation shall become a Subsidiary Guarantor and the Borrower shall comply with Section 6.8 in connection therewith);

 

(b)                                 any Non-Guarantor Subsidiary that is a Foreign Subsidiary or FSHCO may be merged or consolidated with or into, or be liquidated into, any other Non-Guarantor Subsidiary, and any Non-Guarantor Subsidiary that is a Domestic Subsidiary may be merged or consolidated with or into, or be liquidated into, any other Non-Guarantor Subsidiary that is a Domestic Subsidiary;

 

(c)                                  any Non-Guarantor Subsidiary that is a Foreign Subsidiary or FSHCO may Dispose of all or substantially all of its assets (upon voluntary liquidation, dissolution, winding-up or otherwise) to any other Non-Guarantor Subsidiary, and any Non-Guarantor Subsidiary that is a

 

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Domestic Subsidiary may Dispose of all or substantially all of its assets (upon voluntary liquidation dissolution, winding-up or otherwise) to any other Non-Guarantor Subsidiary that is a Domestic Subsidiary;

 

(d)                                 any Restricted Subsidiary may liquidate or dissolve if (i) the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders and (ii) to the extent such Restricted Subsidiary is a Loan Party, any assets or business not otherwise disposed of or transferred in accordance with Section 7.5 (or, in the case of any such business, discontinued), shall be transferred to, or otherwise owned or conducted by, a Loan Party (other than Holdings) after giving effect to such liquidation or dissolution;

 

(e)                                  any Subsidiary Guarantor may (i) merge, amalgamate or consolidate with or into any other Subsidiary Guarantor, (ii) merge, amalgamate or consolidate with or into any Non-Guarantor Subsidiary; provided that if such Subsidiary Guarantor is not the surviving entity, such merger, amalgamation or consolidation shall be deemed to be an “Investment” permitted to be made pursuant to Section 7.7 and (iii) Dispose of any or all of its assets (upon voluntary liquidation or otherwise) to the Borrower or any other Subsidiary Guarantor; and

 

(f)                                   any merger, amalgamation, dissolution, liquidation or consolidation or Disposition of all or substantially all of a the Property or business of a Group Member, the purpose of which is to effect (i) any Disposition permitted under Section 7.5 (other than in reliance on clause (c) thereof), (ii) any Investment permitted under Section 7.7 (other than in reliance on clause (k) thereof), (iii) any merger permitted under Section 7.11(d), (iv) the First Amendment Transactions or (v)(A) the conversion of the Borrower or any Restricted Subsidiary into another form of entity or (B) any reorganization or reincorporation of (1) the Borrower or any Domestic Subsidiary in another jurisdiction in the United States or (2) any Foreign Subsidiary in the United States or any other jurisdiction; provided that in the case of this clause (v), (x) no Event of Default has occurred and is continuing or would result therefrom, (y) such conversion, reorganization or reincorporation does not adversely affect the aggregate value of the guarantee of the Secured Obligations or the Collateral or the Secured Parties’ rights and remedies (taken as a whole) under the Loan Documents (in each case, as reasonably determined by the Borrower in consultation with the Administrative Agent) and (z) if reasonably requested by the Administrative Agent, customary legal opinions, authorizing resolutions and other corporate documents as reasonably requested by the Agents shall have been delivered to the Administrative Agent.

 

Notwithstanding anything herein to the contrary, the Borrower may merge or consolidate with or into any other Person (such other Person, the “Merger Partner”) so long as: (i) the Borrower shall be the continuing or surviving corporation or, in the case of a merger or consolidation in which the Borrower is not the continuing or surviving Person, the Person formed by or surviving any such merger shall be an entity organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof (the Borrower or such other Person, as the case may be, being herein referred to as the “Successor Borrower”), (ii) the Successor Borrower (if other than the Borrower) shall expressly assume all the obligations of the Borrower under this Agreement and the other Loan Documents pursuant to a supplement hereto or thereto in form reasonably satisfactory to the Administrative Agent, (iii) no Event of Default has occurred and is continuing at the date of such merger or consolidation or would result from such merger or consolidation, (iv) each Subsidiary Guarantor, unless such Subsidiary Guarantor is the other party to such merger or consolidation, shall have by a supplement to the Guarantee and Collateral Agreement in form reasonably satisfactory to the Administrative Agent confirmed that its obligation under the Guarantee and Collateral Agreement shall apply to the Successor Borrower’s obligations under this Agreement, (v) the Successor Borrower shall, immediately following such merger or consolidation, directly or indirectly own all Subsidiaries owned by

 

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the Borrower immediately prior to such merger or consolidation, (vi) the Secured Parties’ rights and remedies under the Loan Documents, including their rights and remedies with respect to any Collateral owned by the Successor Borrower, and the Successor Borrower’s obligations under the Guarantee and Collateral Agreement will not be impaired in any manner as a result of such merger or consolidation, (vii) if reasonably requested by the Administrative Agent, customary legal opinions, authorizing resolutions and other corporate documents as reasonably requested by the Agents shall be required to be provided and (viii) the Borrower shall have provided any documentation and other information regarding the Successor Borrower as shall have been reasonably requested in writing by any Lender through the Administrative Agent that such Lender shall have reasonably determined is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act and each Lender shall be reasonably satisfied with its “know your customer” and PATRIOT Act review of the proposed Successor Borrower; provided that, if the foregoing are satisfied, the Successor Borrower (if other than the existing Borrower) will succeed to, and be substituted for, the Borrower under this Agreement.

 

Notwithstanding anything herein to the contrary, the Borrower may merge with AcquisitionCo on the Acquisition Closing Date in accordance with the Merger Agreement; provided that the Borrower shall be the surviving entity of such merger.

 

7.5                               Dispositions of Property. Dispose of any of its Property (including, without limitation, receivables), or, in the case of any Restricted Subsidiary, issue or sell any shares of such Restricted Subsidiary’s Capital Stock to any Person, except:

 

(a)                                 (i) the Disposition of surplus, obsolete or worn out property, vehicles and other assets in the ordinary course of business and (ii) the Disposition, abandonment, cancellation or lapse of Intellectual Property which, in the reasonable good faith determination of the Borrower, are not material to the conduct of the business of the Group Members, or are no longer economical to maintain in light of their respective use, in the ordinary course of business;

 

(b)                                 (i) the sale of inventory, goods and/or services in the ordinary course of business, (ii) the cross-licensing or licensing of Intellectual Property, in the ordinary course of business that does not constitute a disposition of all substantial rights in such Intellectual Property and does not materially interfere with the business of the Group Members, taken as a whole, and (iii) the contemporaneous exchange of Property for Property of a like kind (other than as set forth in clause (ii)), to the extent that the Property received in such exchange is of a value substantially equivalent to or greater than the value of the Property exchanged (provided that after giving effect to such exchange, the value of the Property of the Borrower or any Subsidiary Guarantor subject to perfected first priority Liens in favor of the Collateral Agent under the Security Documents is substantially equivalent or greater than the value of the Property of the Borrower and the Subsidiary Guarantors immediately prior to such exchange); 

 

(c)                                  Dispositions permitted by Section 7.4 (other than clause (d)(ii) or clause (f)(i) thereof);

 

(d)                                 the sale or issuance of (i) any Restricted Subsidiary’s Capital Stock to the Borrower or any Subsidiary Guarantor or (ii) any Non-Guarantor Subsidiary’s Capital Stock held by a Non-Guarantor Subsidiary to another Non-Guarantor Subsidiary;

 

(e)                                  the Disposition of other assets for Fair Market Value after the Closing Date; provided that (i) with respect to any Disposition pursuant to this clause (e) for a purchase price in excess of the greater of (x) $2,500,000 and (y) 3.33% of Consolidated EBITDA as of the last day of the

 

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most recently ended Test Period, at least 75% of the consideration received in respect of such Disposition shall be cash or Cash Equivalents; provided, further that for purposes of the foregoing requirement, (1) the amount of any Indebtedness or other liabilities (other than Indebtedness or other liabilities that are subordinated to the Obligations or that are owed to a Group Member) of the Group Members (as shown on the most recent balance sheet or statement of financial position (or in the notes thereto) that are assumed by the transferee of any such assets and for which the Group Members have been validly released by all relevant creditors in writing, (2) the amount of any trade-in value applied to the purchase price of any replacement assets acquired in connection with such Disposition, (3) any securities received by the Group Members from the transferee that are converted into cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received) within 180 days following the closing of the applicable Disposition and (4) any Designated Non-Cash Consideration received in respect of such Disposition having an aggregate Fair Market Value, taken together with all other Designated Non-Cash Consideration received pursuant to this clause (4) that is at that time outstanding, not in excess of the greater of $10,000,000 and 13.33% of Consolidated EBITDA as of the last day of the most recently ended Test Period, in each case, shall be deemed to be cash), (ii) no Event of Default has occurred and is continuing or would result therefrom and (iii) the requirements of Section 2.12(b), to the extent applicable, are complied with in connection therewith;

 

(f)                                   the Dispositions listed on Schedule 7.5(f);

 

(g)                                  any Recovery Event; provided that the requirements of Section 2.12(b), to the extent applicable, are complied with in connection therewith;

 

(h)                                 the leasing, occupancy agreements or sub-leasing of Property that would not materially interfere with the required use of such Property by the Borrower or their Restricted Subsidiaries (including the leasing of assets acquired in a permitted Investment hereunder during the period of time the Borrower or the respective Subsidiary is diligently pursuing obtaining any necessary Gaming Permits for the Borrower or such Subsidiary to operate such assets in compliance with the applicable Gaming Regulations);

 

(i)                                     foreclosures or transfers of condemned property as a result of the exercise of “eminent domain” or other similar policies to the respective Governmental Authority or agency that has condemned same (whether by deed in lieu of condemnation or otherwise) and transfers of properties that have been subject to a casualty to the respective insurer of such property as part of an insurance settlement;

 

(j)                                    Dispositions (including of Capital Stock) among the Group Members (upon voluntary liquidation or otherwise); provided that (x) any such Disposition made by any Loan Party to any Person that is not a Loan Party shall be (i) for Fair Market Value with at least 75% of the consideration for such Disposition consisting of cash or Cash Equivalents at the time of such Disposition or (ii) treated as an Investment and otherwise made in compliance with Section 7.7 (other than in reliance on clause (k) thereof), (y) any such Disposition from a Non-Guarantor Subsidiary to the Borrower or any Subsidiary Guarantor shall be for no more than Fair Market Value;

 

(k)                                 Liens permitted by Section 7.3;

 

(l)                                     Restricted Payments permitted by Section 7.6; 

 

(m)                             Investments permitted by Section 7.7 (other than in reliance on clause (k) thereof);

 

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(n)                                 the sale or issuance of the Capital Stock of any Foreign Subsidiary (other than a Loan Party) to any other Foreign Subsidiary or a FSHCO including in connection with any tax restructuring activities not otherwise prohibited hereunder;

 

(o)                                 Dispositions of cash and Cash Equivalents and/or other assets that were Cash Equivalents when the relevant original Investment was made in the ordinary course of business;

 

(p)                                 Dispositions of accounts receivable in connection with the collection or compromise thereof in the ordinary course of business or in any situation of a work-out or financial distress, in each case, of the Person owing such accounts receivable;

 

(q)                                 terminations or the unwinding of any Hedge Agreement permitted hereunder;

 

(r)                                    any Foreign Subsidiary may issue Capital Stock to qualified directors where required by applicable law or to satisfy other requirements of applicable law with respect to ownership of Capital Stock in Foreign Subsidiaries;

 

(s)                                   Dispositions of property pursuant to Permitted Sale Leaseback Transactions to the extent any Indebtedness incurred in connection therewith is permitted under Section 7.2(p);

 

(t)                                    leases, subleases, licenses or sublicenses, in each case in the ordinary course of business and which do not materially interfere with the business of the Borrower and its Restricted Subsidiaries, taken as a whole;

 

(u)                                 Dispositions of Investments in joint ventures to the extent required by, or made pursuant to customary buy/sell arrangements between, the joint venture parties set forth in joint venture arrangements and similar binding arrangements;

 

(v)                                 the Disposition of the Capital Stock in, Indebtedness of, or other securities issued by, an Unrestricted Subsidiary;

 

(w)                               Dispositions and/or terminations in the ordinary course of business of leases, subleases, licenses or sublicenses, (i) the Disposition or termination of which will not materially interfere with the business of the Group Members or (ii) which relate to closed facilities or the discontinuation of any product line;

 

(x)                                 the expiration of any option agreement in respect of real or personal property and any surrender or waiver of contractual rights or the settlement, release or surrender of contractual rights or litigation claims (including in tort) in the ordinary course of business;

 

(y)                                 Dispositions of non-core fee-owned real property, in each case acquired in any acquisition permitted hereunder which, within 180 days of the date of such acquisition, are designated in writing to the Administrative Agent as being held for sale and not for the continued operation of the Group Members or any of their respective businesses; provided that (i) no Event of Default exists on the date on which the definitive agreement governing the relevant Disposition is executed and (ii) only fee- owned real property that is no longer used or useful in the conduct of the business of the Borrower or its Restricted Subsidiaries may be sold pursuant to this Section 7.5(y);

 

(z)                                  [Reserved];

 

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(aa)                          Dispositions of fee-owned real property and related assets in the ordinary course of business in connection with relocation activities for Employees of any Group Member or any Parent Company;

 

(bb)                          Dispositions made to comply with any order of any Governmental Authority or any applicable Law; and

 

(cc)                            any sale of motor vehicles and information technology equipment purchased at the end of an operating lease and resold thereafter;

 

provided further that any Sale Leaseback Transaction that is consummated substantially simultaneously with a Permitted Acquisition and relates to assets acquired in such Permitted Acquisition shall not be restricted by this Section 7.5 and shall not constitute an Asset Sale.

 

To the extent that any Collateral is Disposed of as expressly permitted by this Section 7.5 to any Person other than a Loan Party, such Collateral shall be Disposed of free and clear of the Liens created by the Loan Documents, which Liens shall be automatically released upon the consummation of such Disposition; it being understood and agreed that the Administrative Agent and the Collateral Agent shall be authorized to take, and shall take, any actions reasonably requested by the Borrower in order to effect the foregoing in accordance with Section 9 hereof.

 

7.6                               Restricted Payments. Make or pay directly or indirectly, any Restricted Payment, except:

 

(a)                                 the Borrower may make such Restricted Payments to any Parent Company:

 

(i)                                     the proceeds of which shall be used to pay the portion of any consolidated, combined or similar income tax liability attributable to the income of the Borrower or its Subsidiaries; provided that (x) no such payments shall exceed the income tax liability that would have been imposed on the Borrower and/or the applicable Subsidiaries had such entity(ies) filed on a stand-alone basis and (y) any such payments attributable to an Unrestricted Subsidiary shall be limited to the amount of any cash paid by such Unrestricted Subsidiary to the Borrower or any Restricted Subsidiary for such purposes;

 

(ii)                                  the proceeds of which shall be used to pay any such Parent Company’s operating costs and expenses incurred in the ordinary course of business, other overhead costs and expenses and fees (including insurance premiums, administrative, legal, accounting, reporting and similar expenses provided by third parties) as well as trustee, directors and general partner fees which are reasonable and customary and incurred in the ordinary course of business and attributable to the ownership or operations of the Group Members and their respective Subsidiaries (including any reasonable and customary indemnification claims made by directors or officers attributable to the direct or indirect ownership or operations of the Group Members and their Subsidiaries;

 

(iii)                               the proceeds of which shall be used to pay franchise and excise taxes and other fees, taxes and expenses, required to maintain any such Parent Company’s existence;

 

(iv)                              to finance any Investment permitted to be made pursuant to Section 7.7; provided that (x) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (y) the applicable Parent Company

 

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shall, immediately following the closing thereof, cause all property acquired (whether assets or Capital Stock) to be held by or contributed to Group Member;

 

(v)                                 the proceeds of which shall be used to pay customary costs, fees and expenses (other than to Affiliates) related to any equity or debt offering, refinancing, issuance, incurrence, Disposition, acquisition or Investment permitted by this Agreement (including, without limitation, Section 7.11 hereof) (in each case, whether or not consummated); and

 

(vi)                              the proceeds of which shall be used to pay customary salary, bonus, severance and other benefits payable to current and former Employees of the Group Members or any Parent Company to the extent such salaries, bonuses, severance and other benefits are attributable to the ownership or operation of the Group Members;

 

(b)                                 repurchases, retirements or other acquisitions or retirements for value of Capital Stock (or any options or warrants or stock appreciation or similar rights issued with respect to any of such Capital Stock) of any such Parent Company or the Borrower held by any future, present or former Employee (or any affiliates, spouses, former spouses, other immediate family members, successors, executors, administrators, heirs, legatees or distributees of any such Employee) of any Parent Company, any Group Member or any Subsidiary thereof pursuant to any employee, management or director equity plan, employee, management or director stock option plan or any other employee, management or director benefit plan or any agreement (including any stock option or stock appreciation or similar rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement) with any such Employee; provided that such payments, measured at the time made, do not exceed (i) $5,000,000, in any fiscal year, plus (ii) all net proceeds obtained by a Group Member during such calendar year from the sale of Qualified Capital Stock of any Parent Company or the Borrower not included in Consolidated Net Income for purposes of calculating the Available Amount and not utilized to increase the Available Equity Amount, the Available Excluded Contribution Amount (unless designated for such purpose), as a Cure Amount or for any other purpose (including to increase any available basket) under this Agreement plus (iii) all net cash proceeds obtained from any key-man life insurance policies received by the Group Members during such calendar year minus (iv) the amount of Restricted Payments previously made with the proceeds described in clauses (ii) or (iii) of this clause (b) during such calendar year; provided, further, that any unused portion of the preceding basket in clause (i) for any fiscal year may be carried forward to the immediately succeeding two fiscal years (but no other subsequent fiscal years); and provided, further, that cancellation of Indebtedness owing to any Parent Company from Employees of Holdings, the Group Members or any of their respective Subsidiaries in connection with a repurchase of Capital Stock of any Parent Company or the Borrower will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of this Agreement;

 

(c)                                  (i) the Borrower may make Restricted Payments (including to any Parent Company) to pay cash in lieu of fractional shares in connection with any exercise of warrants, options, or other securities convertible into or exchangeable for Capital Stock of the Borrower (or such Parent Company) or in connection with any other dividend, split or combination thereof or any Permitted Acquisition, in each case, otherwise permitted hereunder and (ii) the Borrower may repurchase (or make Restricted Payments to any Parent Company to enable it to repurchase) Capital Stock upon the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock if such Capital Stock represents all or a portion of the exercise price of such warrants, options or other securities convertible into or exchangeable for Capital Stock as part of a “cashless” exercise;

 

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(d)                                 (i) the Borrower may (or may make Restricted Payments to permit any Parent Company to) redeem in whole or in part any Capital Stock of the Borrower (or such Parent Company) for another class of Qualified Capital Stock of the Borrower (or such Parent Company) or rights to acquire Qualified Capital Stock of the Borrower (or such Parent Company) or with proceeds from substantially concurrent equity contributions or issuances of new Capital Stock of the Borrower (or such Parent Company) (the proceeds of which are not included in Consolidated Net Income for purposes of calculating the Available Amount and not utilized to increase the Available Equity Amount, the Available Excluded Contribution Amount (unless designated for such purpose) or as a Cure Amount or for any other purpose (including to increase any available basket) under this Agreement; provided that any terms and provisions material to the interests of the Lenders, when taken as a whole, contained in such other class of Qualified Capital Stock is at least as advantageous to the Lenders as those contained in the Capital Stock redeemed thereby and (ii) the Borrower may declare and make any Restricted Payment payable solely in the Qualified Capital Stock of the Borrower or any Parent Company;

 

(e)                                  Restricted Payments to the extent any Gaming Authority having jurisdiction over the Borrower or any of its Subsidiaries requires the Borrower (or any Parent Company) to redeem Capital Stock of a particular equity owner of the Borrower (or any Parent Company) in order to avoid the suspension, revocation or denial of a Gaming Permit by any Gaming Authority;

 

(f)                                   [Reserved];

 

(g)                                  the Borrower may make additional Restricted Payments, in an amount equal to (i) the Available Excluded Contribution Amount at such time, plus (ii) the Available Equity Amount at such time, plus (iii) so long as (x) no Event of Default shall have occurred and is continuing and (y) the Borrower is in compliance with the financial covenant set forth in Section 7.1, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period, the Available Amount at such time (other than the portion thereof consisting of clauses (a)(i) and (a)(ii) of the definition of the Available Amount), plus, (iv) so long as (x) no Event of Default shall have occurred and is continuing, (y) the Borrower is in compliance with the financial covenant set forth in Section 7.1, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period and (z) the First Lien Leverage Ratio, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period, is less than 4.20:1.00, amounts available under clauses (a)(i) and (a)(ii) of the definition of the Available Amount; provided, however, that, in the case of clauses (iii) and (iv), the Borrower shall deliver a certificate of a Responsible Officer certifying (and demonstrating in reasonable detail) compliance with the foregoing requirements;

 

(h)                                 (x) so long as no Event of Default shall have occurred and is continuing or would result therefrom and (y) the Borrower is in compliance with the financial covenant set forth in Section 7.1, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period, the Borrower may make additional Restricted Payments in an aggregate amount not to exceed $40,000,000, minus the amount of Restricted Debt Payments made in reliance on Section 7.8(a)(v)(B), minus the outstanding amount of Investments made in reliance on Section 7.7(q)(ii); provided that, any cash on hand of the Borrower and its Subsidiaries that is used on the Acquisition Closing Date to fund the First Amendment Transactions shall reduce, on a dollar-for- dollar basis, the amount of Restricted Payments permitted under this clause (h) to an amount no less than zero ($0.00);

 

(i)                                     so long as no Event of Default shall have occurred and is continuing or would result therefrom, the Borrower may make additional Restricted Payments; provided that, after giving

 

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effect thereto on a Pro Forma Basis, the Total Leverage Ratio for the most recently ended Test Period would not exceed 3.003.25:1.00;

 

(j)                                    to the extent constituting Restricted Payments, the Borrower may enter into and consummate transactions expressly permitted by Section 7.4, 7.5 (other than in reliance on clause (l) thereof), 7.7 (other than in reliance on clause (k) thereof) and 7.9; and

 

(k)                                 the Borrower may (or may make Restricted Payments to allow any Parent Company to) make Restricted Payments in an amount equal to withholding or similar taxes payable or expected to be payable with respect to any present or former Employee (or any affiliates, spouses, former spouses, other immediate family members, successors, executors, administrators, heirs, legatees or distributees of any of the foregoing) and any repurchases of Capital Stock in consideration of such payments including deemed repurchases in connection with the exercise of stock options.; and

 

(l)                                    (i) Restricted Payments made on the Acquisition Closing Date to consummate the First Amendment Transactions; provided that, (x) any cash on hand of the Borrower and its Subsidiaries that is used on the Acquisition Closing Date to fund the First Amendment Transactions shall reduce, on a dollar-for-dollar basis, the amount of Restricted Payments permitted under clause (h) above to an amount no less than zero ($0.00) and (y) other than proceeds of (A) the Additional Initial Term Loans (as defined in the First Amendment), (B) the Second Lien Initial Term Loans and (C) not greater than $20,000,000 of Revolving Loans, in no event shall such Restricted Payments be made on the Acquisition Closing Date with the proceeds of Indebtedness incurred in contemplation of or in connection with the consummation of the Acquisition and (ii) Restricted Payments made after the Acquisition Closing Date, to satisfy any other payment obligations owing by Holdings, the Borrower or other Parent Company under the Merger Agreement.

 

7.7                               Investments. Make any Investments, except:

 

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

 

(b)                                 Investments in Cash Equivalents and/or other assets that were Cash Equivalents at the time made; 

 

(c)                                  Investments (i) by any Loan Party in any other Loan Party (other than Holdings) (it being understood and agreed that any Investments by any Loan Party in any Non-Guarantor Subsidiary that is part of a series of simultaneous Investments by the Borrower and any Restricted Subsidiaries in other Restricted Subsidiaries that result in the proceeds of the intercompany Investment being substantially simultaneously invested in any Loan Party shall be permitted pursuant to this clause (i)), (ii) by any Restricted Subsidiary in any Loan Party (other than Holdings), (iii) by any Non Guarantor Subsidiary in any other Non-Guarantor Subsidiary, (iv) by any Loan Party in any Non- Guarantor Subsidiary; provided that Investments pursuant to clause (iv) (together with the aggregate amount of Proposed Acquisitions by Loan Parties in assets that are not (or do not become) owned by a Loan Party or in Capital Stock in Persons that do not become Loan Parties upon consummation of such acquisition and Investments by Loan Parties in Persons that are not Loan Parties pursuant to Section 7.7(q)(i)) shall not, in the aggregate exceed (measured at the time such Investment is made, as valued at the Fair Market Value and including all related commitments for future Investments), in each case, after the Closing Date, the greater of (x) $18,750,000 and (y) 25% of Consolidated EBITDA as of the last day of the most recently ended Test Period, at any time outstanding, and (v) in the Borrower, Restricted Subsidiary or other Subsidiary to the extent of such Investment existing on the Closing Date;

 

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(d)                                 (i) Permitted Acquisitions consummated after the Closing Date and (ii) any Investment in any Non-Guarantor Subsidiary in an amount required to permit such Non-Guarantor Subsidiary to consummate a Permitted Acquisition, which amount is actually applied by such Non- Guarantor Subsidiary to consummate such Permitted Acquisition substantially concurrently with the making of such Investment;

 

(e)                                  loans and advances of payroll payments or other compensation to present or former Employees of any Parent Company (to the extent such payments or other compensation relate to services provided to such Parent Company (but excluding, for the avoidance of doubt, the portion of any such amount, if any, attributable to the ownership or operations of any subsidiary of any Parent Company other than the Group Members and/or their subsidiaries)), the Borrower and/or any Subsidiary in the ordinary course of business;

 

(f)                                   Investments (i) in existence on, or contractually committed to or contemplated as of, the Closing Date and listed on Schedule 7.7 and (ii) any modification, replacement, renewal or extension of any Investment described in clause (i) above so long as no such modification, renewal or extension increases the amount of such Investment except by the terms thereof or as otherwise permitted by this Section 7.7;

 

(g)                                  Investments of the Borrower or any Restricted Subsidiary under Hedge Agreements permitted hereunder;

 

(h)                                 (i) Investments of the Borrower or any Restricted Subsidiary acquired after the Closing Date, or of any Person acquired by, or merged into or consolidated or amalgamated with, any Group Member after the Closing Date, in each case as part of an Investment otherwise permitted by this Section 7.7, to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger, amalgamation or consolidation and were in existence on the date of the relevant acquisition, merger, amalgamation or consolidation and (ii) any modification, replacement, renewal or extension of any Investment permitted under clause (i) above so long as no such modification, replacement, renewal or extension thereof increases the amount of such Investment except as otherwise permitted by this Section 7.7;

 

(i)                                     Investments made by any Unrestricted Subsidiary prior to the date on which such Unrestricted Subsidiary is designated as a Restricted Subsidiary, so long as such Investments were not made in contemplation of the designation of such Unrestricted Subsidiary as a Restricted Subsidiary;

 

(j)                                    Subsidiaries of a Group Member may be established or created (but not capitalized unless otherwise permitted under this Section 7.7);

 

(k)                                 Investments consisting of (or resulting from) Indebtedness permitted under Section 7.2 (other than Indebtedness permitted under clause (b) or (e)), Permitted Liens, mergers, consolidations, amalgamations, liquidations, windings up, dissolutions permitted under Section 7.4 (other than in reliance on clause (e) or (f)), Dispositions permitted by Section 7.5 (other than in reliance on clause (m)), Restricted Payments permitted under Section 7.6 (other in reliance on clause (j)) and Restricted Debt Payments permitted under Section 7.8;

 

(l)                                     (i) Guarantees of leases (other than Capital Leases) of Group Members or of other obligations of Group Members not constituting Indebtedness and (ii) Guarantees of obligations of suppliers, customers, franchisees and licensees of the Borrower and/or its Restricted Subsidiaries, in each case, in the ordinary course of business;

 

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(m)                             Investments received (i) in connection with the bankruptcy or reorganization of any Person, (ii) in satisfaction or partial satisfaction of accounts receivable or notes receivable from financially troubled account debtors, including Investments received in connection with the bankruptcy or reorganization of suppliers or customers and in settlement of delinquent obligations of, and other disputes with, customers arising in the ordinary course of business, (iii) upon foreclosure with respect to any secured Investment or other transfer of title with respect to any secured Investment and/or (iv) as a result of the settlement, compromise, resolution of litigation, arbitration or other disputes;

 

(n)                                 Investments in the ordinary course of business consisting of endorsements for collection or deposit and customary trade arrangements with customers;

 

(o)                                 loans and advances to any Parent Company in lieu of, and not in excess of the amount of, dividends permitted to be made to such Parent Company in accordance with Section 7.6;

 

(p)                                 loans or advances to present or former Employees (or any of their respective affiliates, spouses, former spouses, other immediate family members, successors, executors, administrators, heirs, legatees or distributees) of any Parent Company, any Group Member or any Subsidiary or joint venture of any Group Member to the extent permitted by applicable Law, in connection with such Person’s purchase of Capital Stock of any Parent Company or the Borrower, either (i) in an aggregate principal amount not to exceed $1,000,000 at any one time outstanding or (ii) so long as the proceeds of such loan or advance are substantially contemporaneously contributed to a Group Member for the purchase of such Capital Stock;

 

(q)                                 additional Investments (including Investments in minority investments, Investments in Unrestricted Subsidiaries, Investments in joint ventures or similar entities that do not constitute Restricted Subsidiaries, Investments constituting acquisitions and Investments in Restricted Subsidiaries that are not, and do not become, Subsidiary Guarantors); provided that the aggregate amount of such additional Investments shall not exceed the sum of:

 

(i)                                     the greater of $15,000,000 and 20% of Consolidated EBITDA as of the last day of the most recently ended Test Period (it being understood that the aggregate amount of Investments in reliance on this clause (q)(i) in Persons that are not Loan Parties (together with the aggregate amount of Proposed Acquisitions by Loan Parties in assets that are not (or do not become) owned by a Loan Party or in Capital Stock in Persons that do not become Loan Parties upon consummation of such acquisition and the aggregate amount of Investments by Loan Parties in Non-Guarantor Subsidiaries pursuant to Section 7.7(c)(iv)) shall not exceed the greater of $18,750,000 and 25% of Consolidated EBITDA as of the last day of the most recently ended Test Period), plus

 

(ii)                                  (x) so long as no Event of Default shall have occurred and is continuing or would result therefrom and (y) the Borrower is in compliance with the financial covenant set forth in Section 7.1, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period, $40,000,000, minus the amount of Restricted Payments made by the Group Members in reliance on Section 7.6(h), minus the amount of Restricted Debt Payments made by the Group Members in reliance on Section 7.8(a)(v)(B); plus

 

(iii)                               the greater of $5,000,000 and 6.67% of Consolidated EBITDA, minus the amount of the Restricted Debt Payments made by the Group Members in reliance on Section 7.8(a)(v)(A); plus

 

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(iv)                              in the event that (A) any Group Member makes any Investment after the Closing Date in any Person that is not a Subsidiary and (B) such Person subsequently becomes a Restricted Subsidiary, an amount equal to 100% of the Fair Market Value of such Investment as of the date on which such Person becomes a Restricted Subsidiary; 

 

(r)                                    purchases of inventory, supplies and materials in the ordinary course of business;

 

(s)                                   the First Amendment Transactions on the Acquisition Closing Date;

 

(t)                                    (s)advances to Employees for travel, moving and relocation expenses in the ordinary course of business;

 

(u)                                 (t)Investments received in lieu of cash in connection with any Disposition permitted by Section 7.5;

 

(v)                                 (u)Investments to the extent that payment therefor is made solely with Capital Stock of the Borrower or any Parent Company to the extent not resulting in a Change of Control;

 

(w)                               (v) Investments made by any Non-Guarantor Subsidiary with the proceeds received by such Non-Guarantor Subsidiary from an Investment made by any Loan Party in such Non- Guarantor Subsidiary pursuant to this Section 7.7 (other than Investments made pursuant to Section 7.7(d)(ii));

 

(x)                                 (w)Investments in Subsidiaries in connection with internal reorganizations and/or restructurings and activities related to tax planning; provided that, after giving effect to any such reorganization, restructuring or activity, neither the guaranties provided by the Guarantors, taken as a whole, nor the security interest of the Collateral Agent in the Collateral, taken as a whole, is materially impaired;

 

(y)                                 (x)Investments consisting of the licensing of Intellectual Property pursuant to joint marketing arrangements with other Persons entered into in the ordinary course of business;

 

(z)                                  (y)Investments made in joint ventures as required by, or made pursuant to, customary buy/sell arrangements between the joint venture parties set forth in joint venture agreements and similar binding arrangements entered into in the ordinary course of business;

 

(aa)                          (z)unfunded pension fund and other employee benefit plan obligations and liabilities to the extent that the same are permitted to remain unfunded under applicable Law;

 

(bb)                          (aa) Investments in Holdings, any Group Member, any Subsidiary of any Group Member and/or any joint venture in connection with intercompany cash management arrangements and related activities in the ordinary course of business;

 

(cc)                            (bb) Investments (i) constituting deposits, prepayments and/or other credits to suppliers, (ii) made in connection with obtaining, maintaining or renewing client and customer contracts and/or (iii) in the form of advances made to distributors, suppliers, licensors and licensees, in each case, in the ordinary course of business or, in the case of clause (iii), to the extent necessary to maintain the ordinary course of supplies to the Group Members;

 

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(dd)                          (cc) Investments made after the Closing Date in an aggregate amount at any time outstanding amount not to exceed (i) so long as (x) no Event of Default shall have occurred and is continuing and (y) the Borrower is in compliance with the financial covenant set forth in Section 7.1, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period, the Available Amount at such time, plus, (ii) the Available Equity Amount at such time plus (iii) the Available Excluded Contribution Amount at such time; provided, however, that, in the case of clause (i) above, the Borrower shall deliver a certificate of a Responsible Officer certifying (and demonstrating in reasonable detail) compliance with the foregoing requirements; and

 

(ee)                            (dd) additional Investments so long as, after giving effect thereto on a Pro Forma Basis, the Total Leverage Ratio would not exceed 3.54.00:1.00 as of the last day of the most recently ended Test Period.

 

7.8                               Optional Payments of Certain Indebtedness; Modifications of Certain Agreements and Instruments. (a) Pay, prepay, redeem, purchase, defease or otherwise satisfy for value prior to the scheduled maturity thereof any amount owing with respect to any Restricted Debt (collectively, “Restricted Debt Payments”), except for:

 

(i)                                     payments of regularly scheduled interest and payments of fees, expenses and indemnification obligations as and when due (other than payments with respect to Subordinated Debt that are prohibited by the subordination provisions thereof);

 

(ii)                                  the refinancing thereof (in whole or part) with the Net Cash Proceeds of any Indebtedness (to the extent such Indebtedness constitutes Permitted Refinancing Debt, and, in any case, is permitted to be incurred pursuant to Section 7.2);

 

(iii)                               (A)  Restricted Debt Payments in exchange for Qualified Capital Stock of the Borrower or any Parent Company and (B) Restricted Debt Payments as a result of the conversion of all or any portion of any Restricted Debt into Qualified Capital Stock of the Borrower or any Parent Company;

 

(iv)                              additional Restricted Debt Payments in an amount equal to (A) the Available Excluded Contribution Amount at such time, plus (B) the Available Equity Amount at such time, plus (C) so long as (x) no Event of Default shall have occurred and is continuing and (y) the Borrower is in compliance with the financial covenant set forth in Section 7.1, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period, the Available Amount at such time (other than the portion thereof consisting of clauses (a)(i) and (a)(ii) of the definition of the Available Amount), plus (D) so long as (x) no Event of Default shall have occurred and is continuing and (y) the Borrower is in compliance with the financial covenant set forth in Section 7.1, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period and (z) the First Lien Leverage Ratio, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period, is less than 4.20:1.00, amounts available under clauses (a)(i) and (a)(ii) of the definition of the Available Amount; provided, however, that, in the case of clauses (C) and (D) above, the Borrower shall deliver a certificate of a Responsible Officer certifying (and demonstrating in reasonable detail) compliance with the foregoing requirements;

 

(v)                                 (A)  the greater of $5,000,000 and 6.67% of Consolidated EBITDA, minus the outstanding amount of Investments made in reliance on Section 7.7(q)(iii), plus (B) (x) so long as no Event of Default shall have occurred and is continuing or would result

 

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therefrom and (y) the Borrower is in compliance with the financial covenant set forth in Section 7.1, calculated on a Pro Forma Basis after giving effect thereto as of the last day of the most recently ended Test Period, additional Restricted Debt Payments in an aggregate amount not to exceed $40,000,000, minus (1) the amount of Restricted Payments made in reliance on Section 7.6(h), minus (2) the outstanding amount of Investments made in reliance on Section 7.7(q)(ii);

 

(vi)                              so long as no Event of Default shall have occurred and is continuing or would result therefrom, additional Restricted Debt Payments; provided that, after giving effect thereto on a Pro Forma Basis, the Total Leverage Ratio as of the last day of the most recently ended Test Period would not exceed 3.503.25:1.00;

 

(vii)                           as part of an applicable high yield discount obligation catch-up payment; and

 

(viii)                        mandatory prepayments of any Specified Junior Debt Facility (and related payments of interest) made with Retained Declined Proceeds;

 

(b)                                 Amend, modify or otherwise change, or consent or agree to any amendment, modification, waiver or other change in, the terms of any Restricted Debt (or the documentation governing any Restricted Debt) if, taken together with all other amendments or modifications, waivers and other changes, the effect thereof is materially adverse to the interests of the Lenders (in their capacities as such) other than to the extent permitted by the terms of any applicable intercreditor or subordination agreement (including the Intercreditor Agreement); provided that, for purposes of clarity, it is understood and agreed that the foregoing limitation shall not otherwise prohibit any Permitted Refinancing Debt or any other replacement, refinancing, amendment, supplement, modification, extension, renewal, restatement or refunding of any Restricted Debt, in each case, that is permitted under the Loan Documents in respect thereof.

 

(c)                                  Amend, modify or otherwise change their respective Organizational Documents in a manner materially adverse to the Lenders (in their capacities as such) without obtaining the prior written consent of the Administrative Agent; provided that, for purposes of clarity, it is understood and agreed that any Group Member may, without the prior consent of the Administrative Agent or any other Person, effect a change to its organizational form and/or consummate any other transaction that is permitted under Section 7.4 and consummate the First Amendment Transactions.

 

7.9                               Transactions with Affiliates. Enter into any transaction involving payment in excess of $2,500,000 with any of their respective Affiliates, whether or not in the ordinary course of business, other than:

 

(a)                                 transactions between or among Loan Parties and Restricted Subsidiaries or any entity that becomes a Restricted Subsidiary as a result of such transaction which transaction is otherwise permitted hereunder;

 

(b)                                 transactions on terms substantially as favorable to the Group Members as would be obtainable by such Group Member at the time in a comparable arm’s-length transaction with a Person other than an Affiliate;

 

(c)                                  [Reserved];the First Amendment Transactions occurring on the Acquisition Closing Date (including the issuance of Capital Stock of any Parent Company to any Employee of

 

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any Parent Company or any Group Member) and the payment of fees and expenses related to the Transactions and/or First Amendment Transactions;

 

(d)                                 (i)  so long as no Event of Default under Sections 8.1(a) or 8.1(f) then exists or would result therefrom, the payment of management, monitoring, advisory and similar fees to any InvestorSponsor in an aggregate amount in any fiscal year not to exceed the greater of $4,000,0005,000,000 and 5.00% of Consolidated EBITDA (it being understood that the first year’s management fee of $5,000,000 shall be prepaid by the Borrower on the Acquisition Closing Date), (ii) so long as no Event of Default under Sections 8.1(a) or 8.1(f) then exists or would result therefrom, consulting and/or operational consulting fees to the InvestorsSponsors and (iii) related indemnities and reasonable expenses relating to the services described in clauses (i) and (ii) above; provided that upon the occurrence and during the continuance of an Event of Default under Sections 8.1(a) or 8.1(f) such amounts under clause (i) and clause (ii) may accrue, but not be payable in cash during such period, but all such accrued amounts (plus accrued interest, if any, with respect thereto) may be payable in cash upon the cure, termination or waiver of such Event of Default (notwithstanding the cap set forth in clause (i));

 

(e)                                  Restricted Payments permitted under Section 7.6;

 

(f)                                   loans, Investments and other transactions to the extent permitted under Section 7.2(b), (c), (e) and (v), Section 7.4, Section 7.5(d), (j), (h), (r) and (u) and Section 7.7(c)(i), (e), (j), (o), (p), (t), (u), (w), (x) and (bb);

 

(g)                                  employment and severance or termination arrangements between any Group Member and any of the Group Members’ respective Employees (including management and employee benefit plans or agreements, subscription agreements or similar agreements pertaining to the repurchase of Capital Stock pursuant to put/call rights or similar rights with current or former Employees and stock option or incentive plans and other compensation arrangements) in the ordinary course of business and otherwise permitted under this Agreement;

 

(h)                                 transactions pursuant to permitted agreements in existence on the Closing Date and set forth on Schedule 7.9 or any amendment thereto to the extent such an amendment, taken as a whole, is not adverse to the Lenders in any material respect;

 

(i)                                     the payment of customary fees and reasonable out of pocket costs to, and indemnities provided on behalf of, Employees of the Group Members or of any Parent Company in the ordinary course of business to the extent attributable to the ownership or operation of the Group Members;

 

(j)                                    [Reserved];on the Acquisition Closing Date, payment to Z Capital Partners LLC of (i) a debt placement fee in an amount not to exceed 0.50% of the aggregate amount of (x) the Initial Facilities, plus (y) the Additional Initial Term Loans (as defined in the First Amendment) plus (z) the Second Lien Term Loans and (ii) a transaction fee in an amount not to exceed 0.50% of the enterprise value of the Borrower;

 

(k)                                 any issuance of Capital Stock of the Borrower or any Parent Company, or other payments, awards or grants in cash, securities, Capital Stock of the Borrower any Parent Company pursuant to, or the funding of, employment arrangements, stock options and stock ownership plans approved by the board of directors of any Parent Company or the Borrower; and

 

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(l)                                     transactions with customers, clients, suppliers, joint ventures, purchasers or sellers of goods or services or providers of employees or other labor entered into in the ordinary course of business, which are (i) fair to the Group Members in the good faith determination of the board of directors (or similar governing body) of the Borrower or the senior management thereof or (ii) on terms at least as favorable as might reasonably be obtained from a Person other than an Affiliate.

 

7.10                        Restrictive Agreements.                 Enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or limits (a) the ability of the Borrower or any Loan Party to create, incur, assume or suffer to exist any Lien upon any of its Property or revenues, whether now owned or hereafter acquired, to secure the Secured Obligations or its obligations under the Guarantee and Collateral Agreement or (b) the ability of any Restricted Subsidiary to pay dividends or other distributions with respect to any of its Capital Stock or to make or repay loans or advances to the Borrower or any other Restricted Subsidiary, other than (i) this Agreement and, the other Loan Documents, the Second Lien Term Loan Agreement and any “Loan Documents” under and as defined in the Second Lien Term Loan Agreement, (ii) the documentation governing Indebtedness permitted under Section 7.2(a)(ii), (a)(iv), (g), (h), (i) and (r) (in the case of each of the foregoing other than clause (h)(i)(1), so long as such restrictions are not materially more restrictive than the terms of the Loan Documents), (iii) with respect to clause (a) only, any agreements governing any purchase money Liens or Capital Lease Obligations otherwise permitted hereby (in which case, any prohibition or limitation shall only be effective against the assets secured thereby and the proceeds thereof), (iv) with respect to clause (a) only, Contractual Obligations incurred in the ordinary course of business and on customary terms which limit Liens on such Contractual Obligation, (v) prohibitions and limitations in effect on the date hereof and listed on Schedule 7.10, (vi) with respect to clause (a) only, customary provisions restricting the subletting or assignment of any lease governing a leasehold interest, (vii) customary restrictions and conditions contained in any agreement relating to a Disposition permitted by Section 7.5; provided that such restrictions and conditions apply only to the asset or Person to be sold, (viii) customary provisions in joint venture agreements and other similar agreements applicable to joint ventures permitted under Section 7.7 and applicable solely to such joint venture and entered into in the ordinary course of business, (ix) any prohibition or limitation that exists pursuant to any applicable Law, (x) with respect to clause (a) only, restrictions on pledges or other deposits expressly permitted by Section 7.3 imposed by agreements entered into in the ordinary course of business, (xi) with respect to clause (a) only, restrictions on cash or other deposits or net worth imposed by suppliers, landlords, customers, insurance and surety or bonding companies under contracts entered into in the ordinary course of business, and (xii) with respect to clause (a) only, provisions restricting the granting of a security interest in intellectual property contained in licenses or sublicenses by the Borrower and its Restricted Subsidiaries of such intellectual property, which licenses and sublicenses were entered into in the ordinary course of business (in which case such restriction shall relate only to such intellectual property).

 

7.11                        Limitation on Activities of Holdings. In the case of Holdings only, notwithstanding anything to the contrary in this Agreement or any other Loan Document:

 

(a)                                 conduct, transact or otherwise engage in any business or operations other than (i) those incidental to its ownership of the Capital Stock of the Borrower and those incidental to other Investments by or in Holdings (including the issuance of preferred Capital Stock (other than Disqualified Capital Stock) in consideration for the purchase of its Capital Stock from present or former Employees (and their spouses, former spouses, heirs, estates and assigns) of any Group Member or pursuant to any equity subscription, shareholder, employment or other agreement), (ii) activities incidental to the maintenance of its existence and compliance with applicable Laws and legal, tax and accounting matters

 

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related thereto, (iii) activities relating to the performance of obligations under the Loan Documents, the Second Lien Term Loan Agreement and any “Loan Documents” under and as defined in the Second Lien Term Loan Agreement and any Specified Junior Debt Facility to which it is a party or in respect of which Holdings is a guarantor or any other Indebtedness otherwise permitted hereunder for which Holdings provides a guarantee, (iv) the receipt and payment by Holdings of Restricted Payments permitted under Section 7.6, (v) preparing reports to Governmental Authorities and to its shareholders, (vi) providing indemnification for its Employees, (vii) making payments of the type permitted under Section 7.9 and the performance of its obligations under any document, agreement and/or Investment contemplated by the First Amendment Transactions or Investments consisting of Guarantee Obligations (other than in respect of Indebtedness) entered into in the ordinary course of business, (viii) the other transactions expressly permitted under this Section 7.11 and (ix) activities incidental to any of the foregoing;

 

(b)                                 incur, create, assume or suffer to exist any Indebtedness or any Liens on its assets, except (i) the Indebtedness incurred by Holdings under the Loan Documents (and any Permitted Refinancing Debt in respect of the Indebtedness thereunder), the Second Lien Term Loan Agreement and any “Loan Documents” under and as defined in the Second Lien Term Loan Agreement and any Specified Junior Debt Facility or otherwise in connection with the First Amendment Transactions, (ii) Guarantee Obligations or other obligations of the Group Members that are otherwise permitted hereunder, (iii) the Liens created under the Security Documents to which it is a party (and, in each case, under the security documents entered into in connection with any Permitted Refinancing Debt in respect thereof) and, subject to the Intercreditor Agreement and the applicable Acceptable Intercreditor Agreement, any security documents relating to aany Specified Junior Debt Facility, (iv) Permitted Liens on the Collateral that are secured on a pari passu or junior basis with the Secured Obligations, (v) Permitted Liens arising in the ordinary course of business or by operation of Law and (vi) the other transactions expressly permitted under this Section 7.11;

 

(c)                                  own, lease, manage or otherwise operate or transfer any properties or assets (including cash other than (i) the ownership of shares of Capital Stock of the Borrower and de minimis amounts of other assets incidental to its business, (ii) (A) cash, Cash Equivalents and other assets received in connection with Restricted Payments permitted under Section 7.6 received from any of its Subsidiaries or permitted contributions to the capital of, or proceeds from the issuance of Capital Stock of, Holdings pending the application thereof and (B) the proceeds of Indebtedness permitted by Section 7.2, (iii) the other transactions expressly permitted under this Section 7.11 and (iv) assets temporarily held by Holdings pending contribution to the Borrower or any other Group Member);

 

(d)                                 consummate any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its Property or business; or

 

(e)                                  change its fiscal year from December 31; provided, however, that Holdings may, upon written notice to, and consent by, the Administrative Agent, change the financial reporting convention specified above to any other financial reporting convention reasonably acceptable to the Administrative Agent, in which case Holdings and the Administrative Agent will, and are hereby authorized by the Lenders to, make any adjustments to this Agreement and the other Loan Documents that are necessary in order to reflect such change in financial reporting.

 

Notwithstanding anything herein to the contrary, Holdings may merge or consolidate with or into any other Person (other than the Borrower) so long as: (i) Holdings shall be the continuing or surviving corporation or, in the case of a merger or consolidation in which Holdings is not the continuing or surviving Person, the Person formed by or surviving any such merger or consolidation

 

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shall be an entity organized or existing under the laws of the United States, any state thereof, the District of Columbia or any territory thereof (Holdings or such Person, as the case may be, being herein referred to as the “Successor Holdings”), (ii) the Successor Holdings (if other than Holdings) shall expressly assume all the obligations of Holdings under this Agreement and the other Loan Documents pursuant to a supplement hereto or thereto in form reasonably satisfactory to the Administrative Agent, (iii) no Event of Default has occurred and is continuing at the date of such merger, consolidation or liquidation or would result from such merger, consolidation or liquidation, (iv) each Subsidiary Guarantor, unless it is the other party to such merger or consolidation, or unless the Successor Holdings is Holdings, shall have by a supplement to the Guarantee and Collateral Agreement in form reasonably satisfactory to the Administrative Agent confirmed that its obligation under the Guarantee and Collateral Agreement shall apply to the Successor Holdings’ obligations under this Agreement, (v) the Successor Holdings shall, immediately following such merger, consolidation or liquidation directly or indirectly own all Subsidiaries owned by Holdings immediately prior to such merger, consolidation or liquidation; (vi) the Secured Parties’ rights and remedies under the Loan Documents, taken as a whole, including their rights and remedies with respect to any Collateral owned by the Successor Holdings, and the Successor Holdings’ obligations under the Guarantee and Collateral Agreement, will not be impaired in any manner as a result of such merger, consolidation or liquidation and (vii) if reasonably requested by the Administrative Agent, an opinion of counsel shall be required to be provided to the effect that such merger, consolidation or liquidation does not violate this Agreement or any other Loan Document; provided that, if the foregoing are satisfied, the Successor Holdings (if other than Holdings) will succeed to, and be substituted for, Holdings under this Agreement; provided, further, that the Borrower agrees to provide any documentation and other information regarding the Successor Holdings as shall have been reasonably requested in writing by any Lender through the Administrative Agent that such Lender shall have reasonably determined is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act.

 

SECTION 8                               EVENTS OF DEFAULT

 

8.1                               Events of Default.

 

If any of the following events shall occur and be continuing:

 

(a)                                 the Borrower shall fail to pay (i) any principal of any Loan or Reimbursement Obligation when due in accordance with the terms hereof or (ii) any interest owed by it on any Loan or any other amount payable by it hereunder or under any other Loan Document within five Business Days after any such interest or other amount becomes due in accordance with the terms hereof; or

 

(b)                                 Any representation or warranty made or deemed made by any Loan Party herein or in any other Loan Document or that is contained in any certificate required to be delivered in connection herewith or therewith shall prove to have been inaccurate in any material respect on or as of the date made or deemed made or furnished; or

 

(c)                                  Any Loan Party shall default in the observance or performance of any agreement contained in (i) any of Section 6.4(a)(i) (solely with respect to the Borrower), Section 6.7(a) (provided that the delivery of a notice of Default or Event of Default at any time will cure such Event of Default arising from the failure to timely deliver such notice of Default or Event of Default, as applicable), Section 6.10, Section 6.11, Section 7 (other than Section 7.1(a)) or Section 10.24 or (ii) Section 7.1(a); provided that an Event of Default under Section 7.1(a) is subject to a cure pursuant to Section 7.1(b); or

 

(d)                                 Any Loan Party shall default in the observance or performance of any other agreement contained in this Agreement or any other Loan Document (other than as provided in clause (a)

 

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or (c) of this Section 8.1), and such default shall continue unremedied for a period of thirty days after receipt by Borrower of written notice from the Administrative Agent; or

 

(e)                                  (1)  Holdings or any Group Member shall (i) default in making any payment of any principal of, interest on, or any other amount payable with respect to, any Indebtedness (excluding the Obligations and any Hedge Agreement) beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created; or (ii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event of default shall occur, in each case, beyond the period of grace, if any, provided in the applicable instrument or agreement, the effect of which event of default described in clauses (i) or (ii) of this clause (e)(1) is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness to become due (or redeemable) prior to its stated maturity or to become subject to a mandatory offer to purchase by the obligor thereunder prior to its stated maturity; provided that (A) a default, event or condition described in this paragraph shall not at any time constitute an Event of Default unless, at such time, one or more defaults or events of default of the type described in this paragraph shall have occurred and be continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $10,000,000, (B) a default, event or condition described in this paragraph shall not at any time constitute an Event of Default unless, at such time such default or event or condition is unremedied and is not waived by the holders of such Indebtedness, and (C) this paragraph (e)(1) shall not apply to (I) secured Indebtedness that becomes due as a result of the sale, transfer, destruction or other disposition of the Property or assets securing such Indebtedness if such sale, transfer, destruction or other disposition and the prepayment of such secured Indebtedness are permitted hereunder or (II) any Guarantee Obligations except to the extent such Guarantee Obligations shall become due and payable by Holdings or any Group Member and remain unpaid after any applicable grace period permitted following demand for the payment thereof; or (2) there occurs under any Hedge Agreement an early termination date resulting from any event of default under such Hedge Agreement as to which Holdings or any Group Member is the defaulting party and the net swap termination value owned by Holdings or such Group Member as a result thereof is greater than $10,000,000; or

 

(f)                                   (i) Holdings or any Group Member (other than Immaterial Subsidiaries) shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or Holdings or any Group Member (other than any Immaterial Subsidiary) shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against Holdings or any Group Member (other than any Immaterial Subsidiary) any case, proceeding or other action of a nature referred to in clause (i) above that (A) results in the entry of an order for relief by a court of competent jurisdiction or any such adjudication or appointment or (B) remains undismissed, undischarged or unstayed pending appeal for a period of 60 consecutive days; or (iii) Holdings or any Group Member (other than any Immaterial Subsidiary) shall admit in writing its inability to, pay its debts as they become due; or

 

(g)                                  (i) Holdings, the Borrower or any of its Subsidiaries shall incur any liability in connection with any non-exempt “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan that would reasonably be expected to result in a Material Adverse Effect, (ii) the occurrence of any ERISA Event that, when taken together with other ERISA Events that have occurred, would reasonably be expected to result in a Material Adverse Effect, (iii) an

 

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event shall have occurred or failed to occur with respect to a Foreign Pension Plan that, when taken together with any other liability in connection with any such events, would reasonably be expected to result in a Material Adverse Effect or (iv) any other similar event or condition shall occur or exist with respect to a Commonly Controlled Plan that would result in a Material Adverse Effect; or

 

(h)                                 One or more final judgments or decrees of a court of competent jurisdiction shall be entered against Holdings or any Group Member or any of their respective assets involving for Holdings, any Group Member or their respective assets, taken as a whole, for the payment of money (in any case, to the extent not adequately covered by self-insurance, if applicable, or not paid or covered by insurance as to which the applicable third party insurance company has not disputed coverage) of $10,000,000 or more, and such judgments or decrees shall have remained unpaid, unvacated, undischarged, unstayed or unbonded pending appeal for a period of sixty (60) consecutive days from the entry thereof; or

 

(i)                                     (i)  Any of the material Security Documents shall cease, for any reason (other than by reason of the express release thereof pursuant to Section 10.15) to be in full force and effect or shall be asserted in writing by any Loan Party not to be a legal, valid and binding obligation of any party thereto, (ii) any security interests purported to be created by any Security Document shall cease to be, or shall be asserted in writing by any Loan Party not to be, a valid and perfected, security interest in a material portion of the Collateral covered thereby, except to the extent that any such loss of perfection results from the failure of the Collateral Agent to maintain possession of certificates actually delivered to it representing securities pledged under the Guarantee and Collateral Agreement or to file UCC continuation statements after notice from the Borrower to file the same, due to a release of such Collateral in accordance with the terms hereof or thereof or the occurrence of the Facility Termination Date or any other termination of such Collateral Document in accordance with the terms thereof, (iii) any material Guarantee Obligations pursuant to the Guarantee and Collateral Agreement by any Loan Party of any of the Secured Obligations shall cease to be in full force and effect (other than in accordance with the terms thereof), or shall be asserted in writing by any Loan Party not to be in effect or not to be legal, valid and binding obligations (other than as a result of the discharge of such Loan Party in accordance with the terms thereof), or (iv) the Intercompany Subordination Agreement or any other subordination agreement (or subordination provisions incorporated in any Restricted Debt) or any intercreditor agreement ceases to be valid and enforceable against any holder of Indebtedness (the outstanding principal amount of which Indebtedness exceeds $10,000,000) party thereto or any Loan Party shall so assert in writing; or

 

(j)                                    any License Revocation occurs with respect to any Material Gaming Facility; or a disciplinary complaint is filed by any Gaming Authority seeking a License Revocation with respect to any material Gaming Permit issued to or held by the Borrower or any of its Restricted Subsidiaries, provided that the Borrower or such Restricted Subsidiary shall have 90 days from the date of the filing of such disciplinary complaint (or such longer period expressly permitted by the applicable Gaming Authority not to exceed 180 days from the date of the filing of the disciplinary complaint) to cure any issue or deficiency giving rise to the filing of the disciplinary complaint such that the disciplinary complaint is dismissed or settled without a revocation, denial, non-renewal or suspension of any such Gaming Permit or license; or

 

(k)                                 A Change of Control occurs; 

 

then, and in any such event, (A) if such event is an Event of Default specified in Section 8.1(f) with respect to the Borrower, automatically the Commitments shall immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents shall immediately become due and payable and (B) if such event is any other

 

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Event of Default, with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower, declare the Loans hereunder 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), together with accrued interest thereon and all other amounts owing under this Agreement and the other Loan Documents to be due and payable forthwith, whereupon the same shall immediately become due and payable. In the case of all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of (x) an acceleration pursuant to this paragraph or (y) the occurrence of the Revolving Termination Date, the Borrower shall at such time deposit in a cash collateral account opened by the Administrative Agent an amount equal to the Minimum Collateral Amount. Amounts held in such cash collateral account shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been backstopped or been fully drawn upon, if any, shall be applied to repay other obligations of the Borrower hereunder and under the other Loan Documents. After all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other Obligations of the Borrower in respect of such Letters of Credit shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to the Borrower (or such other Person as may be lawfully entitled thereto). Except as expressly provided above in this Section or otherwise in any Loan Document, presentment, demand and protest of any kind are hereby expressly waived by Holdings and the Borrower.

 

SECTION 9                               THE AGENTS

 

9.1                               Appointment.     Each Lender and each Issuing Lender hereby irrevocably appoints CS (or any successor appointed pursuant hereto) to act on its behalf as each Agent hereunder and under the other Loan Documents and authorizes such Agent to take such actions on its behalf and to exercise such powers as are delegated to such Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article (other than Sections 9.1, 9.8(a), 9.9 and 9.11 and the first sentence of Section 9.12) are solely for the benefit of the Agents and the Lenders (including the Issuing Lenders) and the Borrower shall not have rights as a third party beneficiary of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to any Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

 

Each Issuing Lender shall act on behalf of the Revolving Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and each Issuing Lender shall have all of the benefits and immunities (a) provided to the Agents in this Article with respect to any acts taken or omissions suffered by such Issuing Lender in connection with Letters of Credit issued by it or proposed to be issued by it and documents pertaining to such Letters of Credit as fully as if the term “Agent” as used in this Article and the definition of “Agent-Related Person” included such Issuing Lender with respect to such acts or omissions, and (b) as additionally provided herein with respect to each Issuing Lender.

 

9.2                               Delegation of Duties.                               Each Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by such Agent (other than a Disqualified Institution). Each Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of such Agent and any such sub-

 

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agent, and shall apply to their respective activities in connection with the syndication of the Facilities as well as activities as such Agent. No Agent shall be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and non-appealable judgment that such Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

 

9.3                               Exculpatory Provisions.                (a)                                 No Agent shall have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, no Agent shall: (i) be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default has occurred and is continuing; (ii) have any duty to take any discretionary action or exercise any discretionary powers, except (in the case of any Agent) discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that such Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that no Agent shall be required to take any action that, in its opinion or the opinion of its counsel, may expose such Agent to liability or that is contrary to any Loan Document or applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and (iii) except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by such Agent or any of its Affiliates in any capacity.

 

(b)                                 The Administrative Agent shall not be liable to any other Secured Party for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 8 and Section 10.1), or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and non-appealable judgment. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default unless and until the Administrative Agent shall have received written notice from a Lender, an Issuing Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default.”

 

(c)                                  No Agent-Related Person shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, (v) the creation, perfection or priority of any Lien purported to be granted by the Security Documents, (vi) the value or sufficiency of any Collateral, or (vii) the satisfaction of any condition set forth in Section 5 or elsewhere herein, other than (in the case of the Administrative Agent) to confirm receipt of items expressly required to be delivered to it.

 

(d)                                 The Administrative Agent shall not be responsible or have any liability for, or have any duty to ascertain, inquire into, monitor or enforce, compliance with the provisions hereof relating to Disqualified Institutions. Without limiting the generality of the foregoing, the Administrative

 

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Agent shall not (x) be obligated to ascertain, monitor or inquire as to whether any Lender or Participant or prospective Lender or Participant is a Disqualified Institution or (y) have any liability with respect to or arising out of any assignment or participation of Loans, or disclosure of confidential information, to any Disqualified Institution.

 

9.4                               Reliance by the Agents.                 Each 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 (including any electronic message, E-System, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. Each Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to any Borrowing or any draft under any Letter of Credit that by its terms shall be fulfilled to the satisfaction of a Lender or an Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender or such Issuing Lender unless the Administrative Agent shall have received notice to the contrary from such Lender or such Issuing Lender prior to any such Borrowing or Letter of Credit draft. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

9.5                               Non-Reliance on Agents and Other Lenders.                     Each Lender expressly acknowledges that neither the Agents nor any of their officers, directors, employees, agents, attorneys-in-fact or affiliates have made any representations or warranties to it and that no act by the Agents hereafter taken, including any review of the affairs of a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute any representation or warranty by any Agent to any Lender. Each Lender and each Issuing Lender represents to the Agents that it has, independently and without reliance upon any Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of an investigation into the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their affiliates and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender and each Issuing Lender also represents that it will, independently and without reliance upon any Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under the applicable Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their affiliates. Each of the Lenders acknowledges and agrees that outside legal counsel to the Administrative Agent in connection with the preparation, negotiation, execution, delivery and administration (including any amendments, waivers and consents) of this Agreement and the other Loan Documents is acting solely as counsel to the Administrative Agent and is not acting as counsel to any Lender (other than the Administrative Agent and its Affiliates) in connection with this Agreement, the other Loan Documents or any of the transactions contemplated hereby or thereby. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Agents hereunder, the Agents shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Loan Party or any affiliate of a Loan Party that may come into the possession of either Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates.

 

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9.6                               Indemnification.    Whether or not the transactions contemplated hereby are consummated, each Lender shall indemnify upon demand each Agent-Related Person, any Issuing Lender or any Related Party with respect to such Person (in each case, to the extent not reimbursed by or on behalf of the Borrower and without limiting the obligations of any Loan Party to do so) on a pro rata basis (determined as of the time that the applicable payment is sought based on each Lender’s ratable share of the sum of the Total Outstandings and unused Commitments at such time) and hold harmless each Agent-Related Person, any Issuing Lender or any Related Party with respect to such Person against any and all Indemnified Liabilities incurred by it (including any such unpaid Indemnified Liabilities in respect of a claim asserted by such Lender); provided that (a) no Lender shall be liable for payment to any Agent-Related Person, any Issuing Lender or any Related Party with respect to such Person of any portion of such Indemnified Liabilities to the extent determined in a final, non-appealable judgment of a court of competent jurisdiction to have resulted from such Agent-Related Person’s, any Issuing Lender’s or Related Party’s own gross negligence or willful misconduct (and no action taken in accordance with the directions of the Required Lenders shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section) and (b) to the extent any Issuing Lender is entitled to indemnification under this Section solely in its capacity and role as an Issuing Lender, only the Revolving Lenders shall be required to indemnify such Issuing Lender in accordance with this Section (determined as of the time that the applicable payment is sought based on each Revolving Lender’s Revolving Percentage thereof at such time). In the case of any investigation, litigation or proceeding giving rise to any Indemnified Liabilities, this Section 9.6 applies whether any such investigation, litigation or proceeding is brought by any Lender or any other Person. Without limitation of the foregoing, each Lender shall reimburse the Administrative Agent and the Collateral Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including the fees, disbursements and other charges of counsel) incurred by the Administrative Agent or the Collateral Agent in connection with preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights and responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent or the Collateral Agent is not reimbursed for such costs or expenses by or on behalf of the Borrower.

 

To the extent required by any applicable Law, the Administrative Agent may withhold from any payment to any Lender an amount equivalent to any U.S. federal income tax. If the IRS or any other Governmental Authority asserts a claim that the Administrative Agent did not properly withhold U.S. federal income tax from amounts paid to or for the account of any Lender because the appropriate form was not delivered or was not properly executed or because such Lender failed to notify the Administrative Agent of a change in circumstance which rendered the exemption from, or reduction of, U.S. federal income tax ineffective or for any other reason, or if the Administrative Agent reasonably determines that a payment was made to a Lender pursuant to this Agreement without deduction of applicable withholding tax from such payment, such Lender shall indemnify the Administrative Agent fully for all amounts paid, directly or indirectly, by the Administrative Agent as Tax or otherwise, including any penalties or interest and together with all reasonable costs and out-of-pocket expenses (including reasonable fees and expenses of counsel) incurred in connection therewith.

 

This Section 9.6 shall survive the occurrence of the Facility Termination Date and the resignation of the Administrative Agent.

 

9.7                               Agent in Its Individual Capacity.               Any Agent 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 an Agent hereunder, and the term “Lender” or “Lenders” shall, unless otherwise

 

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expressly indicated or unless the context otherwise requires, include the Person serving as such Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not an Agent hereunder and without any duty to account therefor to the Lenders.

 

9.8                               Successor Agents.

 

(a)                                 The Administrative Agent may resign as Administrative Agent upon ten days’ notice to the Lenders, the Issuing Lenders and the Borrower. If the Person serving as Administrative Agent and Collateral Agent is a Defaulting Lender or an Affiliate of a Defaulting Lender, either the Required Lenders or the Borrower may, upon ten days’ notice, remove the Administrative Agent and Collateral Agent.  Upon receipt of any such notice of resignation or delivery of any such notice of removal, the Required Lenders shall appoint a successor Administrative Agent and Collateral Agent (which shall be a commercial bank or trust company with offices in the U.S. having combined capital and surplus in excess of $1,000,000,000) with the consent of the Borrower at all times other than during the existence of an Event of Default under Section 8.1(a) or Section 8.1(f) (with respect to the Borrower), which consent shall not be unreasonably withheld or delayed. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty days following the resignation or removal of the Administrative Agent and Collateral Agent, then (a) in the case of any resignation, the resigning Administrative Agent and Collateral Agent may (but shall not be obligated to), on behalf of the Lenders and the Issuing Lenders, appoint a successor Administrative Agent and Collateral Agent meeting the qualifications set forth above (including, for the avoidance of doubt, the consent of the Borrower to the extent required above) or (b) in the case of a removal, the Borrower may, after consulting with the Required Lenders, appoint a successor Administrative Agent and Collateral Agent meeting the qualifications set forth above. Whether or not a successor has been appointed, such resignation or removal shall become effective in accordance with such notice on such effective date, where (i) the retiring or removed Administrative Agent and Collateral Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent or Collateral Agent on behalf of the Lenders or the Issuing Lenders under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent and Collateral Agent is appointed) and (ii) except for any indemnity payments or other amounts then owed to the retiring or removed Administrative Agent or Collateral Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent or Collateral Agent shall instead be made by or to each Lender and Issuing Lender directly (and each Lender and each Issuing Lender will cooperate with the Borrower to enable the Borrower to take such actions), until such time, if any, as the Required Lenders or the Borrower, as applicable, appoint a successor Administrative Agent and Collateral Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent and Collateral Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Administrative Agent and Collateral Agent, and the retiring or removed Administrative Agent and Collateral Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (other than its obligations under Section 10.14 hereof). The fees payable by the Borrower to a successor Administrative Agent and Collateral Agent shall be the same as those payable to its predecessor unless otherwise agreed among the Borrower and such successor. After an Administrative Agent’s and Collateral Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Section 9 and Section 10.5 shall continue in effect for the benefit of such retiring or removed Administrative Agent and Collateral 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 the retiring or removed Administrative Agent and Collateral

 

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Agent was acting as Administrative Agent and Collateral Agent. Notwithstanding anything to the contrary herein, no Disqualified Institution (nor any Affiliate thereof) may be appointed as a successor Administrative Agent or Collateral Agent.

 

(b)                                 Any resignation by, or removal of, CS, as Administrative Agent pursuant to this Section 9.8 shall also constitute its resignation as an Issuing Lender. If CS resigns as an Issuing Lender, it shall retain all the rights, powers, privileges and duties of an Issuing Lender hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as an Issuing Lender and all L/C Obligations with respect thereto, including the right to require the Lenders to make Loans or fund risk participations in unreimbursed amounts pursuant to Section 3.4. Upon the appointment by the Borrower of a successor Issuing Lender hereunder (which successor shall in all cases be a Lender other than a Defaulting Lender), (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Issuing Lender and (b) the retiring Issuing Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (c) the successor Issuing Lender shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring Issuing Lender to effectively assume the obligations of the retiring Issuing Lender with respect to such Letters of Credit.

 

9.9                               Authorization to Execute other Loan Documents; Collateral.

 

(a)                                 Each Lender (and each other Secured Party by accepting the benefits of the Collateral) authorizes the Administrative Agent and/or the Collateral Agent to enter into each of the Loan Documents (including, without limitation, any intercreditor or subordination agreement contemplated by the terms hereof, each Joinder Agreement and each Extension Agreement) (other than this Agreement) and to take all action contemplated by such Loan Documents and agrees that it shall be bound by such Loan Documents as if a signatory thereto. Each Lender (and each other Secured Party by accepting the benefits of the Collateral) agrees (except to the extent provided in Section 9.8(a) following the resignation of the Administrative Agent and Collateral Agent) that no Secured Party, other than the Administrative Agent and/or the Collateral Agent acting on behalf of all Secured Parties, shall have the right individually to seek to realize upon the security granted by any Loan Document, it being understood and agreed that such rights and remedies may be exercised solely by the Administrative Agent and/or the Collateral Agent for the benefit of the Secured Parties, upon the terms of the Loan Documents.

 

(b)                                 Each Lender (and each other Secured Party by accepting the benefits of the Collateral) hereby authorizes and instructs the Collateral Agent to release any Lien or Guarantee Obligation granted to or held by the Collateral Agent upon any Collateral and to subordinate any Lien on any Collateral granted to or held by the Collateral Agent under any Loan Document as contemplated by Section 10.15 hereof. Upon request by the Administrative Agent or the Collateral Agent at any time, the Required Lenders will confirm in writing the Collateral Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations pursuant to this Section 9.9.

 

(c)                                  No Agent shall be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Collateral Agent’s Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall any Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.

 

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9.10                        Lead Arrangers.      None of the Lead Arrangers, Syndication Agent or Joint Bookrunners identified on the cover page of this Agreement shall have any rights, powers, obligations, liabilities, responsibilities or duties under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, the Collateral Agent, a Lender or an Issuing Lender hereunder. Without limiting any other provision of this Article, none of the Lead Arrangers, Syndication Agent or Joint Bookrunners in their respective capacities as such shall have or be deemed to have any fiduciary relationship with any Lender (including any Issuing Lender) or any other Person by reason of this Agreement or any other Loan Document.

 

9.11                        Administrative Agent May File Proofs of Claim; Credit Bidding.   In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on any such Loan Party) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

 

(a)                                 to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, all L/C Obligations and all other Secured Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Lenders, the Administrative Agent and the other Secured Parties (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuing Lenders, the Administrative Agent, the other Secured Parties and their respective agents and counsel and all other amounts due to the Lenders, the Issuing Lenders and the Administrative Agent under Sections 2.9 and 10.5) allowed in such judicial proceeding; and

 

(b)                                 to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; 

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender, each Issuing Lender and each other Secured Party accepting the benefits of the Collateral to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Lenders and the other Secured Parties, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.9 and 10.5.

 

The parties hereto and each other Secured Party accepting the benefits of the Collateral hereby irrevocably authorize the Administrative Agent, based upon the instruction of the Required Lenders, to (a) credit bid and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral at any sale thereof conducted under the provisions of the Bankruptcy Code of the United States, including under Section 363 of the Bankruptcy Code of the United States or any similar Laws in any other jurisdictions to which a Loan Party is subject, or (b) credit bid and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral at any other sale or foreclosure conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with applicable Law. In connection with any such credit bid and purchase, the Secured Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid on a ratable basis (with Secured Obligations with respect to contingent or unliquidated claims being estimated for such

 

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purpose if the fixing or liquidation thereof would not unduly delay the ability of the Administrative Agent to credit bid and purchase at such sale or other disposition of the Collateral and, if such claims cannot be estimated without unduly delaying the ability of the Administrative Agent to credit bid, then such claims shall be disregarded, not credit bid, and not entitled to any interest in the asset or assets purchased by means of such credit bid) and the Secured Parties whose Secured Obligations are credit bid shall be entitled to receive interests (ratably based upon the proportion of their Secured Obligations credit bid in relation to the aggregate amount of Secured Obligations so credit bid) in the asset or assets so purchased (or in the Capital Stock of the acquisition vehicle or vehicles that are used to consummate such purchase). Upon request by the Administrative Agent, the Collateral Agent or the Borrower at any time, the Secured Parties will confirm in writing the Collateral Agent’s authority to release any such Liens on particular types or items of Collateral pursuant to this Section 9.11.

 

9.12                        Cash Management Agreements and Secured Hedge Agreements. Except as otherwise expressly set forth herein, no holder of Cash Management Obligations or Hedge Counterparty that obtains the benefit of the provisions of Section 2.18(f), the Guarantee and Collateral Agreement or any Collateral by virtue of the provisions hereof or any Security Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) (or to notice of or to consent to any amendment, waiver or modification of the provisions hereof or of the Guarantee and Collateral Agreement or any Security Document) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Section 9 to the contrary, no Agent shall be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Secured Obligations arising under Cash Management Obligations and Specified Hedge Agreements except to the extent expressly provided herein and unless the such Agent has received written notice of such Secured Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable holder of Cash Management Obligations or Hedge Counterparty, as the case may be. The Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Secured Obligations arising under Cash Management Documents and Specified Hedge Agreements in the case of a Facility Termination Date.

 

9.13                        Acknowledgement and Consent to Bail-In of EEA Financial Institutions.    Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by (a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution and (b) the effects of any Bail-in Action on any such liability, including, if applicable, (i) a reduction in full or in part or cancellation of any such liability, (ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document or (iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

 

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SECTION 10                        MISCELLANEOUS

 

10.1                        Amendments and Waivers.

 

(a)                                 Except as otherwise expressly set forth in this Agreement, neither this Agreement, any other Loan Document, nor any terms hereof or thereof may be amended (including this Section 10.1), supplemented or modified except in accordance with the provisions of this Section 10.1. The Required Lenders and each Loan Party to the relevant Loan Document may, or, with the written consent of the Required Lenders, the Administrative Agent (or the Collateral Agent if it (but not the Administrative Agent) is a party thereto) and each Loan Party to the relevant Loan Document may, from time to time, (a) enter into written amendments, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights or obligations of the Agents, the Issuing Lenders, the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and conditions as the Required Lenders or the Administrative Agent and/or the Collateral Agent, as applicable, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (i) forgive or reduce the principal amount or extend the final scheduled date of maturity of any Loan, extend the scheduled date or reduce the amount of any amortization payment in respect of any Term Loan, reduce the stated rate of any interest or fee or other amounts payable hereunder (except that any amendment or modification of defined terms used in the financial ratios in this Agreement or waiver of post-default rates of interest shall not constitute a reduction in the rate of interest or fees for purposes of this clause (i)) or extend the scheduled date of any payment thereof (in each case other than any extension for administrative convenience as agreed by the Administrative Agent), or increase the amount (other than an increase with respect to any Incremental Facility agreed to by such Lender) or extend the expiration date of any Lender’s Commitment, in each case without the written consent of each Lender directly and adversely affected thereby (but not the Required Lenders) (it being understood that a waiver of any condition precedent or the waiver of any Default, Event of Default or mandatory prepayment shall not constitute an extension or increase of any Loan or Commitment hereunder); (ii) eliminate or reduce the voting rights of any Lender under this Section, or of any provision of this Agreement or any other Loan Document that requires the consent of all Lenders or all affected Lenders, in each case without the written consent of such Lender (but not the Required Lenders); (iii) reduce any percentage specified in the definition of “Required Lenders” or, except as expressly permitted hereunder, consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement and the other Loan Documents, in each case, without the written consent of all Lenders, (iv) except as expressly permitted by Sections 7.4 and 7.5, release all or substantially all of the Collateral or release all or substantially all of the Guarantors from their obligations under the Guarantee and Collateral Agreement, as applicable, in each case, without the written consent of all Lenders; (v) amend, modify or waive any provision of Section 9 or other term of this Agreement which would adversely affect the Agents without the written consent of the Agents directly and adversely affected thereby; (vi) amend, modify or waive any provision of Section 3 or otherwise directly affect the rights of the Issuing Lenders without the written consent of the Issuing Lenders; (vii) without the consent of the Majority Facility Lenders of the respective Facility affected thereby, amend the definition of Majority Facility Lenders or eliminate any provision of this Agreement or the other Loan Documents that requires the consent of the Majority Facility Lenders; or (viii) amend, modify or waive the pro rata sharing provisions of Section 2.18 or Section 10.7 or the waterfall provisions of Section 2.18(f) without the consent of each Lender directly and adversely affected thereby; and, provided, further, that, (v) the Fee Letters may be amended only by the parties thereto, (w) only the consent of the applicable Issuing Lender and the Administrative Agent shall be required with respect to any amendment that changes such Issuing Lender’s L/C Commitment, (x) no amendment or waiver shall, unless signed by the Majority Facility Lenders in respect of the Revolving Facility (or

 

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by the Administrative Agent with the consent of the Majority Facility Lenders in respect of the Revolving Facility) in addition to the Required Lenders (or by the Administrative Agent with the consent of the Required Lenders) (A) amend or waive compliance with the conditions precedent to the obligations of any Revolving Lender to make any Revolving Loan (or of any Issuing Lender to issue any Letter of Credit) in Section 5.2, (B) amend or waive Sections 2.4, 2.5, 2.9(a), 2.10, 2.18(f) (to the extent pertaining to Revolving Loans) or Section 3 or (C) amend or waive this clause (x), (y) except in cases where additional extensions of term loans and/or revolving loans are being afforded substantially the same treatment afforded to the Initial Term Loans and the Initial Revolving Facility pursuant to this Agreement on the Closing Date, without the consent of the Majority Facility Lenders of each Class of Loans which is being allocated a lesser prepayment, repayment or commitment reduction as a result of the actions described below, alter the required application of any prepayments or repayments (or commitment reduction), as between the various Classes of Loans, pursuant to Section 2.12(g) (it being understood, however, that (1) the Required Lenders may waive, in whole or in part, any such prepayment, repayment or commitment reduction, so long as the application, as amongst the various Classes of Loans, of any such prepayment, repayment or commitment reduction which is still required to be made is not altered, (2) any conversion of any Class of Loans into another Class of Loans hereunder in like principal amount shall not be considered a “prepayment” or “repayment” for purposes of this clause (2)) and (z) the consent of the Lenders or the Required Lenders, as the case may be, shall not be required to make any such changes necessary to effect (A) the provisions of Sections 2.25, 2.28, 10.23 or, except as expressly set forth in the definition of Refinancing Debt Requirements, Section 7.2(a)(ii) or (B) any of the “Market Flex” under and as defined in the fee letter relating to the Additional Initial Term Loans (as defined in the First Amendment).

 

Notwithstanding anything herein to the contrary, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all the Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders, except that (x) the Commitment of any Defaulting Lender may not be increased or extended, or the maturity of any of its Loan may not be extended, the rate of interest on any of its Loans may not be reduced and the principal amount of any of its Loans may not be forgiven, in each case without the consent of such Defaulting Lender) and (y) any amendment, waiver or consent requiring the consent of all the Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than the other affected Lenders shall require the consent of such Defaulting Lender.

 

(b)                                 Each waiver or consent under any Loan Document shall be effective only in the specific instance and for the specific purpose for which it was given. No notice to or demand on any Loan Party shall entitle any Loan Party to any notice or demand in the same, similar or other circumstances. No failure on the part of any Secured Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right.

 

(c)                                  Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Loan Parties, the Lenders, the Agents and all future holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders and the Agents shall be restored to their former position and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing unless limited by the terms of such waiver, but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent on any such subsequent or other Default or Event of Default.

 

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(d)                                 In addition, notwithstanding anything in this Section to the contrary, if the Administrative Agent and the Borrower shall have jointly identified any ambiguity, mistake, defect, inconsistency, obvious error or any error or omission of a technical nature or any necessary or desirable technical changes, in each case, in any provision of the Loan Documents, then the Administrative Agent and/or the Collateral Agent, as applicable, and the Borrower shall be permitted to amend such provision, and, in each case, 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 to the Administrative Agent within five Business Days following receipt of notice thereof.

 

(e)                                  Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrower (a) to add one or more additional credit facilities to this Agreement 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 (or less than ratably) in the benefits of this Agreement and the other Loan Documents with the Term Loans, the Revolving 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 and/or the Majority Facility Lenders, as applicable.

 

(f)                                   Upon notice thereof by the Borrower to the Administrative Agent with respect to the inclusion of any Previously Absent Financial Maintenance Covenant, this Agreement shall be amended by an agreement in writing entered into by the Borrower and the Administrative Agent without the need to obtain the consent of any Lender to include such Previously Absent Financial Maintenance Covenant on the date of the incurrence of the applicable Indebtedness to the extent required by the terms of such definition or section.

 

(g)                                  Notwithstanding anything to the contrary contained in this Section 10.1 or any other provision of this Agreement or any provision of any other Loan Document:

 

(i)                                     the Borrower and any Agent may, without the input or consent of any Lender, amend, supplement and/or waive any Security Document executed in connection with this Agreement to (A) comply with any Law (including any applicable Gaming Regulations) or (B) cause any such Security Document to be consistent with this Agreement and/or the relevant other Loan Documents, and

 

(ii)                                  the Administrative Agent and the Borrower may amend, restate, amend and restate or otherwise modify any intercreditor, subordination, collateral trust agreement or similar agreement, in each case, as set forth in such agreement.

 

10.2                        Notices.                             All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice or, subject to the last sentence of this Section 10.2, email notice, when received, addressed as follows in the case of the Borrower, the Agents, and as set forth in an administrative questionnaire delivered to the Administrative Agent in the case of the Lenders, or to such other address as may be hereafter notified by the respective parties hereto:

 

	
Borrower:
    	
 
    	
Affinity Gaming
    
	
 
    	
 
    	
3755 Breakthrough Way
    
	
 
    	
 
    	
Suite 300
    
	
 
    	
 
    	
Las Vegas, Nevada 89135
    

 

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Attention: Marc H. Rubinstein
    
	
 
    	
 
    	
Facsimile No.: (702) 341-2581
    
	
 
    	
 
    	
E-mail: mrubinstein@affinitygaming.com
    
	
 
    	
 
    	
 
    
	
With a copy to:
    	
 
    	
Morrison & Foerster LLP
    
	
 
    	
 
    	
250 West 55th Street
    
	
 
    	
 
    	
New York, NY 10019-9601
    
	
 
    	
 
    	
Attn: Geoffrey Peck 

Facsimile No.: (212) 468-7900 

E-mail: GPeck@mofo.com
    
	
 
    	
 
    	
 
    
	
Administrative Agent or Collateral Agent:
    	
 
    	
Credit Suisse AG, Cayman Islands Branch
    
	
 
    	
 
    	
Eleven Madison Avenue
    
	
 
    	
 
    	
New York, NY 10010
    
	
 
    	
 
    	
Attn: Agency Manager
    
	
 
    	
 
    	
Tel: (919) 994-6369
    
	
 
    	
 
    	
Facsimile: (212) 322-2291
    
	
 
    	
 
    	
Email: agency.loanops@credit-suisse.com
    

 

provided that any notice, request or demand to or upon the Agents, the Lenders, Holdings, or the Borrower shall not be effective until received.

 

Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Agents; provided that the foregoing shall not apply to notices pursuant to Section 2 unless otherwise agreed by the Agents. Each of the Agents may, in their discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it and communicated to the Borrower; provided that approval of such procedures may be limited to particular notices or communications.

 

10.3                        No Waiver; Cumulative Remedies.                No failure to exercise and no delay in exercising, on the part of any Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

10.4                        Survival of Representations and Warranties. All representations and warranties made hereunder, in the other Loan Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans and other extensions of credit hereunder. Such representations and warranties have been or will be relied upon by the Agents and each Lender regardless of any investigation made by the Agent or any Lender or on their behalf and notwithstanding that the Agent or any Lender may have had notice or knowledge of any Default at the time of any credit extension, and shall continue in full force and effect as long as any Loan

 

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or other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

 

10.5                        Payment of Expenses; Indemnification.

 

(a)                                 The Borrower agrees (i) to pay or reimburse each Agent and the Lead Arrangers for all their respective reasonable and documented out-of-pocket costs and expenses incurred in connection with the syndication of the Facilities (other than fees payable to syndicate members) and the development, preparation, execution and delivery of this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith and any amendment, supplement, waiver or modification thereto, and, as to the Agents only, the administration of the transactions contemplated hereby and thereby, including, without limitation, the reasonable and documented fees and disbursements and other charges of counsel to the Agents (but limited, in the case of legal fees and expenses, to the actual reasonable and documented out-of-pocket fees, disbursements and other charges of one firm of outside counsel to all such Persons taken as a whole and, if necessary, of one local counsel in any relevant jurisdiction to such Persons, taken as a whole) in connection with all of the foregoing, and (ii) to pay or reimburse each Lender, each Issuing Lender, the Agents and the Lead Arrangers for all their documented out-of-pocket costs and expenses incurred in connection with the enforcement of any rights under this Agreement, the other Loan Documents and any such other documents, including, without limitation, the fees and disbursements of counsel (but limited, in the case of (x) legal fees and expenses, to the actual reasonable and documented out-of-pocket fees, disbursements and other charges of one firm of outside counsel to all such Persons taken as a whole (and, in the case of an actual or perceived conflict of interest, one additional firm of counsel for all similarly affected Persons) and, if necessary, of one local counsel in each relevant jurisdiction to such Persons, taken as a whole (and, in the case of an actual or perceived conflict of interest, one additional firm of local counsel in each relevant jurisdiction for all similarly affected Persons) and (y) any other advisors or professionals, to other advisors and professionals engaged by the Administrative Agent) in connection with enforcement proceedings. Other than to the extent required to be paid on the Closing Date, all amounts due under this paragraph (a) shall be payable by the Borrower within 30 days of receipt of an invoice relating thereto, setting forth such expenses in reasonable detail and together with backup documentation supporting such reimbursement requests. Except with respect to stamp, recording and similar Other Taxes (and, in any event, excluding any such Other Taxes in respect of any assignments or participations), this Section 10.5(a) shall not apply with respect to Taxes, which shall be governed by Sections 2.19 and 2.20.

 

(b)                                 The Borrower agrees to indemnify or reimburse each Lender, each Issuing Lender, each Agent, the Lead Arrangers and their respective affiliates, and their respective officers, directors, trustees, employees, advisors, agents, controlling Persons and successors and assigns (each, an “Indemnitee”) for, and hold each Indemnitee harmless from and against any and all other losses, claims, damages, liabilities or related expenses arising out of any actions, investigations, judgments or suits of any kind or nature whatsoever, arising out of or in connection with any claim, investigation, action or proceeding relating to or otherwise with respect to the execution, delivery, enforcement, performance and administration of this Agreement and the other Loan Documents including, without limitation, any of the foregoing relating to the use of proceeds of the Loans or the violation of, noncompliance with or liability under, any Environmental Law applicable to, or any Environmental Claims related to, the operations of Holdings, the Borrower, or any of its Subsidiaries (excluding with regard to any events occurring or circumstances existing solely after the Facility Termination Date) and the fees and disbursements and other charges of legal counsel in connection with claims, investigations, actions or proceedings regarding the foregoing (limited to the reasonable and documented out-of-pocket fees, disbursements and other charges of a single firm of counsel for all Indemnitees, taken as a whole (and, in the case of an actual or perceived conflict of interest, one additional firm of counsel for all similarly affected Indemnitees), and,

 

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if necessary, by a single firm of local counsel in each relevant jurisdiction (which may include a single firm of special counsel acting in multiple jurisdictions) for all Indemnitees taken as a whole (and, in the case of an actual or perceived conflict of interest, one additional firm of local counsel in each relevant jurisdiction for similarly affected Indemnitees)) (all the foregoing in this clause (b), collectively, the “Indemnified Liabilities”) regardless of whether any such Indemnitee is a party thereto, whether or not such proceedings are brought by Holdings, the Borrower, any Subsidiaries, Affiliates, equity holders, or creditor of the Borrower, Holdings or any other person; provided that the Borrower shall not have any obligation hereunder to any Indemnitee with respect to Indemnified Liabilities to the extent such Indemnified Liabilities have resulted from (i) the gross negligence, bad faith or willful misconduct of such Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision), (ii) a material breach by such Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision) or (iii) any proceeding between and among Indemnified Parties (other than any claims against an Indemnitee in its capacity as an Agent or Lead Arranger) that does not involve an act or omission by Holdings, the Borrower or any other Subsidiary of the Borrower; provided, however, that the Administrative Agent, Issuing Lenders, and other Agents, to the extent acting in their capacity as such, shall remain indemnified in respect of such proceeding to the extent that neither the exception set forth in clause (i) of the immediately preceding proviso nor the exception set forth in clause (ii) of the immediately preceding proviso applies to such Person at such time. Each Indemnitee shall be obligated to refund or return any and all amounts paid by the Borrower pursuant to this Section 10.5(b) to such Indemnitee for any fees, expenses, or damages to the extent such Indemnitee is not entitled to payment of such amounts in accordance with the terms hereof. All amounts due under this paragraph (b) shall be payable by the Borrower within 30 days (x) after written demand thereof, in the case of any indemnification obligations and (y) in the case of reimbursement of costs and expenses, after receipt of an invoice relating thereto, setting forth such expenses in reasonable detail and together with backup documentation supporting such reimbursement requests. Statements payable by the Borrower pursuant to this Section shall be submitted to the Borrower at the address thereof set forth in Section 10.2, or to such other Person or address as may be hereafter designated by the Borrower in a written notice to the Administrative Agent. This Section 10.5(b) shall not apply with respect to Taxes other than any Indemnified Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

 

(c)                                  The Borrower shall not be liable for any settlement of any proceeding effected without its consent (which consent shall not be unreasonably withheld, delayed or conditioned), but if any proceeding is settled with the Borrower’s written consent, or if there is a final judgment against any Indemnitee in any such proceeding, the Borrower agrees to indemnify and hold harmless each Indemnitee to the extent and in the manner set forth in Section 10.5(b) above. Notwithstanding anything to the contrary herein, if at any time any Indemnitee shall have requested in accordance with the terms and conditions of this Agreement that the Borrower reimburse such Indemnitee for legal or other expenses in connection with investigating, responding to or defending any proceeding, the Borrower shall be liable for any settlement effected without the Borrower’s prior written consent if (i) such settlement is entered into more than sixty (60) days after receipt by the Borrower of such request for reimbursement and (ii) the Borrower shall not have reimbursed such Indemnitee in accordance with such request in the manner and to the extent set forth in this Agreement prior to the date of such settlement. The Borrower shall not, without the prior written consent of the affected Indemnitee (which consent shall not be unreasonably withheld, conditioned or delayed), effect any settlement of any pending or threatened proceeding in respect of which indemnity could have been sought hereunder by such Indemnitee unless (i) such settlement includes an unconditional release of such Indemnitee from all liability or claims that are the subject matter of such proceeding and (ii) such settlement does not include any statement as to any admission of fault or culpability.

 

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(d)                                 To the extent permitted by applicable Law, no party to this Agreement shall assert, and each party hereby waives, any claim against any other party hereto, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to actual or direct damages) arising out of, in connection with or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the transactions contemplated herein or therein, any Loan or any Letter of Credit or the use of proceeds thereof, except, in the case of a claim by any Indemnitee against the Borrower, to the extent such damages would otherwise be subject to indemnification pursuant to the terms of Section 10.5(b). No party to this Agreement shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems (including any E-System) in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby, except to the extent any such damages arise from the gross negligence, bad faith or willful misconduct of, or material breach of this Agreement or the other Loan Documents by, such party or its Affiliates, as applicable, in each case as determined by a final non-appealable judgment of a court of competent jurisdiction.

 

(e)                                  Without duplication of clause (a) above, the Borrower further agrees to pay the reasonable documented out-of-pocket legal fees of gaming counsel for the Agents in Missouri, Nevada, Colorado and Iowa and any other relevant state or other jurisdiction and all reasonable documented out- of-pocket costs (including reasonable documented out-of-pocket costs of investigation) associated with any qualification (or exemption or waiver therefrom) of any Lender under, or compliance of any Lender with, the Gaming Regulations in connection with this Agreement or the other Loan Documents.

 

The agreements in this Section shall survive the Facility Termination Date.

 

10.6                        Successors and Assigns; Participations and Assignments.

 

(a)                                 The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any affiliate of any Issuing Lender that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder in a manner not permitted by Section 7.4 without the prior written consent of the Administrative Agent and each Lender (and any attempted assignment or transfer by such Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section.

 

(b)                                 (i)                                     Subject to the conditions set forth below and Section 10.6(m), any Lender may assign to one or more assignees (other than (i) a natural person, (ii) except as permitted under Section 10.6(c), the Borrower or any of its Affiliates or (iii) a Defaulting Lender) (each, an “Assignee”), all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:

 

(A)                               the Borrower (such consent not to be unreasonably withheld or delayed); provided that no consent of the Borrower shall be required (x) for an assignment of (1) Term Loans to a Lender, an Affiliate of a Lender, or an Approved Fund (as defined below) or (2) the Initial Revolving Facility or any unfunded Commitments with respect to any other Facility if such assignment is to a Lender with an existing Commitment in respect of such Facility or any Affiliate or Approved Fund of a Lender with an existing Commitment in respect of such Facility or (y) if an Event of Default under Section 8.1(a) or 8.1(f) has occurred and is continuing, for an assignment

 

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to any Assignee; provided, further, that the Borrower shall be deemed to have consented to any such assignment of Term Loans unless it shall object thereto by written notice to the Administrative Agent within 10 Business Days after having received notice thereof;

 

(B)                               the Administrative Agent (such consent not to be unreasonably withheld or delayed); provided that no consent of the Administrative Agent shall be required for (x) an assignment of Term Loans to a Lender, an Affiliate of a Lender or an Approved Fund or (y) an assignment of the Initial Revolving Facility or any unfunded Commitments with respect to any other Facility if such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund of a Lender with an existing Commitment in respect of such Facility (provided that the Administrative Agent shall acknowledge any such assignment referenced in clause (x) or (y)); and

 

(C)                               in the case of an assignment under any Revolving Facility, each Issuing Lender (such consent not to be unreasonably withheld or delayed);

 

Any such assignment by any Lender need not be ratable as among the Facilities.

 

(ii)                                  Assignments shall be subject to the following additional conditions:

 

(A)                               except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitments or Loans under any Facility, the amount of the Commitments or Loans of the assigning Lender subject to each such assignment (determined as of (I) the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or (II) if earlier, the “trade date” (if any) specified in such Assignment and Assumption) shall not be less than $2,500,000 in the case of any assignment in respect of the Revolving Facility, or $1,000,000 in the case of any assignment in respect of a Term Facility, unless the Borrower and the Administrative Agent otherwise consent; provided that (1) no such consent of the Borrower shall be required if an Event of Default under Section 8.1(a) or 8.1(f) has occurred and is continuing and (2) such amounts shall be aggregated in respect of each Lender and its Affiliates or Approved Funds, if any;

 

(B)                               the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500 (which shall not be payable by a Lead Arranger or by the Borrower or any of their respective Affiliates except in respect of an assignment of interests purchased under Section 10.6(c)); provided that only one such fee shall be payable in the case of contemporaneous assignments to or by two or more related Approved Funds;

 

(C)                               no Revolving Commitment or Revolving Loans may be assigned to any Investor Affiliated Lender or Purchasing Borrower Party and Term Loans may not be assigned to any Investor Affiliated Lender or Purchaser Borrower Party except as provided in clause (c) below; and

 

(D)                               the Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an administrative questionnaire.

 

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For the purposes of this Section, “Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in commercial loans and similar extensions of credit in the ordinary course of its activities and that is administered, advised 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.

 

(iii)                               Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) below, from and after the effective date specified in each Assignment and Assumption the Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.19, 2.20, 2.21 and 10.5). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section shall, subject to the Borrower’s rights under Section 10.6(j), be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

 

(iv)                              The Administrative Agent, acting as a non-fiduciary agent of the Borrower solely for tax purposes, and solely with respect to the actions described in this Section 10.6(b) and Section 2.8, shall establish and maintain at its address referred to in Section 10.2 (A) a record within the meaning of Section 5f.103-1(c) of the United States Treasury Regulations (the “Register”) that identifies each Lender, including the Administrative Agent, of an interest in a portion of the Obligations, including the name and address of the Lender, and each Lender’s right to principal and stated interest, and each Lender’s obligations under this Agreement to participate in each Loan and any assignment of any such interest, obligation or right and (B) accounts in the applicable Register in accordance with its usual practice in which it shall record (1) the names and addresses of the Lenders and the Issuing Lenders, as applicable (and each change thereto pursuant to Section 2.24 and Section 10.6), (2) the Commitments of each applicable Lender, (3) the amount of each Loan and each funding of any participation described in clause (A) above, for Eurodollar Loans, the Interest Period applicable thereto, (4) the amount of any principal or interest due and payable or paid with respect to Loans recorded in the applicable Register, (5) the amount of the Reimbursement Obligations due and payable or paid and (6) any other payment received by the Administrative Agent from the Borrowers and its application to the Obligations. The parties intend for all Obligations to be in registered form for Tax purposes.

 

(v)                                 Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an Assignee, the Assignee’s completed administrative questionnaire (unless the Assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. The entries in the Register shall be conclusive, absent manifest error, and the Borrower, the Agents and the Lenders shall 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.

 

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(vi)                              In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, each Issuing Lender and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit in accordance with its Revolving Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs

 

(c)                                  (i)                                     Notwithstanding anything else to the contrary contained in this Agreement, any Lender may assign all or a portion of its Term Loans to any Purchasing Borrower Party or any Investor Affiliated Lender (collectively, “Affiliated Lenders”) on a non-pro rata basis (A) through “Dutch auctions” open to all Lenders holding the relevant Term Loans, on a pro rata basis or (B) through open market purchases, in each case with respect to clauses (A) and (B), without the consent of the Administrative Agent or any other Person; provided that:

 

(A)                               with respect to any assignment to a Purchasing Borrower Party, no Event of Default has occurred or is continuing at the time of acceptance of bids for the “Dutch auction” or entry into a binding agreement with respect to open market purchases;

 

(B)                               the assigning Lender and Affiliated Lender purchasing such Term Loans, as applicable, shall execute and deliver to the Administrative Agent an assignment and assumption agreement substantially in the form of Exhibit M hereto or such other form as reasonably approved by the Administrative Agent (an “Affiliated Lender Assignment Agreement”) in lieu of an Assignment and Assumption;

 

(C)                               for the avoidance of doubt, Lenders shall not be permitted to assign Revolving Commitments or Revolving Loans to any Affiliated Lender;

 

(D)                               any Term Loans assigned to any Purchasing Borrower Party shall be automatically and permanently cancelled upon the effectiveness of such assignment and will thereafter no longer be outstanding for any purpose hereunder;

 

(E)                                no Purchasing Borrower Party may use the proceeds from Revolving Loans to purchase any Term Loans;

 

(F)                                 no Term Loan may be assigned to any Investor Affiliated Lender pursuant to this Section 10.6(c) or otherwise, if after giving effect to such assignment, Investor Affiliated Lenders in the aggregate would own in excess of 25% of the Term Loans of any Class then outstanding (determined as of the time of such

 

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purchase and after giving effect to any simultaneous cancellations thereof) and any assignments to Investor Affiliated Lenders that would cause the Investor Affiliated Lenders to hold in excess of 25% of the aggregate principal amount of the Term Loans of any Class then outstanding shall be deemed void ab initio and the Register shall be modified to reflect a reversal of such assignment;

 

(G)                               any purchases or assignments of Loans by an Affiliated Lender made through “Dutch auctions” shall be conducted pursuant to procedures to be established by the Administrative Agent that are consistent with this Section 10.6(c)(i) and are otherwise reasonably acceptable to the Borrower;

 

(H)                              by its acquisition of Term Loans, each relevant Affiliated Lender shall be deemed to have acknowledged and agreed that the Term Loans held by such Affiliated Lender shall be disregarded in both the numerator and denominator in the calculation of any Required Lender, Majority Facility Lender or other Lender vote (and the Term Loans held by such Affiliated Lender shall be deemed to be voted pro rata along with the other Lenders that are not an Affiliated Lender); provided that (x) such Affiliated Lender shall have the right to vote (and the Term Loans held by such Affiliated Lender shall not be so disregarded) with respect to any amendment, modification, waiver, consent or other action that requires the vote of all Lenders or all Lenders directly and adversely affected thereby, as the case may be, and (y) no amendment, modification, waiver, consent or other action shall (1) disproportionately affect such Affiliated Lender in its capacity as a Lender as compared to other Lenders of the same Class that are not Affiliated Lenders or (2) deprive any Affiliated Lender of its share of any payments which the Lenders are entitled to share on a pro rata basis hereunder, in each case without the consent of such Affiliated Lender; and

 

(I)                                   no Affiliated Lender shall be required to represent or warrant that it is not in possession of material non-public information with respect to any Parent Company, the Borrower and/or any Subsidiary thereof and/or their respective securities in connection with any assignment or purchase permitted by this Section 10.6(c).

 

(ii)                                  Notwithstanding anything to the contrary in this Agreement, no Investor Affiliated Lender shall have any right to (I) attend (including by telephone) any meeting or discussions (or portion thereof) among the Administrative Agent or any Lender to which representatives of the Loan Parties are not invited, (II) receive any information or material prepared by Administrative Agent or any Lender or any communication by or among the Administrative Agent and/or one or more Lenders, except to the extent such information or materials have been made available to any Loan Party or its representatives or (III) make or bring (or participate in, other than as a passive participant in or recipient of its pro rata benefits of) any claim, in its capacity as a Lender, against the Administrative Agent, the Collateral Agent or any other Lender with respect to any duties or obligations or alleged duties or obligations of such Agent or any other such Lender under the Loan Documents.

 

(iii)                               Notwithstanding anything to the contrary contained herein, any Lender may, at any time, assign all or a portion of its rights and obligations under this Agreement in respect of its Term Loans to any Debt Fund Affiliate, and any Debt Fund Affiliate may, from time to time, purchase Term Loans (x) on a non-pro rata basis through “Dutch auctions” open to all applicable Lenders or (y) on a non-pro rata basis through open market purchases without the consent of the Administrative Agent or any other Person, in each case, notwithstanding the requirements set forth in subclauses (A) through (I) of

 

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clause (c)(i) above; provided that the Term Loans of all Debt Fund Affiliates shall not account for more than 49.9% of the amounts included in determining whether the Required Lenders or Majority Facility Lenders have (A) consented to any amendment, modification, waiver, consent or other action with respect to any of the terms of any Loan Document or any departure by any Loan Party therefrom, or subject to the immediately succeeding paragraph, any plan of reorganization pursuant to the Bankruptcy Code, (B) otherwise acted on any matter related to any Loan Document or (C) directed or required the Administrative Agent or any Lender to undertake any action (or refrain from taking any action) with respect to or under any Loan Document. Any Term Loans acquired by any Debt Fund Affiliate and/or Investor Affiliated Lender may (but shall not be required to) be contributed to the Borrower for purposes of cancelling such Indebtedness (it being understood that any Term Loans so contributed shall be retired and cancelled immediately upon the contribution thereof); provided that upon any such cancellation, the aggregate outstanding principal amount of the Term Loans shall be deemed reduced, as of the date of such contribution, by the full par value of the aggregate principal amount of the Term Loans so contributed and cancelled, and each principal repayment installment with respect to the Term Loans pursuant to Section 2.8(a) shall be reduced pro rata by the full par value of the aggregate principal amount of Term Loans so contributed and cancelled.

 

(d)                                 [Reserved.]

 

(e)                                  Each Investor Affiliated Lender hereby agrees that if any Loan Party or any of their assets shall be subject to any voluntary or involuntary proceeding commenced under the Bankruptcy Code (“Bankruptcy Proceedings”), (i) such Investor Affiliated Lender shall not take any step or action in such Bankruptcy Proceeding to object to, impede or delay the exercise of any right or the taking of any action by the Administrative Agent (or the taking of any action by a third party that is supported by the Administrative Agent) in relation to such Investor Affiliated Lender’s claim with respect to its Term Loans (“Term Loan Claim”) (including, without limitation, objecting to any debtor in possession financing, use of cash collateral, grant of adequate protection, sale or disposition (including under 363 of the Bankruptcy Code), compromise, or plan of reorganization) so long as such Investor Affiliated Lender is treated in connection with such exercise or action the same or better terms as the other Lenders holding Term Loans and (ii) with respect to any matter requiring the vote of Lenders holding Term Loans during the pendency of a Bankruptcy Proceeding (including, without limitation, voting on any plan of reorganization), the Loans held by such Investor Affiliated Lender (and any Term Loan Claim with respect thereto) shall be deemed to be voted in the same proportion as the allocation of voting with respect to such matter by Lenders holding Term Loans who are not Investor Affiliated Lenders, so long as such Investor Affiliated Lender is treated in connection with the exercise of such right or taking of such action on the same or better terms as the other Lenders holding Term Loans. Each Investor Affiliated Lender hereby irrevocably appoints the Administrative Agent (such appointment being coupled with an interest) as such Investor Affiliated Lender’s attorney-in-fact with full authority in the place and stead of such Investor Affiliated Lender and in the name of such Investor Affiliated Lender, from time to time in the Administrative Agent’s discretion to take any action and to execute any instrument the Administrative Agent may deem reasonably necessary to carry out the provisions of this clause (e).

 

(f)                                   Upon any contribution of Term Loans to the Borrower or any Subsidiary and upon any purchase of Term Loans by a Purchasing Borrower Party, subject to Section 10.6(c)(i)(C), (A) the aggregate principal amount (calculated on the face amount thereof) of such Term Loans shall automatically be cancelled and retired by the Borrower on the date of such contribution or purchase (and, if requested by the Administrative Agent, with respect to a contribution of Term Loans, any applicable contributing Lender shall execute and deliver to the Administrative Agent an Assignment and Assumption, or such other form as may be reasonably requested by the Administrative Agent, in respect

 

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thereof pursuant to which the respective Lender assigns its interest in such Loans to the Borrower for immediate cancellation) and (B) the Administrative Agent shall record such cancellation or retirement in the Register.

 

(g)                                  In no event shall the Administrative Agent, in its capacity as such, be obligated to ascertain, monitor or inquire as to whether any Lender is an Investor Affiliated Lender or Debt Fund Affiliate nor shall Administrative Agent be obligated to monitor the number of Investor Affiliated Lenders or Debt Fund Affiliates or the aggregate amount of Term Loans held by Investor Affiliated Lenders or Debt Fund Affiliates.

 

(h)                                 Any Lender may, without the consent of the Borrower or the Administrative Agent sell participations to one or more banks or other entities (other than to any natural person) (a “Participant”), but in any event not to a Person that the Administrative Agent has identified in a notice to the Lenders as a Defaulting Lender, in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent, the Issuing Lenders and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 9.6 with respect to any payments made by such Lender to its Participants. Any agreement 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 may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that (1) is described in the first proviso of Section 10.1(a), and (2) directly affects such Participant. Subject to paragraph (h)(i) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.19, 2.20 and 2.21 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 10.7(b) as though it were a Lender; provided that such Participant agrees to be subject to Section 10.7(a) as though it were a Lender.

 

(i)                                     A Participant shall not be entitled to receive any greater payment under Section 2.19 or 2.20 than the applicable Lender and their respective successors and assigns 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 Representative Borrower’s consent to such participation (acknowledging the possibility of payment of such greater payment). No Participant shall be entitled to the benefits of Section 2.20 unless such Participant complies with Section 2.20(e) or (f), as (and to the extent) applicable, as if such Participant were a Lender; provided that any documentation under those sections shall be provided by the Participant to the Participating Lender and the Representative Borrower.

 

(ii)                                  Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such

 

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disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

(i)                                     Any Lender may, without the consent of or notice to the Administrative Agent or the Borrower, at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (other than to any natural person) to secure obligations of such Lender, including any pledge or assignment to secure obligations to (i) a Federal Reserve Bank or any other central bank or (ii) any holder of, or trustee for the benefit of the holders of, such Lender’s Capital Stock, voting trust certificates, bonds, debentures, instruments and other evidence of Indebtedness, and all warrants, options and other rights to acquire the foregoing, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or Assignee for such Lender as a party hereto. The Borrower, upon receipt of written notice from the relevant Lender, agrees to issue Notes to any Lender requiring Notes to facilitate transactions of the type described in this paragraph (i).

 

(j)                                    Disqualified Institutions; non-Qualified Persons.

 

(i)                                     No assignment or participation shall be made to any Person that (x) was a Disqualified Institution or (y) not a Qualified Person as of the date (the “Trade Date”) on which the assigning or participating, as applicable, Lender entered into a binding agreement to sell and assign or participate in all or a portion of its rights and obligations under this Agreement to such Person (unless the Borrower has consented to such assignment in writing in its sole and absolute discretion, in which case such Person will not be considered a Disqualified Institution for the purpose of such assignment or participation). For the avoidance of doubt, with respect to any assignee that becomes a Disqualified Institution or a non-Qualified Person after the applicable Trade Date (including as a result of the delivery of a notice pursuant to, and/or the expiration of the notice period referred to in, the definition of “Disqualified Institution”), (x) such assignee shall not retroactively be disqualified from becoming a Lender and (y) the execution by the Borrower of an Assignment and Assumption with respect to such assignee will not by itself result in such assignee no longer being considered a Disqualified Institution or non-Qualified Person. Any assignment in violation of this clause (j)(i) shall not be void, but the other provisions of this clause (j) shall apply.

 

(ii)                                  If any assignment or participation is made to any Disqualified Institution, its Affiliates or any Person who has represented that it was a Qualified Person as of the relevant Trade Date (but in fact was not a Qualified Person as of the relevant Trade Date) without the Borrower’s prior written consent in violation of clause (j)(i) above, or if any Person becomes a Disqualified Institution or an Affiliate thereof after the applicable Trade Date, the Borrower may, at its sole expense and effort, upon notice to the applicable Disqualified Institution or Affiliate or non-Qualified Person, as applicable, and the Administrative Agent, (A) terminate any Revolving Commitment of such Disqualified Institution or Affiliate or such non-Qualified Person, as applicable, and repay all obligations of the Borrower owing to such Disqualified Institution or Affiliate or such non-Qualified Person, as applicable, in connection with such Revolving Commitment, (B) in the case of outstanding Term Loans held by Disqualified Institutions or their respective Affiliates or such

 

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non-Qualified Person, purchase or prepay such Term Loan by paying the lowerlowest of (x) the principal amount thereof and,   (y) the amount that such Disqualified Institution or its Affiliate or such non-Qualified Person, as applicable, paid to acquire such Term Loans and (z) if reasonably obtainable public sources are available, the most recently available market price of such Term Loans based on such sources, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder and/or (C) require such Disqualified Institution, Affiliate or non-Qualified Person, as applicable, to assign, without recourse (in accordance with and subject to the restrictions contained in this Section 10.6), all of its interest, rights and obligations under this Agreement to one or more Eligible Assignees at the lowerlowest of (x) the principal amount thereof and,  (y) the amount that such Disqualified Institution or its Affiliates or such non-Qualified Person, as applicable, paid to acquire such interests, rights and obligations of such Term Loans and (z) if reasonably obtainable public sources are available, the most recently available market price of such Term Loans based on such sources, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder; provided that if any Lender (including any Disqualified Institution or Affiliate thereof or any non-Qualified Person that becomes a Lender) does not execute and deliver an Assignment and Assumption to the Administrative Agent within one Business Day after having received a request therefor, such Lender (including any Disqualified Institution or Affiliate or any non-Qualified Person thereof that becomes a Lender) hereby grants to the Borrower an irrevocable power of attorney (which power is coupled with an interest) to execute and deliver, on behalf of such Lender, as assignor, any Assignment and Assumption necessary to effectuate any assignment in full of such Lender’s interests hereunder and the Borrower shall notify the Administrative Agent in advance of any exercise of such power of attorney.

 

(iii)                               Notwithstanding anything to the contrary contained in this Agreement, Disqualified Institutions or any of their Affiliates (A) will not (x) have the right to receive information, reports or other materials provided to Lenders by the Borrower, the Administrative Agent or any other Lender, (y) attend or participate in meetings attended by the Lenders and the Administrative Agent, or (z) access any electronic site established for the Lenders or confidential communications from counsel to or financial advisors of the Administrative Agent or the Lenders and (B) (x) for purposes of any consent to any amendment, waiver or modification of, or any action under, and for the purpose of any direction to the Administrative Agent or any Lender to undertake any action (or refrain from taking any action) under this Agreement or any other Loan Document, each Disqualified Institution or its Affiliates, as applicable, will be deemed to have consented in the same proportion as the Lenders that are not Disqualified Institutions consented to such matter, and (y) for purposes of voting on any plan of reorganization or plan of liquidation pursuant to any Debtor Relief Laws, each Disqualified Institution or its Affiliates, as applicable, party hereto hereby agrees (1) not to vote on such plan of reorganization or plan of liquidation pursuant to any Debtor Relief Laws, (2) if such Disqualified Institution or its Affiliates, as applicable, does vote on such plan of reorganization or plan of liquidation pursuant to any Debtor Relief Laws notwithstanding the restriction in the foregoing clause (1), such vote will be deemed not to be in good faith and shall be “designated” pursuant to Section 1126(e) of the Bankruptcy Code (or any similar provision in any other Debtor Relief Laws), and such vote shall not be counted in determining whether the applicable class has accepted or rejected such Plan in accordance with Section 1126(c) of the Bankruptcy Code (or any similar provision in any other Debtor Relief Laws) and (3) not to contest any request by any party

 

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for a determination by the Bankruptcy Court (or other applicable court of competent jurisdiction) effectuating the foregoing clause (2).

 

(iv)                              The Administrative Agent shall have the right, and the Borrower hereby expressly authorizes the Administrative Agent, to provide the list of Disqualified Institutions provided by the Borrower and any updates thereto from time to time (collectively, the “DQ List”) to each Lender requesting the same.

 

(k)                                 It is hereby agreed and understood that the Agents, the Lenders and their respective assignees may be required by certain Gaming Authorities to obtain a license or a finding of suitability in order to remain or become a Lender under this Agreement. If any Gaming Authority shall determine that any Lender is not qualified as an approved financial source or otherwise does not meet the standards pursuant to the Gaming Regulations in the relevant jurisdiction, or any Gaming Authority with jurisdiction over the Gaming Business shall determine that any Lender does not meet its suitability standards (in any such case, a “Former Lender”), the Administrative Agent or the Borrower shall have the right (but not the duty) to designate a lender or lenders (in each case, a “Substitute Lender”, which may be any Lender or Lenders that agree to become a Substitute Lender and with the consent of the Administrative Agent, each Issuing Lender and the Borrower to the extent any such consent is provided for in Section 10.6(b)) that has agreed to assume the rights and obligations of the Former Lender, subject to receipt by the Administrative Agent of evidence satisfactory to the Administrative Agent that such Substitute Lender is a Qualified Person, or has a reasonable basis for a belief that the Substitute Lender is eligible to be a Qualified Person, and in compliance with Gaming Regulations. The Substitute Lender shall assume the rights and obligations of the Former Lender under this Agreement pursuant to an Assignment and Assumption, which assumption shall be required to comply with, and shall become effective in accordance with, the provisions of Section 10.6(b); provided that the purchase price to be paid by the Substitute Lender to the Administrative Agent for the account of the Former Lender for such assumption shall equal the sum of (i) the unpaid principal amount of any Notes held or Loans made by the Former Lender plus accrued interest thereon, plus (ii) the Former Lender’s pro rata share of the aggregate amount of drawings under all Letters of Credit that have not been reimbursed by the Borrower, plus accrued interest thereon, plus (iii) such Former Lender’s pro rata share of accrued fees owing to such Former Lender to the date of the assumption; and, provided, further, the Borrower shall pay all Obligations owing to the Former Lender under the Loan Documents (including all obligations, if any, owing pursuant to Section 2.21, but excluding (x) contingent Obligations for which no claim has been asserted and (y) those amounts in respect of which the purchase price is being paid as provided above). Each Lender agrees that if it becomes a Former Lender, upon payment to it by the Borrower of all such amounts, if any, owing to it under the Loan Documents, it will execute and deliver an Assignment and Assumption upon payment of such purchase price.

 

(l)                                     Notwithstanding the provisions of clause (k) of this Section 10.6, but subject to applicable Gaming Regulations, if any Lender becomes a Former Lender, and if the Administrative Agent or the Borrower fails to find a Substitute Lender pursuant to clause (k) of this Section 10.6 within any time period specified by the appropriate Gaming Authority for the withdrawal of a Former Lender (the “Withdrawal Period”), the Borrower shall immediately (i) prepay in full the outstanding principal amount of each Note held or Loan made by such Former Lender, together with accrued interest thereon to the earlier of (x) the date of payment or (y) the last day of any Withdrawal Period, and (ii) at the option of the Borrower either (A) place an amount equal to such Former Lender’s Revolving Percentage in each Letter of Credit in a separate cash collateral account with the Administrative Agent for each outstanding Letter of Credit, which amount will be applied by the Administrative Agent to satisfy the Borrower’s reimbursement obligations to the respective Issuing Lender in respect of drawings under the applicable Letter of Credit or (B) terminate the Revolving Loan Commitment of such Former Lender at which time the other Lenders’ Revolving Percentages will be automatically adjusted as a result thereof;

 

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provided, that the option specified in this clause (B) may only be exercised if, immediately after giving effect thereto no Lender’s outstanding Revolving Loans, when added to the product of (a) such Lender’s Revolving Percentage and (b) the aggregate amount of all L/C Obligations then outstanding, would exceed such Lender’s Revolving Commitment at such time.

 

(m)                             Subject to the last sentence of this Section 10.6(m), each Lender agrees that all participations and assignments made hereunder shall be subject to, and made in compliance with, all Gaming Regulations applicable to lenders. The Borrower hereby acknowledges that no Lender or Agent shall have the responsibility of determining whether or not a potential assignee of such Lender would be a Qualified Person under the Gaming Regulations of any such jurisdiction (provided that any relevant Gaming Authority may nonetheless determine such assignee not to be a Qualified Person).

 

10.7                        Adjustments; Set-off. (a) Except to the extent that this Agreement provides for payments to be allocated to a particular Lender or to the Lenders under a particular Facility, if any Lender (a “Benefited Lender”) shall at any time receive any payment of all or part of the Obligations owing to it, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by setoff, pursuant to events or proceedings of the nature referred to in Section 8.1(f), or otherwise), other than in connection with assignments hereunder, in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of such other Lender’s Obligations, such Benefited Lender shall purchase for cash from the other Lenders a participating interest in such portion of each such other Lender’s Obligations, or shall provide such other Lenders with the benefits of any such collateral, as shall be necessary to cause such Benefited Lender to share the excess payment or benefits of such collateral ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.

 

(b)                                 In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, without prior notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law, with the consent of the Administrative Agent upon any amount becoming due and payable by the Borrower hereunder (whether at the stated maturity, by acceleration or otherwise) after the expiration of any cure or grace periods, to set off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final but excluding trust accounts, employee benefit accounts, payroll, petty cash, tax and withholding accounts and the like), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of the Borrower; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.26 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Lenders and the Lenders and (y) such Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such setoff and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such setoff and application.

 

10.8                        Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed

 

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signature page of this Agreement by facsimile transmission or by electronic mail as a “.pdf” or “.tif” attachment shall be effective as delivery of a manually executed counterpart hereof. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower and the Administrative Agent.

 

10.9                        Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section, if and to the extent that the enforceability of any provision of this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent or any Issuing Lender, then such provision shall be deemed to be in effect only to the extent not so limited.

 

10.10                 Integration; Survival. This Agreement and the other Loan Documents represent the entire agreement of the Borrower, the Agents and the Lenders with respect to the subject matter hereof and thereof. The provisions of Section 2.19, Section 2.20, Section 2.21 and Section 10.5, Section 10.14 and Section 9 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.

 

10.11                 GOVERNING LAW. 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.

 

10.12                 Submission to Jurisdiction; Waivers. Each party to this Agreement hereby irrevocably and unconditionally:

 

(a)                                 agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or tort or otherwise, in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or thereto, in a forum other than the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable Law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Nothing in this Agreement or any other Loan Document shall affect (i) any right that any Agent may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document in any other jurisdiction to realize on the Collateral or any other security for the Secured Obligations or to enforce a judgment or other court order in favor of the Collateral Agent or the Administrative Agent, (ii) any party from bringing any legal action or proceeding in any jurisdiction for the recognition and enforcement of any judgment or (iii) if all such New York courts decline jurisdiction over any Person or decline (or in the case of the Federal District Court, lack) jurisdiction over any subject matter of such action or proceeding, a legal action or proceeding from being brought with respect thereto in another court having jurisdiction;

 

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(b)                                 waives, to the fullest extent permitted by applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in clause (a) of this Section 10.12. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court;

 

(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 10.2 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.

 

10.13                 Acknowledgments. The Borrower hereby acknowledges that:

 

(a)                                 it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;

 

(b)                                 neither the Agents nor any Lender has any fiduciary relationship with or duty to the Borrower arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Agents and Lenders, on one hand, and the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

(c)                                  no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Borrower and the Lenders.

 

10.14                 Confidentiality. Each of the Agents, the Lead Arrangers, each Issuing Lender and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors on a “need to know” basis solely in connection with the Transactions, the First Amendment Transactions and the administration of this Agreement and the other Loan Documents (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 such Person shall be responsible for its Affiliates’ compliance with this Section 10.14), (b) to the extent requested by any regulatory or self-regulatory authority (in which case such Person shall, except with respect to any audit or examination conducted by bank accountants or any Governmental Authority or regulatory or self-regulatory authority exercising examination or regulatory authority, to the extent practicable and permitted by law, (i) inform the Borrower promptly in advance thereof and (ii) use commercially reasonable efforts to ensure that any information so disclosed is accorded confidential treatment), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process (in which case such Person shall (i) to the extent practicable and permitted by law, inform the Borrower promptly in advance thereof and (ii) use commercially reasonable efforts to ensure that any such information so disclosed is accorded confidential

 

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treatment), (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement (in each case, other than a Disqualified Institution), (g) with the consent of the Borrower, (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to any Agent, any Lead Arranger, any Issuing Lender or any Lender on a nonconfidential basis from a source not known by such Person to be bound by any confidentiality obligations owing to the InvestorsSponsors, any Parent Company or any Group Member, (i) subject to an agreement containing provisions substantially the same as those of this Section, to any credit insurance provider or direct, indirect, actual or prospective counterparty (and its advisor) to any swap, derivative or securitization transaction related to the obligations under this Agreement or (j) on a confidential basis to (i) any rating agency in connection with rating any Parent Company, the Borrower or their Subsidiaries or the Facilities or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Facilities. For the purposes of this Section, “Information” means all information received from or on behalf of the InvestorsSponsors, any Parent Company, any Group Member or any of their representatives in connection with the transactions contemplated by this Agreement relating to any Parent Company or any Group Member and their respective businesses, the Investors or theSponsors or the Transactions or the First Amendment Transactions (including any information obtained by any Agent, any Issuing Lender, any Lender or any Lead Arranger, or any of their respective Affiliates, based on a review of the books and records relating to the Borrower and/or any of their Subsidiaries and their respective Affiliates in connection with the transactions contemplated by this Agreement from time to time, including prior to the date hereof). For the avoidance of doubt, in no event shall any disclosure of any Information be made to a Person that is a Disqualified Institution at the time of disclosure.

 

10.15                 Release of Collateral and Guarantee Obligations; Subordination of Liens.

 

(a)                                 The Lenders and each Agent (and each other Secured Party by accepting the benefits of the Collateral) hereby irrevocably agree that the Liens granted to the Secured Parties by the Loan Parties on any Collateral shall be automatically released (i) in full, as set forth in clause (b) below, (ii) upon the Disposition of such Collateral to any Person other than another Loan Party, to the extent such Disposition is permitted hereunder (and the Administrative Agent and the Collateral Agent may rely conclusively on a certificate to that effect provided to it by any Loan Party upon its reasonable request without further inquiry), (iii) to the extent such Collateral is comprised of property leased to a Loan Party by a Person that is not a Loan Party, upon termination or expiration of such lease, (iv) if the release of such Lien is approved, authorized or ratified in writing by the Required Lenders (or such other percentage of the Lenders whose consent may be required in accordance with Section 10.1), (v) to the extent the property constituting such Collateral is owned by any Guarantor, upon the release of such Guarantor from its Guarantee Obligations under the Guarantee and Collateral Agreement so long as such Guarantor is no longer a Loan Party hereunder, and (vi) to the extent such Collateral ceases to be Collateral. Any such release shall not in any manner discharge, affect, or impair the Secured Obligations or any Liens (other than those being released) upon (or obligations (other than those being released) of the Loan Parties in respect of) all interests retained by the Loan Parties, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral except to the extent otherwise released in accordance with the provisions of the Loan Documents. Additionally, the Lenders (and each other Secured Party by accepting the benefits of the Collateral) hereby irrevocably agree that the Guarantors shall be released from the Guarantees upon consummation of any transaction permitted

 

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hereunder resulting in such Subsidiary ceasing to constitute a Restricted Subsidiary, or otherwise becoming an Excluded Subsidiary, in each case, solely to the extent such Subsidiary ceasing to constitute a Restricted Subsidiary or otherwise becoming an Excluded Subsidiary is not prohibited by this Agreement, or, in the case of a Successor Holdings, the prior Holdings shall be released in accordance with the conditions set forth in Section 7.11. The Lenders (and each other Secured Party by accepting the benefits of the Collateral) hereby authorize the Administrative Agent and the Collateral Agent, as applicable, at the expense of the Borrower, to execute and deliver any instruments, documents, and agreements necessary or desirable to evidence and confirm the release of any Guarantor or Collateral pursuant to the foregoing provisions of this paragraph, all without the further consent or joinder of any Lender. Any representation, warranty or covenant contained in any Loan Document relating to any such Collateral or Guarantor shall no longer be deemed to be repeated solely with respect to such Collateral or Guarantor.

 

(b)                                 Notwithstanding anything to the contrary contained herein or any other Loan Document, upon the Facility Termination Date, upon request of the Borrower, the Administrative Agent and/or Collateral Agent, as applicable, shall (without notice to, or vote or consent of, any Secured Party) take such actions, at the expense of the Borrower, as shall be reasonably requested to evidence termination or release of its security interest in all Collateral, and to release all obligations under any Loan Document. Any such release of Obligations shall be deemed subject to the provision that such Obligations shall be reinstated if after such release any portion of any payment in respect of the Obligations guaranteed thereby shall be rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payment had not been made.

 

(c)                                  The Lenders (and each other Secured Party by accepting the benefits of the Collateral) hereby agree that the Agents are authorized to, at the request of the Borrower, enter into subordination, intercreditor and/or similar agreements to subordinate the Liens of the Collateral Agent in the Collateral to Permitted Liens with respect to Indebtedness.

 

10.16                 Waivers of Jury Trial. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

10.17                 USA PATRIOT ACT. The Administrative Agent, the Collateral Agent and each Lender and Issuing Lender hereby notifies the Loan Parties that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender or Issuing Lender or the Administrative Agent or Collateral Agent, as applicable, to identify such Loan Party in accordance with the Patriot Act. Each Loan Party shall, and shall cause each of its Subsidiaries to, provide to the extent commercially reasonable, such information and take such other actions as are reasonably requested by the Administrative Agent, the Collateral Agent or any Lender or Issuing Lender in order to assist the Administrative Agent, the Collateral Agent and the Lenders and Issuing Lenders in maintaining compliance with the Patriot Act.

 

10.18                 Lender Action. Each Lender (and each other Secured Party by accepting the benefits of the Collateral) agrees that it shall not take or institute any actions or proceedings, judicial or otherwise, for any right or remedy against any Loan Party or any other obligor under

 

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any of the Loan Documents or the Specified Hedge Agreements or the Cash Management Documents (including the exercise of any right of setoff, rights on account of any banker’s lien or similar claim or other rights of self-help), or institute any actions or proceedings, or otherwise commence any remedial procedures, with respect to any Collateral or any other property of any such Loan Party, without the prior written consent of the Administrative Agent.

 

10.19      Marshalling; Payments Set Aside. Neither any Agent nor any Lender shall be under any obligation to marshal any assets in favor of any Loan Party or any other Person or against or in payment of any or all of the Secured Obligations. To the extent that any Loan Party makes a payment or payments to any Agent or Lenders (or to an Agent, on behalf of Lenders), or any Agent or Lenders enforce any security interests or exercise their rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, any other state or federal law, common law or any equitable cause, then, to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related thereto, shall be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or setoff had not occurred.

 

10.20      Interest Rate Limitation. Notwithstanding anything herein to the contrary, the interest rate applicable to any Loan, together with all fees, charges and other amounts which may be treated as interest on such Loan under applicable law (collectively, the “Interest Charges”), shall not exceed the maximum lawful rate of interest (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by a Lender holding such Loan in accordance with applicable law. If any Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to Borrower. In determining whether the interest contracted for, charged, or received by an Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder. To the extent permitted by applicable Law, the Interest Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section 10.20 shall be cumulated and the Interest 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. Thereafter, interest hereunder shall be paid at the rate(s) of interest and in the manner provided in this Agreement, unless and until the rate of interest again exceeds the Maximum Rate, and at that time this Section 10.20 shall again apply.

 

10.21      Application of Gaming Regulations. This Agreement and the Security Documents are subject to the Gaming Regulations, including Liquor Laws. Without limiting the foregoing, the Agents and the Lenders acknowledge that rights, remedies and powers in or under this Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provisions of the Gaming Regulations and Liquor Laws and only to the extent that required approvals (including prior approvals) are obtained from the requisite Gaming Authorities and such other Governmental Authorities. Each of the Lenders and the Agents agrees, at the request of the Borrower or the respective Gaming Authority, to cooperate with the applicable Gaming Authorities in connection with the administration of their regulatory jurisdiction over the Borrower to the extent not inconsistent with the internal policies of such Lender or Agent and any

 

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applicable legal or regulatory restrictions, including the provision of such documents or other information as may be requested by any such Gaming Authorities relating to the Borrower, any of its Affiliates or the Loan Documents. Notwithstanding any other provision of this Agreement, the Borrower expressly authorizes, and will cause each other Loan Party to authorize, each Agent and each Lender to cooperate with the applicable Gaming Authorities as described above and releases each Agent and each Lender from any liability for any such cooperation or related disclosure. Notwithstanding anything to the contrary, all actions taken by each Lender and each Agent pursuant to this Section 10.21 shall be at sole reasonable expense of the Borrower, who hereby agrees to reimburse all reasonable expenses, including attorneys’ fees, incurred by each Lender and each Agent in connection with such actions in accordance with Section 10.5(e).

 

10.22      Intercreditor Agreement. REFERENCE IS MADE TO THE INTERCREDITOR AGREEMENT. EACH LENDER AND ISSUING LENDER HEREUNDER (a) AGREES THAT IT WILL BE BOUND BY AND WILL TAKE NO ACTIONS CONTRARY TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND (b) AUTHORIZES AND INSTRUCTS THE ADMINISTRATIVE AGENT TO ENTER INTO THE INTERCREDITOR AGREEMENT AS “FIRST LIEN AGENT” AND ON BEHALF OF SUCH LENDER. THE PROVISIONS OF THIS SECTION 10.22 ARE NOT INTENDED TO SUMMARIZE ALL RELEVANT PROVISIONS OF THE INTERCREDITOR AGREEMENT. REFERENCE MUST BE MADE TO THE INTERCREDITOR AGREEMENT ITSELF TO UNDERSTAND ALL TERMS AND CONDITIONS THEREOF. EACH LENDER IS RESPONSIBLE FOR MAKING ITS OWN ANALYSIS AND REVIEW OF THE INTERCREDITOR AGREEMENT AND THE TERMS AND PROVISIONS THEREOF, AND NEITHER THE ADMINISTRATIVE AGENT NOR ANY OF ITS AFFILIATES MAKES ANY REPRESENTATION TO ANY LENDER AS TO THE SUFFICIENCY OR ADVISABILITY OF THE PROVISIONS CONTAINED IN THE INTERCREDITOR AGREEMENT. THE FOREGOING PROVISIONS ARE INTENDED AS AN INDUCEMENT TO THE LENDERS UNDER ANY SECOND LIEN FACILITY TO EXTEND CREDIT AND SUCH LENDERS ARE INTENDED THIRD PARTY BENEFICIARIES OF SUCH PROVISIONS AND THE PROVISIONS OF THE INTERCREDITOR AGREEMENT.

 

10.23      10.22 No Advisory or Fiduciary Relationship. In connection with all aspects of the transactions contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by the Agents, the Lenders and the Lead Arrangers are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Administrative Agent, the Lenders and the Lead Arrangers, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) each of the Agents, the Lenders and the Lead Arrangers is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) neither any Agent nor any Lender or Lead Arranger has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Agents, each Lender and the Lead Arrangers and their respective Affiliates may be engaged in a broad range of transactions that involve interests that

 

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differ from those of the Borrower and its Affiliates, and neither the Agents nor any Lender or any Arranger has any obligation to disclose any of such interests to the Borrower or any of its Affiliates. To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against any Agent, any Lender or any Lead Arranger with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

 

10.24      10.23Conflicts. Notwithstanding anything to the contrary contained herein or in any other Loan Document (but excluding any intercreditor or subordination agreement), in the event of any conflict or inconsistency between this Agreement and any other Loan Document (excluding any intercreditor or subordination agreement), the terms of this Agreement shall govern and control; provided that in the case of any conflict or inconsistency between any intercreditor or subordination agreement and any other Loan Document, the terms of such intercreditor or subordination agreement shall govern and control.

 

10.24Post-Closing Covenants.

 

Notwithstanding anything to the contrary contained in this Agreement or the other Loan Documents, the parties hereto acknowledge and agree that:

 

(a)the Borrower shall have (x) delivered to the Collateral Agent the items required by Section 6.8(b) for the properties identified on Schedule 10.24 within 60 days after the Closing Date (as such date may be extended (with respect to a given action or actions) at the sole discretion of the Administrative Agent) and (y) taken such actions and/or delivered such items as otherwise set forth on Schedule 10.24 by the dates with respect thereto described on Schedule 10.24 (as such dates may be extended (with respect to a given action or actions) at the sole discretion of the Administrative Agent); provided that the Borrower shall not be in violation of clause (a)(x) in respect of any Leasehold where the consent of any third party is necessary to deliver the Mortgage contemplated by Schedule 10.24 with respect to such Leasehold (and such consent is not obtained after the Borrower’s use of commercially reasonable efforts to obtain the same); and

 

(b)the Borrower shall (x) obtain as promptly as possible, but in any event within 150 days after the Closing Date (as such date may be extended at the sole discretion of the Administrative Agent), all approvals of any Gaming Authority (collectively, the “Gaming Commission Approvals”) required to pledge, or cause to be pledged, the Capital Stock of The Sands Regent, LLC, The Primadonna Company, LLC, Flamingo Paradise Gaming, LLC, Plantation Investments, LLC, Dayton Gaming, LLC and California Prospectors, Ltd. pursuant to the Guarantee and Collateral Agreement and (y) upon receipt of the Gaming Commission Approvals, be required as promptly as possible, but in any event within five Business Days after such date of receipt, to pledge, and cause to be pledged, the Capital Stock of The Sands Regent, LLC, The Primadonna Company, LLC, Flamingo Paradise Gaming, LLC, Plantation Investments, LLC, Dayton Gaming, LLC, California Prospectors, Ltd. in accordance with the terms of the Guarantee and Collateral Agreement.

 

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

 

	
 
    	
AFFINITY GAMING, as   Borrower
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Signature page to Credit Agreement

 

 

	
 
    	
CREDIT SUISSE AG,   CAYMAN ISLANDS BRANCH
    
	
 
    	
as Administrative   Agent, Issuing Lender and Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Signature  page  to  Credit  Agreement

 

 

	
 
    	
MACQUARIE CAPITAL   FUNDING LLC,
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Signature  page  to  Credit  Agreement

 

 

	
 
    	
FIFTH THIRD BANK,
    
	
 
    	
as an Issuing Lender   and Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

 

ANNEX I

 

LENDER AGREEMENT — CONSENTING LENDERS

 

Reference is hereby made to the First Amendment to Credit Agreement, dated as of September 30, 2016 (the “Agreement”; capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to them in the Agreement), by and among Affinity Gaming, a Nevada corporation, the Subsidiary Guarantors and Credit Suisse AG, Cayman Islands Branch, as Administrative Agent for (and on behalf of) the Lenders under the Existing Credit Agreement referred to below and, after giving effect thereto, the Amended Credit Agreement and as Collateral Agent for the Secured Parties (as defined under the Existing Credit Agreement and, after giving effect thereto, the Amended Credit Agreement).

 

By its signature below, the undersigned hereby (a) consents and agrees to the terms and conditions of the Agreement (including the amendments to the Existing Credit Agreement attached to the Agreement as the Amended Credit Agreement), (b) authorizes the Administrative Agent to execute the Agreement on its behalf as if it were a party thereto and to execute the other amendments, modifications, supplements, instruments or agreements entered into in accordance with Section 4 of Article I of the Agreement; and (c) represents that it is a Lender under the Existing Credit Agreement.

 

The undersigned hereby agrees that this Consenting Lender Agreement shall be binding upon the undersigned and each of its successors and any participants and assigns of its Loans or Commitments under the Existing Credit Agreement, and may not be revoked or withdrawn.  The undersigned agrees that it shall notify any potential successor or any participant or assignee of any of its Loans or Commitments under the Existing Credit Agreement of the effectiveness of this Consenting Lender Agreement prior to consummating any such transfer, assignment or participation.  This Consenting Lender Agreement shall be irrevocable and remain in full force and effect until the First Amendment Effective Date shall have occurred; provided however, unless otherwise agreed by the Consenting Lender in writing (including by email), this Agreement shall automatically terminate on May 30, 2017.

 

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.

 

[Remainder of this page intentionally left blank]

 

 

	
 
    	
 
    
	
 
    	
[NAME OF INSTITUTION],   as a Consenting Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
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[If a second signature is necessary:
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:]
    	
 
    

 

[Signature Page to Lender Agreement]

 

 

ANNEX II

 

ADDITIONAL INITIAL TERM LENDER JOINDER AGREEMENT

 

THIS ADDITIONAL INITIAL TERM LENDER JOINDER AGREEMENT (this “Joinder Agreement”) dated as of [·], 201[·] is executed by [·] (the “Additional Initial Term Lender”).

 

WHEREAS, Affinity Gaming (the “Borrower”), a Nevada corporation, the several banks and other financial institutions or Persons from time to time parties to the Agreement as lenders (collectively, the “Lenders”), Credit Suisse AG, Cayman Islands Branch, as administrative agent (in such capacity, together with its successors and permitted assigns, the “Administrative Agent”) and collateral agent, and the other parties from time to time party thereto, have entered into that certain Credit Agreement dated as of dated as of July 1, 2016 (as amended by that certain First Amendment to Credit Agreement dated as of September 30, 2016 (the “First Amendment”) and as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”); and

 

WHEREAS, pursuant to Article I Section 2 of the First Amendment, the Borrower has requested Additional Initial Term Loans (as defined in the First Amendment); and

 

WHEREAS, the Additional Initial Term Lender desires to become a “Lender” under the Credit Agreement in connection with the Additional Initial Term Loans.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged by the parties hereto, the parties hereto hereby agree as follows:

 

Section 1.  Joinder.  Effective as of the date hereof (the “Effective Date”), the Additional Initial Term Lender acknowledges and agrees that it shall be a Lender under the Credit Agreement having, following the funding thereof, Additional Initial Term Loans in the aggregate principal amount of $[·] and shall have all of the rights and obligations of a Lender under the Credit Agreement and the other Loan Documents, including without limitation, all voting rights associated with such Loans, all rights to receive interest on all Loans made by the Additional Initial Term Lender and all fees with respect to its Loans and other rights of a Lender under the Credit Agreement and the other Loan Documents with respect to its Loans.  The Additional Initial Term Lender, subject to the terms and conditions hereof, hereby assumes all obligations with respect to its Loans, which obligations shall include, but shall not be limited to, the obligation to indemnify the Administrative Agent as provided in the Credit Agreement.

 

By its signature below, in its capacity as an Additional Initial Term Lender under the First Amendment, the undersigned hereby (a) consents and agrees to the terms of the Credit Agreement (including the amendments to the Existing Credit Agreement attached to the First Amendment as the Amended Credit Agreement (as defined therein)) and (b) agrees, on the terms and subject to the conditions set forth in the Credit Agreement (including the First Amendment), to provide its Additional Initial Term Loans on the First Amendment Effective Date (as defined in the First Amendment).

 

Section 2.  Representations, Warranties and Agreements of the Additional Initial Term Lender.  The Additional Initial Term Lender makes and confirms to the Administrative Agent and the other Lenders all of the representations, warranties and covenants of a Lender under the Credit Agreement. Without limiting the foregoing, the Additional Initial Term Lender (a) represents and warrants that (i) it is legally

 

 

authorized to, and has full power and authority to, enter into this Joinder Agreement and perform its obligations under this Joinder Agreement; (ii) it is not (1) a natural person, (2) a Disqualified Institution, (3) except as permitted under Section 10.6(c) of the Credit Agreement, the Borrower or an Affiliate of the Borrower or (4) a Defaulting Lender and (iii) it meets all the requirements to be an assignee under Section 10.6 of the Credit Agreement, and is an Eligible Assignee (as defined in the Amended Credit Agreement) (subject to such consents, if any, as may be required under Section 10.6 of the Credit Agreement); (b) confirms that it has received copies of such documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Joinder Agreement; (c) agrees that it has and will, independently and without reliance upon the Administrative Agent or any Lender and based upon such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in evaluating the Loans, the Loan Documents, the creditworthiness of the Borrower and the Guarantors and the value of the assets of the Borrower and the Guarantors, and taking or not taking action under the Loan Documents; (d) appoints and authorizes the Administrative Agent and the Collateral Agent to take such action as agent on its behalf and to exercise such powers as are reasonably incidental thereto pursuant to the terms of the Loan Documents; (e) agrees that, by this Joinder Agreement, the Additional Initial Term Lender has become a party to and will perform in accordance with their terms all the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender; and (f) prior to the date hereof has delivered to the Borrower and the Administrative Agent any documentation required to be delivered by it pursuant to Section 2.20 of the Credit Agreement, duly completed and executed by the Additional Initial Term Lender.

 

Section 3.  Address and Payment Instructions.  The Additional Initial Term Lender specifies as its address for notices and its Lending Office for all Loans the offices set forth below:

 

	
Notice Address:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Attention:
    	
 
    
	
 
    	
Email:
    	
 
    
	
 
    	
Telephone:
    	
(     )        -     
    
	
 
    	
Facsimile:
    	
(     )        -     
    
	
 
    	
 
    	
 
    
	
Domestic Lending Office:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Attention:
    	
 
    
	
 
    	
Email:
    	
 
    
	
 
    	
Telephone:
    	
(     )        -      
    
	
 
    	
Facsimile:
    	
(     )        -      
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Eurodollar Lending Office:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Attention:
    	
 
    
	
 
    	
Email:
    	
 
    
	
 
    	
Telephone:
    	
(     )      -      
    
	
 
    	
Facsimile:
    	
(     )      -      
    

 

 

All payments to the Additional Initial Term Lender under the Credit Agreement shall be made as provided in the Credit Agreement in accordance with separate instructions delivered to the Administrative Agent.

 

Section 4.  Effectiveness of Agreement.  This Joinder Agreement shall not be effective until this Joinder Agreement is executed and delivered by the Additional Initial Term Lender and acknowledged by the Administrative Agent and the Borrower and each of the following conditions shall have been satisfied:

 

(a)         Prior to or substantially concurrently with the funding of the Additional Initial Term Loans, the First Amendment Effective Date shall have occurred.

 

(b)         Each condition required to be satisfied prior to the making of the Additional Initial Term Loans under that certain Commitment Letter (as amended, restated, replaced, supplemented or otherwise modified from time to time the “Commitment Letter”) dated as of September 6, 2016 among AcquisitionCo and the Lead Arrangers (as defined in the Amended Credit Agreement for periods after the First Amendment Effective Date) shall have been satisfied or waived in accordance with the terms thereof.

 

(c)          The Administrative Agent shall have received a notice of borrowing substantially similar to Exhibit A-1 to the Existing Credit Agreement with respect to the Borrowing of the Additional Initial Term Loans.

 

Section 5.  Agreements of Borrower.  The Borrower hereby agrees that the Additional Initial Term Lender shall be a Lender under the Credit Agreement having the Loans as set forth herein.  The Borrower agrees that the Additional Initial Term Lender shall have all of the rights and remedies of a Lender under the Credit Agreement and the other Loan Documents as if the Additional Initial Term Lender were an original Lender under and signatory to the Credit Agreement.  Further, the Additional Initial Term Lender shall be entitled to the indemnification provisions from the Borrower in favor of the Lenders as provided in the Credit Agreement and the other Loan Documents.

 

Section 6.  Governing Law.  THIS JOINDER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

Section 7.  Counterparts.  This Joinder Agreement may be executed in any number of counterparts each of which, when taken together, shall constitute one and the same agreement.  Delivery of an executed signature page of this Joinder Agreement by facsimile transmission or by electronic mail as a “.pdf” or “.tif” attachment shall be effective as delivery of a manually executed counterpart hereof.

 

Section 8.  Headings.  Section headings have been inserted herein for convenience only and shall not be construed to be a part hereof.

 

Section 9.  Amendments; Waivers.  This Joinder Agreement may not be amended, changed, waived or modified except by a writing executed by the Additional Initial Term Lender, the Borrower and the Administrative Agent.

 

Section 10.  Binding Effect.  This Joinder Agreement shall be binding upon the Additional Initial Term Lender, and its successors and permitted assigns and shall inure to the benefit of the Borrower, the Administrative Agent, and the Lenders, and their respective successors and permitted assigns.

 

 

Section 11.  Definitions.  Terms not otherwise defined herein are used herein with the respective meanings given them in the Credit Agreement.

 

Section 12.  Entire Agreement.  This Joinder Agreement embodies the entire agreement of the parties with respect to the subject matter hereof and supersedes all other prior arrangements and understandings relating to the subject matter hereof.

 

[Signature pages follow]

 

 

IN WITNESS WHEREOF, the undersigned has duly executed this Joinder Agreement as of the date and year first written above.

 

 

	
 
    	
[ADDITIONAL INITIAL TERM LENDER]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
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[If a second signature is necessary:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:]
    

 

[Signature pages continue on next page]

 

 

	
Acknowledged and Accepted as of the
    	
 
    
	
date first written above.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH 
   as Administrative Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
AFFINITY GAMING
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
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Title:
    	
 
    	
 
    

 

[Final signature page to Joinder Agreement]

 

 

Schedule 1

 

Consents, Authorizations, Filings and Notices

 

Colorado - The Modified Financing will need to be submitted to the Colorado Division of Gaming prior to the First Amendment Effective Date.  Approval of the Modified Financing by the Colorado Division of Gaming would take place in conjunction with the approval of the Change of Ownership application filed in Colorado, which also requires approval prior to the First Amendment Effective Date.

 

Iowa - The Modified Financing will need to be approved no later than the First Amendment Effective Date by the Iowa Racing & Gaming Commission.

 

Nevada - Z Capital will need to file with the Nevada Gaming Control Board, after the First Amendment Effective Date, Reg. 8.130 reports for the Modified Financing.

 

For purposes of the foregoing, “Modified Financing” means the transactions to occur on the First Amendment Effective Date, including the consummation of the transactions under the Second Lien Term Loan Agreement.

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