Document:

Exhibit

	
			
	 
	 
	EXHIBIT 4.4

REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT dated June 6, 2017 (this “Agreement”) is entered into by and among Chesapeake Energy Corporation, an Oklahoma corporation (the “Company”), the guarantors listed in Schedule 1 hereto (the “Initial Guarantors”), and Citigroup Global Markets Inc. (“Citi”), acting as representative of the initial purchasers listed on Schedule A to the Purchase Agreement, as defined below (each, an “Initial Purchaser” and, collectively, the “Initial Purchasers”).
The Company, the Initial Guarantors and the Initial Purchasers are parties to the Purchase Agreement dated May 22, 2017 (the “Purchase Agreement”), which provides for the sale by the Company to the Initial Purchasers of $750,000,000 aggregate principal amount of the Company’s 8.00% Senior Notes due 2027 (the “Securities”) which will be unconditionally guaranteed on a senior unsecured basis by each of the Guarantors (as defined below).  As an inducement to the Initial Purchasers to enter into the Purchase Agreement, the Company and the Initial Guarantors have agreed to provide to the Initial Purchasers and their direct and indirect transferees the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows: 
1.    Definitions.  As used in this Agreement, the following terms shall have the following meanings: 
“Additional Guarantor” shall mean any subsidiary of the Company that executes a Guarantee under the Indenture after the date of this Agreement.
“Additional Interest” shall have the meaning set forth in Section 2(d) hereof.
“Business Day” shall mean any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed.
“Citi” shall have the meaning set forth in the preamble.
“Company” shall have the meaning set forth in the preamble and shall also include the Company’s successors.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.
“Exchange Dates” shall have the meaning set forth in Section 2(a)(ii) hereof.
“Exchange Offer” shall mean the exchange offer by the Company and the Guarantors of Exchange Securities for Registrable Securities pursuant to Section 2(a) hereof.

“Exchange Offer Registration” shall mean a registration under the Securities Act effected pursuant to Section 2(a) hereof.
“Exchange Offer Registration Statement” shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another appropriate form) and all amendments and supplements to such registration statement, in each case including the Prospectus contained therein or deemed a part thereof, all exhibits thereto and any document incorporated by reference therein.
“Exchange Securities” shall mean senior unsecured notes issued by the Company and guaranteed by the Guarantors under the Indenture containing terms identical to the Securities (except that the Exchange Securities will not be subject to restrictions on transfer or to any increase in annual interest rate for failure to comply with this Agreement) and to be offered to Holders of Securities in exchange for Securities pursuant to the Exchange Offer.
“FINRA” means the Financial Industry Regulatory Authority, Inc. 
“Free Writing Prospectus” means each free writing prospectus (as defined in Rule 405 under the Securities Act) prepared by or on behalf of the Company or used or referred to by the Company in connection with the sale of the Securities or the Exchange Securities.
“Guarantees” shall mean the guarantees of the Securities and guarantees of the Exchange Securities by the Guarantors under the Indenture.
“Guarantors” shall mean the Initial Guarantors, any Additional Guarantors and any Guarantor's successor that Guarantees the Securities.
“Holders” shall mean the Initial Purchasers, for so long as they own any Registrable Securities, and each of their successors, assigns and direct and indirect transferees who become owners of Registrable Securities under the Indenture; provided that, for purposes of Section 4 and Section 5 hereof, the term “Holders” shall include Participating Broker-Dealers.
“Indemnified Person” shall have the meaning set forth in Section 5(c) hereof.
“Indemnifying Person” shall have the meaning set forth in Section 5(c) hereof.
“Indenture” shall mean the Indenture relating to the Securities dated as of April 24, 2014 among the Company, the Guarantors named therein and Deutsche Bank Trust Company Americas, a New York banking corporation, as trustee, as supplemented by the seventh supplemental indenture dated the date hereof, among the Company, the Initial Guarantors and the Trustee, and as the same may be amended from time to time in accordance with the terms thereof. 
“Initial Purchasers” shall have the meaning set forth in the preamble.

2

“Inspector” shall have the meaning set forth in Section 3(a)(xiv) hereof.
“Issuer Information” shall have the meaning set forth in Section 5(a) hereof.
“Majority Holders” shall mean the Holders of a majority of the aggregate principal amount of the outstanding Registrable Securities; provided that whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, any Registrable Securities owned directly or indirectly by the Company or any of its affiliates shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage or amount; and provided, further, that if the Company shall issue any additional Securities under the Indenture prior to consummation of the Exchange Offer or, if applicable, the effectiveness of any Shelf Registration Statement, such additional Securities and the Registrable Securities to which this Agreement relates shall be treated together as one class for purposes of determining whether the consent or approval of Holders of a specified percentage of Registrable Securities has been obtained.
“Ordinary Course Filings” shall mean any filing by the Company under the Exchange Act that does not relate to the terms of the Securities, the terms of the Exchange Offer or the plan of distribution set forth in any Shelf Registration Statement.
“Notice and Questionnaire” shall mean a notice of registration statement and selling security holder questionnaire distributed to a Holder by the Company upon receipt of a Shelf Request from such Holder. 
“Participating Broker-Dealer” shall have the meaning set forth in Section 4(a) hereof.
“Participating Holder” shall mean any Holder of Registrable Securities that has returned a completed and signed Notice and Questionnaire to the Company in accordance with Section 2(b) hereof. 
“Person” shall mean an individual, partnership, limited liability company, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof. 
“Prospectus” shall mean the prospectus included in, or, pursuant to the rules and regulations of the Securities Act, deemed a part of, a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including a prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Shelf Registration Statement, and by all other amendments and supplements to such prospectus, and in each case including any document incorporated by reference therein. 
“Purchase Agreement” shall have the meaning set forth in the preamble. 

3

“Registrable Securities” shall mean the Securities; provided that the Securities shall cease to be Registrable Securities (i) when a Registration Statement with respect to such Securities has become effective under the Securities Act and such Securities have been exchanged or disposed of pursuant to such Registration Statement, (ii) when such Securities cease to be outstanding or (iii) except in the case of Securities held by an Initial Purchaser that otherwise remain Registrable Securities and that are ineligible to be exchanged in the Exchange Offer, when the Exchange Offer is consummated.
“Registration Default” shall mean the occurrence of any of the following: (i) the Exchange Offer is not completed on or prior to the Target Registration Date, (ii) the Shelf Registration Statement, if required pursuant to Section 2(b)(i) or 2(b)(ii) hereof, has not become effective on or prior to the Target Registration Date, (iii) if the Company receives a Shelf Request pursuant to Section 2(b)(iii), the Shelf Registration Statement required to be filed thereby has not become effective by the later of (a) the Target Registration Date and (b) 90 days after delivery of such Shelf Request, or (iv) the Shelf Registration Statement, if required by this Agreement, has become effective and thereafter ceases to be effective or the Prospectus contained therein ceases to be usable (other than during a Suspension Period), at any time during the Shelf Effectiveness Period, and such failure to remain effective or usable exists for more than 30 days (whether or not consecutive) in any 12-month period without being succeeded by any additional Registration Statement or post-effective amendment that is filed and subsequently declared effective and that cures the failure of such Registration Statement to be effective or usable.
“Registration Expenses” shall mean any and all expenses incident to performance of or compliance by the Company and the Guarantors with this     Agreement, including without limitation: (i) all SEC, stock exchange or FINRA registration and filing fees, (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws (including reasonable fees and disbursements of counsel for any Underwriters or Holders in connection with blue sky qualification of any Exchange Securities or Registrable Securities), (iii) all expenses of printing and distributing any Registration Statement, any Prospectus, any Free Writing Prospectus and any amendments or supplements thereto, any underwriting agreements, securities sales agreements or other similar agreements and any other documents relating to the performance of and compliance with this Agreement, (iv) all rating agency fees, (v) all fees and disbursements relating to the qualification of the Indenture under applicable securities laws, (vi) the fees and disbursements of the Trustee and its counsel, (vii) the fees and disbursements of counsel for the Company and the Guarantors and, in the case of a Shelf Registration Statement, the reasonable, documented fees and disbursements of one counsel for the Participating Holders (which counsel shall be selected by the Participating Holders holding a majority of the aggregate principal amount of Registrable Securities held by such Participating Holders and which counsel may also be counsel for the Initial Purchasers) in connection with such Shelf Registration Statement and (viii) the fees and disbursements of the independent registered public accountants of the Company and the Guarantors, including the expenses of any special audits or “comfort” letters required by or incident to the performance of and compliance with this Agreement, but excluding fees and 

4

expenses of counsel to the Underwriters (other than fees and expenses set forth in clause (ii) above) or the Holders and underwriting discounts and commissions, brokerage commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder.  
“Registration Statement” shall mean any registration statement of the Company and the Guarantors that covers any of the Exchange Securities or Registrable Securities pursuant to the provisions of this Agreement and all amendments and supplements to any such registration statement, including post-effective amendments, in each case including the Prospectus contained therein or deemed a part thereof, all exhibits thereto and any document incorporated by reference therein.
“SEC” shall mean the United States Securities and Exchange Commission. 
“Securities” shall have the meaning set forth in the preamble.
“Securities Act” shall mean the Securities Act of 1933, as amended from time to time. 
“Shelf Effectiveness Period” shall have the meaning set forth in Section 2(b) hereof. 
“Shelf Registration” shall mean a registration effected pursuant to Section 2(b) hereof. 
“Shelf Registration Statement” shall mean a “shelf” registration statement of the Company and the Guarantors that covers all or a portion of the Registrable Securities (but no other securities (except for the Exchange Securities related thereto) unless approved by a majority in aggregate principal amount of the Registrable Securities held by the Participating Holders) on an appropriate form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein or deemed a part thereof, all exhibits thereto and any document incorporated by reference therein.
“Shelf Request” shall have the meaning set forth in Section 2(b) hereof.
“Staff” shall mean the staff of the SEC.
“Suspension Notice” shall have the meaning set forth in Section 2(d) hereof.
“Suspension Period” shall have the meaning set forth in Section 2(d) hereof.
“Target Registration Date” shall mean November 28, 2018.
“Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended from time to time.

5

“Trustee” shall mean the trustee with respect to the Securities under the Indenture. 
“Underwriter” shall have the meaning set forth in Section 3(e) hereof. 
“Underwritten Offering” shall mean an offering in which Registrable Securities are sold to an Underwriter for reoffering to the public.
2.    Registration Under the Securities Act.  (a)  To the extent not prohibited by any applicable law or applicable interpretations of the Staff, the Company and the Guarantors shall use their commercially reasonable efforts to (x) cause to be filed an Exchange Offer Registration Statement covering an offer to the Holders to exchange all the Registrable Securities for Exchange Securities and (y) have such Registration Statement become and remain effective until the earlier of (i) 180 days after the last Exchange Date for use by one or more participating Broker-Dealers and (ii) the date on which a Participating Broker-Dealer is no longer required to deliver a prospectus in connection with market-making or other trading activities.  The Company and the Guarantors shall commence the Exchange Offer promptly after the Exchange Offer Registration Statement is declared effective by the SEC and use their commercially reasonable efforts to complete the Exchange Offer not later than 60 days after such effective date.
The Company and the Guarantors shall commence the Exchange Offer by mailing or making available the related Prospectus, appropriate letters of transmittal and other accompanying documents to each Holder stating, in addition to such other disclosures as are required by applicable law, substantially the following:    
		
	(i)
	that the Exchange Offer is being made pursuant to this Agreement and that all Registrable Securities validly tendered and not properly withdrawn will be accepted for exchange; 

		
	(ii)
	the dates of acceptance for exchange (which shall be a period of at least 20 Business Days from the date such notice is mailed or made available) (the “Exchange Dates”);

		
	(iii)
	that any Registrable Security not tendered will remain outstanding and continue to accrue interest but will not retain any rights under this Agreement, except as otherwise specified herein;

		
	(iv)
	that any Holder electing to have a Registrable Security exchanged pursuant to the Exchange Offer will be required to (A) surrender such Registrable Security, together with the appropriate letters of transmittal, to the institution and at the address and in the manner specified in the notice, or (B) effect such exchange

6

otherwise in compliance with the applicable procedures of the depositary for such Registrable Security, in each case prior to the close of business on the last Exchange Date; and 
		
	(v)
	that any Holder will be entitled to withdraw its election, not later than the close of business on the last Exchange Date, by (A) sending to the institution and at the address specified in the notice, a facsimile transmission or letter setting forth the name of such Holder, the principal amount of Registrable Securities delivered for exchange and a statement that such Holder is withdrawing its election to have such Securities exchanged or (B) effecting such withdrawal in compliance with the applicable procedures of the depositary for the Registrable Securities.    

As a condition to participating in the Exchange Offer, a Holder will be required to represent to the Company and the Guarantors that (1) any Exchange Securities to be received by it will be acquired in the ordinary course of its business, (2) at the time of the commencement of the Exchange Offer it has no arrangement or understanding with any Person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Securities in violation of the provisions of the Securities Act, (3) it is not an “affiliate” (within the meaning of Rule 405 under the Securities Act) of the Company or any Guarantor and (4) if such Holder is a broker-dealer that will receive Exchange Securities for its own account in exchange for Registrable Securities that were acquired as a result of market-making or other trading activities, then such Holder will deliver a Prospectus (or, to the extent permitted by law, make available a Prospectus to purchasers) in connection with any resale of such Exchange Securities. Each Holder hereby acknowledges and agrees that any broker-dealer and any such Holder using the Exchange Offer to participate in a distribution of the Exchange Securities to be acquired in the Exchange Offer (A) could not under SEC policy as in effect on the date of this Agreement rely on the position of the SEC enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the SEC’s letter to Shearman & Stearling dated July 2, 1993, and similar no-action letters, and (B) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and that such a secondary resale transaction should be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K if the resales are of Exchange Securities obtained by such Holder in exchange for Registrable Securities acquired by such Holder directly from the Company.
As soon as practicable after the last Exchange Date, the Company and the Guarantors shall: 
		
	(I)
	accept for exchange Registrable Securities or portions thereof validly tendered and not properly withdrawn pursuant to the Exchange Offer; and 

		
	(II)
	deliver, or cause to be delivered, to the Trustee for cancellation all Registrable Securities or portions thereof so accepted for exchange by the Company and issue, and cause the Trustee to promptly authenticate and deliver to each 

7

Holder, Exchange Securities equal in principal amount to the principal amount of the Registrable Securities tendered by such Holder.
The Company and the Guarantors shall use their commercially reasonable efforts to complete the Exchange Offer as provided above and shall comply with the 
applicable requirements of the Securities Act, the Exchange Act and other applicable laws and regulations in connection with the Exchange Offer.  The Exchange Offer shall not be subject to any conditions, other than that the Exchange Offer does not violate any applicable law or applicable interpretations of the Staff.
(b)    In the event that (i) the Company and the Guarantors determine that the Exchange Offer Registration provided for in Section 2(a) hereof is not available or the Exchange Offer may not be completed as soon as practicable after the last Exchange Date because it would violate any applicable law or applicable interpretations of the Staff, (ii) the Exchange Offer is not for any other reason completed by the Target Registration Date or (iii) the Company receives a written request (a “Shelf Request”) within 30 Days following the consummation of the Exchange Offer from any Holder representing that it (A) is prohibited by applicable law or SEC policy from participating in the Exchange Offer, (B) may not resell the Exchange Securities acquired by it in the Exchange Offer to the public without delivering a prospectus and that the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder, (C) is a broker-dealer and holds Registrable Securities acquired directly from the Company, or (D) is an affiliate of the Company and will not receive Exchange Securities in the Exchange Offer that may be freely transferred without restriction under the federal securities laws, the Company and the Guarantors shall use their commercially reasonable efforts to cause to be filed as soon as practicable after such determination or Shelf Request, as the case may be, a Shelf Registration Statement, providing for the sale of all the Registrable Securities by the Holders thereof and to have such Shelf Registration Statement become effective; provided that no Holder will be entitled to have any Registrable Securities included in any Shelf Registration Statement, or entitled to use the Prospectus forming a part of such Shelf Registration Statement, until such Holder shall have delivered a completed and signed Notice and Questionnaire and provided such other information regarding such Holder to the Company as is contemplated by Section 3(b) hereof.
In the event that the Company and the Guarantors are required to file a Shelf Registration Statement pursuant to clause (iii) of the preceding sentence, the Company and the Guarantors shall use their commercially reasonable efforts to file and have become effective both an Exchange Offer Registration Statement pursuant to Section 
2(a) hereof with respect to Registrable Securities and a Shelf Registration Statement (which may be a combined Registration Statement with the Exchange Offer Registration Statement) with respect to offers and sales of Registrable Securities held by the Initial Purchasers after completion of the Exchange Offer.  
The Company and the Guarantors agree to use their commercially reasonable efforts to keep the Shelf Registration Statement continuously effective until (i) the later of (x) one year after the last date of original issuance of the Securities and (y) six 

8

months following the effective date of the Shelf Registration Statement or (ii) such time as all the Registrable Securities covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement or otherwise cease to be Registrable Securities (the “Shelf Effectiveness Period”).  Except during a Suspension Period, the Company and the Guarantors further agree to supplement or amend the Shelf Registration Statement, the related Prospectus and any Free Writing Prospectus if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or by the Securities Act or by any other rules and regulations thereunder or if reasonably requested by a Holder with respect to information relating to such Holder, and to use their commercially reasonable efforts to cause any such amendment to become effective, if required, and such Shelf Registration Statement, Prospectus or Free Writing Prospectus, as the case may be, to become usable as soon as thereafter practicable.  The Company and the Guarantors agree to furnish to the Participating Holders copies of any such supplement or amendment promptly after its being used or filed with the SEC.  
(c)    The Company and the Guarantors shall pay all Registration Expenses in connection with any registration pursuant to Section 2(a) or Section 2(b) hereof.  Each Holder shall pay all underwriting discounts and commissions, brokerage commissions and transfer taxes, if any, relating to the sale or disposition of such Holder’s Registrable Securities pursuant to the Shelf Registration Statement and the fees and disbursements of any counsel or other advisor or experts retained by such Holders (severally or jointly), other than the counsel specifically referred to in clause (vii) of the definition of “Registration Expenses.” 
(d)    An Exchange Offer Registration Statement pursuant to Section 2(a) hereof will not be deemed to have become effective unless it has been declared effective by the SEC.  A Shelf Registration Statement pursuant to Section 2(b) hereof will not be deemed to have become effective unless it has been declared effective by the SEC or is automatically effective upon filing with the SEC as provided by Rule 462 under the Securities Act.
If a Registration Default occurs, the interest rate on the Registrable Securities will be increased (“Additional Interest”) by (i) 0.25% per annum for the first 180-day period beginning on the day immediately following such Registration Default and (ii) an additional 0.25% per annum with respect to each subsequent 90-day period, in each case until and including the date such Registration Default ends, up to a maximum increase of 1.00% per annum.  A Registration Default ends when the Securities cease to be Registrable Securities or, if earlier, (1) in the case of a Registration Default under clause (i) of the definition thereof, when the Exchange Offer is completed, (2) in the case of a Registration Default under clause (ii) or clause (iii) of the definition thereof, when the Shelf Registration Statement becomes effective or (3) in the case of a Registration Default under clause (iv) of the definition thereof, when the Shelf Registration Statement again becomes effective or the Prospectus again becomes usable.  If at any time more than one Registration Default has occurred and is continuing, then, until the next date that there is no Registration Default, the increase in interest rate provided for by this paragraph shall apply as if there occurred a single 

9

Registration Default that begins on the date that the earliest such Registration Default occurred and ends on such next date that there is no Registration Default. Any Additional Interest paid in accordance with this Section 2(d) shall be liquidated damages and shall be the sole and exclusive remedy of the Holders for each and any Registration Default.
Notwithstanding any provision in this Agreement to the contrary, the Company and the Guarantors shall be permitted by notice to the Participating Holders (a “Suspension Notice”) to suspend the use of a Shelf Registration Statement or the related Prospectus (which, for this purpose, includes the Prospectus included in the Exchange Offer Registration Statement following the completion of the Exchange Offer) without paying Additional Interest for a period not to exceed 30 consecutive calendar days or an aggregate of 60 calendar days in any twelve-month period (a “Suspension Period”), if, in the Company’s good faith determination, the continued effectiveness of such Shelf Registration Statement and the use of the related Prospectus would require the public disclosure of material non-public information of the Company. As promptly as practicable following its good faith determination that the event causing the Suspension Period set forth in the preceding sentence no longer exists, the Company and the Guarantors shall terminate the Suspension Period and notify each Participating Holder of such termination; provided however that during a Suspension Period, the Company and the Guarantors will pay any required Additional Interest in accordance with Section 2(d).
3.    Registration Procedures.  (a) In connection with their obligations pursuant to Section 2(a) and Section 2(b) hereof, the Company and the Guarantors shall: 
(i)    use their commercially reasonable efforts to prepare and file with the SEC a Registration Statement on the appropriate form under the Securities Act, which form (A) shall be selected by the Company and the Guarantors, (B) shall, in the case of a Shelf Registration, be available for the sale of the Registrable Securities by the Participating Holders thereof and (C) shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith; and use their commercially reasonable efforts to cause such Registration Statement to become effective and remain effective for the applicable period in accordance with Section 2 hereof; 
(ii)    prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period in accordance with Section 2 hereof and cause each Prospectus to be supplemented by any required prospectus supplement and, as so supplemented, to be filed pursuant to Rule 424 under the Securities Act; and keep each Prospectus current during the period described in Section 4(a)(3) of and Rule 174 under the Securities Act that is applicable to transactions by brokers or dealers with respect to the Registrable Securities or Exchange Securities; 

10

(iii)    to the extent any Free Writing Prospectus is used, file with the SEC any Free Writing Prospectus that is required to be filed by the Company or the Guarantors with the SEC in accordance with the Securities Act and to retain any Free Writing Prospectus not required to be filed;
(iv)    in the case of a Shelf Registration, furnish to each Participating Holder, to counsel for the Initial Purchasers, to counsel for such Participating Holders and to each Underwriter of an Underwritten Offering of Registrable Securities, if any, without charge, as many copies of each Prospectus, preliminary prospectus or Free Writing Prospectus, and any amendment or supplement thereto, as such Participating Holder, counsel or Underwriter may reasonably request in order to facilitate the sale or other disposition of the Registrable Securities thereunder; and, subject to Section 3(c) hereof, the Company and the Guarantors consent to the use of such Prospectus, preliminary prospectus or such Free Writing Prospectus and any amendment or supplement thereto in accordance with applicable law by each of the Participating Holders and any such Underwriters in connection with the offering and sale of the Registrable Securities covered by and in the manner described in such Prospectus, preliminary prospectus or such Free Writing Prospectus or any amendment or supplement thereto in accordance with applicable law; 
(v)    use their commercially reasonable efforts to register or qualify the Registrable Securities under all applicable state securities or blue sky laws of such jurisdictions as any Participating Holder shall reasonably request in writing by the time the applicable Registration Statement becomes effective; cooperate with such Participating Holders in connection with any filings required to be made with FINRA; and do any and all other acts and things that may be reasonably necessary or advisable to enable each Participating Holder to complete the disposition in each such jurisdiction of the Registrable Securities owned by such Participating Holder; provided that neither the Company nor any Guarantor shall be required to (1) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (2) file any general consent to service of process in any such jurisdiction or (3) subject itself to taxation in any such jurisdiction if it is not so subject;
(vi)    notify counsel for the Initial Purchasers and, in the case of a Shelf Registration, notify each Participating Holder and counsel for such Participating Holders promptly and, if requested by any such Participating Holder or counsel, confirm such advice in writing (1) when a Registration Statement has become effective, when any post-effective amendment thereto has been filed and becomes effective, when any Free Writing Prospectus has been filed or any amendment or supplement to the Prospectus or any Free Writing Prospectus has been filed, other than with respect to Ordinary Course Filings incorporated by reference therein, (2) of any request by the SEC or any state securities authority for amendments and supplements to a Registration Statement, Prospectus or any Free Writing Prospectus or for additional information after the Registration Statement has become effective, other than with respect to Ordinary Course Filings incorporated by reference therein, (3) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a 

11

Registration Statement, or of the suspension by any state securities commission of the qualification of the Registrable Securities for offering or sale in any such jurisdiction, or the initiation of any proceedings for that purpose, including the receipt by the Company of any notice of objection of the SEC to the use of a Shelf Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act, (4) unless the Company and the Guarantors have delivered a Suspension Notice, of the happening (but not the nature) of any event during the period a Registration Statement is effective that makes any statement made in such Registration Statement or the related Prospectus or any Free Writing Prospectus untrue in any material respect or that requires the making of any changes in such Registration Statement or Prospectus or any Free Writing Prospectus in order to make the statements therein, in the light of the circumstances in which they were made in the case of the Prospectus or any Free Writing Prospectus, not misleading and (5) unless the Company and the Guarantors have delivered a Suspension Notice, of any determination by the Company or any Guarantor that a post-effective amendment to a Registration Statement or any amendment or supplement to the Prospectus or any Free Writing Prospectus would be appropriate; 
(vii)    use their commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement or, in the case of a Shelf Registration, the resolution of any objection of the SEC pursuant to Rule 401(g)(2) under the Securities Act, including by filing an amendment to such Registration Statement on the proper form, at the earliest practicable moment and provide prompt notice to each Holder or Participating Holder of the withdrawal of any such order or such resolution; 
(viii)    in the case of a Shelf Registration, furnish or make available to each Participating Holder, without charge, at least one conformed copy of each Registration Statement and any post-effective amendment thereto (without any documents incorporated therein by reference or exhibits thereto, unless requested); 
(ix)    in the case of a Shelf Registration, cooperate with the Participating Holders of Registrable Securities in certificated form, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends and enable such Registrable Securities to be issued in such denominations and registered in such names (consistent with the provisions of the Indenture) as such Participating Holders may reasonably request at least two Business Days prior to the closing of any sale of Registrable Securities in certificated form, if any;
(x)    upon the occurrence of any event contemplated by Section 3(a)(vi)(4) hereof other than during a Suspension Period or for which the Company and the Guarantors have delivered a Suspension Notice, use their commercially reasonable efforts to prepare and file with the SEC a supplement or post-effective amendment to the applicable Exchange Offer Registration Statement or Shelf Registration Statement or the related Prospectus or any Free Writing Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered 

12

(or, to the extent permitted by law, made available) to purchasers of the Registrable Securities, such Prospectus or Free Writing Prospectus, as the case may be, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and the Company and the Guarantors shall notify the Participating Holders (in the case of a Shelf Registration Statement) and the Initial Purchasers and any Participating Broker-Dealers known to the Company (in the case of an Exchange Offer Registration Statement) to suspend use of the Prospectus or any Free Writing Prospectus as promptly as practicable after the occurrence of such an event, and such Participating Holders, such Participating Broker-Dealers and the Initial Purchasers, as applicable, hereby agree to suspend use of the Prospectus or any Free Writing Prospectus, as the case may be, until the Company and the Guarantors have amended or supplemented the Prospectus or the Free Writing Prospectus, as the case may be, to correct such misstatement or omission; provided that the obligations under this Section 3(a)(x) with respect to the Exchange Offer Registration Statement shall terminate at the end of the period set forth in Section 2(a)(y) of this Agreement;
(xi)    a reasonable time prior to the filing of any Registration Statement, any Prospectus, any Free Writing Prospectus, any amendment to a Registration Statement or amendment or supplement to a Prospectus or a Free Writing Prospectus, other than any Ordinary Course Filing that is to be incorporated by reference into a Registration Statement, a Prospectus or a Free Writing Prospectus after the initial filing of a Registration Statement, provide copies of such document to counsel for the Initial Purchasers for distribution to the Initial Purchasers (and, in the case of a Shelf Registration Statement, to counsel for the Participating Holders for distribution to the Participating Holders) and make such of the representatives of the Company and the Guarantors as shall be reasonably requested by the Initial Purchasers or their counsel (and, in the case of a Shelf Registration Statement, the Participating Holders or their counsel) available for discussion of such document; and the Company and the Guarantors shall not, at any time after initial filing of a Registration Statement, use or file any Prospectus, any Free Writing Prospectus, any amendment of or supplement to a Registration Statement or a Prospectus or a Free Writing Prospectus, other than any Ordinary Course Filing that is to be incorporated by reference into a Registration Statement, a Prospectus or a Free Writing Prospectus, of which the Initial Purchasers and their counsel (and, in the case of a Shelf Registration Statement, the Participating Holders and their counsel) shall not have previously been advised and furnished a copy or to which the Initial Purchasers or their counsel (and, in the case of a Shelf Registration Statement, the Participating Holders or their counsel) shall reasonably object; 
(xii)    obtain a CUSIP number for all Exchange Securities or Registrable Securities, as the case may be, not later than the initial effective date of a Registration Statement; 
(xiii)    cause the Indenture to be qualified under the Trust Indenture Act in connection with the registration of the Exchange Securities or Registrable Securities, as the case may be; cooperate with the Trustee and the Holders to effect such changes to 

13

the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and execute, and use their commercially reasonable efforts to cause the Trustee to execute, all documents as may be required to effect such changes and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner; 
(xiv)    in the case of a Shelf Registration, make available for inspection by a representative of the Participating Holders (an “Inspector”), any Underwriter participating in any disposition pursuant to such Shelf Registration Statement, and not more than one law firm or accounting firm designated by a majority in aggregate principal amount of the Securities held by the participating Holders and not more than one law firm or accounting firm designated by such Underwriters, at reasonable times and in a reasonable manner, all pertinent financial and other records, documents and properties of the Company and its subsidiaries, and cause the respective officers, directors and employees of the Company and the Guarantors to supply all information reasonably requested by any such Inspector, Underwriter, attorney or accountant in connection with a Shelf Registration Statement, in each case as is customary for “due diligence” examinations in the context of underwritten offerings; provided that if any such information is identified by the Company or any Guarantor as being confidential or proprietary, each Person receiving such information shall take such actions as are reasonably necessary to protect the confidentiality of such information to the extent such action is otherwise not inconsistent with, an impairment of or in derogation of the rights and interests of any Inspector, Participating Holder or Underwriter;
(xv)    in the case of a Shelf Registration, if reasonably requested by any Participating Holder, promptly include in a Prospectus supplement or post-effective amendment such information with respect to such Participating Holder as such Participating Holder reasonably requests to be included therein and make all required filings of such Prospectus supplement or such post-effective amendment as promptly as practicable after the Company has received notification of the matters to be so included in such filing; 
(xvi)    in the case of a Shelf Registration, with respect to an Underwritten Offering consented to by the Company (such consent not to be unreasonably withheld), enter into such customary agreements and take all such other commercially reasonable actions in connection therewith (including those requested by the Holders of a majority in principal amount of the Registrable Securities covered by the Shelf Registration Statement) in order to expedite or facilitate the disposition of such Registrable Securities pursuant to such Underwritten Offering and in such connection, (1) to the extent possible, make such representations and warranties to the Participating Holders and Underwriters of such Registrable Securities with respect to the business of the Company and its subsidiaries and the Registration Statement, Prospectus, any Free Writing Prospectus and documents incorporated by reference or deemed incorporated by reference, if any, in each case, in the form, substance and scope as are made in Section 2 of the Purchase Agreement (as modified to contemplate an underwritten offering) and other representations and warranties customarily covered in underwritten offerings, (2) obtain opinions of counsel to the Company and the Guarantors in the form, 

14

scope and substance as are delivered pursuant to Sections 5(c) and 5(d) of the Purchase Agreement (as modified to contemplate an underwritten offering) and other matters customarily covered in opinions requested in underwritten offerings, which counsel shall be reasonably satisfactory to the Participating Holders and such Underwriters and their respective counsel, addressed to each Underwriter of Registrable Securities, (3) obtain “comfort” letters from the independent registered public accountants of the Company and the Guarantors (and, if necessary, any other registered public accountant of any subsidiary of the Company or any Guarantor, or of any business acquired by the Company or any Guarantor for which financial statements and financial data are or are required to be included in the Registration Statement) addressed to each Participating Holder (to the extent permitted by applicable professional standards) and Underwriter of Registrable Securities, such letters to be in customary form and covering matters of the type customarily covered in “comfort” letters in connection with underwritten offerings, including but not limited to financial information contained in any preliminary prospectus, Prospectus or Free Writing Prospectus and (4) deliver such documents and certificates as may be reasonably requested by the Holders of a majority in principal amount of the Registrable Securities being sold or the Underwriters, and which are customarily delivered in underwritten offerings, to evidence the continued validity of the representations and warranties of the Company and the Guarantors made pursuant to clause (1) above and to evidence compliance with any customary conditions contained in an underwriting agreement; and 
(xvii)    so long as any Registrable Securities remain outstanding, cause each Additional Guarantor upon the creation or acquisition by the Company of such Additional Guarantor, to execute a counterpart to this Agreement in the form attached hereto as Annex A and to deliver such counterpart, together with an opinion of counsel as to the enforceability thereof against such entity, to the Initial Purchasers no later than five Business Days following the execution thereof.
(b)    In the case of a Shelf Registration Statement, the Company may require each Holder of Registrable Securities to furnish to the Company a Notice and Questionnaire and such other information regarding such Holder and the proposed disposition by such Holder of such Registrable Securities as the Company and the Guarantors may from time to time reasonably request in writing.
(c)    Each Participating Holder agrees that, upon receipt of any Suspension Notice or any notice from the Company and the Guarantors of the happening of any event of the kind described in Section 3(a)(vi)(3) or Section 3(a)(vi)(4) hereof, such Participating Holder will forthwith discontinue disposition of Registrable Securities pursuant to the Shelf Registration Statement until such Participating Holder’s receipt of the copies of the supplemented or amended Prospectus and any Free Writing Prospectus contemplated by Section 3(a)(x) hereof or notice of the termination of the related Suspension Period and, if so directed by the Company and the Guarantors, such Participating Holder will deliver to the Company and the Guarantors all copies in its possession, other than permanent file copies then in such Participating Holder’s possession, of the Prospectus and any Free Writing Prospectus covering such Registrable Securities that is current at the time of receipt of such notice.

15

(d)    If the Company and the Guarantors shall give any notice to suspend the disposition of Registrable Securities pursuant to a Registration Statement (including a Suspension Notice), the Company and the Guarantors shall extend the period during which such Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date when the Holders of such Registrable Securities shall have received copies of the supplemented or amended Prospectus or any Free Writing Prospectus necessary to resume such dispositions or notice of the termination of the related Suspension Period. If so directed by the Company and the Guarantors, each Holder will deliver to the Company or destroy (at the Company’s expense) all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Registrable Securities that was current at the time of receipt of such notice.  Notwithstanding the foregoing, each Holder will not be required to expunge electronic copies that reside on computer system backups or are retained to the extent otherwise required by any legal obligation, or each Holder’s bona fide internal document retention policies and procedures in place for legal, compliance or regulatory purposes.
(e)    The Participating Holders who desire to do so may sell such Registrable Securities in an Underwritten Offering only upon the prior consent of the Company, such consent not to be unreasonably withheld.  In any such Underwritten Offering, the investment bank or investment banks and manager or managers (each an “Underwriter”) that will administer the offering will be selected by the Holders of a majority in principal amount of the Registrable Securities included in such offering; provided that each such Underwriter must be reasonably satisfactory to the Company.
4.    Participation of Broker-Dealers in Exchange Offer.  (a)  The Staff has taken the position that any broker-dealer that receives Exchange Securities for its own account in the Exchange Offer in exchange for Securities that were acquired by such broker-dealer as a result of market-making or other trading activities (a “Participating Broker-Dealer”) may be deemed to be an “underwriter” within the meaning of the Securities Act and must deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Securities. 
The Company and the Guarantors understand that it is the Staff’s position that if the Prospectus contained in the Exchange Offer Registration Statement includes a plan of distribution containing a statement to the above effect and the means by which Participating Broker-Dealers may resell the Exchange Securities, without naming the Participating Broker-Dealers or specifying the amount of Exchange Securities owned by them, such Prospectus may be delivered by Participating Broker-Dealers (or, to the extent permitted by law, made available to purchasers) to satisfy their prospectus delivery obligation under the Securities Act in connection with resales of Exchange Securities for their own accounts, so long as the Prospectus otherwise meets the requirements of the Securities Act. 
(b)    In light of the above, and notwithstanding the other provisions of this Agreement, the Company and the Guarantors agree to amend or supplement the 

16

Prospectus contained in the Exchange Offer Registration Statement for a period of up to 180 days after the last Exchange Date (as such period may be extended pursuant to Section 3(d) hereof), in order to expedite or facilitate the disposition of any Exchange Securities by Participating Broker-Dealers consistent with the positions of the Staff recited in Section 4(a) above.  The Company and the Guarantors further agree that Participating Broker-Dealers shall be authorized to deliver such Prospectus (or, to the extent permitted by law, make available) during such period in connection with the resales contemplated by this Section 4.
(c)    The Initial Purchasers shall have no liability to the Company, any Guarantor or any Holder with respect to any request that they may make pursuant to Section 4(b) hereof. 
5.     Indemnification and Contribution.  (a)  The Company and each Guarantor, jointly and severally, agree to indemnify and hold harmless each Initial Purchaser and each Holder, their respective affiliates, directors and officers and each Person, if any, who controls any Initial Purchaser or any Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, reasonable legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such reasonable fees and expenses are incurred), joint or several, that arise out of, or are based upon, (1) any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading, or (2) any untrue statement or alleged untrue statement of a material fact contained in any Prospectus, any Free Writing Prospectus or any “issuer information” (“Issuer Information”) filed or required to be filed pursuant to Rule 433(d) under the Securities Act, or any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Initial Purchaser, or information relating to any Holder furnished to the Company in writing through Citi, or any selling Holder expressly for use therein.  In connection with any Underwritten Offering permitted by Section 3, the Company and the Guarantors, jointly and severally, will also indemnify the Underwriters, if any, their respective affiliates and each Person who controls such Persons (within the meaning of the Securities Act and the Exchange Act) to the same extent as provided above with 
respect to the indemnification of the Holders, if requested in connection with any Registration Statement, any Prospectus, any Free Writing Prospectus or any Issuer Information.
(b)    Each Holder agrees, severally and not jointly, to indemnify and hold harmless the Company, the Guarantors, the Initial Purchasers and the other selling Holders, the directors of the Company and the Guarantors, each officer of the Company and the Guarantors who signed the Registration Statement and each Person, if any, 

17

who controls the Company, the Guarantors, any Initial Purchaser and any other selling Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Holder furnished to the Company in writing by such Holder expressly for use in any Registration Statement, any Prospectus and any Free Writing Prospectus.
(c)    If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Person in respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such Person (the “Indemnified Person”) shall promptly notify the Person against whom such indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under paragraph (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under paragraph (a) or (b) above. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person to represent in such proceeding the Indemnified Person and any others entitled to indemnification pursuant to this Section 5 that the Indemnifying Person may designate and shall pay the reasonable fees and expenses of such counsel related to such proceeding, as incurred.  In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.  It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred.  Any such separate firm (x) for any Initial Purchaser, its affiliates, directors and officers and any control Persons of such Initial Purchaser shall be designated in writing by Citi, (y) for any Holder, its directors and officers and any control Persons of such Holder shall be designated in writing by the Majority Holders and (z) in all other cases shall be designated in writing by the Company.  The Indemnifying 
Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the 

18

plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment.  No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (A) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (B) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.
(d)    If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors from the offering of the Securities and the Exchange Securities, on the one hand, and by the Holders from receiving Securities or Exchange Securities registered under the Securities Act, on the other hand, or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Company and the Guarantors on the one hand and the Holders on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.  The relative fault of the Company and the Guarantors on the one hand and the Holders on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Guarantors or by the Holders and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
(e)    The Company, the Guarantors and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 5 were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above.  The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with any such action or claim.  Notwithstanding the provisions of this Section 5, in no event shall a Holder be required to contribute any amount in excess of the amount by which the total price at which the Securities or Exchange Securities sold by such Holder exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No 

19

Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.  The Holders’ obligations to contribute pursuant to this Section 5 are several and not joint.
 (f)    The remedies provided for in this Section 5 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.
(g)    The indemnity and contribution provisions contained in this Section 5 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of the Initial Purchasers or any Holder or any Person controlling any Initial Purchaser or any Holder, or by or on behalf of the Company or the Guarantors or the officers or directors of or any Person controlling the Company or the Guarantors, (iii) acceptance of any of the Exchange Securities and (iv) any sale of Registrable Securities pursuant to a Shelf Registration Statement.
6.    General. 
(a)    No Inconsistent Agreements.   The Company and the Guarantors represent, warrant and agree that (i) the rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of any other outstanding securities issued or guaranteed by the Company or any Guarantor under any other agreement and (ii) neither the Company nor any Guarantor has entered into, or on or after the date of this Agreement will enter into, any agreement that is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof.
(b)    Amendments and Waivers.   The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company and the Guarantors have obtained the written consent of Holders of at least a majority in aggregate principal amount of the outstanding Registrable Securities affected by such amendment, modification, supplement, waiver or consent; provided that no amendment, modification, supplement, waiver or consent to any departure from the provisions of Section 5 hereof shall be effective as against any Holder of Registrable Securities unless consented to in writing by such Holder.  Any amendments, modifications, supplements, waivers or consents pursuant to this Section 6(b) shall be by a writing executed by each of the parties hereto.
(c)    Notices.  All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telecopier, or any courier guaranteeing overnight delivery (i) if to a Holder, at the most current address given by such Holder to the Company by means of a notice given in accordance with the provisions of this Section 6(c), which address initially is, with respect to the Initial Purchasers, the address set forth in the Purchase Agreement; (ii) if

20

to the Company and the Guarantors, initially at the Company’s address set forth in the Purchase Agreement and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 6(c); and (iii) to such other persons at their respective addresses as provided in the Purchase Agreement and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 6(c).  All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged, if telecopied; and on the next Business Day if timely delivered to an air courier guaranteeing overnight delivery.  Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee, at the address specified in the Indenture. 
(d)    Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Purchase Agreement or the Indenture.  If any transferee of any Holder shall acquire Registrable Securities in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all the terms of this Agreement, and by taking and holding such Registrable Securities such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such Person shall be entitled to receive the benefits hereof.  The Initial Purchasers (in their capacity as Initial Purchasers) shall have no liability or obligation to the Company or the Guarantors with respect to any failure by a Holder to comply with, or any breach by any Holder of, any of the obligations of such Holder under this Agreement. 
(e)    Third Party Beneficiaries. Each Holder shall be a third party beneficiary to the agreements made hereunder between the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand.    
(f)    Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, 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. 
(g)    Headings.  The headings in this Agreement are for convenience of reference only, are not a part of this Agreement and shall not limit or otherwise affect the meaning hereof. 
(h)    Governing Law.  This Agreement, and any claim, controversy or dispute arising under or related to this Agreement, shall be governed by and construed in accordance with the laws of the State of New York. 

21

(i)    Entire Agreement; Severability.  This Agreement contains the entire agreement between the parties relating to the subject matter hereof and supersedes all oral statements and prior writings with respect thereto.  If any term, provision, covenant or restriction contained in this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable or against public policy, the remainder of the terms, provisions, covenants and restrictions contained herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated.  The Company, the Guarantors and the Initial Purchasers shall endeavor in good faith negotiations to replace the invalid, void or unenforceable provisions with valid provisions the economic effect of which  comes as close as possible to that of the invalid, void or unenforceable provisions.
[Signature pages follow.]

22

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

	 
	 
	 

	 
	 
	CHESAPEAKE ENERGY CORPORATION

	 
	 
	 

	 
	By:
	/s/ Domenic Dell'Osso, Jr.

	 
	 
	Name:  Domenic Dell'Osso, Jr.

	 
	 
	Title:  Executive Vice President and
Chief Financial Officer

	 
	 
	 

	 
	 
	INITIAL GUARANTORS:

	 
	 
	 

	 
	 
	CHESAPEAKE ENERGY LOUISIANA CORPORATION,

	 
	 
	CHESAPEAKE ENERGY MARKETING, L.L.C.,

	 
	 
	CHESAPEAKE E&P HOLDING, L.L.C.,

	 
	 
	CHESAPEAKE NG VENTURES CORPORATION,

	 
	 
	CHESAPEAKE OPERATING, L.L.C.,

	 
	 
	CHESAPEAKE PLAINS, LLC,

	 
	 
	CHK ENERGY HOLDINGS, INC.,

	 
	 
	SPARKS DRIVE SWD, INC.,

	 
	 
	WINTER MOON ENERGY CORPORATION,

	 
	 
	CHESAPEAKE AEZ EXPLORATION, L.L.C.,

	 
	 
	CHESAPEAKE APPALACHIA, L.L.C.,

	 
	 
	CHESAPEAKE-CLEMENTS ACQUISITION, L.L.C.,

	 
	 
	CHESAPEAKE EXPLORATION, L.L.C.,

	 
	 
	CHESAPEAKE LAND DEVELOPMENT COMPANY, L.L.C.,

	 
	 
	CHESAPEAKE MIDSTREAM DEVELOPMENT, L.L.C.,

	 
	 
	CHESAPEAKE ROYALTY, L.L.C.,

	 
	 
	CHESAPEAKE VRT, L.L.C.,

	 
	 
	CHK UTICA, L.L.C.,

	 
	 
	COMPASS MANUFACTURING, L.L.C.,

	 
	 
	EMLP, L.L.C.,

	 
	 
	EMPRESS, L.L.C.,

	 
	 
	GSF, L.L.C.,

	 
	 
	MC LOUISIANA MINERALS, L.L.C.,

	 
	 
	MC MINERAL COMPANY, L.L.C.,

	 
	 
	MIDCON COMPRESSION, L.L.C.,

	 
	 
	NOMAC SERVICES, L.L.C.,

	 
	 
	NORTHERN MICHIGAN EXPLORATION COMPANY, L.L.C.,

	 
	 
	CHESAPEAKE LOUISIANA, L.P.,
By: Chesapeake Operating, L.L.C., its General Partner

	 
	 
	EMPRESS LOUISIANA PROPERTIES, L.P.
By: EMLP, L.L.C., its General Partner

	 
	 
	 

	 
	By:
	/s/ Domenic Dell'Osso, Jr.

	 
	 
	Name:  Domenic Dell'Osso, Jr.

	 
	 
	Title:  Authorized Signatory

[Signature Page to Registration Rights Agreement]

	
			
	Confirmed and accepted as of the date first above written:

	 
	 
	 

	CITIGROUP GLOBAL MARKETS INC.
	 

	 
	 
	 

	For itself and on behalf of the
	 

	several Initial Purchasers
	 

	 
	 
	 

	By:
	/s/ Mohammed S. Baabde
	 

	 
	Name:  Mohammed S. Baabde
	 

	 
	Title:  Director
	 

    

[Signature Page to Registration Rights Agreement]

	
		
	 
	Schedule 1

	 
	 

	 
	 

	INITIAL GUARANTORS

	 
	 

	CHESAPEAKE ENERGY LOUISIANA CORPORATION
	 

	CHESAPEAKE ENERGY MARKETING, L.L.C.
	 

	CHESAPEAKE E&P HOLDING, L.L.C.
	 

	CHESAPEAKE NG VENTURES CORPORATION
	 

	CHESAPEAKE OPERATING, L.L.C.
	 

	CHESAPEAKE PLAINS, LLC
	 

	CHK ENERGY HOLDINGS, INC.
	 

	SPARKS DRIVE SWD, INC.
	 

	WINTER MOON ENERGY CORPORATION
	 

	CHESAPEAKE AEZ EXPLORATION, L.L.C.
	 

	CHESAPEAKE APPALACHIA, L.L.C.
	 

	CHESAPEAKE-CLEMENTS ACQUISITION, L.L.C.
	 

	CHESAPEAKE EXPLORATION, L.L.C.
	 

	CHESAPEAKE LAND DEVELOPMENT COMPANY, L.L.C.
	 

	CHESAPEAKE MIDSTREAM DEVELOPMENT, L.L.C.
	 

	CHESAPEAKE ROYALTY, L.L.C.
	 

	CHESAPEAKE VRT, L.L.C.
	 

	CHK UTICA, L.L.C.
	 

	COMPASS MANUFACTURING, L.L.C.
	 

	EMLP, L.L.C.
	 

	EMPRESS, L.L.C.
	 

	GSF, L.L.C.
	 

	MC LOUISIANA MINERALS, L.L.C.
	 

	MC MINERAL COMPANY, L.L.C.
	 

	MIDCON COMPRESSION, L.L.C.
	 

	NOMAC SERVICES, L.L.C.
	 

	NORTHERN MICHIGAN EXPLORATION COMPANY, L.L.C.
	 

	CHESAPEAKE LOUISIANA, L.P.
	 

	EMPRESS LOUISIANA PROPERTIES, L.P.
	 

Annex A
Counterpart to Registration Rights Agreement
The undersigned hereby absolutely, unconditionally and irrevocably agrees as a Guarantor (as defined in the Registration Rights Agreement, dated June 6, 2017 by and among Chesapeake Energy Corporation, an Oklahoma corporation, the guarantors party thereto and Citigroup Global Markets Inc., on behalf of itself and the other Initial Purchasers) to be bound by the terms and provisions of such Registration Rights Agreement.
IN WITNESS WHEREOF, the undersigned has executed this counterpart as of _______________, 201_.
	
			
	 
	[GUARANTOR]

	 
	 
	 

	 
	By:
	 

	 
	 
	Name:

	 
	 
	Title:cpst_Ex10.1

		

			 

		

		
			Exhibit 10.1
		

		
			BUSINESS FINANCING AGREEMENT
		

			
					
						Borrower:

					
					
						Capstone Turbine Corporation

					
						21211 Nordhoff Street

					
						Chatsworth, CA 91311

					
						 

					
					
						Lender:

					
					
						Western Alliance Bank, an Arizona corporation

					
						55 Almaden Boulevard, Suite 100

					
						San Jose, CA  95113

				

		
			 
		

		
			This BUSINESS FINANCING AGREEMENT, dated as of June 2, 2017, is made and entered into between WESTERN ALLIANCE BANK, AN ARIZONA CORPORATION (“Lender”) and CAPSTONE TURBINE CORPORATION, a Delaware corporation (“Borrower”), on the following terms and conditions:
		

		
			1.           REVOLVING CREDIT LINE.
		

		
			1.1         Advances.  Subject to the terms and conditions of this Agreement, from the date on which this Agreement becomes effective until the Maturity Date, Lender will make Advances to Borrower not exceeding the Credit Limit (subject at all times to, in the case of Advances with respect to EXIM Eligible Receivables and EXIM Eligible Inventory, the EXIM Credit Limit) or the Borrowing Base (subject at all times to the Domestic Borrowing Base and EXIM Borrowing Base as applicable), whichever is less; provided that in no event shall Lender be obligated to make any Advance that results in an Overadvance or while any Overadvance is outstanding. Amounts borrowed under this Section may be repaid and reborrowed during the term of this Agreement. It shall be a condition to each Advance that (a) an Advance Request acceptable to Lender has been received by Lender, (b) all of the representations and warranties set forth in Section 3 are true and correct in all material respects (other than representations and warranties already qualified by materiality, which shall be true and correct in all respects), on the date of such Advance as though made at and as of each such date (other than representations and warranties that speak as of an earlier date, in which case as of such earlier date), and (c) no Default has occurred and is continuing, or would result from such Advance. 
		

		
			1.2         Advance Requests.  Borrower may request that Lender make an Advance by delivering to Lender an Advance Request therefor and Lender shall be entitled to rely on all the information provided by Borrower to Lender on or with the Advance Request. If the conditions to lending noted in Section 1.1 are satisfied, the Lender shall honor Advance Requests, instructions or repayments given by Borrower (if an individual) or by any Authorized Person.
		

		
			1.3         Due Diligence.  Lender may audit Borrower’s Receivables and Inventory and any and all records pertaining to the Collateral, at Lender’s sole discretion and at Borrowers expense provided, an audit must be completed prior to the initial Advance and at least once every six months thereafter. Lender may appraise the Inventory, at Lender’s sole discretion and at Borrowers expense provided, an appraisal must be completed prior to the initial Advance and at least once every twelve months thereafter. Lender may at any time and from time to time contact Account Debtors and other persons obligated or knowledgeable in respect of Receivables to confirm the Receivable Amount of such Receivables, to determine whether Receivables constitute Eligible Receivables, and for any other purpose in connection with this Agreement. If any of the Collateral or Borrower’s books or records pertaining to the Collateral are in the possession of a third party, Borrower authorizes that third party to permit Lender or its agents to have access to perform inspections or audits thereof and to respond to Lender’s requests for information concerning such Collateral and records.
		

		
			1.4         Collections.
		

		
			(a)          Lender shall have the exclusive right to receive all Collections on all Receivables. Borrower shall (i) immediately transfer and deliver to Lender all Collections Borrower receives for deposit into the Collection Account, (ii) deliver to Lender a detailed cash receipts journal on Friday of each week until the Lockbox is operational, and (iii) immediately enter into a collection services agreement acceptable to Lender (the “Lockbox Agreement”) pursuant to which all Collections received in the Lockbox shall be deposited into the Collection Account. Borrower shall use the Lockbox address as the remit to and payment address for all of Borrower’s Collections from Account Debtors, and Borrower shall instruct all Account Debtors to make payments either directly to the Lockbox for deposit by Lender directly to the Collection Account, or instruct them to deliver such payments to Lender by wire transfer, ACH, or other means as Lender may direct for deposit to the Lockbox or Collection Account. It will be considered an immediate Event of Default if this does not occur or the Lockbox is not operational within 45 days of the date of this Agreement. Without limiting the foregoing, Borrower may maintain any deposit account it maintains with Wells Fargo as of the date of this Agreement solely (i) for purposes of receipt of Collections from customers who have not yet begun paying into the Lockbox or the Collections Account so long as within 30 days from the date of this Agreement (or such later date to which Lender may agree in its sole discretion), at Lender’s option, Borrower enters into one or more “springing” control agreements with Wells Fargo reasonably acceptable to Lender in respect of such account(s), Borrower promptly sweeps Collections received in such account(s) after the date hereof to the Lockbox or the Collections Account and such account(s) is closed within 90 days after the date of this Agreement (or such later date to which Lender may agree in its sole discretion), (ii) for purposes of payment of ACH and checks as of the date of this Agreement until there is no longer any ACH or checks outstanding on such account and (iii) for purposes of paying payroll until such function is switched to Lender or a payroll provider acceptable to Lender.
		

		
			

		 

		

			 

		

 

		

			 

		

		

		
			(b)          At Lender’s option, Lender may either (i) transfer all Collections deposited into the Collection Account to Borrower’s Account, or (ii) apply the Collections deposited into the Collection Account to the outstanding Account Balance, in either case, (x) at the end of each day or (y) if Lender is unable to do so at the end of each day, then in no event later than within three business days of the date received; provided that upon the occurrence and during the continuance of any Default, Lender may apply all Collections to the Obligations in such order and manner as Lender may determine. Lender has no duty to do any act other than to apply such amounts as required above. If an item of Collections is not honored or Lender does not receive good funds for any reason, any amount previously transferred to Borrower’s Account or applied to the Account Balance shall be reversed as of the date transferred or applied, as applicable, and, if applied to the Account Balance, the Finance Charge will accrue as if the Collections had not been so applied. Lender shall have, with respect to any goods related to the Receivables, all the rights and remedies of an unpaid seller under the UCC and other applicable law, including the rights of replevin, claim and delivery, reclamation and stoppage in transit.  
		

		
			1.5         Receivables Activity Report. Within 30 days after the end of each Month End, Lender shall send to Borrower a report covering the transactions for the prior billing period, including the amount of all Advances, Collections, Adjustments, Finance Charges, and other fees and charges. The accounting shall be deemed correct and conclusive, absent manifest error, unless Borrower makes written objection to Lender within 30 days after the Lender sends the accounting to Borrower.
		

		
			1.6         Adjustments.  In the event any Adjustment or dispute is asserted by any Account Debtor, Borrower shall use commercially reasonable efforts to promptly resolve such disputes; provided that in no case will (a) the aggregate Adjustments made with respect to any Receivable exceed seven percent (7%) of its original Receivable Amount or (ii) the aggregate Adjustments made in any calendar month exceed $25,000, unless, in either case, Borrower has obtained the prior written consent of Lender. So long as any Obligations are outstanding, Lender shall have the right, at any time, to take possession of any rejected, returned, or recovered personal property valued more than $25,000, individually, or $100,000 in the aggregate,. If such possession is not taken by Lender, and provided that the value of such personal property is greater than $25,000, individually, or $100,000 in the aggregate, Borrower is to resell it for Lender’s account at Borrower’s expense with the proceeds made payable to Lender. While Borrower retains possession of any returned goods and the value of such returned goods is greater than $25,000, individually, or $100,000 in the aggregate, Borrower shall segregate said goods and mark them as property of Lender.
		

		
			1.7         Recourse; Maturity.  Advances and the other Obligations shall be with full recourse against Borrower. On the Maturity Date, Borrower will pay all then outstanding Advances and other Obligations (other than contingent indemnification obligations not yet due and payable) to the Lender or such earlier date as shall be herein provided.
		

		
			1.8         Letter of Credit Line.  Subject to the terms and conditions of this Agreement, Lender hereby agrees to issue or cause an Affiliate to issue letters of credit for the account of Borrower to support the obligations of Borrower or any subsidiary of Borrower (each, a “Letter of Credit” and collectively, “Letters of Credit”) from time to time; provided that (a) the sum of the Letter of Credit Obligations and the FX Amount (as hereinafter defined) shall not at any time exceed the International Sublimit and (b) the Letter of Credit Obligations will be treated as Advances for purposes of determining availability under the Credit Limit and shall decrease, on a dollar-for-dollar basis, the amount available for other Advances. The form and substance of each Letter of Credit shall be subject to approval by Lender, in its sole discretion. Each Letter of Credit shall be subject to the additional terms of the Letter of Credit agreements, applications and any related documents required by Lender in connection with the issuance thereof (each, a “Letter of Credit Agreement”). Each draft paid under any Letter of Credit shall be repaid by Borrower in accordance with the provisions of the applicable Letter of Credit Agreement. No Letter of Credit shall be issued that results in an Overadvance or while any Overadvance is outstanding. Upon the Maturity Date, the amount of Letters of Credit Obligations shall be Cash Collateralized on terms reasonably acceptable to Lender if the term of this Agreement is not extended by Lender, or shall be terminated.
		

		
			1.9         Cash Management Services.  Borrower may use availability hereunder up to the Cash Management Sublimit for Lender’s cash management services, which may include merchant services, direct deposit of payroll, business credit card, and check cashing services identified in various cash management services agreements related to such services (the “Cash Management Services”). The aggregate committed amount under the Cash Management Sublimit (without giving effect to any extensions of credit thereunder) will be treated as an Advance for purposes of determining availability under the Credit Limit and shall decrease, on a dollar-for-dollar basis, the amount available for other Advances.  The Cash Management Services shall be subject to additional terms set forth in applicable cash management services agreements.
		

		
			1.10         Foreign Exchange Facility. Subject to and upon the terms and conditions of this Agreement and any other agreement that Borrower may enter into with Lender in connection with foreign exchange transactions (“FX Contracts”) and subject to the availability under the Credit Limit and the Borrowing Base, Borrower may request Lender to enter into FX Contracts with Borrower (the “Foreign Exchange Facility”), which shall be due no later than the Maturity Date unless cash secured on terms reasonably satisfactory to Lender.  Borrower shall conduct all its United States foreign currency exchange business through Lender. Borrower shall pay any standard issuance and 
		

		
			

		 

		

			2

		

 

		

			 

		

		

		
			other fees that Lender notifies Borrower will be charged for issuing and processing FX Contracts for Borrower. The sum of the Letter of Credit Obligations and the FX Amount shall at all times be equal to or less than the International Sublimit. The “FX Amount” shall equal the amount determined by multiplying (i) the aggregate amount, in United States Dollars, of FX Contracts between Borrower and Lender outstanding as of any date of determination by (ii) the applicable Foreign Exchange Reserve Percentage as of such date. The “Foreign Exchange Reserve Percentage” shall be a percentage as determined by Lender, in its reasonable discretion from time to time and advised to Borrower.  If at any time the EXIM Line of Credit is terminated or otherwise ceases to exist, Borrower shall immediately secure in cash all obligations under the Foreign Exchange Facility on terms reasonably acceptable to Lender or shall terminate its obligations under the Foreign Exchange Facility.
		

		
			1.11       Overadvances.  Upon any occurrence of an Overadvance, Borrower shall immediately pay down the Advances such that, after giving effect to such payments, no Overadvance exists; provided that if an Overadvance exists because Lender institutes reserves or changes its criteria for what constitutes eligible receivables or inventory for purposes of the Borrowing Base, Borrower shall immediately pay down the Advances after written notice by Lender to Borrower of such Overadvance such that after giving effect to such payments, no Overadvance exists.
		

		
			1.12       Termination of Commitment.  On the Maturity Date the Line of Credit shall automatically terminate, all of Lender’s obligations to make Advances and extend credit to Borrower pursuant to the terms and conditions of this Agreement shall automatically terminate, and the Credit Limit shall automatically reduce to $0.  Borrower may also terminate the Line of Credit at any time upon not less than 7 days’ prior written notice to Lender (it being understood and agreed that the actual date of termination may be modified after delivery of such notice if in connection with a refinancing of the Line of Credit for which the date of such refinancing changes).  In the event of any termination of the Line of Credit, Borrower shall, concurrent with such termination, pay to Lender, in immediately available funds, the entire outstanding balance of the Obligations (other than (i) inchoate indemnification obligations and (ii) Letters of Credit Obligations and other Obligations that have been Cash Collateralized), including the Termination Fee, if applicable.
		

		
			2.           FEES AND FINANCE CHARGES
		

		
			2.1         Finance Charges.  Lender may, but is not required to, deduct the amount of accrued Finance Charge from Collections received by Lender.  The accrued and unpaid Finance Charge shall be due and payable within 10 calendar days after each  Month End during the term hereof.  
		

		
			2.2         Fees.  
		

		
			(a)         Termination Fee.  In the event the Line of Credit under this Agreement is terminated prior to the first anniversary of the date of this Agreement, Borrower shall pay the Termination Fee to Lender; provided that if this Agreement, following Borrower's request and the consent of Lender (which consent shall not be unreasonably withheld), is transferred to an operating division of Lender other than the Capital Finance Group, the transfer will not be deemed a termination resulting in the payment of the Termination Fee; provided that Borrower agrees, at the time of transfer, to the payment of comparable fees in an amount not less than that set forth in this Agreement, and provided further that such transfer is not as a result of an Event of Default.
		

		
			(b)          Reserved.
		

		
			(c)          Domestic Facility Fee.  Borrower shall pay the Domestic Facility Fee to Lender promptly upon the execution of this Agreement and on each anniversary thereof.
		

		
			(d)          EXIM Facility Fee.  Borrower shall pay the EXIM Facility Fee to Lender promptly upon the execution of this Agreement and on each anniversary thereof.
		

		
			(e)          EXIM Application Fee.  Borrower shall pay the EXIM Application Fee to Lender promptly upon the execution of this Agreement and on each anniversary thereof.
		

		
			(f)           Reserved.  
		

		
			(g)          Letter of Credit Fees.  Borrower shall pay to Lender fees upon the issuance of each Letter of Credit, upon the payment or negotiation of each draft under any Letter of Credit and upon the occurrence of any other activity with respect to any Letter of Credit (including without limitation, the transfer, amendment or cancellation of any Letter of Credit) determined in accordance with Lender's standard fees and charges then in effect for such activity.  
		

		
			(h)          Reserved.  
		

		
			
		

		
			

		 

		

			3

		

 

		

			 

		

		

		
			(i)           Cash Management and FX Forward Contract Fees.  Borrower shall pay to Lender fees in connection with the Cash Management Services and the FX Forward Contracts as determined in accordance with Lender's standard fees and charges then in effect for such activity. 
		

		
			(j)           Due Diligence Fee.  Borrower shall pay the Due Diligence Fee to Lender on each anniversary of the date of this Agreement.
		

		
			3.           REPRESENTATIONS AND WARRANTIES.  Borrower represents and warrants on the date of this Agreement and on the date of each Advance or issuance of a Letter of Credit:  
		

		
			3.1         No representation, warranty or other statement of Borrower in any certificate or written statement given to Lender contains any untrue statement of a material fact or omits to state a material fact necessary to make the statement contained in the certificates or statement not misleading.  
		

		
			3.2         Borrower is duly existing and in good standing in its state of formation, Borrower is qualified and licensed to do business in, and in good standing in, any state in which the conduct of its business or its ownership of property requires that it be qualified, unless failure to be so qualified or licensed or in good standing would not reasonably be expected to result in a Material Adverse Change.
		

		
			3.3         The execution, delivery and performance of this Agreement has been duly authorized, and does not conflict with Borrower’s organizational documents, nor constitute an Event of Default under any material agreement by which Borrower is bound. Borrower is not in default under any agreement to which or by which it is bound where such default would reasonably be expected to result in a Material Adverse Change.
		

		
			3.4         Borrower has good title to the Collateral and all inventory is in all material respects of good and marketable quality, free from defects except where the same would not reasonably be expected to result in a Material Adverse Change.
		

		
			3.5         In each case except as otherwise notified to Lender pursuant to Section 4.2 hereof, Borrower’s name, form of organization, chief executive office, and the place where the records concerning all Receivables and Collateral are kept is set forth at the beginning of this Agreement, Borrower is located at its address for notices set forth in this Agreement.
		

		
			3.6         As of the date of this Agreement, Exhibit E sets forth a complete list of all patents, patent applications, trademarks, trademark applications, registered copyrights and copyright applications owned by Borrower and material in-bound licenses to Borrower from third parties (other than readily available, non-negotiated licenses of computer software and other intellectual property used solely for performing accounting, word processing and similar administrative tasks (referred to herein as “Off-the Shelf Licenses”)).
		

		
			4.           MISCELLANEOUS PROVISIONS.  Borrower will:    
		

		
			4.1         Maintain its corporate existence and good standing in its jurisdictions of incorporation and maintain its qualification in each jurisdiction necessary to Borrower’s business or operations and not merge or consolidate with or into any other business organization (other than one or more of Borrower’s subsidiaries merging into Borrower with Borrower being the surviving corporation), or acquire all or substantially all of the capital stock or property of a third party, unless (i) any such acquired entity becomes a “borrower” under this Agreement and (ii) Lender has previously consented to the applicable transaction in writing.
		

		
			4.2         Give Lender at least 30 days prior written notice of changes to its name, organization, chief executive office or location of records (or such shorter period to which Lender may agree in writing in its sole discretion).
		

		
			4.3         Pay all its taxes including gross payroll, withholding and sales taxes when due and will deliver satisfactory evidence of payment to Lender if requested; provided that Borrower shall not be required to pay any such tax which amount, applicability or validity is being contested in good faith by appropriate proceedings and for which proper reserves have been made in accordance with GAAP, and by reason of such contest or nonpayment, no property is subject to a material risk of loss or forfeiture.
		

		
			4.4         Maintain:
		

		
			(a)          Insurance reasonably satisfactory to Lender as to amount, nature and carrier covering property damage (including loss of use and occupancy) to any of Borrower’s properties, business interruption insurance, public liability insurance including coverage for contractual liability, product liability and workers’ compensation, and any other insurance which is usual for Borrower’s business.  Each such policy shall provide for at least thirty (30) days prior notice (or ten (10) days in the case of nonpayment of premium) to Lender of any cancellation thereof.
		

		
			

		 

		

			4

		

 

		

			 

		

		

		
			(b)          all risk property damage insurance policies (including without limitation windstorm coverage, and hurricane coverage as applicable) covering the tangible property comprising the collateral.  Each insurance policy must be for the full replacement cost of the collateral and include a replacement cost endorsement, or in an amount acceptable to Lender.  The insurance must be issued by an insurance company reasonably acceptable to Lender and must include a lender’s loss payable endorsement in favor of Lender in a form reasonably acceptable to Lender.
		

		
			(c)          Upon the request of Lender, Borrower shall deliver to Lender a copy of each insurance policy, or, if permitted by Lender, a certificate of insurance listing all insurance in force.
		

		
			4.5         Subject to Section 1.4(a) hereof, promptly transfer and deliver into the Lockbox or the Collection Account all Collections Borrower receives.
		

		
			4.6         Not create, incur, assume, or be liable for any indebtedness, other than Permitted Indebtedness.
		

		
			4.7         In accordance with Section 4.8(f), notify Lender if Borrower hereafter obtains any interest in any registered copyrights, patents, trademarks or has obtained licenses that are significant in value or are material to the conduct of its business.
		

		
			4.8         Provide the following financial information and statements in form and content reasonably acceptable to Lender, and such additional information as reasonably requested by Lender from time to time.  Lender has the right to require Borrower to deliver financial information and statements to Lender more frequently than otherwise provided below, and to use such additional information and statements to measure any applicable financial covenants in this Agreement.
		

		
			(a)          Within 180 days of the fiscal year end, the annual financial statements of Borrower, certified and dated by an authorized financial officer.  These financial statements must be audited (with an opinion reasonably satisfactory to the Lender) by a Certified Public Accountant reasonably acceptable to Lender, it being understood that each of KPMG and Marcum are reasonably acceptable to Lender.  The statements shall be prepared on a consolidated basis.
		

		
			(b)          No later than 30 days after the end of each month (other than the last month of a fiscal quarter or the last month of the fiscal year), and no later than the earlier to occur of 45 days after the last day of each fiscal quarter or 5 days after the delivery of Borrower’s Form 10-K Annual Report or Form 10-Q Quarterly Report, as the case may be, in accordance with clause (d) below, (i) monthly unaudited financial statements of Borrower including balance sheet and income statement, certified and dated by an authorized financial officer, which statements shall be prepared on a consolidated basis, (ii) an inventory schedule and (iii) deferred revenue schedule.
		

		
			(c)          In connection with the filing of any Form 10-Q Quarterly Report, promptly provide copies of any management letters and correspondence relating to management letters, sent or received by Borrower to or from Borrower’s auditor.  If no management letter is prepared, Borrower shall, upon Lender’s reasonable request, use commercially reasonable efforts to obtain a letter from such auditor stating that no significant deficiencies were noted that would otherwise be addressed in a management letter.  
		

		
			(d)          Copies of the Form 10-K Annual Report, Form 10-Q Quarterly Report and Form 8-K Current Report for Borrower concurrent with the date of filing with the Securities and Exchange Commission (it being understood and agreed that any posting on EDGAR shall be deemed to satisfy the requirements of this Section 4.8(d)).
		

		
			(e)          Board approved annual budget and financial projections specifying the assumptions used in creating the projections.  Annual budget and projections shall in any case be provided to Lender within 30 days of each fiscal year end.  It is understood and agreed that any projections shall be prepared by Borrower in good faith on the basis of information and estimates that Borrower believes to be reasonable at the time made, and such projections do not constitute a representation or warranty that the results set forth therewith be met; it being acknowledged and agreed by Lender that uncertainty is inherent in any forecasts, projections and other forward-looking information, projections as to future events or conditions are not to be viewed as facts, and the actual results during the period or periods covered by such forecasts may differ materially from the projected results). 
		

		
			(f)           No later than 30 days after the end of each month (other than the last month of a fiscal quarter or the last month of the fiscal year) and no later than the earlier to occur of 45 days after the last day of each fiscal quarter or 5 days after the delivery of Borrower’s Form 10-K Annual Report or Form 10-Q Quarterly Report, as the case may be, in accordance with clause (d) above, a compliance certificate of Borrower, signed by an authorized financial officer and setting forth (i) the information and computations (in sufficient detail) to
		

		
			

		 

		

			5

		

 

		

			 

		

		

		
			establish compliance with all financial covenants at the end of the period covered by the financial statements then being furnished, (ii) whether there existed as of the date of such financial statements and whether there exists as of the date of the certificate, any default under this Agreement and, if any such default exists, specifying the nature thereof and the action Borrower is taking and proposes to take with respect thereto and (iii) in connection with any fiscal quarter end or year end compliance certificate delivery, any new registered copyrights, patents, trademarks applied for or acquired, and any material intellectual property licenses it has obtained (other than Off-the-Shelf Licenses), in each case  since the later of the date of this Agreement and the date of the most recent quarterly or annual compliance certificate, as the case may be.
		

		
			(g)          Within 30 days of the end of each fiscal quarter, upon Lender’s request, sampling of copies of invoices along with the supporting purchase orders, proof-of-delivery and acceptance documentation.
		

		
			(h)          Within 15 days of filing, copies of all business tax returns, which must be prepared by a Certified Public Accountant reasonably acceptable to Lender (it being understood that Moss Adams is reasonably acceptable to Lender).
		

		
			(i)           Within 15 days after the 15th day and the end of each calendar month, (i) a roll forward domestic borrowing base certificate, in form and substance reasonably satisfactory to Lender and in substantially the form attached hereto as Exhibit B, setting forth Domestic Eligible Receivables and Receivable Amounts thereof, and Eligible Inventory, as of the last day of the preceding reporting period, and (ii) a roll forward EXIM borrowing base certificate, in form and substance satisfactory to Lender and in substantially the form attached hereto as Exhibit C, setting forth EXIM Eligible Receivables and Receivable Amounts thereof, and Eligible Inventory, as of the last day of the preceding reporting period.
		

		
			(j)           Within 15 days after the 15th day and the end of each calendar month, a reasonably detailed aging of Borrower’s receivables by invoice date and due date, separating domestic receivables and EXIM receivables, together with payable aging by invoice date and due date, inventory analysis, sales or billing journal, cash receipts report, deferred revenue report, and such other matters as Lender may reasonably request.
		

		
			(k)          Promptly upon Lender’s reasonable request, such other books, records, statements, lists of property and accounts, budgets, forecasts or reports as to Borrower and as to each guarantor of Borrower’s obligations to Lender as Lender may reasonable request.
		

		
			Notwithstanding the foregoing, so long as the Cash to Loan Ratio is at all times greater than 1.20 to 1.0, the borrowing base certificates and reporting due under clauses (i) and (j), respectively, of this Section 4.8 with respect to the 15th day of the month shall not be required.
		

		
			4.9         Maintain its primary depository and operating accounts with Lender and, in the case of any deposit accounts not maintained with Lender, grant to Lender a first priority perfected security interest in and “control” (within the meaning of A.R.S. Section 47-9104) of such deposit account pursuant to documentation reasonably acceptable to Lender, other than with respect to deposit accounts and securities accounts of Borrower that (a) at any time have an aggregate balance of not more than $25,000 (unless any excess is promptly, and in no event longer than three (3) business days after receipt of such excess, transferred to the Lockbox or the Collections Account), or (b) are located in a foreign country into which Collections are not paid and do not have an aggregate balance greater than $250,000 (such excluded accounts, collectively, “Excluded Accounts”).  
		

		
			4.10       Provide to Lender:
		

		
			(a)          promptly upon the execution hereof, the following documents which shall be in form reasonably satisfactory to Lender:
		

		
			(i)           the EXIM Documents;
		

		
			(ii)          account control agreements with respect to any depository, operating or investment accounts held at another financial institution other than Lender (other than Excluded Accounts);
		

		
			(iii)          a duly executed Collateral Access Agreement with respect to the premises located at 16640 Stagg Street, Van Nuys, California, and
		

		
			(b)          as soon as practicable but in any event no later than July 17,  2017, the lender’s loss payable endorsement required under Section 4.4(b) above.
		

		
			4.11       Promptly provide to Lender such additional information and documents regarding the finances, properties, business or books and records of Borrower or any guarantor or any other obligor as Lender may reasonably request.
		

		
			

		 

		

			6

		

 

		

			 

		

		

		
			4.12       Maintain Borrower’s financial condition as follows using generally accepted accounting principles consistently applied and used consistently with prior practices (except to the extent modified by the definitions herein):
		

		
			(a)         The Cash to Loan Ratio not at any time less than 0.85 to 1.0. 
		

		
			(b)         Trailing 6 months Adjusted EBITDA, measured as of the end of each fiscal quarter, to not negatively deviate by more than (i) 30% off from the Covenant Projections, or (ii) $4,000,000 in the aggregate in any fiscal year from the Covenant Projections.
		

		
			4.13       Maintain at all times the Cash Collateral on deposit with Lender.
		

		
			5.           SECURITY INTEREST.  To secure the prompt payment and performance to Lender of all of the Obligations, Borrower hereby grants to Lender a continuing security interest in the Collateral.  Borrower is not authorized to sell, assign, transfer or otherwise convey any Collateral without Lender’s prior written consent, except for (i) the sale of inventory in Borrower’s usual course of business, (ii) Permitted Liens, (iii) the disposition of assets no longer used or useful in its business, (iv) the disposition of equipment that is worn-out or obsolete, (v) non-exclusive outbound licenses of intellectual property (including in connection with the sales of its inventory and the provision of services to its customers), (vi) the lapse or disposition of intellectual property if Borrower reasonably determines in its good faith business discretion that such intellectual property is not material to its business, and (vii) the disposition of other assets in an amount not in excess of $250,000 per fiscal year; provided that the dispositions described in clauses (iii), (iv) and (vii) of this Section 5 shall not exceed $500,000 in the aggregate per fiscal year.  Borrower agrees to sign any instruments and documents reasonably requested by Lender to evidence, perfect, or protect the interests of Lender in the Collateral.  Borrower agrees to deliver to Lender the originals of all instruments, chattel paper and documents in excess of $50,000 individually and $100,000 in the aggregate evidencing or related to Receivables and Collateral, in each case other than checks in the ordinary course of business.  Borrower shall not grant or permit any lien or security in the Collateral or any interest therein other than Permitted Liens.  
		

		
			6.           POWER OF ATTORNEY.  Borrower irrevocably appoints Lender and its successors and as true and lawful attorney in fact, and authorizes Lender (a) to, whether or not there has been an Event of Default, (i) demand, collect, receive, sue, and give releases to any Account Debtor for the monies due or which may become due upon or with respect to the Receivables and to compromise, prosecute, or defend any action, claim, case or proceeding relating to the Receivables, including the filing of a claim or the voting of such claims in any bankruptcy case, all in Lender’s name or Borrower’s name, as Lender may choose; (ii) prepare, file and sign Borrower’s name on any notice, claim, assignment, demand, draft, or notice of or satisfaction of lien or mechanics’ lien or similar document; (iii) notify all Account Debtors with respect to the Receivables to pay Lender directly; (iv) receive and open all mail addressed to Borrower for the purpose of collecting the Receivables; (v) endorse Borrower’s name on any checks or other forms of payment on the Receivables; (vi) execute on behalf of Borrower any and all instruments, documents, financing statements and the like to perfect Lender’s interests in the Receivables and Collateral; (vii) debit any Borrower’s deposit accounts maintained with Lender for any and all Obligations due under this Agreement; and (viii) do all acts and things necessary or expedient, in furtherance of any such purposes, and (b) to, upon the occurrence and during the continuance of an Event of Default, sell, assign, transfer, pledge, compromise, or discharge the whole or any part of the Receivables.  Upon the occurrence and continuation of an Event of Default, all of the power of attorney rights granted by Borrower to Lender hereunder shall be applicable with respect to all Receivables and all Collateral.
		

		
			7.           DEFAULT AND REMEDIES.  
		

		
			7.1         Events of Default.  The occurrence of any one or more of the following shall constitute an Event of Default hereunder.
		

		
			(a)          Failure to Pay.  Borrower fails to make a payment when due under this Agreement.
		

		
			(b)          Lien Priority.  Lender fails to have an enforceable first lien (except for any prior liens to which Lender has consented in writing) on or security interest in the Collateral.
		

		
			(c)          False Information.  Borrower (or any guarantor) has given Lender any materially false or misleading information or representations or has failed to disclose any material fact relating to the subject matter of this Agreement; provided that with respect to the annual budget and financial projections provided pursuant to Section 4.8(e), subject to the last sentence of Section 4.8(e).
		

		
			(d)          Death.  If an individual, Borrower or any guarantor dies or becomes legally incompetent, or if Borrower is a partnership, any general partner that is an individual dies or becomes legally incompetent.
		

		
			(e)          Bankruptcy.  Borrower (or any guarantor) files a bankruptcy petition, a bankruptcy petition is filed against Borrower (or any guarantor) or Borrower (or any guarantor) makes a general assignment for the benefit of creditors.
		

		
			
		

		
			

		 

		

			7

		

 

		

			 

		

		

		
			(f)           Receivers.  A receiver or similar official is appointed for a substantial portion of Borrower’s (or any guarantor’s) business, or the business is terminated.
		

		
			(g)          Judgments.  Any judgments or arbitration awards are entered against Borrower (or any guarantor), or Borrower (or any guarantor) enters into any settlement agreements with respect to any litigation or arbitration and the aggregate amount of all such judgments, awards, and agreements exceeds $250,000 in excess of insurance (for which the insurance carrier has not denied coverage) and any applicable indemnification which are not released, vacated, appealed or bonded within 30 days of its entry.
		

		
			(h)          Material Adverse Change.  A Material Adverse Change occurs.
		

		
			(i)           Cross-default.  Any default occurs under any agreement in connection with any debt for borrowed money Borrower (or any guarantor) has obtained from anyone else or which Borrower (or any guarantor) has guaranteed (other than trade amounts payable incurred in the ordinary course of business and not more than 120 days past due unless such trade amount payable is the subject of a good faith dispute).
		

		
			(j)           Default under Related Documents.  Any default occurs under any guaranty, subordination agreement, security agreement, deed of trust, mortgage, or other document required by or delivered in connection with this Agreement after giving effect to any applicable grace period provided in such document, or any such document is no longer in effect.
		

		
			(k)          Other Agreements.  Borrower (or any guarantor) or any of Borrower’s Affiliates fails to meet the conditions of, or fails to perform any obligation under any other agreement Borrower (or any guarantor) or any of Borrower’s Affiliates has with Lender or any Affiliate of Lender.
		

		
			(l)           Change of Control.  A Change of Control occurs.  
		

		
			(m)         Other Breach Under Agreement.  Borrower fails to meet the conditions of, or fails to perform any obligation under, any term of this Agreement not specifically referred to above.
		

		
			7.2         Remedies. Upon the occurrence of an Event of Default, (1) without implying any obligation to do so, Lender may cease making Advances or extending any other financial accommodations to Borrower; (2) all or a portion of the Obligations shall be, at the option of and upon demand by Lender, or with respect to an Event of Default described in Section 7.1(e), automatically and without notice or demand, due and payable in full; and (3) Lender shall have and may exercise all the rights and remedies under this Agreement and under applicable law, including the rights and remedies of a secured party under the Arizona Uniform Commercial Code, all the power of attorney rights described in Section 6 with respect to all Collateral, and the right to collect, dispose of, sell, lease, use, and realize upon all Receivables and all Collateral in any commercial reasonable manner.
		

		
			8.           ACCRUAL OF INTEREST, FEES.  All interest and finance charges hereunder calculated at an annual rate shall be based on a year of 360 days, which results in a higher effective rate of interest than if a year of 365 or 366 days were used.  Lender may charge interest, finance charges and fees based upon the projected amounts thereof as of the due dates therefor, and adjust subsequent charges to account for the actual accrued amounts.  If any amount due under Section 2.2, amounts due under Section 9, and any other Obligations not otherwise bearing interest hereunder is not paid when due, such amount shall bear interest at a per annum rate equal to the Finance Charge Percentage until the earlier of (i) payment in good funds or (ii) entry of a trial judgment thereof, at which time the principal amount of any money judgment remaining unsatisfied shall accrue interest at the highest rate allowed by applicable law.
		

		
			9.           FEES, COSTS AND EXPENSES; INDEMNIFICATION. Borrower will pay to Lender upon demand all reasonable fees, costs and expenses (including EXIM Bank Expenses, reasonable fees of attorneys and professionals and their reasonable costs and expenses) that Lender incurs or may from time to time impose in connection with any of the following: (a) preparing, negotiating, administering, and enforcing this Agreement or any other agreement executed in connection herewith, including any amendments, waivers or consents in connection with any of the foregoing, (b) any litigation or dispute (whether instituted by Lender, Borrower or any other person) in any way relating to the Receivables, the Collateral, this Agreement or any other agreement executed in connection herewith or therewith, (c) enforcing any rights against Borrower or any guarantor, or any Account Debtor, (d) protecting or enforcing its interest in the Receivables or the Collateral, (e) collecting the Receivables and the Obligations, or (f) the representation of Lender in connection with any bankruptcy case or insolvency proceeding involving Borrower, any Receivable, the Collateral, any Account Debtor, or any guarantor. Borrower shall indemnify and hold Lender harmless from and against any and all claims, actions, damages, costs, expenses, and liabilities of any nature whatsoever arising in connection with any of the foregoing, except to the extent that any such claims, actions, damages, costs, expenses, or liabilities are finally judicially determined by a court of competent jurisdiction to have arisen from the gross negligence or willful misconduct of Lender.  Notwithstanding anything to the contrary contained herein, in no event shall Borrower be responsible for the payment or indemnification of any Excluded Taxes.
		

		
			
		

		
			

		 

		

			8

		

 

		

			 

		

		

		
			10.          INTEGRATION, SEVERABILITY WAIVER, CHOICE OF LAW, FORUM AND VENUE.  
		

		
			 
		

		
			10.1       This Agreement and any related security or other agreements required by this Agreement, collectively: (a) represent the sum of the understandings and agreements between Lender and Borrower concerning this credit; (b) replace any prior oral or written agreements between Lender and Borrower concerning this credit; and (c) are intended by Lender and Borrower as the final, complete and exclusive statement of the terms agreed to by them. In the event of any conflict between this Agreement and any other agreements required by this Agreement, this Agreement will prevail. If any provision of this Agreement is deemed invalid by reason of law, this Agreement will be construed as not containing such provision and the remainder of the Agreement shall remain in full force and effect. Lender retains all of its rights, even if it makes an Advance after a default. If Lender waives a default, it may enforce a later default. Any consent or waiver under, or amendment of, this Agreement must be in writing, and no such consent, waiver, or amendment shall imply any obligation by Lender to make any subsequent consent, waiver, or amendment.  
		

		
			 
		

		
			10.2       THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ARIZONA.  THE PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER RELATED DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF MARICOPA, ARIZONA, OR, AT THE SOLE OPTION OF LENDER, IN ANY OTHER COURT IN WHICH LENDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS JURISDICTION OVER THE SUBJECT MATTER AND PARTIES IN CONTROVERSY.  EACH PARTY HERETO WAIVES ANY RIGHT TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION AND STIPULATES THAT THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF MARICOPA, ARIZONA SHALL HAVE IN PERSONAM JURISDICTION AND VENUE OVER EACH SUCH PARTY FOR THE PURPOSE OF LITIGATING ANY SUCH DISPUTE, CONTROVERSY, OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT, OR ANY OTHER RELATED DOCUMENTS.  SERVICE OF PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST THE BORROWER MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS ADDRESS SPECIFIED FOR NOTICES PURSUANT TO SECTION 11.
		

		
			11.         NOTICES; ELECTRONIC, TELEPHONIC AND TELEFAX AUTHORIZATIONS.  All notices shall be given to Lender and Borrower at the addresses, e-mail addresses or faxes set forth on the signature page of this agreement and shall be deemed to have been delivered and received: (a) if mailed, three (3) calendar days after deposited in the United States mail, first class, postage pre-paid, (b) one (1) calendar day after deposit with an overnight mail or messenger service; or (c) on the same date of confirmed transmission if sent by hand delivery, e-mail, telecopy, telefax or telex.  Lender may honor e-mail, telephone or telefax instructions for Advances or repayments given, or purported to be given, by any one of the Authorized Persons.  Borrower will indemnify and hold Lender harmless from all liability, loss, and costs in connection with any act resulting from e-mail, telephone or telefax instructions Lender reasonably believes are made by any Authorized Person, except to the extent finally judicially determined by a court of competent jurisdiction to have arisen from the gross negligence or willful misconduct of Lender.  Lender makes no assurances as to the privacy and security of electronic or telephonic communications.  This paragraph will survive this Agreement’s termination, and will benefit Lender and its officers, employees, and agents.
		

		
			12.         DEFINITIONS AND CONSTRUCTION.  
		

		
			12.1       Definitions.  In this Agreement:  
		

		
			“Acceptable Letter of Credit” means a standby letter of credit, issued by a bank or financial institution acceptable to Lender in its reasonable discretion, in form and substance satisfactory to Lender in its reasonable discretion, naming Lender as beneficiary, to reimburse payments of drafts drawn under outstanding Letters of Credit and/or pay other outstanding Obligations..
		

		
			“Account Balance” means at any time the aggregate of the Advances outstanding as reflected on the records maintained by Lender, together with any past due Finance Charges thereon.
		

		
			“Account Debtor” has the meaning in the Arizona Uniform Commercial Code and includes any person liable on any Receivable, including without limitation, any guarantor of any Receivable and any issuer of a letter of credit or banker’s acceptance assuring payment thereof.
		

		
			“Adjusted EBITDA” means net profit before tax plus interest expense, depreciation expense, amortization expense, stock-based compensation, changes in fair value of warrant liability or other intangibles, changes resulting from foreign exchange adjustments arising from a revaluation of assets subject to foreign currency revaluation, less cash distributions and/or cash dividends.
		

		
			“Adjustments” means all discounts, allowances, disputes, offsets, defenses, rights of recoupment, rights of return, warranty claims, or short payments, asserted by or on behalf of any Account Debtor with respect to any Receivable.
		

		
			
		

		
			

		 

		

			9

		

 

		

			 

		

		

		
			“Advance” means an advance made by Lender to Borrower under this Agreement.
		

		
			“Advance Rate” means (i) up to 80% in the case of Domestic Eligible Receivables, (ii) up to 80% in the case of EXIM Eligible Receivables, (iii) up to 30% of the book value in the case of Domestic Eligible Inventory until the first appraisal is received pursuant to Section 1.3 hereof, and thereafter up to 90% of the net forced liquidation value in the case of Domestic Eligible Inventory, and (iv) up to 30% of the book value in the case of EXIM Eligible Inventory until the first appraisal is received pursuant to Section 1.3 hereof, and thereafter up to 90% of the net forced liquidation value in the case of EXIM Eligible Inventory, or in each case, such greater or lesser percentage as Lender may from time to time establish in its sole discretion upon written notice to Borrower.
		

		
			“Advance Request” means the Advance Request set forth on Exhibit D hereto signed by an Authorized Person requesting an Advance.
		

		
			“Agreement” means this Business Financing Agreement.
		

		
			“Affiliate” means, as to any person or entity, any other person or entity directly or indirectly controlling or controlled by, or under direct or indirect common control with, such person or entity.  
		

		
			“Authorized Person” means Borrower (if an individual) or any one of the individuals authorized to sign on behalf of Borrower, and any other individual designated by any one of such authorized signers.
		

		
			“Borrower Agreement” is the Export-Import Bank of the United States Working Capital Guarantee Program Borrower Agreement executed by Borrower in favor of EXIM Bank and Lender.
		

		
			“Borrower’s Account” means Borrower’s general operating account maintained with Lender, into which Advances will be deposited unless otherwise instructed by Borrower in writing.
		

		
			“Borrowing Base” means at any time the sum of (i) the Domestic Borrowing Base plus (ii) the EXIM Borrowing Base.
		

		
			“Cash Collateral” means cash of Borrower in an amount not less than $5,000,000 maintained on deposit with Lender in a controlled account over which Borrower has no right to withdraw funds.
		

		
			“Cash Management Services” has the meaning set forth in Section 1.9.
		

		
			“Cash Collateralize” means the delivery of cash or an Acceptable Letter of Credit to Lender, as security for the payment of Obligations, in an amount equal to the sum of (a) 105% of the Letters of Credit Obligations, plus (b) with respect to any inchoate, contingent or other Obligations (including Obligations with respect to the International Sublimit and the Cash Management Sublimit), Lender’s good faith estimate of the amount due or to become due, including all fees and other amounts relating to such Obligations.  “Cash Collateralization” has a correlative meaning.
		

		
			“Cash Management Sublimit” means $500,000.
		

		
			“Cash to Loan Ratio” means, as of the date of determination, the ratio of (i) the sum of Cash Collateral plus any additional of Borrower’s unrestricted cash on deposit with Lender, to (ii) the sum of outstanding Advances, Letters of Credit Obligations and the aggregate committed amount under the Cash Management Sublimit (without giving effect to any extensions of credit thereunder).
		

		
			“Change of Control” means any Person or “group” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) who does not have an ownership interest in Borrower on the date of the initial Advance is or becomes the “beneficial owner” (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, directly or indirectly, of more than twenty percent (20%) of capital stock of Borrower having the right to vote for the election of members of the Board of Directors.
		

		
			“Collateral” means all of Borrower’s rights and interest in any and all personal property, whether now existing or hereafter acquired or created and wherever located, and all products and proceeds thereof and accessions thereto, including but not limited to the following (collectively, the “Collateral”):  (a) all accounts (including health care insurance receivables), chattel paper (including tangible and electronic chattel paper), inventory (including all goods held for sale or lease or to be furnished under a contract for service, and including returns and repossessions), equipment (including all accessions and additions thereto), instruments (including promissory notes), investment property (including securities and securities entitlements), documents (including negotiable documents), deposit accounts, letter of credit rights, money (including the Cash Collateral), any commercial tort claim of Borrower which is now or hereafter identified by Borrower or Lender, general intangibles (including payment intangibles and software), goods (including fixtures) and all of Borrower’s books and records with respect to any of the foregoing, and the computers and equipment containing said books and records; and (b) any and all cash proceeds and/or noncash
		

		
			

		 

		

			10

		

 

		

			 

		

		

		
			proceeds thereof, including without limitation, insurance proceeds, and all supporting obligations and the security therefore or for any right to payment; provided that in no event shall Collateral include any Excluded Property.
		

		
			“Collateral Access Agreement” means a landlord waiver, mortgagee waiver, bailee letter, or acknowledgement agreement of any warehouseman, processor, lessor, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in the Collateral, in each case, in form and substance satisfactory to Lender.
		

		
			“Collection Account” means the deposit account maintained with Lender which, pursuant to the Lockbox Agreement, all Collections received in the Lockbox are to be deposited, and as to which Borrower has no right to withdrawal funds.
		

		
			“Collections” means all payments from or on behalf of an Account Debtor with respect to Receivables.
		

		
			“Compliance Certificate” means a certificate in the form attached as Exhibit A to this Agreement by an Authorized Person that, among other things, the representations and warranties set forth in this Agreement are true and correct as of the date such certificate is delivered, other than those representations and warranties that speak as of an earlier date, in which case true and correct as of such date. 
		

		
			“Covenant Projections” means that annual projections prepared by Borrower and accepted in writing by Lender for purposes of Section 4.12(b) hereof; provided that if such annual projections have not been delivered to Lender within 30 days of Borrower’s fiscal year end, then “Covenant Projections” shall mean the projections approved by Borrower’s board of directors and delivered to Lender pursuant to Section 4.8(e) hereof.
		

		
			“Credit Limit” means $12,000,000, which is intended to be the maximum amount of Advances at any time outstanding.
		

		
			“Default” means any Event of Default or any event that with notice, lapse of time or otherwise would constitute an Event of Default.
		

		
			“Domestic Borrowing Base” means at any time the sum of (i) the Domestic Eligible Receivable Amount multiplied by the applicable Advance Rate, plus (ii) the lesser of (x) the value of Domestic Eligible Inventory multiplied by the applicable Advance Rate or (y) the Domestic Eligible Inventory Sublimit, minus (iii) such reserves as Lender may deem proper and necessary from time to time in the exercise of its commercially reasonable discretion.
		

		
			“Domestic Eligible Inventory” means Inventory which shall be valued at book value or net forced liquidation value, as applicable, and which satisfies the following requirements:
		

		
			(a)          the Inventory is owned by Borrower free of any title defects or any liens or interests of others except the security interest in favor of Lender;
		

		
			(b)          the Inventory consists of component parts held for sale or use in the ordinary course of Borrower’s business which is of good and merchantable quality.  Finished goods, display items, work-in-process, parts, samples, and packing and shipping materials are not eligible.  Inventory which is obsolete, unsalable, damaged, defective, used, discontinued, perishable or slow moving, or which has been returned by the buyer, is not eligible;
		

		
			(c)          the Inventory is covered by insurance as required in Section 4.4 of this Agreement;
		

		
			(d)          the Inventory has not been manufactured to the specifications of a particular Account Debtor;
		

		
			(e)          the Inventory is not subject to any licensing agreements which would prohibit or restrict in any way the ability of Lender to sell the Inventory (including its packaging) to third parties;
		

		
			(f)           the Inventory has been produced in compliance with the requirements of the U.S. Fair Labor Standards Act (29 U.S.C. §§201 et seq.);
		

		
			(g)          the Inventory is not on consignment;
		

		
			(h)          the Inventory is not related to an “undesirable” industry, as determined by Lender from time to time in its sole discretion; 
		

		
			(i)           the Inventory is located in the United States at an address that has been disclosed to Lender in writing and is located on premises owned by Borrower or leased by Borrower and covered with a landlord’s waiver (or equivalent), or is the subject of an executed bailee agreement in form acceptable to Lender; 
		

		
			

		 

		

			11

		

 

		

			 

		

		

		
			(j)           Lender has received an audit on the Inventory reasonably satisfactory to Lender; and 
		

		
			(k)          the Inventory is otherwise acceptable to Lender.
		

		
			“Domestic Eligible Inventory Sublimit” means the lesser of (i) $4,800,000, or (ii) an amount equal to 40% of the Domestic Borrowing Base.
		

		
			“Domestic Eligible Receivable” means a Receivable that satisfies all of the following:
		

		
			(a)         The Receivable has been created by Borrower in the ordinary course of Borrower’s business and without any obligation on the part of Borrower to render any further performance.
		

		
			(b)         There are no conditions which must be satisfied before Borrower is entitled to receive payment of the Receivable, and the Receivable does not arise from COD sales, consignments or guaranteed sales.
		

		
			(c)         The Account Debtor upon the Receivable does not claim any defense to payment of the Receivable, whether well founded or otherwise.
		

		
			(d)         The Receivable, or the applicable portion thereof (as approved by Lender on a case-by-case basis in its sole discretion), is not the obligation of an Account Debtor who has asserted or may be reasonably be expected to assert any counterclaims or offsets against Borrower (including offsets for any “contra accounts” owed by Borrower to the Account Debtor for goods purchased by Borrower or for services performed for Borrower).
		

		
			(e)         The Receivable represents a genuine obligation of the Account Debtor and to the extent any credit balances exist in favor of the Account Debtor, such credit balances shall be deducted in calculating the Receivable Amount.
		

		
			(f)          Borrower has sent an invoice to the Account Debtor in the amount of the Receivable.
		

		
			(g)         Borrower is not prohibited by the laws of the state where the Account Debtor is located from bringing an action in the courts of that state to enforce the Account Debtor’s obligation to pay the Receivable. Borrower has taken all appropriate actions to ensure access to the courts of the state where Account Debtor is located, including, where necessary; the filing of a Notice of Business Activities Report or other similar filing with the applicable state agency or the qualification by Borrower as a foreign corporation authorized to transact business in such state.
		

		
			(h)         The Receivable is owned by Borrower free of any title defects or any liens or interests of others except the security interest in favor of Lender, and Lender has a perfected, first priority security interest in such Receivable.
		

		
			(i)          The Account Debtor on the Receivable is not any of the following:  (1) an employee, Affiliate, parent or subsidiary of Borrower, or an entity which has common officers or directors with Borrower; (2) the U.S. government or any agency or department of the U.S. government unless Borrower complies with the procedures in the Federal Assignment of Claims Act of 1940 (41 U.S.C. §15) with respect to the Receivable; (3) any person or entity located in a foreign country unless (A) the Receivable is supported by an irrevocable letter of credit issued by a bank acceptable to Lender, and (B) if requested by Lender, the original of such letter of credit and/or any usance drafts drawn under such letter of credit and accepted by the issuing or confirming bank have been delivered to Lender; or (4) an Account Debtor as to which 35% or more of the aggregate dollar amount of all outstanding Receivables owing from such Account Debtor have not been paid within 90 days from invoice date.
		

		
			(j)           The Receivable is not in default (a Receivable will be considered in default if any of the following occur:  (i) the Receivable is not paid within 90 days from its invoice date; provided that if payment terms are 90 days, which Borrower may in its reasonable good faith business judgment institute for certain Account Debtors in an aggregate amount not to exceed ten (10%) of the total Domestic Eligible Receivables on any date of determination, then solely with respect to such Account Debtors, the Receivable will be considered in default if not paid within 120 days from its invoice date; (ii) the Account Debtor obligated upon the Receivable suspends business, makes a general assignment for the benefit of creditors, or fails to pay its debts generally as they come due; or (iii) any petition is filed by or against the Account Debtor obligated upon the Receivable under any bankruptcy law or any other law or laws for the relief of debtors).
		

		
			(k)          The Receivable does not arise from the sale of goods which remain in Borrower’s possession or under Borrower’s control.
		

		
			
		

		
			

		 

		

			12

		

 

		

			 

		

		

		
			(l)           The Receivable is not evidenced by a promissory note or chattel paper, nor is the Account Debtor obligated to Borrower under any other obligation which is evidenced by a promissory note.
		

		
			(m)         the Receivable is not that portion of Receivables due from an Account Debtor which is in excess of 30% of Borrower’s aggregate dollar amount of all outstanding Receivables.
		

		
			(n)         The Receivable is otherwise acceptable to Lender.
		

		
			“Domestic Eligible Receivable Amount” means at any time the sum of the Receivable Amounts of the Domestic Eligible Receivables.
		

		
			“Domestic Facility Fee” means a fee equal to 0.625% of the Credit Limit due upon the date of this Agreement and each anniversary thereof so long as any Advances are outstanding or available hereunder. 
		

		
			“Domestic Line of Credit” means the revolving line of credit under which Borrower may request Lender to issue Advances with respect to Domestic Eligible Receivables and Domestic Eligible Inventory up to the Credit Limit, as specified in Section 1.1 hereof.
		

		
			“Domestic Overadvance” means at any time an amount equal to the greater of the amount (if any) by which the total amount of the outstanding Advances with respect to Domestic Eligible Receivables and Domestic Eligible Inventory (including deemed Advances with respect to the International Sublimit and the total amount of the Cash Management Sublimit) exceeds the lesser of the Credit Limit or the Domestic Borrowing Base.
		

		
			“Domestic Subsidiary” means any direct or indirect Subsidiary of Borrower organized under the laws of any state of the United States or the District of Columbia.
		

		
			“Due Diligence Fee” means a payment of an annual fee equal to $900 due upon each anniversary of the date of this Agreement so long as any Advance is outstanding or available hereunder.
		

		
			“Eligible Inventory” means Domestic Eligible Inventory and EXIM Eligible Inventory.
		

		
			“Eligible Receivable” means a Domestic Eligible Receivable or an EXIM Eligible Receivable.
		

		
			“Excluded Accounts” has the meaning set forth in Section 4.9.
		

		
			“Excluded Property” means (i) any of the outstanding equity interests of a Foreign Subsidiary in excess of 65% of the issued and outstanding equity interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding equity interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary if the pledge of a greater percentage would result in adverse tax consequences to Borrower or would reasonably be expected to result in adverse tax consequences to Borrower in the future), (ii) any document, contract, license or agreement to which Borrower or any future grantor of assets is a party or any of its rights or interests thereunder (including, without limitation, rights of Borrower or any future grantor in any assets leased, licensed or otherwise acquired thereunder), if and for so long as the grant of such security interest or the assignment thereof shall constitute or result in a breach or right of termination in favor of any party pursuant to the terms of, or a default under, or is otherwise prohibited by the terms of any such document, contract, license or agreement due to an enforceable provision containing a restriction on assignment, transfer, pledge, hypothecation or the grant of a security interest thereunder (other than to the extent that any such term is rendered ineffective pursuant to Section 9406, 9407, 9408, or 9409 of the UCC (or any successor provision or provisions) or any other applicable law (including any applicable bankruptcy law) or principles of equity); provided that the foregoing exclusion shall not apply if such prohibition has been waived by the other party to such document, contract, license or agreement or the other party to such document, contract, license or agreement has otherwise consented to the creation hereunder of a security interest in such document, contract, license or agreement; provided, further, that immediately upon the ineffectiveness or lapse or termination of any such provision, the Collateral shall include, and Borrower or such other grantor shall be deemed to have granted a security interest in, all its rights, title and interests in and to such document, contract, license or agreement as if such provision had never been in effect; and provided, further, that the foregoing exclusion shall in no way be construed so as to limit, impair or otherwise affect Lender’s unconditional continuing security interest in and to all rights, title and interests of Borrower or such other grantor in or to any payment obligations or other rights to receive monies due or to become due under any such document, contract, license or agreement and in any such monies and other proceeds of such document, contract, license or agreement, or (iii) any “intent to use” trademark applications to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such “intent to use” trademark applications under applicable federal law.
		

		
			“Excluded Taxes” means (i) any tax imposed on the net income or net profits of Lender, including any federal, state or local income taxes, franchise taxes, branch profits taxes or similar taxes and (ii) United States federal withholding
		

		
			

		 

		

			13

		

 

		

			 

		

		

		
			taxes resulting from Lender’s failure to claim an exemption or reduction therefrom to which Lender is entitled.
		

		
			“EXIM Application Fee” means a fee in the amount of $100 due upon the date of this Agreement.  
		

		
			“EXIM Bank” means Export-Import Bank of the United States.
		

		
			“EXIM Bank Expenses” are all reasonable fees that the Lender pays to the EXIM Bank in consideration of the issuance of the EXIM Guarantee.
		

		
			“EXIM Borrowing Base” means at any time the sum of (i) the EXIM Eligible Receivable Amount multiplied by the applicable Advance Rate, plus (ii) the lesser of (x) the value of EXIM Eligible Inventory multiplied by the applicable Advance Rate or (y) the EXIM Eligible Inventory Sublimit, minus (iii) such reserves as Lender may deem proper and necessary from time to time in the exercise of its commercially reasonable discretion.
		

		
			“EXIM Credit Limit” means $7,500,000, which is intended to be the maximum amount of Advances at any time outstanding with respect to EXIM Eligible Receivables and EXIM Eligible Inventory.
		

		
			“EXIM Documents” means the EXIM Guarantee, Borrower Agreement, and each other agreement executed in connection therewith.
		

		
			“EXIM Eligible Inventory” means “Eligible Export-Related Inventory” as defined in Borrower Agreement.
		

		
			“EXIM Eligible Inventory Sublimit” means the lesser of (i) $4,500,000, or (ii) an amount equal to 60% of the EXIM Borrowing Base. 
		

		
			“EXIM Eligible Receivables” means “Eligible Export-Related Accounts Receivable” as defined in Borrower Agreement. 
		

		
			“EXIM Facility Fee” means a fee equal to 1.0% of the EXIM Credit Limit due upon the date of this Agreement and each anniversary thereof so long as any Advances are outstanding or available hereunder.
		

		
			“EXIM Guarantee” means the Master Guaranty Agreement executed by EXIM Bank in favor of Lender.
		

		
			“EXIM Line of Credit” means the revolving line of credit under which Borrower may request Lender to issue Advances with respect to EXIM Eligible Receivables and EXIM Eligible Inventory up to the EXIM Credit Limit, as specified in Section 1.1 hereof.
		

		
			“EXIM Overadvance” means at any time an amount equal to the amount (if any) by which the total amount of the outstanding Advances with respect to EXIM Eligible Receivables and EXIM Eligible Inventory (including deemed Advances with respect to the International Sublimit exceeds the lesser of the EXIM Credit Limit or the EXIM Borrowing Base.
		

		
			“Event of Default” has the meaning set forth in Section 7.1.
		

		
			“Finance Charge” means an interest amount equal to the Finance Charge Percentage of the ending daily Account Balance for the relevant period.
		

		
			“Finance Charge Percentage” means a rate per year equal to (i) the Prime Rate plus 1.50 percentage points per annum with respect to Advances made under the Domestic Line of Credit, and (ii) the Prime Rate plus 1.50 percentage points per annum with respect to Advances made under the EXIM Line of Credit, and, in each case, plus an additional 5.00 percentage points per annum during any period that an Event of Default has occurred and is continuing.
		

		
			“Foreign Subsidiary” means any direct or indirect Subsidiary of a Borrower that is not a Domestic Subsidiary.
		

		
			“FX Amount” has the meaning set forth in Section 1.10.
		

		
			“FX Contracts” has the meaning set forth in Section 1.10.
		

		
			“International Sublimit” means $1,000,000.
		

		
			“Inventory” means and includes all of Borrower’s now owned or hereafter acquired goods, merchandise and other personal property, wherever located, to be furnished under any consignment, arrangement, contract of service or held for sale or lease, all raw materials, work in process, finished goods and materials and supplies of any kind, 
		

		
			

		 

		

			14

		

 

		

			 

		

		

		
			nature or description which are or might be used or consumed in Borrower’s business or used in selling or furnishing such goods, merchandise and other personal property, and all documents of title or other documents representing them.
		

		
			“Lender” means WESTERN ALLIANCE BANK, an Arizona corporation, and its successors and assigns.
		

		
			“Letter of Credit” has the meaning set forth in Section 1.8.
		

		
			“Letters of Credit Obligation” means, at any time, the sum of, without duplication, (i) the maximum amount available to be drawn on all outstanding Letters of Credit issued by Lender or by Lender’s Affiliate and (ii) the aggregate amount of all amounts drawn and unreimbursed with respect to Letters of Credit issued by the Lender or by Lender’s Affiliate.
		

		
			“Lockbox” is defined in the Lockbox Agreement.
		

		
			“Lockbox Agreement” is defined in Section 1.4(a).
		

		
			“Material Adverse Change” means a material adverse change in the business condition, financial condition, results of operations, assets or prospects of Borrower and its subsidiaries, taken as a whole, or on the ability of Borrower to repay the credit in accordance with the terms hereof.
		

		
			“Maturity Date” means two years from the date hereof or such earlier date as Lender shall have declared the Obligations immediately due and payable pursuant to Section 7.2.
		

		
			“Month End” means the last calendar day of each month.
		

		
			“Obligations” means all liabilities and obligations of Borrower to Lender of any kind or nature, present or future, arising under or in connection with this Agreement or under any other document, instrument or agreement, whether or not evidenced by any note, guarantee or other instrument, whether arising on account or by overdraft, whether direct or indirect (including those acquired by assignment) absolute or contingent, primary or secondary, due or to become due, now owing or hereafter arising, and however acquired; including, without limitation, all Advances, Finance Charges, fees, interest, expenses, professional fees and attorneys’ fees.
		

		
			“Off-the-Shelf Licenses” has the meaning set forth in Section 3.6.
		

		
			“Overadvance” means a Domestic Overadvance or an EXIM Overadvance.  
		

		
			“Permitted Indebtedness” means:
		

		
			(a)          Indebtedness under this Agreement or under Borrower Agreement or that is otherwise owed to the Lender.
		

		
			(b)          Indebtedness existing on the date hereof and specifically disclosed on a schedule to this Agreement.
		

		
			(c)          Purchase money indebtedness (including capital leases) incurred to acquire capital assets in the ordinary course of business and not exceeding (i) until the first anniversary of this Agreement, $500,000 in total principal amount at any time outstanding and (ii) the amount outstanding at the end as of the first anniversary of the date of this Agreement (if not in excess of the amount set forth in the immediately preceding clause (i)) plus $500,000 in total principal amount at any time outstanding from the first anniversary of this Agreement until the Maturity Date.
		

		
			(d)          Other indebtedness in an aggregate amount not to exceed $50,000 at any time outstanding; provided that such indebtedness is junior in priority (if secured) to the Obligations and provided that the incurrence of such Indebtedness does not otherwise cause an Event of Default hereunder.
		

		
			(e)          Indebtedness incurred in the refinancing of any indebtedness set forth in (a) through (d) above, provided that the principal amount thereof is not increased (other than in connection with the payment of accrued interest or fees) or the terms thereof are not modified to impose terms upon Borrower that are, taken as a whole, more burdensome in any material respect.
		

		
			(f)           the endorsement of negotiable instruments by Borrower for deposit or collection or similar transactions in the ordinary course of business.
		

		
			(g)          Indebtedness secured by Permitted Liens.
		

		
			
		

		
			

		 

		

			15

		

 

		

			 

		

		

		
			(h)          Unsecured credit card debt with American Express or like credit card provider not to exceed at any one time an aggregate principal amount of $500,000.
		

		
			(i)           Trade amounts payable incurred in the ordinary course of business.  
		

		
			(j)            Indebtedness in the form of insurance premiums financed through the applicable insurance company.
		

		
			“Permitted Liens” means the following but only with respect to property not consisting of Receivables or Inventory:
		

		
			(a)          Liens securing any of the indebtedness described in clauses (a) through (d) of the definition of Permitted Indebtedness.
		

		
			(b)          Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings, provided the same have no priority over any of Lender’s security interests.
		

		
			(c)          Liens incurred in connection with the extension, renewal or refinancing of the indebtedness described in clause (e) of the definition of Permitted Indebtedness, provided that any extension, renewal or replacement lien shall be limited to the property encumbered by the existing lien and the principal amount of the indebtedness being extended, renewed or refinanced does not increase.
		

		
			(d)          In the case of real property, covenants, restrictions, rights, easements and minor irregularities in title which do not materially interfere with Borrower’s business or operations as presently conducted.
		

		
			(e)          Liens in existence on the date of this Agreement specifically disclosed on a schedule to this Agreement.
		

		
			(f)           Liens on indebtedness permitted under clause (c) of Permitted Indebtedness provided that such liens do not at any time encumber any property other than the property financed by such indebtedness and the proceeds of any disposition thereof.
		

		
			(g)          Statutory Liens of landlords, banks, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like liens arising in the ordinary course of business (i) for amounts that are not yet overdue or (ii) for amounts that are overdue by more than 10 days that are being contested in good faith by appropriate proceedings diligently pursued, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP, and by reason of such contest, no property is subject to a material risk of loss or forfeiture.
		

		
			(h)          Pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation.
		

		
			(i)           Deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business.
		

		
			(j)           any interest or title of a lessor under any lease entered into by Borrower or any other subsidiary in the ordinary course of its business and covering only the assets so leased.
		

		
			(k)          Liens that are junior in priority to Lender’s liens on the Collateral that arise from judgments and attachments in connection with court proceedings provided that the attachment or enforcement of such liens would not result in an Event of Default hereunder and such liens are being contested in good faith by appropriate proceedings, adequate reserves have been set aside and no material Collateral is subject to a material risk of loss or forfeiture and the claims in respect of such liens are fully covered by insurance (subject to ordinary and customary deductibles) and a stay of execution pending appeal or proceeding for review is in effect.
		

		
			(l)           Liens on unearned insurance premiums securing the financing thereof to the extent permitted under clause (j) of the definition of “Permitted Indebtedness”. 
		

		
			(m)         Liens on any cash required to be reserved for by Wells Fargo in amounts not in excess of the amounts set forth in the payoff letter dated on or about the date of this Agreement pursuant to which Borrower is otherwise repaying all outstanding indebtedness for borrowed money to Wells Fargo and the liens of Wells Fargo are otherwise being terminated.
		

		
			“Person” shall mean any individual, sole proprietorship, partnership, limited liability partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, public benefit corporation, 
		

		
			
		

		
			

		 

		

			16

		

 

		

			 

		

		

		
			entity or government (whether national, federal, provincial, state, county, city, municipal or otherwise, including any instrumentality, division, agency, body or department thereof), and shall include such Person’s successors and assigns.
		

		
			“Prime Rate” means the greater of 4.00% per year or the Prime Rate per year published in the Money Rates section of the Western Edition of The Wall Street Journal, or such other rate of interest publicly announced from time to time by Lender as its Prime Rate.  Lender may price loans to its other customers at, above, or below the Prime Rate. Any change in the Prime Rate shall take effect at the opening of business on the day specified in the public announcement of a change in the Prime Rate.
		

		
			“Receivable Amount” means as to any Receivable, the Receivable Amount due from the Account Debtor after deducting all discounts, credits, offsets, payments or other deductions of any nature whatsoever, whether or not claimed by the Account Debtor.
		

		
			“Receivables” means Borrower’s rights to payment arising in the ordinary course of Borrower’s business, including accounts, chattel paper, instruments, contract rights, documents, general intangibles, letters of credit, drafts, and bankers acceptances.
		

		
			“Termination Fee” means 1.0% of the Credit Limit.
		

		
			“UCC” means the Arizona Uniform Commercial Code, as amended or supplemented from time to time.
		

		
			12.2       Construction:  
		

		
			(a)          In this Agreement: (i) references to the plural include the singular and to the singular include the plural; (ii) references to any gender include any other gender; (iii) the terms “include” and “including” are not limiting; (iv) the term “or” has the inclusive meaning represented by the phrase “and/or,” (v) unless otherwise specified, section and subsection references are to this Agreement, and (vi) any reference to any statute, law, or regulation shall include all amendments thereto and revisions thereof.
		

		
			(b)          Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved using any presumption against either Borrower or Lender, whether under any rule of construction or otherwise.  On the contrary, this Agreement has been reviewed by each party hereto and their respective counsel.  In case of any ambiguity or uncertainty, this Agreement shall be construed and interpreted according to the ordinary meaning of the words used to accomplish fairly the purposes and intentions of all parties hereto.
		

		
			(c)          Titles and section headings used in this Agreement are for convenience only and shall not be used in interpreting this Agreement.
		

		
			13.         JURY TRIAL WAIVER.  THE UNDERSIGNED ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES.  TO THE EXTENT PERMITTED BY LAW, EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN THE UNDERSIGNED PARTIES.
		

		
			14.         RESERVED. 
		

		
			15.         EXECUTION, EFFECTIVENESS, SURVIVAL.  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 documents executed in connection herewith constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic transmission (including a .pdf file) shall be effective as delivery of a manually executed counterpart of this Agreement.  This Agreement shall become effective upon the execution and delivery hereof by Borrower and Lender and shall continue in full force and effect until the Maturity Date and thereafter so long as any Obligations (other than unasserted indemnification obligations and other than to extent Obligations are cash collateralized or backstopped as expressly provided hereunder in a manner reasonably acceptable to Lender) remain outstanding hereunder.  Upon the payment, performance and satisfaction in full in cash of the Obligations (other than (i) inchoate indemnification obligations and (ii) Letters of Credit Obligations and other Obligations that have been Cash Collateralized), and all of Lender’s obligations to make Advances hereunder have been terminated, the security interests created by this Agreement shall be terminated automatically without the requirement for any action on the part of any Person.  Furthermore, any security interest granted hereby or pursuant to any other document in any Collateral that is disposed of pursuant to a disposition permitted hereunder shall be automatically released (without affecting the security interest in Collateral that is not being disposed of) without the
		

		
			

		 

		

			17

		

 

		

			 

		

		

		
			requirement for any action on the part of any Person.  In each case Lender will, upon the reasonable request of and at the expense of Borrower, file appropriate UCC financing statement amendments to release of record any security interest to be released in accordance with the foregoing and take such other actions as may be reasonably requested by Borrower to evidence the release of such security interests.  Lender reserves the right, after Borrower files a Form 8-K announcing the closing of this Agreement, to issue press releases, advertisements, and other promotional materials describing any successful outcome of services provided on Borrower’s behalf, in each case in the form of a customary “tombstone” unless otherwise agreed by Borrower (not to be unreasonably withheld or delayed). Borrower agrees that Lender shall have the right to identify Borrower by name in those materials.
		

		
			16.         OTHER AGREEMENTS.  Any security agreements, liens and/or security interests securing payment of any obligations of Borrower owing to Lender or its Affiliates also secure the Obligations, and are valid and subsisting and are not adversely affected by execution of this Agreement.  An Event of Default under this Agreement constitutes a default under other outstanding agreements between Borrower and Lender or its Affiliates.
		

		
			17.         REVIVAL AND REINSTATEMENT OF OBLIGATIONS.  If the incurrence or payment of the Obligations by Borrower or any guarantor, or the transfer to Lender of any property should for any reason subsequently be asserted, or declared, to be void or voidable under any state or federal law relating to creditors’ rights, including provisions of the United States Bankruptcy Code relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (each, a “Voidable Transfer”), and if Lender is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that Lender is required or elects to repay or restore, and as to all reasonable costs, expenses, and reasonable attorneys’ fees of Lender related thereto the liability of Borrower and such guarantor automatically shall be revived, reinstated, and restored and shall exist as though such Voidable Transfer had never been made.
		

		
			18.         PATRIOT ACT NOTIFICATION.  Lender hereby notifies Borrower that pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001 (“Patriot Act”), Lender is required to obtain, verify and record information that identifies Borrower, which information includes the names and addresses of Borrower and other information that will allow Lender to identify Borrower in accordance with the Patriot Act.
		

		
			19.         ACCOUNTING TERMS AND PRINCIPLES.  All accounting determinations required to be made pursuant hereto shall, unless expressly otherwise provided herein, be made in accordance with GAAP.  No change in the accounting principles used in the preparation of any financial statement hereafter adopted by Borrower (including, with respect to GAAP, any change in GAAP that would require leases that would be classified as operating leases under GAAP on the date of this Agreement to be reclassified as capital leases) shall be given effect for purposes of measuring compliance with any provision of this Agreement or otherwise determining any relevant ratios and baskets which govern whether any action is permitted hereunder unless Borrower and Lender agree to modify such provisions to reflect such changes in GAAP, and unless such provisions are modified, all financial statements and similar documents provided hereunder shall be provided together with a reconciliation between the calculations and amounts set forth therein before and after giving effect to such changes in GAAP.  
		

		
			20.         CONFIDENTIALITY.  Lender agrees that material, non-public information regarding Borrower, its operations, assets, and existing and contemplated business plans (“Confidential Information”) shall be treated by Lender in a confidential manner, and shall not be disclosed by Lender to Persons who are not parties to this Agreement, except:  (i) to attorneys for and other advisors, accountants, auditors, and consultants to Lender (“Lender Representatives”), (ii) to subsidiaries and Affiliates of Lender, provided that any such subsidiary or Affiliate shall have agreed to receive such information hereunder subject to the terms of this Section 20, (iii) as may be  required by regulatory authorities or otherwise in connection with an examination or review of Lender by any regulatory authority or other governmental authority, (iv) as may be required by statute, decision, or judicial or administrative order, rule, or regulation; provided that (x) prior to any disclosure under this clause (iv), the disclosing party agrees to provide Borrower with prior notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior notice to Borrower pursuant to the terms of the applicable statute, decision, or judicial or administrative order, rule, or regulation, and (y) any disclosure under this clause (iv) shall be limited to the portion of the Confidential Information as may be required by such statute, decision, or judicial or administrative order, rule, or regulation, (v) as may be agreed to in advance by Borrower or as requested or required by any governmental authority pursuant to any subpoena or other legal process, provided, that, (x) prior to any disclosure under this clause (v) the disclosing party agrees to provide Borrower with prior notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior notice to Borrower pursuant to the terms of the subpoena or other legal process, and (y) any disclosure under this clause (v) shall be limited to the portion of the Confidential Information as may be required by such governmental authority pursuant to such subpoena or other legal process, (vi) as to any such information that is or becomes generally available to the public (other than as a result of prohibited disclosure by Lender or Lender Representatives), (vii) in connection with any assignment, prospective assignment, sale, prospective sale, participation, prospective participation, pledge or prospective pledge of Lender’s interest under this Agreement, provided that any such transferee or prospective transferee shall have agreed in writing to receive such information hereunder subject to the terms of this Section 20, (viii) in connection with any litigation or other adversary proceeding involving parties hereto which such litigation or adversary proceeding involves claims related to the rights or duties of such parties under this Agreement; provided, that, prior to any disclosure to any Person (other than Borrower, Lender, any of its Affiliates, or their respective counsel) under this clause (viii) with respect to litigation involving any Person (other than Borrower, Lender, any of their respective Affiliates, or 
		

		
			

		 

		

			18

		

 

		

			 

		

		

		
			their respective counsel), the disclosing party agrees to provide Borrower with prior notice thereof, and (ix) in connection with, and to the extent reasonably necessary for, the exercise of any secured creditor remedy under this Agreement.
		

		
			[remainder of this page intentionally left blank]
		

		
			 
		

		
			 
		

		
			

		 

		

			19

		

 

		

			 

		

		

		
			21.         NOTICE OF FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THIS WRITTEN AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.
		

		
			IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement on the day and year above written.
		

			
					
						BORROWER:

					
					
						 

					
					
						LENDER:

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						CAPSTONE TURBINE CORPORATION,

					
					
						 

					
					
						WESTERN ALLIANCE BANK,

				
	
					
						a  Delaware corporation

					
					
						 

					
					
						an Arizona corporation

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						By:

					
					
						/s/Jayme Brooks

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Name:

					
					
						Jayme Brooks

					
					
						 

					
					
						By:

					
					
						/s/Justin Vogel

				
	
					
						Title:

					
					
						Chief Financial Officer & Chief Accounting Officer

					
					
						 

					
					
						Name:

					
					
						Justin Vogel

				
	
					
						 

					
					
						 

					
					
						 

					
					
						Title:

					
					
						Vice President

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Address for Notices:

					
					
						 

					
					
						Address for Notices:

				
	
					
						21211 Nordhoff Street

					
					
						 

					
					
						55 Almaden Blvd.

				
	
					
						Chatsworth, CA 91311

					
					
						 

					
					
						San Jose, CA  95113

				
	
					
						E-mail:  jbrooks@capstoneturbine.com

					
					
						 

					
					
						Fax:  (408) 423-8520

				
	
					
						E-mail:  chovsepian@capstoneturbine.com

					
					
						 

					
					
						Attn: Lee Shodiss

				
	
					
						Attn:  Jayme Brooks

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Attn:  Clarice Hovsepian

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				

		
			 
		

		 

		

			Business Financing Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00271-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00271-of-00352.parquet"}]]