Document:

exhibit10-2.htm

 EXHIBIT 10.2 

  

  

 

CUSTODY CONTROL AGREEMENT

CUSTODY CONTROL AGREEMENT dated as of April 30, 2015 by and among CĪON INVESTMENT CORPORATION, a corporation organized under the laws of the State of Maryland (the “Company”), EAST WEST BANK, a California banking corporation (“East West Bank”), as the secured lender (the “Secured Lender”), and U.S. BANK NATIONAL ASSOCIATION, as custodian (in such capacity, the “Custodian”).

 

Pursuant to a Custody Agreement dated as of June 20, 2012 (the “Custody Agreement”) by and among the Company and the Custodian, the Custodian has agreed to provide certain custodial services (the “Custodial Services”), including to establish the “CION Inv – CIC Pledged Assets Account” in the name of the Company (the “Account”) and to hold certain Securities (as defined in the Custody Agreement) that are pledged to the Secured Lender in connection with the Loan and Security Agreement (as defined below) in the name of the Company.

 

The Company and the Secured Lender have entered into a Loan and Security Agreement dated as of April 30, 2015 (the “Loan and Security Agreement”) pursuant to which the Secured Lender has agreed, subject to the terms and conditions therein specified, to extend credit (by means of loans and letters of credit) to the Company.

 

The Company, the Secured Lender and the Custodian are entering into this Agreement to perfect the security interest of the Secured Lender in the Account and any securities or other property therein.  It is understood that the Custodian has no responsibility with respect to the creation, validity or perfection of the security interest otherwise than to act in accordance with the express terms of this Agreement.  Accordingly, the parties hereto hereby agree as follows:

 

1.           Definitions.  As used herein, (i) “UCC” means the Uniform Commercial Code as in effect in the State of New York and (ii) the terms “entitlement order”, “financial asset”, “securities account”, “securities intermediary”, “security certificate” and “security entitlement” have the respective meanings attributed thereto in Article 8 of the UCC., and the terms “bank” and “deposit account” have the meanings attributed thereto in Article 9 of the UCC.  “Business day” shall be any day other than a Saturday, Sunday or other day on which the Custodian is or is authorized or required by law to be closed.

 

2.           The Account.  The Custodian hereby confirms that (i) the Account has been established and is maintained with the Custodian on its books and records and that Exhibit B attached hereto is a complete and accurate statement of the Account and (ii) to the extent the Account is deemed to be a “deposit account” within the meaning of Section 9-102(29) of the UCC, the Custodian is a “bank” and, to the extent the Account is deemed to be a “securities account” within the meaning of Section 8-501 of the UCC, the Custodian is a “securities intermediary.”  The Custodian agrees that each item of property (whether cash or any security, instrument, security certificate, obligation, share, participation, interest or other property) at any time held in the Account shall be treated as a financial asset, provided, however, nothing herein shall require the Custodian to credit to the Account or to treat as a financial asset (within the meaning of Section 8-102(a)(9) of the UCC) any asset in the nature of a general intangible (as defined in Section 9-102(a)(42) of the UCC) or, in the case of such general intangible only, to “maintain” a sufficient quantity thereof (within the meaning of Section 8-504 of the UCC). Notwithstanding any term hereof or elsewhere to the contrary, it is hereby expressly acknowledged that (a) interests in bank loans or participations (collectively “Loan Assets”) may be acquired and delivered by the Company to the Custodian from time to time which are not evidenced by, or accompanied by delivery of, a security (as that term is defined in Section 8-102 of the UCC) or an instrument (as that term is defined in Section 9-102(a)(47) of the UCC), and may be evidenced solely by delivery to the Custodian of a facsimile copy of an assignment agreement (“Loan Assignment Agreement”) in favor of the Company as assignee, (b) any such Loan Assignment Agreement (and the registration of the related Loan Assets on the books and records of the applicable obligor or bank agent) shall be registered in the name of the Company, and (c) any duty on the part of the Custodian with respect to such Loan Asset (including in respect of any duty it might otherwise have to maintain a sufficient quantity of such Loan Asset for purposes of Section 8-504 of the UCC) shall be limited to the exercise of reasonable care by the Custodian in the physical custody of any such Loan Assignment Agreement that may be delivered to it.  It is acknowledged and agreed that the Custodian is not under a duty to examine underlying credit agreements or loan documents to determine the validity or sufficiency of any Loan Assignment Agreement (and shall have no responsibility for the genuineness or completeness thereof), or for the Company’s  title to any related Loan Asset. References in this Agreement to the “Account” shall be deemed to include all financial assets in the Account.

 

 

 

 

 

3.           Control.  The Custodian hereby acknowledges that any agreements, instruments, security certificates or other documents evidencing or relating to any of the property of the Company (whether in bearer or registered form including any thereof registered in the name of the Company, payable to the Company’s order, or specifically endorsed to the Company, but which have not been endorsed to the Custodian or in blank) in which the Company has granted a security interest pursuant to the Loan and Security Agreement and that are in its possession or control (such agreements, instruments, security certificates and other documents being herein referred to as the “Underlying Documents”), are held by it for the benefit of the Secured Lender and as its agent. The Custodian agrees upon the occurrence of the Effective Time (as defined below) to deliver to the Secured Lender such of the Underlying Documents as shall from time to time be specified by the Secured Lender.

 

The Custodian hereby agrees to treat the Secured Lender as entitled to exercise the rights that comprise the financial assets credited to the Account and agrees to honor and comply with all withdrawal, payment, transfer, substitution or other fund disposition or other instructions or entitlement orders delivered by the Secured Lender to the Custodian concerning the Account (collectively, “instructions”) without further consent by the Company or any other person or entity.  Prior to the Effective Time, the Company shall also be entitled to give instructions concerning the Account.  After the Effective Time, the Company shall have no right or ability to access or withdraw or transfer financial assets from, or to give other instructions concerning, the Account until such time as the Secured Lender shall have notified the Custodian in writing of the withdrawal of a Sole Control Notice (as defined below) and instructed the Custodian to resume honoring instructions which the Company is entitled to give under the Custody Agreement.

 

For purposes hereof, the “Effective Time” shall be the opening of business on the second business day next succeeding the business day on which a notice purporting to be signed by the Secured Lender in substantially the same form of Exhibit C, attached hereto, with a copy of this Agreement attached thereto (a “Sole Control Notice”), is actually received by the individual employee of the Custodian to whom the notice is required hereunder to be addressed; provided that if any such notice is so received after 12:00 noon, New York City time, on any business day, the “Effective Time” shall be the opening of business on the third business day next succeeding the business day on which such receipt occurs.

 

 

 

 

 

Notwithstanding the foregoing: (i) all transactions involving or resulting in a transaction involving the Account duly commenced by the Custodian or any affiliate prior to the Effective Time and so consummated or processed thereafter shall be deemed not to constitute a violation of this Agreement; and (ii) the Custodian and/or any affiliate may (at its discretion and without any obligation to do so) (x) cease honoring the Company’s instructions and/or commence honoring solely the Secured Lender’s instructions concerning the Account at any time or from time to time after it becomes aware that the Secured Lender has sent to it a Sole Control Notice but prior to the Effective Time therefor (including without limitation halting, reversing or redirecting any transaction referred to in the foregoing clause (i)), or (y) deem a Sole Control Notice to be received by it for purposes of the foregoing paragraph prior to the specified individual’s actual receipt if otherwise actually received by the Custodian (or if such Sole Control Notice contains minor mistakes or other irregularities but otherwise substantially complies with the form attached hereto as Exhibit C or does not attach an appropriate copy of this Agreement), with no liability whatsoever to the Company or any other party for doing so.

 

4.           Effect upon Custody Agreement.  This Agreement supplements, rather than replaces, the Custody Agreement, which will continue to apply to the Account and the Custodial Services, and the respective rights, powers, duties, obligations, liabilities and responsibilities of the parties thereto and hereto, to the extent not expressly conflicting with the provisions of this Agreement (however, in the event of any such conflict, the provisions of this Agreement shall control).  Prior to issuing any instructions on or after the Effective Time, the Secured Lender shall provide the Custodian with such standard account documentation as the Custodian may reasonably request to establish the identity and authority of the individuals issuing instructions on behalf of the Secured Lender.  The Secured Lender may request the Custodian to provide other services (such as automatic daily transfers) with respect to the Account on or after the Effective Time, provided that if such services are not authorized or otherwise covered under the Custody Agreement, the Custodian’s decision to provide any such services shall be made in its sole discretion (including without limitation being subject to the Company and/or the Secured Lender executing any such documentation pertaining to such services or other documentation as the Custodian may require in connection therewith). The parties hereto agree that all the rights and protections contained in the Custody Agreement for the benefit of the Custodian shall apply to the Custodian under this Agreement; provided that such rights and protections shall be in addition to the rights and protections afforded to the Custodian hereunder.

 

5.           Representations, Warranties and Covenants of Custodian.  The Custodian represents and warrants to and agrees with the Secured Lender as follows:

 

(i)           The Underlying Documents and Account will be maintained in the manner set forth herein and in the Custody Agreement subject to the provisions hereof until termination of this Agreement, and the Custodian will not change the name or account number of the Account without prior notice to the Secured Lender.

 

(ii)           Except for the Custody Agreement, the Custodian has not entered into, and until the termination of this Agreement will not enter into, (x) any other agreement pursuant to which it agrees to comply with instructions with respect to the Underlying Documents or the Account, or (y) any other agreement purporting to limit or condition the obligation of the Custodian to comply with instructions originated by the Secured Lender as set forth in paragraph 3 above.

 

(iii)           The Custodian has no actual knowledge of any claim to or interest in the Underlying Documents or the Account, other than the interests therein of the Secured Lender and the Company.  If the Custodian is notified in writing by any person or entity that such person or entity asserts any lien, encumbrance or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Account, the Custodian will notify the Secured Lender and the Company promptly thereof.

 

 

 

 

 

6.           No Offset, Etc.  The Custodian hereby subordinates to the security interest of the Secured Lender in the Account any security interest now or hereafter existing in favor of the Custodian over or with respect to the Account; provided, that, the Custodian may setoff any amounts with respect to (i) returned or charged-back items, (ii) reversals or cancellations of payment orders and other electronic fund transfers, (iii) the Custodian’s charges, fees and expenses with respect to the Account or the services provided hereunder or under the Custody Agreement or (iv) overdrafts in the Account.

 

7.           No Implied Duties or Responsibilities.  Notwithstanding anything to the contrary in this Agreement:  (i) the Custodian shall have only the duties and responsibilities with respect to the matters set forth herein as is expressly set forth in writing herein and shall not be deemed to be an agent, bailee or fiduciary for any party hereto; (ii) the Custodian shall be fully protected in acting or refraining from acting in good faith without investigation on any notice (including without limitation a Sole Control Notice), instruction or request purportedly furnished to it by the Company or the Secured Lender in accordance with the terms hereof, in which case the parties hereto agree that the Custodian has no duty to make any further inquiry whatsoever; (iii) it is hereby acknowledged and agreed that the Custodian has no knowledge of (and is not required to know) the terms and provisions of the Loan and Security Agreement or any other related documentation or whether any actions by the Secured Lender (including without limitation the sending of a Sole Control Notice), the Company or any other person or entity are permitted or a breach thereunder or consistent or inconsistent therewith; (iv) the Custodian may conclusively rely on any notice (including, without limitation, a Sole Control Notice), direction, certificate or other document (including, without limitation, facsimile or other electronically transmitted instructions, documents or information) furnished to it hereunder by the Secured Lender; (v) the Custodian shall not be liable to any party hereto or any other person for any action or failure to act under or in connection with this Agreement except to the extent such conduct constitutes its own willful misconduct or gross negligence (and to the maximum extent permitted by law, no party hereunder shall under any circumstances be liable for any incidental, indirect, special, consequential or punitive damages; provided that nothing contained in this provision shall limit the Company’s or the Secured Lender’s indemnification obligations set forth in paragraph 9 to the extent such incidental, indirect, special, consequential or punitive damages are included in any third party claim in connection with which the Custodian is entitled to indemnification); (vi) the Custodian shall not be liable for losses or delays caused by force majeure, interruption or malfunction of computer, transmission or communications facilities, labor difficulties, court order or decree, the commencement of bankruptcy or other similar proceedings or other matters beyond the Custodian’s reasonable control; and (vii) the Custodian shall be under no obligation to exercise or to honor any of the rights or powers vested in it by this Agreement or the Custody Agreement at the request or direction of the Company or Secured Lender pursuant to this Agreement unless such Company or Secured Lender shall have offered to the Custodian reasonable security or indemnity against all costs, expenses and liabilities which might reasonably be incurred by it in compliance with such request or direction.

 

8.           Indemnification of Custodian.  The Company hereby agrees to indemnify, defend and save harmless the Custodian and its directors, officers, employees and agents against any loss, liability, obligation, damage, action, judgment, suit and expense (including reasonable and invoiced attorneys’ fees and expenses) (collectively, “Losses”)  incurred in connection with this Agreement or the Account (except to the extent due to the Custodian’s bad faith, willful misconduct or gross negligence) or any interpleader proceeding relating thereto or incurred at the Company’s or Secured Lender’s direction or instruction.

 

 

 

 

 

Without limiting the foregoing, after the occurrence of the Effective Time, the Secured Lender agrees to indemnify and hold harmless the Custodian and its directors, officers, employees and agents, from and against any and all Losses incurred as a result of the Secured Lender’s direction or instruction in connection with this Agreement or the Account (except to the extent due to the Custodian’s bad faith, willful misconduct or gross negligence); provided that such Losses shall not have been reimbursed by the Company.

 

9.           Termination.  The rights and powers granted herein to the Secured Lender have been granted in order to perfect its security interests in the Underlying Documents and the Account, are powers coupled with an interest and are not intended to be affected by the bankruptcy of the Company or the lapse of time.  The Custodian or Secured Lender may terminate this Agreement in either party’s discretion upon the sending of at least thirty (30) days’ advance written notice to the other parties hereto. The Custodian may terminate this Agreement because of a material breach by the Company or the Secured Lender of any of the terms of this Agreement or the Custodial Services, upon the sending of at least ten (10) business days advance written notice to the other parties hereto.  This Agreement shall automatically terminate upon the termination of the Loan and Security Agreement. Any other termination or any amendment or waiver of this Agreement shall be effected solely by an instrument in writing executed by all the parties hereto.  The provisions of paragraphs 7 and 8 above shall survive any such termination.

 

10.           Compensation.  The Custodian shall be entitled to compensation for its services in accordance with the terms of that certain fee letter dated April 14, 2015, between the Company and the Custodian.

 

11.           Securities Intermediary’s and Bank’s Jurisdiction. The parties agree that the securities intermediary's jurisdiction (within the meaning of Article 8 of the UCC) with respect to the Account (if it is deemed to be a “securities account” within the meaning of Section 8-501 of the UCC), and the bank’s jurisdiction (within the meaning of Article 9 of the UCC) with respect to the Account (if it is deemed to be a “deposit account” within the meaning of Section 9-102(29) of the UCC), and of the transactions contemplated hereby is the State of New York.

 

12.           Miscellaneous.  This Agreement:  (i) may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument; (ii) shall become effective when counterparts hereof have been signed and delivered by the parties hereto; and (iii) shall be governed by and construed in accordance with the law of the State of New York.  All parties hereby waive all rights to a trial by jury in any action or proceeding relating to the Underlying Documents, the Account or this Agreement.  All notices under this Agreement shall be in writing and sent (including via facsimile or electronic transmission) to the parties hereto at their respective addresses, fax numbers or e-mail address set forth below in Exhibit A (or to such other address, fax number or e-mail address as any such party shall designate in writing to the other parties from time to time).  No amendment or modification of this Agreement or waiver of any right hereunder shall be binding on any party hereto unless it is in writing and is signed by such party.  Unless the context requires otherwise any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented, renewed or otherwise modified (subject to any restrictions on such amendments, supplements, renewals or modifications set forth herein).

 

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.

 

	 	
CĪON INVESTMENT CORPORATION

 

 

 

By: /s/ Michael A. Reisner_______________

  Name: Michael A. Reisner

  Title: Co-President & Co-CEO

	 	
 

EAST WEST BANK, as

 

 

 

Secured Lender

By: /s/ Emma Wang______________________

  Name: Emma Wang

  Title: First Vice President

	 	
 

U.S. BANK NATIONAL ASSOCIATION, as

Custodian

 

 

 

By: /s/ Gayle Filomia_____________________

  Name: Gayle Filomia

  Title: Vice President

 

[Signature Page to Control Agreement]EX-10.3

 Exhibit 10.3 

FIFTH AMENDMENT TO CREDIT AGREEMENT 

This Fifth Amendment to Credit Agreement (the “Amendment”) is made as of this
5th day of May, 2015, by and among SL INDUSTRIES, INC., a Delaware corporation, and each of the entities listed as a Borrower on the signature pages hereto (collectively,
“Borrowers” and each is individually referred to as a “Borrower”), each of the entities listed as a GUARANTOR on the signature pages hereto (collectively “Guarantors” and each is individually
referred to as a “Guarantor”, and collectively with the Borrowers, the “Loan Parties”) the financial institutions which are now or which hereafter become a party hereto as lenders (collectively, the
“Lenders” and each is individually referred to as a “Lender”), and PNC BANK, NATIONAL ASSOCIATION, in its capacity as administrative agent for the Lenders (hereinafter referred to in such capacity as the
“Administrative Agent”) and in its capacity as a Lender. 
 BACKGROUND 

A. On August 9, 2012, Borrowers, Guarantors, Lenders and Administrative Agent entered into a Credit Agreement to reflect certain
financing arrangements between the parties thereto (as amended, modified, renewed, extended, replaced or substituted from time to time, the “Credit Agreement”). The Credit Agreement and all other documents, instruments, and
agreements executed in connection therewith are collectively referred to herein as the “Existing Financing Agreements.” All capitalized terms used herein but not otherwise defined herein shall have the meaning given to them in the
Credit Agreement. 
 B. The Borrowers have informed Administrative Agent and Lenders that a direct or indirect wholly owned subsidiary of SL
Industries, Inc. seeks to acquire the Equity Interests of a certain foreign company identified to Administrative Agent in that certain letter of intent delivered by Borrowers to Administrative Agent (the “Letter of Intent”) dated
April 29, 2015 (the “Proposed Acquisition”). The Proposed Acquisition would otherwise constitute a Permitted Acquisition except that the purchase price may exceed the amount of total costs and liabilities permitted for any
individual acquisition involving a foreign Subsidiary. 
 C. Additionally, Borrowers have informed Administrative Agent and Lenders that
Teal Electronics Corporation (“Teal”) seeks to enter into an agreement (the “Discount Agreement”) with a certain receivables purchaser to be identified and to be acceptable to Administrative Agent (the “IR
Purchaser”), pursuant to which Teal may, from time to time, offer to sell to IR Purchaser, and IR Purchaser will purchase from Teal, accounts receivable owed to Teal by a certain customer of Teal (the “IR Customer”) and
certain of IR Customer’s permitted affiliates (such receivables, the “IR Customer Receivables”) pursuant to the terms set forth in the Discount Agreement. In connection therewith, IR Purchaser may from time to time file a
financing statement relative only to the IR Customer Receivables sold by Teal to IR Purchaser pursuant to the Discount Agreement to complete true sale requirements (the “IRP Liens”). 

 D. The Borrowers have requested that Administrative Agent and Lenders (i) consent to the
Acquisition, (ii) amend certain terms and provisions contained in the Credit Agreement to permit the sale of the IR Customer Receivables pursuant to the Discount Agreement and to permit the IRP Liens, and (iii) amend certain other terms
and provisions contained in the Credit Agreement, in each case subject to the terms and conditions set forth in this Amendment. 
 NOW
THEREFORE, with the foregoing background hereinafter deemed incorporated by reference herein and made part hereof, the parties hereto, intending to be legally bound, promise and agree as follows: 

1. Consent. 
 (a) In
reliance upon the documentation and information provided to Administrative Agent and subject to the terms hereof, and notwithstanding anything to the contrary contained in Section 2.8 [Use of Proceeds], 8.2.4 [Loans and Investments], or
Section 8.2.6 [Liquidations, Mergers, Consolidations, Acquisitions] of the Credit Agreement, Administrative Agent and Lenders hereby consent upon the receipt by Administrative Agent of a fully executed version of this Amendment, and subject to
the other terms and conditions set forth herein, to the Proposed Acquisition, so long as each of the conditions of a Permitted Acquisition are otherwise satisfied (except the condition set forth in clause (a)(iii) of the definition thereof) and so
long as it is consistent with the Letter of Intent. In connection with the consent provided above, Sections 2.8 [Use of Proceeds], 8.2.4 [Loans and Investments] and 8.2.6 [Liquidations, Mergers, Consolidations, Acquisitions] of the Credit Agreement
shall be deemed amended to allow for (x) the Proposed Acquisition as described herein and (y) the use of the proceeds of the Revolving Credit Loans in connection therewith. For avoidance of doubt, Borrowers shall deliver to Administrative
Agent all documentation required under the Credit Agreement corresponding to such Proposed Acquisition evidencing that the Proposed Acquisition is a Permitted Acquisition and that each condition other than with respect to the purchase price as
required in clause (a)(iii) of such definition have been satisfied. 
 (b) This consent shall be effective only as to the items set forth in
the preceding paragraph. This consent shall not be deemed to constitute a consent to the breach by Loan Parties of any covenants or agreements contained in any Existing Financing Agreement with respect to any other transaction or matter. Loan
Parties agree that the consents set forth in the preceding paragraph (a) shall be limited to the precise meaning of the words as written therein and shall not be deemed (i) to be a consent to, or any waiver or modification of, any other
term or condition of any Existing Financing Agreement, or (ii) to prejudice any right or remedy that Administrative Agent or Lenders may now have or may in the future have under or in connection with any Existing Financing Agreement other than
with respect to the matters for which the consent in the preceding paragraph (a) has been provided. Other than as described in this Amendment, the consents described in the preceding paragraph (a) shall not alter, affect, release or
prejudice in any way any Obligations under the Existing Financing Agreements. This consent shall not be construed as establishing a course of conduct on the part of Administrative Agent or Lenders upon which the Borrower may rely at any time in the
future. Borrower expressly waives any right to assert any claim to such effect at any time. 

  
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 (c) Notwithstanding the foregoing, in the event the Proposed Acquisition is not completed on or
before September 30, 2015 (unless such date is extended by Administrative Agent in writing in its discretion) (the “Termination Date”), the consent set forth in clause (a) above shall cease to be effective on the day
immediately following the Termination Date. 
 2. Amendments. Upon the effectiveness of this Amendment, the Credit Agreement shall be
amended as follows: 
 (a) Definition. The definition of “Permitted Liens” contained in Section 1.1 of the
Credit Agreement shall be amended by deleting the “and” after clause (x), deleting the “and” after clause (xi), replacing “.” after clause (xii)(4) with “; and” and adding the following clause (xiii) to
the end of such definition: 
 (xii) Liens in favor of IR Purchaser solely in the Specified Discount Accounts sold by the Borrower to IR
Purchaser in accordance with Section 8.2.7(vii) [Disposition of Assets or Subsidiaries]. 
 (b) New Definitions. Section 1.1
of the Credit Agreement shall be amended by adding the following defined terms: 
 Discount Agreement shall mean that certain
agreement among IR Purchaser and Teal Electronics Corporation, in form and substance satisfactory to Administrative Agent, as amended, restated, supplemented, or otherwise modified from time to time with the consent of Administrative Agent. 

IR Purchaser shall mean that certain entity identified as such to, and acceptable to, Administrative Agent. 

Specified Discount Accounts shall mean those specific Accounts identified to Administrative Agent, owing by IR Customer to the Borrower
which are sold by Teal Electronics Corporation to IR Purchaser pursuant to the Discount Agreement, in accordance with Section 8.2.7(vii) [Disposition of Assets or Subsidiaries]. 

IR Customer shall mean that certain entity identified as such to, and acceptable to, Administrative Agent. 

(c) Use of Proceeds. Section 2.8 of the Credit Agreement shall be amended and restated in its entirety as follows: 

2.8 Use of Proceeds. The proceeds of the Loans shall be used for refinancing existing Indebtedness of Borrower, to provide for the
working capital needs of Borrower and reimbursement of letters of credit, to fund Permitted Recapitalization Distributions, and to fund Permitted Acquisitions. 

  
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 (d) Dispositions of Assets or Subsidiaries. Section 8.2.7 of the Credit Agreement
shall be amended by deleting the “or” at the end of clause (v) and replacing “.” at the end of clause (vi) with “; or” and adding the following clause (vii) to the end of such section: 

(vii) sales of Specified Discount Accounts, so long as the following terms and conditions are satisfied: (A) the aggregate face amount of
Specified Discount Accounts which may be sold by the Borrower shall not exceed $3,000,000 during any fiscal year; (B) any sale or transfer of Specified Discount Accounts shall be without any recourse, offset or claim of any kind or nature to or
against any Loan Party, the Administrative Agent or any Lender; (C) no Potential Default or Event of Default shall exist at the time of such sale, unless otherwise consented to by Administrative Agent; and (D) the documentation relating to
such sales is satisfactory to Administrative Agent in its reasonable discretion. 
 3. Representations and Warranties. Each Loan
Party hereby: 
 (a) reaffirms all representations and warranties made to Administrative Agent and Lenders under the Credit Agreement and all
of the other Existing Financing Agreements (as modified in connection herewith) and confirms that all are true and correct in all material respects as of the date hereof, in each case other than representations and warranties that relate to a
specific date; 
 (b) reaffirms all of the covenants contained in the Credit Agreement, and covenants to abide thereby until all Loans,
Obligations and other liabilities of Loan Parties to Administrative Agent and Lenders, of whatever nature and whenever incurred, are satisfied and/or released by Administrative Agent and Lenders; 

(c) represents and warrants that no Potential Default or Event of Default has occurred and is continuing under any of the Existing Financing
Agreements; 
 (d) represents and warrants that since December 31, 2014, no event or development has occurred which has had or is
reasonably likely to have a Material Adverse Change; 
 (e) represents and warrants that it has the authority and legal right to execute,
deliver and carry out the terms of this Amendment and all related agreements, instruments, and documents to which such Loan Party is a party, that such actions were duly authorized by all necessary corporate or company action and that the officers
executing this Amendment and any related agreements, instruments or documents on its behalf were similarly authorized and empowered, and that neither this Amendment or any related agreements, instruments, or documents contravenes any provisions of
its Articles of Incorporation or Certificate of Formation, as applicable and Bylaws or Operating Agreement, as applicable, or of any contract or agreement to which it is a party or by which any of its properties are bound; and 

(f) represents and warrants that this Amendment and all assignments, instruments, documents, and agreements executed and delivered by such Loan
Party in connection herewith, are valid, binding and enforceable in accordance with their respective terms. 

  
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 4. Security Interest. As security for the payment and performance of the Obligations, and
satisfaction by the Loan Parties of all covenants and undertakings contained in the Credit Agreement, the Loan Documents and the Existing Financing Agreements (as modified in connection herewith), each of the Loan Parties reconfirms the prior grant
of the security interest in and first priority, perfected lien in favor of Administrative Agent, for its benefit and the ratable benefit of each Lender, upon and to, all of its right, title and interest in and to the Collateral, whether now owned or
hereafter acquired, created or arising and wherever located. 
 5. Confirmation of Indebtedness. Loan Parties confirm and acknowledge
that as of the close of business on May 5, 2015 Borrowers were indebted to Administrative Agent and Lenders under the Credit Agreement in the aggregate principal amount of (i) $6,879,000, comprised of zero of outstanding Revolving Credit
Loans and $456,000 for issued and outstanding Letters of Credit and (ii) $6,423,000 under the DOJ/EPA Letter of Credit, in each case without any deduction, defense, setoff, claim or counterclaim, plus all fees, costs and expenses incurred to
date in connection with the Credit Agreement and the other Loan Documents. 
 6. Acknowledgment of Guarantors. Each Guarantor hereby
covenants and agrees that the Continuing Agreement of Guaranty and Suretyship dated August 9, 2012, as amended, restated, supplemented and otherwise modified from time to time, shall remain in full force and effect and shall continue to cover
the existing and future Obligations of Borrowers and each other Guarantor to Administrative Agent and Lenders under the Credit Agreement and the other Loan Documents. 

7. Conditions Precedent/Effectiveness Conditions. This Amendment shall be effective upon the satisfaction of each of the following
conditions (all documents to be in form and substance reasonably satisfactory to Administrative Agent and Administrative Agent’s counsel): 

(a) Administrative Agent shall have received this Amendment duly executed by Lenders and all Loan Parties; 

(b) Loan Parties shall have paid or reimbursed Administrative Agent for its reasonable attorneys’ fees and expenses as required under the
Credit Agreement, including those in connection with the preparation, negotiation and execution of this Amendment and the documents provided for herein or related hereto; 

(c) Administrative Agent shall have received an executed version of the Discount Agreement; and 

(d) Execution and/or delivery of all other agreements, instruments and documents requested by Administrative Agent to effectuate and implement
the terms hereof. 
 8. Reaffirmation of Existing Financing Agreements. Except as expressly modified by the terms hereof, all of the
terms and conditions of the Credit Agreement, as amended, and all other of the Existing Financing Agreements (except as otherwise modified in connection herewith), are hereby reaffirmed and shall continue in full force and effect as therein written.

  
 5 

 9. Release. As further consideration for Administrative Agent’s and Lenders’
agreement to grant the accommodations set forth herein, each Borrower and each Guarantor hereby waives and releases and forever discharges Administrative Agent and Lenders and their respective officers, directors, attorneys, agents and employees
(the “Released Parties”) from any liability, damage, claim, loss or expense of any kind that Borrowers, Guarantors, or any of them, may have against Released Parties, or any of them, arising out of or relating to the Obligations,
this Amendment or the Loan Documents. 
 10. Miscellaneous. 

(a) No rights are intended to be created hereunder for the benefit of any third party donee, creditor, or incidental beneficiary. 

(b) The headings of any paragraph of this Amendment are for convenience only and shall not be used to interpret any provision hereof. 

(c) No modification hereof or any agreement referred to herein shall be binding or enforceable unless in writing and signed on behalf of the
party against whom enforcement is sought. 
 (d) The terms and conditions of this Amendment shall be governed by the laws of the State of New
York. 
 (e) This Amendment may be executed in any number of counterparts and by facsimile, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same agreement. Delivery by facsimile or electronic transmission shall bind the parties hereto. 

[SIGNATURES APPEAR ON THE FOLLOWING PAGE] 

  
 6 

 IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by their
duly authorized officers as of the date first above written. 
  

							
	BORROWERS:				SL INDUSTRIES, INC.
				
					By:		/s/ Louis J. Belardi
					Name:		Louis J. Belardi
					Title:		CFO, Secretary & Treasurer
				
							SL DELAWARE, INC.
							SL DELAWARE HOLDINGS, INC.
							TEAL ELECTRONICS CORPORATION
							SL MONTEVIDEO TECHNOLOGY, INC.
							SL SURFACE TECHNOLOGIES, INC.
							CEDAR CORPORATION
							MTE CORPORATION
							MEX HOLDINGS LLC
							SL POWER ELECTRONICS CORPORATION
							SLGC HOLDINGS, INC.
							SLMTI DS LLC
				
					By:		/s/ Louis J. Belardi
					Name:		Louis J. Belardi
					Title:		Authorized Officer
				
	GUARANTORS:						SL POWER ELECTRONICS LTD.
							INDUSTRIAS SL, S.A. DE C.V.
							CONDOR POWER SUPPLIES DE MEXICO, S.A. DE C.V.
							SL XIANGHE POWER ELECTRONICS CORP.
							SL SHANGHAI POWER ELECTRONICS CORP.
							SL SHANGHAI INTERNATIONAL TRADING CORP.
							CEDRO DE MEXICO, S.A. DE C.V.
							TPE DE MEXICO, S. DE R.L. DE C.V.
				
					By:		/s/ Louis J. Belardi
					Name:		Louis J. Belardi
					Title:		Authorized Officer

  

  
 [SIGNATURE PAGE TO
FIFTH AMENDMENT TO CREDIT AGREEMENT] 

							
	AGENT AND LENDER:				PNC BANK, NATIONAL ASSOCIATION, as a Lender and as Administrative Agent
				
					By:		/s/ Bryan Flory
					Name:		Bryan Flory
					Title:		Assistant Vice President

  
 [SIGNATURE PAGE TO
FIFTH AMENDMENT TO CREDIT AGREEMENT]

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