Document:

Exhibit 4.2

 

FIRST AMENDED
AND RESTATED RIGHTS AGREEMENT

 

This First Amended
and Restated Rights Agreement, dated as of August 20, 2015 (the "Agreement"), is between PERCEPTRON, INC., a Michigan
corporation (the "Company"), and AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC (the "Rights Agent").

 

WITNESSETH

 

WHEREAS, this Agreement
amends and restates that certain Rights Agreement, dated March 28, 1998, between the Company and the Rights Agent, as amended by
a First Amendment to Rights Agreement dated March 17, 2008 (the "Original Rights Agreement"). Upon execution and delivery
of this Agreement, the Original Rights Agreement shall be superseded.

 

WHEREAS, the Board
of Directors of the Company previously authorized and declared a dividend distribution (the "Distribution") of one Right
for each outstanding share of the Common Stock, $0.01 par value, of the Company outstanding on April 6, 1998 (the "Record
Date") and authorized the issuance of one Right in respect of each share of Common Stock of the Company issued between April
6, 1998 and the earlier of the Distribution Date, the Expiration Date or the Final Expiration Date (as such terms are hereinafter
defined), and under certain other circumstances, each Right initially representing the right to purchase one one-hundredth of a
share of Series A Preferred Stock of the Company having the rights, powers and preferences set forth in the Articles of Amendment
attached hereto as Exhibit A, upon the terms and subject to the conditions hereinafter set forth (the "Rights");

 

NOW, THEREFORE, in
consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:

 

SECTION 1.          CERTAIN
DEFINITIONS. For purposes of this Agreement, the following terms have the meanings indicated:

 

(a)          "Acquiring
Person" shall mean any Person (as such term is hereinafter defined) who or which, together with all Affiliates (as such term
is hereinafter defined) and Associates (as such term is hereinafter defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of securities of the Company constituting a Substantial Block (as such term is hereinafter defined),
but shall not include the Company or any subsidiary of the Company, or any employee benefit plan of the Company or of any subsidiary
of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any
such plan; provided, further, if the Board of Directors determines in good faith that a Person who would otherwise
be an "Acquiring Person" has become such inadvertently (including, without limitation, because (i) such Person was unaware
that he or it beneficially owned a percentage of Common Stock that would otherwise cause such Person to be an "Acquiring Person"
or (ii) such Person was aware of the extent of his or its Beneficial Ownership but had no actual knowledge of the consequences
of such Beneficial Ownership under this Agreement) and without any intention of changing or influencing control of the Company,
and if such Person as promptly as practicable has divested or divests himself or itself of Beneficial Ownership of a sufficient
number of shares of Common Stock so that such Person would no longer be an "Acquiring Person," then such Person shall
not be deemed to be or to have become an "Acquiring Person" for any purposes of this Agreement; and provided,
further, that no Person shall be deemed to be an "Acquiring Person" on account of Common Stock of the Company
beneficially owned by such Person as of the time the adoption of this Agreement is first publicly announced unless after such announcement
such Person shall become the Beneficial Owner of any additional shares of Common Stock. Notwithstanding the foregoing, no Person
shall become an "Acquiring Person" as the result of an acquisition of Common Stock by the Company which, by reducing
the number of shares outstanding, increases the proportionate number of shares beneficially owned by such Person to 20% or more
of the Common Stock then outstanding; provided, however, that if a Person shall become the Beneficial Owner of 20%
or more of the Common Stock then outstanding by reason of share purchases by the Company and shall, after such share purchases
by the Company, become the Beneficial Owner of any additional shares of Common Stock, then such Person shall be deemed to be an
"Acquiring Person."

 

    	 

     

    

 

(b)          "Affiliate"
and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") as in effect on the date of this Agreement.

 

(c)          A
Person shall be deemed the "Beneficial Owner" of, shall have "Beneficial Ownership" of and shall be deemed
to "beneficially own" any securities:

 

(i)          which
such Person, or any of such Person's Affiliates or Associates, beneficially owns, directly or indirectly;

 

(ii)         which
such Person or any of such Person's Affiliates or Associates, directly or indirectly, has (A) the right to acquire (whether such
right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether
or not in writing), or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of, to have "Beneficial Ownership"
of, or to "beneficially own," (1) securities tendered pursuant to a tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or Associates until such tendered securities are accepted for purchase or exchange,
or (2) securities issuable upon exercise of Rights at any time prior to the occurrence of a Triggering Event or (3) securities
issuable upon exercise of Rights from and after the occurrence of a Triggering Event, which Rights were acquired by such Person
or any of such Person's Affiliates or Associates prior to the Distribution Date or pursuant to Section 3(a) hereof ("Original
Rights") or pursuant to Section 11(i) or Section 22 hereof in connection with an adjustment made with respect to Original
Rights; or (B) the right to vote or dispose of, pursuant to any agreement, arrangement or understanding (whether or not in writing);
provided, however, that a Person shall not be deemed the "Beneficial Owner" of, to have "Beneficial
Ownership" of, or to "beneficially own," any security under this clause (B) if the agreement, arrangement or understanding
to vote such security (1) arises solely from a revocable proxy given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations of the Exchange Act and (2) is not then reportable by
such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); or

 

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(iii)        which are beneficially
owned, directly or indirectly, by any other Person with which such Person or any of such Person's Affiliates or Associates has
any agreement, arrangement or understanding (whether or not in writing) for the purpose of acquiring, holding, voting (except pursuant
to a revocable proxy as described in clause (B) of subparagraph (ii) of this paragraph (c)) or disposing of any securities of the
Company; provided, however, that nothing in this paragraph (c) shall cause a person engaged in business as an underwriter
of securities to be the "Beneficial Owner" of, to have "Beneficial Ownership" of, or to "beneficially
own," any securities acquired through such person's participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.

 

Notwithstanding anything in this
definition to the contrary, the phrase "then outstanding," when used with reference hereto, shall mean the number of
such securities then issued and outstanding together with the number of such securities not then actually issued and outstanding
which such Person would be deemed to own beneficially hereunder.

 

(d)          "Business
Day" shall mean any day other than a Saturday, Sunday, or a day on which banking institutions in the State of Michigan or
the State of New York are authorized or obligated by law or executive order to close.

 

(e)          "Close
of business" on any given date shall mean 5:00 P.M., Detroit, Michigan time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00 P.M., Detroit, Michigan time, on the next succeeding Business Day.

 

(f)           "Common
Stock" when used with reference to the Company shall mean the Common Stock, $0.01 par value, of the Company, and when used
with reference to any Person other than the Company shall mean the capital stock (or equity interest) with the greatest voting
power, or the equity securities or other equity interest having power to control or direct the management, of such Person or, if
such other Person is a subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person.

 

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(g)          "Definitive
Acquisition Agreement" shall mean any agreement entered into by the Company that is conditioned on the approval by the holders
of not less than a majority of the outstanding shares of Common Stock then outstanding at a meeting of shareholders with respect
to (i) a merger, consolidation, recapitalization, reorganization, share exchange, business combination or similar transaction involving
the Company or (ii) the acquisition in any manner, directly or indirectly, of more than 50% of the consolidated total assets (including,
without limitation, equity securities of its subsidiaries) of the Company.

 

(h)         "Distribution
Date" shall have the meaning set forth in Section 3 hereof.

 

(i)          "Expiration
Date" shall have the meaning set forth in Section 7 hereof.

 

(j)          "Final
Expiration Date" shall have the meaning set forth in Section 7 hereof.

 

(k)         "Nasdaq
Stock Market" shall mean the stock market operated by The Nasdaq Stock Market, Inc.

 

(l)          "Permitted
Offer" shall have the meaning set forth in Section 11(a)(ii)(B)(2) hereof.

 

(m)        "Person"
shall mean any individual, firm, corporation or other entity and shall include any successor (by merger or otherwise) of such entity.

 

(n)         "Qualified
Offer" shall mean a tender offer for all outstanding Common Stock of the Company which meets all of the following requirements
on the date on which the offer is commenced (for purposes of this definition, the "date on which the offer is commenced"
shall be determined within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act) and immediately
prior to the consummation of the offer.

 

(i)          the
same per share price is offered for all Common Stock in the offer, provided that such per share price is greater than the highest
closing price per share for the Common Stock during the 365 calendar day period immediately preceding the date on which the offer
is commenced (as determined pursuant to Section 11(d)(i) hereof) (for purposes of this definition, the "date on which the
offer is commenced" shall be determined within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act);

 

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(ii)         in
the case of an offer that includes shares of common stock of the offering Person, (A) the value of such shares for purposes of
this definition shall be the lower of (1) the average of the last sale prices (regular way) of such shares reported in the principal
consolidated transaction reporting system with respect to such shares for the five Trading Days immediately preceding the date
of any determination, and (2) the lowest reported market price for common stock of the offering Person during the five Trading
Days immediately preceding the date on which the offer is commenced, (B) the offering Person is a publicly owned United States
corporation and its common stock is listed or admitted to trading on either the New York Stock Exchange or the Nasdaq Stock Market,
(C) no stockholder approval of the offering Person is required to issue such common stock, or, if required, has already been obtained,
(D) no other class of voting stock of the offering Person is outstanding, (E) the offering Person meets the registrant eligibility
requirements for use of Form S-3 for registering securities under the Securities Act of 1933, as amended, including, without limitation,
the filing of all required Exchange Act reports in a timely manner during the twelve calendar months prior to the date of commencement
of the offer, (F) the offering Person shall permit representatives of the Company, including a nationally recognized investment
banking firm retained by the Board of Directors of the Company, legal counsel and an accounting firm designated by the Company,
to have access to such offering Person's books, records, management, accountants and other appropriate outside advisers for the
purposes of permitting such representatives to conduct a due diligence review of the offering Person in order to permit such investment
banking firm (relying as appropriate on the advice of such legal counsel) to be able to render an opinion to the Board of Directors
of the Company with respect to whether the consideration being offered to the Company's shareholders is fair and in order to permit
the Board of Directors of the Company to evaluate the offer and make an informed decision; and (G) within 10 Business Days after
such representatives of the Company (including a nationally recognized investment banking firm retained by the Board of Directors
of the Company and legal counsel and an accounting firm designated by the Company) shall have notified the Company and the offeror
that they have completed such due diligence review to their satisfaction (or, following completion of such due diligence review,
within 10 Business Days after any increase in the offer consideration), such investment banking firm does not render an opinion
to the Board of Directors of the Company that the consideration being offered to the shareholders of the Company is either unfair
or inadequate and such investment banking firm does not, after the expiration of such 10 Business Day period, render an opinion
to the Board of Directors of the Company that the consideration being offered to the shareholders of the Company has become either
unfair or inadequate based on a subsequent disclosure or discovery of a development or developments that have had or are reasonably
likely to have a material adverse effect on the value of the common stock of the offeror;

 

(iii)       on
or prior to the date on which the offer is commenced, such offering Person:

 

(A)        has
on hand cash or cash equivalents for the full amount necessary to consummate such offer and has irrevocably committed in writing
to the Company to utilize such cash or cash equivalents for purposes, of such offer if consummated and to set apart and maintain
available such cash or cash equivalents for such purposes until the offer is consummated or withdrawn; or

 

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(B)        has
all financing in the full amount necessary to consummate such offer and has: (1) entered into, and provided to the Company certified
copies of, definitive financing agreements (including exhibits and related documents) for funds for such offer which, when added
to the amount of cash and cash equivalents available, committed in writing, set apart and maintained in the same manner as described
in clause (A) above, are in an amount not less than the full amount necessary to consummate such offer, which agreements are with
one or more responsible financial institutions or other entities having the necessary financial capacity and ability to provide
such funds, constitute firm, unqualified commitments to provide the funding described above without market or company maximum limitations,
and are subject only to customary terms and conditions (which shall in no event include conditions requiring access by such financial
institutions to non-public information to be provided by the Company, conditions based on the accuracy of any information concerning
the Company, or conditions requiring the Company to make any representations, warranties or covenants in connection with such financing),
and (2) provided to the Company copies of all written materials prepared by such Person for such financial institutions in connection
with entering into such financing agreements; provided that, "the full amount necessary to consummate such offer" in
either clause (A) or (B) above shall be an amount sufficient to pay for all Common Stock outstanding on a fully diluted basis the
consideration pursuant to the offer and the second-step transaction required by clause (viii) below and all related expenses;

 

(iv)        such
offer is conditioned on receiving a minimum of at least 90% of the outstanding Common Stock (other than those owned by the offering
Person) being tendered and not withdrawn as of the offer's expiration date, which condition shall not be waivable;

 

(v)         prior
to or on the date that such offer is commenced, the Company shall have received an irrevocable written commitment of the offering
Person that the offer will remain open for at least 60 Business Days and, if a Special Meeting is duly requested in accordance
with Section 23(d), for at least 10 Business Days after the date of the Special Meeting or, if no Special Meeting is held within
90 Business Days following receipt of the Special Meeting Notice in accordance with Section 23(d), for at least 10 Business Days
following such 90 Business Day period; provided, however, that (x) if there is any increase in the price of such offer, such offer
must remain open for at least an additional 15 Business Days after the last such increase, (y) such offer must remain open for
at least 15 Business Days after the date that any bona fide alternative offer is made which, in the opinion of one or more investment
banking firms designated by the Company, provides for consideration per share in excess of that provided for in such offer, and
(z) such offer must remain open for at least 15 Business Days after the date, if any, on which such offering Person reduces the
per share price offered in accordance with clause (vii)(B) below (provided, in the case of each of clauses (x), (y) and (z) above,
in no event will such offer have been outstanding for less than 60 Business Days); provided further, however, that such offer need
not remain open, as a result of this clause (v), beyond (1) the time which any other offer satisfying the criteria for a Qualified
Offer is then required to be kept open under this clause (v), (2) the scheduled expiration date, as such date may be extended by
public announcement on or prior to the then scheduled expiration date, of any other tender offer for Common Stock with respect
to which the Board of Directors has agreed to redeem the Rights immediately prior to acceptance for payment of Common Stock thereunder
(unless such other offer is terminated prior to its expiration without any Common Stock having been purchased thereunder) or (3)
one Business Day after the shareholder vote with respect to approval of any Definitive Acquisition Agreement has been officially
determined and certified by the inspector of elections;

 

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(vi)       an
offer that, within 20 Business Days after the commencement date of the offer (or within 10 Business Days after any increase in
the offer consideration), does not result in a nationally recognized investment banking firm retained by the Board of Directors
of the Company rendering an opinion to the Board of Directors of the Company that the consideration being offered to the holders
of the Common Stock is either unfair or inadequate;

 

(vii)       prior
to or on the date that such offer is commenced, such offering Person makes an irrevocable written commitment to the Company and,
with respect to clause (A) to the Company's shareholders,

 

(A)        to
consummate a transaction or transactions promptly upon the completion of such offer (and in no event later than five Business Days
thereafter), whereby all Common Stock not purchased in such offer will be acquired at the same cash price per share paid in such
offer, and

 

(B)        that
the offering Person will not make any amendments to the offer to reduce the offer consideration, or otherwise change the terms
of the offer in a way that is adverse to a tendering shareholder (other than a reduction to reflect any dividend declared by the
Company, other than a regular quarterly dividend, after the commencement of such offer or any material change in the capital structure
of the Company initiated by the Company after the commencement of such offer, whether by way of reclassification, recapitalization,
reorganization, repurchase or otherwise);

 

(viii)     the
offer is subject only to the conditions required in this definition and other customary terms and conditions, and is not subject
to any financing, funding or similar condition, nor any condition relating to completion of or satisfaction with any due diligence
or similar investigation; and

 

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(ix)        an
offer (other than an offer consisting solely of cash consideration) pursuant to which the Company has received the written representation
and certification of the offering Person and the written representations and certifications of the offering Person's Chief Executive
Officer and Chief Financial Officer, acting in such capacities, that (A) all facts about the offering Person that would be material
to making a shareholder's decision to accept the offer have been fully and accurately disclosed as of the date of the commencement
of the offer, (B) all such new facts will be fully and accurately disclosed on a prompt basis during the entire period during which
the offer remains open and (C) all required Exchange Act reports will be filed by the offering Person in a timely manner during
such period.

 

(n)          "Preferred
Stock" shall mean shares of Series A Preferred Stock, no par value, of the Company.

 

(o)          "Shares
Acquisition Date" shall mean the first date of public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such.

 

(p)          "Shareholder
Approval" shall mean the approval of this Agreement by the affirmative vote of the holders of a majority of the voting power
of the outstanding shares of Common Stock (or other shares that vote together with the Common Stock as one class for purposes of
such an approval) entitled to vote and that are present, or represented by proxy, and are voted on the proposal to approve this
Agreement, at a meeting of shareholders of the Company duly held in accordance with applicable law.

 

(q)          "Subsidiary"
or "subsidiary" of any Person shall mean any corporation or other entity of which a majority of the voting power of the
voting equity securities or equity interest is owned, directly or indirectly, by such Person.

 

(r)           "Substantial
Block" shall mean a number of shares of the Common Stock which equals or exceeds 20% of the number of shares of the Common
Stock then outstanding.

 

(s)           "Triggering
Event" shall mean any event described in Section 11(a)(ii)(A), (B) or (C) or Section 13(a).

 

SECTION 2.         APPOINTMENT
OF RIGHTS AGENT. The Company hereby appoints the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof shall prior to the Distribution Date also be the holders of the Common Stock) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint
such Co-Rights Agents as it may deem necessary or desirable.

 

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SECTION 3.         ISSUE
OF RIGHT CERTIFICATES. (a) Until the earlier of (i) the tenth business day after the Shares Acquisition Date (or, if the tenth
day after the Shares Acquisition Date occurs before the Record Date, the close of business on the Record Date) (or, if such Shares
Acquisition Date results from the consummation of a Permitted Offer, such later date as may be determined before the Distribution
Date by action of the Board of Directors, as provided in the next sentence) or (ii) the tenth business day (or such later date
as may be determined by action of the Board of Directors, prior to such time as any Person becomes an Acquiring Person) after the
date of the commencement of, or first public announcement of the intent to commence, by any Person (other than the Company, any
subsidiary of the Company, or any employee benefit plan of the Company or of any subsidiary of the Company or any Person or entity
organized, appointed or established by the Company for or pursuant to the terms of any such plan), a tender or exchange offer if,
upon consummation thereof, such Person would be an Acquiring Person, other than a tender or exchange offer that is determined before
the Distribution Date to be a Permitted Offer, (including any such date which is after the date of this Agreement and prior to
the issuance of the Rights; the earlier of the dates in subsections (i) and (ii) hereof being herein referred to as the "Distribution
Date"), (A) the Rights will be evidenced (subject to the provisions of paragraph (b) of this Section 3) by the certificates
for the Common Stock registered in the names of the holders of the Common Stock (which certificates for the Common Stock shall
be deemed also to be Right Certificates) and not by separate Right Certificates, and (B) the right to receive Right Certificates
will be transferable only in connection with the transfer of the Common Stock. The Board of Directors of the Company may, to the
extent set forth in the preceding sentence, defer the date set forth in clause (i) or (ii) of the preceding sentence to a specified
later date or to an unspecified later date to be determined by a subsequent action or event (but in no event to a date later than
the close of business on the tenth day after the first occurrence of a Triggering Event). As soon as practicable after the Distribution
Date, the Rights Agent will send, by first-class, insured, postage prepaid mail, to each record holder of the Common Stock as of
the close of business on the Distribution Date, at the address of such holder shown on the records of the Company, a Right Certificate,
in substantially the form of Exhibit B hereto, evidencing one Right for each share of the Common Stock so held. As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates. The Company will notify the Rights Agent promptly of the
Distribution Date.

 

(b)           On
the Record Date, or as soon as practicable thereafter, the Company will send a copy of a Summary of Rights to Purchase Preferred
Stock, in substantially the form attached hereto as Exhibit C (the "Summary of Rights"), by first-class, postage prepaid
mail, to each record holder of the Common Stock as of the close of business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for the Common Stock outstanding as of the Record Date, until the Distribution
Date, the Rights will be evidenced by such certificates for the Common Stock registered in the names of the holders of the Common
Stock. Until the Distribution Date (or earlier redemption, exchange or expiration of the Rights), the surrender for transfer of
any of the certificates for the Common Stock outstanding on the Record Date, shall also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.

 

(c)           Rights
shall be issued in respect of all shares of Common Stock issued after the Record Date but prior to the earlier of the Distribution
Date, the Expiration Date or the Final Expiration Date (as such terms are defined in Section 7). Certificates representing such
shares of Common Stock shall have impressed on, printed on, written on or otherwise affixed to them the following legend:

 

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This certificate also evidences
and entitles the holder hereof to certain Rights as set forth in a First Amended and Restated Rights Agreement between Perceptron,
Inc. and American Stock Transfer & Trust Company, LLC Rights Agent, dated as of August 20, 2015 (the "Rights Agreement"),
the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices
of Perceptron, Inc. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. Perceptron, Inc. will mail to the holder of this certificate
a copy of the Rights Agreement (as in effect on the date of mailing) without charge promptly after receipt of a written request
therefor. Under certain circumstances, Rights which are or were beneficially owned by Acquiring Persons or their Affiliates or
Associates (as such terms are defined in the Rights Agreement) and any subsequent holder of such Rights may become null and void.

 

With respect to such certificates containing
the foregoing legend, until the Distribution Date, the Rights associated with the Common Stock represented by such certificates
shall be evidenced by such certificates alone, and the surrender for transfer of any of such certificates shall also constitute
the transfer of the Rights associated with the Common Stock represented by such certificate. In the event that the Company purchases
or acquires any shares of the Common Stock after the Record Date but prior to the Distribution Date, any Rights associated with
such shares of the Common Stock shall be deemed cancelled and retired so that the Company shall not be entitled to exercise any
Rights associated with the Common Stock which is no longer outstanding.

 

SECTION 4.          FORM
OF RIGHT CERTIFICATES. (a) The Right Certificates (and the forms of election to purchase shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit B hereto and may have such marks of identification or designation
and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform
to usage. Subject to the provisions of Section 22 hereof, the Right Certificates, whenever issued, shall be dated as of the Record
Date, and on their face shall entitle the holders thereof to purchase such number of one one-hundredths of a share of the Preferred
Stock as shall be set forth therein at the price per share set forth therein (the "Purchase Price"), but the amount and
type of securities and the Purchase Price thereof shall be subject to adjustment as provided herein.

 

(b)           Notwithstanding
any other provision of this Agreement, any Right Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents
Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate thereof, (ii) on or after the Distribution Date
by any Person who subsequently becomes an Acquiring Person (or an Affiliate or Associate of an Acquiring Person), (iii) by a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such,
or (iv) by a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom such Acquiring Person
has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect
avoidance of Section 7(e) hereof, any Right Certificate issued at any time to any nominee of such Acquiring Person, Associate or
Affiliate, and any Right Certificate issued pursuant to Section 6 or Section 11 upon transfer, exchange, replacement or adjustment
of any other Right Certificate referred to in this sentence, shall contain the following legend:

 

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The Rights represented by this
Right Certificate are or were beneficially owned by a Person who was or became an Acquiring Person or an Affiliate or an Associate
of an Acquiring Person (as such terms are defined in the Rights Agreement). Accordingly, this Right Certificate and the Rights
represented hereby may become null and void in the circumstances specified in Section 7(e) of the Rights Agreement.

 

SECTION 5.          COUNTERSIGNATURE
AND REGISTRATION. The Right Certificates shall be executed on behalf of the Company in the manner provided in the By-Laws of
the Company for Common Stock Certificates. The Right Certificates shall be manually countersigned by the Rights Agent and shall
not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery
by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent, and issued and delivered with
the same force and effect as though the person who signed such Right Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution
of this Rights Agreement any such person was not such an officer.

 

Following the Distribution
Date, the Rights Agent will keep or cause to be kept, at its principal office, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Right Certificates,
the number of Rights evidenced on its face by each of the Right Certificates and the date of each of the Right Certificates.

 

SECTION 6.          TRANSFER,
SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES, MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. Subject
to the provisions of Section 4(b), Section 7(e), Section 14 and Section 27 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the earlier of the Expiration Date or the Final Expiration Date,
any Right Certificate or Certificates (other than Rights Certificates representing Rights that have become void pursuant to Section
7(e) hereof or that have been exchanged pursuant to Section 27 hereof) may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered holder to purchase a like number of one one-hundredths
of a share of Preferred Stock (or, following a Triggering Event, Common Stock, other securities, cash or other assets, as the case
may be) as the Right Certificate or Right Certificates surrendered then entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Right Certificate shall make
such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to be transferred,
split up, combined or exchanged at the principal office of the Rights Agent for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Rights Certificate
until the registered holder shall have completed and signed the certificate contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request. Thereupon the Rights Agent shall,
subject to Section 4(b), Section 7(e), Section 14 and Section 27 hereof, countersign and deliver to the person entitled thereto
a Right Certificate or Right Certificates, as the case may be, as so requested. The Company may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange
of Right Certificates.

 

    	11

     

    

 

Upon receipt by the
Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the
Company's request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender
to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will make and deliver a new Right Certificate
of like tenor to the Rights Agent for delivery to the registered owner in lieu of the Right Certificate so lost, stolen, destroyed
or mutilated.

 

SECTION 7.         EXERCISE
OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS. (a) Subject to Section 7(e) and Section 27 hereof, the registered holder
of any Right Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate, with the form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the principal office of the Rights Agent, together with payment of the aggregate
Purchase Price with respect to the total number of one one-hundredths of a share of Preferred Stock (or other securities or property,
as the case may be) as to which such surrendered Rights are then exercisable, at or prior to the close of business on the earlier
of (i) August 20, 2018, (ii) the final adjournment of the Company's 2015 annual meeting of shareholders of the Company if shareholder
approval of this Agreement has not been received prior to such time (the earlier of (i) and (ii) shall be referred to as the "Final
Expiration Date"), (iii) the date on which the Rights are redeemed as provided in Section 23, (iv) the time at which such
Rights are exchanged as provided in Section 27 hereof or (v) the time at which the Rights expire pursuant to Section 13(d) hereof
(the earliest of (iii), (iv) or (v) being herein referred to as the "Expiration Date").

 

(b)           The
Purchase Price for each one one-hundredth of a share of Preferred Stock pursuant to the exercise of a Right shall initially be
$73.00, shall be subject to adjustment from time to time as provided in Sections 11 and 13 hereof and shall be payable in lawful
money of the United States of America in accordance with paragraph (c) below.

 

    	12

     

    

 

(c)           Upon
receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment of the Purchase Price per one one-hundredth of a share of Preferred Stock (or other shares, securities
or property, as the case may be) to be purchased and an amount equal to any applicable transfer tax in cash, or by certified check
or bank draft payable to the order of the Company, the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly
(i) requisition from any transfer agent of the Preferred Stock of the Company certificates for the total number of one one-hundredths
of a share of Preferred Stock to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, (ii) if the Company shall have elected to deposit the total number of shares of Preferred Stock issuable upon exercise
of the Rights hereunder with a depositary agent, requisition from the depositary agent depositary receipts representing such number
of one one-hundredths of a share of Preferred Stock as are to be purchased (in which case certificates for the shares of Preferred
Stock represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company will direct
the depositary agent to comply with such request, (iii) when appropriate, requisition from any transfer agent of the Common Stock
of the Company certificates for the total number of shares of Common Stock to be paid in accordance with Section 11(a)(ii), 11(a)(iii)
and Section 27, (iv) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14, (v) promptly after receipt of such certificates or depositary receipts, cause the same to
be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be
designated by such holder and (vi) when appropriate, after receipt, promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate. In the event that the Company is obligated to issue securities, distribute property or pay cash
pursuant to Section 11(a)(iii) hereof, the Company will make all arrangements necessary so that cash, property or securities are
available for issuance, distribution or payment by the Rights Agent, if and when appropriate.

 

(d)           In
case the registered holder of any Right Certificate shall exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the provisions of Section 14 hereof.

 

(e)           Notwithstanding
anything in this Agreement to the contrary, any Rights that are or were at any time on or after the earlier of the Distribution
Date or the Shares Acquisition Date beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether
or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with
whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company (with the concurrence of a majority of the Continuing Directors) has determined
is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 7(e), shall
become null and void upon the occurrence of a Triggering Event and no holder of such Rights shall have any right with respect to
such Rights under any provision of this Agreement from and after the occurrence of a Triggering Event. No Rights Certificate shall
be issued pursuant to Section 3 that represents Rights beneficially owned by an Acquiring Person whose Rights would be void pursuant
to the preceding sentence or any Associate, Affiliate or transferee thereof whose Rights would be void pursuant to the preceding
sentence; no Rights Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights
would be void pursuant to the preceding sentence or any Associate, Affiliate or transferee thereof whose Rights would be void pursuant
to the preceding sentence or to any nominee of such Acquiring Person, Associate, Affiliate or transferee; and any Rights Certificate
delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be void pursuant to the preceding sentence
shall be cancelled. The Company shall use all reasonable efforts to insure that the provisions of this Section 7(e) and Section
4(b) hereof are complied with, but shall have no liability to any holder of Rights Certificates or other Person as a result of
its failure to make any determinations with respect to an Acquiring Person or its Affiliates, Associates or transferees hereunder.

 

    	13

     

    

 

(f)           Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action
with respect to a registered holder upon the occurrence of any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the form of election to purchase set forth on the reverse
side of the Rights Certificate surrendered for such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request.

 

SECTION 8.          CANCELLATION
AND DESTRUCTION OF RIGHT CERTIFICATES. All Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation
or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right Certificates shall be issued
in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Right Certificates
to the Company, or shall, at the written request of the Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.

 

SECTION 9.          RESERVATION
AND AVAILABILITY OF SHARES OF CAPITAL STOCK. (a) The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock (and will use its best efforts, following the occurrence
of a Triggering Event, out of its authorized and unissued shares of Common Stock or its authorized and issued Common Stock held
in its treasury and/or other securities), the number of shares of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) that, as provided in this Agreement, will be sufficient to permit the exercise in
full of all outstanding Rights.

 

(b)           So
long as the shares of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other securities)
issuable and deliverable upon the exercise of Rights may be listed on any national securities exchange, the Company shall use its
best efforts to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed
on such exchange upon official notice of issuance upon such exercise.

 

    	14

     

    

 

(c)           The
Company shall use its best efforts to (i) file, as soon as practicable following the first occurrence of a Triggering Event, a
registration statement under the Securities Act of 1933 (the "Act"), with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, (ii) cause such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the date of the expiration of the Rights. The Company will also take such action as may be appropriate
under the blue sky laws of the various states. The Company, by resolution of its Board of Directors, may temporarily suspend, for
a period of time not to exceed ninety (90) days, the exercisability of the Rights in order to prepare and file such registration
statement. Upon any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement and notice to the Rights Agent at such time as the suspension
is no longer in effect. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in
any jurisdiction unless the requisite qualification in such jurisdiction shall have been obtained.

 

(d)           The
Company covenants and agrees that it will take all such action as may be necessary to ensure that all one one-hundredths of a share
of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock and/or other securities) delivered upon exercise
of Rights shall, at the time of delivery of the certificates for such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable.

 

(e)           The
Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right Certificates or of any one one-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be) upon the exercise of Rights. The Company shall not,
however, be required (i) to pay any transfer tax which may be payable in respect of any transfer involved in the transfer or delivery
of Right Certificates or the issuance or delivery of certificates for the one one-hundredths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) in a name other than that of the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or (ii) to issue or deliver any certificates for a number of one one-hundredths of a
share of Preferred Stock upon the exercise of any Rights until any such tax shall have been paid (any such tax being payable by
the holder of such Right Certificate at the time of surrender) or until it has been established to the Company's satisfaction that
no such tax is due.

 

SECTION 10.       PREFERRED
STOCK RECORD DATE. Each person in whose name any certificate for a number of one one-hundredths of a share of Preferred Stock
(or shares of Common Stock and/or other securities, as the case may be) is issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of such fractional shares of Preferred Stock (or shares of Common Stock and/or other
securities, as the case may be) represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which the Preferred Stock (or Common Stock and/or
other securities, as the case may be) transfer books of the Company are closed, such person shall be deemed to have become the
record holder of such shares (fractional or otherwise) on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Stock (or Common Stock and/or other securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of
a shareholder of the Company with respect to shares for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive
any notice of any proceedings of the Company, except as provided herein.

 

    	15

     

    

 

SECTION 11.       ADJUSTMENT
OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number of shares covered by each Right and
the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.

 

(a)(i)       In
the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable
in shares of the Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into
a smaller number of shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including
any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), except
as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date
for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares
of Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of Preferred Stock
or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when
the Preferred Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive
by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require an adjustment
under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to any adjustment required pursuant to Section 11(a)(ii).

 

(ii)          Subject
to Section 27 of this Agreement, in the event:

 

    	16

     

    

 

(A)       any Acquiring
Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly,
(1) shall merge into the Company or otherwise combine with the Company, the Company shall be the continuing or surviving corporation
of such merger or combination, and the Common Stock of the Company shall remain outstanding, (2) shall merge, consolidate or otherwise
combine with any Subsidiary of the Company (except in a transaction complying with the conditions of Section 13(d) of this Agreement),
(3) shall, in one or more transactions, transfer any assets to the Company or any of its Subsidiaries in exchange (in whole or
in part) for shares of the capital stock of the Company or any of its Subsidiaries or for securities exercisable for or convertible
into shares of the capital stock of the Company or any of its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries,
with or without consideration, any additional shares of the capital stock of the Company or any of its Subsidiaries or securities
exercisable for or convertible into shares of the capital stock of the Company or any of its Subsidiaries (other than as part of
a pro rata distribution to all holders of the Common Stock of the Company or any of its Subsidiaries), (4) shall sell, purchase,
lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one transaction or a series of transactions), to, from or
with the Company or any of the Company's Subsidiaries, assets on terms and conditions less favorable to the Company than the Company
would be able to obtain through arm's-length negotiation with an unaffiliated third party, other than a transaction set forth in
Section 13(a) hereof, (5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation
for full-time employment as a regular employee at rates in accordance with the Company's (or its subsidiaries') past practices,
or (6) shall receive a direct or indirect benefit (except proportionately as a stockholder), of any loans, advances, guarantees,
pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its Subsidiaries,
or

 

(B)        any
Person, alone or together with its Affiliates and Associates, shall become an Acquiring Person, unless the event causing the Person
to become an Acquiring Person (1) is a transaction set forth in Section 13(a) hereof, or (2) is an acquisition of shares of Common
Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined
by the Board of Directors (prior to the consummation of the Permitted Offer), after receiving advice from one or more investment
banking firms selected by the Board of Directors, to be (x) at a price that is fair to shareholders (taking into account all factors
that the Board of Directors deem relevant including, without limitation, prices that could reasonably be achieved if the Company
or its assets were sold on an orderly basis designed to realize maximum value) and (y) otherwise in the best interests of the Company
and its shareholders (other than the Person or any Affiliate or Associate thereof on whose behalf the offer is being made), (such
tender offer or exchange offer being referred to herein as a "Permitted Offer") (provided that this clause (2) shall
cease to apply if such Acquiring Person thereafter becomes the Beneficial Owner of any additional shares of Common Stock other
than pursuant to such Permitted Offer or a transaction set forth in Section 13(a) or 13(d) hereof), or

 

    	17

     

    

 

(C)        during
such time as there is an Acquiring Person, (1) there shall be any failure to declare and pay at the regular date therefor any dividends
(whether or not cumulative) on any outstanding Preferred Stock of the Company (except to the extent such declaration or payment
would be prohibited under the laws of the Company's jurisdiction of incorporation), (2) there shall be any reduction in the annual
rate of dividends paid on the Common Stock (except to reflect any subdivision of the Common Stock or as required under the laws
of the Company's jurisdiction of incorporation or as approved by a majority of the Board of Directors or by the holders of 66-2/3%
percent or more of the then outstanding shares of Common Stock beneficially owned by Persons other than the Acquiring Person or
its Affiliates or Associates), (3) there shall be a failure to increase the annual rate of dividends as necessary to reflect any
reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction which has the
effect of reducing the number of outstanding shares of the Common Stock (except to the extent such increase in the rate of dividends
would be prohibited under the laws of the Company's jurisdiction of incorporation), or (4) there shall be any reclassification
of securities (including any reverse stock split), or recapitalization of the Company, or any merger or consolidation of the Company
with any of its Subsidiaries or any other transaction or series of transactions to which the Company or any of its Subsidiaries
is a party, other than a transaction or transactions to which the provisions of Section 13(a) apply, (whether or not with or into
or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate
share of the outstanding shares of any class of equity or convertible securities of the Company or any of its Subsidiaries which
is directly or indirectly owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person,

 

then, within five (5) days after
the date of the occurrence of an event described in Section 11(a)(ii)(B) hereof and promptly following the occurrence of any event
described in Section 11(a)(ii)(A) or (C) hereof, proper provision shall be made so that each holder of a Right (except as provided
in Section 7(e) hereof) shall thereafter have a right to receive, upon exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, in lieu of a number of one one-hundredths of a share of Preferred Stock, such number of shares
of the Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the
then number of one one-hundredths of a share of Preferred Stock for which a Right is then exercisable and dividing that product
by (y) 50% of the current market price per share of the Common Stock of the Company (determined pursuant to Section 11(d)) on the
date on which the first of the events listed above in this subparagraph (ii) occurs (such number of shares are hereinafter referred
to as the "Adjustment Shares").

 

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(iii)          In
the event that there shall not be sufficient authorized but unissued Common Stock to permit the exercise in full of the Rights
in accordance with the foregoing subparagraph (ii), the Company shall take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exercise of the Rights; provided, however, if the Company is unable to cause
the authorization of a sufficient number of additional shares of Common Stock, then, in the event the Rights become so exercisable,
the Company, with respect to each Right and to the extent necessary and permitted by applicable law and any agreements or instruments
in effect on the date hereof to which it is a party, shall, upon the exercise of such Rights, (A) pay cash in an amount equal to
the Purchase Price, in lieu of issuing shares of Common Stock and requiring payment therefor, or (B) issue debt or equity securities,
or a combination thereof, having a value equal to the Current Value (as defined hereinafter) of the Common Stock (including, without
limitation, shares, or units of shares, of preferred stock, which may include the Preferred Stock), where the value of such securities
shall be determined by a nationally recognized investment banking firm selected by the Board of Directors of the Company, and require
the payment of the Purchase Price, or (C) deliver any combination of cash, property, Common Stock and/or other securities having
a value equal to the Current Value, and require payment of all or any requisite portions of the Purchase Price. The Current Value
shall be the product of the current market price per share of Common Stock (determined pursuant to Section 11(d) on the date of
the occurrence of any of the events listed above in subparagraph (ii)) multiplied by the number of shares of Common Stock for which
the Right otherwise would be exercisable if there were sufficient shares available. To the extent that the Company determines that
some action need be taken pursuant to clauses (A), (B) or (C) of the proviso of this Section 11(a)(iii), the Board of Directors
may suspend the exercisability of the Rights for a period of up to 45 days following the date on which the first of the events
listed in Section 11(a)(ii)(A), (B) or (C) shall have occurred, in order to decide the appropriate form of distribution to be made
pursuant to the above proviso and to determine the value thereof. In the event of any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect.

 

(b)           In
the case the Company shall fix a record date for the issuance of rights or warrants to all holders of Preferred Stock entitling
them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred Stock (or shares
having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock") or
securities convertible into Preferred Stock or equivalent preferred stock) at a price per share of Preferred Stock or per share
of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent
preferred stock) less than the current market price (as defined in Section 11(d)) per share of Preferred Stock on such record date,
the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, of which the numerator shall be the number of shares of Preferred Stock outstanding on
such record date plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares
of Preferred Stock and/or equivalent preferred stock so to be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price and of which the denominator shall be the number of shares
of Preferred Stock outstanding on such record date plus the number of additional shares of Preferred Stock and/or equivalent preferred
stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible);
provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription
price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall
be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent. Shares of Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in
the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would
then be in effect if such record date has not been fixed.

 

    	19

     

    

 

(c)           In
case the Company shall fix a record date for the making of a distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences
of indebtedness or assets (other than a regular periodic cash dividend at a rate not in excess of 125% of the rate of the last
cash dividend theretofore paid or a dividend payable in Preferred Stock, but including any dividend payable in stock other than
Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record
date by a fraction, of which the numerator shall be the current market price (as defined in Section 11(d)) per share of Preferred
Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent) of the portion of the assets or evidences of indebtedness
so to be distributed or of such subscription rights or warrants applicable to one share of Preferred Stock and of which the denominator
shall be such current market price per share of Preferred Stock; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to
be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in
the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.

 

    	20

     

    

 

(d)           (i)
For the purpose of any computation under Section 11(b) or (c) hereof, the "current market price" per, or "value"
of a, share of the Common Stock on any date of determination shall be deemed to be the average of the daily closing prices per
share of such Common Stock for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such
date, and for the purpose of any computation in Section 11(a)(ii) and Section 13, the "current market price" per, or
"value" of a, share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share
of such Common Stock for 20 consecutive Trading Days immediately following such date; provided, however, that in
the event that the current market price (or value) per share of the Common Stock is determined during the period following the
announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such
Common Stock or securities convertible into shares of such Common Stock, or (B) any sub-division, combination or reclassification
of such Common Stock, and prior to the expiration of 30 Trading Days or 20 Trading Days, as the case may be, after the ex-dividend
date for such dividend or distribution, or the record date for such sub-division, combination or reclassification, then, and in
each such case, the "current market price" or "value" shall be appropriately adjusted to take into account
ex-dividend trading. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the
shares of the Common Stock are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares
of the Common Stock are listed or admitted to trading or, if the shares of the Common Stock are not listed or admitted to trading
on any national securities exchange, as reported in the principal consolidated transaction reporting system with respect to securities
listed on the Nasdaq Stock Market, or if the shares of Common Stock are not listed or admitted on the Nasdaq Stock Market, the
last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported
by the National Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then
in use, or, if on any such date the shares of the Common Stock are not quoted by such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board of Directors
of the Company. If on any such date no market maker is making a market in the Common Stock, the fair value of such shares on such
date shall be as determined in good faith by the Board of Directors. The term "Trading Day" shall mean a day on which
the Nasdaq Stock Market or, if the shares of Common Stock are not listed or admitted to trading on the Nasdaq Stock Market, the
principal national securities exchange on which the shares of Common Stock are listed or admitted to trading, is open for the transaction
of business or, if the shares of the Common Stock are not listed or admitted to trading on the Nasdaq Stock Market or any national
securities exchange, a Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions in the State of Michigan are
not authorized or obligated by law or executive order to close. If the Common Stock is not publicly held or not so listed or traded,
"current market price" per share shall mean the fair value per share as determined in good faith by the Board of Directors.

 

(ii)         For
the purpose of any computation hereunder, the "current market price" per share of Preferred Stock shall be determined
in the same manner as set forth above for the Common Stock in clause (i) of this Section 11(d) (other than the last sentence thereof).
If the current market price per share of Preferred Stock cannot be determined in the manner provided above or if the Preferred
Stock is not publicly held or listed or traded in a manner described in clause (i) of this Section 11(d), the "current market
price" per share of Preferred Stock shall be conclusively deemed to be an amount equal to 100 (as such number may be appropriately
adjusted for such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock occurring after
the date of this Agreement) multiplied by the current market price per share of the Common Stock. If neither the Common Stock nor
the Preferred Stock is publicly held or so listed or traded, "current market price" per share of the Preferred Stock
shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. For all purposes of this Agreement,
the "current market price" of one one-hundredth of a share of Preferred Stock shall mean the "current market price"
per share of Preferred Stock divided by 100.

 

    	21

     

    

 

(e)           No
adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1%
in such price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall
be made to the nearest cent or to the nearest ten-thousandth of a share as the case may be. Notwithstanding the first sentence
of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three years from
the date of the transaction which mandates such adjustment or (ii) the date of the expiration of the right to exercise any Rights.

 

(f)            If
as a result of an adjustment made pursuant to Section 11(a) or Section 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Preferred Stock, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent
as practicable to the provisions with respect to the Preferred Stock contained in Section 11(a) through (p), inclusive, and the
provisions of Section 7, Section 9, Section 10, Section 13, Section 14 and Section 27 with respect to the Preferred Stock shall
apply on like terms to any such other shares.

 

(g)           All
Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of one one-hundredths of a share of Preferred Stock purchasable from time
to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.

 

(h)           Unless
the Company shall have exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result
of the calculations made in Section 11(b) and (c), each Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one one-hundredths of a share of Preferred
Stock (calculated to the nearest one-millionth) obtained by (i) multiplying (A) the number of one one-hundredths of a share covered
by a Right immediately prior to such adjustment by (B) the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the
Purchase Price.

 

(i)            The
Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of one one-hundredths of a share of Preferred Stock purchasable upon the exercise of a Right.
Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of one one-hundredths
of a share of Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest ten-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after the adjustment of the Purchase Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of Right Certificates
on such record date Right Certificates evidencing, subject to Section 14, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Right Certificates held by such holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Right Certificates evidencing all the Rights to which such holders shall be entitled after
such adjustment. Right Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered in the names of the holders
of record of Right Certificates on the record date specified in the public announcement.

 

    	22

     

    

 

(j)            Irrespective
of any adjustment or change in the Purchase Price or the number of one one-hundredths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price
per one one-hundredth of a share and the number of one one-hundredths of a share which were expressed in the initial Right Certificates
issued hereunder.

 

(k)           Before
taking any action that would cause an adjustment reducing the Purchase Price below one one-hundredth of the then par value, if
any, of a share of Preferred Stock issuable upon exercise of the Rights, the Company shall take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable
one one-hundredths of a share of such Preferred Stock at such adjusted Purchase Price.

 

(l)            In
any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence of such event the issuing to the holder of any Right
exercised after such record date the number of one one-hundredths of a share of Preferred Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise over and above the number of one one-hundredths of a share of Preferred Stock
and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional shares upon the occurrence of the event requiring
such adjustment.

 

(m)          Anything
in this Section 11 to the contrary notwithstanding, the Company, acting by resolution of its Board of Directors, shall be entitled
to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in order that any consolidation or subdivision of Preferred
Stock, issuance wholly for cash of any of the shares of Preferred Stock at less than the current market price, issuance wholly
for cash of the Preferred Stock or securities which by their terms are convertible into or exchangeable for Preferred Stock, stock
dividends or issuance of rights, options or warrants referred to hereinabove in this Section 11, hereafter made by the Company
to holders of its Preferred Stock shall not be taxable to such shareholders.

 

    	23

     

    

 

(n)           The
Company covenants and agrees that, after the Distribution Date, it will not, except as permitted by Sections 23, 26 and 27 hereof,
take (nor will it permit any of its subsidiaries to take) any action if at the time such is taken it is reasonably foreseeable
that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights, unless
such action is approved by the Board of Directors.

 

(o)           The
Company covenants and agrees that it shall not, at any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies with Section 11(n) hereof), (ii) merge with or into any
other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(n) hereof), or (iii) sell
or transfer (or permit any of its subsidiaries to sell or transfer), in one or more transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person (other
than the Company and/or any of its Subsidiaries in one or more transactions each of which complies with Section 11(n) hereof),
if (x) at the time of or immediately after such consolidation, merger or sale there are any rights, warrants or other instruments
or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or (y) prior to, simultaneously with or immediately after such consolidation, merger or sale, the
shareholders of the Person who constitutes, or would constitute, the "Principal Party" for purposes of Section 13(a)
hereof shall have received a distribution of Rights previously owned by such Person or any of its Affiliates and Associates. The
Company shall not consummate any such consolidation, merger, sale or transfer unless prior thereto the Company and such other Person
shall have executed and delivered to the Rights Agent a supplemental agreement evidencing compliance with this Section 11(o).

 

(p)           Anything
in this Agreement to the contrary notwithstanding, in the event the Company shall at any time after the date of this Agreement
and prior to the Distribution Date (i) declare or pay any dividend on the Common Stock of the Company payable in such Common Stock
or (ii) subdivide the outstanding Common Stock of the Company into a greater number of shares (by reclassification or otherwise
than by payment of dividends in such Common Stock) or (iii) combine or consolidate the outstanding Common Stock of the Company
into a smaller number of shares, then in any such case, (A) the number of one one-hundredths of a share of Preferred Stock purchasable
after such event upon proper exercise of each Right shall be determined by multiplying the number of one one-hundredths of a share
of Preferred Stock so purchasable immediately prior to such event by a fraction, the numerator of which is the number of shares
of Common Stock of the Company outstanding immediately before such event and the denominator of which is the number of shares of
such Common Stock outstanding immediately after such event and (B) action shall be taken such that each share of Common Stock of
the Company outstanding immediately after such event shall have issued with respect to it that number of Rights which each share
of such Common Stock outstanding immediately prior to such event had issued with respect to it. The Company may elect on or after
the date of any adjustment of the number of one one-hundredths of a share of Preferred Stock purchasable upon proper exercise of
each Right pursuant to this Section 11(p), to adjust the Purchase Price as provided in Section 11(a)(i). The adjustments provided
for in this Section 11(p) shall be made successively whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected. If an event occurs which would require an adjustment under Section 11(a)(ii) and this Section 11(p),
the adjustments provided for in this Section 11(p) shall be in addition and prior to any adjustment required pursuant to Section
11(a)(ii).

 

    	24

     

    

 

SECTION 12.       CERTIFICATE
OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES. Whenever an adjustment is made as provided in Sections 11 and 13, the Company
shall (a) promptly prepare a certificate setting forth such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer agent for the Preferred Stock and the Common Stock a
copy of such certificate and (c) mail a brief summary thereof to each holder of a Right Certificate (or, if prior to the Distribution
Date, to each holder of a certificate representing shares of Common Stock) in accordance with Section 25. The Rights Agent shall
be fully protected in relying on any such certificate and on any adjustment therein contained. Notwithstanding the foregoing sentence,
the failure of the Company to make such certificate or give such notice shall not affect the validity or the force or effect of
the requirement for such adjustment. Any adjustment to be made pursuant to Sections 11 and 13 shall be effective as of the date
of the event giving rise to such adjustment.

 

SECTION 13.       CONSOLIDATION,
MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER. (a) In the event that, following the Distribution Date, directly or
indirectly, (i) the Company shall consolidate with, or merge with and into, any other Person (other than a Subsidiary of the Company
in a transaction that complies with Section 11(n) hereof) and the Company shall not be the continuing or surviving corporation
of such consolidation or merger, or the Company shall effect a statutory share exchange with the outstanding shares of Common Stock
of the Company being exchanged for stock or other securities of any Person, cash or property, (ii) any Person (other than a Subsidiary
of the Company in a transaction that complies with Section 11(n) hereof) shall consolidate, merge with and into the Company, the
Company shall be the continuing or surviving corporation of such merger and, in connection with such merger, all or part of the
Common Stock shall be changed into or exchanged for stock or other securities of any other Person (or the Company) or cash or any
other property, or (iii) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person (other than the Company or any Subsidiary of the Company in
one or more transactions each of which complies with Section 11(n) hereof), then, and in each such case, proper provision shall
be made so that (A) each holder of a Right, except as provided in Section 7(e) hereof, shall thereafter have the right to receive,
in lieu of Preferred Stock, upon the exercise thereof at the then-current Purchase Price in accordance with the terms of this Agreement,
such number of shares of validly issued, fully paid, non-assessable and freely tradable Common Stock of the Principal Party (as
hereinafter defined), not subject to any rights of call or first refusal, as shall be equal to the result obtained by (1) multiplying
the then current Purchase Price by the then number of one one-hundredths of a share of Preferred Stock for which a Right is then
exercisable (or, if a Triggering Event has occurred prior to the first occurrence of an event set forth in this Section 13(a),
multiplying the number of such one one-thousandths of a share for which a Right was exercisable immediately prior to the first
occurrence of a Triggering Event by the Purchase Price in effect immediately prior to such first occurrence), and dividing that
product by (2) 50% of the current market price per share of the Common Stock of such Principal Party (determined in the manner
described in Section 11(d)) on the date of consummation of such consolidation, merger, sale or transfer; (B) the Principal Party
shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Agreement; (C) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of Section 11 hereof shall apply to such Principal Party; (D)
such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of shares of
its Common Stock in accordance with Section 9) in connection with such consummation as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the shares of its Common Stock thereafter
deliverable upon the exercise of the Rights; and (E) the provisions of Section 11(a)(ii) hereof shall be of no effect following
the first occurrence of any of the transactions described in Section 13(a) hereof.

 

    	25

     

    

 

(b)          "Principal
Party" shall mean

 

(i)            in
the case of any transaction described in clause (i) or (ii) of the first sentence of Section 13(a), (A) the Person that is the
issuer of any securities into which shares of Common Stock of the Company are converted in such merger, consolidation or share
exchange, or, if there is more than one such issuer, the issuer the Common Stock of which has the greatest aggregate market value,
or (B) if no securities are so issued, (1) the Person that survives such consolidation or is the other party to the merger or share
exchange and survives such merger or share exchange, or, if there is more than one such Person, the Person the Common Stock of
which has the greatest aggregate market value, (2) if the Person that is the other party to the merger or share exchange does not
survive the merger or share exchange, the Person that does survive the merger or share exchange (including the Company if it survives)
or (3) the Person resulting from the consolidation; and

 

(ii)           in
the case of any transaction described in clause (iii) of the first sentence of Section 13(a), the Person that is the party receiving
the greatest portion of the assets or earning power transferred pursuant to such transaction or transactions, or, if each Person
that is a party to such transaction or transactions receives the same portion of the assets or earning power so transferred, or
if the Person receiving the greatest portion of the assets or earning power cannot be determined, the Person the Common Stock of
which has the greatest aggregate market value;

 

provided, however, that in
any such case, (A) if the Common Stock of such Person is not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Securities Exchange Act of 1934, and such Person is a direct or indirect subsidiary of
another Person the Common Stock of which is and has been so registered, "Principal Party" shall refer to such other Person;
(B) in case such Person is a subsidiary, directly or indirectly, of more than one Person, the Common Stocks of all of which are
and have been so registered, "Principal Party" shall refer to whichever of such Person is the issuer of the Common Stock
having the greatest market value of shares held by the public, and (C) in case such Person is owned, directly or indirectly, by
a joint venture formed by two or more Persons that are not owned, directly or indirectly, by the same Person, the rules set forth
in (A) and (B) above shall apply to each of the chains of ownership having an interest in such joint venture as if such party were
a "subsidiary" of both or all of such joint venturers and the Principal Parties in each such chain shall bear the obligations
set forth in this Section 13 in the same ratio as their direct or indirect interests in such Person bear to the total of such interests.

 

    	26

     

    

 

(c)           The
Company shall not consummate any such consolidation, merger, exchange, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock which have not been issued or reserved for issuance to permit the exercise
in full of the Rights in accordance with this Section 13 and unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in paragraphs (a) and (b)
of this Section 13 and further providing that, as soon as practicable after the date of any consolidation, merger, exchange or
sale of assets mentioned in paragraph (a) of this Section 13, the Principal Party will:

 

(i)            prepare
and file a registration statement under the Securities Act of 1933, as amended (the "Act") with respect to the Rights
and the securities purchasable upon exercise of the Rights on an appropriate form, will use its best efforts to cause such registration
statement to become effective as soon as practicable after such filing and will use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times meeting the requirements of the Act) until the date of expiration
of the Rights, and similarly comply with applicable state securities laws; and

 

(ii)           will
deliver to holders of the Rights historical financial statements for the Principal Party and each of its Affiliates which comply
in all respects with the requirements for registration on Form 10 under the Securities Exchange Act of 1934 (whether or not the
Principal Party would otherwise be required to file such Form); and

 

(iii)          use
its best efforts, if the Common Stock of the Principal Party shall be listed or admitted to trading on the Nasdaq Stock Market
or on a national securities exchange, to list or admit to trading (or continue the listing of) the Rights and the securities purchasable
upon exercise of the Rights on the Nasdaq Stock Market or such securities exchange or, if the Common Stock of the Principal Party
shall not be listed or admitted to trading on the Nasdaq Stock Market or a national securities exchange, to cause the Rights and
the securities receivable upon exercise of the Rights to be reported by such other system then in use; and

 

(iv)         obtain
waivers of any rights of first refusal or preemptive rights in respect of the Common Stock of the Principal Party subject to purchase
upon exercise of outstanding Rights.

 

The provisions of this Section 13 shall
similarly apply to successive mergers or consolidations or sales or other transfers. In the event that one of the transactions
described in Section 13(a) hereof shall occur at any time after the occurrence of a transaction described in Section 11(a)(ii)
hereof, the Rights which have not theretofore been exercised shall thereafter become exercisable in the manner described in Section
13(a).

 

    	27

     

    

 

(d)          Notwithstanding
anything in this Agreement to the contrary, Section 13 shall not be applicable to a transaction described in subparagraphs (i)
and (ii) of Section 13(a) if (i) such transaction is consummated with a Person or Persons who acquired shares of Common Stock pursuant
to a tender or exchange offer for all outstanding shares of Common Stock which complies with the provisions of Section 11(a)(ii)(B)(2)
hereof (or a wholly owned subsidiary of any such Person or Persons), (ii) the price per share of Common Stock offered in such transaction
is not less than the price per share of Common Stock paid to all holders of shares of Common Stock whose shares were purchased
pursuant to such tender or exchange offer and (iii) the form of consideration being offered to the remaining holders of shares
of Common Stock pursuant to such transaction is the same as the form of consideration paid pursuant to such tender or exchange
offer. Upon consummation of any transaction contemplated by this Section 13(d), all Rights hereunder shall expire.

 

SECTION 14.         FRACTIONAL
RIGHTS AND FRACTIONAL SHARES. (a) The Company shall not be required to issue fractions of Rights or to distribute Right Certificates
which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction
of the current market value of a whole Right. For the purposes of this Section 14(a), the current market value of a whole Right
shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange
or, if the Rights are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights
are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any national securities exchange,
as reported in the principal consolidated transaction reporting system with respect to securities listed on the Nasdaq Stock Market,
or if the Rights are not listed or admitted to trading on the Nasdaq Stock Market, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then
in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights selected by the Board of Directors of the Company. If
on any such date no such market maker is making a market in the Rights the fair value of the Rights on such date as determined
in good faith by the Board of Directors of the Company shall be used.

 

(b)           The
Company shall not be required to issue fractions of shares (other than fractions which are integral multiples of one one-hundredths
of a share of Preferred Stock) upon exercise of the Rights or to distribute certificates which evidence fractional shares (other
than fractions which are integral multiples of one one-hundredth of a share of Preferred Stock). Fractions of shares of Preferred
Stock in integral multiples of one one-hundredth of a share may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary selected by it; provided, however, that
such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the shares of Preferred Stock represented by such depositary receipts. In lieu
of fractional shares that are not integral multiples of one one-hundredth of a share of Preferred Stock, the Company may pay to
the registered holders of Right Certificates at the time such Right Certificates are exercised as herein provided an amount in
cash equal to the same fraction of the current market value of one one-hundredth of a share of Preferred Stock. For purposes of
this Section 14(b), the current market value of one one-hundredth of a share of Preferred Stock shall be one one-hundredth of the
closing price of a share of Preferred Stock (as determined pursuant to Section 11(d)(ii)) for the Trading Day immediately prior
to the date of such exercise.

 

    	28

     

    

 

(c)           Following
the occurrence of a Triggering Event, the Company shall not be required to issue fractions of shares of Common Stock upon exercise
of the Rights or to distribute certificates which evidence fractional shares of Common Stock. In lieu of fractional shares of Common
Stock, the Company may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of one (1) share of Common Stock. For purposes of this
Section 14(c), the current market value of one share of Common Stock shall be the closing price of one share of Common Stock (as
determined pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such exercise.

 

(d)           The
holder of a Right by the acceptance of the Rights expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right.

 

SECTION 15.        RIGHTS
OF ACTION. All rights of action in respect of this Agreement, except for the rights of actions given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date,
the registered holders of the Common Stock); and any registered holder of any Right Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior
to the Distribution Date, of the Common Stock), may, in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, his right to exercise the
Rights evidenced by such Right Certificate in the manner provided in such Right Certificate and in this Agreement and subject to
the limitations set forth in such Right Certificates and in this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for
any breach of this Agreement and will be entitled to specific performance of the obligations under, and injunctive relief against
actual or threatened violations of, the obligations of any Person subject to this Agreement.

 

SECTION 16.       AGREEMENT
OF RIGHT HOLDERS. Every holder of a Right by accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:

 

(a)          prior
to the Distribution Date, the Rights shall be evidenced by the certificates for shares of the Common Stock registered in the name
of the holders of such shares (which certificates shall also constitute Rights Certificates) and will be transferable only in connection
with the transfer of the Common Stock;

 

    	29

     

    

 

(b)          after
the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a proper instrument of transfer and with the appropriate
forms and certificates fully executed; and

 

(c)          subject
to Section 6, Section 7(e) and Section 7(f) hereof, the Company and the Rights Agent may deem and treat the Person in whose name
the Right Certificate (or, prior to the Distribution Date, the associated Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificates
or the associated Common Stock certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent, subject to the last sentence of Section 7(e) hereof, shall be affected by any notice
to the contrary.

 

(d)          notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of
a Right or other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary
or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory
or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation; provided, however, the Company must
use its best efforts to have any such order, decree or ruling lifted or otherwise overturned as soon as possible.

 

SECTION 17.        RIGHT
CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one one-hundredths of a share of Preferred Stock or any other
securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the
rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders
at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in Section 24), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Right Certificate shall have been exercised in accordance with the provisions hereof.

 

SECTION 18.       CONCERNING
THE RIGHTS AGENT. The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred
in the administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or expense (including reasonable
expenses of the Rights Agent's legal counsel), incurred without gross negligence, bad faith or willful misconduct on the part of
the Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of liability in the premises, or by reason of or as
a result of the Rights Agent's compliance with the instructions set forth in this Agreement or with any written or oral instructions
delivered to the Rights Agent pursuant hereto. The costs and expenses incurred in enforcing this right of indemnification shall
be paid by the Company.

 

    	30

     

    

 

The Rights Agent shall
be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or certificate for the Common Stock or for other securities
of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons.

 

SECTION 19.       MERGER
OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any corporation, succeeding to the corporate trust business of
the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation would be eligible
for appointment as a successor Rights Agent under the provisions of Section 21. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Right Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of the predecessor so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates
either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in the Agreement.

 

In case at any time
the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such
Right Certificates either in its prior name or in its changed name; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement.

 

SECTION 20.       DUTIES
OF RIGHTS AGENT. The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound:

 

(a)          The
Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.

 

    	31

     

    

 

(b)          Whenever
in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate
signed by any one of the Chairman of the Board, the President, any Vice President, the Treasurer or the Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate.

 

(c)          The
Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or willful misconduct.

 

(d)          The
Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in
the Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals
are and shall be deemed to have been made by the Company only.

 

(e)          The
Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except
its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it be responsible for any change in the exercisability of the Rights (including
the Rights becoming void pursuant to any provision of this Agreement); nor shall it be responsible for any adjustment required
under the provisions of Sections 11 or 13 or responsible for the manner, method or amount of any such adjustment or the ascertaining
of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice of any such change or adjustment); nor shall it by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any shares of the Common Stock to be issued pursuant to this Agreement or
any Right Certificate or as to whether any shares of the Common Stock will, when issued, be validly authorized and issued, fully
paid and nonassessable.

 

(f)           The
Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying
out or performing by the Rights Agent of the provisions of this Agreement.

 

(g)          The
Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the President, any Vice-President, the Secretary or the Treasurer of the Company, and to
apply to such officers for advice or instructions in connection with its duties, and it shall not be liable for any action taken
or suffered to be taken by it in good faith in accordance with instructions of any such officer.

 

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(h)          The
Rights Agent and any shareholder, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other legal
entity.

 

(i)            The
Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect
or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued employment thereof.

 

(j)           No
provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.

 

(k)          If,
with respect to any Right Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be, has either not been completed or indicates an affirmative
response to clause l and/or 2 thereof, the Rights Agent shall not take any further action with respect to such requested exercise
or transfer without first consulting with the Company.

 

SECTION 21.       CHANGE
OF RIGHTS AGENT. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent of the Preferred Stock and Common Stock by registered
or certified mail, and the Company will mail said notice to the holders of the Right Certificates by first class mail. The Company
may remove the Rights Agent or any successor Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Preferred Stock and Common Stock by registered or certified
mail, and to the holders of the Right Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with
such notice, submit his Right Certificate for inspection by the Company), then the registered holder of any Right Certificate may
apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing business under the laws of the United States or of
any state of the United States, in good standing under the laws of its jurisdiction of incorporation, which is authorized under
such laws to exercise corporate trust powers and is subject to supervision or examination by federal or state authority or which
has at the time of its appointment as Rights Agent a combined capital and surplus of at least $10 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary
for the purpose. Not later than the effective date of any such appointment the Company shall file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the Preferred Stock and Common Stock, and mail a notice thereof in writing
to the registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.

 

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SECTION 22.       ISSUANCE
OF NEW RIGHT CERTIFICATES. Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price per share and the number or kind or class of shares or other securities
or property purchasable under the Right Certificates made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock following the Distribution Date and prior to the redemption or expiration
of the Rights, the Company (a) shall, with respect to shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement outstanding, granted or awarded as of the Distribution Date, or upon the exercise,
conversion or exchange of securities hereinafter issued by the Company, and (b) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i) no such Rights Certificate shall be issued if,
and to the extent that, the Company shall be advised by counsel that such issuance would create a significant risk of material
adverse tax consequences to the Company or the person to whom such Rights Certificate would be issued, and (ii) no such Rights
Certificate shall be issued, if and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.

 

SECTION 23.        REDEMPTION.
(a) The Rights may be redeemed pursuant to this Section 23, but shall not be redeemed in any other manner.

 

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(b)          The Board of Directors
of the Company may, at its option, at any time prior to the earlier of (i) the time any Person becomes an Acquiring Person (or,
if such event results from the consummation of a Permitted Offer such later date as may be determined by action of the Board of
Directors, or (ii) 5:00 P.M., Detroit, Michigan time on the Final Expiration Date, redeem all but not less than all of the then
outstanding Rights at a redemption price of $0.001 per Right appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the "Redemption
Price"), provided, further, however, that if, following the occurrence of a Shares Acquisition Date and following
the expiration of the right of redemption hereunder but prior to any Triggering Event, each of the following shall have occurred
and remain in effect: (A) a Person who is an Acquiring Person shall have transferred or otherwise disposed of a number of shares
of Common Stock in a transaction, or series of transactions, which did not result in the occurrence of a Triggering Event such
that such Person is thereafter a Beneficial Owner of less than 20% of the outstanding shares of Common Stock, (B) there are no
other Persons, immediately following the occurrence of the event described in clause (A), who are Acquiring Persons, and (C) the
transfer or other disposition described in clause (A) above was other than pursuant to a transaction, or series of transactions,
which directly or indirectly involved the Company or any of its Subsidiaries; then the right of redemption shall be reinstated
and thereafter be subject to the provisions of this Section 23. Notwithstanding anything contained in this Agreement to the contrary,
the Rights shall not be exercisable pursuant to Section 11(a)(ii) prior to the expiration of the Company's right of redemption
pursuant to this Section 23(a) without regard to the last proviso.

 

(c)          During
the period commencing at the close of business on the Shares Acquisition Date and terminating on the earlier of (i) the occurrence
of a Triggering Event and (ii) the Final Expiration Date, the Board of Directors of the Company may, at its option, redeem all
but not less than all of the then outstanding Rights at the Redemption Price, provided that (A) such redemption is in connection
with the consummation of an event set forth in clause (i) or (ii) of Section 13(a), (B) no Acquiring Person, and no Affiliate or
Associate of an Acquiring Person (other than the Company or its subsidiaries) is a constituent corporation to such event; and (C)
such redemption is approved by the Board of Directors as being in their judgment in the best interest of the Company and its stockholders.

 

		(d)	(i) In the event the Company, not earlier than 60 Business Days nor later than 80 Business Days
following the commencement of a Qualified Offer within the meaning of Rule 14(d)-2(a) under the Exchange Act, which has not been
terminated prior thereto and which continues to be a Qualified Offer, receives a written notice complying with the terms of this
Section 23(d) (the "Special Meeting Notice") that is properly executed by the holders of record (or their duly authorized
proxy) of not less than 10% of the shares of Common Stock then outstanding (excluding the Person making the Qualified Offer and
such Person's Affiliates and Associates or their duly authorized proxy), directing the Board of Directors to submit to a vote of
shareholders at a special meeting of the shareholders of the Company (a "Special Meeting") a resolution authorizing the
redemption of all, but not less than all, of the then outstanding Rights at the Redemption Price (the "Shareholder Resolution"),
then the Board of Directors of the Company shall take such actions as are necessary or desirable to cause the Shareholder Resolution
to be so submitted to a vote of shareholders, by including a proposal relating to adoption of the Shareholder Resolution in the
proxy materials of the Company for the Special Meeting; provided, however, that if the Company, at any time prior
to the Special Meeting and prior to a vote on the Shareholder Resolution, enters into a Definitive Acquisition Agreement, the holding
of the Special Meeting may be delayed until the shareholders meeting to vote on the Definitive Acquisition Agreement (and any Special
Meeting called in connection therewith may be cancelled) if the Shareholder Resolution will be separately submitted to a vote at
the same shareholders meeting as the Definitive Acquisition Agreement. The Board of Directors shall set a date for determining
the shareholders of record entitled to notice of and to vote at the Special Meeting in accordance with the Company's articles of
incorporation, bylaws and applicable law.

 

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(ii) Any Special
Meeting Notice must be delivered to the Secretary of the Company at the principal executive offices of the Company and must set
forth as to the shareholders of record executing the request (x) the name and address of such shareholders, as they appear on the
Company's books and records, (y) the number of shares of Common Stock which are owned of record by each of such shareholders, and
(z) in the case of shares of Common Stock that are owned beneficially by another Person, an executed certification by the holder
of record that such holder has executed such Special Meeting Notice only after obtaining instructions to do so from such beneficial
owner.

 

(iii) Subject
to the requirements of applicable law, the Board of Directors of the Company may take a position in favor of or opposed to the
adoption of the Shareholder Resolution, or no position with respect to the Shareholder Resolution, as it determines to be appropriate
in the exercise of its duties. At the offering Person's request, the Company shall include in any proxy soliciting material prepared
by it in connection with the Special Meeting proxy soliciting material submitted by the offering Person; provided, however, that
the offering Person, by written agreement with the Company contained in or delivered with such request, shall have indemnified
the Company against any and all liabilities resulting from any statements found to be defamatory, misstatements, misleading statements
or omissions contained in or omitted from the offering Person's proxy soliciting materials and have agreed to pay the Company's
incremental costs incurred as a result of including such material in the Company's proxy soliciting material. Notwithstanding anything
to the contrary contained this Agreement, if the Board of Directors determines that it is in the best interests of shareholders
to seek an alternative transaction so as to obtain greater value for shareholders than that provided by any Qualified Offer, the
Company shall be entitled to include information relating to such alternative transaction in the proxy soliciting material prepared
by it in connection with the Special Meeting.

 

(iv) In the event
that no Person has become an Acquiring Person prior to the redemption date referred to in this Section 23(d), and the Qualified
Offer continues to be a Qualified Offer and either (i) the Special Meeting is not held on or prior to the 90th Business Day following
receipt of the Special Meeting Notice (or such later date as is permitted by Section 23(d)(i) above) (the "Outside Date")
or (ii) if, at the Special Meeting, holders of a majority of the shares of Common Stock outstanding as of the record date for the
Special Meeting (excluding the Person making the Qualified Offer and such Person's Affiliates and Associates or their duly authorized
proxy) (or such higher vote requirement as may be required by the Company's articles of incorporation) shall vote in favor of the
Shareholder Resolution (and the results of the vote are certified as official by the appointed inspectors of election for the Special
Meeting), then (x) all of the Rights shall be deemed redeemed by such failure to hold the Special Meeting or as a result of such
shareholder action, as the case may be, at the Redemption Price, or (y) the Board of Directors shall take such other action as
would prevent the existence of the Rights from interfering with the consummation of the Qualified Offer, effective immediately
prior to the consummation of the Qualified Offer (provided that the Qualified Offer is consummated prior to 60 days after the earlier
of the date of the Special Meeting or the Outside Date).

 

    	36

     

    

 

(v) Nothing in
this paragraph (d) shall be construed as limiting or prohibiting the Company or any offering Person from proposing or engaging
in any acquisition, disposition or other transfer of any securities of the Company, any merger or consolidation involving the Company,
any sale or other transfer of assets of the Company, any liquidation, dissolution or winding-up of the Company, or any other business
combination or other transaction, or any other action by the Company or such offering Person; provided, however, that the holders
of Rights shall have the rights set forth in this Rights Agreement with respect to any such acquisition, disposition, transfer,
merger, consolidation, sale, liquidation, dissolution, winding-up, business combination, transaction or action.

 

(e)          Immediately
upon the action of the Board of Directors of the Company ordering the redemption of the Rights, or the effectiveness of a redemption
pursuant to Section 23(d), and without any further action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give
public notice of any such redemption; provided, however, that the failure to give, or any defect in, any such notice
shall not affect the validity of such redemption. Within 10 days after the action of the Board of Directors ordering the redemption
of the Rights, the Company shall give notice of such redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the Transfer Agent for the Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which
the payment of the Redemption Price will be made. Neither the Company nor any of its Affiliates or Associates may redeem, acquire
or purchase for value any Rights at any time in any manner other than that specifically set forth in this Section 23, and other
than in connection with the repurchase of Common Stock prior to the Distribution Date.

 

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SECTION 24.        NOTICE
OF CERTAIN EVENTS. In case the Company shall propose at any time following the Distribution Date (a) to pay any dividend payable
in stock of any class to the holders of Preferred Stock or to make any other distribution to the holders of Preferred Stock (other
than a regular periodic cash dividend at a rate not in excess of 125% of the rate of the last cash dividend theretofore paid),
or (b) to offer to the holders of Preferred Stock rights or warrants to subscribe for or to purchase any additional shares of Preferred
Stock or shares of stock of any class or any other securities, rights or options, or (c) to effect any reclassification of its
Preferred Stock (other than a reclassification involving only the subdivision of outstanding Preferred Stock), or (d) to effect
any consolidation or merger into or with, or to effect any sale or other transfer (or to permit one or more of its subsidiaries
to effect any sale or other transfer), in one or more transactions, of more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to, any other Person, or (e) to effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give to each holder of a Right, in accordance with Section 25, a notice of
such proposed action, which shall specify the record date for the purposes of such stock dividend, distribution of rights or Rights,
or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to
take place and the date of participation therein by the holders of the Preferred Stock, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (a) or (b) above at least twenty days prior to the record
date for determining holders of the Preferred Stock for purposes of such action, and in the case of any such other action, at least
twenty days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the
Preferred Stock, whichever shall be the earlier.

 

In case any of the
events set forth in Section 11(a)(ii) of this Agreement shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Right, in accordance with Section 25, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights under Section 11(a)(ii).

 

SECTION 25.        NOTICES.
Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:

 

Perceptron, Inc.

47827 Halyard Drive

Plymouth, MI  48170-2461

 

Subject to the provisions of Section 21,
any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Right Certificate
to or on the Rights Agent shall be deemed given or made upon receipt and shall be addressed (until another address is filed in
writing with the Company) as follows:

 

American Stock Transfer
& Trust Company, LLC

40 Wall Street

New York, NY  10005

 

Notices or demands
authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall
be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder
as shown on the registry books of the Company.

 

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SECTION 26.        SUPPLEMENTS
AND AMENDMENTS. Prior to the Distribution Date and subject to the penultimate sentence of this Section 26, the Company may,
by resolution of its Board of Directors and the Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates representing shares of Common Stock. From and after the Distribution
Date and subject to the penultimate sentence of this Section 26, the Company may, by resolution of its Board of Directors, and
the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the approval of any holders of Rights
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement any provisions contained herein which may be defective
or inconsistent with any other provisions herein, (iii) to shorten or lengthen any time period hereunder, or (iv) to change or
supplement the provisions hereunder in any manner which the Company may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Rights (other than an Acquiring Person or an Affiliate or Associate of any such Person);
provided, however, this Agreement may not be supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) whether before or after the Distribution Date, a time period relating to which the Rights may be redeemed at such
time as the Rights are not then redeemable, or (B) after the Distribution Date, any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and/or the benefits to, the holders of Rights (other than
an Acquiring Person or an Affiliate or Associate of any such Person). Upon the delivery of a certificate from an appropriate officer
of the Company which states that the proposed supplement or amendment is in compliance with the terms of this Section 26, the Rights
Agent shall execute such supplement or amendment. Prior to the Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of Common Stock.

 

SECTION 27.       EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for shares of Common Stock at an exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors of the
Company shall not be empowered to effect such exchange at any time after any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any Subsidiary of the Company or any Person or entity organized, appointed
or established by the Company for or pursuant to the terms of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the shares of Common Stock then outstanding.

 

(b)           Immediately
upon the action of the Board of Directors ordering the exchange of any Rights pursuant to subsection (a) of this Section 27 and
without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of shares of Common Stock equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether
or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the shares of
Common Stock for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become void pursuant
to the provisions of Section 7(e) hereof) held by each holder of Rights.

 

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(c)           In
the event that there shall not be sufficient shares of Common Stock issued but not outstanding or authorized but unissued to permit
any exchange of Rights as contemplated in accordance with this Section 27, the Company shall take all such action as may be necessary
to authorize additional shares of Common Stock for issuance upon exchange of the Rights. In the event the Company shall, after
good faith effort, be unable to take all such action as may be necessary to authorize such additional shares of Common Stock, the
Company shall substitute, for each share of Common Stock that would otherwise be issuable upon exchange of a Right, a number of
shares of Preferred Stock or fraction thereof such that the current per share market price of one share of Preferred Stock multiplied
by such number or fraction is equal to the current per share market price of one share of Common Stock as of the date of issuance
of such shares of Preferred Stock or fraction thereof.

 

(d)           The
Company shall not be required to issue fractions of shares of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such fractional Common Stock, the Company shall pay to the registered holders of the Rights
Certificates with regard to which such fractional shares of shares of Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole share of Common Stock. For the purposes of this paragraph (d),
the current market value of a whole share of Common Stock shall be the closing price of a share of Common Stock (as determined
pursuant to the third sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange pursuant
to this Section 27.

 

SECTION 28.        SUCCESSORS.
All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure
to the benefit of their respective successors and assigns hereunder.

 

SECTION 29.        DETERMINATIONS
AND ACTIONS BY THE BOARD OF DIRECTORS, ETC. For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding
shares of Common Stock of which any Person is the Beneficial Owner, shall be made in accordance with the provisions of Rule 13d-3(d)(1)(i)
of the General Rules and Regulations under the Exchange Act. The Board of Directors of the Company shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and powers specifically granted to the Board, or the Company,
or as may be necessary or advisable in the administration of this Agreement, including, without limitation, the right and power
to (a) interpret the provisions of this Agreement, and (b) make all determinations deemed necessary or advisable for the administration
of this Agreement (including a determination to redeem or not redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purpose of clause (ii) below, all omissions with respect to the foregoing) which
are done or made by the Board in good faith, shall (i) be final, conclusive and binding on the Company, the Rights Agent, the holders
of the Right Certificates and all other parties, and (ii) not subject the Board to any liability to the holders of the Rights Certificates.

 

    	40

     

    

 

SECTION 30.       BENEFITS
OF THIS AGREEMENT. Nothing in this Agreement shall be construed to give to any person or corporation other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Stock) any
legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Right Certificates.

 

SECTION 31.       SEVERABILITY.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of Directors of the Company determines in its good faith
judgment that severing the invalid language from this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated and shall not expire until the close of business on
the tenth business day following the date of such determination by the Board of Directors.

 

SECTION 32.       GOVERNING
LAW. This Agreement and each Right Certificate issued hereunder shall be deemed to be a contract made under the laws of the
State of Michigan and for all purposes shall be governed by and construed in accordance with the laws of such State applicable
to contracts to be made and performed entirely within such State.

 

SECTION 33.       COUNTERPARTS.
This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and the same instrument.

 

SECTION 34.        DESCRIPTIVE
HEADINGS. Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions hereof.

 

    	41

     

    

 

IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

 

	Attest:	 	PERCEPTRON, INC.
	 	 	The Company
	 	 	 
	By:	/s/ Sylvia M. Smith	 	By:	/s/ Jeffrey M. Armstrong
	 	Title: Assistant Secretary	 	 	Jeffrey M. Armstrong
	 	 	 	 	President and Chief Executive Officer
	 	 	 	 	 
	Attest:	 	 	AMERICAN STOCK TRANSFER & TRUST
	 	 	 	COMPANY, LLC, Rights Agent
	 	 	 	 	 
	By:	/s/ Christine Pino	 	By:	/s/ Paula Caroppoli
	 	Title: Vice President	 	 	Title: Senior Vice President

  

    	42

     

    

 

EXHIBIT A

  

	
        MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY
        SERVICES

        CORPORATION, SECURITIES AND LAND DEVELOPMENT
        BUREAU

	
        Date Received

        MAR 25 1998
	 	
        (FOR BUREAU USE ONLY)

         

        FILED

        MAR 25 1998

         

        Administrator

        MI DEPARTMENT OF CONSUMER & INDUSTRY SERVICES

        CORPORATION, SECURITIES & LAND DEVELOPMENT BUREAU

	
         

         
	 
	
        Name:

         
	
        Brendan J. Cahill

        Dykema Gossett PLLC
	EFFECTIVE DATE:
	Address	
        1577 North Woodward, Ste 300

        Bloomfield Hills, MI 48304

	 	 	 	 	 

DOCUMENT WILL BE RETURNED TO NAME AND ADDRESS
INDICATED ABOVE

 

CERTIFICATE OF AMENDMENT TO
THE ARTICLES OF INCORPORATION

For use by Domestic Corporations

 

Pursuant to the
provisions of Act 284, Public Acts of 1972 (profit corporations), or Act 162, Public Acts of 1982 (nonprofit corporations), the
undersigned corporation executes the following Certificate:

 

FIRST: That the name
of the corporation is Perceptron, Inc. (the “Corporation”).

 

SECOND: That Corporation
identification number (CID) assigned by the Bureau is: 272-233.

 

THIRD: The location
of its registered office is: 47827 Halyard Drive, Plymouth, Michigan 48170-2461.

 

FOURTH: That pursuant
to the authority conferred upon the Board of Directors by the Articles of Incorporation of said Corporation, the Board of Directors
of the Corporation on March 23, 1998, duly adopted the following resolution creating a series of 190,000 shares of Preferred Stock,
no par value, designated as Series A Preferred Stock:

 

RESOLVED, That it
is hereby declared to be in the best interests of the Corporation that the Articles of Incorporation of the Corporation, as amended
to date, be further amended to create a new series of Preferred Stock to consist of 190,000 shares and to be designated as Series
A Preferred Stock, no par value, and to determine the preferences, limitations and relative rights of the Series A Preferred Stock
by adding the following to Article IV of such Articles of Incorporation to read as follows:

 

SERIES A PREFERRED
STOCK, NO PAR VALUE

 

A.           Designation
and Amount. The shares of such series shall be designated as “Series A Preferred Stock, no par value,” and the
number of shares constituting such series shall be 190,000. Such number of shares may be increased or decreased by resolution of
the Board of Directors of the Corporation; provided, that no decrease shall reduce the number of shares of Series A Preferred Stock
to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible
into Series A Preferred Stock.

 

    	A-1 

     

    

 

B.           Dividends
and Distributions.

 

(1)          Subject
to any prior and superior rights of the holders of any series of Preferred Stock ranking prior and superior to the shares of Series
A Preferred Stock with respect to dividends that may be authorized by the Articles of Incorporation, the holders of shares of Series
A Preferred Stock shall be entitled prior to the payment of any dividends on shares ranking junior to the Series A Preferred Stock
to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the last day of January, April, July and October in each year (each such date being referred to herein as a
“Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the
greater of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount
of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions
other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock, par value $1.00 per share, of the Corporation (the “Common Stock”) since
the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since
the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event the Corporation shall at any time
after March 23, 1998 (the “Rights Declaration Date”) (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior
to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately prior to such event.

 

(2)          The
Corporation shall declare a dividend or distribution on the Series A Preferred Stock as provided in paragraph (1) above immediately
after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series A Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

 

(3)          Dividends
shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series A Preferred Stock, unless the date of issue of such shares is prior to
the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall
be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof.

 

    	A-2 

     

    

 

(4)          Dividends
in full shall not be declared or paid or set apart for payment on the Series A Preferred Stock for a dividend period terminating
on the Quarterly Dividend Payment Date unless dividends in full have been declared or paid or set apart for payment on the Preferred
Stock of all series (other than series with respect to which dividends are not cumulative from a date prior to such dividend date)
for the respective dividend periods terminating on such dividend date.

 

C.            Voting
Rights. The holders of shares of Series A Preferred Stock shall have the following voting rights:

 

			(1)           Subject to the provision for adjustment
hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereof to 100 votes on all matters voted
on at a meeting of the shareholders of the Corporation. In the event the Corporation shall at any time after the Rights Declaration
Date (i) declare any dividend on Common Stock payable in shares of Common Stock, or (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the number of votes per share
to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying
such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 

			(2)           Except as otherwise provided herein, in
any other Amendment to the Articles of Incorporation of the Corporation or by law, the holders of shares of Series A Preferred
Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall
vote together as one voting group on all matters voted on at a meeting of shareholders of the Corporation.

 

			(3)           Except as set forth herein or by law,
holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

 

D.           Certain
Restrictions.

 

(1)          Whenever
quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section B. are in
arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series
A Preferred Stock outstanding shall have been paid in full, the Corporation shall not:

 

			     (a)          declare or pay dividends on, or
make any other distributions on, any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock;

 

			     (b)          declare or pay dividends on or make
any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity
stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are
then entitled;

 

    	A-3 

     

    

 

			     (c)          redeem or purchase or otherwise
acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred Stock;

 

			     (d)          redeem or purchase or otherwise
acquire for consideration any shares of Series A Preferred Stock or any shares of stock ranking on a parity with the Series A Preferred
Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to
all holders of such shares and the Series A Preferred Stock upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine
in good faith will result in fair and equitable treatment among the respective series or classes.

 

     (2)          The
Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (1) of this Section D, purchase or otherwise acquire such
shares at such time and in such manner.

 

E.            Liquidation,
Dissolution or Winding Up.

 

     (1)         Upon
any liquidation, dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall have received $100.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the “Series
A Liquidation Preference”). Following the payment of the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the “Common Adjustment”) equal to the quotient obtained by dividing
(i) the Series A Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph (3) below to reflect
such events as stocks splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii),
the “Adjustment Number”). Following the payment of the full amount of the Series A Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Series A Preferred Stock and Common Stock, respectively, holders of Series A
Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets
to be distributed, with the holders of Series A Preferred Stock entitled to receive an aggregate per share amount equal to 100
times (as appropriately adjusted as set forth in subparagraph (3) below to reflect such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock) the aggregate amount to be distributed per share to holders of shares of
Common Stock.

 

     (2)         In
the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference
and the liquidation preferences of all other series of Preferred Stock, if any, which rank on a parity with the Series A Preferred
Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares and the Series A Preferred
Stock in proportion to their respective liquidation preferences.

 

    	A-4 

     

    

 

     (3)         In
the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying
such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such
event.

 

F.            Merger,
Consolidation, etc. In case the Corporation shall enter into any merger, consolidation, combination or other transaction in
which the shares of Common Stock are exchanged or changed into other stock or securities, cash and/or any other property, then
in any such case each share of Series A Preferred Stock shall at the same time be similarly exchanged or changed in an amount per
share (subject to the provision for adjustment hereinafter set forth) equal to 100 times the aggregate amount of stock, securities,
cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed
or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange
or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

 

G.            Redemption.
The shares of Series A Preferred Stock shall not be redeemable.

 

H.                 Ranking.
The Series A Preferred Stock shall rank junior to all other series of the Corporation’s Preferred Stock as to the payment
of dividends and other distribution of assets, unless, in accordance with authorization in the Articles of Incorporation, the terms
of any such series shall provide otherwise.

 

I.            Reacquired
Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized
but unissued shares of preferred stock and may be reissued as part of a new series of preferred stock subject to the conditions
and restrictions on issuance set forth herein, in the Articles of Incorporation, or in any other Amendment to the Articles of Incorporation
creating a series of preferred stock or any similar stock or as otherwise required by law.

 

J.            Amendment.
The Articles of Incorporation of the Corporation shall not be further amended in any manner which would alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote of the
holders of a majority of the outstanding shares of Series A Preferred Stock, voting separately as one voting group.

 

    	A-5 

     

    

 

K.           Fractional
Shares. Series A Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such
holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Preferred Stock.

 

5.       This
Amendment to the Articles of Incorporation of the Corporation was duly adopted by the Board of Directors of the Corporation on
March 23, 1998, without shareholder action, which shareholder action was not required.

 

    	A-6 

     

    

 

IN WITNESS
WHEREOF, the undersigned has executed and subscribed this Certificate and does affirm the foregoing as true this 23 day of March,
1998.

 

	 	 	PERCEPTRON, INC.
	 	 	 	 
	 	 	By:	 /s/ John G Zimmerman
	 	 	 	John G. Zimmerman
	 	 	 	Vice President and Chief Financial Officer
	 	 	 	 
	Attest:	 	 	 
	 	 	 	 
	/s/ Thomas Vaughn	 	 	 
	Secretary	 	 	 

 

    	A-7 

     

    

 

EXHIBIT B

 

[Form of Rights Certificate]

 

	Certificate No. R____________	 	___________Rights

  

NOT EXERCISABLE AFTER AUGUST
20, 2018 OR EARLIER IF NOTICE OF REDEMPTION OR EXCHANGE IS GIVEN OR UPON THE CONSUMMATION OF CERTAIN OTHER TRANSACTIONS SPECIFIED
IN SECTION 13(d) OF THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001 PER RIGHT
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]*

 

Right Certificate

 

PERCEPTRON,
INC.

 

This certifies that
                                          ,
or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the First Amended and Restated Rights Agreement dated as of August 20, 2015
(the "Rights Agreement"), between Perceptron, Inc., a Michigan corporation (the "Company"), and American Stock
Transfer & Trust Company, LLC (the "Rights Agent"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M. (Detroit, Michigan time) on August 20, 2018 at the
office of the Rights Agent, or its successors as Rights Agent, in New York, New York, one one-hundredth of a fully paid non-assessable
share of the Series A Preferred Stock, no par value (the "Preferred Stock"), of the Company, at a purchase price of $73.00
per one one-hundredth of a share (the "Purchase Price"), upon presentation and surrender of this Right Certificate with
the Form of Election to Purchase duly executed. The number of Rights evidenced by this Right Certificate (and the number of shares
which may be purchased upon exercise thereof) set forth above, and the Purchase Price per share set forth above, are the number
and Purchase Price as of March 17, 2008 based on the Preferred Stock of the Company as constituted at such date.

 

 

*
The portion of the legend in brackets shall be inserted only if applicable.

 

    	B-1 

     

    

 

Upon the occurrence
of a Triggering Event (as such term is defined in the Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who, after such transfer, became an Acquiring Person, or an Affiliate
or Associate of an Acquiring Person, such Rights shall become null and void and no holder hereof shall have any right with respect
to such Rights from and after the occurrence of such Triggering Event.

 

As provided in the
Rights Agreement, the Purchase Price and the number and kind of shares of Preferred Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening
of certain events.

 

This Right Certificate
is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders
of the Right Certificates. Copies of the Rights Agreement are on file at the above-mentioned office of the Rights Agent.

 

This Right Certificate,
with or without other Right Certificates, upon surrender at the principal office of the Rights Agent, may be exchanged for another
Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate
number of one one-hundredths of a share of Preferred Stock as the Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not
exercised.

 

Subject to the provisions
of the Rights Agreement, the Rights evidenced by this Certificate may be redeemed by the Company at its option at a redemption
price of $.001 per Right or may be called for exchange for newly issued shares of Common Stock or Preferred Stock.

 

No fractional shares
of Preferred Stock will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a share of Preferred Stock which may, at the election of the Company, be evidenced by depository
receipts), but in lieu thereof a cash payment will be made, as provided in the Rights Agreement.

 

No holder of this Right
Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preferred Stock or of
any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or, to receive notice of meetings or other actions affecting stockholders (except
as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced
by this Right Certificate shall have been exercised as provided in the Rights Agreement.

 

    	B-2 

     

    

 

This Right Certificate
shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.

 

WITNESS the facsimile
signature of the proper officers of the Company and its corporate seal. Dated as of                   ,
_____.

 

	ATTEST:	 	PERCEPTRON, INC.
	 	 	 
	 	By	 	 	 	 
	Secretary	 	 	 	Title:	 
	 	 	 	 	 	 
	Countersigned:	 	 	 	 	 
	 	 	 	 	 	 
	·	By	 	 	 	 
	 	 	Authorized Signature	 	 	 

  

    	B-3 

     

    

 

[Form of Reverse Side of Right Certificate]

 

FORM
OF ASSIGNMENT

 

(To be executed by the registered holder
if such

holder desires to transfer the Right Certificates.)

 

FOR VALUE RECEIVED
                                                                  
hereby sells, assigns and transfers unto                                                                                                                        

 

·                      ___________________________________________________________________________________

___________

 

(Please print name and address of transferee)

 

·                      this
Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint                         
Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution.

 

	Dated:______, __	 	 	 
	 	 	Signature	 

 

Signature Guaranteed:

 

·

 

Certificate

 

The undersigned hereby
certifies by checking the appropriate boxes that:

 

(1)         the
Rights evidenced by this Right Certificate [  ] are [  ] are not being sold, assigned and transferred by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined pursuant
to the Rights Agreement);

 

(2)         after
due inquiry and to the best knowledge of the undersigned, it [  ] did [  ] did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or subsequently became an Acquiring Person or an Affiliate or Associate of an Acquiring Person.

  

	Dated:______, __	 	 	 
	 	 	Signature	 

  

    	B-4 

     

    

 

NOTICE

 

The signature to the
foregoing Assignment and Certificate must correspond to the name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.

 

FORM
OF ELECTION TO PURCHASE

 

(To be executed if holder desires to exercise
the Rights represented by the Right Certificate.)

 

To _______________________:

 

The undersigned hereby
irrevocably elects to exercise                               
Rights represented by this Right Certificate to purchase the shares of the one one-hundredths of a share of Series A Preferred
Stock (or, in certain circumstances, a combination of cash, other property, Preferred Stock, Common Stock, and/or other securities)
upon the exercise of such Rights and requests that certificates for such shares be issued in the name of:

 

Please insert social security

or other identifying number

 

(Please print name and address)

 

If such number of Rights shall not be all
the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered
in the name of and delivered to:

 

Please insert social security

or other identifying number

 

(Please print name and address)

 

Dated: ____________, _____

 

	 	 
	 	Signature
	 	(Signature must conform in all respects to name of holder as specified on the face of this Right Certificate)

  

Signature Guaranteed:

 

    	B-5 

     

    

 

Certificate

 

The undersigned hereby
certifies by checking the appropriate boxes that:

 

(1)         the
Rights evidenced by this Right Certificate [ ] are [ ] are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined pursuant to the Rights Agreement);

 

(2)         after
due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person.

 

	Dated:______, ___	 	 	 
	 	 	Signature	 

  

NOTICE

 

The signature to the
foregoing Election to Purchase and Certificate must correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.

 

    	B-6 

     

    

 

EXHIBIT C

 

SUMMARY
OF RIGHTS TO PURCHASE

PREFERRED
STOCK

 

On March 23, 1998,
the Board of Directors of Perceptron, Inc. (the "Company") declared a dividend distribution of one Right for each outstanding
share of Common Stock, $.01 par value (the "Common Stock"), of the Company. The distribution was paid to the Company's
shareholders of record on April 6, 1998 (the "Record Date") on April 8, 1998.

 

Effective August 20,
2015 and March 17, 2008, the Board of Directors of the Company amended the Rights. This Summary describes the terms of the Rights,
as amended. Each Right entitles the registered holder to purchase from the Company one one-hundredth of a share of Series A Preferred
Stock, no par value (the "Preferred Stock") at a price of $73.00 per one one-hundredth of a share (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights are set forth in a First Amended and Restated Rights
Agreement (the "Rights Agreement") between the Company and American Stock Transfer & Trust Company, LLC as Rights
Agent (the "Rights Agent").

 

Until the earlier to
occur of (i) ten business days following a public announcement that a person or group of affiliated or associated persons (an "Acquiring
Person") acquired, or obtained the right to acquire, beneficial ownership of 20% or more of the outstanding shares of the
Common Stock (such public announcement date being the "Shares Acquisition Date") (or, if pursuant to a Permitted Offer
(as defined below) such later date as fixed by the Board of Directors) or (ii) ten business days (or such later date as may be
determined by the Board of Directors prior to such time as any person becomes an Acquiring Person) following the commencement or
announcement of an intention to commence a tender offer or exchange offer by any person if, upon consummation thereof, such person
would be an Acquiring Person, other than as a result of a Permitted Offer (as defined below), (the earlier of such dates being
called the "Distribution Date"), the Rights are, with respect to any of the Common Stock certificates outstanding as
of April 6, 1998, evidenced by such Common Stock certificate. The Rights Agreement provides that, until the Distribution Date,
the Rights will be transferred with and only with the Common Stock. Until the Distribution Date (or earlier redemption, exchange
or expiration of the Rights), new Common Stock certificates issued after April 6, 1998 upon transfer or new issuance of the Common
Stock will contain a notation incorporating the Rights Agreement by reference. Until the Distribution Date (or earlier redemption,
exchange or expiration of the Rights), the surrender for transfer of any of the Common Stock certificates outstanding as of April
6, 1998 or issued thereafter will also constitute the transfer of the Rights associated with the Common Stock represented by such
certificate.

 

As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights. Subject to certain adjustments as may be required by the Rights Agreement, the Company will issue
one Right with each new share of Common Stock issued until the Distribution Date so that all shares will have attached Rights.
No person shall be deemed to be an Acquiring Person on account of shares of Common Stock beneficially owned by such person on March
23, 1998 unless thereafter they become the beneficial owner of any additional shares of Common Stock.

 

    	C-1 

     

    

 

The Rights are not
exercisable until the Distribution Date, and, if later, the expiration of the Company's right to redeem the Rights. The Rights
will expire on August 20, 2018, or, if earlier, the final adjournment of the Company's 2015 annual meeting of shareholders, if
shareholder approval of the Rights Agreement has not been obtained, unless earlier redeemed or called for exchange by the Company
as described below or their earlier expiration upon the consummation of certain transactions as described below.

 

The Preferred Stock
will be nonredeemable and will be junior to any other class of preferred stock. Each share of Preferred Stock will be entitled
to receive when, as and if declared, a quarterly dividend equal to the greater of $1.00 or 100 times the per share value of any
dividend (other than stock dividends) declared on the Common Stock since the immediately preceding quarterly dividend payment date.
In the event of liquidation, the holders of the Preferred Stock generally will be entitled to receive a liquidation payment in
an amount equal to $100.00 per share of Preferred Stock plus all accrued and unpaid dividends thereon, and, after the holders of
Common Stock have received a liquidation payment in an amount equal to $1.00 per share, holders of the Preferred Stock and the
Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed, with the holders of
Preferred Stock entitled to receive an aggregate per share amount equal to 100 times the aggregate amount to be distributed per
share to holders of shares of Common Stock. Each share of Preferred Stock will be entitled to 100 votes per share voting together
with the Common Stock. In the event of any merger, consolidation or other transaction in which the Common Stock is exchanged, each
share of Preferred Stock will be entitled to receive 100 times the amount received per share of Common Stock. The rights of the
Preferred Stock as to dividends, voting and liquidation preferences are protected by anti-dilution provisions.

 

The Purchase Price
payable, and the number of shares of the Preferred Stock or other securities or property issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination
or reclassification of the Preferred Stock; (ii) upon the grant to holders of the Preferred Stock of certain rights or warrants
to subscribe for shares of the Preferred Stock or convertible securities at less than the current market price of the Preferred
Stock; or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends out of earnings or retained earnings at a rate not in excess of 125% of the rate of the last cash dividend
theretofore paid or a dividend paid in the Preferred Stock) or of subscription rights or warrants (other than those referred to
above). With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment
of at least 1% in such Purchase Price.

 

Prior to a Triggering
Event, fractional shares of the Preferred Stock will not be issued (other than fractions which are integral multiples of one one-hundredths
of a share of Preferred Stock) and, in lieu thereof, an adjustment in cash will be made equal to the same fraction of the current
market value of one one-hundredth of a share of Preferred Stock. Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of shares of Common Stock and, in lieu thereof, an adjustment in cash will be made equal to
the same fraction of the current market value of one share of Common Stock.

 

    	C-2 

     

    

 

In the event that (i)
the Company were the surviving corporation in a merger or other combination with an Acquiring Person or affiliated or associated
persons of an Acquiring Person and its Common Stock were not changed or exchanged; or (ii) an Acquiring Person engages in one of
a number of self-dealing transactions specified in the Rights Agreement; or (iii) in certain circumstances, an Acquiring Person
becomes the beneficial owner of 20% or more of the outstanding shares of Common Stock (except pursuant to a tender or exchange
offer for all outstanding shares at a price and on terms determined by a majority of the Board of Directors, prior to the consummation
of the offer, after receiving advice from an investment banking firm selected by a majority of the Board of Directors, to be a
price that is fair to shareholders and in the best interests of the Company and its shareholders (a "Permitted Offer")),
or (iv) during such time as there is an Acquiring Person, there shall occur certain failures to pay, or reductions in, dividends
on outstanding common or preferred stock of the Company or a recapitalization of the Company which has the effect of increasing
the Acquiring Person's proportionate share of the outstanding Common Stock by more than 1%, then proper provision shall be made
so that each holder of a Right, other than Rights that were or are beneficially owned by the Acquiring Person (which will thereafter
be void), shall thereafter have the right to receive upon exercise that number of shares of the Common Stock (or, in certain circumstances,
a combination of cash, other property, Preferred Stock, Common Stock and/or other securities) having a market value of two times
the exercise price of the Right.

 

Following the Distribution
Date, in the event (i) that the Company were acquired in a merger or other business combination transaction in connection with
which the Company is not the continuing or surviving corporation or in which all or a part of the Common Stock shall be changed
into or exchanged for stock or other securities of any other Person or cash or any other property (other than certain mergers and
combinations with an Acquiring Person who becomes such in a Permitted Offer if the price per share of Common Stock offered in such
transaction is no less than the price per share of Common Stock paid to all holders in the Permitted Offer tender or exchange offer
and the form of consideration being offered in such transaction is the same as the form of consideration paid in the Permitted
Offer tender or exchange offer (a "Permitted Combination")); or (ii) that 50% or more of the Company's assets or earning
power were sold, then proper provision shall be made so that each holder of a Right, other than Rights that were or are beneficially
owned by the Acquiring Person (which will thereafter be void), shall thereafter have the right to receive, upon the exercise thereof
at the then current exercise price of the Right, that number of shares of common stock of the Acquiring Person which at the time
of such transaction would have a market value of two times the exercise price of the Right. Upon the consummation of a Permitted
Combination, all rights shall expire. Each of the events described in this paragraph constitutes a "Triggering Event"
under the Rights Agreement.

 

At any time after any
Person becomes an Acquiring Person but prior to the time such Acquiring Person has acquired 50% or more of the outstanding Common
Stock, the Board may cause shareholders to exchange all or part of their Rights for shares of Common Stock or Preferred Stock at
a ratio of one share of Common Stock or one one-hundredth of a share of Preferred Stock per Right, subject to adjustment. As soon
as the Board has determined to make such exchange, the Rights may no longer be exercised.

 

    	C-3 

     

    

 

At any time prior to
a person or group of affiliated or associated persons becoming an Acquiring Person (or, if pursuant to a Permitted Offer (as defined
below) such later date as fixed by the Board of Directors), the Board of Directors of the Company may redeem the Rights in whole,
but not in part, at a price of $.001 per Right (the "Redemption Price"). Thereafter, the Company's right of redemption
may be reinstated, prior to a Triggering Event, (i) if an Acquiring Person reduces his beneficial ownership to less than 20% of
the outstanding shares of Common Stock in a transaction or series of transactions not involving the Company; and (ii) there are
no other Persons, immediately following the event described in clause (i), who are Acquiring Persons. Additionally, the Board of
Directors may at any time prior to the occurrence of a Triggering Event, redeem the then outstanding Rights in whole, but not in
part, at the Redemption Price, if such redemption is in connection with the consummation of a merger or other business combination
involving the Company but not involving an Acquiring Person or its Affiliates or Associates which is determined to be in the best
interests of the Company and its shareholders by the Board of Directors.

 

However, in the event
the Company receives a Qualified Offer (as defined below), the Rights may be redeemed by way of shareholder action taken at a special
meeting of shareholders called for the purpose of voting on a resolution accepting the Qualified Offer and authorizing the redemption
of the Rights pursuant to the provisions of the Agreement. The special meeting must be held within 90 business days after the Company
receives a request from shareholders to hold such a meeting. The request from shareholders must be received by the Company not
earlier than 60 business days and not later than 80 business days following the commencement of the Qualified Offer and must be
executed by holders of not less than 10% of the outstanding Common Stock (excluding the Acquiring Person and its affiliates and
associates). If a resolution to redeem the Rights is approved by holders of a majority of the outstanding Common Stock (excluding
the Acquiring Person and its affiliates and associates) at the special meeting (or if the special meeting is not held on or before
the 90th business day after receipt of the request for a meeting or such later date at which an acquisition agreement approved
by the Board is voted on by shareholders), it will become effective immediately prior to the consummation of any Qualified Offer
consummated within 60 days after the earlier of the special meeting or the 90th business day after receipt of a request for a special
meeting of shareholders. A "Qualified Offer" is a tender offer for all outstanding Common Stock not already beneficially
owned by the person making the offer that meets all of the following conditions:

 

		(i)	the same per share price is offered for all shares, is
greater than the highest closing price for the Common Stock during the 365 calendar day period immediately preceding the date
on which the offer is commenced,

 

		(ii)	if the consideration offered includes shares of common
stock of the offering person, the offering person is a publicly owned United States corporation and its common stock is traded
on either the New York Stock Exchange or The Nasdaq Stock Market, no further stockholder approval is required to issue such common
stock, no other class of voting stock of the offering person is outstanding, the offering person meets the registrant eligibility
requirements for use of Form S-3 for registering securities under the Securities Act of 1933, as amended, including, without limitation,
the filing of all required Exchange Act reports in a timely manner during the twelve calendar months prior to the date of commencement
of the offer, and the offering person shall permit the Company's representatives, including an investment banking firm, legal
counsel and an accountant, to have access to such offering person's books, records, management, accountants and other advisers
for the purpose of permitting such representatives to conduct a due diligence review to permit such investment banking firm to
be able to render a fairness opinion with respect to the consideration being offered and the Board of Directors to evaluate the
offer and make an informed decision. Further, within 10 Business Days after such representatives of the Company shall have notified
the Company and the offeror that they have completed such due diligence review to their satisfaction (or, following completion
of such due diligence review, within 10 Business Days after any increase in the offer consideration), such investment banking
firm does not render an opinion to the Board of Directors that the consideration being offered to the shareholders of the Company
is either unfair or inadequate and such investment banking firm does not, after the expiration of such 10 Business Day period,
render an opinion to the Board of Directors that the consideration being offered to the shareholders of the Company has become
either unfair or inadequate based on a subsequent disclosure or discovery of a development or developments that have had or are
reasonably likely to have a material adverse effect on the value of the common stock of the offeror,

 

    	C-4 

     

    

 

		(iii)	the offer is accompanied by written financing commitments
and/or the offeror has on hand cash or cash equivalents, for the full amount of all financing necessary to consummate the offer
and follow-on merger,

 

		(iv)	the offer is subject to a non-waivable condition that
a minimum of 90% of the outstanding Common Stock (other than those owned by the offeror) will be tendered and not withdrawn as
of the offer's expiration date,

 

		(v)	the offer by its terms remains open for at least 60 business
days and at least 10 business days after the date of any special meeting of shareholders called under the redemption provisions,
plus 15 business days after any change in price or after any bona fide alternative offer for a higher consideration is made,

 

		(vi)	the offer, within 20 business days after the commencement
date of the offer (or within 10 business days after any increase in the offer consideration), does not result in a nationally
recognized investment banking firm retained by the Board of Directors of the Company rendering an opinion to the Board of Directors
of the Company that the consideration being offered to the holders of the Common Stock is either unfair or inadequate,

 

		(vii)	on or before the date the offer is commenced, the offering
person makes an irrevocable written commitment to the Company:

 

		(A)	to acquire, within 5 business days following completion
of the offer, all Common Stock then not beneficially owned by such person at the same cash price per share as paid in the offer,

 

		(B)	not to amend its offer to reduce the price or otherwise
change the terms in a way that is adverse to tendering shareholders,

 

		(C)	such offer is subject only to the conditions required
in the definition and usual and customary terms and conditions, and is not subject to any financing, funding or similar condition,
nor to any condition relating to completion of or satisfaction with any due diligence or similar investigation, and

 

    	C-5 

     

    

 

		(D)	an offer (other than an offer consisting solely of cash
consideration) pursuant to which the Company has received the written representation and certification of the offering person
and the written representations and certifications of the offering person's Chief Executive Officer and Chief Financial Officer,
acting in such capacities, that (A) all facts about the offering person that would be material to making a shareholder's decision
to accept the offer have been fully and accurately disclosed as of the date of the commencement of the offer, (B) all such new
facts will be fully and accurately disclosed on a prompt basis during the entire period during which the offer remains open and
(C) all required Exchange Act reports will be filed by the offering person in a timely manner during such period.

 

Immediately upon the
action of the Board of Directors of the Company electing to redeem the Rights, the Company shall make announcement thereof, and
upon such election, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive
the Redemption Price. At the effective time of a redemption in connection with the calling of a special meeting of shareholders
in connection with a Qualified Offer, the right to exercise the Rights shall terminate and the only right of holders of the Rights
will be to receive the Redemption Price.

 

Until a Right is exercised,
the holder thereof, as such, will have no rights as a shareholder of the Company, including, without limitation, the right to vote
or to receive dividends.

 

The Rights Agreement
may be amended without shareholder approval prior to the Distribution Date at the Board of Directors' discretion. After the Distribution
Date, the Board of Directors generally may amend the Rights Agreement without the consent of the Rights holders to cure any ambiguity,
correct defects or inconsistencies, shorten or lengthen time periods or supplement or change any other provision which shall not
adversely affect the Rights holders; provided that the lengthening of any time period is for the purpose of protecting, enhancing
or clarifying the rights of, and/or for the benefit of the holders of the Rights (other than the Acquiring Person and its affiliated
and associated persons). However, if the Rights are not then redeemable, the Board may not lengthen a time period relating to when
the Rights may be redeemed.

 

A copy of the Rights
Agreement, has been filed with the Securities and Exchange Commission as an Exhibit to the report on Form 8-K filed on August 24,
2015, and as an Exhibit to Form 8-A/A, dated August 24, 2015. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to
the Rights Agreement, which is hereby incorporated herein by reference.

 

    	C-6ex10-1.htm

Exhibit 10.1

 

 

 

$125,000,000.00

SECOND AMENDED AND RESTATED LOAN AGREEMENT
dated as of August 20, 2015,

by and among

OMEGA PROTEIN CORPORATION,
OMEGA PROTEIN, INC.
and
BIORIGINAL FOOD & SCIENCE CORP.,
each as a Borrower,

the Lenders referred to herein,
as Lenders,

 and

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent,
Swingline Lender and Issuing Lender

WELLS FARGO SECURITIES, LLC,
as Sole Lead Arranger and Sole Book Manager

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS 

 

 

	
 
	
 
	
 
	
 
	
 Page

	
ARTICLE I DEFINITIONS      
	
 1

	
 
	
Section 1.01 
	
 
	
Definitions 
	
 1

	
 
	
Section 1.02 
	
 
	
Other Definitions and Provisions 
	
 32

	
 
	
Section 1.03 
	
 
	
Accounting Terms 
	
 32

	
 
	
Section 1.04 
	
 
	
UCC Terms 
	
 32

	
 
	
Section 1.05 
	
 
	
Rounding 
	
 32

	
 
	
Section 1.06 
	
 
	
References to Agreement and Laws 
	
 32

	
 
	
Section 1.07 
	
 
	
Times of Day 
	
 33

	
 
	
Section 1.08 
	
 
	
Letter of Credit Amounts 
	
 33

	
 
	
Section 1.09 
	
 
	
Guaranty Obligations 
	
 33

	
 
	
Section 1.10 
	
 
	
Covenant Compliance Generally 
	
 33

	
 
	
Section 1.11 
	
 
	
Exchange Rates; Currency Equivalents 
	
 33

	
 
	
Section 1.12 
	
 
	
Change of Currency 
	
 34

	
 
	
Section 1.13 
	
 
	
Pro Forma Basis 
	
 34

	
 
	
 
	
 
	
 
	
 

	
ARTICLE II REVOLVING CREDIT FACILITY      
	
 34

	
 
	
Section 2.01 
	
 
	
Revolving Credit Loans 
	
 34

	
 
	
Section 2.02 
	
 
	
Swingline Loans 
	
 35

	
 
	
Section 2.03 
	
 
	
Procedure for Advances of Revolving Credit Loans and Swingline Loans 
	
 37

	
 
	
Section 2.04 
	
 
	
Repayment and Prepayment of Revolving Credit Loans and Swingline Loans 
	
 38

	
 
	
Section 2.05 
	
 
	
Permanent Reduction of the Revolving Credit Commitment 
	
 38

	
 
	
Section 2.06 
	
 
	
Termination of Revolving Credit Facility 
	
 39

	
 
	
 
	
 
	
 
	
 

	
ARTICLE III LETTER OF CREDIT FACILITY      
	
 39

	
 
	
Section 3.01 
	
 
	
L/C Commitments 
	
 39

	
 
	
Section 3.02 
	
 
	
Procedure for Issuance of Letters of Credit 
	
 40

	
 
	
Section 3.03 
	
 
	
Commissions and Other Charges 
	
 41

	
 
	
Section 3.04 
	
 
	
L/C Participations 
	
 41

	
 
	
Section 3.05 
	
 
	
Reimbursement Obligation of the Borrowers 
	
 42

	
 
	
Section 3.06 
	
 
	
Obligations Absolute 
	
 42

	
 
	
Section 3.07 
	
 
	
Effect of Letter of Credit Application 
	
 43

	
 
	
 
	
 
	
 
	
 

	
ARTICLE IV GENERAL LOAN PROVISIONS      
	
 43

	
 
	
Section 4.01 
	
 
	
Interest 
	
 43

	
 
	
Section 4.02 
	
 
	
Notice and Manner of Conversion or Continuation of Loans 
	
 45

	
 
	
Section 4.03 
	
 
	
Fees 
	
 45

	
 
	
Section 4.04 
	
 
	
Manner of Payment 
	
 46

	
 
	
Section 4.05 
	
 
	
Evidence of Indebtedness 
	
 46

	
 
	
Section 4.06 
	
 
	
Adjustments 
	
 47

	 	Section 4.07	 	Administrative Agent's Clawback	47
	 	Section 4.08	 	Changed Circumstances	48
	 	Section 4.09	 	Indemnity	49
	 	Section 4.10	 	Increased Costs	49
	 	Section 4.11	 	Taxes	51
	 	Section 4.12	 	Mitigation Obligations; Replacement of Lenders	54

  

 

 -i-

 

 

	 	 	 	 	Page
	 	Section 4.13	 	Increase in Revolving Credit Commitment	55
	 	Section 4.14	 	Cash Collateral	56
	 	Section 4.15	 	Defaulting Lenders	57
	 	Section 4.16	 	Agreement with Respect to the Revolving B Commitment and the Revolving B Exposure	59
	 	 	 	 	 
	ARTICLE V CONDITIONS OF CLOSING AND BORROWING AND COLLATERAL	59
	 	Section 5.01	 	Conditions to Closing	59
	 	Section 5.02	 	Conditions to All Extensions of Credit	65
	 	Section 5.03	 	Assets of Borrowers	66
	 	Section 5.04	 	Assets of Subsidiaries	66
	 	Section 5.05	 	Guaranty	66
	 	 	 	 	 
	ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES	66
	 	Section 6.01	 	No Liens	66
	 	Section 6.02	 	Financial Statements	66
	 	Section 6.03	 	Good Standing	66
	 	Section 6.04	 	Authority and Compliance	67
	 	Section 6.05	 	Binding Agreements	67
	 	Section 6.06	 	Litigation	67
	 	Section 6.07	 	No Conflicting Agreements	67
	 	Section 6.08	 	Taxes	67
	 	Section 6.09	 	No Default	67
	 	Section 6.10	 	Adverse Circumstances	67
	 	Section 6.11	 	Accuracy of Information	68
	 	Section 6.12	 	ERISA	68
	 	Section 6.13	 	Environmental	68
	 	Section 6.14	 	Subsidiaries	68
	 	Section 6.15	 	Anti-Corruption Laws and Sanctions	68
	 	Section 6.16	 	Vessels	68
	 	Section 6.17	 	Real Property	69
	 	Section 6.18	 	Aircraft	69
	 	Section 6.19	 	Perfection of Security Interests in Collateral	69
	 	Section 6.20	 	Continuation of Representations and Warranties	69
	 	Section 6.21	 	Intellectual Property Matters	69
	 	Section 6.22	 	Solvency	70
	 	Section 6.23	 	Canadian Pension Plans	70
	 	 	 	 	 
	ARTICLE VII AFFIRMATIVE COVENANTS	71
	 	Section 7.01	 	Financial Statements and Other Information	71
	 	Section 7.02	 	Adverse Conditions or Events	72
	 	Section 7.03	 	Taxes and Other Obligations	72
	 	Section 7.04	 	Insurance	72
	 	Section 7.05	 	Compliance with Governmental Requirements	73
	 	Section 7.06	 	Environmental	73
	 	Section 7.07	 	Compliance with Material Agreements	73
	 	Section 7.08	 	Maintenance of Records	73

  

 

 -ii-

 

 

	 	 	 	 	Page
	 	Section 7.09	 	Inspection of Books and Records	73
	 	Section 7.10	 	Existence and Qualification	74
	 	Section 7.11	 	Vessel Covenants	74
	 	Section 7.12	 	Citizenship	74
	 	Section 7.13	 	Additional Collateral	74
	 	Section 7.14	 	Further Assurances	75
	 	Section 7.15	 	Minimum Tangible Net Worth	75
	 	Section 7.16	 	Consolidated Total Leverage Ratio	75
	 	Section 7.17	 	Consolidated Fixed Charge Coverage Ratio	75
	 	Section 7.18	 	Covenant to Guarantee Obligations and Give Security	75
	 	Section 7.19	 	Use of Proceeds	76
	 	Section 7.20	 	Compliance with Anti-Corruption Laws and Sanctions	76
	 	Section 7.21	 	Canadian Pension Plans	77
	 	 	 	 	 
	ARTICLE VIII NEGATIVE COVENANTS	77
	 	Section 8.01	 	Negative Pledge	77
	 	Section 8.02	 	Merger, Etc	77
	 	Section 8.03	 	Extensions of Credit	77
	 	Section 8.04	 	Borrowings	77
	 	Section 8.05	 	Dividends and Distributions	78
	 	Section 8.06	 	Dispositions	78
	 	Section 8.07	 	Capital Expenditures	79
	 	Section 8.08	 	Revolving Credit Exposure not to Exceed Commitment	79
	 	Section 8.09	 	Investments	79
	 	Section 8.10	 	Change of Control of Borrowers	80
	 	Section 8.11	 	Change in Nature of Business	80
	 	Section 8.12	 	No Negative Pledge	80
	 	Section 8.13	 	Arm’s Length Transactions	80
	 	Section 8.14	 	Hedge Agreements	80
	 	Section 8.15	 	Subsidiaries	80
	 	Section 8.16	 	Maritime Industry Standards	80
	 	Section 8.17	 	Sanctions and Anti-Corruption	81
	 	Section 8.18	 	Canadian Pension Plans	81
	 	 	 	 	 
	ARTICLE IX DEFAULT AND REMEDIES	81
	 	Section 9.01	 	Events of Default	81
	 	Section 9.02	 	Remedies	83
	 	Section 9.03	 	Rights and Remedies Cumulative; Non-Waiver; etc	84
	 	Section 9.04	 	Crediting of Payments and Proceeds	84
	 	Section 9.05	 	Administrative Agent May File Proofs of Claim	85
	 	Section 9.06	 	Credit Bidding	86
	 	Section 9.07	 	Right of Setoff	86
	 	 	 	 	 
	ARTICLE X THE ADMINISTRATIVE AGENT	87
	 	Section 10.01	 	Appointment and Authority	87
	 	Section 10.02	 	Rights as a Lender	87
	 	Section 10.03	 	Exculpatory Provisions	88

  

 

 -iii-

 

 

	 	 	 	 	Page
	 	Section 10.04	 	Reliance by the Administrative Agent	88
	 	Section 10.05	 	Delegation of Duties	89
	 	Section 10.06	 	Resignation of Administrative Agent	89
	 	Section 10.07	 	Non-Reliance on Administrative Agent and Other Lenders	90
	 	Section 10.08	 	No Other Duties, etc	90
	 	Section 10.09	 	Collateral Matters	90
	 	Section 10.10	 	Secured Hedge Agreements and Secured Cash Management Agreements	91
	 	 	 	 	 
	ARTICLE XI MISCELLANEOUS	92
	 	Section 11.01	 	Notices	92
	 	Section 11.02	 	Amendments, Waivers and Consents	94
	 	Section 11.03	 	Expenses; Indemnity	95
	 	Section 11.04	 	Interest Rate Limitation	97
	 	Section 11.05	 	GOVERNING LAW; JURISDICTION, ETC	98
	 	Section 11.06	 	WAIVER OF JURY TRIAL	99
	 	Section 11.07	 	Reversal of Payments	99
	 	Section 11.08	 	Injunctive Relief	99
	 	Section 11.09	 	Accounting Matters	99
	 	Section 11.10	 	Successors and Assigns; Participations	100
	 	Section 11.11	 	Treatment of Certain Information; Confidentiality	104
	 	Section 11.12	 	Performance of Duties	105
	 	Section 11.13	 	All Powers Coupled with Interest	105
	 	Section 11.14	 	Survival	105
	 	Section 11.15	 	Titles and Captions	105
	 	Section 11.16	 	Severability of Provisions	105
	 	Section 11.17	 	Counterparts; Integration; Effectiveness; Electronic Execution	105
	 	Section 11.18	 	Term of Agreement	106
	 	Section 11.19	 	USA PATRIOT Act	106
	 	Section 11.20	 	Independent Effect of Covenants	106
	 	Section 11.21	 	Reservations of Rights	106
	 	Section 11.22	 	Debtor-Creditor Relationship	106
	 	Section 11.23	 	Injunctive Relief	107
	 	Section 11.24	 	Arbitration	107
	 	Section 11.25	 	Amendment and Restatement; No Novation	108
	 	Section 11.26	 	Inconsistencies with Other Documents	109
	 	Section 11.27	 	Judgment Currency	109
	 	Section 11.28	 	Recourse Against Bioriginal Omega and Other Canadian Loan Parties	109
	 	Section 11.29	 	NOTICE OF FINAL AGREEMENT	109

   

 

-iv- 

 

  

	
EXHIBITS

	
Exhibit A-1
	
-
	
Form of Revolving A Note

	
Exhibit A-2
	
-
	
Form of Revolving B Note

	
Exhibit A-3
	
-
	
Form of Swingline Note

	
Exhibit B
	
-
	
Form of Notice of Borrowing

	
Exhibit C
	
-
	
Form of Notice of Account Designation

	
Exhibit D
	
-
	
Form of Notice of Prepayment

	
Exhibit E
	
-
	
Form of Notice of Conversion/Continuation

	
Exhibit F
	
-
	
Form of Officer’s Compliance Certificate

	
Exhibit G
	
-
	
Form of Assignment and Assumption

	
Exhibit H-1
	
-
	
U.S. Tax Compliance Certificate (For Foreign Lenders That Are Not Partnerships for U.S. Federal Income Tax Purposes)

	
Exhibit H-2
	
-
	
U.S. Tax Compliance Certificate (For Foreign Participants That Are Not Partnerships for U.S. Federal Income Tax Purposes)

	
Exhibit H-3
	
-
	
U.S. Tax Compliance Certificate (For Foreign Lenders That Are Partnerships for U.S. Federal Income Tax Purposes)

	
Exhibit I
	
-
	
Form of Joinder Agreement

	  	  	  
	
SCHEDULES
	  	  
	
Schedule 1.01
	
-
	
Existing Letters of Credit

	
Schedule 5.01
	
-
	
Continuing Letters of Credit

	
Schedule 6.06
	
-
	
Litigation

	
Schedule 6.14
	
-
	
Subsidiaries 

	
Schedule 6.16
	
-
	
Vessels

	
Schedule 6.17
	
-
	
Real Property

	
Schedule 6.18

Schedule 6.23 
	
-

-
	
Aircraft

Canadian Pension Plans

	
Schedule 8.01
	
-
	
Existing Liens

	
Schedule 8.04
	
-
	
Existing Indebtedness

	
Schedule 8.14
	
-
	
Existing Hedge Agreements

 

 

 -v-

 

 

THIS SECOND AMENDED AND RESTATED LOAN AGREEMENT, dated as of August 20, 2015, by and among OMEGA PROTEIN CORPORATION, a Nevada corporation (the “Company”), OMEGA PROTEIN, INC., a Virginia corporation (“OPI”), and BIORIGINAL FOOD & SCIENCE CORP., a corporation amalgamated under the laws of Saskatchewan (“Bioriginal Omega”), each as a Borrower, and collectively as the Borrowers, the lenders who are party to this Agreement and the lenders who may become a party to this Agreement pursuant to the terms hereof, as Lenders, and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as Administrative Agent for the Lenders.

 

STATEMENT OF PURPOSE

 

The Borrowers and Wells Fargo Bank, National Association are party to that certain Amended and Restated Loan Agreement, dated as of March 21, 2012 (as amended prior to the date hereof, the “Existing Loan Agreement”), which established a $60,000,000.00 senior secured revolving credit facility with a $15,000,000.00 letter of credit subfacility.

 

The Borrowers have requested, and, subject to the terms and conditions hereof, the Administrative Agent and the Lenders have agreed, to amend and restate the Existing Loan Agreement and extend certain credit facilities to the Borrowers pursuant to the terms and conditions of this Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, such parties hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.01     Definitions. The following terms when used in this Agreement shall have the meanings assigned to them below:

 

“AAA” has the meaning assigned thereto in Section 11.24(b).

 

“Acquisition” means, by any Person, the acquisition by such Person, in a single transaction or in a series of transactions, of either (a) all or any substantial portion of the Property of, or a line of business or division of, another Person; or (b) at least a majority of the Equity Interests of another Person which are entitled to vote for the election of the board of directors (or similar governing body) of such Person, in each case whether or not involving a merger or consolidation with such other Person.

 

“Acquisition Note” means that certain Intercompany Promissory Note dated September 5, 2014, in the original principal amount of $28,500,000.00, executed by Bioriginal Omega and payable to the order of the Company.

 

“Additional Reedville Properties” means those real properties owned by OPI and located at 533 Menhaden Road, Reedville, Virginia 22539.

 

“Adjusted EBITDA” means, for any period, for the Borrowers and their consolidated Subsidiaries on a consolidated basis, an amount equal to the consolidated net income of the Borrowers and their consolidated Subsidiaries for such period plus (a) the following to the extent deducted in calculating such consolidated net income: (i) consolidated interest expense for such period, (ii) the provision for federal, state, local and foreign income taxes payable for such period, (iii) the amount of depreciation and amortization expense and other non-cash charges for such period, (iv) extraordinary losses during such period, and (v) non-recurring charges for such period, less (b) (i) non-cash income and extraordinary gains during such period, and (ii) non-recurring gains for such period; provided that the addition or subtraction of such extraordinary and non-recurring items in the form of cash payments are to be mutually agreed upon by the Borrowers and the Administrative Agent. 

 

 

 

 

  

“Administrative Agent” means Wells Fargo, in its capacity as Administrative Agent hereunder, and any successor thereto appointed pursuant to Section 10.06.

 

“Administrative Agent’s Office” means, with respect to any currency, the office of the Administrative Agent specified in or determined in accordance with the provisions of Section 11.01(c) with respect to such currency, or such other address or account with respect to such currency as the Administrative Agent may from time to time notify to the Borrowers and the Lenders.

 

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

 

“AFA” means the American Fisheries Act of 1998, as amended, Public L. No. 105-277, 122 Stat. 2681 (as codified in scattered sections of Title 46 of the United States Code, in particular, 46 U.S.C. § 31322 et seq., any and all successor statutes thereto and all regulations from time to time promulgated thereunder.

 

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

 

“Agent Parties” has the meaning assigned thereto in Section 11.01(e)(ii).

 

“Agreement” means this Second Amended and Restated Loan Agreement, including all schedules and exhibits to this Agreement, as amended, restated, supplemented or otherwise modified from time to time.

 

“Aircraft Security Agreement” means each aircraft security agreement, in form and substance satisfactory to the Administrative Agent, that purports to grant to the Administrative Agent on behalf of the Secured Parties a security interest in the aircraft owned by any Loan Party, as amended, restated, supplemented or otherwise modified from time to time.

 

“Alternative Currency” means each of Euro, Sterling and any other lawful currency to be designated hereunder as an Alternative Currency by the Borrowers and the Administrative Agent, and consented to by each Lender to be providing Extensions of Credit in such currency (such consent not to be unreasonably withheld or delayed), as agreed to in writing by the Borrowers and the Administrative Agent.

 

“Alternative Currency Equivalent” means, at any time, with respect to any amount denominated in Dollars, the equivalent amount thereof in the applicable Alternative Currency as determined by the Administrative Agent at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of such Alternative Currency with Dollars.

 

“Alternative Currency Sublimit” means an amount equal to the lesser of the Revolving A Commitments and the Alternative Currency Equivalent of $10,000,000.00.

 

 

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“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrowers or their Subsidiaries from time to time concerning or relating to bribery or corruption, including, without limitation, the United States Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder.

 

“Applicable Law” means all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities and all orders and decrees of all courts and arbitrators.

 

“Applicable Margin” means the corresponding percentages per annum as set forth below based on the Consolidated Total Leverage Ratio:

 

	
Pricing Level
	
Consolidated Total Leverage Ratio
	
LIBOR Rate Loans/CDOR Rate Loans +
	
Base Rate Loans/Canadian Prime Rate Loans +
	
Commitment Fee

	
I
	
Less than 1.00 to 1.00
	
1.25%
	
0.00%
	
0.20%

	
II
	
Less than 2.00 to 1.00 but greater than or equal to 1.00 to 1.00
	
1.50%
	
0.00%
	
0.25%

	
III
	
Greater than or equal to 2.00 to 1.00
	
1.75%
	
0.25%
	
0.30%

 

The Applicable Margin shall be determined and adjusted quarterly as of the first day of the month immediately following the date by which the Borrowers are required to provide an Officer’s Compliance Certificate pursuant to Section 7.01 for the most recently ended fiscal quarter of the Borrowers (each a “Calculation Date”); provided that (a) the Applicable Margin shall be based on Pricing Level I until the first Calculation Date occurring after the Closing Date and, thereafter the Pricing Level shall be determined by reference to the Consolidated Total Leverage Ratio as of the last day of the most recently ended fiscal quarter of the Borrowers preceding the applicable Calculation Date; and (b) if the Borrowers fail to provide the Officer’s Compliance Certificate as required by Section 7.01 for the most recently ended fiscal quarter of the Borrowers preceding the applicable Calculation Date, the Applicable Margin from such Calculation Date shall be based on Pricing Level III until such time as an appropriate Officer’s Compliance Certificate is provided, at which time the Pricing Level shall be determined by reference to the Consolidated Total Leverage Ratio as of the last day of the most recently ended fiscal quarter of the Borrowers preceding such Calculation Date. The Applicable Margin shall be effective from one Calculation Date until the next Calculation Date. Any adjustment in the Applicable Margin shall be applicable to all Extensions of Credit then existing or subsequently made or issued.

 

Notwithstanding the foregoing, in the event that any financial statement or Officer’s Compliance Certificate delivered pursuant to Section 7.01 is shown to be inaccurate (regardless of whether (i) this Agreement is in effect, (ii) the Revolving Credit Commitments are in effect, or (iii) any Extension of Credit is outstanding when such inaccuracy is discovered or such financial statement or Officer’s Compliance Certificate was delivered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “Applicable Period”) than the Applicable Margin applied for such Applicable Period, then (A) the Borrowers shall immediately deliver to the Administrative Agent a corrected Officer’s Compliance Certificate for such Applicable Period, (B) the Applicable Margin for such Applicable Period shall be determined as if the Consolidated Total Leverage Ratio in the corrected Officer’s Compliance Certificate were applicable for such Applicable Period, and (C) the Borrowers shall immediately and retroactively be obligated to pay to the Administrative Agent the accrued additional interest and fees owing as a result of such increased Applicable Margin for such Applicable Period, which payment shall be promptly applied by the Administrative Agent in accordance with Section 4.04. Nothing in this paragraph shall limit the rights of the Administrative Agent and Lenders with respect to Sections 4.01(c) and 9.02 nor any of their other rights under this Agreement. The Borrowers’ obligations under this paragraph shall survive the termination of the Revolving Credit Commitments and the repayment of all other Obligations hereunder.

 

 

-3-

 

  

“Applicable Period” has the meaning assigned thereto in the definition of “Applicable Margin”.

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

“Arranger” means Wells Fargo Securities, LLC, in its capacity as sole lead arranger and sole bookrunner, and its successors.

 

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.10), and accepted by the Administrative Agent, in substantially the form attached as Exhibit G or any other form approved by the Administrative Agent.

 

“Assignment of Insurances” means each assignment of insurances, in form and substance satisfactory to the Administrative Agent, executed and delivered by a Loan Party in favor of the Mortgage Trust and relating to insurances with respect to any Vessel, as such assignment may be amended, restated, supplemented or otherwise modified from time to time.

 

“Attributable Indebtedness” means, on any date of determination, (a) in respect of any Capital Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP; and (b) in respect of any Synthetic Lease, the capitalized amount or principal amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease.

 

“Australian Dollars” means the lawful currency of Australia.

 

“Bank of Montreal” means, collectively, Bank of Montreal, BMO Harris Bank N.A., and its Affiliates and any Affiliate of BMO Financial Group.

 

“Base Rate” means, at any time, the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) LIBOR for an Interest Period of one month plus 1.50%; each change in the Base Rate shall take effect beginning such time with the corresponding change or changes in the Prime Rate, the Federal Funds Rate or LIBOR (provided that clause (c) shall not be applicable during any period in which LIBOR is unavailable or unascertainable).

 

“Base Rate Loan” means any Loan bearing interest at a rate based upon the Base Rate as provided in Section 4.01(a).

 

“Bioriginal Acquisition” means the acquisition by the Company of the Equity Interests of Bioriginal Food & Science Corp., a Saskatchewan corporation, Entity No. 101228896, pursuant to that certain Share Purchase Agreement, dated September 5, 2014, by and among the Company and 101264205 Saskatchewan Ltd., a Saskatchewan corporation, Entity No. 101264205, as Buyer, and the Sellers and Purchasers as described therein.

 

 

-4-

 

  

“Bioriginal Europe” means Bioriginal Europe/Asia B.V., a corporation formed under the laws of the Netherlands.

 

“Bioriginal Europe Intercompany Hedge Agreement” means a Hedge Agreement in the form of a forward foreign exchange transaction between the Company or OPI and Bioriginal Europe entered into on a corresponding basis, and on the same terms and conditions, as a Hedge Agreement entered into for the same purpose between the Company and a Hedge Bank.

 

“Bioriginal Indebtedness” means the Indebtedness of Bioriginal Omega described in Schedule 8.04 attached hereto, including any refinancings, refundings or replacements thereof.

 

“Bioriginal Omega” has the meaning assigned thereto in the preamble.

 

“Bioriginal Omega Property” means that certain real property and improvements owned by Bioriginal Omega and located at 102 Melville Street, Saskatoon, Saskatchewan.

 

“Bioriginal Party” means, as applicable, Bioriginal Omega and each of its Subsidiaries, and “Bioriginal Parties” means, collectively, all of the above.

 

“Borrower” means, as applicable, the Company, OPI and Bioriginal Omega, and “Borrowers” means, collectively, all of the above.

 

“Business Day” means any day other than a Saturday, Sunday or legal holiday on which banks in Houston, Texas are open for the conduct of their commercial banking business; provided that (a) when used in connection with a LIBOR Rate Loan, the term “Business Day” shall also exclude any day that is not a London Banking Day; (b) when used in connection with a Loan denominated in Canadian Dollars, the term “Business Day” shall also exclude any day on which banks are not open for business in Toronto, Canada; and (c) when used in connection with a Loan in any Alternative Currency, the term “Business Day” shall also exclude any day on which banks are not open for general business in the principal financial center of the country of such Alternative Currency.

 

“Calculation Date” has the meaning assigned thereto in the definition of “Applicable Margin”.

 

“Canadian Dollar Equivalent” means, at any time, with respect to any amount denominated in Dollars, the equivalent amount thereof in Canadian Dollars as determined by the Administrative Agent at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of Canadian Dollars with Dollars.

 

“Canadian Dollars” or “C$” means the lawful currency of Canada.

 

“Canadian Loan Party” or “Canadian Loan Parties” has the meaning assigned thereto in Section 11.28.

 

“Canadian Overdraft Facility” means the credit facility made available to Bioriginal Omega by Bank of Montreal pursuant to a Combined Canadian &/or US Dollar Operating Loan Agreement and all documents or instruments executed and delivered in connection therewith, together with any and all other successor, replacement or substituted overdraft credit facilities provided by a Cash Management Bank to Bioriginal Omega, in each case as the same may be amended, supplemented, restated, replaced, substituted, or otherwise modified from time to time.

 

 

-5-

 

  

“Canadian Pension Plans” means a “registered pension plan” (as such term is defined in the ITA) that any Loan Party establishes, sponsors, maintains or to which it is liable for or makes, is making or is obligated to make contributions at any time.

 

“Canadian Prime Rate” means, at any time, the greater of (a) the rate of interest per annum most recently announced or established by the Administrative Agent as its reference rate in effect on such day for determining interest rates for Canadian Dollar denominated commercial loans in Canada and commonly known as the “prime rate” (or its equivalent or analogous such rate) and (b) CDOR on such day for an Interest Period of one month plus 1.50%. Each change in the Canadian Prime Rate shall be effective as of the opening of business on the day such change in such prime rate occurs. The parties hereto acknowledge that the rate announced publicly by the Administrative Agent as its Canadian prime rate is an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks.

 

“Canadian Prime Rate Loan” means any Loan bearing interest at a rate based upon the Canadian Prime Rate as provided in Section 4.01(a).

 

“Capital Lease” means any lease of any Property by the Borrowers or any of its Subsidiaries, as lessee, that should, in accordance with GAAP, be classified and accounted for as a capital lease on a consolidated balance sheet of the Borrowers and their Subsidiaries.

 

“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent or directly to the Issuing Lender (with notice thereof to the Administrative Agent), in either case for the benefit of one or more of the Issuing Lender, the Swingline Lender or the other Lenders, as collateral for L/C Obligations or obligations of the Lenders to fund participations in respect of L/C Obligations or Swingline Loans, cash or deposit account balances or, if the Administrative Agent and the Issuing Lender and the Swingline Lender shall agree, in their sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent, the Issuing Lender and the Swingline Lender, as applicable. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such Cash Collateral and other credit support.

 

“Cash Management Agreement” means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card (including non-card electronic payables), electronic funds transfer and other cash management arrangements.

 

“Cash Management Bank” means any Person that (a) at the time it enters into a Cash Management Agreement with a Loan Party, is a Lender, an Affiliate of a Lender, the Administrative Agent or an Affiliate of the Administrative Agent; or (b) at the time it (or its Affiliate) becomes a Lender (including on the Closing Date), is a party to a Cash Management Agreement with a Loan Party, in each case in its capacity as a party to such Cash Management Agreement.

 

“CDOR” means, for the relevant Interest Period, on the day that is the commencement date of such Interest Period, the annual rate of interest determined with reference to the arithmetic average of the discount rate quotations of all institutions listed in respect of the relevant Interest Period for Canadian Dollar-denominated bankers acceptances displayed and identified as such on the CDOR page of the Reuters screen (or on any successor or substitute page on such screen or service that displays such rate, or on the appropriate page of such other information service that publishes such rate as shall be selected by the Administrative Agent from time to time in its reasonable discretion), at or about approximately 10:00 a.m., Toronto, Canada, time, on such day and, if such day is not a Business Day, then on the immediately preceding Business Day (as adjusted by the Administrative Agent after 10:00 a.m., Toronto, Canada, time to reflect any error in the posted rate of interest or in the posted average annual rate of interest). Notwithstanding the foregoing, if CDOR shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

 

-6-

 

  

“CDOR Rate Loan” means any Loan bearing interest at a rate based upon CDOR as provided in Section 4.01(a).

 

“Change of Control” means an event or series of events by which:

 

(a)     any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all Equity Interests that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of 35% of the Equity Interests of the Company entitled to vote for members of the board of directors or equivalent governing body of the Company on a fully diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right);

 

(b)     during any period of 24 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Company 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 or equivalent governing body 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 equivalent governing body, or (iii) whose election or nomination to that board or other equivalent governing body 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 equivalent governing body; or

 

(c)     any Person or two or more Persons acting in concert shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation thereof, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the management or policies of the Company, or control over the Voting Stock of the Company on a fully-diluted basis (and taking into account all such Voting Stock that such Person or group has the right to acquire pursuant to any option right) representing 35% or more of the combined voting power of such Voting Stock;

 

(d)     with respect to OPI, the failure of the Company to directly or indirectly own all of the outstanding Equity Interests of OPI; and

 

(e)     with respect to Bioriginal Omega, the failure of the Company to directly or indirectly own all of the outstanding Equity Interests of Bioriginal Omega.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority; or (c) the making or issuance of any 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, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

 

-7-

 

  

“Closing Date” means the date of this Agreement.

 

“Code” means the Internal Revenue Code of 1986, and the rules and regulations promulgated thereunder, each as amended or modified from time to time.

 

“Collateral” means the collateral security for the Secured Obligations pledged or granted pursuant to the Collateral Documents.

 

“Collateral Documents” means a collective reference to the Security Agreements, the Mortgages, the Aircraft Security Agreements, the Mortgage Trust Agreement, the First Preferred Ship Mortgages, the Assignment of Insurances and other security documents as may be executed and delivered by the Loan Parties hereunder, in each case, as amended, restated, supplemented or otherwise modified from time to time.

 

“Commitment Fee” has the meaning assigned thereto in Section 4.03(a).

 

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

 

“Communications” has the meaning assigned thereto in Section 11.01(e)(ii).

 

“Company” has the meaning assigned thereto in the preamble.

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profit Taxes or capital Taxes imposed by Canada or a political subdivision thereof.

 

“Consolidated Fixed Charge Coverage Ratio” means, as of any date of determination, the ratio of (a) (i) Adjusted EBITDA, minus (ii) cash dividends and distributions (including, for the avoidance of doubt, share buy-backs), minus (iii) federal, state, local and foreign taxes paid in cash, minus (iv) maintenance Capital Expenditures in an aggregate amount not to exceed $10,000,000.00, in each case for the period of four consecutive fiscal quarters ending on or immediately prior to such date, to (b) Consolidated Fixed Charges for the period of four consecutive fiscal quarters ending on or immediately prior to such date.

 

“Consolidated Fixed Charges” means, for any period, the sum of the following determined on a consolidated basis for such period, without duplication, for the Borrowers and their Subsidiaries in accordance with GAAP: (a) consolidated interest expense for such period paid or payable in cash, plus (b) scheduled principal payments with respect to Indebtedness.

 

“Consolidated Total Leverage Ratio” means, as of any date of determination, the ratio of (a) Total Funded Debt on such date to (b) Adjusted EBITDA for the period of four consecutive fiscal quarters ending on or immediately prior to such date.

 

“Contested in Good Faith” means, as to any payment, tax, assessment, charge, levy, lien, encumbrance or claim, contesting the amount, applicability or validity thereof in good faith by appropriate proceedings or other appropriate actions promptly initiated and diligently conducted in a manner satisfactory to the Administrative Agent; provided that the enforcement of any related Lien is stayed in a manner satisfactory to the Administrative Agent pending the resolution of such contest.

 

 

-8-

 

  

“Continuing Letters of Credit” has the meaning assigned thereto in Section 5.01(h)(v).

 

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

 

“Credit Facility” means, collectively, the Revolving Credit Facility, the Swingline Facility and the L/C Facility.

 

“Credit Support Triggering Event” has the meaning assigned thereto in the definition of “Unrestricted Subsidiary”.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States, 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.

 

“Default” means any of the events specified in Section 9.01 which with the passage of time, the giving of notice or the occurrence of any other condition, would constitute an Event of Default.

 

“Defaulting Lender” means, subject to Section 4.15(b), any Lender that (a) has failed to (i) fund all or any portion of the Revolving Credit Loans, participations in L/C Obligations or participations in Swingline Loans required to be funded by it hereunder within two Business Days of the date such Loans or participations were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrowers in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, the Issuing Lender, the Swingline 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 or Swingline Loans) within two Business Days of the date when due; (b) has notified the Borrowers, the Administrative Agent, the Issuing Lender or the Swingline Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied); (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrowers, to confirm in writing to the Administrative Agent and the Borrowers 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 Borrowers); or (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 state or federal 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 that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 4.15(b)) upon delivery of written notice of such determination to the Borrowers, the Issuing Lender, the Swingline Lender and each Lender.

 

 

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“Disposition” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any Property by a Loan Party (including the Equity Interests of any Subsidiary), 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, but excluding any loss of, damage to or destruction of, or any condemnation or other taking for public use of, any Property of a Loan Party.

 

“Dollar Equivalent” means, at any time, (a) with respect to any amount denominated in Dollars, such amount; and (b) with respect to any amount denominated in Canadian Dollars or any Alternative Currency, the equivalent amount thereof in Dollars as determined by the Administrative Agent at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of Dollars with Canadian Dollars or such Alternative Currency, as applicable.

 

“Dollars” or “$” means, unless otherwise qualified, dollars in lawful currency of the United States.

 

“Domestic Subsidiary” means any Subsidiary organized under the laws of any political subdivision of the United States.

 

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 11.10(b)(iii), (v) and (vi) (subject to such consents, if any, as may be required under Section 11.01 (b)(iii)).

 

“Eligible Vessels” means each of the Vessels, other than any Ineligible Vessels and any Excluded Vessel.

 

“Environmental Claims” means any and all administrative, regulatory or judicial actions, suits, written demands, demand letters, claims, liens, written allegations, notices of noncompliance or violation, investigations (other than internal reports prepared by any Person in the ordinary course of business and not in response to any third party action or request of any kind) or proceedings relating in any way to any actual or alleged violation of or liability under any Environmental Law or relating to any permit issued, or any approval given, under any such Environmental Law, including any and all claims by Governmental Authorities for enforcement, cleanup, removal, response, remedial or other actions or damages, contribution, indemnification cost recovery, compensation or injunctive relief resulting from Hazardous Materials or arising from alleged injury or threat of injury to human health or the environment.

 

“Environmental Laws” means any foreign, federal, state or local laws, ordinances or codes, rules, orders, or regulations relating to pollution or the protection or preservation of the environment, including laws relating to hazardous substances, laws relating to reclamation of land and waterways and laws relating to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment (including ambient air, surface water, ground water, land surface or subsurface strata) or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, handling of, or exposure to pollution, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.

 

 

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“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such Equity Interest.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder, as in effect as of the date hereof and any subsequent provisions which are amendatory thereof, supplemental thereto or substituted therefor.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with Borrowers within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

 

“ERISA Plan” means, at any time, any employee benefit plan as defined under Section 3(3) of ERISA and in respect of which any Borrower or any ERISA Affiliate is (or, if such plan were terminated at such time, would under ERISA be deemed to be) an “employer” as defined in ERISA.

 

“Euro” means the single currency of the Participating Member States.

 

“Eurodollar Reserve Percentage” means, for any day, the percentage (expressed as a decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%) which is in effect for such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including any basic, supplemental or emergency reserves) in respect of eurocurrency liabilities or any similar category of liabilities for a member bank of the Federal Reserve System in New York City.

 

“Event of Default” means any of the events specified in Section 9.01; provided that any requirement for passage of time, giving of notice, or the occurrence of any other condition, has been satisfied.

 

“Excluded Property” means, with respect to any Loan Party and subject in all respects to clauses (p) and (q) below, (a) any owned real property which is located outside of the United States (except with respect to Bioriginal Omega, the Bioriginal Omega Property); (b) unless requested by the Administrative Agent, any leasehold interests in real property; (c) unless requested by the Administrative Agent, any trademarks, services marks, trade names, copyrights, patents, patent rights, franchises, licenses, and other intellectual property rights for which a perfected Lien thereon is not effected either by filing of a Uniform Commercial Code financing statement or by appropriate evidence of such Lien being filed in either the United States Copyright Office or the United States Patent and Trademark Office; (d) unless requested by the Administrative Agent, any personal property (other than personal property described in clause (b) above) for which the attachment or perfection of a Lien thereon is not governed by the Uniform Commercial Code; (e) unless requested by the Administrative Agent, the Equity Interests of any direct or indirect Foreign Subsidiary of a Loan Party; (f) any Property which is subject to a Lien securing purchase money indebtedness permitted under Section 8.04(d) pursuant to documents which prohibit such Loan Party from granting any other Liens in such Property; (g) NMFFP Collateral and other assets of the Company, OPI and any Domestic Subsidiary of the Loan Parties that are acquired after the Closing Date (provided that if the aggregate value of (i) such NMFFP Collateral that, after the Closing Date, is released from Liens securing any NMFFP Financing and (ii)  such other assets is equal to or greater than $10,000,000.00, then such NMFFP Collateral and such other assets shall cease to constitute “Excluded Property” to the extent of such excess); (h) the Equity Interests of any Foreign Subsidiary that is an Unrestricted Subsidiary or an Inactive Subsidiary; (i) Equity Interests of OPI; (j) the Excluded Vessels; (k) the Borrowers’ existing account number 475053001 at JPMorgan Chase Bank, N.A. and the funds on deposit therein from time to time; (l) cash or cash equivalents deposited in a segregated account if a hedge provider requires Borrowers to cash collateralize a permitted Hedge Agreement that the Borrowers have entered into with such hedge provider, provided that such cash or cash equivalents shall only be Excluded Property so long as such hedge provider requires that such Hedge Agreements be cash collateralized; (m) subject to Section 7.13(c), the Additional Reedville Properties; (n) subject to Section 7.13(d), the Released Louisiana and Mississippi Properties; (o) the real property and fixtures, but not any personal property (which personal property includes without limitation equipment and inventory), at 610 Menhaden Road, Reedville, Virginia; (p) assets (including, without limitation, Equity Interests) to the extent that the Administrative Agent and the Borrowers agree that the granting of a Lien on such collateral would have material adverse tax consequences for the Loan Parties; and (q) assets (including, without limitation, Equity Interests) as to which the Administrative Agent and the Borrowers agree that the cost of obtaining a security interest therein would be excessive in relation to the value afforded thereby, or if the granting of a security interest therein would be prohibited by contract or applicable law unless such prohibition would not be effective under applicable law.

 

 

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“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 liability of such Loan Party for or the guarantee of such Loan Party of, or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any liability or guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the liability for or the guarantee of such Loan Party or the grant of such security interest becomes effective with respect to such Swap Obligation (such determination being made after giving effect to any applicable keepwell, support or other agreement for the benefit of the applicable Loan Party). If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal for the reasons identified in the immediately preceding sentence of this definition.

 

“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 (including margin Taxes and gross receipts Taxes), capital Taxes imposed by Canada or any political subdivision thereof, 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, 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, any withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment, or (ii) such Lender changes its applicable Lending Office, except in each case to the extent that pursuant to Section 4.11, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its applicable Lending Office; (c) any Taxes attributable to any Lender’s failure to comply with Section 4.11(f); (d) any U.S. federal withholding Taxes imposed by FATCA; (e) any withholding Taxes payable under Part XIII of the Income Tax Act (Canada) that are imposed on amounts payable to or for the account of the Administrative Agent or any Lender as a consequence of the Administrative Agent or such Lender not dealing at arm’s length (within the meaning of the Income Tax Act (Canada)) with any Canadian Loan Party at the time of such payment; and (f) any withholding Taxes payable under Part XIII of the Income Tax Act (Canada) that are imposed on amounts payable to or for the account of any Administrative Agent or Lender as a consequence of such Administrative Agent or Lender being, at any time, a “specified non-resident shareholder” (within the meaning of subsection 18(5) of the Income Tax Act (Canada)) of a Canadian Loan Party, or, at any time, not dealing at arm’s length (within the meaning of the Income Tax Act (Canada)) with a “specified shareholder” (within the meaning of subsection 18(5) of the Income Tax Act (Canada)) of a Canadian Loan Party.

 

 

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“Excluded Vessels” means the Vessels identified as “Excluded Vessels” on Schedule 6.16; provided that if any such Vessel is not scrapped or sold within twelve months of the Closing Date, such Vessel shall cease to be an Excluded Vessel.

 

“Existing Letters of Credit” means those letters of credit existing on the Closing Date and identified on Schedule 1.01.

 

“Existing Loan Agreement” has the meaning assigned thereto in the Statement of Purpose.

 

“Extensions of Credit” means, as to any Lender at any time, (a) an amount equal to the sum of (i) the aggregate principal amount of all Revolving Credit Loans made by such Lender then outstanding, (ii) such Lender’s Revolving Credit Commitment Percentage of the L/C Obligations then outstanding, (iii) such Lender’s Revolving Credit Commitment Percentage of the Swingline Loans then outstanding; or (b) the making of any Loan or participation in any Letter of Credit by such Lender, as the context requires.

 

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

 

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

 

“Fee Letter” means the separate fee letter agreement, dated as of May 27, 2015, among the Borrowers and the Administrative Agent. 

 

“First Preferred Ship Mortgage” means each first preferred fleet mortgage or first preferred ship mortgage, in form and substance satisfactory to the Administrative Agent, executed and delivered by a Loan Party in favor of the Mortgage Trust, or assigned to the Mortgage Trust by any prior mortgagee pursuant to an assignment, in form and substance satisfactory to the Administrative Agent, with respect to an Eligible Vessel, as such mortgage may be amended, restated, supplemented or otherwise modified from time to time.

 

“Fishing Industry Vessel” has the meaning set forth in 46 C.F.R. § 356.3.

 

“Flood Hazard Property” has the meaning assigned thereto in Section 5.01(d)(iii).

 

“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person; and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Borrowers are resident for tax purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

  

 

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“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

 

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to the Issuing Lender, such Defaulting Lender’s Revolving Credit Commitment Percentage of the outstanding L/C Obligations other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof; and (b) with respect to the Swingline Lender, such Defaulting Lender’s Revolving Credit Commitment Percentage of Swingline Loans other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

 

“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course of its activities. 

 

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

 

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

 

“Governmental Requirements” means any and all present and future judicial decisions, laws, statutes, rulings, rules, regulations, permits, certificates, or ordinances of any Governmental Authority in any way applicable to any Borrower, any Guarantor, any Bioriginal Party or the Property, including the generality of the foregoing, the ownership, use, occupancy, possession, construction, operation, maintenance, alteration, repair, or reconstruction thereof.

 

“Guarantors” means Protein Finance Company, a Delaware corporation, Omega Shipyard, Inc., a Delaware corporation, Protein Industries, Inc., a Delaware corporation, Cyvex Nutrition, Inc., a California corporation, InCon Processing, L.L.C., a Delaware limited liability company, Wisconsin Specialty Protein, LLC, a Wisconsin limited liability company, and subject to Section 11.28, any other Person which subsequently guaranties the payment and performance of the Obligations; provided that (a) none of Bioriginal Omega or its Subsidiaries shall be, or shall be deemed to be, a “Guarantor” of any Obligation or Secured Obligation of a Loan Party (other than the direct Obligations and Secured Obligations of Bioriginal Omega in respect of the Revolving B Commitment), and (b) none of any Unrestricted Subsidiary or any Inactive Subsidiary shall be, or shall be deemed to be, a “Guarantor” of any Secured Obligation of a Loan Party, in any case for any purpose under this Agreement and the other Loan Documents.

 

“Guaranty Agreement” means the Second Amended and Restated Guaranty Agreement of even date herewith executed by a Guarantor in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, which shall be in form and substance acceptable to the Administrative Agent, as amended, restated, supplemented or otherwise modified from time to time.

 

 

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“Guaranty Obligation” means, with respect to the Loan Parties and their Subsidiaries, without duplication, any obligation, contingent or otherwise, of any such Person pursuant to which such Person has directly or indirectly guaranteed any Indebtedness or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of any such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement condition or otherwise); or (b) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided that the term “Guaranty Obligation” shall not include endorsements for collection or deposit in the ordinary course of business.

 

“Hazardous Materials” means all materials defined as hazardous materials or hazardous substances under any Governmental Requirements relating to the environment, and petroleum, petroleum products, oil and asbestos.

 

“Hedge Agreement” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement; and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other derivatives master agreement, all as amended, restated, supplemented or otherwise modified from time to time.

 

“Hedge Bank” means any Person that (a) at the time it enters into a Hedge Agreement with a Loan Party permitted under Article VIII, is a Lender, an Affiliate of a Lender, the Administrative Agent or an Affiliate of the Administrative Agent or (b) at the time it (or its Affiliate) becomes a Lender (including on the Closing Date), is a party to a Hedge Agreement with a Loan Party, in each case in its capacity as a party to such Hedge Agreement.

 

“Hedge Termination Value” means, in respect of any one or more Hedge Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Hedge Agreements, (a) for any date on or after the date such Hedge Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s); and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedge Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedge Agreements (which may include a Lender or any Affiliate of a Lender).

 

“HSBC Equipment Lease” means that certain Master Equipment Lease, dated March 24, 2014, between Bioriginal Omega, as lessee, and HSBC Bank Canada, as lessor, covering the equipment and other property from time to time leased thereunder, together with all schedules and exhibits thereto and all other documents and instruments executed and delivered in connection therewith, in each case as amended, restated, renewed, extended, supplemented or modified from time to time.

 

 

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“HSBC Indebtedness” means the Indebtedness owed by Bioriginal Omega to HSBC Bank Canada pursuant to the Facility Letter Agreement, dated April 15, 2014, and pursuant to the HSBC Equipment Lease, in each case including any refinancings, refundings or replacements thereof.

 

“Inactive Subsidiary” means, subject to Section 7.18, any direct or indirect Subsidiary of the Company which is designated by the Borrowers as an Inactive Subsidiary and which (a) individually has assets not exceeding $500,000.00 and (b) together with all other Inactive Subsidiaries, has assets not exceeding $2,500,000.00 in the aggregate. As of the Closing Date, Omega International Marketing Company, Omega Protein Mexico S. de R.L. de C.V., EFASense Ltd., Biorganic Marketing Ltd. and Dalian Lifeline International Trading Ltd. are the only Inactive Subsidiaries of the Company.

 

“Increased Amount Date” has the meaning assigned thereto in Section 4.13(a).

 

“Indebtedness” means, with respect to any Person at any date and without duplication, the sum of the following:

 

(a)     all liabilities, obligations and indebtedness for borrowed money including, but not limited to, obligations evidenced by bonds, debentures, notes or other similar instruments of any such Person;

 

(b)     all obligations to pay the deferred purchase price of Property or services of any such Person (including all obligations under non-competition, earn-out or similar agreements), except trade payables arising in the ordinary course of business not more than 90 days past due, or that are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided for on the books of such Person;

 

(c)     the Attributable Indebtedness of such Person with respect to such Person’s obligations in respect of Capital Leases and Synthetic Leases (regardless of whether accounted for as indebtedness under GAAP);

 

(d)     all obligations of such Person under conditional sale or other title retention agreements relating to Property purchased by such Person to the extent of the value of such Property (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business);

 

(e)     all Indebtedness of any other Person secured by a Lien on any asset owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements except trade payables arising in the ordinary course of business), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse (but if not assumed by such Person or if limited in recourse, the amount thereof shall be equal to the lesser of the amount of such Indebtedness or the value of the encumbered Property of such Person securing the same); 

 

(f)     all obligations, contingent or otherwise, of any such Person relative to the face amount of letters of credit, whether or not drawn, including any Reimbursement Obligation, and bankers acceptances issued for the account of any such Person;

 

(g)     all net obligations of such Person under any Hedge Agreements; and

 

(h)     all Guaranty Obligations of any such Person with respect to any of the foregoing.

 

 

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For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Hedge Agreement on any date shall be deemed to be the Hedge Termination Value thereof as of such date.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes; and (b) to the extent not otherwise described in clause (a), Other Taxes.

 

“Indemnitee” has the meaning assigned thereto in Section 11.03(b).

 

“Ineligible Vessel” means (a) the Vessels identified on Schedule 6.16 as collateral for the NMFFP Financing permitted under Section 8.04(b), and (b) any Vessel that at the time of determination is mortgaged to secure any NMFFP Financing owed by any Loan Party under the NMFFP to the extent such NMFFP Financing is permitted under Section 8.04(c); provided that if any such Vessel described in clause (a) or (b) above shall cease to secure any NMFFP Financing, including as the result of the satisfaction or discharge of such NMFFP Financing, the release of all Loan Parties’ obligations thereunder or the release of such Vessel as security therefore, such Vessel shall no longer constitute an “Ineligible Vessel”.

 

“Information” has the meaning assigned thereto in Section 11.11.

 

“Interest Period” has the meaning assigned thereto in Section 4.01(b).

 

“IRS” means the United States Internal Revenue Service, or any successor thereto.

 

“ISP98” means the International Standby Practices (1998 Revision, effective January 1, 1999), International Chamber of Commerce Publication No. 590.

 

“Issuing Lender” means (a) with respect to Letters of Credit issued hereunder on or after the Closing Date, Wells Fargo, in its capacity as issuer thereof, or any successor thereto; and (b) with respect to the Existing Letters of Credit, Wells Fargo, in its capacity as issuer thereof.

 

“ITA” means the Income Tax Act (Canada), as amended.

 

“Joinder Agreement” has the meaning assigned thereto in Section 7.18.

 

“Jones Act” means Section 27 of the Merchant Marine Act of 1920, as amended (recodified at 46 U.S.C. § 55101 et seq.), and all successors statutes thereto, and any and all regulations promulgated under any thereof.

 

“L/C Facility” means, collectively, the letter of credit facilities established pursuant to Article III.

 

“L/C Obligations” means at any time, an amount equal to the sum of (a) the aggregate undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit which have not then been reimbursed pursuant to Section 3.05.

 

“L/C Participants” means (a) with respect to any Revolving A L/C Commitment, the Revolving A Lenders and (b) with respect to any Revolving B L/C Commitment, the Revolving B Lenders, in each case other than the Issuing Lender.

 

 

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“Lender” means a Revolving A Lender or a Revolving B Lender, as the context requires. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.

 

“Lending Office” means, with respect to any Lender, the office of such Lender maintaining such Lender’s Extensions of Credit.

 

“Letter of Credit Application” means an application, in the form specified by the Issuing Lender from time to time, requesting the Issuing Lender to issue a Letter of Credit.

 

“Letters of Credit” means, individually or collectively as the context may require, the Revolving A Letters of Credit and the Revolving B Letters of Credit issued pursuant to Section 3.01 and the Existing Letters of Credit.

 

“LIBOR” means,

 

(a)     for any interest rate calculation with respect to a LIBOR Rate Loan, the rate of interest per annum determined on the basis of the rate for deposits in Dollars or the applicable Alternative Currency for a period equal to the applicable Interest Period which appears on Reuters Screen LIBOR01 Page (or any applicable successor page) at approximately 11:00 a.m. (London time) two London Banking Days prior to the first day of the applicable Interest Period (rounded upward, if necessary, to the nearest 1/100th of 1%). If, for any reason, such rate does not appear on Reuters Screen LIBOR01 Page (or any applicable successor page), then “LIBOR” shall be determined by the Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars or the applicable Alternative Currency in minimum amounts of at least $5,000,000.00 would be offered by first class banks in the London interbank market to the Administrative Agent at approximately 11:00 a.m. (London time) two London Banking Days prior to the first day of the applicable Interest Period for a period equal to such Interest Period.

 

(b)     for any interest rate calculation with respect to a Base Rate Loan, the rate of interest per annum determined on the basis of the rate for deposits in Dollars for a period equal to one month (commencing on the date of determination of such interest rate) which appears on the Reuters Screen LIBOR01 Page (or any applicable successor page) at approximately 11:00 a.m. (London time) on such date of determination, or, if such date is not a Business Day, then the immediately preceding Business Day (rounded upward, if necessary, to the nearest 1/100th of 1%). If, for any reason, such rate does not appear on Reuters Screen LIBOR01 Page (or any applicable successor page) then “LIBOR” for such Base Rate Loan shall be determined by the Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars would be offered by first class banks in the London interbank market to the Administrative Agent at approximately 11:00 a.m. (London time) on such date of determination for a period equal to one month commencing on such date of determination.

 

Each calculation by the Administrative Agent of LIBOR shall be conclusive and binding for all purposes, absent manifest error.

 

“LIBOR Rate” means a rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%) determined by the Administrative Agent pursuant to the following formula:

 

	
LIBOR Rate =
	
LIBOR

	  	
1.00-Eurodollar Reserve Percentage

	  	  

Notwithstanding the foregoing, if the LIBOR Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

 

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“LIBOR Rate Loan” means any Loan bearing interest at a rate based upon the LIBOR Rate as provided in Section 4.01(a).

 

“Lien” means any mortgage, ship mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest 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 to real property, and any financing lease having substantially the same economic effect as any of the foregoing). For the purposes of this Agreement, a Person shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, Capital Lease or other title retention agreement relating to such asset.

 

“Loan Documents” means, collectively, this Agreement, each Note, the Letter of Credit Applications, the Guaranty Agreements, the Collateral Documents, the Fee Letter, any applicable UCC-1 or PPSA financing statements, any applicable FAA filings, any applicable stock powers, the Partner’s Certificates, the Officer’s Certificates, the Notice of Final Agreement, each Joinder Agreement and each other document, instrument, certificate and agreement executed and delivered by the Loan Parties or any of their respective Subsidiaries in favor of or provided to the Administrative Agent or any Secured Party in connection with this Agreement (excluding any Secured Hedge Agreement and any Secured Cash Management Agreement), all as may be amended, restated, supplemented or otherwise modified from time to time.

 

“Loan Party” means, as applicable and subject to Section 11.28, any Borrower, any Guarantor, or any other Person who is, or whose Property is, directly or indirectly liable for Obligations, and “Loan Parties” means, collectively, all of the above. None of any Unrestricted Subsidiary or any Inactive Subsidiary shall be a Loan Party.

 

“Loans” means the collective reference to the Revolving Credit Loans and the Swingline Loans, and “Loan” means any of such Loans.

 

“London Banking Day” means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank Eurodollar market.

 

“MarAd” means the U.S. Maritime Administration.

 

“Material Adverse Effect” means (a) a material adverse effect upon the validity or enforceability of any of the Loan Documents; (b) a material adverse change in, or a material adverse effect upon, the condition (financial or otherwise), business, assets, prospects, or operations of any Loan Party; (c) a material impairment of the ability of either Borrower to fulfill its obligations under any of the Loan Documents; (d) a material impairment of the ability of the Loan Parties taken as a whole to fulfill their obligations under any of the Loan Documents; or (e) a material impairment of the value of any Collateral from time to time securing the Secured Obligations or the ability of the Administrative Agent or the Secured Parties to realize thereon.

 

“Maturity Date” means the earliest to occur of (a) August 20, 2020, (b) the date of termination of the entire Revolving Credit Commitment by the Borrowers pursuant to Section 2.05, or (c) the date of termination of the Revolving Credit Commitment pursuant to Section 9.02(a).

 

“Maximum Rate” means the higher of the maximum interest rate allowed by applicable federal or Texas law as amended from time to time and in effect on the date for which a determination of interest accrued hereunder is made. The determination of the maximum rate permitted by applicable Texas law shall be made pursuant to the weekly ceiling as determined pursuant to Chapter 303 of the Texas Finance Code, but the Administrative Agent on behalf of the Lenders reserve the right to implement from time to time any other rate ceiling permitted by such law.

 

 

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“Mortgage” means each mortgage, deed of trust or deed to secure debt, in form and substance satisfactory to the Administrative Agent, that purports to grant to the Administrative Agent for the benefit of the Secured Parties, a Lien on the fee interests of any Loan Party in any real property, as such mortgage may be amended, restated, supplemented or otherwise modified from time to time.

 

“Mortgage Trust” means the Omega Master Vessel Trust 2012, the Delaware statutory trust, created pursuant to the Mortgage Trust Agreement.

 

“Mortgage Trust Agreement” means the Master Vessel Trust Agreement between the Administrative Agent and the Mortgage Trustee pertaining to the Mortgage Trust.

 

“Mortgage Trustee” means Wilmington, not in its individual capacity, but solely as trustee under the Mortgage Trust Agreement, and each co-trustee, separate trustee and successor trustee appointed in accordance with the Mortgage Trust Agreement.

 

“Mortgaged Property” means any real property that is owned by a Loan Party and is subject to a Mortgage.

 

“Multiemployer Plan” has the meaning provided therefor in ERISA.

 

“NMFFP” means the National Marine Fisheries Finance Program.

 

“NMFFP Collateral” means (a) the Ineligible Vessels, (b) any real property owned by any Loan Party and identified in Schedule 6.17 as collateral for the NMFFP Financing and any real property that at the time of determination is mortgaged to secure any NMFFP Financing owed by any Loan Party to the extent such NMFFP Financing is permitted by Section 8.04(c), and (c) any equipment or other Property in which a Lien has been granted to secure NMFFP Financing permitted by Section 8.04(b) or (c).

 

“NMFFP Financing” means any obligation, whether actual or contingent, to repay any amount advanced or that may be advanced by the United States, acting under Title XI, by or through the Secretary of Commerce or any other instrumentality, pursuant to a loan guarantee made available pursuant to Title XI.

 

“Non-Consenting Lender” means any Lender that does not approve any consent, waiver, amendment, modification or termination that (a) requires the approval of all Lenders or all affected Lenders in accordance with the terms of Section 11.02 and (b) has been approved by the Required Lenders.

 

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

 

“Notes” means the collective reference to the Revolving Credit Notes and the Swingline Note.

 

“Notice of Account Designation” has the meaning assigned thereto in Section 2.03(b).

 

“Notice of Borrowing” has the meaning assigned thereto in Section 2.03(a).

 

 

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“Notice of Conversion/Continuation” has the meaning assigned thereto in Section 4.02.

 

“Notice of Final Agreement” has the meaning assigned thereto in Section 5.01(h)(ii).

 

“Notice of Prepayment” has the meaning assigned thereto in Section 2.04(c).

 

“Obligations” means, in each case, whether now in existence or hereafter arising: (a) the principal of and interest on (including interest accruing after the filing of any bankruptcy or similar petition) the Loans, (b) the L/C Obligations and (c) all other fees and commissions (including attorneys’ fees), charges, indebtedness, loans, liabilities, financial accommodations, obligations, covenants and duties owing by the Loan Parties and each of their respective Subsidiaries to the Lenders or the Administrative Agent, in each case under any Loan Document, with respect to any Loan or Letter of Credit of every kind, nature and description, direct or indirect, absolute or contingent, due or to become due, contractual or tortious, liquidated or unliquidated, and whether or not evidenced by any note and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any federal bankruptcy laws (as now or hereafter in effect) or under any other laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding up or adjustment of debts, naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

 

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

 

“Officer’s Certificate” means, for each Loan Party that is a corporation or limited liability company, a certificate executed by an authorized officer having attached thereto (a) a copy of its articles of incorporation or organization and bylaws or operating agreement, and all amendments thereto, a certificate of incumbency of all of its officers who will be authorized to execute or attest any of the Loan Documents to which it is a party, and a copy of resolutions approving the Loan Documents to which it is a party and authorizing the transactions contemplated by this Agreement; and (b) certificates of existence and good standing issued by the appropriate governmental officials of the state in which such corporation or limited liability company is organized, and, if different, satisfactory evidence of good standing in the state in which real estate, owned by it and mortgaged to the Administrative Agent on behalf of the Secured Parties, is located.

 

“Officer’s Compliance Certificate” has the meaning assigned thereto in Section 7.01(d).

 

“OPI” has the meaning assigned thereto in the preamble.

 

“Other Connection Taxes” means, with respect to any Person, Taxes imposed as a result of a present or former connection between such Person and the jurisdiction imposing such Tax (other than connections arising solely from such Person having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

 

“Other Taxes” means all present or future stamp, court or documentary taxes, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, or otherwise, with respect to, any Loan Document except any such Taxes that are Other Connection Taxes imposed with respect to an assignment of any Loan or Commitment hereunder (other than an assignment made pursuant to Section 4.12).

 

“Participant” has the meaning assigned thereto in Section 11.10(d).

 

 

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“Participant Register” has the meaning assigned thereto in Section 11.10(d).

 

“Participating Member State” means any member state of the European Union that has the Euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.

 

“Partner’s Certificate” means, for each Loan Party that is a partnership, a certificate executed by an authorized officer having attached thereto (a) a true and complete copy of an executed copy of its partnership agreement and all amendments thereto, and (b) for each limited partnership, a copy of the certificate of limited partnership accompanied by a certificate that the copy is true and complete, issued by the appropriate governmental officials of the state in which such limited partnership is organized, and, if different, satisfactory evidence of good standing in the state in which real estate, owned by it and mortgaged to the Administrative Agent on behalf of the Secured Parties, is located.

 

“PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), as amended.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor agency.

 

“Permitted Acquisitions” means investments consisting of an Acquisition by a Loan Party, provided that (a) the Property acquired (or the Property of the Person acquired) in such Acquisition is used or useful in the same or a similar line of business as the Loan Parties were engaged in on the Closing Date (or any reasonable extensions or expansions thereof); (b) in the case of an Acquisition of the Equity Interests of another Person, the board of directors (or other comparable governing body) of such other Person shall have duly approved such Acquisition; (c) Borrowers shall have delivered to Lender a pro forma Officer’s Compliance Certificate demonstrating that, upon giving effect to such Acquisition (including any Indebtedness permitted pursuant to Section 8.04(l)), the Loan Parties would be in compliance with the financial covenants set forth in Sections 7.15 through and including 7.17 on a pro forma basis; (d) the representations and warranties made by the Loan Parties in each Loan Document shall be true and correct in all material respects at and as if made as of the date of such Acquisition (after giving effect thereto); (e) if such transaction involves the purchase of an interest in a partnership between a Loan Party as a general partner and entities unaffiliated with Borrowers as the other partners, such transaction shall be effected by having such Equity Interest acquired by a corporate holding company directly or indirectly wholly-owned by such Loan Party newly formed for the sole purpose of effecting such transaction; (f) immediately after giving effect to such Acquisition, there shall be at least $5,000,000.00 of availability existing under the Commitment; and (g) the aggregate consideration (including cash consideration and non-cash consideration (other than Equity Interests of the Company), any assumption of indebtedness, deferred purchase price and any earn-out payments) paid by the Loan Parties for all such Acquisitions during any fiscal year shall not exceed the greater of (i) $50,000,000.00 or (ii) 15% of the Tangible Net Worth of the Borrowers and their Subsidiaries as of the immediately prior fiscal quarter end prior to such Acquisitions (based on the most recent fiscal quarter period for which financial statements are available).

 

“Permitted Bioriginal Disposition” means (a) Dispositions of inventory in the ordinary course of business, (b) Dispositions of machinery and equipment no longer used or useful in the conduct of business of a Bioriginal Party that are made in the ordinary course of business, (c) Dispositions of Property by a Bioriginal Party to another Bioriginal Party or to a Loan Party, provided that to the extent constituting an investment, such transaction is permitted by Section 8.09, (d) Dispositions of accounts receivable in connection with the collection or compromise thereof, (e) licenses, sublicenses, leases or subleases granted to others not interfering in any material respect with the business of the Bioriginal Parties or the Loan Parties, and (f) the Disposition of cash equivalents for fair market value.

 

 

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“Permitted Disposition” means (a) Dispositions of inventory in the ordinary course of business; (b) Dispositions of machinery and equipment no longer used or useful in the conduct of business of a Loan Party that are made in the ordinary course of business; (c) Dispositions of Property by a Loan Party to another Loan Party, provided that to the extent constituting an investment, such transaction is permitted by Section 8.09; (d) Dispositions of accounts receivable in connection with the collection or compromise thereof; (e) licenses, sublicenses, leases or subleases granted to others not interfering in any material respect with the business of the Loan Parties; (f) the Disposition of cash equivalents for fair market value; and (g) provided that Borrowers are in compliance with Section 7.16 (based on the most recent fiscal quarter period for which financial statements are available) and no other Events of Default exist, the Disposition(s) of the Vessels named “Rappahannock” and “Tidelands”.

 

“Permitted Liens” means (a) the Liens evidenced by the Loan Documents; (b) other Liens in favor of the Administrative Agent on behalf of the Secured Parties; (c) Liens existing on the date hereof and listed on Schedule 8.01 (including Liens securing the NMFFP Financing) and any renewals or extensions thereof, provided that (i) the scope of Property covered thereby is not changed, (ii) the amount secured or benefited thereby is not increased, and (iii) the direct or any contingent obligor with respect thereto is not changed; (d) Liens on Vessels that at any time hereafter are mortgaged to secure NMFFP Financing permitted by Section 8.04(c); (e) Liens (other than Liens imposed under ERISA) for taxes, assessments or governmental charges or levies not yet past due or which are being Contested in Good Faith, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP; (f) (i) statutory deemed trusts and liens arising under the laws of Canada or any Province or Territory thereof securing employee source deductions (including collected and unremitted income taxes, employment insurance, and Canada Pension Plan contributions), unpaid wages, severance pay, termination pay, vacation pay, and employer pension contributions in respect of pension plans or other statutory obligations, and (ii) Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and suppliers and other Liens imposed by law or pursuant to customary reservations or retentions of title arising in the ordinary course of business; provided that such Liens referred to in clauses (f)(i) and (f)(ii) secure only amounts not yet due and payable or, if due and payable are not overdue by more than 45 days, are unfiled and no other action has been taken to enforce the same or are being Contested in Good Faith, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP; (g) pledges or deposits made in the ordinary course of business to secure payment of workers’ compensation, or to participate in any funds in connection with workers’ compensation unemployment insurance, old age pensions, or other social security programs; (h) deposits to secure the performance of bids, trade contracts and leases (other than indebtedness), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; (i) easements, rights-of-way, restrictions and other similar encumbrances affecting real property which (1) are not Liens which secure other indebtedness or obligations, and (2) in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the Property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person; (j) Liens securing judgments for the payment of money (or appeal or other surety bonds relating to such judgments) not constituting an Event of Default under Section 9.01(i); (k) Liens securing purchase money indebtedness permitted under Section 8.04(d) (but only to the extent of the assets purchased with such purchase money indebtedness and any related insurance and any proceeds of any thereof); (l) leases or subleases granted to others not interfering in any material respect with the business of Borrowers or any of their Subsidiaries; (m) any interest of title of a lessor under, and Liens arising from UCC financing statements (or equivalent filings, registrations or agreements in foreign jurisdictions) relating to, leases permitted by this Agreement; (n) normal and customary rights of setoff upon deposits of cash in favor of banks or other depository institutions; (o) Liens of a collection bank arising under Section 4.210 of the Uniform Commercial Code on items in the course of collection; (p) maritime Liens on Vessels arising by operation of law in the ordinary course of business that are not overdue by more than forty five (45) days or are being Contested in Good Faith, and a reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made therefor; (q) Liens on unearned insurance premiums securing indebtedness permitted under Section 8.04(j); (r) Liens on cash collateral in a segregated account to secure permitted Hedge Agreements that Borrowers have entered into with hedge providers; (s) Liens on accounts receivables and inventory acquired in a Permitted Acquisition securing Indebtedness permitted under Section 8.04(l); (t) other Liens on assets having an aggregate value not exceeding at any time the greater of (i) $15,000,000.00 and (ii) 5% of the Tangible Net Worth of the Borrowers and their consolidated Subsidiaries; and (u) that certain Judgment No. CO-2005-20036 against OPI in favor of Jay Foster filed August 26, 2011 in Jackson County, Mississippi in the amount of $4,804.63.

 

 

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

 

“Platform” means Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system.

 

“PPSA” means the Personal Property Security Act as in effect from time to time in a relevant province or territory in Canada for purposes of the provisions hereof relating to perfection, effect of perfection or non-perfection or priority of any security interest in any Collateral located in Canada.

 

“Prime Rate” means, at any time, the rate of interest per annum publicly announced from time to time by the Administrative Agent as its prime rate. Each change in the Prime Rate shall be effective as of the opening of business on the day such change in such prime rate occurs. The parties hereto acknowledge that the rate announced publicly by the Administrative Agent as its prime rate is an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks.

 

“Prohibited Transaction” has the meaning provided therefor in ERISA.

 

“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 Equity Interests.

 

“Public Lenders” means certain of the Lenders that may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Borrowers or its securities).

 

“Recipient” means (a) the Administrative Agent, (b) any Lender and (c) the Issuing Lender, as applicable.

 

“Reedsburg, WI Facility” shall mean that certain land and improvements at 522 Greenway Court, Reedsburg, Wisconsin, and all personal property located there.

 

“Reedville Evaporator Unit” shall mean that certain six-effect waste heat evaporator unit, installed in 2011, that services the Dupps Dryer System located at OPI’s facility at Reedville, Virginia.

 

“Register” has the meaning assigned thereto in Section 11.10(c).

 

“Reimbursement Obligation” means the obligation of the Borrowers to reimburse the Issuing Lender pursuant to Section 3.05 for amounts drawn under Letters of Credit.

 

 

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

 

“Release” means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Material), including the movement of any Hazardous Material through the air, soil, surface water or groundwater.

 

“Released Louisiana and Mississippi Properties” shall mean (a) the properties of OPI located at 5659 Elder Ferry Road, Moss Point, Mississippi, and 5735 Elder Ferry Road, Moss Point, Mississippi, (b) the improvements thereon, and (c) the fixtures attached thereto.

 

“Removal Effective Date” has the meaning assigned thereto in Section 10.06(b).

 

“Reportable Event” has the meaning provided therefor in ERISA.

 

“Required Lenders” means, at any date, any combination of Lenders holding at least 51% of the sum of the aggregate amount of the Commitments or, if the Commitments have been terminated, any combination of Lenders holding at least 51% of the aggregate Extensions of Credit under this Agreement; provided that “Required Lenders” shall consist of at least two Lenders, except as provided herein; and provided, further, that the Commitment of, and the portion of the Extensions of Credit under this Agreement, as applicable, held or deemed held by, any Defaulting Lender, any Loan Party and/or any Affiliate of any Loan Party shall be excluded for purposes of making a determination of Required Lenders. Except to the extent any Person is a Defaulting Lender, any Lender and any Approved Fund administered or managed by such Lender or a Related Party to such Lender and any Affiliate of such Lender, each of which holds Commitments and/or Extensions of Credit, shall be deemed to be one Lender for purposes of determining whether “Required Lenders” consist of at least two Lenders. 

 

“Resignation Effective Date” has the meaning assigned thereto in Section 10.06(a).

 

“Responsible Officer” means, as to any Person, the chief executive officer, president, chief financial officer, controller, treasurer or assistant treasurer of such Person or any other officer of such Person designated in writing by the Borrowers reasonably acceptable to the Administrative Agent. Any document delivered hereunder or under any other Loan Document that is signed by a Responsible Officer of a Person shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Person and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Person.

 

“Revaluation Date” means, with respect to any Loan, each of the following: (a) each date of a borrowing of a CDOR Rate Loan, (b) each date of a borrowing of a LIBOR Rate Loan denominated in an Alternative Currency, (c) each date of a continuation of a CDOR Rate Loan or a LIBOR Rate Loan denominated in an Alternative Currency pursuant to Section 4.02 or (d) such additional dates as the Administrative Agent shall determine or the Required Lenders shall require.

 

“Revolving A Commitment” means (a) as to any Revolving A Lender, the obligation of such Revolving A Lender to make Revolving A Loans to the account of the Borrowers hereunder in an aggregate principal amount at any time outstanding not to exceed the amount set forth opposite such Revolving A Lender’s name on the Register, as such amount may be modified at any time or from time to time pursuant to the terms hereof (including Section 4.13); and (b) as to all Revolving A Lenders, the aggregate commitment of all Revolving A Lenders to make Revolving A Loans, as such amount may be modified at any time or from time to time pursuant to the terms hereof (including Section 4.13). The aggregate Revolving A Commitment of all the Revolving A Lenders on the Closing Date shall be $95,000,000.00.

 

 

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“Revolving A Commitment Percentage” means, as to any Revolving A Lender at any time, the ratio of (a) the amount of the Revolving A Commitment of such Revolving A Lender to (b) the Revolving A Commitments of all the Revolving A Lenders.

 

“Revolving A Exposure” means, as to any Revolving A Lender at any time, the aggregate principal amount at such time of its outstanding Revolving A Loans and such Revolving A Lender’s participation in L/C Obligations in respect of Revolving A Letters of Credit and Swingline Loans at such time.

 

“Revolving A L/C Commitment” means the lesser of (a) $20,000,000.00 and (b) the Revolving A Commitment. The Revolving A L/C Commitment is part of, and not in addition to, the Revolving A Commitment.

 

“Revolving A Lender” means each Person executing this Agreement as a Revolving A Lender on the Closing Date and any other Person that shall have become a party to this Agreement as a Revolving A Lender pursuant to an Assignment and Assumption, other than any Person that ceases to be a party hereto as a Revolving A Lender pursuant to an Assignment and Assumption. 

 

“Revolving A Letter of Credit” has the meaning assigned thereto in Section 3.01(a)(i).

 

“Revolving A Loan” means any revolving loan made to the Borrowers pursuant to Section 2.01(a) and all such revolving loans collectively as the context requires.

 

“Revolving A Note” means a promissory note made by the Borrowers in favor of a Revolving A Lender evidencing the Revolving A Loans made by such Revolving A Lender, substantially in the form attached as Exhibit A-1, and any amendments, supplements and modifications thereto, any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

 

“Revolving A Outstandings” means the sum of (a) with respect to Revolving A Loans and Swingline Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Revolving A Loans and Swingline Loans, as the case may be, occurring on such date; plus (b) with respect to any L/C Obligations in respect of Revolving A Letters of Credit on any date, the aggregate outstanding amount thereof on such date after giving effect to any Extensions of Credit occurring on such date and any other changes in the aggregate amount of the L/C Obligations in respect of Revolving A Letters of Credit as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Revolving A Letters of Credit or any reductions in the maximum amount available for drawing under Revolving A Letters of Credit taking effect on such date.

 

“Revolving B Commitment” means (a) as to any Revolving B Lender, the obligation of such Revolving B Lender to make Revolving B Loans to the account of the Borrowers hereunder in an aggregate principal amount at any time outstanding not to exceed the amount set forth opposite such Revolving B Lender’s name on the Register, as such amount may be modified at any time or from time to time pursuant to the terms hereof (including Section 4.13); and (b) as to all Revolving B Lenders, the aggregate commitment of all Revolving B Lenders to make Revolving B Loans, as such amount may be modified at any time or from time to time pursuant to the terms hereof (including Section 4.13). The aggregate Revolving B Commitment of all the Revolving B Lenders on the Closing Date shall be $30,000,000.00.

 

 

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“Revolving B Commitment Percentage” means, as to any Revolving B Lender at any time, the ratio of (a) the amount of the Revolving B Commitment of such Revolving B Lender to (b) the Revolving B Commitments of all the Revolving B Lenders.

 

“Revolving B Exposure” means, as to any Revolving B Lender at any time, the aggregate principal amount at such time of its outstanding Revolving B Loans and such Revolving B Lender’s participation in L/C Obligations in respect of Revolving B Letters of Credit.

 

“Revolving B L/C Commitment” means the lesser of (a) $7,500,000 and (b) the Revolving B Commitment; provided that the Revolving B L/C Commitment may be temporarily increased to $9,000,000, solely to the extent required by the Issuing Lender in order to issue a backstop Letter of Credit and replacement Letters of Credit in respect of the Continuing Letters of Credit, in accordance with Section 5.01(h)(v)(B). The Revolving B L/C Commitment is part of, and not in addition to, the Revolving B Commitment.

 

“Revolving B Lender” means each Person executing this Agreement as a Revolving B Lender on the Closing Date and any other Person that shall have become a party to this Agreement as a Revolving B Lender pursuant to an Assignment and Assumption, other than any Person that ceases to be a party hereto as a Revolving B Lender pursuant to an Assignment and Assumption. 

 

“Revolving B Letter of Credit” has the meaning assigned thereto in Section 3.01(a)(ii).

 

“Revolving B Loan” means any revolving loan made to the Borrowers pursuant to Section 2.01(b) and all such revolving loans collectively as the context requires.

 

“Revolving B Note” means a promissory note made by the Borrowers in favor of a Revolving B Lender evidencing the Revolving B Loans made by such Revolving B Lender, substantially in the form attached as Exhibit A-2, and any amendments, supplements and modifications thereto, any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

 

“Revolving B Outstandings” means the sum of (a) with respect to Revolving B Loans on any date, the aggregate outstanding principal amount of Revolving B Loans after giving effect to any borrowings and prepayments or repayments of Revolving B Loans occurring on such date; plus (b) with respect to any L/C Obligations in respect of Revolving B Letters of Credit on any date, the aggregate outstanding amount thereof on such date after giving effect to any Extensions of Credit occurring on such date and any other changes in the aggregate amount of the L/C Obligations in respect of Revolving B Letters of Credit as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Revolving B Letters of Credit or any reductions in the maximum amount available for drawing under Revolving B Letters of Credit taking effect on such date.

 

“Revolving Credit Commitment” means, individually or collectively as the context requires, a Revolving A Commitment or a Revolving B Commitment.

 

“Revolving Credit Commitment Percentage” means, individually or collectively as the context requires, a Revolving A Commitment Percentage or a Revolving B Commitment Percentage.

 

“Revolving Credit Exposure” means, individually or collectively as the context requires, Revolving A Exposure or Revolving B Exposure.

 

 

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“Revolving Credit Facility” means, collectively, the revolving credit facilities established pursuant to Article II (including any increase in such revolving credit facilities pursuant to Section 4.13).

 

“Revolving Credit Loan” means, individually or collectively as the context requires, a Revolving A Loan or a Revolving B Loan.

 

“Revolving Credit Note” means, individually or collectively as the context requires, a Revolving A Note or a Revolving B Note.

 

“Revolving Credit Outstandings” means, individually or collectively as the context requires, Revolving A Outstandings or Revolving B Outstandings.

 

“Rules” has the meaning assigned thereto in Section 11.24.

 

“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the U.S. government (including those administered by OFAC), the European Union, Her Majesty’s Treasury, or other relevant sanctions authority.

 

“Sanctioned Country” means, when determined, a country or territory which is itself the subject or target of any Sanctions.

 

“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in clauses (a) and (b). 

 

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

 

“Secured Cash Management Agreement” means any Cash Management Agreement (including, for the avoidance of doubt, the Canadian Overdraft Facility) that is entered into by and between any Loan Party and any Cash Management Bank.

 

“Secured Hedge Agreement” means any Hedge Agreement permitted under Article VIII, in each case that is entered into by and between any Loan Party and any Hedge Bank.

 

“Secured Obligations” means, collectively, (a) the Obligations and (b) all existing or future payment and other obligations owing by any Loan Party under (i) any Secured Hedge Agreement (other than an Excluded Swap Obligation) and (ii) any Secured Cash Management Agreement.

 

“Secured Parties” means, collectively, the Administrative Agent, the Lenders, the Issuing Lender, the Hedge Banks, the Cash Management Banks, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 10.05, any other holder from time to time of any Secured Obligations and, in each case, their respective successors and permitted assigns.

 

“Security Agreement” means each security agreement, pledge and other agreement, in form and substance satisfactory to the Administrative Agent, that purport to grant to the Administrative Agent for the benefit of the Secured Parties, a security interest in the personal property of any Loan Party, as such agreement may be amended, restated, supplemented or otherwise modified from time to time.

 

 

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“Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the Property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person; (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature; (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s Property would constitute an unreasonably small capital; and (e) such Person is able to pay its debts and liabilities, contingent obligations and other commitments as they mature in the ordinary course of business. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“Spot Rate” means, for a currency, the rate determined by the Administrative Agent to be the rate quoted by the Person acting in the capacity of foreign exchange reference bank as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days prior to the date as of which the foreign exchange computation is made; provided that the Administrative Agent may obtain such spot rate from another financial institution designated by the Administrative Agent if the Person acting in the capacity of foreign exchange reference bank does not have as of the date of determination a spot buying rate for any such currency.

 

“Sterling” means the lawful currency of the United Kingdom.

 

“Subordinated Indebtedness” means the collective reference to any Indebtedness incurred by the Borrowers or any of their Subsidiaries that is subordinated in right and time of payment to the Obligations on terms and conditions satisfactory to the Administrative Agent.

 

“Subsidiary” means as to any Person, any corporation, partnership, limited liability company or other entity of which more than 50% of the outstanding Equity Interests having ordinary voting power to elect a majority of the board of directors (or equivalent governing body) or other managers of such corporation, partnership, limited liability company or other entity is at the time owned by (directly or indirectly) or the management is otherwise controlled by (directly or indirectly) such Person (irrespective of whether, at the time, Equity Interests of any other class or classes of such corporation, partnership, limited liability company or other entity shall have or might have voting power by reason of the happening of any contingency). Unless otherwise qualified, references to “Subsidiary” or “Subsidiaries” herein shall refer to those of the Borrowers.

 

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

 

“Swingline Commitment” means the lesser of (a) $10,000,000.00 and (b) the Revolving A Commitment. The Swingline Commitment is part of, and not in addition to, the Revolving A Commitment.

 

“Swingline Facility” means the Swingline facility established pursuant to Section 2.02.

 

“Swingline Lender” means Wells Fargo in its capacity as Swingline lender hereunder or any successor thereto.

 

 

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“Swingline Loan” means any Swingline loan made by the Swingline Lender to the Borrowers pursuant to Section 2.02, and all such Swingline loans collectively as the context requires.

 

“Swingline Note” means a promissory note made by the Borrowers in favor of the Swingline Lender evidencing the Swingline Loans made by the Swingline Lender, substantially in the form attached as Exhibit A-3, and any amendments, supplements and modifications thereto, any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

 

“Swingline Participation Amount” has the meaning assigned thereto in Section 2.01(b)(iii).

 

“Synthetic Lease” means any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product where such transaction is considered borrowed money indebtedness for tax purposes but is classified as an operating lease in accordance with GAAP.

 

“Tangible Net Worth” means at any time the consolidated stockholders equity of the Borrowers and their consolidated Subsidiaries plus Subordinated Indebtedness and minus intangibles (including goodwill, patents, trademarks, trade names, organization expense, unamortized debt discount and expense, capitalized or deferred research and development costs, deferred marketing expenses, and other like intangibles, and monies due from Affiliates, officers, directors, employees, shareholders, members or managers of the Borrowers).

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, fines, additions to tax or penalties applicable thereto.

 

“Title XI” means Title XI of the Merchant Marine Act of 1936 and any and all regulations promulgated under any provision thereof.

 

“Total Funded Debt” means, as of any date, with respect to the Borrowers and their consolidated Subsidiaries on a consolidated basis, without duplication, all indebtedness for borrowed money (including obligations under capitalized leases).

 

“UCC” means the Uniform Commercial Code as in effect in the State of Texas, as amended or modified from time to time.

 

“Uniform Customs” means the Uniform Customs and Practice for Documentary Credits (2007 Revision), effective July, 2007 International Chamber of Commerce Publication No. 600.

 

“United States” means the United States of America.

 

“Unrestricted Subsidiary” means Subsidiaries of the Company that do not, as of the last day of the most recently completed fiscal quarter of the Company, have assets with a book value in excess of 10.00% of the consolidated total assets of the Company and did not, as of the four-quarter period ending on the last day of such fiscal quarter, have revenues exceeding 10.00% of the consolidated revenues of the Company; provided that if (a) the aggregate assets then owned by all Subsidiaries of the Company that would otherwise constitute Unrestricted Subsidiaries shall have a book value in excess of 10.00% of the consolidated total assets of the Company as of the last day of such fiscal quarter or (b) the combined revenues of all Subsidiaries of the Company that would otherwise constitute Unrestricted Subsidiaries shall exceed 10.00% of the consolidated revenues of the Company for such four-quarter period (each a “Credit Support Triggering Event”), the Company shall redesignate one or more of such Subsidiaries not to be Unrestricted Subsidiaries within ten Business Days after delivery of the Officer’s Compliance Certificate for such fiscal quarter, such that only those such Subsidiaries as shall then have aggregate assets on a book-value basis of less than 10.00% of the consolidated total assets of the Company and combined revenues of less than 10.00% of the consolidated revenues of the Company shall constitute Unrestricted Subsidiaries. As of the Closing Date and thereafter until otherwise provided for as set out below, Bioriginal Europe, its wholly-owned Subsidiary, Vitaboost B.V., and any and all other Subsidiaries of the Company that, when taken together with other Subsidiaries of the Company that qualify under the foregoing criteria are hereby designated as, and shall be deemed to be, Unrestricted Subsidiaries. Notwithstanding the foregoing, with respect to Bioriginal Europe upon a Credit Support Triggering Event, the Company shall have the option, in its sole discretion, either to (i) designate Bioriginal Europe as a Loan Party, in the capacity solely as a Guarantor and provider of Collateral in respect of the Revolving B Exposure (in which case, for the avoidance of doubt, Bioriginal Europe will be subject to, and included in, the representations, warranties, covenants (and will have its financial results included in the calculation of financial covenants), or other provisions of the Loan Documents, as applicable and to the extent applicable to other Loan Parties), or (ii) elect to continue to designate Bioriginal Europe as an Unrestricted Subsidiary and not a Loan Party (in which case, for the avoidance of doubt, Bioriginal Europe will be excluded from the representations, warranties, covenants (and will not have its financial results included in the calculation of financial covenants), or other provisions of the Loan Documents, as applicable and to the extent applicable to other Loan Parties).

 

 

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“U.S. Citizen” means a person that (a) is an “eligible owner” within the meaning of 46 U.S.C. § 12103(b), and any and all successor statutes thereto, and any and all regulations promulgated under any thereof; and (b) satisfies the ownership requirements of 46 U.S.C. § 12113(c) (if such Person is an entity) and 46 C.F.R. § 356.3(e), and any and all successor statutes thereto, and any and all regulations promulgated under any thereof.

 

“U.S. Coast Guard” means the United States Coast Guard, a military organization under the Department of Homeland Security.

 

“U.S. Fisheries Trade” means processing, storing, transporting (except in foreign commerce), catching, taking and harvesting fish in the navigable waters of the United States or in the Exclusive Economic Zone, and landing any catch, wherever caught, in the United States.

 

“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

 

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in Section 4.11(f).

 

“Vessels” means, at any time, each of the vessels owned by any Loan Party at such time, including the vessels listed on Schedule 6.16, in each case together with all their engines, boilers, machinery, masts, anchors, cables, rigging, nets, tackle, apparel, furniture, boats, chains, equipment and all other appurtenances to such vessels whether aboard or removed from such vessels, together with any and all additions, improvements and/or replacements which may hereafter be made to, on or in such vessels or any part thereof.

 

“Voting Stock” means, with respect to any Person, Equity Interests issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even though the right so to vote has been suspended by the happening of such contingency.

 

“Wells Fargo” means Wells Fargo Bank, National Association, a national banking association, and its successors.

 

 

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“Wilmington” means Wilmington Trust Company, a Delaware trust company, and any Person appointed as a successor trustee in accordance with the Mortgage Trust Agreement, in their individual capacities.

 

“Withholding Agent” means the Company and/or the Administrative Agent, as applicable.

 

Section 1.02     Other Definitions and Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document: (a) the definitions of terms herein shall apply equally to the singular and plural forms of the terms defined; (b) whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms; (c) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”; (d) the word “will” shall be construed to have the same meaning and effect as the word “shall”; (e) any reference herein to any Person shall be construed to include such Person’s successors and assigns; (f) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof; (g) 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; (h) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights; (i) the term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form; (j) in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including”; and (k) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

 

Section 1.03     Accounting Terms. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP, applied on a consistent basis, as in effect from time to time and in a manner consistent with that used in preparing the audited financial statements required by Section 7.01, except as otherwise specifically prescribed herein (including as prescribed by Section 11.09). Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Borrowers and their Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.

 

Section 1.04     UCC Terms. Terms defined in the UCC in effect on the Closing Date and not otherwise defined herein shall, unless the context otherwise indicates, have the meanings provided by those definitions. Subject to the foregoing, the term “UCC” refers, as of any date of determination, to the UCC then in effect.

 

Section 1.05     Rounding. Any financial ratios required to be maintained by the Borrowers pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio or percentage is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

 

 

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Section 1.06     References to Agreement and Laws. Unless otherwise expressly provided herein, (a) references to formation documents, governing documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) references to any Applicable Law, including, without limitation, the Code, the PPSA, the Commodity Exchange Act, ERISA, the PATRIOT Act, the Securities Act of 1933, the UCC, the Investment Company Act of 1940, the Interstate Commerce Act, the Trading with the Enemy Act of the United States or any of the foreign assets control regulations of the United States Treasury Department, shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Applicable Law.

 

Section 1.07     Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Central time (daylight or standard, as applicable).

 

Section 1.08     Letter of Credit Amounts. Unless otherwise specified, all references herein to the amount of a Letter of Credit at any time shall be deemed to mean the maximum face amount of such Letter of Credit after giving effect to all increases thereof contemplated by such Letter of Credit or the Letter of Credit Application therefor (at the time specified therefor in such applicable Letter of Credit or Letter of Credit Application and as such amount may be reduced by (a) any permanent reduction of such Letter of Credit or (b) any amount which is drawn, reimbursed and no longer available under such Letter of Credit).

 

Section 1.09     Guaranty Obligations. Unless otherwise specified, the amount of any Guaranty Obligation shall be the lesser of the principal amount of the obligations guaranteed and still outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Guaranty Obligation.

 

Section 1.10     Covenant Compliance Generally. For purposes of determining compliance under Sections 8.01, 8.02, 8.03, 8.05 and 8.06, any amount in a currency other than Dollars will be converted to Dollars in a manner consistent with that used in calculating consolidated net income in the most recent annual financial statements of the Company and its Subsidiaries delivered pursuant to Section 7.01(a). Notwithstanding the foregoing, for purposes of determining compliance with Sections 8.01, 8.02 and 8.03, with respect to any amount of Indebtedness or Investment in a currency other than Dollars, no breach of any basket contained in such sections shall be deemed to have occurred solely as a result of changes in rates of exchange occurring after the time such Indebtedness or Investment is incurred; provided that for the avoidance of doubt, the foregoing provisions of this Section 1.10 shall otherwise apply to such Sections, including with respect to determining whether any Indebtedness or Investment may be incurred at any time under such Sections.

 

Section 1.11     Exchange Rates; Currency Equivalents.

 

(a)     The Administrative Agent shall determine the Spot Rates as of each Revaluation Date to be used for calculating Dollar Equivalent amounts of Revolving Credit Outstandings denominated in Canadian Dollars or Alternative Currencies. Such Spot Rates shall become effective as of such Revaluation Date and shall be the Spot Rates employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur.

 

(b)     Whenever in this Agreement in connection with a borrowing, conversion, continuation or prepayment of a LIBOR Rate Loan or a CDOR Rate Loan, an amount, such as a required minimum or multiple amount, is expressed in Dollars, but such borrowing, LIBOR Rate Loan or CDOR Rate Loan is denominated in an Alternative Currency or Canadian Dollars, such amount shall be the relevant Alternative Currency Equivalent or the Canadian Dollar Equivalent, respectively, of such Dollar amount, as determined by the Administrative Agent.

 

 

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Section 1.12     Change of Currency.

 

(a)     Each obligation of the Borrowers to make a payment denominated in the national currency unit of any member state of the European Union that adopts the Euro as its lawful currency after the date hereof shall be redenominated into Euro at the time of such adoption. If, in relation to the currency of any such member state, the basis of accrual of interest expressed in this Agreement in respect of that currency shall be inconsistent with any convention or practice in the London interbank market for the basis of accrual of interest in respect of the Euro, such expressed basis shall be replaced by such convention or practice with effect from the date on which such member state adopts the Euro as its lawful currency; provided that if any Extension of Credit in the currency of such member state is outstanding immediately prior to such date, such replacement shall take effect, with respect to such Extension of Credit, at the end of the then current Interest Period.

 

(b)     Each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify to be appropriate to reflect the adoption of the Euro by any member state of the European Union and any relevant market conventions or practices relating to the Euro.

 

(c)     Each provision of this Agreement also shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify to be appropriate to reflect a change in currency of any other country and any relevant market conventions or practices relating to the change in currency.

 

Section 1.13     Pro Forma Basis. For purposes of this Agreement, “pro forma” and “pro forma basis” mean, with respect to any determination for any period, that such determination shall be made giving pro forma effect to each Acquisition or Disposition consummated, or any Person becoming, or ceasing to be, a consolidated Subsidiary, in each case during such period (including any incurrence, assumption, refinancing or repayment of Indebtedness), as if such Acquisition or Disposition or consolidation or deconsolidation and related transactions had been consummated on the first day of such period, in each case based on historical results accounted for in accordance with GAAP.

 

ARTICLE II

REVOLVING CREDIT FACILITY

 

Section 2.01     Revolving Credit Loans. 

 

(a)     Revolving A Facility. Subject to the terms and conditions of this Agreement and the other Loan Documents, and in reliance upon the representations and warranties set forth herein, each Revolving A Lender severally agrees to make Revolving A Loans to the Company and OPI, in Dollars or in one or more Alternative Currencies, from time to time from the Closing Date until the Maturity Date as requested by the Borrowers in accordance with the terms of Section 2.03; provided that (i) the aggregate Revolving A Outstandings at any time shall not exceed the Revolving A Commitment at such time, (ii) the Revolving A Exposure of any Revolving A Lender shall not at any time exceed such Revolving A Lender’s Revolving A Commitment, and (iii) the aggregate Revolving A Outstandings denominated in Alternative Currencies at any time shall not exceed the Alternative Currency Sublimit. Each Revolving A Loan by a Revolving A Lender shall be in a principal amount equal to such Revolving A Lender’s Revolving A Commitment Percentage of the aggregate principal amount of Revolving A Loans requested on such occasion. Subject to the terms and conditions hereof, the Borrowers may borrow, repay and reborrow Revolving A Loans hereunder until the Maturity Date.

 

 

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(b)     Revolving B Facility. Subject to the terms and conditions of this Agreement and the other Loan Documents, and in reliance upon the representations and warranties set forth herein, each Revolving B Lender severally agrees to make Revolving B Loans to the Borrowers, in Dollars or Canadian Dollars, from time to time from the Closing Date until the Maturity Date as requested by the Borrowers in accordance with the terms of Section 2.03; provided that (i) the aggregate Revolving B Outstandings at any time shall not exceed the Revolving B Commitment at such time, and (ii) the Revolving B Exposure of any Revolving B Lender shall not at any time exceed such Revolving B Lender’s Revolving B Commitment. Each Revolving B Loan by a Revolving B Lender shall be in a principal amount equal to such Revolving B Lender’s Revolving B Commitment Percentage of the aggregate principal amount of Revolving B Loans requested on such occasion. Subject to the terms and conditions hereof, the Borrowers may borrow, repay and reborrow Revolving B Loans hereunder until the Maturity Date.

 

Section 2.02     Swingline Loans.

 

(a)     Availability. Subject to the terms and conditions of this Agreement, the Swingline Lender may in its sole discretion make Swingline Loans to the Borrowers from time to time from the Closing Date until the Maturity Date; provided that (i) after giving effect to any amount requested, the Revolving A Outstandings shall not exceed the Revolving A Commitment at any time; and (ii) the aggregate principal amount of all outstanding Swingline Loans (after giving effect to any amount requested) shall not exceed the Swingline Commitment.

 

(b)     Refunding.

 

(i)     The Swingline Lender, at any time and from time to time in its sole and absolute discretion may, on behalf of the Borrowers (which hereby irrevocably direct the Swingline Lender to act on their behalf), by written notice given no later than 11:00 a.m. on any Business Day request each Revolving A Lender to make, and each Revolving A Lender hereby agrees to make, a Revolving A Loan as a Base Rate Loan in an amount equal to such Revolving A Lender’s Revolving A Commitment Percentage of the aggregate amount of the Swingline Loans outstanding on the date of such notice, to repay the Swingline Lender. Each Revolving A Lender shall make the amount of such Revolving A Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00 p.m. on the day specified in such notice. The proceeds of such Revolving A Loans shall be immediately made available by the Administrative Agent to the Swingline Lender for application by the Swingline Lender to the repayment of the Swingline Loans. No Revolving A Lender’s obligation to fund its respective Revolving A Commitment Percentage of a Swingline Loan shall be affected by any other Revolving A Lender’s failure to fund its Revolving A Commitment Percentage of a Swingline Loan, nor shall any Revolving A Lender’s Revolving A Commitment Percentage be increased as a result of any such failure of any other Revolving A Lender to fund its Revolving A Commitment Percentage of a Swingline Loan.

 

(ii)     The Borrowers shall pay to the Swingline Lender on demand in immediately available funds the amount of such Swingline Loans to the extent amounts received from the Revolving A Lenders are not sufficient to repay in full the outstanding Swingline Loans requested or required to be refunded. In addition, the Borrowers irrevocably authorize the Administrative Agent to charge any account maintained by the Borrowers with the Swingline Lender (up to the amount available therein) in order to immediately pay the Swingline Lender the amount of such Swingline Loans to the extent amounts received from the Revolving A Lenders are not sufficient to repay in full the outstanding Swingline Loans requested or required to be refunded. If any portion of any such amount paid to the Swingline Lender shall be recovered by or on behalf of the Borrowers from the Swingline Lender in bankruptcy or otherwise, the loss of the amount so recovered shall be ratably shared among all the Revolving A Lenders in accordance with their respective Revolving A Commitment Percentages.

 

 

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(iii)     If for any reason any Swingline Loan cannot be refinanced with a Revolving A Loan pursuant to Section 2.02(b)(i), each Revolving A Lender shall, on the date such Revolving A Loan was to have been made pursuant to the notice referred to in Section 2.02(b)(i), purchase for cash an undivided participating interest in the then outstanding Swingline Loans by paying to the Swingline Lender an amount (the “Swingline Participation Amount”) equal to such Revolving A Lender’s Revolving A Commitment Percentage of the aggregate principal amount of Swingline Loans then outstanding. Each Revolving A Lender will immediately transfer to the Swingline Lender, in immediately available funds, the amount of its Swingline Participation Amount. Whenever, at any time after the Swingline Lender has received from any Revolving A Lender such Revolving A Lender’s Swingline Participation Amount, the Swingline Lender receives any payment on account of the Swingline Loans, the Swingline Lender will distribute to such Revolving A Lender its Swingline Participation Amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s participating interest was outstanding and funded and, in the case of principal and interest payments, to reflect such Revolving A Lender’s pro rata portion of such payment if such payment is not sufficient to pay the principal of and interest on all Swingline Loans then due); provided that in the event that such payment received by the Swingline Lender is required to be returned, such Revolving A Lender will not return to the Swingline Lender any portion thereof previously distributed to it by the Swingline Lender.

 

(iv)     Each Revolving A Lender’s obligation to make the Revolving A Loans referred to in Section 2.02(b)(i) and to purchase participating interests pursuant to Section 2.02(b)(ii) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right that such Revolving A Lender or the Borrowers may have against the Swingline Lender, the Borrowers or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Article VI, (iii) any adverse change in the condition (financial or otherwise) of any Borrower, (iv) any breach of this Agreement or any other Loan Document by any Borrower, any other Loan Party or any other Revolving Credit Lender or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

 

(v)     If any Revolving A Lender fails to make available to the Administrative Agent for the account of the Swingline Lender any amount required to be paid by such Revolving A Lender pursuant to the foregoing provisions of this Section 2.04(b) by the time specified in Section 2.04(b)(i), the Swingline Lender shall be entitled to recover from such Revolving A Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swingline Lender at a rate per annum equal to the applicable Federal Funds Rate, plus any administrative, processing or similar fees customarily charged by the Swingline Lender in connection with the foregoing. If such Revolving A Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Revolving A Lender’s Revolving A Loan or Swingline Participation Amount, as the case may be. A certificate of the Swingline Lender submitted to any Revolving A Lender (through the Administrative Agent) with respect to any amount owing under this clause (v) shall be conclusive absent manifest error.

 

 

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(c)     Defaulting Lenders. Notwithstanding anything to the contrary contained in this Agreement, this Section 2.02 shall be subject to the terms and conditions of Section 4.14 and Section 4.15.

 

Section 2.03     Procedure for Advances of Revolving Credit Loans and Swingline Loans.

 

(a)     Requests for Borrowing. The Borrowers shall give the Administrative Agent irrevocable prior written notice substantially in the form of Exhibit B (a “Notice of Borrowing”) not later than 11:00 a.m. (i) on the same Business Day as each Base Rate Loan and Swingline Loan, (ii) at least one Business Day before each Canadian Prime Rate Loan, (iii) at least three Business Days before each LIBOR Rate Loan denominated in Dollars and CDOR Rate Loan and (iv) at least four Business Days before each LIBOR Rate Loan denominated in an Alternative Currency, of its intention to borrow, specifying (A) the date of such borrowing, which shall be a Business Day, (B) the amount of such borrowing, which shall be, (x) with respect to Base Rate Loans (other than Swingline Loans) and Canadian Prime Rate Loans in an aggregate principal amount of $1,000,000.00 or a whole multiple of $500,000.00 in excess thereof, (y) with respect to LIBOR Rate Loans and CDOR Rate Loans in an aggregate principal amount of $2,000,000.00 or a whole multiple of $500,000.00 in excess thereof and (z) with respect to Swingline Loans in an aggregate principal amount of $100,000.00 or a whole multiple of $100,000.00 in excess thereof, (C) whether such Loan is to be a Revolving A Loan, Revolving B Loan or Swingline Loan, (D) in the case of a Revolving A Loan, whether the Loans are to be LIBOR Rate Loans or Base Rate Loans, (E) in the case of a Revolving B Loan, whether the Loans are to be CDOR Rate Loans or Canadian Prime Rate Loans, (F) in the case of a LIBOR Rate Loan or CDOR Rate Loan, the duration of the Interest Period applicable thereto, and (G) the currency of such borrowing. If a Notice of Borrowing fails to specify a currency, then such borrowing shall be made in Dollars. A Notice of Borrowing received after 11:00 a.m. shall be deemed received on the next Business Day. The Administrative Agent shall promptly notify the Lenders of each Notice of Borrowing.

 

(b)     Disbursement of Revolving Credit Loans and Swingline Loans. Not later than 1:00 p.m. on the proposed borrowing date, (i) each Lender will make available to the Administrative Agent, for the account of the Borrowers, at the office of the Administrative Agent in funds immediately available to the Administrative Agent, such Lender’s Revolving Credit Commitment Percentage of the Revolving Credit Loans to be made on such borrowing date and (ii) the Swingline Lender will make available to the Administrative Agent, for the account of the Borrowers, at the office of the Administrative Agent in funds immediately available to the Administrative Agent, the Swingline Loans to be made on such borrowing date. The Borrowers hereby irrevocably authorize the Administrative Agent to disburse the proceeds of each borrowing requested pursuant to this Section in immediately available funds by crediting or wiring such proceeds to the deposit account of the Borrowers identified in the most recent notice substantially in the form attached as Exhibit C (a “Notice of Account Designation”) delivered by the Borrowers to the Administrative Agent or as may be otherwise agreed upon by the Borrowers and the Administrative Agent from time to time. Subject to Section 4.07 hereof, the Administrative Agent shall not be obligated to disburse the portion of the proceeds of any Revolving Credit Loan requested pursuant to this Section to the extent that any Lender has not made available to the Administrative Agent its Revolving Credit Commitment Percentage of such Loan. Revolving A Loans to be made for the purpose of refunding Swingline Loans shall be made by the Revolving A Lenders as provided in Section 2.02(b).

 

 

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Section 2.04     Repayment and Prepayment of Revolving Credit Loans and Swingline Loans.

 

(a)     Repayment on Termination Date. The Borrowers hereby agree to repay the outstanding principal amount of (i) all Revolving Credit Loans in full on the Maturity Date, and (ii) all Swingline Loans in accordance with Section 2.02(b) (but, in any event, no later than the Maturity Date), together, in each case, with all accrued but unpaid interest thereon.

 

(b)     Mandatory Prepayments. If at any time the Revolving Credit Outstandings exceed the Revolving Credit Commitments, the Borrowers agree to repay immediately upon notice from the Administrative Agent, by payment to the Administrative Agent for the account of the Lenders, Extensions of Credit in an amount equal to such excess with each such repayment applied first, to the principal amount of outstanding Swingline Loans, second to the principal amount of outstanding Revolving Credit Loans and third, with respect to any Letters of Credit then outstanding, a payment of Cash Collateral into a Cash Collateral account opened by the Administrative Agent, for the benefit of the Revolving A Lenders or Revolving B Lenders, as applicable, in an amount equal to such excess (such Cash Collateral to be applied in accordance with Section 9.02(b)).

 

(c)     Optional Prepayments. The Borrowers may at any time and from time to time prepay Revolving Credit Loans and Swingline Loans, in whole or in part, with irrevocable prior written notice to the Administrative Agent substantially in the form attached as Exhibit D (a “Notice of Prepayment”) given not later than 11:00 a.m. (i) on the same Business Day as each prepayment of Base Rate Loans and Swingline Loans, (ii) at least one Business Day before each prepayment of Canadian Prime Rate Loans and (iii) at least three Business Days before each prepayment of LIBOR Rate Loans and CDOR Rate Loans, specifying the date and amount of prepayment and whether the prepayment is of LIBOR Rate Loans, CDOR Rate Loans, Base Rate Loans, Canadian Prime Rate Loans, Swingline Loans or a combination thereof, and, if of a combination thereof, the amount allocable to each. Upon receipt of such notice, the Administrative Agent shall promptly notify each Lender. If any such notice is given, the amount specified in such notice shall be due and payable on the date set forth in such notice. Partial prepayments shall be in an aggregate amount of $1,000,000.00 or a whole multiple of $500,000.00 in excess thereof with respect to Base Rate Loans (other than Swingline Loans and Canadian Prime Rate Loans), $2,000,000.00 or a whole multiple of $500,000.00 in excess thereof with respect to LIBOR Rate Loans and CDOR Rate Loans and $100,000.00 or a whole multiple of $100,000.00 in excess thereof with respect to Swingline Loans or in any case if lower, the unpaid principal balance of the Loans to be prepaid. A Notice of Prepayment received after 11:00 a.m. shall be deemed received on the next Business Day. 

 

(d)     Limitation on Prepayment of LIBOR Rate Loans and CDOR Rate Loans. The Borrowers may not prepay any LIBOR Rate Loan or CDOR Rate Loan on any day other than on the last day of the Interest Period applicable thereto unless such prepayment is accompanied by any amount required to be paid pursuant to Section 4.09 hereof.

 

(e)     Hedge Agreements. No repayment or prepayment pursuant to this Section shall affect any of the Borrowers’ obligations under any Hedge Agreement.

 

Section 2.05     Permanent Reduction of the Revolving Credit Commitment.

 

(a)     Voluntary Reduction. The Borrowers shall have the right at any time and from time to time, upon at least two Business Days prior written notice to the Administrative Agent, to permanently reduce, without premium or penalty, (i) the entire Revolving Credit Commitment at any time or (ii) portions of the Revolving Credit Commitment, from time to time, in an aggregate principal amount not less than $3,000,000.00 or any whole multiple of $1,000,000.00 in excess thereof. Any reduction of the Revolving Credit Commitment shall be applied to the Revolving Credit Commitment of each Lender according to its Revolving Credit Commitment Percentage. All commitment fees accrued until the effective date of any termination of the Revolving Credit Commitment shall be paid on the effective date of such termination.

 

 

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(b)     Corresponding Payment. Each permanent reduction permitted pursuant to this Section shall be accompanied by a payment of principal sufficient to reduce the aggregate outstanding Revolving Credit Loans, Swingline Loans and L/C Obligations, as applicable, after such reduction to an aggregate amount not greater than the Revolving Credit Commitment, and if the aggregate amount of all outstanding Letters of Credit exceeds the Revolving Credit Commitment as so reduced, the Borrowers shall be required to deposit Cash Collateral in a Cash Collateral account opened by the Administrative Agent in an amount equal to such excess. If applicable, such Cash Collateral shall be applied in accordance with Section 9.02(b). Any reduction of the Revolving Credit Commitment to zero shall be accompanied by payment of all outstanding Revolving Credit Loans and Swingline Loans (and furnishing of Cash Collateral satisfactory to the Administrative Agent for all L/C Obligations) and shall result in the termination of the Revolving Credit Commitment and the Swingline Commitment and the Revolving Credit Facility. If the reduction of the Revolving Credit Commitment requires the repayment of any LIBOR Rate Loan or CDOR Rate Loan, such repayment shall be accompanied by any amount required to be paid pursuant to Section 4.09 hereof.

 

Section 2.06     Termination of Revolving Credit Facility. The Revolving Credit Facility and the Revolving Credit Commitments shall terminate on the Maturity Date.

 

ARTICLE III

LETTER OF CREDIT FACILITY

 

Section 3.01     L/C Commitments.

 

(a)     Availability. 

 

(i)     Revolving A Letters of Credit. Subject to the terms and conditions hereof, the Issuing Lender, in reliance on the agreements of the other Revolving A Lenders set forth in Section 3.04(a), agrees to issue standby letters of credit (the “Revolving A Letters of Credit”) for the account of the Company and OPI on any Business Day from the Closing Date to, but not including, the fifth Business Day prior to the Maturity Date in such form as may be approved from time to time by the Issuing Lender; provided that the Issuing Lender shall have no obligation to issue any Letter of Credit if, after giving effect to such issuance, (A) the L/C Obligations would exceed the Revolving A L/C Commitment, (B) the Revolving A Outstandings would exceed the Revolving A Commitment or (C) the Revolving Credit Outstandings would exceed the Revolving Credit Commitment. Each Letter of Credit shall (1) be denominated in Dollars or an Alternative Currency in a minimum amount of $100,000.00 or the Alternative Currency Equivalent thereof (or such lesser amount as agreed to by the Issuing Lender), (2) be a standby letter of credit issued to support obligations of the Borrowers or any other Loan Party, contingent or otherwise, incurred in the ordinary course of business, (3) expire on a date no more than 16 months after the date of issuance or last renewal of such Letter of Credit (subject to automatic renewal for additional one year periods pursuant to the terms of the Letter of Credit Application or other documentation acceptable to the Issuing Lender), which date shall be no later than the Maturity Date unless the L/C Obligations have been Cash Collateralized no later than the Maturity Date and (4) be subject to the Uniform Customs and/or ISP98, as set forth in the Letter of Credit Application or as determined by the Issuing Lender and, to the extent not inconsistent therewith, the laws of the State of Texas. 

 

 

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(ii)     Revolving B Letters of Credit. Subject to the terms and conditions hereof, the Issuing Lender, in reliance on the agreements of the other Revolving B Lenders set forth in Section 3.04(a), agrees to issue standby or commercial letters of credit (the “Revolving B Letters of Credit”) for the account of Bioriginal Omega on any Business Day from the Closing Date to, but not including the fifth Business Day prior to the Maturity Date in such form as may be approved from time to time by the Issuing Lender; provided that the Issuing Lender shall have no obligation to issue any Letter of Credit if, after giving effect to such issuance, (A) the L/C Obligations would exceed the Revolving B L/C Commitment, (B) the Revolving B Outstandings would exceed the Revolving B Commitment or (C) the Revolving Credit Outstandings would exceed the Revolving Credit Commitment. Each Letter of Credit shall (1) be denominated in Dollars or Canadian Dollars in a minimum amount of $100,000.00 (or such lesser amount as agreed to by the Issuing Lender), (2) be a standby or commercial letter of credit issued to support obligations of the Borrowers or any other Loan Party, contingent or otherwise, incurred in the ordinary course of business, (3) expire on a date no more than 16 months after the date of issuance or last renewal of such Letter of Credit (subject to automatic renewal for additional one year periods pursuant to the terms of the Letter of Credit Application or other documentation acceptable to the Issuing Lender), which date shall be no later than the Maturity Date unless the L/C Obligations have been Cash Collateralized no later than the Maturity Date and (4) be subject to the Uniform Customs and/or ISP98, as set forth in the Letter of Credit Application or as determined by the Issuing Lender and, to the extent not inconsistent therewith, the laws of the State of Texas. 

 

(iii)     General. The Issuing Lender shall not at any time be obligated to issue any Letter of Credit hereunder if such issuance would conflict with, or cause the Issuing Lender or any L/C Participant to exceed any limits imposed by, any Applicable Law. References herein to “issue” and derivations thereof with respect to Letters of Credit shall also include extensions or modifications of any outstanding Letters of Credit, unless the context otherwise requires. As of the Closing Date, each of the Existing Letters of Credit shall constitute, for all purposes of this Agreement and the other Loan Documents, a Letter of Credit issued and outstanding hereunder.

 

(b)     Defaulting Lenders. Notwithstanding anything to the contrary contained in this Agreement, Article III shall be subject to the terms and conditions of Sections 4.14 and 4.15.

 

Section 3.02     Procedure for Issuance of Letters of Credit. The Borrowers may from time to time request that the Issuing Lender issue Letters of Credit by delivering to the Issuing Lender at the Administrative Agent’s Office a Letter of Credit Application therefor, completed to the satisfaction of the Issuing Lender, and such other certificates, documents and other papers and information as the Issuing Lender may reasonably request. Upon receipt of any Letter of Credit Application, the Issuing Lender shall process such Letter of Credit Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall, subject to Section 3.01 and Article V, promptly issue the Letter of Credit requested thereby (but in no event shall the Issuing Lender be required to issue any Letter of Credit earlier than three Business Days after its receipt of the Letter of Credit Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed by the Issuing Lender and the Borrowers. The Issuing Lender shall promptly furnish to the Borrowers a copy of such Letter of Credit and promptly notify each applicable Lender of the issuance and upon request by any such Lender, furnish to such Lender a copy of such Letter of Credit and the amount of such Lender’s participation therein.

 

 

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Section 3.03     Commissions and Other Charges.

 

(a)     Letter of Credit Commissions. Subject to Sections 4.14 and 4.15, the Borrowers shall pay to the Administrative Agent, for the account of the Issuing Lender and the applicable L/C Participants, a letter of credit commission with respect to each Letter of Credit in the amount equal to the daily amount available to be drawn under such Letter of Credit, times the Applicable Margin in effect from time to time with respect to Revolving Credit Loans that are LIBOR Rate Loans or, in the case of Letters of Credit denominated in Canadian Dollars, CDOR Rate Loans (determined on a per annum basis). Such commission shall be payable quarterly in arrears on the last Business Day of each calendar quarter, on the Maturity Date and thereafter on demand of the Administrative Agent. The Administrative Agent shall, promptly following its receipt thereof, distribute to the Issuing Lender and the applicable L/C Participants all commissions received pursuant to this Section 3.03 in accordance with their respective Revolving Credit Commitment Percentages.

 

(b)     Issuance Fee. In addition to the foregoing commission, the Borrowers shall pay to the Administrative Agent, for the account of the Issuing Lender, standard bank fees and charges of the Issuing Lender for the issuance of each Letter of Credit. Such issuance fee shall be payable quarterly in arrears on the last Business Day of each calendar quarter commencing with the first such date to occur after the issuance of such Letter of Credit, on the Maturity Date and thereafter on demand of the Administrative Agent.

 

(c)     Other Costs. In addition to the foregoing fees and commissions, the Borrowers shall pay or reimburse the Issuing Lender for such normal and customary costs and expenses as are incurred or charged by the Issuing Lender in effecting payment under, amending or otherwise administering any Letter of Credit.

 

Section 3.04     L/C Participations.

 

(a)     The Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce the Issuing Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the Issuing Lender, on the terms and conditions hereinafter stated, for such L/C Participant’s own account and risk an undivided interest equal to such L/C Participant’s applicable Revolving Credit Commitment Percentage in the Issuing Lender’s obligations and rights under and in respect of each Letter of Credit issued hereunder and the amount of each draft paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees with the Issuing Lender that, if a draft is paid under any Letter of Credit for which the Issuing Lender is not reimbursed in full by the Borrowers through a Revolving Credit Loan or otherwise in accordance with the terms of this Agreement, such L/C Participant shall pay to the Issuing Lender upon demand at the Issuing Lender’s address for notices specified herein an amount equal to such L/C Participant’s Revolving Credit Commitment Percentage of the amount of such draft, or any part thereof, which is not so reimbursed.

 

(b)     Upon becoming aware of any amount required to be paid by any L/C Participant to the Issuing Lender pursuant to Section 3.04(a) in respect of any unreimbursed portion of any payment made by the Issuing Lender under any Letter of Credit, the Issuing Lender shall notify each L/C Participant of the amount and due date of such required payment and such L/C Participant shall pay to the Issuing Lender the amount specified on the applicable due date. If any such amount is paid to the Issuing Lender after the date such payment is due, such L/C Participant shall pay to the Issuing Lender on demand, in addition to such amount, the product of (i) such amount, times (ii) the daily average Federal Funds Rate as determined by the Administrative Agent during the period from and including the date such payment is due to the date on which such payment is immediately available to the Issuing Lender, times (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360. A certificate of the Issuing Lender with respect to any amounts owing under this Section shall be conclusive in the absence of manifest error. With respect to payment to the Issuing Lender of the unreimbursed amounts described in this Section, if the L/C Participants receive notice that any such payment is due (A) prior to 1:00 p.m. on any Business Day, such payment shall be due that Business Day, and (B) after 1:00 p.m. on any Business Day, such payment shall be due on the following Business Day.

 

 

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(c)     Whenever, at any time after the Issuing Lender has made payment under any Letter of Credit and has received from any L/C Participant its applicable Revolving Credit Commitment Percentage of such payment in accordance with this Section, the Issuing Lender receives any payment related to such Letter of Credit (whether directly from the Borrowers or otherwise), or any payment of interest on account thereof, the Issuing Lender will distribute to such L/C Participant its pro rata share thereof; provided that in the event that any such payment received by the Issuing Lender shall be required to be returned by the Issuing Lender, such L/C Participant shall return to the Issuing Lender the portion thereof previously distributed by the Issuing Lender to it.

 

Section 3.05     Reimbursement Obligation of the Borrowers. In the event of any drawing under any Letter of Credit, the Borrowers agree to reimburse (either with the proceeds of a Revolving Credit Loan as provided for in this Section or with funds from other sources), in same day funds, the Issuing Lender on each date on which the Issuing Lender notifies the Borrowers of the date and amount of a draft paid under any Letter of Credit for the amount of (a) such draft so paid and (b) any amounts referred to in Section 3.03(c) incurred by the Issuing Lender in connection with such payment. Unless the Borrowers shall immediately notify the Issuing Lender that the Borrowers intend to reimburse the Issuing Lender for such drawing from other sources or funds, the Borrowers shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting that the applicable Lenders make a Revolving Credit Loan bearing interest at the Base Rate on such date in the amount of (a) such draft so paid and (b) any amounts referred to in Section 3.03(c) incurred by the Issuing Lender in connection with such payment, and the applicable Lenders shall make a Revolving Credit Loan bearing interest at the Base Rate in such amount, the proceeds of which shall be applied to reimburse the Issuing Lender for the amount of the related drawing and costs and expenses. Each Lender acknowledges and agrees that its obligation to fund a Revolving Credit Loan in accordance with this Section to reimburse the Issuing Lender for any draft paid under a Letter of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including non-satisfaction of the conditions set forth in Section 2.03(a) or Article V. If the Borrowers have elected to pay the amount of such drawing with funds from other sources and shall fail to reimburse the Issuing Lender as provided above, the unreimbursed amount of such drawing shall bear interest at the rate which would be payable on any outstanding Base Rate Loans which were then overdue from the date such amounts become payable (whether at stated maturity, by acceleration or otherwise) until payment in full.

 

Section 3.06     Obligations Absolute. The Borrowers’ obligations under this Article III (including the Reimbursement Obligation) shall be absolute and unconditional under any and all circumstances and irrespective of any set off, counterclaim or defense to payment which the Borrowers may have or have had against the Issuing Lender or any beneficiary of a Letter of Credit or any other Person. The Borrowers also agree that the Issuing Lender and the L/C Participants shall not be responsible for, and the Borrowers’ Reimbursement Obligation under Section 3.05 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Borrowers 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 Borrowers against any beneficiary of such Letter of Credit or any such transferee. The Issuing Lender shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions caused by the Issuing Lender’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction by final nonappealable judgment. The Borrowers agree that any action taken or omitted by the Issuing Lender under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct shall be binding on the Borrowers and shall not result in any liability of the Issuing Lender or any L/C Participant to the Borrowers. The responsibility of the Issuing Lender to the Borrowers in connection with any draft presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are in conformity with such Letter of Credit.

 

 

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Section 3.07     Effect of Letter of Credit Application. To the extent that any provision of any Letter of Credit Application related to any Letter of Credit is inconsistent with the provisions of this Article III, the provisions of this Article III shall apply.

 

ARTICLE IV

GENERAL LOAN PROVISIONS

 

Section 4.01     Interest.

 

(a)     Interest Rate Options. Subject to the provisions of this Section, at the election of the Borrowers, (i) Revolving A Loans denominated in Dollars shall bear interest at (A) the Base Rate plus the Applicable Margin or (B) the LIBOR Rate plus the Applicable Margin; (ii) Revolving A Loans denominated in Alternative Currencies shall bear interest at the LIBOR Rate plus the Applicable Margin; (iii) Revolving B Loans denominated in Dollars shall bear interest at (A) the Base Rate plus the Applicable Margin or (B) the LIBOR Rate plus the Applicable Margin; (iv) Revolving B Loans denominated in Canadian Dollars shall bear interest at (A) the Canadian Prime Rate plus the Applicable Margin or (B) CDOR plus the Applicable Margin; and (v) any Swingline Loan shall bear interest at the Base Rate plus the Applicable Margin. The Borrowers shall select the rate of interest and Interest Period, if any, applicable to any Loan at the time a Notice of Borrowing is given or at the time a Notice of Conversion/Continuation is given pursuant to Section 4.02. Any Loan or any portion thereof as to which the Borrowers have not duly specified an interest rate as provided herein shall be deemed a Base Rate Loan or a Canadian Prime Rate Loan, as applicable.

 

(b)     Interest Periods. In connection with each LIBOR Rate Loan or CDOR Rate Loan, the Borrowers, by giving notice at the times described in Section 2.03 or 4.02, as applicable, shall elect an interest period (each, an “Interest Period”) to be applicable to such Loan, which Interest Period shall be a period of one month, two months, three months, or six months; provided that:

 

(i)     the Interest Period shall commence on the date of advance or continuation of or conversion to any LIBOR Rate Loan or CDOR Rate Loan and, in the case of immediately successive Interest Periods, each successive Interest Period shall commence on the date on which the next preceding Interest Period expires;

 

(ii)     the Borrowers may not select any Interest Period that ends after the Maturity Date;

 

(iii)     Interest Periods commencing on the same date for LIBOR Rate Loans or CDOR Rate Loans comprising part of the same Loan shall be of the same duration;

 

 

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(iv)     whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day; provided that if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day;

 

(v)     with respect to LIBOR Rate Loans and CDOR Rate Loans, if any Interest Period begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last Business Day of such calendar month; and

 

(vi)     there shall be no more than (A) five Interest Periods for Revolving A Loans and (B) five Interest Periods for Revolving B Loans, in each case in effect at any time.

 

(c)     Default Rate. Subject to Section 9.03, (i) immediately upon the occurrence and during the continuance of an Event of Default under Section 9.01(a) or (g), or (ii) at the election of the Required Lenders, upon the occurrence and during the continuance of any other Event of Default, (A) the Borrowers shall no longer have the option to request LIBOR Rate Loans, CDOR Rate Loans, Swingline Loans or Letters of Credit, (B) all outstanding LIBOR Rate Loans and CDOR Rate Loans shall bear interest at a rate per annum of 2% in excess of the rate (including the Applicable Margin) then applicable to LIBOR Rate Loans and CDOR Rate Loans until the end of the applicable Interest Period and thereafter at a rate equal to 2% in excess of the rate (including the Applicable Margin) then applicable to Base Rate Loans and Canadian Prime Rate Loans, (C) all outstanding Base Rate Loans, Canadian Prime Rate Loans and other Obligations arising hereunder or under any other Loan Document shall bear interest at a rate per annum equal to 2% in excess of the rate (including the Applicable Margin) then applicable to Base Rate Loans, Canadian Prime Rate Loans or such other Obligations arising hereunder or under any other Loan Document and (D) all accrued and unpaid interest shall be due and payable on demand of the Administrative Agent. Interest shall continue to accrue on the Obligations after the filing by or against the Borrowers of any petition seeking any relief in bankruptcy or under any Debtor Relief Law.

 

(d)     Interest Payment and Computation. Interest on each Base Rate Loan and Canadian Prime Rate Loan shall be due and payable in arrears on the last Business Day of each calendar quarter commencing September 30, 2015; and interest on each LIBOR Rate Loan and CDOR Rate Loan shall be due and payable on the last day of each Interest Period applicable thereto, and if such Interest Period extends over three months, at the end of each three month interval during such Interest Period. All computations of interest for LIBOR Rate Loans denominated in Sterling, CDOR Rate Loans, Base Rate Loans when the Base Rate is determined by the Prime Rate, and Canadian Prime Rate Loans shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest provided hereunder shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365/366-day year).

 

(e)     Maximum Rate. In accordance with the provisions of Section 11.04, in no contingency or event whatsoever shall the aggregate of all amounts deemed interest under this Agreement charged or collected pursuant to the terms of this Agreement exceed the Maximum Rate.

 

(f)     For the purposes of the Interest Act (Canada), (i) whenever a rate of interest or fee rate hereunder is calculated on the basis of a year (the “deemed year”) that contains fewer days than the actual number of days in the calendar year of calculation, such rate of interest or fee rate shall be expressed as a yearly rate by multiplying such rate of interest or fee rate by the actual number of days in the calendar year of calculation and dividing it by the number of days in the deemed year, (ii) the principle of deemed reinvestment of interest shall not apply to any interest calculation hereunder and (iii) the rates of interest stipulated herein are intended to be nominal rates and not effective rates or yields.

 

 

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Section 4.02     Notice and Manner of Conversion or Continuation of Loans. Provided that no Default or Event of Default has occurred and is then continuing, the Borrowers shall have the option to (a) convert at any time all or any portion of any outstanding Base Rate Loans (other than Swingline Loans) or Canadian Prime Rate Loans in a principal amount equal to $1,000,000.00 or any whole multiple of $100,000.00 in excess thereof into one or more LIBOR Rate Loans or CDOR Rate Loans, respectively, and (b) upon the expiration of any Interest Period, (i) convert all or any part of its outstanding LIBOR Rate Loans or CDOR Rate Loans in a principal amount equal to $2,000,000.00 or a whole multiple of $500,000.00 in excess thereof into Base Rate Loans (other than Swingline Loans) or Canadian Prime Rate Loans, respectively, or (ii) continue such LIBOR Rate Loans or CDOR Rate Loans as LIBOR Rate Loans or CDOR Rate Loans, respectively. Whenever the Borrowers desire to convert or continue Loans as provided above, the Borrowers shall give the Administrative Agent irrevocable prior written notice in the form attached as Exhibit E (a “Notice of Conversion/Continuation”) not later than 11:00 a.m. three Business Days before the day on which a proposed conversion or continuation of such Loan is to be effective specifying (A) the Loans to be converted or continued, and, in the case of any LIBOR Rate Loan or CDOR Rate Loan to be converted or continued, the last day of the Interest Period therefor, (B) the effective date of such conversion or continuation (which shall be a Business Day), (C) the principal amount of such Loans to be converted or continued, and (D) the Interest Period to be applicable to such converted or continued LIBOR Rate Loan or CDOR Rate Loan. If the Borrowers fail to give a timely Notice of Conversion/Continuation prior to the end of the Interest Period for any LIBOR Rate Loan or CDOR Rate Loan, then the applicable LIBOR Rate Loan or CDOR Rate Loan shall be converted to a Base Rate Loan or Canadian Prime Rate Loan, respectively. Any such automatic conversion to a Base Rate Loan or Canadian Prime Rate Loan shall be effective as of the last day of the Interest Period then in effect with respect to the applicable LIBOR Rate Loan or CDOR Rate Loan. If the Borrowers request a conversion to, or continuation of, LIBOR Rate Loans or CDOR Rate Loans, but fail to specify an Interest Period, they will be deemed to have specified an Interest Period of one month. Notwithstanding anything to the contrary herein, a Swingline Loan may not be converted to a LIBOR Rate Loan. The Administrative Agent shall promptly notify the affected Lenders of such Notice of Conversion/Continuation.

 

Section 4.03     Fees.

 

(a)     Commitment Fee. Commencing on the Closing Date, subject to Sections 4.14 and 4.15, the Borrowers shall pay to the Administrative Agent, for the account of the Revolving Credit Lenders, a non-refundable commitment fee (the “Commitment Fee”) at a rate per annum equal to the Applicable Margin on the average daily unused portion of the Revolving Credit Commitment of the Revolving Credit Lenders (other than the Defaulting Lenders, if any); provided that the amount of outstanding Swingline Loans shall not be considered usage of the Revolving Credit Commitment for the purpose of calculating the Commitment Fee. The Commitment Fee shall be payable in arrears on the last Business Day of each calendar quarter during the term of this Agreement commencing September 30, 2015 and ending on the date upon which all Obligations (other than contingent indemnification obligations not then due) arising under the Revolving Credit Facility shall have been indefeasibly and irrevocably paid and satisfied in full, all Letters of Credit have been terminated or expired (or been Cash Collateralized) and the Revolving Credit Commitment has been terminated. Such commitment fee shall be distributed by the Administrative Agent to the Lenders (other than any Defaulting Lender) pro rata in accordance with such Lenders’ respective Revolving Credit Commitment Percentages.

 

(b)     Other Fees. The Borrowers shall pay to the Arranger and the Administrative Agent for their own respective accounts fees in the amounts and at the times specified in the Fee Letter. The Borrowers shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified.

 

 

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Section 4.04     Manner of Payment.

 

(a)     Sharing of Payments. Each payment by the Borrowers on account of the principal of or interest on the Loans or of any fee, commission or other amounts (including the Reimbursement Obligation) payable to the Lenders under this Agreement shall be made not later than 1:00 p.m. on the date specified for payment under this Agreement to the Administrative Agent at the Administrative Agent’s Office for the account of the Lenders entitled to such payment in the applicable currency, in immediately available funds, and shall be made without any set off, counterclaim or deduction whatsoever. Any payment received after such time shall be deemed to have been made on the next succeeding Business Day for all purposes. Upon receipt by the Administrative Agent of each such payment, the Administrative Agent shall distribute to each such Lender at its address for notices set forth herein its Revolving Credit Commitment Percentage in respect of the Revolving Credit Facility (or other applicable share as provided herein) of such payment and shall wire advice of the amount of such credit to each Lender. Each payment to the Administrative Agent on account of the principal of or interest on the Swingline Loans or of any fee, commission or other amounts payable to the Swingline Lender shall be made in like manner, but for the account of the Swingline Lender. Each payment to the Administrative Agent of the Issuing Lender’s fees or L/C Participants’ commissions shall be made in like manner, but for the account of the Issuing Lender or the L/C Participants, as the case may be. Each payment to the Administrative Agent of Administrative Agent’s fees or expenses shall be made for the account of the Administrative Agent and any amount payable to any Lender under Sections 4.09, 4.10, 4.11 or 11.03 shall be paid to the Administrative Agent for the account of the applicable Lender. Subject to Section 4.01(b)(iv), if any payment under this Agreement shall be specified to be made upon a day which is not a Business Day, it shall be made on the next succeeding day which is a Business Day and such extension of time shall in such case be included in computing any interest if payable along with such payment.

 

(b)     Defaulting Lenders. Notwithstanding the foregoing clause (a), if there exists a Defaulting Lender each payment by the Borrowers to such Defaulting Lender hereunder shall be applied in accordance with Section 4.14(b).

 

Section 4.05     Evidence of Indebtedness.

 

(a)     Extensions of Credit. The Extensions of Credit made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Extensions of Credit made by the Lenders to the Borrowers and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrowers hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrowers shall execute and deliver to such Lender (through the Administrative Agent) a Revolving Credit Note and/or Swingline Note, as applicable, which shall evidence such Lender’s Revolving Credit Loans and/or Swingline Loans, as applicable, in addition to such accounts or records. Each Lender may attach schedules to its Notes and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.

 

 

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(b)     Participations. In addition to the accounts and records referred to in clause (a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swingline Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

 

Section 4.06     Adjustments. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender’s receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations (other than pursuant to Sections 4.09, 4.10, 4.11 or 11.03) greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them; provided that

 

(i)     if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and

 

(ii)     the provisions of this paragraph shall not be construed to apply to (A) any payment made by the Borrowers pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (B) the application of Cash Collateral provided for in Section 4.14 or (C) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in Swingline Loans and Letters of Credit to any assignee or participant, other than to the Loan Parties or any of its Subsidiaries (as to which the provisions of this paragraph shall apply).

 

Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against each Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of each Loan Party in the amount of such participation.

 

Section 4.07     Administrative Agent’s Clawback.

 

(a)     Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.03(b) and may, in reliance upon such assumption, make available to the Borrowers a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable borrowing available to the Administrative Agent, then the applicable Lender and the Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrowers to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the daily average Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (B) in the case of a payment to be made by the Borrowers, the interest rate applicable to Base Rate Loans. If the Borrowers 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 Borrowers the amount of such interest paid by the Borrowers 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. Any payment by the Borrowers shall be without prejudice to any claim the Borrowers may have against a Lender that shall have failed to make such payment to the Administrative Agent.

 

 

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(b)     Payments by the Borrowers; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrowers prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders, the Issuing Lender or the Swingline Lender hereunder that the Borrowers will not make such payment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders, the Issuing Lender or the Swingline Lender, as the case may be, the amount due. In such event, if the Borrowers have not in fact made such payment, then each of the Lenders, the Issuing Lender or the Swingline Lender, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, Issuing Lender or the Swingline Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

 

(c)     Nature of Obligations of Lenders Regarding Extensions of Credit. The obligations of the Lenders under this Agreement to make the Loans and issue or participate in Letters of Credit are several and are not joint or joint and several. The failure of any Lender to make available its Revolving Credit Commitment Percentage of any Loan requested by the Borrowers shall not relieve it or any other Lender of its obligation, if any, hereunder to make its Revolving Credit Commitment Percentage of such Loan available on the borrowing date, but no Lender shall be responsible for the failure of any other Lender to make its Revolving Credit Commitment Percentage of such Loan available on the borrowing date.

 

Section 4.08     Changed Circumstances.

 

(a)     Circumstances Affecting LIBOR Rate and CDOR Availability. In connection with any request for a LIBOR Rate Loan or a CDOR Rate Loan, or a conversion to or continuation thereof, if for any reason (i) the Administrative Agent shall determine (which determination shall be conclusive and binding absent manifest error) that deposits in the applicable currency are not being offered to banks in the London interbank Eurodollar market for the applicable amount and Interest Period of such Loan, (ii) the Administrative Agent shall determine (which determination shall be conclusive and binding absent manifest error) that reasonable and adequate means do not exist for ascertaining the LIBOR Rate or CDOR, as applicable, for such Interest Period with respect to a proposed LIBOR Rate Loan or CDOR Rate Loan, or (iii) the Required Lenders shall determine (which determination shall be conclusive and binding absent manifest error) that the LIBOR Rate or CDOR Rate Loan, as applicable, does not adequately and fairly reflect the cost to such Lenders of making or maintaining such Loans during such Interest Period, then the Administrative Agent shall promptly give notice thereof to the Borrowers. Thereafter, until the Administrative Agent notifies the Borrowers that such circumstances no longer exist, the obligation of the Lenders to make LIBOR Rate Loans or CDOR Rate Loans, as applicable, and the right of the Borrowers to convert any Loan to or continue any Loan as a LIBOR Rate Loan or a CDOR Rate Loan, as applicable, shall be suspended and the Borrowers shall either (1) repay in full (or cause to be repaid in full) the then outstanding principal amount of each such LIBOR Rate Loan or CDOR Rate Loan, as applicable, together with accrued interest thereon (subject to Section 4.01(d)), on the last day of the then current Interest Period applicable to such LIBOR Rate Loan or CDOR Rate Loan; or (2) convert the then outstanding principal amount of each such LIBOR Rate Loan or CDOR Rate Loan to a Base Rate Loan or a Canadian Prime Rate Loan, respectively, as to which the interest rate is not determined by reference to LIBOR or CDOR as of the last day of such Interest Period.

 

 

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(b)     Laws Affecting LIBOR Rate Availability. If, after the date hereof, the introduction of, or any change in, any Applicable Law or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any of the Lenders (or any of their respective Lending Offices) with any request or directive (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, shall make it unlawful or impossible for any of the Lenders (or any of their respective Lending Offices) to honor its obligations hereunder to make or maintain any LIBOR Rate Loan or CDOR Rate Loan, as applicable, such Lender shall promptly give notice thereof to the Administrative Agent and the Administrative Agent shall promptly give notice to the Borrowers and the other Lenders. Thereafter, until the Administrative Agent notifies the Borrowers that such circumstances no longer exist, (i) the obligations of the Lenders to make LIBOR Rate Loans or CDOR Rate Loans, as applicable, and the right of the Borrowers to convert any Loan to a LIBOR Rate Loan or CDOR Rate Loan or continue any Loan as a LIBOR Rate Loan or CDOR Rate Loan, as applicable, shall be suspended and thereafter the Borrowers may select only Base Rate Loans or Canadian Prime Rate Loans, as applicable, hereunder, (ii) all Base Rate Loans and Canadian Prime Rate Loans shall cease to be determined by reference to LIBOR or CDOR, respectively, and (iii) if any of the Lenders may not lawfully continue to maintain a LIBOR Rate Loan or CDOR Rate Loan to the end of the then current Interest Period applicable thereto, the applicable Loan shall immediately be converted to a Base Rate Loan or a Canadian Prime Rate Loan as to which the interest rate is not determined by reference to LIBOR or CDOR, respectively, for the remainder of such Interest Period.

 

Section 4.09     Indemnity. Subject to Section 11.28, each Borrower, jointly and severally, hereby indemnifies each of the Lenders against any loss or expense (including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain a LIBOR Rate Loan or CDOR Rate Loan or from fees payable to terminate the deposits from which such funds were obtained) which may arise or be attributable to each Lender’s obtaining, liquidating or employing deposits or other funds acquired to effect, fund or maintain any Loan (a) as a consequence of any failure by the Borrowers to make any payment when due of any amount due hereunder in connection with a LIBOR Rate Loan or CDOR Rate Loan; (b) due to any failure of the Borrowers to borrow, continue or convert on a date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation; or (c) due to any payment, prepayment or conversion of any LIBOR Rate Loan or CDOR Rate Loan on a date other than the last day of the Interest Period therefor. The amount of such loss or expense shall be determined, in the applicable Lender’s sole discretion, based upon the assumption that such Lender funded its Revolving Credit Commitment Percentage of the LIBOR Rate Loans or CDOR Rate Loans in the London or Canadian interbank market and using any reasonable attribution or averaging methods which such Lender deems appropriate and practical. A certificate of such Lender setting forth the basis for determining such amount or amounts necessary to compensate such Lender shall be forwarded to the Borrowers through the Administrative Agent and shall be conclusively presumed to be correct save for manifest error.

 

Section 4.10     Increased Costs.

 

(a)     Increased Costs Generally. 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 advances, loans or other credit extended or participated in by, any Lender (except any reserve requirement reflected in the LIBOR Rate) or the Issuing Lender;

 

 

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(ii)     subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of “Excluded Taxes” and (C) Connection Income 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 the Issuing Lender or the London or Canadian interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or LIBOR Rate Loans or CDOR Rate Loans made by such Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such Lender, the Issuing Lender or such other Recipient of making, converting to, continuing or maintaining any LIBOR Rate Loan or CDOR Rate Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender, the Issuing Lender or such other Recipient 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, the Issuing Lender or such other Recipient hereunder (whether of principal, interest or any other amount) then, upon written request of such Lender, the Issuing Lender or such other Recipient, the Borrowers shall promptly pay to any such Lender, the Issuing Lender or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, the Issuing Lender or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

 

(b)     Capital Requirements. If any Lender or the Issuing Lender determines that any Change in Law affecting such Lender or the Issuing Lender or any lending office of such Lender or such Lender’s or the Issuing Lender’s holding company, if any, regarding capital requirements, has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Lender’s capital or on the capital of such Lender’s or the Issuing Lender’s holding company, if any, as a consequence of this Agreement, the Revolving Credit Commitment of such Lender or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by the Issuing Lender, to a level below that which such Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Lender’s policies and the policies of such Lender’s or the Issuing Lender’s holding company with respect to capital adequacy), then from time to time upon written request of such Lender or such Issuing Lender the Borrowers shall promptly pay to such Lender or the Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s holding company for any such reduction suffered.

 

(c)     Certificates for Reimbursement. A certificate of a Lender, the Issuing Lender or such other Recipient setting forth the amount or amounts necessary to compensate such Lender, the Issuing Lender, such other Recipient or any of their respective holding companies, as the case may be, as specified in paragraph (a) or (b) of this Section and delivered to the Borrowers, shall be conclusive absent manifest error. The Borrowers shall pay such Lender, the Issuing Lender or such other Recipient, as the case may be, the amount shown as due on any such certificate within ten days after receipt thereof.

 

(d)     Delay in Requests. Failure or delay on the part of any Lender, the Issuing Lender or such other Recipient to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s, the Issuing Lender’s or such other Recipient’s right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender, the Issuing Lender or any other Recipient pursuant to this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender, the Issuing Lender or such other Recipient, as the case may be, notifies the Borrowers of the Change in Law giving rise to such increased costs or reductions, and of such Lender’s, the Issuing Lender’s or such other Recipient’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 nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

 

 

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Section 4.11     Taxes.

 

(a)     Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrowers hereunder or under any other Loan Document shall be made free and clear of and without deduction or withholding for 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 Borrowers 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 4.11(a)) the applicable Lender receives an amount equal to the sum it would have received had no such deduction or withholding been made.

 

(b)     Payment of Other Taxes by the Borrowers. The Borrowers shall timely pay to the relevant Governmental Authority in accordance with Applicable Law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

 

(c)     Indemnification by the Borrowers. The Borrowers shall indemnify the Administrative Agent and each Lender, within ten days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 4.11) payable or paid by the Administrative Agent or such Lender or required to be withheld or deducted from a payment to the Administrative Agent or such Lender and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrowers by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(d)     Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within ten days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrowers has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrowers to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.10 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 (d).

 

(e)     Evidence of Payments. As soon as practicable after any payment of Taxes by the Borrowers to a Governmental Authority pursuant to this Section 4.11, the Borrowers shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

 

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(f)     Status of Lenders. Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments hereunder or under any other Loan Document shall deliver to the Borrowers (with a copy to the Administrative Agent), at the time or times prescribed by Applicable Law or reasonably requested by the Borrowers or the Administrative Agent, such properly completed and executed documentation prescribed by Applicable Law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrowers or the Administrative Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by the Borrowers or the Administrative Agent as will enable the Borrowers or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 4.11(f)(i), (ii) and (iii) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

 

Without limiting the generality of the foregoing, in the event that a Borrower is a U.S. Person:

 

(i)     any Lender that is a U.S. Person shall deliver to such Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of such Borrower or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. backup withholding Tax;

 

(ii)     any Foreign Lender shall deliver to such 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 Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of such Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

 

(A)     in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction of U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

 

(B)     executed originals of IRS Form W-8ECI;

 

(C)     in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit H-1 to the effect that such Foreign Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of any Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) duly executed originals of IRS Form W-8BEN or W-8BEN-E;

 

 

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(D)     to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit H-2 or Exhibit H-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit H-4 on behalf of each such direct and indirect partner; or

 

(E)     any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to such 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 Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of such 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 United States federal withholding Tax duly completed together with such supplementary documentation as may be prescribed by Applicable Law to permit such Borrower or the Administrative Agent to determine the withholding or deduction required to be made.

 

(iii)     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 Borrowers and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrowers 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 Borrowers or the Administrative Agent as may be necessary for the Borrowers and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. For purposes of this clause (iii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrowers and the Administrative Agent in writing of its legal inability to do so.

 

(g)     Treatment of Certain Refunds. If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified pursuant to this Section (including additional amounts paid by the Borrowers pursuant to this Section), it shall pay to the applicable indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent, such Lender or the Issuing Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the applicable indemnifying party, upon the request of the Administrative Agent, such Lender or the Issuing Lender, agrees to repay the amount paid over pursuant to this clause (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (g), in no event will the Administrative Agent, the Issuing Lender or any Lender be required to pay any amount to an indemnifying party pursuant to this clause (g) the payment of which would place the Administrative Agent or Lender in a less favorable net after-Tax position than the Administrative Agent or Lender would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This paragraph shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrowers or any other Person.

 

 

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(h)     Survival. Without prejudice to the survival of any other agreement of the Borrowers hereunder, the agreements and obligations of the Borrowers contained in this Section shall survive the payment in full of the Obligations and the termination of the Commitments.

 

(i)     Issuing Bank. For purposes of this Section 4.11, the term “Lender” includes any Issuing Bank.

 

Section 4.12     Mitigation Obligations; Replacement of Lenders.

 

(a)     Designation of a Different Lending Office. If any Lender requests compensation under Section 4.10, or requires the Borrowers to pay additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.11, then such Lender shall, at the request of the Borrowers, use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 4.10 or Section 4.11, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

 

(b)     Replacement of Lenders. If any Lender requests compensation under Section 4.10, or if the Borrowers are required to pay additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.11, or if any Lender declines to make a LIBOR Rate Loan or CDOR Rate Loan, or a conversion or continuation thereof pursuant to Section 4.08, and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with Section 4.12(a), or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then the Borrowers may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.10), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:

 

(i)     the Borrowers shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 11.10;

 

(ii)     such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in Letters of Credit, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 4.09) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts);

 

 

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(iii)     in the case of any such assignment resulting from a claim for compensation under Section 4.10 or payments required to be made pursuant to Section 4.11, such assignment will result in a reduction in such compensation or payments thereafter;

 

(iv)     such assignment does not conflict with Applicable Law; and

 

(v)     in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

 

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.

 

Section 4.13     Increase in Revolving Credit Commitment. 

 

(a)     Request for Increase. Provided there exists no Default or Event of Default, upon written notice to the Administrative Agent (which shall promptly notify the Lenders in accordance with its customary practice), the Borrowers may from time to time request an increase in the Revolving A Commitments and/or the Revolving B Commitments by an aggregate principal amount not exceeding $75,000,000.00; provided that such increase shall not be less than a minimum principal amount of $10,000,000.00. Such notice shall specify the date (an “Increased Amount Date”) on which the Borrowers propose that any such increase in the aggregate Revolving Credit Commitments shall be effective, which shall be a date not less than ten Business Days after the date on which such notice is delivered to Administrative Agent, which date may be adjusted by the Borrowers and the Administrative Agent. 

 

(b)     Lender Elections to Increase. Each Lender shall notify the Administrative Agent by the proposed Increased Amount Date whether or not it agrees to increase its applicable Revolving Credit Commitment, which shall be at such Lender’s sole discretion to elect or decline, and, if so, whether by an amount equal to, greater than, or less than its applicable Revolving Credit Commitment Percentage of such requested increase. 

 

(c)     Notification by Administrative Agent; Additional Lenders. The Administrative Agent shall notify the Borrowers and each Lender of the Lenders’ responses to each request made hereunder. To achieve the full amount of a requested increase and subject to the approval of the Required Lenders and the approvals required for an Eligible Assignee, the Borrowers may also invite additional Eligible Assignees to become Lenders pursuant to a joinder agreement in form and substance satisfactory to the Administrative Agent and its counsel.

 

(d)     Allocations. If the aggregate Revolving Credit Commitments are increased in accordance with this Section 4.13, the Administrative Agent and the Borrowers shall determine the final allocation of such increase. The Administrative Agent shall, in accordance with its customary practice, promptly notify the Borrowers and the Lenders of the final allocation of such increase.

 

 

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(e)     Conditions to Effectiveness of Increase. Any such increase of the Revolving Credit Commitments shall be effective as of such Increased Amount Date; provided that: (i) no Default or Event of Default shall exist on such Increased Amount Date before and after giving effect to (A) any increase in the Revolving Credit Commitments, and (B) the making of any Loans pursuant thereto; (ii) the Borrowers shall deliver to the Administrative Agent an Officer’s Compliance Certificate of the Borrowers dated as of the Increased Amount Date (in sufficient copies for each Lender) certifying that the Borrowers will be in pro forma compliance (based on the most recent fiscal quarter period for which financial statements are available) with the financial covenants set out in Sections 7.15 and 7.16 of this Agreement both before and after giving effect to (A) any increase in the Revolving Credit Commitments, and (B) the making of any Loans pursuant thereto; (iii) the Borrowers shall pay any upfront fees or other fees, costs and expenses associated with any addition of additional Lenders pursuant to Section 4.13(c); (iv) the outstanding Loans and Revolving Credit Commitment Percentages of Swingline Loans and L/C Obligations will be reallocated by the Administrative Agent on the applicable Increased Amount Date among the applicable Lenders in accordance with their revised Revolving Credit Commitment Percentages, and the applicable Lenders agree to make all payments and adjustments necessary to effect such reallocation and the Borrowers shall pay any and all costs required pursuant to Section 4.09 in connection with such reallocation as if such reallocation were a repayment; and (v) the Borrowers shall deliver or cause to be delivered any customary legal opinions or other documents (including a resolution duly adopted by the board of directors (or equivalent governing body) of the Borrowers authorizing such increase in the Revolving Credit Commitments) reasonably requested by Administrative Agent in connection with any such transaction. 

 

(f)     Conflicting Provisions. This Section 4.13 shall supersede any provisions in Sections 4.06 or 11.02 to the contrary.

 

Section 4.14     Cash Collateral. At any time that there shall exist a Defaulting Lender, within one Business Day following the written request of the Administrative Agent, the Issuing Lender or the Swingline Lender (with a copy to the Administrative Agent), the Borrowers shall Cash Collateralize the Fronting Exposure of the Issuing Lender and/or the Swingline Lender, as applicable, with respect to such Defaulting Lender (determined after giving effect to Section 4.15(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an amount equal to such Fronting Exposure.

 

(a)     Grant of Security Interest. The Borrowers, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Administrative Agent, for the benefit of the Issuing Lender and the Swingline Lender, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lender’s obligation to fund participations in respect of L/C Obligations and Swingline Loans, to be applied pursuant to subsection (c) below. If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent, the Issuing Lender and the Swingline Lender as herein provided or that the total amount of such Cash Collateral is less than the applicable Fronting Exposure, the Borrowers will, promptly upon demand by the Administrative Agent, 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).

 

(b)     Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 4.14 or Section 4.15 in respect of Letters of Credit and Swingline Loans shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of L/C Obligations and Swingline Loans (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such Property as may otherwise be provided for herein.

 

(c)     Termination of Requirement. Cash Collateral (or the appropriate portion thereof) provided to reduce the Fronting Exposure of the Issuing Lender and/or the Swingline Lender, as applicable, shall no longer be required to be held as Cash Collateral pursuant to this Section 4.14 following (i) the elimination of the event which occasioned the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the Administrative Agent, the Issuing Lender and the Swingline Lender that there exists excess Cash Collateral; provided that, subject to Section 4.15, the Person providing Cash Collateral, the Issuing Lender and the Swingline Lender may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations.

 

 

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Section 4.15     Defaulting Lenders.

 

(a)     Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in this Agreement, 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)     Waivers and Amendments. 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 the definition of Required Lenders.

 

(ii)     Defaulting Lender Waterfall. 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 Article IX or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 9.07 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 Issuing Lender or the Swingline Lender hereunder; third, to Cash Collateralize the Fronting Exposure of the Issuing Lender and the Swingline Lender with respect to such Defaulting Lender in accordance with Section 4.14; fourth, as the Borrowers may request (so long as no Default or Event of Default exists), to the funding of any Loan or funded participation 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 Borrowers, to be held in a deposit account and released pro rata in order to (A) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans and funded participations under this Agreement and (B) Cash Collateralize the Issuing Lender’s future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit and Swingline Loans issued under this Agreement, in accordance with Section 4.14; sixth, to the payment of any amounts owing to the Lenders, the Issuing Lender or the Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Lender or the Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrowers as a result of any judgment of a court of competent jurisdiction obtained by the Borrowers 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 (1) such payment is a payment of the principal amount of any Loans or funded participations in Letters of Credit or Swingline Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (2) such Loans were made or the related Letters of Credit or Swingline Loans were issued at a time when the conditions set forth in Section 5.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and funded participations in Letters of Credit or Swingline Loans owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or funded participations in Letters of Credit or Swingline Loans owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swingline Loans are held by the Lenders pro rata in accordance with the Commitments under the Credit Facility without giving effect to Section 4.15(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 Section 4.15(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

 

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(iii)     Certain Fees.

 

(A)     Each Defaulting Lender shall not be entitled to receive any Commitment Fee for any period during which that Lender is a Defaulting Lender.

 

(B)     Each Defaulting Lender shall be entitled to receive letter of credit commissions pursuant to Section 3.03 for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Revolving Credit Commitment Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 4.14.

 

(C)     With respect to any letter of credit commission not required to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, the Borrowers shall (1) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations or Swingline Loans that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (2) pay to each Issuing Lender and Swingline Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such Issuing Lender’s or Swingline Lender’s Fronting Exposure to such Defaulting Lender, unless Cash Collateral has been provided with respect to such Fronting Exposure, and (3) not be required to pay the remaining amount of any such fee.

 

(iv)     Reallocation of Participations to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in L/C Obligations and Swingline Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Revolving Credit Commitment Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that (x) no Event of Default exists at such time, and (y) such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving Commitment. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

 

(v)     Cash Collateral, Repayment of Swingline Loans. If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrowers shall, without prejudice to any right or remedy available to them hereunder or under law, (x) first, repay Swingline Loans in an amount equal to the Swingline Lenders’ Fronting Exposure and (y) second, Cash Collateralize the Issuing Lender’s Fronting Exposure in accordance with the procedures set forth in Section 4.14.

 

 

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(b)     Defaulting Lender Cure. If the Borrowers, the Administrative Agent, the Issuing Lender and the Swingline 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 and Swingline Loans to be held pro rata by the Lenders in accordance with the Commitments under the Credit Facility (without giving effect to Section 4.15(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 Borrowers while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed 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 that Lender’s having been a Defaulting Lender.

 

(c)     New Swingline Loans/Letters of Credit. So long as any Lender is a Defaulting Lender, (i) the Swingline Lender shall not be required to fund any Swingline Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swingline Loan and (ii) no Issuing Lender shall be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

 

Section 4.16     Agreement with Respect to the Revolving B Commitment and the Revolving B Exposure. For so long as the Revolving B Commitment has not been terminated and thereafter for so long as the Secured Obligations in respect of the Revolving B Exposure remain outstanding, the Administrative Agent, the Lenders, the Borrowers and the other Loan Parties hereby acknowledge and agree that none of the Company, OPI, Bioriginal Omega or any other Loan Party or Person shall be obligated or required to deposit any funds with the Administrative Agent or any Lender holding all or any portion of the Revolving B Commitment or the Revolving B Exposure for the purpose of such Lender maintaining, increasing, renewing or otherwise continuing its Revolving B Commitment or making, continuing, renewing, extending or maintaining Loans or other Extensions of Credit under the Revolving B Commitment.

 

ARTICLE V

CONDITIONS OF CLOSING AND BORROWING AND COLLATERAL

 

Section 5.01     Conditions to Closing. The obligation of the Lenders to close this Agreement and the amendment and restatement of the Existing Loan Agreement is subject to the satisfaction of each of the following conditions:

 

(a)     Executed Loan Documents. This Agreement, a Revolving Credit Note in favor of each Lender requesting a Revolving Credit Note, a Swingline Note in favor of the Swingline Lender, and the Collateral Documents (including any amendment, reaffirmation or assignment thereof), together with any other applicable Loan Documents, shall have been duly authorized, executed and delivered to the Administrative Agent by the parties thereto, shall be in full force and effect, and no Default or Event of Default shall exist hereunder or thereunder.

 

(b)     Closing Certificates; Etc. The Administrative Agent shall have received each of the following in form and substance reasonably satisfactory to the Administrative Agent:

 

 

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(i)     Officer’s Certificate. A certificate from a Responsible Officer of the Borrowers to the effect that (A) all representations and warranties of the Loan Parties contained in this Agreement and the other Loan Documents are true, correct and complete in all material respects (except to the extent any such representation and warranty is qualified by materiality or reference to Material Adverse Effect, in which case, such representation and warranty shall be true, correct and complete in all respects); (B) none of the Loan Parties is in violation of any of the covenants contained in this Agreement or the other Loan Documents; (C) no Default or Event of Default has occurred and is continuing; (D) since December 31, 2014 no event has occurred or condition arisen, either individually or in the aggregate, that could reasonably be expected to have a Material Adverse Effect; and (E) each of the Loan Parties, as applicable, has satisfied each of the conditions set forth in Section 5.01 and Section 5.02.

 

(ii)     Certificate of Secretary of each Loan Party. A certificate of a Responsible Officer of each Loan Party certifying as to the incumbency and genuineness of the signature of each officer of such Loan Party executing Loan Documents to which it is a party and certifying that attached thereto is a true, correct and complete copy of (A) the articles or certificate of incorporation or formation of such Loan Party and all amendments thereto, certified as of a recent date by the appropriate Governmental Authority in its jurisdiction of incorporation or formation; (B) the bylaws or other governing document of such Loan Party as in effect on the Closing Date; (C) resolutions duly adopted by the board of directors (or other governing body) of such Loan Party authorizing and approving the transactions contemplated hereunder and the execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party; and (D) each certificate required to be delivered pursuant to Section 5.01(b)(iii).

 

(iii)     Certificates of Good Standing. Certificates as of a recent date of the good standing of each Loan Party under the laws of its jurisdiction of organization and, to the extent requested by the Administrative Agent, each other jurisdiction where such Loan Party is qualified to do business and, to the extent available, a certificate of the relevant taxing authorities of such jurisdictions certifying that such Loan Party has filed required tax returns and owes no delinquent taxes.

 

(iv)     Opinions of Counsel. Favorable opinions of counsel to the Loan Parties addressed to the Administrative Agent and the Lenders with respect to the Loan Parties, the Loan Documents and such other matters as the Lenders shall request (which such opinions shall expressly permit reliance by permitted successors and assigns of the addressees thereof).

 

(c)     Personal Property Collateral and Aircraft Collateral.

 

(i)     Filings and Recordings. The Administrative Agent shall have received all filings and recordations (including all UCC financing statements, PPSA financing statements and FAA filing documents) that are necessary to perfect the security interests of the Administrative Agent, on behalf of the Secured Parties, in the Collateral and the Administrative Agent shall have received evidence reasonably satisfactory to the Administrative Agent that upon such filings and recordations such security interests constitute valid and perfected first priority Liens thereon (except for Permitted Liens).

 

(ii)     Pledged Collateral. The Administrative Agent shall have received (A) original stock certificates or other certificates evidencing the Equity Interests pledged pursuant to the Collateral Documents, together with an undated stock power for each such certificate duly executed in blank by the registered owner thereof and (B) each original promissory note pledged pursuant to the Collateral Documents together with an undated endorsement for each such promissory note duly executed in blank by the holder thereof.

 

 

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(iii)     Lien Search. The Administrative Agent shall have received the results of a Lien search (including a search as to judgments, pending litigation, bankruptcy, tax and intellectual property matters), in form and substance reasonably satisfactory thereto, made against the Loan Parties under the Uniform Commercial Code (or applicable judicial docket) or PPSA, as applicable, as in effect in each jurisdiction in which filings or recordations under the Uniform Commercial Code or PPSA, as applicable, should be made to evidence or perfect security interests in all assets of such Loan Party, indicating among other things that the assets of each such Loan Party are free and clear of any Lien (except for Permitted Liens).

 

(iv)     Insurance. The Administrative Agent shall have received evidence of all insurance, required pursuant to Section 7.04, evidence of payment of all insurance premiums for the current policy year of each (with appropriate endorsements naming the Administrative Agent as lender’s loss payee (and mortgagee, as applicable) on all such policies for property hazard insurance and as additional insured on all policies for liability insurance, and if requested by the Administrative Agent, copies of such insurance policies.

 

(v)     As to Aircraft. The Administrative Agent shall have received an Aircraft Security Agreement, duly executed by each Loan Party that owns any aircraft, together with an aircraft title memorandum as to each aircraft evidencing that such aircraft is free and clear of all Liens other than Permitted Liens.

 

(d)     Real Property Collateral.

 

(i)     Title Insurance. The Administrative Agent shall have received a commitment or, in the case of real property collateral located in the United States or, as applicable or customary in the relevant province, Canada, a marked-up commitment for a policy of title insurance or an acceptable endorsement to an existing policy of title insurance, insuring the Secured Parties’ first priority Mortgages and showing no Liens prior to the Secured Parties’ Liens other than Permitted Liens, with title insurance companies acceptable to the Administrative Agent on the Property subject to a Mortgage with the final title insurance policy or endorsement being delivered within 30 days after the Closing Date. Further, the Borrowers agree to provide or obtain any customary statutory declaration or affidavits and indemnities as may be required or necessary to obtain title insurance satisfactory to the Administrative Agent.

 

(ii)     Title Exceptions. The Administrative Agent shall have received copies of all recorded documents creating exceptions to the title policy or endorsement referred to in Section 5.01(d)(i).

 

(iii)     Matters Relating to Flood Hazard Properties. Evidence as to (A) whether any Mortgaged Property is in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards (a “Flood Hazard Property”) and (B) if any Mortgaged Property is a Flood Hazard Property, (1) whether the community in which such Mortgaged Property is located is participating in the National Flood Insurance Program, (2) the applicable Loan Party’s written acknowledgment of receipt of written notification from Lender (x) as to the fact that such Mortgaged Property is a Flood Hazard Property and (y) as to whether the community in which each such Flood Hazard Property is located is participating in the National Flood Insurance Program, and (3) copies of certificates of insurance of the Loan Parties evidencing flood insurance satisfactory to the Administrative Agent and naming the Administrative Agent on behalf of the Secured Parties, as first mortgagee/loss payee, and, if requested by the Administrative Agent, copies of such flood insurance policies and all endorsements thereto. Notwithstanding the foregoing, with respect to real property collateral located in Canada, such evidence shall be provided only to the extent applicable or customary in the relevant province, or as reasonably requested by the Administrative Agent.

 

 

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(iv)     Surveys. A survey of the sites of the real property covered by the Mortgages, dated a date reasonably satisfactory to each of the Administrative Agent and such title insurance company by an independent professional licensed land surveyor, which surveys in respect of property located in the United States shall be sufficient to delete any standard printed survey exception contained in the applicable title policy and be made in accordance with the Minimum Standard Detail Requirements for Land Title Surveys jointly established and adopted by the American Land Title Association and the American Congress on Surveying and Mapping in 2005 with all items from Table A thereof completed, except for Nos. 1, 5, 12, 14 and 15.

 

(v)     Tax Issues. Evidence satisfactory to the Administrative Agent: (A) of the identity of all taxing authorities and any applicable utility districts (or similar authorities) having jurisdiction over each Mortgaged Property or any portion thereof; (B) that all taxes and any other similar charges have been paid, including copies of receipts or statements marked “paid” by the appropriate authority; and (C) if applicable, that each Mortgaged Property is a separate tax lot or lots with separate assessment or assessments of the land and the improvements thereon, independent of any other land or improvements and that each Mortgaged Property is a separate legally subdivided parcel (delivery of relevant title insurance policy endorsements acceptable to the Administrative Agent shall be deemed to satisfy this clause (C)).

 

(vi)     Environmental Assessments. The Administrative Agent shall have received a Phase I environmental assessment and such other environmental report reasonably requested by the Administrative Agent, in each case addressed to Administrative Agent (or in respect of which a suitable reliance letter has been obtained) regarding each parcel of real property subject to a Mortgage by an environmental engineering firm acceptable to the Administrative Agent showing no environmental conditions in violation of Environmental Laws or liabilities under Environmental Laws, either of which could reasonably be expected to have a Material Adverse Effect.

 

(vii)     Other Real Property Information. The Administrative Agent shall have received such other certificates, documents and information as are reasonably requested by the Lenders, including landlord agreements/waivers, engineering and structural reports and permanent certificates of occupancy (if available), each in form and substance satisfactory to the Administrative Agent.

 

(e)     Vessels. 

 

(i)     Mortgage Trust Agreement. The Administrative Agent shall have received a duly authorized, executed and delivered Mortgage Trust Agreement, together with a trust receipt, as such term is defined therein, for a First Preferred Ship Mortgage and an Assignment of Insurances with respect to each Vessel that is an Eligible Vessel.

 

(ii)     First Preferred Ship Mortgages and Assignment of Insurances. The Administrative Agent shall have received a copy of a First Preferred Ship Mortgage, duly executed by each Loan Party that owns an Eligible Vessel, together with U.S. Coast Guard documentation, records and abstracts, including copies of a valid U.S. Coast Guard Certificate of Documentation with a valid fishery endorsement issued (or coastwise trade endorsements, as their use may require) with respect to each such Eligible Vessel, demonstrating that each such Eligible Vessel is duly documented with the U.S. Coast Guard and authorized for employment in the U.S. Fisheries Trade and/or the U.S. coastwise trade and that each such Eligible Vessel is free and clear of all Liens other than Permitted Liens and an Assignment of Insurances, duly executed by each Loan Party that owns an Eligible Vessel.

 

 

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(iii)     Recording of First Preferred Ship Mortgages. The Administrative Agent shall have received evidence of recording of the First Preferred Ship Mortgages with the U.S. Coast Guard National Vessel Documentation Center. 

 

(f)     Consents; Defaults.

 

(i)     Governmental and Third Party Approvals. The Loan Parties shall have received all material governmental, shareholder and third party consents and approvals necessary (or any other material consents as determined in the reasonable discretion of the Administrative Agent) in connection with the transactions contemplated by this Agreement and the other Loan Documents and the other transactions contemplated hereby, including those required pursuant to 46 C.F.R. § 356.19(b)(6) and (c) and, to the extent required, 46 U.S.C. § 31322(f)(2), and all applicable waiting periods shall have expired without any action being taken by any Person that could reasonably be expected to restrain, prevent or impose any material adverse conditions on any of the Loan Parties or such other transactions or that could seek or threaten any of the foregoing, and no law or regulation shall be applicable which in the reasonable judgment of the Administrative Agent could reasonably be expected to have such effect.

 

(ii)     No Injunction, Etc. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain substantial damages in respect of, or which is related to or arises out of this Agreement or the other Loan Documents or the consummation of the transactions contemplated hereby or thereby, or which, in the Administrative Agent’s sole discretion, would make it inadvisable to consummate the transactions contemplated by this Agreement or the other Loan Documents or the consummation of the transactions contemplated hereby or thereby.

 

(g)     Financial Matters.

 

(i)     Financial Statements. The Administrative Agent shall have received the unaudited consolidated balance sheet of the Borrowers and their Subsidiaries as of March 31, 2015 and related unaudited consolidated interim statements of income and retained earnings.

 

(ii)     The pro forma capital and ownership structure and the equity holding arrangements of the Company and its Subsidiaries (and all agreements relating thereto) will be reasonably satisfactory to the Administrative Agent. The Administrative Agent will be satisfied with the terms and amounts of any intercompany loans among the Loan Parties and the flow of funds in connection with the Closing Date.

 

(iii)     The Administrative Agent shall have received, in form and substance reasonably satisfactory to the Administrative Agent, (A) copies of satisfactory audited consolidated financial statements for the Borrowers and their Subsidiaries for the three fiscal years most recently ended for which financial statements are available and interim unaudited financial statements for each quarterly period ended since the last audited financial statements for which financial statements are available and (B) projections prepared by management of balance sheets, income statements and cash flow statements of the Borrowers and their Subsidiaries for the term of the Senior Credit Facility, subject to the assumption that such projections have been prepared based on reasonable assumptions made at the time of preparation.

 

 

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(iv)     Financial Condition/Solvency Certificate. Each Borrower shall have delivered to the Administrative Agent a certificate, in form and substance satisfactory to the Administrative Agent, and certified as accurate by the chief financial officer of such Borrower, that after giving effect to this Agreement and the transactions contemplated hereby, such Borrower is Solvent and the Loan Parties, on an aggregate basis, are Solvent. 

 

(v)     Payment at Closing. The Borrowers shall have paid (A) to the Administrative Agent, the Arranger and the Lenders the fees set forth or referenced in Section 4.03 and any other accrued and unpaid fees or commissions due hereunder, (B) all fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent accrued and unpaid prior to or on the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrowers and the Administrative Agent) and (C) to any other Person such amount as may be due thereto in connection with the transactions contemplated hereby, including all taxes, fees and other charges in connection with the execution, delivery, recording, filing and registration of any of the Loan Documents.

 

(h)     Miscellaneous.

 

(i)     Notice of Borrowing. The Administrative Agent shall have received a Notice of Borrowing from the Borrowers in accordance with Section 2.03(a) and a Notice of Account Designation specifying the account or accounts to which the proceeds of any Loans made on or after the Closing Date are to be disbursed.

 

(ii)     Notice of Final Agreement. Each Loan Party shall have executed a notice in compliance with the provisions of Section 26.02 of the Texas Business and Commerce Code (the “Notice of Final Agreement”).

 

(iii)     PATRIOT Act. At least five business days prior to the Closing Date, the Loan Parties shall have provided to the Administrative Agent and the Lenders the documentation and other information requested by the Administrative Agent in order to comply with requirements of the PATRIOT Act, applicable “know your customer” and anti-money laundering rules and regulations.

 

(iv)     Collateral Protection Insurance Notice. The Borrowers shall have provided to the Administrative Agent the collateral protection insurance notice required under Texas law.

 

(v)     HSBC Indebtedness. The Borrowers shall have provided to the Administrative Agent evidence that the HSBC Indebtedness (other than the HSBC Equipment Lease) has been or concurrently with the Closing Date is being repaid and all Liens securing obligations thereunder have been or concurrently with the Closing Date are being released; provided that the letters of credit listed on Schedule 5.01 issued by HSBC Bank Canada (as renewed, extended or otherwise amended but not increased, the “Continuing Letters of Credit”) shall continue after the payoff of such Indebtedness owing to HSBC Bank Canada and such Continuing Letters of Credit shall be secured either by, at Biorginal Omega’s option, (A) cash collateral pledged by Bioriginal Omega to HSBC Bank Canada, or (B) a Letter of Credit issued under this Agreement, in either case in the aggregate amount equal to 105% of the face amount of such Continuing Letters of Credit to be held by HSBC Bank Canada for so long as the Continuing Letters of Credit remain outstanding.

 

 

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(vi)     Other Documents. All opinions, certificates and other instruments and all proceedings in connection with the transactions contemplated by this Agreement shall be satisfactory in form and substance to the Administrative Agent. The Administrative Agent shall have received copies of all other documents, certificates and instruments reasonably requested thereby, with respect to the transactions contemplated by this Agreement.

 

Without limiting the generality of the provisions of the last paragraph of Section 10.03, for purposes of determining compliance with the conditions specified in this Section 5.01, the Administrative Agent and each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

 

Section 5.02     Conditions to All Extensions of Credit. The obligations of the Lenders to make or participate in any Extensions of Credit (including the initial Extension of Credit), convert or continue any Loan (other than the automatic conversion of LIBOR Rate Loans to Base Rate Loans or CDOR Rate Loans to Canadian Prime Rate Loans pursuant to this Agreement) and/or the Issuing Lender to issue or extend any Letter of Credit are subject to the satisfaction of the following conditions precedent on the relevant borrowing, continuation, conversion, issuance or extension date:

 

(a)     Continuation of Representations and Warranties. The representations and warranties contained in Article VI shall be true and correct in all material respects, except for any representation and warranty that is qualified by materiality or reference to Material Adverse Effect, which such representation and warranty shall be true and correct in all respects on and as of such borrowing, continuation, conversion, issuance or extension date with the same effect as if made on and as of such date, except for any such representation and warranty that by its terms is made only as of an earlier date, which representation and warranty shall remain true and correct in all material respects, except for any representation and warranty that is qualified by materiality or reference to Material Adverse Effect, which such representation and warranty shall be true and correct in all respects as of such earlier date.

 

(b)     No Existing Default. No Default or Event of Default shall have occurred and be continuing (i) on the borrowing, continuation or conversion date with respect to such Loan or after giving effect to the Loans to be made, continued or converted on such date or (ii) on the issuance or extension date with respect to such Letter of Credit or after giving effect to the issuance or extension of such Letter of Credit on such date.

 

(c)     Notices. The Administrative Agent shall have received a Notice of Borrowing or Notice of Conversion/Continuation, as applicable, from the Borrowers in accordance with Section 2.03(a) or Section 4.02, as applicable.

 

(d)     In the case of an Extension of Credit to be denominated in Canadian Dollars or an Alternative Currency, there shall not have occurred any change in national or international financial, political or economic conditions or currency exchange rates or exchange controls which in the reasonable opinion of the Administrative Agent would make it impracticable for such Extension of Credit to be denominated in Canadian Dollars or the relevant Alternative Currency.

 

(e)     Additional Documents. The Administrative Agent shall have received each additional document, instrument, legal opinion or other item reasonably requested by it.

 

 

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Section 5.03     Assets of Borrowers. The payment and performance of the Secured Obligations shall be secured by a first and superior Lien (except for Permitted Liens) against all of the assets of each Borrower (other than Excluded Property) pursuant to the terms of one or more Security Agreements, Mortgages, First Preferred Ship Mortgages, Assignments of Insurances, Aircraft Security Agreements, and other appropriate Collateral Documents. Upon the Administrative Agent’s request, Borrowers will, with respect to deposit accounts and investment property that is not Excluded Property held with a financial intermediary other than the Administrative Agent, cause such financial intermediary to enter into a control agreement with the Administrative Agent in form and substance satisfactory to the Administrative Agent.

 

Section 5.04     Assets of Subsidiaries. The payment and performance of the Secured Obligations shall be secured by a first and superior Lien (subject only to Permitted Liens) against all of the assets (other than Excluded Property) of each Subsidiary other than Unrestricted Subsidiaries or Inactive Subsidiaries pursuant to the terms of one or more Security Agreements, Mortgages, First Preferred Ship Mortgages, Assignments of Insurances, Aircraft Security Agreements, and other appropriate Collateral Documents. Upon the Administrative Agent’s request, such Subsidiaries will, with respect to deposit accounts and investment property that is not Excluded Property held with a financial intermediary other than the Administrative Agent, cause such financial intermediary to enter into a control agreement with the Administrative Agent in form and substance satisfactory to the Administrative Agent.

 

Section 5.05     Guaranty. The payment and performance of the Secured Obligations shall be unconditionally guaranteed by the Guarantors, pursuant to one or more Guaranty Agreements, which shall be satisfactory in form and substance to the Administrative Agent.

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES

 

To induce the Administrative Agent and Lenders to enter into this Agreement and to induce the Lenders to make Extensions of Credit, the Loan Parties, subject to Section 11.28, jointly and severally, hereby represent and warrant to the Administrative Agent and the Lenders both before and after giving effect to the transactions contemplated hereunder, which representations and warranties shall be deemed made on the Closing Date and as otherwise set forth in Section 5.02, that:

 

Section 6.01     No Liens. Each Loan Party has good and defensible title to all of its assets, and none of such assets are subject to any Lien except for Permitted Liens.

 

Section 6.02     Financial Statements. The financial statements of each Borrower heretofore delivered to the Administrative Agent and any Lender have been prepared in accordance with GAAP and fairly present such Borrower’s financial condition as of the date or dates thereof, and there have been no material adverse changes in such Borrower’s financial condition or operation since the date or dates thereof.

 

Section 6.03     Good Standing. The Company is a corporation, duly organized, validly existing and in good standing under the laws of Nevada and has the power and authority to own its Property and to carry on its business in each jurisdiction in which it does business and in which the failure to be so qualified would (when considered alone or when aggregated with the effect of failure to qualify in all other jurisdictions) have a Material Adverse Effect. OPI is a corporation, duly organized, validly existing and in good standing under the laws of Virginia and has the power and authority to own its Property and to carry on its business in each jurisdiction in which it does business and in which the failure to be so qualified would (when considered alone or when aggregated with the effect of failure to qualify in all other jurisdictions) have a Material Adverse Effect. Bioriginal Omega is a corporation, duly organized, validly existing and in good standing under the laws of Saskatchewan and has the power and authority to own its Property and to carry on its business in each jurisdiction in which it does business and in which the failure to be so qualified would (when considered alone or when aggregated with the effect of failure to qualify in all other jurisdictions) have a Material Adverse Effect. Each of the Guarantors is a corporation, limited liability company or partnership, duly organized, validly existing and in good standing under the laws of its state of incorporation, formation or organization, as the case may be, and has the power and authority to own its Property and to carry on its business in each jurisdiction in which it does business and in which the failure to be so qualified would (when considered alone or when aggregated with the effect of failure to qualify in all other jurisdictions) have a Material Adverse Effect.

 

 

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Section 6.04     Authority and Compliance. Each Loan Party has full power and authority to execute, deliver and perform the Loan Documents to which it is a party and to incur and perform the obligations provided for therein. No consent or approval of any Governmental Authority or other third party (including any approvals required by the provisions of 46 C.F.R. § 356.19(b)(6) and (c) and, to the extent applicable, 46 U.S.C. § 31322(f)(2)) is required as a condition to the validity or performance of any Loan Document other than those which have already been obtained and are in full force and effect and filings to perfect Liens created by the Loan Documents, and each Loan Party is in compliance in all material respects with all Governmental Requirements to which it is subject.

 

Section 6.05     Binding Agreements. This Agreement and the other Loan Documents executed by each Loan Party constitute valid and legally binding obligations of such Loan Party, enforceable in accordance with their terms (except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting creditors’ rights generally and general equitable principles).

 

Section 6.06     Litigation. Except as set forth on Schedule 6.06, there are no proceedings involving any Loan Party pending or, to the knowledge of any Loan Party, threatened before any court or Governmental Authority, agency or arbitration authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

Section 6.07     No Conflicting Agreements. There is no charter, bylaw, stock provision, partnership agreement or other document pertaining to the power or authority of any Loan Party and no provision of any existing agreement, mortgage, indenture or contract binding on any Loan Party or affecting any Property of any Loan Party, which would conflict with or in any way prevent the execution, delivery or carrying out of the terms of this Agreement and the other Loan Documents.

 

Section 6.08     Taxes. All federal, state, provincial and other material taxes and assessments due and payable by each Loan Party have been paid or are being Contested in Good Faith. Each Loan Party has filed all federal, state, provincial and other material tax returns which it is required to file.

 

Section 6.09     No Default. No Event of Default exists and no Default has occurred and is continuing.

 

Section 6.10     Adverse Circumstances. Neither the business nor any Property of any Loan Party is presently affected by any fire, explosion, accident, strike, lockout, or other dispute, embargo, act of God, act of public enemy, or similar event or circumstance that has had or could reasonably be expected to have a Material Adverse Effect.

 

 

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Section 6.11     Accuracy of Information. To the best of each Loan Party’s knowledge, all factual information furnished to the Administrative Agent and any Lender in connection with this Agreement and the other Loan Documents (other than projections and other forward looking statements) is and will be accurate and complete on the date as of which such information is delivered to the Administrative Agent and any Lender and is not and will not be incomplete by the omission of any material fact necessary to make such information not misleading. Projections and other forward looking information provided to the Administrative Agent and any Lender were prepared or made by Borrowers in good faith and based upon good faith estimates and assumptions believed reasonable by management of Borrowers at the time made, but the parties acknowledge that such information is not a representation as to future results.

 

Section 6.12     ERISA. As of the date hereof, to the extent any (aggregate or alone) of the following could reasonably be expected to have a Material Adverse Effect, (i) each Loan Party is in compliance in all material respects with all applicable provisions of ERISA; (ii) neither a Reportable Event nor a Prohibited Transaction has occurred and is continuing with respect to any ERISA Plan; (iii) no notice of intent to terminate an ERISA Plan has been filed, nor has any ERISA Plan been terminated; (iv) no Loan Party nor any ERISA Affiliate has completely or partially withdrawn from a Multiemployer Plan; and (v) each Loan Party and each ERISA Affiliate have met their minimum funding requirements under ERISA with respect to all of their ERISA Plans.

 

Section 6.13     Environmental. The conduct of each Loan Party’s business operations and the condition of each Loan Party’s Property does not and will not violate any federal laws, rules or ordinances for environmental protection, or regulations of the Environmental Protection Agency, or any applicable local or state law, rule, regulation or rule of common law (including, in the case of any Canadian Bioriginal Party that is a Loan Party, any laws, rules or ordinances, or law, rule, regulation or rule of common law, of any Governmental Authority having jurisdiction over such Bioriginal Party), or any judicial interpretation thereof relating primarily to the environment or Hazardous Materials if, as a result thereof, a Material Adverse Effect could reasonably be expected to result therefrom.

 

Section 6.14     Subsidiaries. No Borrower has any Subsidiaries except those listed on Schedule 6.14.

 

Section 6.15     Anti-Corruption Laws and Sanctions. None of (a) the Borrowers, any Subsidiary or any of their respective directors, officers, employees or affiliates, or (b) to the knowledge of each Borrower, any agent or representative of such Borrower or any respective Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby is a Sanctioned Person or currently the subject or target of any Sanctions. 

 

Section 6.16     Vessels. On the date hereof, no Loan Party owns any Vessels other than the Vessels set forth on Schedule 6.16. Schedule 6.16 identifies each Vessel owned on the date hereof that secures NMFFP Financing permitted by Section 8.04(b). Each Loan Party that owns a Vessel is a U.S. Citizen and each Vessel is owned by a U.S. Citizen. Each Vessel is in compliance with all Governmental Requirements applicable to Vessels documented under U.S. flag and engaged in the U.S. Fisheries Trade, duly documented in the name of the applicable Loan Party under the laws and flag of the United States with a valid fishery endorsement, or coastwise trade endorsement, as its use may require, on its U.S. Coast Guard Certificate of Documentation, and duly qualified for the U.S. Fisheries Trade and/or the U.S. coastwise trade, except where failure to so comply could not reasonably be expected to result in a Material Adverse Effect or could result in loss or forfeiture of its fishery endorsement or disqualify it from operating in the U.S. Fisheries Trade, if it has a fishery endorsement to the Certificate of Documentation.

 

 

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Section 6.17     Real Property. Set forth on Schedule 6.17 is a list of all real property located in the United States that is owned or leased by the Loan Parties as of the Closing Date (including an indication of any owned real property pledged to secure NMFFP Financings).

 

Section 6.18     Aircraft. Set forth on Schedule 6.18 is a list of all aircraft (including serial number, year and N-number) owned by the Loan Parties as of the Closing Date. Each of the Loan Parties that owns any aircraft are “citizens of the United States” as such term in defined in § 40102(a)(15) of the Federal Aviation Act.

 

Section 6.19     Perfection of Security Interests in Collateral. Each Collateral Document, including the First Preferred Ship Mortgages and Assignment of Insurances, creates in favor of the Administrative Agent or the Mortgage Trust on behalf of the Secured Parties a Lien that has attached in the Collateral secured thereby. Upon the (a) filing of the UCC-1 or PPSA financing statements and comparable other documents in each appropriate jurisdiction, (b) recording of the notices of grants of security interests referred to in the Security Agreements in the United States Patent and Trademark Office and the United States Copyright Office, as applicable, (c) recording of any Mortgages, (d) filing of any Aircraft Security Agreements, (e) filing with the U.S. Coast Guard National Vessel Documentation Center of a First Preferred Ship Mortgage with respect to each U.S. flagged Eligible Vessel, and (f) taking possession of any Collateral with respect to which the Administrative Agent’s interest may only be perfected by possession, such Liens on the Collateral granted thereby shall be perfected, first priority security interests (subject to Permitted Liens), and no further recordings or filings are or will be required in connection with the creation, perfection or enforcement of such security interests and Liens, other than the filing of continuation statements in accordance with Applicable Law. Within 15 Business Days following the Closing Date, the Administrative Agent shall cause the Mortgage Trustee to release of record each Excluded Vessel and each Ineligible Vessel which is subject to any First Preferred Ship Mortgage as of the Closing Date.

 

Upon written request by the Borrowers, the Administrative Agent will release its Liens on the Reedville Evaporator Unit and upon such release OPI may grant a security interest in the Reedville Evaporator Unit to secure the NMFFP Financing as NMFFP Collateral; in connection with such release, the Borrowers shall provide the Administrative Agent with a more detailed description of the Reedville Evaporator Unit. Contemporaneously with the release of the Reedville Evaporator Unit, OPI shall grant to the Administrative Agent, for the benefit of the Secured Parties, a first priority Lien (except for Permitted Liens) upon the Vessel Rappahannock, Official No. 650997, and the Borrowers shall execute such supplements to fleet mortgage, supplements to assignment of insurances, and other documents as required by Administrative Agent, in form and substance satisfactory to the Administrative Agent in its sole discretion.

 

Section 6.20     Continuation of Representations and Warranties. All representations and warranties made under this Agreement shall be deemed to be made at and as of the date hereof and at and as of the date of any future Loan and in all instances shall be true and correct in all material respects, except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, on and as of the date of such future Loan, such representations and warranties shall continue to be true and correct as of such specified earlier date.

 

Section 6.21     Intellectual Property Matters. Each Loan Party owns or possesses rights to use all material franchises, licenses, copyrights, copyright applications, patents, patent rights or licenses, patent applications, trademarks, trademark rights, service marks, service mark rights, trade names, trade name rights, copyrights and other rights with respect to the foregoing which are reasonably necessary to conduct its business. No event has occurred which permits, or after notice or lapse of time or both would permit, the revocation or termination of any such rights, and no Loan Party is liable to any Person for infringement under Applicable Law with respect to any such rights as a result of its business operations.

 

 

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Section 6.22     Solvency. The Loan Parties, on a consolidated basis, are Solvent.

 

Section 6.23     Canadian Pension Plans. 

 

(a)     No Loan Party has established, maintains or contributes to, or has any unsatisfied obligation to contribute to, or liability under, any active or terminated Canadian Pension Plan other than (i) on the Closing Date, those listed on Schedule 6.23 and (ii) thereafter, Canadian Pension Plans not otherwise prohibited by this Agreement.

 

(b)     All obligations of each Loan Party (including fiduciary, funding, investment and administration obligations) required to be performed in connection with the Canadian Pension Plans or the funding agreements therefor have been performed in a timely fashion save for any failure to do so which would not reasonably be expected to have a Material Adverse Effect. There are no outstanding disputes concerning the assets held pursuant to any such funding agreement which would reasonably be expected to have a Material Adverse Effect.

 

(c)     All contributions or premiums required to be made by any Loan Party to the Canadian Pension Plans have been made in a timely fashion in accordance with the terms of the Canadian Pension Plans and Applicable Law save for any failure to do so which would not reasonably be expected to have a Material Adverse Effect.

 

(d)     All employee contributions to the Canadian Pension Plans required to be made by way of authorized payroll deduction have been properly withheld by each Loan Party and fully paid into the Canadian Pension Plans in a timely fashion save for any failure to do so which would not reasonably be expected to have a Material Adverse Effect.

 

(e)     All reports and disclosures relating to the Canadian Pension Plans required by any Applicable Law have been filed or distributed in a timely fashion save for any failure to do so which would not reasonably be expected to have a Material Adverse Effect.

 

(f)     There have been no improper withdrawals, or applications of, the assets of any of the Canadian Pension Plans which would reasonably be expected to have a Material Adverse Effect.

 

(g)     No amount is owing by any of the Canadian Pension Plans under the ITA, any taxation statute or otherwise which would reasonably be expected to have a Material Adverse Effect.

 

(h)     There are no pending or, to the knowledge of any Loan Party, after due inquiry, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Canadian Pension Plan which would reasonably be expected to have a Material Adverse Effect. There exists no state of facts which after notice or lapse of time or both could reasonably be expected to give rise to any such proceeding, claim, action or lawsuit. 

 

(i)     Each Canadian Pension Plan is in compliance with the applicable provisions of the ITA and other Applicable Law save for non-compliance which would not reasonably be expected to have a Material Adverse Effect.

 

(j)     No Canadian Pension Plan contains a “defined benefit provision” as such term is defined in the ITA.

 

 

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ARTICLE VII

AFFIRMATIVE COVENANTS

 

Until all of the Obligations (other than contingent indemnification obligations not then due) have been paid and satisfied in full in cash, all Letters of Credit have been terminated or expired (or been Cash Collateralized) and the Commitments terminated, each Borrower will, and each other Loan Party (except in the case of the covenants set forth in Sections 7.01, 7.15, 7.16, and 7.17) will, subject to Section 11.28:

 

Section 7.01     Financial Statements and Other Information. Deliver or cause to be delivered to the Administrative Agent (which shall promptly make such information available to the Lenders in accordance with its customary practice):

 

(a)     Annual Financial Statements. Within 120 days of a Borrower’s fiscal year end, such Borrower’s annual financial statements (including a balance sheet, profit and loss statement and statement of cash flows, with supporting schedules). These financial statements must be audited (with an unqualified opinion) by an independent certified public accountant acceptable to the Administrative Agent. The financial statements shall be prepared on a consolidated basis and in reasonable detail.

 

(b)     Quarterly Financial Statements. Within 45 days of the period’s end (excluding the last period in each fiscal year), such Borrower’s quarterly financial statements (including a balance sheet, profit and loss statement and statement of cash flows, with supporting schedules), certified and dated by an authorized financial officer of such Borrower. These financial statements may be Borrower prepared. The financial statements shall be prepared on a consolidated basis and in reasonable detail.

 

(c)     SEC Filings. Copies of such Borrower’s Form 10-K Annual Report, Form 10-Q Quarterly Report and Form 8-K Current Report promptly after the date of filing with the SEC.

 

(d)     Officer’s Compliance Certificate. Within the period(s) provided in Section 7.01(a) and (b) above, an Officer’s Compliance Certificate of Borrowers in the form of Exhibit F attached hereto (an “Officer’s Compliance Certificate”) signed by authorized financial officers of Borrowers setting forth (i) the information and computations (in sufficient detail) to establish whether or not Borrowers are in compliance with all financial covenants at the end of the period covered by the financial statements then being furnished and (ii) whether there existed as of the date of such financial statements and whether there exists as of the date of the certificate, any Event of Default under this Agreement and, if any such Event of Default exists, specifying the nature thereof and the action Borrowers are taking and proposes to take with respect thereto.

 

(e)     Update of Schedules. Within the period(s) provided in Section 7.01(a) above, a report signed by a Responsible Officer of the Company that supplements Schedules 6.06, 6.14, 6.16, 6.17 and 6.18, such that, as supplemented, such Schedules would be accurate and complete as of such date.

 

(f)     Vessels. (i) Within the period(s) provided in Section 7.01(a) above, a report detailing the flag (if other than the United States) and, with respect to each Vessel which has been relocated to any area other than the Atlantic seaboard or the Gulf Coast, the then current location of each of the Vessels; and (ii) within five days after receipt of notice or knowledge by any Loan Party, notice of (A) any arrest of any Vessel or the exercise or purported exercise of any Lien on any Vessel, (B) any intended deactivation or lay-up of any Vessel, or (C) any loss of any material certification, including any fishery endorsement, with respect to any Vessel, excluding for purposes of this clause, notices pertaining to the Ineligible Vessels and Excluded Vessels.

 

 

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(g)     Projections. Within 30 days of each fiscal year end of such Borrower, such Borrower’s annual projections, specifying the assumptions used in creating the projections.

 

(h)     “Know Your Customer”. Promptly upon the request thereof, such other information and documentation required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations (including, without limitation, the PATRIOT Act) as from time to time reasonably requested by the Administrative Agent to any Lender.

 

(i)     Additional Information. Such additional information, reports and statements with respect to the business operations and financial condition of such Borrower as the Administrative Agent or any Lender may reasonably request from time to time.

 

Section 7.02     Adverse Conditions or Events. Promptly advise the Administrative Agent (which shall promptly make such information available to the Lenders in accordance with its customary practice) in writing of (a) any condition, event or act which comes to its attention that would or could reasonably be expected to materially adversely affect any Loan Party’s financial condition or operations, the Collateral from time to time securing the Secured Obligations, or Lender’s rights under the Loan Documents; (b) any litigation filed by or against any Loan Party which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect; (c) the occurrence of any Event of Default, or of any Default, or the failure of any Loan Party to observe any of its undertakings hereunder or under any of the other Loan Documents; (d) any uninsured or partially uninsured loss through fire, theft, liability or Property damage in excess of an aggregate of $5,000,000.00; and (e) any other event which has or could reasonably be expected to have a Material Adverse Effect.

 

Section 7.03     Taxes and Other Obligations. Pay all of such Loan Party’s taxes, assessments and other obligations, including taxes and assessments and lawful claims which, if unpaid, might by law become a Lien against the assets of such Loan Party, as the same become due and payable, except to the extent the same are being Contested in Good Faith.

 

Section 7.04     Insurance. Keep its properties of an insurable nature (including all Vessels, aircraft, and all real property) insured at all times against such risks and to the extent that like properties are customarily insured by other companies engaged in the same or similar businesses similarly situated, maintain insurance of the types (including worker’s compensation insurance, liability insurance and casualty insurance) and in the coverage amounts and with reasonable deductibles as are usual and customary, with financially sound and reputable insurance companies not Affiliates of the Loan Parties. Such Loan Party shall promptly give the Mortgage Trustee (if applicable) and the Administrative Agent (which shall promptly make such information available to the Lenders in accordance with its customary procedure) notice of any cancellation, alteration or amendment of an insurance policy received by it from an insurer or from the operator. If requested by the Administrative Agent, such insurance policies shall (a) provide that the Administrative Agent shall receive prompt notice of any claims filed thereunder; (b) include a standard mortgagee clause in favor of the Administrative Agent on behalf of the Secured Parties with loss payable for all claims of $5,000,000.00 or more to the Administrative Agent on behalf of the Secured Parties; and (c) provide that no adverse alteration or cancellation thereof shall be effective as against the Administrative Agent on behalf of the Secured Parties until 30 days after written notice of such alteration or cancellation is given to the Administrative Agent (which shall promptly make such information available to the Lenders in accordance with its customary procedure). Each Loan Party shall deliver to the Administrative Agent certificates of insurance coverage on the Closing Date and thereafter as and when requested by the Administrative Agent, and, if requested by the Administrative Agent, copies of such insurance policies and all endorsements thereto.

 

 

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Section 7.05     Compliance with Governmental Requirements. (a) Comply in all material respects with all applicable Governmental Requirements (including the Jones Act and all laws applicable to the U.S. Fisheries Trade) and provide evidence thereof to the Administrative Agent if requested by the Administrative Agent, and (b) comply with and satisfy all legal requirements of each Vessel’s home port, now or hereafter from time to time in effect, in order that such Vessel shall continue to be documented pursuant to the laws of the jurisdiction of its home port with such endorsements as shall qualify such Vessel for participation in trades and services to which it may be dedicated from time to time and not do or allow to be done anything whereby such documentation is or could reasonably be expected to be forfeited.

 

Section 7.06     Environmental. Except where failure to do so would not reasonably be expected to cause a Material Adverse Effect, each Loan Party will comply in all material respects with all environmental, health, and safety laws and regulations applicable to it. The Loan Parties shall immediately notify the Administrative Agent of any material remedial action taken by any Loan Party under environmental laws with respect to such Loan Party’s business operations. Except where failure to do so would not reasonably be expected to cause a Material Adverse Effect, the Loan Parties will not use or permit any other party to use any Hazardous Materials at any of their places of business or at any other Property owned by the Loan Parties except such materials as are incidental to the Loan Parties’ normal course of business, maintenance and repairs and which are handled in compliance with all applicable environmental laws. Upon the reasonable written request of the Administrative Agent following the occurrence of any event or the discovery of any condition which the Administrative Agent reasonably believes has caused (or could be reasonably expected to cause) the representations and warranties set forth in Section 6.13 to be untrue in any material respect, furnish or cause to be furnished to the Administrative Agent, at the Loan Parties’ expense, a report of an environmental assessment of said occurrence or discovery in reasonable scope, form and depth (including, where appropriate, invasive soil or groundwater sampling) by a consultant reasonably acceptable to the Administrative Agent. If the Loan Parties fail to deliver such an environmental report within 75 days after receipt of such written request, then the Administrative Agent may arrange for the same, and the Loan Parties hereby grant to the Administrative Agent and its representatives access to such real properties to reasonably undertake such an assessment (including, where appropriate, invasive soil or groundwater sampling). The reasonable cost of any assessment arranged for by the Administrative Agent pursuant to this provision will be payable by the Loan Parties on demand and added to the obligations secured by the Collateral Documents. The Loan Parties shall provide the Administrative Agent, its agents, contractors, employees and representatives with access to and copies of any and all data and documents relating to or dealing with any Hazardous Materials used, generated, manufactured, stored or disposed of by their business operations within ten days of the request therefor.

 

Section 7.07     Compliance with Material Agreements. Comply in all respects with all existing and future agreements, indentures, mortgages, or documents which are binding upon it or affect any of its properties or business, a breach of which (when considered alone or when aggregated with the effect of other breaches) could reasonably be expected to have a Material Adverse Effect.

 

Section 7.08     Maintenance of Records. Keep at all times consolidated books and records of account in accordance with GAAP in which full, true and correct entries will be made of all dealings or transactions in relation to the business and affairs of such Loan Party, and such Loan Party will provide adequate protection against loss or damage to such consolidated books of record and account.

 

Section 7.09     Inspection of Books and Records. Allow any representative of the Administrative Agent or any Lender to visit and inspect its properties, to examine its books of record and account and to discuss its affairs, finances and accounts with any of its officers, directors, employees and agents, all at such reasonable times and as often as the Administrative Agent or any Lender may reasonably request, upon reasonable advance notice to the Company; provided that, unless an Event of Default is continuing, the Borrowers shall only be required to reimburse the Administrative Agent for costs and expenses in connection with one such inspection per calendar year.

 

 

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Section 7.10     Existence and Qualification. Preserve and maintain its existence and good standing in each jurisdiction in which qualification is required and where failure to so qualify could reasonably be expected to have a Material Adverse Effect.

 

Section 7.11     Vessel Covenants. Maintain a valid U.S. Coast Guard Certificate of Documentation with a valid fishery endorsement (or coastwise trade endorsement, as its use may require) and a current U.S. Coast Guard Certificate of Inspection for each Vessel identified on Schedule 6.16 as a U.S. flagged Vessel, (b) comply with all material (i) U.S. Coast Guard requirements and NMFFP requirements, (ii) manning requirements of each Vessel and (iii) requirements of the protection and indemnity and hull underwriters as is necessary to ensure full insurance coverage of each Vessel, and (c) promptly, satisfy all maritime Liens, other than Liens created pursuant to the First Preferred Ship Mortgages and any other Permitted Liens.

 

Section 7.12     Citizenship. Each Loan Party that owns a Vessel shall qualify at all times as a U.S. Citizen and shall cause such Vessel to be in compliance with all laws applicable to the Vessels documented under U.S. flag and engaged in the U.S. Fisheries Trade, duly documented in the name of the relevant Loan Party under the laws and flag of the United States with a valid fishery endorsement (or coastwise trade endorsement, as its use may require) on its U.S. Coast Guard Certificate of Documentation, and duly qualified for the U.S. Fisheries Trade and/or the U.S. coastwise trade.

 

Section 7.13     Additional Collateral.

 

(a)     Collateral Other Than Vessels. (i) Cause all of the owned and leased real and personal property (other than Excluded Property) of each Loan Party to be subject at all times to first priority, perfected and, in the case of real property (whether leased or owned), title insured Liens in favor of the Administrative Agent on behalf of the Secured Parties to secure the Secured Obligations pursuant to the terms and conditions of the Collateral Documents, subject in any case to Permitted Liens and (ii) deliver such other documentation as the Administrative Agent or the Required Lender (through the Administrative Agent) may reasonably request in connection with the foregoing, including appropriate UCC-1 or PPSA financing statements, real estate title insurance policies, surveys, environmental reports, landlord’s waivers, Officer’s Certificates, Partner’s Certificates, and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to above and the perfection of the Administrative Agent’s (on behalf of the Secured Parties) Liens thereunder), all in form, content and scope reasonably satisfactory to the Administrative Agent or the Required Lenders, as applicable.

 

(b)     Vessels. Upon the acquisition by a Loan Party of an Eligible Vessel, upon an Excluded Vessel ceasing to be an Excluded Vessel, or upon an Ineligible Vessel ceasing to be an Ineligible Vessel, unless such Vessel is, or is to be, subject to a Lien securing indebtedness permitted under Section 8.04(c), such Loan Party shall execute and deliver to the Mortgage Trustee, for the benefit of the Administrative Agent and the Secured Parties, (i) a First Preferred Ship Mortgage granting the Mortgage Trust, for the benefit of the Administrative Agent and the Secured Parties, a Lien in such Vessel to secure the Obligations, (ii) an Assignment of Insurances granting the Mortgage Trust, for the benefit of the Administrative Agent and the Secured Parties, a Lien in the insurances in respect of such Vessel, together with the proceeds thereof, to secure the Secured Obligations, and (iii) such evidence of corporate authority to enter into such First Preferred Ship Mortgage and Assignment of Insurances as the Administrative Agent or the Mortgage Trustee may reasonably request.

 

 

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(c)     Additional Reedville Properties. Upon completion of construction of a building to house meal-bagging operations or similar improvements to an existing building on any real property constituting Additional Reedville Properties or any adjacent real property to the Additional Reedville Properties, the Additional Reedville Properties shall cease to be Excluded Property, and the Borrowers shall cause such Properties to be subject at all times to a first priority, perfected and title insured Lien in favor of the Administrative Agent on behalf of the Secured Parties to secure the Secured Obligations, subject in any case to Permitted Liens, and shall deliver such documentation set forth in Section 5.01, including Section 5.01(d), reasonably required by the Administrative Agent.

 

(d)     Released Louisiana and Mississippi Properties. Upon request of the Administrative Agent, the Released Louisiana and Mississippi Properties shall cease to be Excluded Property, and the Borrowers shall cause such Properties to be subject at all times to a first priority, perfected and title insured Lien in favor of the Administrative Agent on behalf of the Secured Parties to secure the Secured Obligations, subject in any case to Permitted Liens, and shall deliver such documentation set forth in Section 5.01, including Section 5.01(d), reasonably required by the Administrative Agent.

 

Section 7.14     Further Assurances. Make, execute or endorse, acknowledge and deliver or file or cause the same to be done, all such vouchers, invoices, notices, certifications and additional agreements, undertakings, conveyances, deeds of trust, mortgages, assignments, financing statements or other assurances, and take any and all such other actions as the Administrative Agent or the Required Lenders (through the Administrative Agent) may from time to time deem necessary or appropriate in connection with this Agreement or any of the other Loan Documents (a) to cure any defects in the creation of the Loan Documents, or (b) to evidence further or more fully describe, perfect or realize on the Collateral intended as security, or (c) to correct any omissions in the Loan Documents, or (d) to state more fully the security for the Secured Obligations, or (e) to perfect, protect or preserve any Liens pursuant to any of the Loan Documents, or (f) for better assuring and confirming unto the Administrative Agent on behalf of the Secured Parties all or any part of the security for any of the Secured Obligations.

 

Section 7.15     Minimum Tangible Net Worth. Maintain on a consolidated basis Tangible Net Worth equal to at least the sum of the following: (a) $170,000,000.00, plus (b) 50% of net income (if positive, with no deduction for losses) earned in each quarterly accounting period commencing after December 31, 2014, plus (c) 75% of the net proceeds from any Equity Interests issued after the date of this Agreement, plus (d) 100% of any increase in stockholders’ equity resulting from the conversion of debt securities to Equity Interests after the date of this Agreement. Tangible Net Worth for purposes of this calculation shall exclude “Other Comprehensive Income/Loss” as set forth in the Borrowers’ applicable financial statements. This covenant will be tested at the end of each fiscal quarter, commencing with the fiscal quarter ending June 30, 2015.

 

Section 7.16     Consolidated Total Leverage Ratio. Maintain on a consolidated basis a Consolidated Total Leverage Ratio of no greater than 3.00 to 1.00. This ratio will be calculated at the end of each fiscal quarter, commencing with the fiscal quarter ending June 30, 2015.

 

Section 7.17     Consolidated Fixed Charge Coverage Ratio. Maintain on a consolidated basis a Consolidated Fixed Charge Coverage Ratio of at least 1.25 to 1.00. This ratio will be calculated at the end of each fiscal quarter, commencing with the fiscal quarter ending June 30, 2015.

 

Section 7.18     Covenant to Guarantee Obligations and Give Security. Upon the formation or acquisition of any new direct or indirect Subsidiary (other than an Unrestricted Subsidiary) by any Loan Party and/or upon any existing Unrestricted Subsidiary or Inactive Subsidiary ceasing to be designated as such as provided in the respective definitions of such terms in Section 1.01, then, subject to the defined term “Guarantor” and to the extent such Subsidiary’s assets are not Excluded Property, Borrowers shall, at Borrowers’ expense, within 30 days after such formation, acquisition or conversion from an Unrestricted Subsidiary or Inactive Subsidiary status subject to the provisions of the defined term “Unrestricted Subsidiary”:

 

 

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(a)     cause such Subsidiary to execute and deliver to the Administrative Agent a joinder agreement substantially in the form of Exhibit I (a “Joinder Agreement”);

 

(b)     furnish to the Administrative Agent a description of the real and personal properties of such Subsidiary, in detail satisfactory to the Administrative Agent, together with the documentation, evidence, consents and other items called for by Section 5.01;

 

(c)     cause such Subsidiary, and cause each direct and indirect parent of such Subsidiary (if it has not already done so), to become a Guarantor and to grant a Lien against all of its assets (other than Excluded Property) by executing and delivering to the Administrative Agent on behalf of the Secured Parties such Collateral Documents, as specified by and in form and substance satisfactory to the Administrative Agent, as the Administrative Agent shall deem appropriate for such purpose;

 

(d)     cause such Subsidiary and each direct and indirect parent of such Subsidiary (if it has not already done so) to take whatever action (including the recording of mortgages, the filing of Uniform Commercial Code or PPSA financing statements, the giving of notices and the endorsement of notices on title documents) may be necessary or advisable in the opinion of the Administrative Agent to vest in the Administrative Agent on behalf of the Secured Parties valid and subsisting Liens on the properties purported to be subject to the Collateral Documents delivered pursuant to this Section 7.18, enforceable against all third parties in accordance with their terms;

 

(e)     if requested by the Administrative Agent, execute and deliver to the Administrative Agent on behalf of the Secured Parties a Security Agreement and all certificates (or other evidence acceptable to Lender) evidencing the issued and outstanding Equity Interests of any such Subsidiary which shall be endorsed or accompanied by stock powers executed in blank, as applicable; and

 

(f)     upon the request of the Administrative Agent in its sole discretion, a signed copy of a favorable opinion, addressed to the Administrative Agent and the other Secured Parties, of counsel for the Loan Parties acceptable to the Administrative Agent as to the matters contained in clauses (a), (c), (d) and (e) above, and as to such other matters as the Administrative Agent may reasonably request.

 

Section 7.19     Use of Proceeds. Use the proceeds of any Extension of Credit solely for the following purposes: (a) to finance Permitted Acquisitions; (b) for working capital, capital expenditures and general corporate purposes of the Borrowers and their Subsidiaries, including the payment of certain fees and expenses incurred in connection with this Agreement; and (c) for the full or partial repayment of the HSBC Indebtedness.

 

The Borrowers will not request any Extension of Credit, and the Borrowers shall not use, and shall ensure that their Subsidiaries and their respective directors, officers, employees and agents shall not use, the proceeds of any Extension of Credit (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (iii) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

 

 

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Section 7.20     Compliance with Anti-Corruption Laws and Sanctions. The Borrowers will maintain in effect and enforce policies and procedures designed to ensure compliance by the Borrowers, their Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions. Notwithstanding anything in this Agreement to the contrary, no provision of this Agreement shall be interpreted to contravene, or require any notification to the Attorney General of Canada under, the Foreign Extraterritorial Measures (United States) Order, 1992, by Bioriginal Omega or any Subsidiary located in Canada.

 

Section 7.21     Canadian Pension Plans. Each Loan Party shall (a) administer the Canadian Pension Plans in accordance with the requirements of the applicable pension plan texts, funding agreements, the ITA and applicable federal or provincial pension benefits legislation if the failure to do so would reasonably be expected to have a Material Adverse Effect, (b) not accept payment of any amount from any of the Canadian Pension Plans if doing so would reasonably be expected to have a Material Adverse Effect, (c) not terminate, or cause to be terminated, any of the Canadian Pension Plans if doing so would reasonably be expected to have a Material Adverse Effect, (d) promptly provide the Administrative Agent with any documentation relating to any of the Canadian Pension Plans as the Administrative Agent may reasonably request, and (e) notify the Administrative Agent within 30 days of (i) any increase in the liabilities of any of the Canadian Pension Plans in excess of $2,000,000.00, (ii) the establishment of a new Canadian Pension Plan, or (iii) commencing payment of contributions to any Canadian Pension Plan to which any Loan Party had not previously been contributing.

 

ARTICLE VIII

NEGATIVE COVENANTS

 

Until all of the Obligations (other than contingent, indemnification obligations not then due) have been paid and satisfied in full in cash, all Letters of Credit have been terminated or expired (or been Cash Collateralized) and the Commitments terminated, the Loan Parties will not, subject to Section 11.28:

 

Section 8.01     Negative Pledge. Grant, suffer or permit any Lien on its assets, except for Permitted Liens.

 

Section 8.02     Merger, Etc. Enter into any merger, amalgamation or consolidation, except that any Borrower may merge, amalgamate into or consolidate with any of its Subsidiaries so long as such Borrower or (in the case of amalgamation) its successor is the survivor and any Subsidiary may merge or amalgamate with any other Subsidiary; provided that when any wholly-owned Subsidiary is merging or amalgamating with another Subsidiary, the wholly-owned Subsidiary or (in the case of an amalgamation) its successor shall be the continuing or surviving Person.

 

Section 8.03     Extensions of Credit. Make any loan or advance to any Person without consent of the Required Lenders, except (a) loans and intercompany adjustments among Borrowers and their Subsidiaries occurring in the ordinary course of business; (b) advances made to employees of such Loan Party for the payment by them of items for which an expense report or voucher will be filed and which items will constitute ordinary and necessary business expenses of such Loan Party; (c) loans and advances to suppliers of raw materials or other inventory to any Loan Party up to a maximum amount of $3,000,000.00 outstanding at any time for all such loans and advances to all such suppliers; any loan or advance permitted by this Section may be prepaid; and (d) extensions of credit to suppliers in order to engage in the current lines of business of the Bioriginal Parties not to exceed an aggregate amount of $5,000,000.00 outstanding at any time.

 

 

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Section 8.04     Borrowings. Create, incur, assume or become liable in any manner for any Indebtedness other than to Lenders, except for (a) normal trade debts incurred in the ordinary course of such Loan Party’s business; (b) any Indebtedness in respect of NMFFP Financing outstanding on the Closing Date and described on Schedule 8.04 attached hereto; (c) Indebtedness in respect of NMFFP Financing and/or other financing incurred after the Closing Date that is secured by assets not securing the Secured Obligations, in an aggregate principal amount not to exceed $35,000,000.00 (for all Loan Parties collectively); (d) purchase money Indebtedness (including Capital Leases) incurred by a Loan Party to finance the purchase of fixed assets in an aggregate outstanding amount not to exceed $10,000,000.00 (for all Loan Parties collectively); (e) take or pay arrangements entered into in the ordinary course of business; (f) obligations under the earn-out agreement incurred under the prior Acquisition by Borrowers of InCon Processing, L.L.C., obligations under the earn-out agreement incurred under the Bioriginal Acquisition, and obligations under other non-competition, earn-out or similar agreements incurred under or pursuant to Permitted Acquisitions; (g) leases of personal property which are not Capital Leases under GAAP as in effect at the date hereof; (h) net liabilities under Hedge Agreements permitted under Section 8.14; (i) other unsecured Indebtedness in an aggregate principal amount not to exceed $10,000,000.00 at any one time outstanding (for all Loan Parties collectively); (j) Indebtedness incurred in connection with the financing of insurance premiums in the ordinary course of business in an aggregate principal amount not to exceed $2,000,000.00 (for all Loan Parties collectively); (k) Indebtedness permitted under Section 8.03; (l) Indebtedness of a Person existing at the time such Person became a Subsidiary or assets were acquired from such Person in connection with a Permitted Acquisition; provided that (i) such Indebtedness was not incurred in connection with, or in contemplation of, such Person becoming a Subsidiary or the acquisition of such assets, (ii) no Loan Party other than the Person who became a Subsidiary or their Subsidiary shall have any liability or other obligation with respect to such Indebtedness, and (iii) such Indebtedness does not result in any Lien other than Permitted Liens; (m) the Bioriginal Indebtedness; and (n) Indebtedness in respect of the Canadian Overdraft Facility, in an aggregate amount not to exceed C$7,000,000.00.

 

Section 8.05     Dividends and Distributions. (a) Declare or pay any dividends or distributions; or (b) purchase, redeem, buy-back, retire or otherwise acquire for value any of its Equity Interests now or hereafter outstanding; or (c) make any distribution of assets to the holders of its Equity Interests, whether in cash, assets, or in obligations of such Loan Party; or (d) allocate or otherwise set apart any sum for the payment of any dividend or distribution on, or for the purchase, redemption, or retirement of any of its Equity Interests; or (e) make any other distribution by reduction of capital or otherwise in respect of any of its Equity Interests; provided that, so long as (i) no Event of Default exists or would result therefrom and (ii) both before and after giving effect thereto, the Borrowers shall be in pro forma compliance with the financial covenant set forth in Section 7.17, (A) each Subsidiary may declare and pay dividends or distributions to any Loan Party and any other Person that owns an Equity Interest in such Subsidiary, ratably according to their respective holdings of the type of Equity Interest in respect of which such dividend or distribution is being made, (B) Borrowers may purchase, redeem, buy-back or retire or otherwise acquire for value any of their respective Equity Interests now or hereafter outstanding, and (C) the Company and each Subsidiary may declare and pay dividends or distributions whether payable in cash or in common Equity Interests of such Person.

 

Section 8.06     Dispositions. Make any Disposition except (a) Permitted Dispositions, (b) Permitted Bioriginal Dispositions and (c) other Dispositions so long as (i) at least 75% of the consideration paid in connection therewith shall be cash or cash equivalents paid contemporaneously with the consummation of the transaction and shall be in an amount not less than the fair market value of the Property disposed of, (ii) such transaction does not involve the sale or other disposition of a minority Equity Interest in a Subsidiary, (iii) such transaction does not involve a sale or other disposition of receivables other than receivables owned by or attributable to other Property concurrently being disposed of in a transaction otherwise permitted under this Section, and (iv) the aggregate net book value of all of the assets sold or otherwise disposed of by the Loan Parties in all such transactions in any fiscal year of the Company shall not exceed the greater of $15,000,000.00 and 5% of the consolidated total assets of the Company.

 

 

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Section 8.07     Capital Expenditures. Spend or incur obligations (including the total amount of any Capital Leases) to acquire fixed assets for more than the aggregate of: (a) the greater of $40,000,000.00 or 15% of sales (for all Loan Parties collectively), in any single fiscal year (it being understood that, so long as no Default has occurred and is continuing or would result from such expenditure, up to 50% of such amount, if not expended in the fiscal year for which it is permitted, may be carried over for expenditure in the next following fiscal year); and (b) an amount not to exceed $3,000,000.00 for the expansion of the Reedsburg, WI Facility; provided that, (i) in respect of capital expenditures for the expansion of the Reedsburg, WI Facility described in clause (b), the Administrative Agent on behalf of the Secured Parties shall receive a first priority Lien (except for Permitted Liens) on the fixed assets so acquired, and (ii) any amount expended or incurred for expansion of the Reedsburg, WI Facility in excess of the $3,000,000.00 permitted pursuant to clause (b) shall be subject to the restrictions of clause (a).

 

Section 8.08     Revolving Credit Exposure not to Exceed Commitment. Permit at any time the Revolving Credit Exposure to exceed the Revolving Credit Commitments, except as a result of foreign exchange fluctuations and subject to compliance with Section 2.04(b).

 

Section 8.09     Investments. Make any investments, except investments consisting of (a) temporary investments in securities of the United States or Canada having maturities not in excess of one year; (b) any certificate of deposit, time deposit or bankers acceptances maturing not more than one year after its date of issuance, that is issued by (i) any bank organized under the laws of the United States (or any state thereof) or Canada, and that has (A) a short-term credit rating of at least “Prime-1” (or the then equivalent grade) by Moody’s Investors Service, Inc., or at least “A-1” (or the then equivalent grade) by Standard & Poor’s Corporation, or at least “R-1” (or the then equivalent grade) by DBRS Limited, and (B) a combined capital and surplus greater than $500,000,000.00 (or equivalent in Canadian Dollars), or (ii) any Lender; (c) readily marketable commercial paper rated at least “A-1” by Standard & Poor’s Corporation (or similar rating by any similar organization which rates commercial paper); (d) readily marketable direct obligations of any state of the United States of America or any political subdivision of any such state or province of Canada or any potential subdivision of any such province given on the date of such investment a credit rating of at least AA by Standard & Poor’s Corporation or AA by DBRS Limited due within one year from the acquisition thereof; (e) repurchase agreements with respect to the investments referred to in the preceding clauses with any bank or trust company organized under the laws of the United States (or any state thereof) or Canada and having combined capital, surplus and undivided profits of not less than $500,000,000.00 (or equivalent in Canadian Dollars) (as of the date of its most recent financial statements) and having deposits that have received one of the two highest ratings obtainable from Standard & Poor’s Corporation or DBRS Limited; (f) Eurodollar time accounts or Eurodollar certificates of deposit and bankers acceptances of any bank or trust company organized under the laws of the United States of America or any state thereof having combined capital, surplus and undivided profits of not less than $500,000,000.00 (as of the date of its most recent financial statements) and having deposits that have received one of the two highest ratings obtainable from Standard & Poor’s Corporation; (g) shares of money market mutual or similar funds which invest primarily in assets satisfying the requirements of clauses (a) through (f) of this Section 8.09; (h) Hedge Agreements permitted by Section 8.14, to the extent the same constitute assets of such Loan Party; (i) Permitted Acquisitions; (j) Cash Management Agreements permitted under this Agreement; (k) the Acquisition Note; (l) investments in joint ventures with suppliers to engage in the current lines of business of the Bioriginal Parties not to exceed an aggregate amount of $5,000,000.00 outstanding at any time; (m) investments by the Loan Parties in their respective Subsidiaries outstanding on the Closing Date; (n) additional investments made after the Closing Date by any Loan Party into another Loan Party; (o) additional investments made after the Closing Date by any Subsidiary that is not a Loan Party into a Subsidiary that is not a Loan Party; (p) additional investments made after the Closing Date by any Loan Party in Unrestricted Subsidiaries not to exceed an aggregate amount of $5,000,000.00 outstanding at any time; (q) guaranties of indebtedness permitted under Section 8.04 (provided that the Bioriginal Indebtedness permitted under Section 8.04(m) may only be guaranteed by Bioriginal Omega and the other Canadian Loan Parties); (r) investments in the form of cash collateral provided to HSBC Bank to secure the Continuing Letters of Credit pursuant to, and in accordance with, Section 5.01(h)(v)); and (s) other investments of a nature not contemplated in the foregoing clauses of this Section in an amount not to exceed in the aggregate (for the Loan Parties collectively) the greater of $5,000,000.00 and 2% of the Tangible Net Worth of the Borrowers and their Subsidiaries at any one time outstanding.

  

 

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Section 8.10     Change of Control of Borrowers. Permit a Change of Control.

 

Section 8.11     Change in Nature of Business. Conduct any business other than, or make any material change in the nature of, its business as carried on as of the date hereof.

 

Section 8.12     No Negative Pledge. Enter into or permit to exist any arrangement or agreement, other than pursuant to this Agreement or any Loan Document, which directly or indirectly prohibits such Loan Party from creating or incurring any Lien on any of its assets, other than (a) any agreements governing indebtedness permitted to be incurred pursuant to clauses (b), (c), (d) and (g) of Section 8.04 (but only to the extent of the assets purchased or leased with the financing provided by such agreements and any insurance thereon and proceeds of any thereof), and (b) customary non-assignment provisions in leases, joint venture agreement, and other contracts entered into in the ordinary course of business.

 

Section 8.13     Arm’s Length Transactions. Enter into a transaction with any Affiliate, except (a) a transaction upon terms that are not less favorable to it than would be obtained in a transaction negotiated at arm’s length with an unrelated third party, or (b) a transaction with another Loan Party.

 

Section 8.14     Hedge Agreements. Enter into any Hedge Agreement other than those (a) that are existing as of the date of the Agreement and set forth on Schedule 8.14, and (b) Hedge Agreements (including, without limitation, Bioriginal Europe Intercompany Hedge Agreements) that are entered into in the ordinary course of business to mitigate risks and not entered into for speculative purposes.

 

Section 8.15     Subsidiaries. Form or acquire any Subsidiaries without complying with the provisions of Section 7.18.

 

Section 8.16     Maritime Industry Standards. Without limiting any of the terms of any First Preferred Ship Mortgage: (a) permit any Vessel to be used for any illegal purpose or to commence or continue a voyage in unseaworthy condition; (b) change the flag, class, ownership, management or control of any Vessel; (c) cause or allow any Vessel to be operated in any area not covered by the insurance policies required under this Agreement or the other Loan Documents or in any country for which exports or transactions are subject to specific restrictions under United States export laws; (d) cause or allow any Vessel to be chartered to any Person without the prior written consent of the Administrative Agent; (e) cause or allow any change in the physical characteristics of any Vessel that would, in the reasonable judgment of the Administrative Agent, materially interfere with the suitability of such Vessel for normal offshore fisheries operations without the prior written consent of the Administrative Agent (which consent shall not be unreasonably withheld); (f) charter any Vessel to, or permit the Vessel to serve under any contract with, a Person included within the definition of “national” of a “designated foreign country,” or “specially designated national” of a “designated foreign country,” in the Foreign Assets Control Regulations, or engage in any transaction that violates any provision of the Iranian Transactions Regulations, 31 C.F.R. Part 560, as amended, the Foreign Funds Control Regulations, 31 C.F.R. Part 520, as amended, the Transaction Control Regulations, 31 C.F.R. Part 505, as amended, the Haitian Transaction Regulations, 31 C.F.R. Part 580, as amended, the Foreign Assets Control Regulations, 31 C.F.R. 500, as amended, or Executive Orders 12810 and 12831 if such transaction or violation would (i) expose the Administrative Agent, any Lender or any Related Party to any penalty, sanction or investigation or (ii) jeopardize the Lien created by the First Preferred Ship Mortgages or (iii) might reasonably be expected to have a material adverse effect on the Loan Parties or the operation of the Vessels; (g) abandon any Vessel in a port outside the United States; (h) engage in any unlawful trade or violate any law or carry any cargo that shall expose any Vessel to forfeiture or capture; or (i) operate any Vessel in any jurisdiction or in any manner which could cause the Lien created by the applicable First Preferred Ship Mortgage to be rendered unenforceable or the Administrative Agent’s foreclosure or enforcement rights to be materially impaired or hindered.

 

 

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Section 8.17     Sanctions and Anti-Corruption. Use the proceeds of any Extension of Credit, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other individual or entity, knowingly (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws; or (b) subject to Section 7.20, to fund any activities of or business with any individual or entity, or in any Designated Jurisdiction, that, at the time of such funding, is the subject of Sanctions, or in any other manner that, to the Borrowers’ knowledge, will result in a violation by any Lender, Arranger, Administrative Agent, L/C Issuer or Swingline Lender of Anti-Corruption Laws or applicable Sanctions.

 

Section 8.18     Canadian Pension Plans. No Loan Party shall establish, sponsor, maintain or contribute to or be in any way liable with respect to any Canadian Pension Plan that has a “defined benefit provision” (as such term is defined in the ITA), provided that if any Loan Party intends to acquire a Canadian company with a Canadian Pension Plan that has a “defined benefit provision” (as defined in the ITA) already in place, such Loan Party will negotiate, in good faith, amendments to this Agreement mutually acceptable to the Borrowers and the Administrative Agent to address such change.

 

ARTICLE IX

DEFAULT AND REMEDIES

 

Section 9.01     Events of Default. Each of the following shall constitute an Event of Default:

 

(a)     Nonpayment. (a) Any Borrower shall default in the due and punctual payment of any principal or interest of the Loans or any Reimbursement Obligation when due and payable, whether at maturity, by reason of acceleration or otherwise, or (b) any Loan Party shall default in the due and punctual payment of any other Obligation when due and payable, whether at maturity, by reason of acceleration or otherwise.

 

(b)     Representations and Warranties. Any representation, warranty or statement made by any Loan Party herein or otherwise in writing in connection herewith or in connection with any of the other Loan Documents and the agreements referred to herein or therein or in any financial statement, certificate or statement signed by any officer or employee of any Loan Party and furnished pursuant to any provision of the Loan Documents shall be materially false, incorrect or incomplete when made.

 

(c)     Default in Covenants Under Agreement. (i) Any Loan Party shall default in the due performance or observance by it of any term, covenant or agreement set forth in Sections 7.02, 7.11, 7.12, 7.13, 7.15, 7.16, and 7.17 or in Article VIII hereof; or, (ii) any Loan Party shall default in the due performance or observance of any term, covenant or agreement contained in this Agreement other than those specified in clause (i) immediately preceding (and other than those covered by another Section in this Section 9.1), and such default continues unremedied for a period of 20 days.

 

 

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(d)     Default in Other Loan Documents. Any Loan Party shall default in the due performance of or observance by it of any term, covenant or agreement on its part to be performed pursuant to the terms of any of the other Loan Documents and the default shall continue unremedied beyond any grace or cure period therein provided.

 

(e)     Default in Other Debt. An event of default shall occur under the provisions of any instrument (other than the Loan Documents) evidencing indebtedness of any Loan Party for the payment of borrowed money in an amount in excess of $2,000,000.00 or of any agreement relating thereto (including the NMFFP Financing), the effect of which is to permit the holder or holders of such instrument to cause the indebtedness evidenced by such instrument to become due and payable prior to its stated maturity (whether or not the holder actually exercises such option).

 

(f)     Validity of Loan Documents. Any of the Loan Documents shall cease to be a legal, valid and binding agreement enforceable against any party executing the same in accordance with the respective terms thereof, or shall in any way be terminated, or become or be declared ineffective or inoperative, or shall in any way whatsoever cease to give or provide the respective rights, remedies, powers and privileges intended to be created thereby.

 

(g)     Bankruptcy. Any Loan Party shall suspend or discontinue its business operations, or shall generally fail to pay its debts as they mature, or shall file a petition commencing a voluntary case concerning any Loan Party under any Debtor Relief Law; or any involuntary case shall be commenced against any Loan Party under any Debtor Relief Law and such involuntary case shall not be dismissed within 60 days of filing.

 

(h)     Inability to Pay Debts; Attachment. (i) Any Loan Party becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the Property of such Loan Party and is not released, satisfied, vacated or fully bonded within 30 days after its issue or levy.

 

(i)     Judgments and Decrees. Any Loan Party shall suffer a final judgment for the payment of money in an amount in excess of $2,000,000.00 and shall not discharge the same within a period of 30 days unless, pending further proceedings, execution has not been commenced, or, if commenced, has been effectively stayed. Any order, judgment or decree shall be entered in any proceeding against any Loan Party decreeing the dissolution or split up of such entity and such order shall remain undischarged and unstayed for a period in excess of 30 days.

 

(j)     Hedge Agreement Default. An “Event of Default” as defined in any Hedge Agreement shall occur under any Hedge Agreement between a Hedge Bank and any Borrower or an Affiliate of any Borrower and such default shall continue unremedied beyond any grace or cure period therein provided.

 

(k)     ERISA. Any of the following events shall occur or exist with respect to any Loan Party and any ERISA Affiliate and the regulations promulgated thereunder:

 

(i)     any Reportable Event shall occur;

 

(ii)     complete or partial withdrawal from any Multiemployer Plan shall take place;

 

(iii)     any Prohibited Transaction shall occur;

 

 

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(iv)     a notice of intent to terminate an ERISA Plan shall be filed, or an ERISA Plan shall be terminated;

 

(v)     circumstances shall exist which constitute grounds entitling the PBGC to institute proceedings to terminate an ERISA Plan, or the PBGC shall institute such proceedings;

 

(vi)     any Loan Party or any ERISA Affiliate completely or partially withdraws from a Multiemployer Plan; or

 

(vii)     any Loan Party or any ERISA Affiliate fails to meet its minimum funding requirements under ERISA with respect to its ERISA Plans;

 

and in each case above, such event or condition, together with all other events or conditions, if any, could reasonably be expected to subject such Loan Party to any tax, penalty or other liability in the aggregate in excess of $2,000,000.00.

 

Subject to Section 11.02, an Event of Default that has occurred shall cease to be an Event of Default only if it has been waived in writing by the Administrative Agent, the Required Lenders and/or the Lenders, as applicable, or the Administrative Agent, the Required Lenders and/or the Lenders have acknowledged its cure in writing. Upon the acceleration of the maturity or other payment of the Obligations, notwithstanding any provision in this Agreement or any other Loan Document providing that the Administrative Agent and/or the Lenders may exercise their rights and remedies during the “existence of an Event of Default” or similar language, no further waiver or cure of any Event of Default shall be available to Borrowers, and the Administrative Agent and/or the Lenders shall be entitled to exercise all of their rights and remedies under this Agreement and the other Loan Documents.

 

Section 9.02     Remedies. Upon the occurrence of an 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 Borrowers:

 

(a)     Acceleration; Termination of Credit Facility. Terminate the Commitment and declare the principal of and interest on the Loans and the Reimbursement Obligations at the time outstanding, and all other amounts owed to the Lenders and to the Administrative Agent under this Agreement or any of the other Loan Documents (including all L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented or shall be entitled to present the documents required thereunder) and all other Obligations, to be forthwith due and payable, whereupon the same shall immediately become due and payable without presentment, demand, protest or other notice of any kind, all of which are expressly waived by each Loan Party, anything in this Agreement or the other Loan Documents to the contrary notwithstanding, and terminate the Credit Facility and any right of the Borrowers to request borrowings or Letters of Credit thereunder; provided that upon the occurrence of an Event of Default specified in Section 9.01(g), the Credit Facility shall be automatically terminated and all Obligations shall automatically become due and payable without presentment, demand, protest or other notice of any kind, all of which are expressly waived by each Loan Party, anything in this Agreement or in any other Loan Document to the contrary notwithstanding.

 

(b)     Letters of Credit. With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to the preceding paragraph, the Borrowers shall at such time deposit in a Cash Collateral account opened by the Administrative Agent an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. 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 fully drawn upon, if any, shall be applied to repay the other Obligations on a pro rata basis. After all such Letters of Credit shall have expired or been fully drawn upon, the Reimbursement Obligation shall have been satisfied and all other Obligations shall have been paid in full, the balance, if any, in such Cash Collateral account shall be returned to the Borrowers.

 

 

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(c)     General Remedies. Exercise on behalf of the Secured Parties all of its other rights and remedies under this Agreement, the other Loan Documents and Applicable Law, in order to satisfy all of the Obligations.

 

Section 9.03     Rights and Remedies Cumulative; Non-Waiver; etc.

 

(a)     The enumeration of the rights and remedies of the Administrative Agent and the Lenders set forth in this Agreement is not intended to be exhaustive and the exercise by the Administrative Agent and the Lenders of any right or remedy shall not preclude the exercise of any other rights or remedies, all of which shall be cumulative, and shall be in addition to any other right or remedy given hereunder or under the other Loan Documents or that may now or hereafter exist at law or in equity or by suit or otherwise. No delay or failure to take action on the part of the Administrative Agent or any Lender in exercising any right, power or privilege shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege or shall be construed to be a waiver of any Event of Default. No course of dealing between the Borrowers, the Administrative Agent and the Lenders or their respective agents or employees shall be effective to change, modify or discharge any provision of this Agreement or any of the other Loan Documents or to constitute a waiver of any Event of Default.

 

(b)     Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 9.02 for the benefit of all the Lenders and the Issuing Lender; provided that the foregoing shall not prohibit (i) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (ii) the Issuing Lender or the Swingline Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as Issuing Lender or Swingline Lender, as the case may be) hereunder and under the other Loan Documents, (iii) any Lender from exercising setoff rights in accordance with Section 9.07 (subject to the terms of Section 4.04), or (iv) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 9.02 and (ii) in addition to the matters set forth in clauses (ii), (iii) and (iv) of the preceding proviso and subject to Section 4.04, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

 

Section 9.04     Crediting of Payments and Proceeds. In the event that the Obligations have been accelerated pursuant to Section 9.02 or the Administrative Agent or any Lender has exercised any remedy set forth in Section 9.02 or enforced any Collateral Document, all payments received by the Lenders upon the Secured Obligations and all net proceeds from the enforcement of the Secured Obligations shall be applied:

 

 

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First, to payment of that portion of the Secured Obligations constituting fees, indemnities, expenses and other amounts, including attorney fees, payable to the Mortgage Trustee, the Administrative Agent in its capacity as such, the Issuing Lender in its capacity as such and the Swingline Lender in its capacity as such, and after the payment to the Mortgage Trustee, ratably among the Administrative Agent, the Issuing Lender and Swingline Lender in proportion to the respective amounts described in this clause First payable to them;

 

Second, to payment of that portion of the Secured Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders under the Loan Documents, including attorney fees, ratably among the Lenders 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 interest on the Loans and Reimbursement Obligations, ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them;

 

Fourth, to payment of that portion of the Secured Obligations constituting unpaid principal of the Loans, Reimbursement Obligations and payment obligations then owing under Secured Hedge Agreements and Secured Cash Management Agreements, ratably among the Lenders, the Issuing Lender, the Hedge Banks and the Cash Management Banks in proportion to the respective amounts described in this clause Fourth held by them;

 

Fifth, to the Administrative Agent for the account of the Issuing Lender, to Cash Collateralize any L/C Obligations then outstanding; and

 

Last, the balance, if any, after all of the Secured Obligations have been indefeasibly paid in full, to the Borrowers or as otherwise required by Applicable Law.

 

Notwithstanding the foregoing, Secured Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements shall be excluded from the application described above if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be. Each Cash Management Bank or Hedge Bank not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of Article X for itself and its Affiliates as if a “Lender” party hereto.

 

Section 9.05     Administrative Agent May File Proofs of Claim. 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 the Borrowers) 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, L/C Obligations and all other 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 Lender and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuing Lender and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Issuing Lender and the Administrative Agent under Sections 3.03, 4.03 and 11.03) allowed in such judicial proceeding; and

 

 

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(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 and the Issuing Lender 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 Lender, 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 3.03, 4.03 and 11.03.

 

Section 9.06     Credit Bidding.

 

(a)     The Administrative Agent, on behalf of itself and the Lenders, shall have the right to credit bid and purchase for the benefit of the Administrative Agent and the Lenders all or any portion of Collateral at any sale thereof conducted by the Administrative Agent under the provisions of the UCC, including pursuant to Sections 9-610 or 9-620 of the UCC, at any sale thereof conducted under the provisions of the United States Bankruptcy Code, including Section 363 thereof, or a sale under a plan of reorganization, or at any other sale or foreclosure conducted by the Administrative Agent (whether by judicial action or otherwise) in accordance with Applicable Law.

 

(b)     Each Lender hereby agrees that, except as otherwise provided in any Loan Documents or with the written consent of the Administrative Agent and the Required Lenders, it will not take any enforcement action, accelerate obligations under any Loan Documents, or exercise any right that it might otherwise have under Applicable Law to credit bid at foreclosure sales, UCC sales or other similar dispositions of Collateral.

 

Section 9.07     Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, the Issuing Lender, the Swingline Lender and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the Issuing Lender, the Swingline Lender or any such Affiliate to or for the credit or the account of any Borrower or any other Loan Party against any and all of the obligations of any Borrower or such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender, the Issuing Lender or the Swingline Lender or any of their respective Affiliates, irrespective of whether or not such Lender, the Issuing Lender, the Swingline Lender or any such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrowers or such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender, the Issuing Lender, the Swingline Lender or such Affiliate different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness; 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 9.04 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 Lender, the Swingline Lender and the Lenders, and (y) the 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. The rights of each Lender, the Issuing Lender, the Swingline Lender and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the Issuing Lender, the Swingline Lender or their respective Affiliates may have. Each Lender, the Issuing Lender and the Swingline Lender agrees to notify the Borrowers and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.

 

 

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ARTICLE X

THE ADMINISTRATIVE AGENT

 

Section 10.01     Appointment and Authority.

 

(a)     Each of the Lenders and the Issuing Lender hereby irrevocably designates and appoints Wells Fargo to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Lender, and neither any Borrower nor any other Loan Party shall have rights as a third party beneficiary of any 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 the Administrative 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 contracting parties.

 

(b)     The Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders (including in its capacity as a potential Hedge Bank or Cash Management Bank) and the Issuing Lender hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and the Issuing Lender for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Secured Obligations, together with such powers and discretion as are reasonably incidental thereto (including to enter into additional Loan Documents or supplements to existing Loan Documents on behalf of the Secured Parties). In this connection, the Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to this Article X for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this Articles X and XI (including Section 11.03, as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.

 

Section 10.02     Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative 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 Borrowers or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

 

 

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Section 10.03     Exculpatory Provisions.

 

(a)     The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:

 

(i)     shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

 

(ii)     shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative 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 the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or Applicable Law, including 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)     shall not, 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 Borrowers or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

 

(b)     The Administrative Agent shall not be liable 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 11.02 and Section 9.02) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Borrowers, a Lender or the Issuing Lender.

 

(c)     The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with 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, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article V or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

 

Section 10.04     Reliance by the Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, 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. The Administrative 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 the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender or the Issuing Lender unless the Administrative Agent shall have received notice to the contrary from such Lender or the Issuing Lender prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrowers), 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.

 

 

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Section 10.05     Delegation of Duties. The Administrative 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 the Administrative Agent. The Administrative 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 the Administrative Agent and any such sub agent, and shall apply to their respective activities in connection with the syndication of the Credit Facility as well as activities as Administrative Agent. The Administrative Agent shall not 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 the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub agents.

 

Section 10.06     Resignation of Administrative Agent.

 

(a)     The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Lender and the Borrowers. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrowers, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to), on behalf of the Lenders and the Issuing Lender, appoint a successor Administrative Agent meeting the qualifications set forth above. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

 

(b)     If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Required Lenders may, to the extent permitted by Applicable Law, by notice in writing to the Borrowers and such Person, remove such Person as Administrative Agent and, in consultation with the Borrowers, appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.

 

(c)     With effect from the Resignation Effective Date or the Removal Effective Date (as applicable), (i) the retiring or removed Administrative 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 on behalf of the Lenders or the Issuing Lender 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 is appointed) and (ii) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the Issuing Lender directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed Administrative Agent, and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents. The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor. After the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 11.03 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.

 

 

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(d)     Any resignation by Wells Fargo as Administrative Agent pursuant to this Section shall also constitute its resignation as Issuing Lender and Swingline Lender. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Issuing Lender and Swingline Lender, (ii) the retiring Issuing Lender and Swingline Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (iii) 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 arrangement satisfactory to the retiring Issuing Lender to effectively assume the obligations of the retiring Issuing Lender with respect to such Letters of Credit.

 

Section 10.07     Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the Issuing Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and the Issuing Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

 

Section 10.08     No Other Duties, etc. Anything herein to the contrary notwithstanding, none of the syndication agents, documentation agents, co-agents, book managers, lead managers, arrangers, lead arrangers or co-arrangers listed on the cover page or signature pages hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the Issuing Lender hereunder.

 

Section 10.09     Collateral Matters.

 

(a)     Each of the Lenders (including in its or any of its Affiliate’s capacities as a potential Hedge Bank or Cash Management Bank) irrevocably authorize the Administrative Agent, at its option and in its discretion:

 

(i)     to release any Lien on any Collateral granted to or held by the Administrative Agent, for the ratable benefit of the Secured Parties, under any Loan Document (A) upon the termination of the Commitments and payment in full of all Secured Obligations (other than (1) contingent indemnification obligations and (2) obligations and liabilities under Secured Cash Management Agreements or Secured Hedge Agreements as to which arrangements satisfactory to the applicable Cash Management Bank or Hedge Bank shall have been made) and the expiration or termination of all Letters of Credit (other than Letters of Credit as to which other arrangements satisfactory to the Administrative Agent and the applicable Issuing Bank shall have been made), (B) that is sold or to be sold as part of or in connection with any sale permitted hereunder or under any other Loan Document, or (C) if approved, authorized or ratified in writing in accordance with Section 11.02; and

 

 

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(ii)     to subordinate any Lien on any Collateral granted to or held by the Administrative Agent under any Loan Document to the holder of any Permitted Lien.

 

The foregoing shall be deemed to include the authorization of the Administrative Agent to direct the Mortgage Trustee to take such actions pursuant to the First Preferred Ship Mortgages and the Assignments of Insurances. Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate (or instruct the Mortgage Trustee to release or subordinate) its interest in particular types or items of Property pursuant to this Section 10.09. In each case as specified in this Section 10.09, the Administrative Agent will, at the Borrowers’ expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, in each case in accordance with the terms of the Loan Documents and this Section 10.09. In the case of any such sale, transfer or disposal of any Property constituting Collateral in a transaction constituting a Disposition permitted pursuant to Section 8.06, the Liens created by any of the Collateral Documents on such Property shall be automatically released without need for further action by any Person.

 

(b)     The Administrative Agent shall not 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 Administrative Agent’s Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.

 

Section 10.10     Secured Hedge Agreements and Secured Cash Management Agreements. No Cash Management Bank or Hedge Bank that obtains the benefits of Section 9.04 or any Collateral by virtue of the provisions hereof or of any Collateral 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) 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 Article X to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Secured Cash Management Agreements and Secured Hedge Agreements unless the Administrative Agent has received written notice of such Secured Cash Management Agreements and Secured Hedge Agreements, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be.

 

 

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ARTICLE XI

MISCELLANEOUS

 

Section 11.01     Notices.

 

(a)     Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in clause (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows:

 

If to the Borrowers:

Omega Protein Corporation and/or
Omega Protein, Inc., as applicable
2105 Citywest Blvd., Suite 500
Houston, TX 77042
Attention of: Andrew Johannesen, Chief Financial Officer
Telephone No.: (713) 940-6113
Facsimile No.: (713) 940-6122
E-mail: ajohannesen@omegaprotein.com

 

If to Wells Fargo as Administrative Agent:

Wells Fargo Bank, National Association
2500 Citywest Blvd., Suite 1100
Houston, TX 77042
Attention of: Geri E. Landa
Telephone No.: (713) 273-8537
Facsimile No.: (713) 273-8530
E-mail: geri.landa@wellsfargo.com

If to any Lender:

To the address set forth on the Register

 

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).

 

(b)     Electronic Communications. Notices and other communications to the Lenders and the Issuing Lender hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices to any Lender or the Issuing Lender pursuant to Article II if such Lender or the Issuing Lender, as applicable, has notified the Administrative Agent that is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrowers may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice, email or other communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient.

 

 

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(c)     Administrative Agent’s Office. The Administrative Agent hereby designates its office located at the address set forth above, or any subsequent office which shall have been specified for such purpose by written notice to the Borrowers and Lenders, as the Administrative Agent’s Office referred to herein, to which payments due are to be made and at which Loans will be disbursed and Letters of Credit requested.

 

(d)     Change of Address, Etc. Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.

 

(e)     Platform.

 

(i)     Each Loan Party agrees that the Administrative Agent may, but shall not be obligated to, make the Communications (as defined below) available to the Issuing Lender and the other Lenders by posting the Communications on Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system.

 

(ii)     The Platform is provided “as is” and “as available.” The Agent Parties (as defined below) do not warrant the adequacy of the Platform and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or the Platform. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to any Loan Party, any Lender or any other Person or entity for damages of any kind, including direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of any Loan Party’s or the Administrative Agent’s transmission of communications through the Platform. “Communications” means, collectively, any notice, demand, communication, information, document or other material that any Loan Party provides to the Administrative Agent pursuant to any Loan Document or the transactions contemplated therein which is distributed to the Administrative Agent, the Issuing Lender or any Lender by means of electronic communications pursuant to this Section, including through the Platform.

 

(f)     Private Side Designation. Each Public Lender agrees to cause at least one (1) individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and Applicable Law, including United States federal and state securities Applicable Laws, to make reference to any Borrower’s materials and/or information that are not made available through the “Public Side Information” portion of the Platform and that may contain material non-public information with respect to such Borrower or its securities for purposes of United States federal or state securities Applicable Laws.

 

 

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Section 11.02     Amendments, Waivers and Consents. Except as set forth below or as specifically provided in any Loan Document, any term, covenant, agreement or condition of this Agreement or any of the other Loan Documents may be amended or waived by the Lenders, and any consent given by the Lenders, if, but only if, such amendment, waiver or consent is in writing signed by the Required Lenders (or by the Administrative Agent with the consent of the Required Lenders) and delivered to the Administrative Agent and, in the case of an amendment, signed by the Borrowers; provided, that no amendment, waiver or consent shall:

 

(a)     without the prior written consent of the Required Lenders, amend, modify or waive (i) Section 5.02 or any other provision of this Agreement if the effect of such amendment, modification or waiver is to require the Lenders (pursuant to, in the case of any such amendment to a provision hereof other than Section 5.02, any substantially concurrent request by the Borrowers for a borrowing of Revolving Credit Loans) to make Revolving Credit Loans when such Revolving Credit Lenders would not otherwise be required to do so, (ii) the amount of the Swingline Commitment or (iii) the amount of the Revolving A L/C Commitment or the Revolving B L/C Commitment;

 

(b)     increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 9.02) or the amount of Loans of any Lender, in any case, without the written consent of such Lender;

 

(c)     waive, extend or postpone any date fixed by this Agreement or any other Loan Document for any payment or mandatory prepayment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document (including extending the Maturity Date or the maturity of any Loan) without the written consent of each Lender directly and adversely affected thereby;

 

(d)     reduce the principal of, or the rate of interest specified herein on, any Loan or Reimbursement Obligation, or (subject to clause (iv) of the second proviso to this Section) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender directly and adversely affected thereby; provided that only the consent of the Required Lenders shall be necessary (i) to waive any obligation of the Borrowers to pay interest at the rate set forth in Section 4.01(c) during the continuance of an Event of Default or (ii) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or L/C Obligation or to reduce any fee payable hereunder;

 

(e)     change Section 4.06 or Section 9.04 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly and adversely affected thereby;

 

(f)     except as otherwise permitted by this Section 11.02 change any provision of this Section or reduce the percentages specified in the definitions of “Required Lenders,” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender directly affected thereby;

 

(g)     consent to the assignment or transfer by any Loan Party of such Loan Party’s rights and obligations under any Loan Document to which it is a party, in each case, without the written consent of each Lender;

 

 

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(h)     release any Guarantor from any Guaranty Agreement, without the written consent of each Lender; and

 

(i)     release all or substantially all of the Collateral or release any Security Document (other than as authorized in Section 10.09 or as otherwise specifically permitted or contemplated in this Agreement or the applicable Security Document) without the written consent of each Lender;

 

provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the Issuing Lender in addition to the Lenders required above, affect the rights or duties of the Issuing Lender under this Agreement or any Letter of Credit Application relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swingline Lender in addition to the Lenders required above, affect the rights or duties of the Swingline Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; (iv) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto; and (v) the Administrative Agent and the Borrowers shall be permitted to amend any provision of the Loan Documents (and such amendment shall become effective without any further action or consent of any other party to any Loan Document) if the Administrative Agent and the Borrowers shall have jointly identified an obvious error or any error or omission of a technical or immaterial nature in any such provision. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender.

 

Notwithstanding anything in this Agreement to the contrary, each Lender hereby irrevocably authorizes the Administrative Agent on its behalf, and without further consent, to enter into amendments or modifications to this Agreement (including amendments to this Section 11.02) or any of the other Loan Documents or to enter into additional Loan Documents as the Administrative Agent reasonably deems appropriate in order to effectuate the terms of Section 4.13; provided that no amendment or modification shall result in any increase in the amount of any Lender’s Commitment or any increase in any Lender’s Revolving Credit Commitment Percentage, in each case, without the written consent of such affected Lender.

 

Section 11.03     Expenses; Indemnity.

 

(a)     Costs and Expenses. Subject to Section 11.28, the Borrowers and any other Loan Party, jointly and severally, shall pay (i) all reasonable out of pocket expenses incurred by the Administrative Agent and its Affiliates, Wilmington and the Mortgage Trustee (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, Wilmington and the Mortgage Trustee), in connection with the syndication of the Credit Facility, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out of pocket expenses incurred by the Issuing Lender in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out of pocket expenses incurred by the Administrative Agent, any Lender, the Issuing Lender, Wilmington or the Mortgage Trustee (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender, the Issuing Lender, Wilmington or the Mortgage Trustee), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out of pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

 

 

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(b)     Indemnification by the Borrowers. Subject to Section 11.28, each Borrower shall, jointly and severally, indemnify the Administrative Agent (and any sub-agent thereof), each Lender and the Issuing Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, and shall pay or reimburse any such Indemnitee for, any and all losses, claims (including any Environmental Claims), damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any Person (including any Borrower or any other Loan Party), other than such Indemnitee and its Related Parties, arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Issuing Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or Release of Hazardous Materials on or from any Property owned or operated by any Loan Party or any Subsidiary thereof, or any Environmental Claim related in any way to any Loan Party or any Subsidiary, (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by any Loan Party or any Subsidiary thereof, and regardless of whether any Indemnitee is a party thereto, or (v) any claim (including any Environmental Claims), investigation, litigation or other proceeding (whether or not the Administrative Agent or any Lender is a party thereto) and the prosecution and defense thereof, arising out of or in any way connected with the Loans, this Agreement, any other Loan Document, or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby, including reasonable attorneys and consultant’s fees, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by any Loan Party or any Subsidiary thereof against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if such Loan Party or such Subsidiary has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction. IT IS THE INTENTION OF THE PARTIES THAT THE FOREGOING INDEMNITIES SHALL APPLY TO LOSSES, LIABILITIES, CLAIMS, DAMAGES OR EXPENSES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF AN INDEMNITEE.

 

(c)     Reimbursement by Lenders. To the extent that the Borrowers for any reason fails to indefeasibly pay any amount required under clause (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the Issuing Lender, the Swingline Lender or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the Issuing Lender, the Swingline Lender or such Related Party, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lender’s pro rata share at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender); provided that with respect to such unpaid amounts owed to the Issuing Lender or the Swingline Lender solely in its capacity as such, only the Lenders shall be required to pay such unpaid amounts, such payment to be made severally among them based on such Lenders’ Revolving Credit Commitment Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought); provided, further, that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), the Issuing Lender or the Swingline Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), Issuing Lender or the Swingline Lender in connection with such capacity. The obligations of the Lenders under this clause (c) are subject to the provisions of Section 4.07.

 

 

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(d)     Waiver of Consequential Damages, Etc. To the fullest extent permitted by Applicable Law, the Borrowers and each other Loan Party shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual 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, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in clause (b) above 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 in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

 

(e)     Payments. All amounts due under this Section shall be payable promptly after demand therefor.

 

(f)     Survival. Each party’s obligations under this Section shall survive the termination of the Loan Documents and payment of the obligations hereunder.

 

Section 11.04     Interest Rate Limitation.

 

(a)     It is the intention of the parties to comply strictly with applicable usury laws. Accordingly, notwithstanding any provision to the contrary in the Loan Documents, in no event shall any Loan Documents require the payment or permit the payment, taking, reserving, receiving, collection or charging of any sums constituting interest under Applicable Laws that exceed the Maximum Rate. If any such excess interest is called for, contracted for, charged, taken, reserved or received in connection with any Loan Documents, or in any communication by any Lender or any other Person to the Borrowers or any other Person, or in the event that all or part of the principal or interest hereof or thereof shall be prepaid or accelerated, so that under any of such circumstances or under any other circumstance whatsoever the amount of interest contracted for, charged, taken, reserved or received on the amount of principal actually outstanding from time to time under the Loan Documents shall exceed the Maximum Rate, then in such event it is agreed that: (a) the provisions of this paragraph shall govern and control; (b) no Borrower nor any other Person or entity now or hereafter liable for the payment of any Loan Documents shall be obligated to pay the amount of such interest to the extent it is in excess of the Maximum Rate; (c) any such excess interest which is or has been received by any Lender, notwithstanding this paragraph, shall be credited against the then unpaid principal balance hereof or thereof, or if any of the Loan Documents has been or would be paid in full by such credit, refunded to the Borrowers; and (d) the provisions of each of the Loan Documents, and any other communication to the Borrowers, shall immediately be deemed reformed and such excess interest reduced, without the necessity of executing any other document, to the Maximum Rate. The right to accelerate the maturity of the Loan Documents does not include the right to accelerate, collect or charge unearned interest, but only such interest that has otherwise accrued as of the date of acceleration. Without limiting the foregoing, all calculations of the rate of interest contracted for, charged, taken, reserved or received in connection with any of the Loan Documents which are made for the purpose of determining whether such rate exceeds the Maximum Rate shall be made to the extent permitted by Applicable Laws by amortizing, prorating, allocating and spreading during the period of the full term of such Loan Documents, including all prior and subsequent renewals and extensions hereof or thereof, all interest at any time contracted for, charged, taken, reserved or received by any Lender. The terms of this Section shall be deemed to be incorporated into each of the other Loan Documents.

 

 

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(b)     To the extent that the Administrative Agent on behalf of the Lenders are relying on Chapter 303 of the Texas Finance Code to determine the Maximum Rate payable on the applicable Notes and/or any other portion of the Obligations, the Administrative Agent will utilize the weekly ceiling from time to time in effect as provided in such Chapter 303, as amended. To the extent federal law permits the Lenders to contract for, charge, take, receive or reserve a greater amount of interest than under Texas law, the Administrative Agent on behalf of the Lenders will rely on federal law instead of such Chapter 303 for the purpose of determining the Maximum Rate. Additionally, to the extent permitted by Applicable Law now or hereafter in effect, the Administrative Agent on behalf of the Lenders may, at its option and from time to time, utilize any other method of establishing the Maximum Rate under such Chapter 303 or under other Applicable Law by giving notice, if required, to the Borrowers as provided by Applicable Law now or hereafter in effect.

 

Section 11.05     GOVERNING LAW; JURISDICTION, ETC.

 

(a)     GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS (BUT NOT THE RULES GOVERNING CONFLICT OF LAWS) OF THE STATE OF TEXAS.

 

(b)     SUBMISSION TO JURISDICTION. EACH OF THE BORROWERS AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY 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 IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER, THE ISSUING LENDER, THE SWINGLINE LENDER, OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF TEXAS SITTING IN HARRIS COUNTY, AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF TEXAS, 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 TEXAS 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 IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER, THE ISSUING LENDER OR THE SWINGLINE LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)     WAIVER OF VENUE. EACH OF THE BORROWERS AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY 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 PARAGRAPH (B) OF THIS SECTION. 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.

 

 

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(d)     SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.01. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

Section 11.06     WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section 11.07     Reversal of Payments. To the extent any Loan Party makes a payment or payments to the Administrative Agent for the ratable benefit of the Lenders or the Administrative Agent receives any payment or proceeds of the Collateral which payments or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or proceeds repaid, the Obligations or part thereof intended to be satisfied shall be revived and continued in full force and effect as if such payment or proceeds had not been received by the Administrative Agent. The Administrative Agent on behalf of the Lenders shall have the continuing and exclusive right to apply, reverse and re-apply any and all payments to any portion of the Obligations in a manner consistent with the terms of this Agreement.

 

Section 11.08     Injunctive Relief. The Borrowers recognize that, in the event the Borrowers fail to perform, observe or discharge any of their obligations or liabilities under this Agreement, any remedy of law may prove to be inadequate relief to the Lenders. Therefore, the Borrowers agree that the Lenders, at the Lenders’ option, shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.

 

Section 11.09     Accounting Matters. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrowers or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrowers shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (a) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (b) the Borrowers shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

 

 

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Section 11.10     Successors and Assigns; Participations.

 

(a)     Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that no Borrower nor any other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of paragraph (b) of this Section, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

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

 

(i)     Minimum Amounts.

 

(A)     in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and/or the Loans at the time owing to it or contemporaneous assignments to related Approved Funds that equal at least the amount specified in paragraph (b)(i)(B) of this Section in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

 

(B)     in any case not described in paragraph (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $5,000,000.00, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrowers otherwise consent (each such consent not to be unreasonably withheld or delayed); provided that a Borrower shall be deemed to have given its consent 15 Business Days after the date written notice thereof has been delivered by the assigning Lender (through the Administrative Agent) unless such consent is expressly refused by such Borrower prior to such 15th Business Day;

 

(ii)     Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned;

 

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

 

 

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

 

(B)     the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of the Credit Facility if such assignment is to a Person that is not a Lender with a Commitment, an Affiliate of such Lender or an Approved Fund with respect to such Lender; 

 

(C)     the consents of (1) the Issuing Lender shall be required for any assignment in respect of the Revolving Credit Facility, and (2) the Swingline Lender shall be required for any assignment in respect of the Revolving A Facility; and 

 

(D)     the consent of the Administrative Agent if, in the reasonable opinion of the Administrative Agent, such assignment would result in any Loan Party’s noncompliance with MarAd certification or disclosure requirements or similar governmental regulations; and provided, further, that no Lender may assign all or any portion of its rights and obligations under this Agreement to any Person if such assignment, either by itself or in combination with any other event or circumstance, including any assignment made prior to or contemporaneously therewith, would, in the reasonable opinion of the Administrative Agent, be expected to cause (1) any First Preferred Ship Mortgage to cease to qualify as a valid preferred mortgage as defined in the AFA, (2) MarAd to conclude, pursuant to 46 C.F.R. § 356.11 or 46 C.F.R. § 356.19(b)(6), that Persons who are not U.S. Citizens would obtain excessive control of any Loan Party or (3) the Loan Parties who are grantors under any First Preferred Ship Mortgage to cease to qualify as U.S. Citizens eligible to own and operate Fishing Industry Vessels. 

 

(iv)     Assignment and Assumption. 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 $3,500.00 for each assignment; provided that (A) only one such fee will be payable in connection with simultaneous assignments to two or more Approved Funds by a Lender and (B) the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

 

(v)     No Assignment to Certain Persons. No such assignment shall be made to (A) the Loan Parties or any of the Loan Parties’ Subsidiaries or Affiliates or (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B).

 

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

 

 

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(vii)     Certain Additional Payments. 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 Borrowers 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 (A) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, the Issuing Lender, the Swingline Lender and each other Lender hereunder (and interest accrued thereon), and (B) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swingline Loans in accordance with its Revolving Credit Commitment 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.

 

(viii)     Notice to MarAd. Within 30 days of the requisite parties’ approval of any such assignment, the Administrative Agent shall provide MarAd, attention Citizenship Approval Officer, with notice thereof, setting forth the name and address of the new Lender as well as certain other information that may be requested of it by the Citizenship Approval Officer. 

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement 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 4.08, 4.09, 4.10, 4.11 and 11.03 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section.

 

(c)     Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at one of its offices in Houston, Texas, a copy of each Assignment and Assumption and each joinder agreement entered into pursuant to Section 4.13 delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Revolving Credit Commitment of, and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, absent manifest error, and the Borrowers, the Administrative Agent 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. The Register shall be available for inspection by the Borrowers and any Lender (but only to the extent of entries in the Register that are applicable to such Lender), at any reasonable time and from time to time upon reasonable prior notice.

 

 

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(d)     Participations. Any Lender may at any time, without the consent of, or notice to, the Borrowers or the Administrative Agent, sell participations to any Person (other than a natural Person or any Loan Party or any of the Loan Parties’ Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the Borrowers, the Administrative Agent, the Issuing Lender, the Swingline Lender and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, and (iv) any such participation shall require the prior written consent of the Administrative Agent if, in the reasonable opinion of the Administrative Agent, such participation would result in any Loan Party’s non-compliance with MarAd certification or disclosure requirements or similar governmental regulations; and provided, further, that no Lender may sell participations in all or any portion of its rights and obligations under this Agreement to any Person if such participation, either by itself or in combination with any other event or circumstance, including any participation sold prior to or contemporaneously therewith, would, in the reasonable opinion of the Administrative Agent, be expected to cause (A) any First Preferred Ship Mortgage to cease to qualify as a valid preferred mortgage as defined in the AFA, (B) MarAd to conclude, pursuant to 46 C.F.R. § 356.11 or 46 C.F.R. § 356.19(b)(6), that Persons who are not U.S. Citizens would obtain excessive control of any Loan Party, or (C) the Loan Parties who are grantors under any First Preferred Ship Mortgage to cease to qualify as U.S. Citizens eligible to own and operate Fishing Industry Vessels. Each Lender shall be responsible for the indemnity under Section 11.03(c) with respect to any payments made by such Lender to its Participant(s).

 

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in Section 11.02 that directly affects such Participant and could not be affected by a vote of the Required Lenders. The Borrowers agrees that each Participant shall be entitled to the benefits of Sections 4.08, 4.09, 4.10 and 4.11 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant agrees to be subject to the provisions of Section 4.12 as if it were an assignee under paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.07 as though it were a Lender; provided that such Participant agrees to be subject to Section 4.06 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrowers, 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 disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-(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. The Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

(e)     Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment under Sections 4.10 and 4.11 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrowers’ prior written consent. No Participant shall be entitled to the benefits of Section 4.11 unless the Borrowers are notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with Section 4.11 as though it were a Lender.

 

 

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

 

Section 11.11     Treatment of Certain Information; Confidentiality. Each of the Administrative Agent, the Lenders and the Issuing Lender agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent required or requested by, or required to be disclosed to, any rating agency, or regulatory or similar authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners); (c) to the extent required by Applicable Laws or regulations or by any subpoena or similar legal process; (d) to any other party hereto; (e) in connection with the exercise of any remedies under this Agreement, under any other Loan Document or under any Secured Hedge Agreement or Secured Cash Management Agreement, or any action or proceeding relating to this Agreement, any other Loan Document or any Secured Hedge Agreement or Secured Cash Management Agreement, or the enforcement of rights hereunder or thereunder; (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement, or (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrowers and its obligations, this Agreement or payments hereunder; (g) on a confidential basis to (i) any rating agency in connection with rating the Borrowers or its Subsidiaries or the Credit Facility or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Credit Facility; (h) with the consent of the Borrowers, (i) to Gold Sheets and other similar bank trade publications, such information to consist of deal terms and other information customarily found in such publications; (j) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, any Lender, the Issuing Lender or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrowers; or (k) to governmental regulatory authorities in connection with any regulatory examination of the Administrative Agent or any Lender or in accordance with the Administrative Agent’s or any Lender’s regulatory compliance policy if the Administrative Agent or such Lender deems necessary for the mitigation of claims by those authorities against the Administrative Agent or such Lender or any of its subsidiaries or affiliates. For purposes of this Section, “Information” means all information received from any Loan Party or any Subsidiary thereof relating to any Loan Party or any Subsidiary thereof or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or the Issuing Lender on a nonconfidential basis prior to disclosure by any Loan Party or any Subsidiary thereof; provided that, in the case of information received from a Loan Party or any Subsidiary thereof after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

 

 

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Section 11.12     Performance of Duties. Each of the Loan Party’s obligations under this Agreement and each of the other Loan Documents shall be performed by such Loan Party at its sole cost and expense.

 

Section 11.13     All Powers Coupled with Interest. All powers of attorney and other authorizations granted to the Lenders, the Administrative Agent and any Persons designated by the Administrative Agent or any Lender pursuant to any provisions of this Agreement or any of the other Loan Documents shall be deemed coupled with an interest and shall be irrevocable so long as any of the Obligations remain unpaid or unsatisfied, any of the Commitments remain in effect or the Credit Facility has not been terminated. All such powers of attorney shall be for security.

 

Section 11.14     Survival.

 

(a)     All representations and warranties set forth in Article VI and all representations and warranties contained in any certificate, or any of the Loan Documents (including, but not limited to, any such representation or warranty made in or in connection with any amendment thereto) shall constitute representations and warranties made under this Agreement. All representations and warranties made under this Agreement shall be made or deemed to be made at and as of the Closing Date (except those that are expressly made as of a specific date), shall survive the Closing Date and shall not be waived by the execution and delivery of this Agreement, any investigation made by or on behalf of the Lenders or any borrowing hereunder.

 

(b)     Notwithstanding any termination of this Agreement, the indemnities to which the Administrative Agent and the Lenders are entitled under the provisions of this Article XI and any other provision of this Agreement and the other Loan Documents shall continue in full force and effect and shall protect the Administrative Agent and the Lenders against events arising after such termination as well as before.

 

Section 11.15     Titles and Captions. Titles and captions of Articles, Sections and subsections in, and the table of contents of, this Agreement are for convenience only, and neither limit nor amplify the provisions of this Agreement.

 

Section 11.16     Severability of Provisions. Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating the remainder of such provision or the remaining provisions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction.

 

Section 11.17     Counterparts; Integration; Effectiveness; Electronic Execution.

 

(a)     Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 5.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement

 

 

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(b)     Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the Texas Uniform Electronic Transaction Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

 

Section 11.18     Term of Agreement. This Agreement shall remain in effect from the Closing Date through and including the date upon which all Obligations (other than contingent indemnification obligations not then due) arising hereunder or under any other Loan Document shall have been indefeasibly and irrevocably paid and satisfied in full, all Letters of Credit have been terminated or expired (or been Cash Collateralized) and the Commitments have been terminated. No termination of this Agreement shall affect the rights and obligations of the parties hereto arising prior to such termination or in respect of any provision of this Agreement which survives such termination.

 

Section 11.19     USA PATRIOT Act. The Administrative Agent and each Lender hereby notifies the Borrowers that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies the Borrowers and the other Loan Parties, which information includes the name and address of the Borrowers and each other Loan Party and other information that will allow such Lender to identify each Borrower or such other Loan Parties in accordance with the PATRIOT Act.

 

Section 11.20     Independent Effect of Covenants. The Borrowers and the other Loan Parties expressly acknowledge and agree that each covenant contained in Articles VII or VIII hereof shall be given independent effect. Accordingly, the Borrowers and the other Loan Parties shall not engage in any transaction or other act otherwise permitted under any covenant contained in Articles VII or VIII, if before or after giving effect to such transaction or act, any Borrower or any other Loan Party shall or would be in breach of any other covenant contained in Articles VII or VIII.

 

Section 11.21     Reservations of Rights. Nothing in this Agreement shall be deemed to (a) limit the applicability of any otherwise applicable statutes of limitation and any waivers contained in this Agreement, or (b) apply to or limit the right of the Administrative Agent or any Lender (i) to exercise self-help remedies such as (but not limited to) setoff, or (ii) to foreclose judicially or nonjudicially against any real or personal property collateral, or to exercise judicial or nonjudicial power of sale rights, (iii) to obtain from a court provisional or ancillary remedies such as (but not limited to) injunctive relief, writ of possession, prejudgment attachment, or the appointment of a receiver, or (iv) to pursue rights against a party to this Agreement in a third-party proceeding in any action brought against Lender in a state, federal or international court, Governmental Authority or hearing body (including actions in specialty courts, such as bankruptcy and patent courts). Subject to the terms of this Agreement, the Administrative Agent or any Lender may exercise the rights set forth in clauses (b)(i) through (b)(iv), inclusive, before, during or after the pendency of any proceeding brought pursuant to this Agreement.

 

Section 11.22     Debtor-Creditor Relationship. None of the terms of this Agreement or of any other document executed in conjunction herewith or related hereto shall be deemed to give the Administrative Agent or any Lender the rights or powers to exercise control over the business or affairs of the Borrowers. The relationship among Borrowers and the Lenders created by this Agreement is only that of debtor-creditor, and no Lender or the Administrative Agent is a fiduciary on behalf of any Borrower, or any Subsidiary or any other Person.

 

 

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Section 11.23     Injunctive Relief. The Loan Parties recognize that, in the event the Loan Parties fail to perform, observe or discharge any of their obligations or liabilities under this Agreement, any remedy at law may prove to be inadequate relief to the Administrative Agent and the Lenders; therefore, the Loan Parties agree that if any Default or Event of Default shall exist, the Administrative Agent or any Lender, as applicable, shall be entitled to temporary and permanent injunctive relief without the necessity of proving actual damages.

 

Section 11.24     Arbitration.

 

(a)     Arbitration. The parties hereto agree, upon demand by any party, to submit to binding arbitration all claims, disputes and controversies between or among them (and their respective employees, officers, directors, attorneys, and other agents), whether in tort, contract or otherwise in any way arising out of or relating to (i) any credit subject hereto, or any of the Loan Documents, and their negotiation, execution, collateralization, administration, repayment, modification, extension, substitution, formation, inducement, enforcement, default or termination; or (ii) requests for additional credit.

 

(b)     Governing Rules. Any arbitration proceeding will (i) proceed in a location in Texas selected by the American Arbitration Association (“AAA”); (ii) be governed by the Federal Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting choice of law provision in any of the documents between the parties; and (iii) be conducted by the AAA, or such other administrator as the parties shall mutually agree upon, in accordance with the AAA’s commercial dispute resolution procedures, unless the claim or counterclaim is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and costs in which case the arbitration shall be conducted in accordance with the AAA’s optional procedures for large, complex commercial disputes (the commercial dispute resolution procedures or the optional procedures for large, complex commercial disputes to be referred to herein, as applicable, as the “Rules”). If there is any inconsistency between the terms hereof and the Rules, the terms and procedures set forth herein shall control. Any party who fails or refuses to submit to arbitration following a demand by any other party shall bear all costs and expenses incurred by such other party in compelling arbitration of any dispute. Nothing contained herein shall be deemed to be a waiver by any party that is a bank of the protections afforded to it under 12 U.S.C. § 91 or any similar applicable state law.

 

(c)     No Waiver of Provisional Remedies, Self-Help and Foreclosure. The arbitration requirement does not limit the right of any party to (i) foreclose against real or personal property collateral; (ii) exercise self-help remedies relating to collateral or proceeds of collateral such as setoff or repossession; or (iii) obtain provisional or ancillary remedies such as replevin, injunctive relief, attachment or the appointment of a receiver, before during or after the pendency of any arbitration proceeding. This exclusion does not constitute a waiver of the right or obligation of any party to submit any dispute to arbitration or reference hereunder, including those arising from the exercise of the actions detailed in clauses (i), (ii) and (iii) of this paragraph.

 

(d)     Arbitrator Qualifications and Powers. Any arbitration proceeding in which the amount in controversy is $5,000,000.00 or less will be decided by a single arbitrator selected according to the Rules, and who shall not render an award of greater than $5,000,000.00. Any dispute in which the amount in controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel of three arbitrators; provided however, that all three arbitrators must actively participate in all hearings and deliberations. The arbitrator will be a neutral attorney licensed in the State of Texas with a minimum of ten years’ experience in the substantive law applicable to the subject matter of the dispute to be arbitrated. The arbitrator will determine whether or not an issue is arbitratable and will give effect to the statutes of limitation in determining any claim. In any arbitration proceeding the arbitrator will decide (by documents only or with a hearing at the arbitrator’s discretion) any pre-hearing motions which are similar to motions to dismiss for failure to state a claim or motions for summary adjudication. The arbitrator shall resolve all disputes in accordance with the substantive law of Texas and may grant any remedy or relief that a court of such state could order or grant within the scope hereof and such ancillary relief as is necessary to make effective any award. The arbitrator shall also have the power to award recovery of all costs and fees, to impose sanctions and to take such other action as the arbitrator deems necessary to the same extent a judge could pursuant to the Federal Rules of Civil Procedure, the Texas Rules of Civil Procedure or other Applicable Law. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction. The institution and maintenance of an action for judicial relief or pursuit of a provisional or ancillary remedy shall not constitute a waiver of the right of any party, including the plaintiff, to submit the controversy or claim to arbitration if any other party contests such action for judicial relief.

 

 

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(e)     Discovery. In any arbitration proceeding, discovery will be permitted in accordance with the Rules. All discovery shall be expressly limited to matters directly relevant to the dispute being arbitrated and must be completed no later than 20 days before the hearing date. Any requests for an extension of the discovery periods, or any discovery disputes, will be subject to final determination by the arbitrator upon a showing that the request for discovery is essential for the party’s presentation and that no alternative means for obtaining information is available.

 

(f)     Class Proceeding and Consolidations. No party hereto shall be entitled to join or consolidate disputes by or against others in any arbitration, except parties who have executed any Loan Document, or to include in any arbitration any dispute as a representative or member of a class, or to act in any arbitration in the interest of the general public or in a private attorney general capacity.

 

(g)     Payment of Arbitration Costs and Fees. The arbitrator shall award all costs and expenses of the arbitration proceeding.

 

(h)     Miscellaneous. To the maximum extent practicable, the AAA, the arbitrators and the parties shall take all action required to conclude any arbitration proceeding within one hundred eighty (180) days of the filing of the dispute with the AAA. No arbitrator or other party to an arbitration proceeding may disclose the existence, content or results thereof, except for disclosures of information by a party required in the ordinary course of its business or by Applicable Law or regulation. If more than one agreement for arbitration by or between the parties potentially applies to a dispute, the arbitration provision most directly related to the Loan Documents or the subject matter of the dispute shall control. This arbitration provision shall survive termination, amendment or expiration of any of the Loan Documents or any relationship between the parties.

 

Section 11.25     Amendment and Restatement; No Novation. This Agreement constitutes an amendment and restatement of the Existing Loan Agreement, as amended, effective from and after the Closing Date. The execution and delivery of this Agreement shall not constitute a novation of any indebtedness or other obligations owing to any Lender under the Existing Loan Agreement based on facts or events occurring or existing prior to the execution and delivery of this Agreement. On the Closing Date, the credit facilities described in the Existing Loan Agreement, as amended, shall be amended, supplemented, modified and restated in their entirety by the facilities described herein, and all loans and other obligations of the Borrowers outstanding as of such date under the Existing Loan Agreement, as amended, shall be deemed to be loans and obligations outstanding under the corresponding facilities described herein, without any further action by any Person, except that the Administrative Agent shall make such transfers of funds as are necessary in order that the outstanding balance of such Loans, together with any Loans funded on the Closing Date, reflect the respective Revolving Credit Commitment of the Lenders hereunder. All Liens securing the “Obligations” as defined in the Existing Loan Agreement are hereby renewed and extended to secure the Secured Obligations.

 

 

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Section 11.26     Inconsistencies with Other Documents. In the event there is a conflict or inconsistency between this Agreement and any other Loan Document, the terms of this Agreement shall control; provided that any provision of the Collateral Documents which imposes additional burdens on the Borrowers, the other Loan Parties or any of their Subsidiaries or further restricts the rights of the Borrowers, the other Loan Parties or any of their Subsidiaries or gives the Administrative Agent or Lenders additional rights shall not be deemed to be in conflict or inconsistent with this Agreement and shall be given full force and effect.

 

Section 11.27     Judgment Currency. If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or under any other Loan Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given. The obligation of each Borrower in respect of any such sum due from it to the Administrative Agent or any Lender hereunder or under the other Loan Documents shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by the Administrative Agent or such Lender, as the case may be, of any sum adjudged to be so due in the Judgment Currency, the Administrative Agent or such Lender, as the case may be, may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum originally due to the Administrative Agent or any Lender from any Borrower in the Agreement Currency, such Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Administrative Agent or such Lender, as the case may be, against such loss. If the amount of the Agreement Currency so purchased is greater than the sum originally due to the Administrative Agent or any Lender in such currency, the Administrative Agent or such Lender, as the case may be, agrees to return the amount of any excess to such Borrower (or to any other Person who may be entitled thereto under applicable law).

 

Section 11.28     Recourse Against Bioriginal Omega and Other Canadian Loan Parties. Notwithstanding anything to the contrary contained herein or in any other Loan Document, there shall be no actual, implied or imputed, direct or indirect liability, obligation or recourse on Bioriginal Omega or any other Person organized under the laws of Canada or any Province or Territory in Canada that becomes a Loan Party, or any of their respective successors and assigns (each, a “Canadian Loan Party”, and collectively, the “Canadian Loan Parties”), to pay, perform or discharge any Obligations or Secured Obligations and none of any of the Canadian Loan Parties shall be, or deemed to be, liable, obligated or responsible for any representation or warranty, or for the performance of any covenant or agreement of any Loan Party (other than the Canadian Loan Parties) in this Agreement or any other Loan Document other than (a) the Obligations or Secured Obligations arising solely under the Revolving B Commitment, and (b) the representations and warranties and the performance of the covenants and agreements of the Canadian Loan Parties made with respect to the Obligations or Secured Obligations arising solely under the Revolving B Commitment. The Administrative Agent, the Swingline Lender, the Issuing Lender, the Lenders, and the Secured Parties acknowledge and agree that none of the Canadian Loan Parties are liable or obligated for, or guarantee, whether alone, joint, several, or joint and several with any other Person for any Obligations or Secured Obligations of the Company, OPI or the other Loan Parties (other than the Canadian Loan Parties).

 

Section 11.29     NOTICE OF FINAL AGREEMENT. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

 

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[SIGNATURE PAGES FOLLOW]

 

 

 

 

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

 

	
 
	
OMEGA PROTEIN CORPORATION,
	
 

	 	as Borrower	 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	 /s/  Andrew Johannesen 	
 

	
 
	
 
	
Andrew Johannesen
	
 

	
 
	
 
	
Executive Vice President and Chief Financial Officer
	
 

	 	 	 	 
	 	 	 	 
	 	OMEGA PROTEIN, INC.,	 
	 	as Borrower	 
	 	 	 	 
	 	 	 	 
	 	By:	 /s/ Andrew Johannesen	 
	 	 	Andrew Johannesen	 
	 	 	Vice President	 
	 	 	 	 
	 	 	 	 
	 	BIORIGINAL FOOD & SCIENCE CORP.,	 
	 	as Borrower	 
	 	 	 	 
	 	 	 	 
	 	By:	 /s/  John Held	 
	 	 	John Held	 
	 	 	Authorized Signatory	 

 

 

 

  

AGENTS AND LENDERS:

 

	
 
	
WELLS FARGO BANK,
	
 

	 	NATIONAL ASSOCIATION, 	 
	 	as Administrative Agent	 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
 /s/  Joanna L. Mitchell
	
 

	
 
	
 
	
Joanna L. Mitchell
	
 

	
 
	
 
	
Senior Vice President
	
 

 

 

 

 

	
 
	
WELLS FARGO BANK,
	
 

	 	NATIONAL ASSOCIATION, 	 
	 	as Lender, Swingline Lender and Issuing Lender	 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
 /s/  Geri E. Landa
	
 

	
 
	
 
	
Geri E. Landa
	
 

	
 
	
 
	
Senior Vice President
	
 

 

 

 

 

	
 
	
JPMORGAN CHASE BANK, N.A., 
	
 

	 	as Lender	 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
 /s/  Chris Smith 
	
 

	
 
	
Name: 
	
Christopher Smith 
	
 

	
 
	
Title: 
	
Vice President 
	
 

  

 

 

 

	
 
	
JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, 
	
 

	 	as Lender	 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
 /s/  Michael N. Tam 
	
 

	
 
	
Name: 
	
Michael N. Tam 
	
 

	
 
	
Title: 
	
Senior Vice President 
	
 

 

 

 

 

	
 
	
BMO HARRIS BANK N.A.,
	
 

	 	as Lender	 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
 /s/  Lindsay Giometti
	
 

	
 
	
Name: 
	
Lindsay Giometti 
	
 

	
 
	
Title: 
	
Vice President 
	
 

 

 

 

 

	
 
	
BANK OF MONTREAL,
	
 

	 	as Lender	 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
 /s/ Helen Alvarez-Hernandez
	
 

	
 
	
Name: 
	
Helen Alvarez-Hernandez 
	
 

	
 
	
Title: 
	
Director 
	
 

 

 

 

 

Each of the undersigned Guarantors hereby executes this Agreement for the purposes of (a) acknowledging that it is a Loan Party under this Agreement, (b) making the representations and warranties in Article VI of this Agreement, and (c) acknowledging and agreeing that it is bound by all of the terms, provisions, covenants and conditions applicable to the Loan Parties contained in this Agreement.

 

	
 
	
PROTEIN FINANCE COMPANY
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/s/  Andrew Johannesen
	
 

	
 
	
 
	
Andrew Johannesen
	
 

	
 
	
 
	
Vice President
	
 

	 	 	 	 
	 	 	 	 
	 	OMEGA SHIPYARD, INC.	 
	 	 	 	 
	 	 	 	 
	 	By: 	/s/  Andrew Johannesen 	 
	 	 	Andrew Johannesen	 
	 	 	Vice President	 
	 	 	 	 
	 	 	 	 
	 	PROTEIN INDUSTRIES, INC.	 
	 	 	 	 
	 	 	 	 
	 	By: 	/s/  Andrew Johannesen 	 
	 	 	Andrew Johannesen	 
	 	 	Vice President	 
	 	 	 	 
	 	 	 	 
	 	CYVEX NUTRITION, INC.	 
	 	 	 	 
	 	 	 	 
	 	By: 	/s/  Andrew Johannesen 	 
	 	 	Andrew Johannesen	 
	 	 	Vice President	 
	 	 	 	 
	 	 	 	 
	 	INCON PROCESSING, L.L.C.	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/  Andrew Johannesen 	 
	 	 	Andrew Johannesen	 
	 	 	Vice President	 
	 	 	 	 
	 	 	 	 
	 	WISCONSIN SPECIALTY PROTEIN, LLC	 
	 	 	 	 
	 	 	 	 
	 	By: 	/s/  Andrew Johannesen 	 
	 	 	Andrew Johannesen	 
	 	 	Vice President

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