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 EXHIBIT 10.2
 EXECUTION VERSION
 SHARE PURCHASE AGREEMENT
 by and among
 PAR PHARMACEUTICAL, INC.,
 CLAN LABORATORIES PVT. LTD.,
 MUTHASAMY SHANMUGAM,
 JAGANATHAN JAYASEELAN,
 SEEMA SURESH,
 THERTHA INVESTMENT & PORTFOLIO SERVICES PRIVATE LIMITED,
 EDICT PHARMACEUTICALS PRIVATE LIMITED
 and
 JAGANATHAN JAYASEELAN, as Sellers’ Representative
 

 

 Dated:  May 17, 2011
 

 

 

 
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 TABLE OF CONTENTS
 Page
 
 1.
 DEFINITIONS AND RULES OF CONSTRUCTION
 2
 1.1
 
 Definitions
 2
 1.2
 Rules of Construction.
 2
 1.3
 Disclosure Schedules.
 3
 
 2.
 TERMS OF ACQUISITION.
 3
 2.1
 Share Purchase.
 3
 2.2
 Purchase Price; Payment of Purchase Price.
 3
 2.3
 Adjustments to Purchase Price.
 4
 2.4
 Payoff Amount Payments
 5
 2.5
 Payment of Funds
 5
 2.6
 .
 Closing.
 5
 2.7
 Withholding.
 7
 
 3.
 REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY.
 7
 3.1
 Organization; Good Standing; Power
 7
 3.2
 Capitalization; Options; Seller Rights
 8
 3.3
 Due Authorization; Validity; No Conflicts
 8
 3.4
 Interests in Other Entities.
 9
 3.5
 Governmental Authorizations; Third-Party Consents.
 9
 3.6
 Financial Statements.
 9
 3.7
 Absence of Certain Changes.
 10
 3.8
 
 Contracts.
 12
 3.9
 Certain Business Matters.
 14
 3.10
 Tax Matters.
 14
 3.11
 
 Litigation.
 16
 3.12
 Compliance with Applicable Laws.
 16
 3.13
 Environmental Matters.
 16
 3.14
 
 Permits.
 17
 3.15
 Title to Properties; Real Property.
 17
 3.16
 Fixed Assets
 18
 3.17
 Intellectual Property.
 19
 3.18
 Regulatory Matters.
 20
 3.19
 
 Insurance.
 21
 3.20
 Bank Accounts; Credit Cards; Corporate Accounts; and Powers of Attorney.
 22
 3.21
 Employee Arrangements.
 22
 3.22
 Employees.
 23
 3.23
 Absence of Certain Business Practices.
 26
 

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 3.24
 Affiliated Transactions.
 26
 3.25
 Import and Export Controls.
 26
 3.26
 Prior Transactions
 27
 3.27
 
 Brokers.
 27
 3.28
 
 Disclosure.
 27
 3.29
 Disclaimer of Other Representations and Warranties
 27
 
 4.
 REPRESENTATIONS AND WARRANTIES OF THE SELLERS.
 27
 4.1
 Organization; Good Standing; Power
 27
 4.2
 Due Authorization; Validity; No Conflicts
 28
 4.3
 Stock Ownership.
 28
 4.4
 Governmental Authorizations; Third-Party Consents
 29
 4.5
 No Competing Interests.
 29
 4.6
 Adequate Consideration; No Tax Proceeding
 29
 4.7
 
 Brokers
 29
 
 5.
 REPRESENTATIONS AND WARRANTIES OF THE BUYER.
 29
 5.1
 Organization and Power.
 29
 5.2
 Due Authorization; Validity; No Conflicts.
 29
 5.3
 
 Financing
 30
 5.4
 
 Brokers
 30
 
 6.
 COVENANTS.
 30
 6.1
 Investigation by the Buyer.
 30
 6.2
 Carry on in Ordinary Course.
 31
 6.3
 Exclusive Dealings.
 33
 6.4
 Reasonable Best Efforts
 33
 6.5
 Supplemental Disclosure.
 33
 6.6
 Compounding Actions
 34
 6.7
 Tax Certificates
 34
 6.8
 Licenses and Certifications
 34
 6.9
 Corporate Compliance
 34
 6.10
 Company Preference Shares
 35
 6.11
 
 Records
 35
 6.12
 Maintenance of Insurance
 35
 6.13
 Resignations; Powers of Attorney
 35
 6.14
 Payoff of Company Indebtedness
 35
 6.15
 Termination of Guaranty
 36
 6.16
 Public Announcements
 36
 6.17
 Sellers’ Further Assurances
 36
 6.18
 Buyer’s Further Assurances
 36
 
 7.
 CERTAIN TAX MATTERS
 36
 

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 7.1
 Tax Indemnification
 36
 7.2
 Straddle Period
 37
 7.3
 Tax Periods Ending on or before the Closing Date
 37
 7.4
 Cooperation on Tax Matters.
 37
 7.5
 Certain Taxes
 38
 7.6
 Treatment of Indemnity Payments
 38
 
 8.
 CONDITIONS TO CLOSING.
 38
 8.1
 Conditions to the Buyer’s Obligation to Close
 38
 8.2
 Conditions to the Sellers’ Obligations to Close
 41
 
 9.
 TERMINATION
 42
 9.1
 Termination
 42
 9.2
 Effects of Termination
 43
 
 10.
 SURVIVAL; INDEMNIFICATION.
 43
 10.1
 Survival of Representations, Warranties and Covenants
 43
 10.2
 Indemnification by the Sellers.
 43
 10.3
 Indemnification by the Buyer
 44
 10.4
 Procedures for Indemnification; Defense
 44
 10.5
 Limitations on Indemnification.
 46
 10.6
 Indemnification in Case of Strict liability or Indemnitee Negligence
 47
 10.7
 Right to Offset
 47
 10.8
 Exclusive Remedy
 47
 
 11.
 NON-COMPETITION; CONFIDENTIALITY.
 47
 11.1
 Non-Competition
 47
 11.2
 Non-Solicitation.
 48
 11.3
 Non-Disruption.
 48
 11.4
 Confidentiality.
 48
 11.5
 Remedies upon Breach.
 49
 
 12.
 MISCELLANEOUS PROVISIONS.
 49
 12.1
 Execution in Counterparts.
 49
 12.2
 
 Notices.
 49
 12.3
 Amendments; Waivers.
 51
 12.4
 Entire Agreement.
 51
 12.5
 Fees and Disbursements.
 51
 12.6
 Assignment.
 51
 12.7
 Binding Effect; Benefits.
 51
 12.8
 
 Severability
 52
 12.9
 Appointment and Duties of Sellers’ Representative.
 52
 

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 12.10
 Governing Law; Arbitration.
 52
 12.11
 Appointment for Service of Process
 54
 

 ANNEXES
 Annex A – Definitions
 

 EXHIBITS
 

 Exhibit A – Form of Consulting Agreement
 Exhibit B – Form of Employment Agreement
 Exhibit C – Form of Seller Release
 Schedules 
 	 	 
	 Schedule 2.2
	 Requested ANDAs

	 Schedule 2.3(c)
	 Pre-Approved Purchases of Materials and Capital Assets

	 Schedule 2.5
	 Allocation among Sellers

	 Schedule 3.1
	 Organization; Good Standing; Power

	 Schedule 3.2(a)
	 Capitalization

	 Schedule 3.2(b)
	 Prior Offerings and Issuances

	 Schedule 3.2(c)
	 Outstanding Options, Warrants, Rights, Calls, Commitments, etc.

	 Schedule 3.2(d)
	 Preemptive Rights, Rights of First Refusal, Stock Option Grants, etc.

	 Schedule 3.3
	 Due Authorization; Validity; No Conflicts

	 Schedule 3.5
	 Company’s Governmental Authorizations; Third-Party Consents

	 Schedule 3.6(a)
	 Company Financial Statements

	 Schedule 3.6(b)
	 Accruals for Taxes and Liabilities

	 Schedule 3.6(d)
	 Undisclosed Liabilities

	 Schedule 3.6(e)(i)
	 Company Indebtedness

	 Schedule 3.6(e)(ii)
	 Loans and Advances

	 Schedule 3.7(b)
	 Absence of Changes – Liabilities

	 Schedule 3.7(c)
	 Absence of Changes – Repayment of Company Indebtedness

	 Schedule 3.7(d)
	 Absence of Changes – Discharge of Liabilities

	 Schedule 3.7(e)
	 Absence of Changes – Liens

	 Schedule 3.7(j)
	 Absence of Changes – Capital Expenditures

	 Schedule 3.7(m)
	 Absence of Changes – Loans to Employees

	 Schedule 3.7(o)
	 Absence of Changes – Insurance Policies

	 Schedule 3.8(a)
	 Material Contracts

	 Schedule 3.8(b)
	 Discounts, Allowances, etc.

	 Schedule 3.9(a)
	 Sole-Source Suppliers of Goods or Services

	 Schedule 3.9(c)
	 Non-Compete and Exclusive Dealing Agreements

	 Schedule 3.9(d)
	 Notices from Material Suppliers

	 Schedule 3.10(k)
	 Tax Matters

	 Schedule 3.11
	 Litigation

	 Schedule 3.12
	 Compliance with Applicable Laws
  
  

	  
  
  

  
 
  
  
 Schedule 3.13
	  
                                iv
  

                     
 
  
 Environmental Matters

	 Schedule 3.14
	 Permits

	 Schedule 3.15(a)
	 Sufficiency and Title to Properties

	 Schedule 3.15(b)
	 Owned Real Property

	 Schedule 3.16
	 Equipment

	 Schedule 3.17(a)
	 Infringement Claims

	 Schedule 3.17(c)
	 Notice of Infringement Claims

	 Schedule 3.17(d)
	 Domain Names

	 Schedule 3.18
	 Products

	 Schedule 3.19
	 Insurance

	 Schedule 3.20(a)
	 Bank Accounts

	 Schedule 3.20(b)
	 Credit Card Accounts

	 Schedule 3.20(c)
	 Other Corporate Accounts

	 Schedule 3.20(d)
	 Powers of Attorney

	 Schedule 3.21(a)
	 Benefit Plans

	 Schedule 3.21(b)
	 Claims Against Benefit Plans, etc.

	 Schedule 3.21(c)
	 Obligations to Provide Benefits to Former Employees, etc.

	 Schedule 3.21(d)
	 Self-Funded and Self-Insured Benefit Plans

	 Schedule 3.21(g)
	 Restrictions on Right to Amend, Terminate or Assign Benefit Plans

	 Schedule 3.21(h)
	 Agreements with Employees, Directors or Agents; Future Benefit Plans

	 Schedule 3.22(a)
	 Employee Information

	 Schedule 3.24
	 Affiliated Transactions

	 Schedule 3.26
	 Prior Transactions

	 Schedule 4.3
	 Stock Ownership

	 Schedule 4.4
	 Sellers’ Governmental Authorizations; Third-Party Consents

	 Schedule 4.5
	 Shared Assets

	 Schedule 6.2
	 Post-Signing Conduct of Business

	 Schedule 11.2
	 Non-Solicitation

 

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 SHARE PURCHASE AGREEMENT
 This SHARE PURCHASE AGREEMENT (this “Agreement”) is made this 17th day of May 2011, by and among Par Pharmaceutical, Inc., a Delaware corporation (the “Buyer”), Edict Pharmaceuticals Private Limited, a company incorporated under the laws of India, having its registered office at 1/58, Pudupakkam Main Road, Pudupakkam, Kelambakkam – 603 103, Chennai, Tamilnadu, India (the “Company”), Clan Laboratories Private Limited, a company incorporated under the laws of India, having its registered office at 1/58, Pudupakkam Main Road, Pudupakkam, Kelambakkam – 603 103, Chennai, Tamilnadu, India (“Clan Laboratories”), Muthusamy Shanmugam, an individual residing at 9 Revere Road, Monmouth Junction, New Jersey 08852 (“M. Shanmugam”), Jaganathan Jayaseelan, an individual residing at **** (“J. Jayaseelan”, and together with Clan Laboratories and M. Shanmugam, the “Major Sellers” and each, a “Major Seller”), Seema Suresh, an individual residing at **** holding **** (“S. Suresh”), Thertha Investment & Portfolio Services Private Limited, a company incorporated under the laws of India, having its registered office at Flat No. 1, Prasanna Enclave, No. 30, Bharathi Avenue, 2nd Street, Kotturpuram, Chennai – 600085, Tamil Nadu, India (“TIPS,” collectively with Clan Laboratories,  J. Jayaseelan, M. Shanmugam and S. Suresh, the “Sellers,” and each individually, a “Seller”), and Jaganathan Jayaseelan, solely in his capacity as Sellers’ Representative.
 W I T N E S S E T H:
 WHEREAS, the Company is principally engaged in the business of researching, developing and manufacturing pharmaceutical products for pharmaceutical companies (the “Business”);
 WHEREAS, the Sellers are, in the aggregate, the record and beneficial owners of 58,762 fully paid up equity shares (exclusive of equity shares to be issued prior to closing upon conversion of the preference shares and 1,152 equity shares to be issued to S. Suresh in respect of share application money), Rs. 100 per share, of the Company (the “Company Common Shares”) and 79,330 5% cumulative convertible preference shares, Rs. 100 per share, of the Company (the “Company Preference Shares”, and together with Company Common Shares, (“Company Stock”), which shares represent all of the issued and outstanding share capital of the Company;
 WHEREAS, prior to the Closing, each of S. Suresh and TIPS (the “Preference Shareholders”)  shall convert all the Company Preference Shares that she or it holds into 3,153 Company Common Shares; and
 WHEREAS, the Sellers desire to sell all their shares of Company Common Shares to the Buyer, and the Buyer desires to purchase all of the outstanding Company Common Shares from the Sellers, in the manner and subject to the terms and conditions hereinafter set forth.
 NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements herein contained, the parties hereby agree as follows:
 

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 1.
 DEFINITIONS AND RULES OF CONSTRUCTION
 1.1
 Definitions
 .  Capitalized terms used in this agreement have the meanings set forth in Annex A.
 1.2
 Rules of Construction.
 (a)
 When the context in which words are used in this Agreement indicates that such is the intent, words used in the singular shall have a comparable meaning when used in the plural, and vice versa; pronouns stated in the masculine, feminine or neuter shall include each other gender.
 (b)
 The section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties hereto and shall not in any way affect the meaning or interpretation of this Agreement.
 (c)
 The term “including” is not limiting and means “including, without limitation.”
 (d)
 Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are disclosed to the Buyer, (ii) references to any statute or regulation shall be construed as including all statutory and regulatory provisions amending, replacing, supplementing or interpreting such statute or regulation, except that for purposes of determining the accuracy of any representation and warranty, such reference shall only be to such statute or regulation as in effect on the date the representation and warranty was made and (iii) references to “Sections,” “Schedules” or “Exhibits” are to sections, schedules or exhibits, as applicable, of this Agreement.
 (e)
 Unless otherwise expressly provided herein, “dollars” or “$” means the currency of the U.S. that, as at the time of payment, is legal tender for the payment of public and private debts.  Unless otherwise expressly provided herein, “rupees” or “Rs.” means the currency of India that, as at the time of payment, is legal tender for the payment of public and private debts.  Any calculation of Rs. hereunder requiring a conversion from $, or vice versa, shall be calculated using the applicable exchange rate published in The Wall Street Journal for the close of the business day immediately preceding the date of such calculation, which exchange rate is quoted at 4:00 p.m. Eastern Time by Reuters. Where the context requires, amounts expressed in dollars shall be interpreted to mean the rupee equivalent of such amount.
 (f)
 This Agreement is between financially sophisticated and knowledgeable parties and is entered into by such parties in reliance upon the economic and legal bargains contained herein, the language used in this Agreement has been negotiated by the parties and their representatives and shall be interpreted and construed in a fair and impartial manner without regard to such factors as the party who prepared, or caused the preparation of, this Agreement or the relative bargaining power of the parties.
 

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 1.3
 Disclosure Schedules.
   The schedules referred to herein and delivered pursuant to and attached to this Agreement (collectively, “Disclosure Schedules”) are integral parts of this Agreement.  Nothing in a Disclosure Schedule shall be deemed adequate to disclose an exception to a representation or warranty made herein, unless the Disclosure Schedule identifies the exception with reasonable particularity and describes the relevant facts in reasonable detail, including by explicit cross-reference to another Disclosure Schedule to this Agreement.  Without limiting the generality of the foregoing, the mere listing, or inclusion of a copy, of a document or other item shall not be deemed adequate to disclose an exception to a representation or warranty made herein, unless the representation or warranty is being made as to the existence of the document or other item itself.  The Company and the Major Sellers are responsible for preparing and arranging the Disclosure Schedules corresponding to the lettered and numbered sections of Section 3, and each Seller is responsible for preparing and arranging the information in respect of such Seller on the Disclosure Schedules corresponding to the lettered and numbered sections of Section 4.  
 2.
 TERMS OF ACQUISITION.
 2.1
 Share Purchase.
   Subject to the terms and conditions of this Agreement, on the Closing Date, each Seller shall sell, transfer, convey and deliver to the Buyer, free and clear of any Liens (other than restrictions of general applicability under applicable securities Laws or ownership Laws of India, including in respect of foreign ownership) and the Buyer shall purchase, acquire and accept from each Seller, all right, title and interest of such Seller, legal and equitable, beneficial and of record, in and to the number of shares of the Company Common Shares as of the Closing Date set forth opposite each Seller’s name on Schedule 3.2(a), which shares shall represent all of the issued and outstanding share capital of the Company.  
 2.2
 Purchase Price; Payment of Purchase Price.
 (a)
 Purchase Price.  In accordance with Sections 2.2(b) and 2.2(c) and in respect of payments to be made under Section 2.2 subject to satisfaction of applicable conditions in Section 2.2(c), as full consideration for all of the Company Common Shares, the Buyer shall pay an amount equal to Thirty-Two Million Five Hundred Thousand and One Dollars ($32,500,001) (collectively, the “Purchase Price”).
 (b)
 Payments at Closing.  Twenty Million Five Hundred Thousand Dollars ($20,500,000) subject to Sections 2.3 and 12.5 (the “Closing Consideration”), will be paid by the Buyer to the Sellers at Closing.
 (c)
 Additional Payments.  In addition to the Closing Consideration, the Buyer shall pay up to a maximum of $12,000,001 as the balance of consideration for the Company Common Shares, payable as, and subject to the satisfaction of the conditions and the achievements, set forth below:
 (i)
 If the FDA’s inspection of the Facility is successful as indicated by (A) a No Action Indicated Finding or a completed inspection without the issuance of a FDA Form 483, (B) an acknowledgement letter from the FDA stating that the Company’s 
 

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 response to any Form 483 issued in connection with such inspection is acceptable to the FDA, or (C) a Voluntary Action Indicated classification with recommendation for approval of any and all ANDA filings which were subject of the inspection, then Buyer shall pay **** to the Sellers within five (5) business days after any of the criteria set forth subsections (A) through (C) above is satisfied, and **** upon the later of (1) five (5) business days after any of the criteria set forth in subsections (A) through (C) above is satisfied and (2) **** after the Closing Date.
 (ii)
 For each of the products listed in Sections (a)-(c) of Schedule 2.2, the Buyer shall pay **** to the Sellers if a complete ANDA is accepted for filing by the FDA on or before the first anniversary of the Closing Date, which amount shall be payable within five (5) business days after the applicable ANDA has been accepted for filing by the FDA.
 (iii)
 If complete ANDAs for all of the products listed in Sections (a)-(d) of Schedule 2.2 and a fifth product to be agreed upon by the Buyer and the Sellers Representative in writing (collectively, the “Requested ANDAs,” and each individually, a “Requested ANDA”) are accepted for filing by the FDA on or before the first anniversary of the Closing Date (or, if the Buyer and the Sellers’ Representative have not agreed on the fifth product by the Closing Date, the first anniversary of the date on which the identification of the fifth product is agreed), the Buyer shall pay **** to the Sellers within five (5) business days after all of the Requested ANDAs have been accepted for filing.
 2.3
 Adjustments to Purchase Price. 
 (a)
 In the event that the aggregate amount of the Company Indebtedness (excluding (i) the loans made by Clan Laboratories to the Company after April 1, 2011 solely to fund the operating expenses of the Company (the “Opex Loans”) and (ii) any Indebtedness incurred by the Company after the date hereof, with the prior written consent of the Buyer, to purchase the materials and capital assets necessary for the Company to develop products under the Supply Agreement (the “Capex Loans”)), as set forth in the applicable Payoff Letters, exceeds the rupee equivalent of $4,300,000 on the Closing Date, then the Closing Consideration shall be reduced by the amount that the Company Indebtedness (excluding the Opex Loans and Capex Loans) exceeds $4,300,000.  
 (b)
 In the event that the aggregate amount of the Opex Loans (including all interest and fees thereon) on the Closing Date, as set forth in the applicable Payoff Letter, exceeds the rupee equivalent of the product of (i) $177,000 multiplied by (ii) the number of calendar months that expire between April 1, 2011 and the Closing Date, prorated for any partial month (the “Approved Opex Loan Amount”), then the Closing Consideration shall be reduced by the amount that the Opex Loans exceed the Approved Opex Loan Amount.
 (c)
 In the event that the aggregate amount of the Capex Loans (including all interest and fees thereon) on the Closing Date, as set forth in the applicable Payoff Letter, exceeds the rupee equivalent of the sum of (i) $800,000 (for a portion of the capital and material expenditures set forth on Schedule 2.3(c)) plus (ii) any additional amount approved in writing by Buyer after the date hereof in respect of the purchase of materials or capital assets (the 
 

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 “Approved Capex Loan Amount”), then the Closing Consideration shall be reduced by the amount that the Capex Loans exceed the Approved Capex Loan Amount.
 2.4
 Payoff Amount Payments
 . In addition to the Purchase Price, the Buyer shall, contemporaneously with the Closing, pay an advance to the Company equivalent to the Final Payoff Amount and the Company shall use such funds to pay the Final Payoff Amount to each of the Company Creditors (including the Opex Loan and Capex Loan creditors) on the Closing Date as specified in the Payoff Letters.  Subject to compliance with applicable Law, as consideration towards the advance paid by the Buyer to the Company, the Company shall, within a period of 180 days from the Closing Date, issue Company Common Shares to the Buyer at a valuation equivalent to the purchase price per Company Common Share payable pursuant to this Agreement.
 2.5
 Payment of Funds
 .  All payments due to the Sellers pursuant to this Section 2 shall be allocated among the Sellers as set forth on Schedule 2.5 and shall be paid by wire transfer of immediately available funds to accounts designated in writing by the Sellers at least five (5) Business Days prior to each scheduled date of payment.  Payments to M. Shanmugam shall be made in U.S. Dollars.  Payments to all other Sellers shall be made to Sellers’ accounts, which shall all be at no more than two banks in India, in U.S. Dollars and converted into Rupees by such bank.
 2.6
 Closing.
 (a)
 Closing Date.  The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of the Company at 10:00 a.m. IST on the second (2nd) business day after all conditions precedent set forth in Sections 8.1 and 8.2 shall have been satisfied or waived (other than those conditions precedent that by their nature are to be satisfied at Closing).  The date on which the Closing occurs is referred to herein as the “Closing Date”. 
 (b)
 The Buyer’s Closing Deliveries.  Subject to the terms and conditions of this Agreement, at the Closing, the Buyer shall duly execute (to the extent a party thereto) and deliver those documents and make the other deliveries required to be made by the Buyer pursuant to Section 8.2.
 (c)
 The Seller’s Deliveries.  Subject to the terms and conditions of this Agreement, at the Closing, the Sellers shall duly execute (to the extent a party thereto) and deliver those documents and make the other deliveries required to be made by the Sellers and the Company pursuant to Section 8.1.  
 (d)
 Closing Actions.  On the Closing Date, upon satisfaction or waiver of the conditions to Closing set forth in Sections 8.1 and 8.2, the following shall occur:
 (i)
 The Buyer shall pay the Closing Consideration to the Sellers by wire transfer of immediately available funds and, subject to receipt of the Closing Consideration, the Sellers shall deliver to the Buyer, duly signed and executed share transfer forms for transfer of the Company Common Shares to the Buyer as well as the original share 
 

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 certificates duly endorsed pertaining to all of the Company Common Shares, free and clear of all Liens, other than restrictions of general applicability under applicable securities Laws or ownership Laws of India, including in respect of foreign ownership.
 (ii)
 The Sellers, the Company and the Buyer shall complete and deliver necessary forms and documents in respect of the Company Common Shares including Form FC-TRS, consent letters, undertakings and other documents required to be submitted pursuant to the Form FC-TRS, file the aforementioned documents with the concerned authorized dealer and the Company shall procure the requisite endorsement on the Form FC-TRS pursuant to applicable Law. Thereafter, a complete set of the Form FC-TRS, duly endorsed, shall be handed over to the Board of Directors of the Company (the “Board of Directors”) for its necessary action pursuant to clause (iii) below.
 (iii)
 The Company shall cause a meeting of the Board of Directors at which the Board of Directors shall take note of, approve and register the transfer of the Company Common Shares from the Sellers to the Buyer and authorize relevant persons for carrying out relevant notings/changes in all the corporate records of the Company, including the register of members to reflect the Buyer as the legal and beneficial owner of the Company Common Shares.
 (iv)
 The Sellers shall deliver or ensure the delivery of the following documents to the Buyer:
 A.
 duly stamped equity share certificates endorsed in favor of the Buyer in respect of the Company Common Shares;
 B.
 a certified extract of the register of members of the Company evidencing the inclusion of the name of the Buyer in the register of members as the owner of the Company Common Shares;
 C.
 (1) certified true copies of resolutions of the Board of Directors, approving, on and from the Closing Date, the transfer of the Company Common Shares contemplated hereunder; and (2) resolutions of the Board of Directors approving, effective on and from the Closing Date, the appointment of the directors appointed by the Buyer and acceptance of the resignation and discharge of the directors nominated by the Sellers;
 D.
 certified true copies of resolutions of the Board of Directors approving, on and from the Closing Date, revocation of any power of attorney or authority given by the Sellers or the Company to the directors appointed by the Sellers or to any other person to act on behalf of the Company, if any; and
 E.
 resignation letters of directors nominated by the Sellers as directors of the Company, effective as of Closing Date.
 (v)
 The Board of Directors shall be re-constituted and nominees of the Buyer shall be appointed as directors on the Board of Directors.
 

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 2.7
 Withholding. 
 (a)
 Notwithstanding any other provision of this Agreement, and for the avoidance of doubt, (i) each payment made pursuant to this Agreement shall be made net of any Taxes required by applicable Law to be deducted or withheld from such payment and (ii) any amounts deducted or withheld from any such payment shall be remitted to the applicable Governmental Authority and shall be treated for all purposes of this Agreement as having been paid.  The party making any such deduction or withholding shall furnish to the other party official receipts (or copies thereof) evidencing the payment of any such Taxes.  If the Buyer or any of the Sellers become aware that any amount is required to be so deducted or withheld, such party shall promptly provide notice to the other parties hereto.
 (b)
 With regard to the Taxes deductible by Buyer in connection with the consideration payable to M. Shanmugam hereunder, Buyer shall deduct and withhold an amount from the gross consideration payable to M. Shanmugam for his Company Common Shares equal to the product of the gross consideration payable to M. Shanmugam for his Company Common Shares and the **** from the disposition of stock or securities, and any amounts deducted or withheld from any such payment shall be remitted to the applicable Governmental Authority and shall be treated for all purposes of this Agreement as having been paid by the Buyer.
 3.
 REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY.
   The Company and the Major Sellers hereby, jointly and severally, represent and warrant to the Buyer, as of the date hereof and as of the Closing Date, as follows:
 3.1
 Organization; Good Standing; Power
 . The Company is a company duly organized and validly existing under the Laws of India and has all requisite corporate power and authority to own, lease and operate its assets and properties and to carry on the Business as presently conducted.  Except as set forth on Schedule 3.1, there are no other jurisdictions in which the character and location of the properties owned or leased by the Company or the conduct of the Company’s business require that the Company be duly qualified to transact business as a foreign corporation in such jurisdiction, except where the failure to be so qualified would not individually or in the aggregate reasonably be likely to have a Material Adverse Effect.  The Company’s Memorandum of Association and Articles of Association have been filed with the relevant Registrar of Companies and all resolutions or agreements required by the Act or other applicable Law to be attached to or incorporated in the Company’s Memorandum of Association and Articles of Association have been so attached and incorporated.  The statutory books and registers of the Company have been properly kept and maintained in all material respects and neither the Company nor the Major Sellers has received any notice, or expects to receive any notice, that the statutory books or records are incorrect.  Except as set forth on Schedule 3.1, all returns, particulars, resolutions and other documents which the Company is required by applicable Law to file with or deliver to the Registrar of Companies or any other Governmental Authority have been correctly prepared and duly filed or delivered.  The minute books of the Company contain true and complete records of all meetings and other material actions of Board of Directors and the shareholders of the Company, including actions by vote or written consent of the Board of Directors and the shareholders of the Company.
 

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 3.2
 Capitalization; Options; Seller Rights
 . The authorized share capital of the Company consists solely of (a) 65,000 shares of the Company Common Shares, 58,762 of which shares are issued and outstanding as of the date hereof and 63,067 of which will be issued and outstanding on the Closing Date after conversion of the Company Preference Shares in accordance with Section 6.10 and (b) 80,000 shares of Company Preference Shares, 79,330 of which shares are issued and outstanding as of the date hereof and none of which shall be issued and outstanding as of the Closing Date, after conversion of the Company Preference Shares in accordance with Section 6.10.  No shares of the share capital of the Company are held as treasury stock.  All issued and outstanding shares of Company Stock are owned, of record, solely by the Sellers.  The number and class of shares of Company Stock so owned by each of the Sellers as of the date hereof and as of the Closing Date is as set forth on Schedule 3.2(a).  Except as set forth on Schedule 3.2(b), all shares of Company Stock have been duly authorized and validly issued and are fully paid and non-assessable.  Except as set forth on Schedule 3.2(b), all prior offerings, issuances and transfers of Company share capital have been made in accordance with applicable securities Laws, the Act, other applicable Laws, the Company Organizational Documents and Contracts to which the Company is a party or otherwise bound.  Except as set forth on Schedule 3.2(c), there are, and on the Closing Date there will be, no outstanding obligations, options, warrants, rights, calls, commitments, conversion rights, plans or other agreements of any character to which the Company is a party or by which it is otherwise bound that provide for the repurchase or issuance by the Company of any shares of its share capital or permit any Person to share or participate in any of the profits, revenues or sales of the Company.  Except as set forth on Schedule 3.2(d), there are no preemptive rights, rights of first refusal or first offer, stock option grant or exercise rights, voting or veto rights, change of control or similar rights, anti-dilution protections or other rights that any shareholder, officer, employee or director of the Company or any other Person is (or would be) entitled to invoke as a result of the transactions contemplated by this Agreement or otherwise.
 3.3
 Due Authorization; Validity; No Conflicts
 .  Except as set forth on Schedule 3.3, the execution and delivery by the Company of this Agreement and each of the Ancillary Agreements to which it shall become a party, the performance by the Company of its obligations hereunder and thereunder, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action on the part of the Company, and the Company has all necessary corporate power with respect thereto.  This Agreement and each of the Ancillary Agreements to which it shall become a party has been (or will be) duly executed and delivered by the Company and are, or will be when duly executed by the Company (assuming the due execution by the other parties hereto or thereto), valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except to the extent that enforceability thereof may be limited by general equitable principles or the operation of bankruptcy, insolvency, reorganization, moratorium or similar Laws.  Except as set forth on Schedule 3.3, assuming all of the Consents are obtained, made or filed, neither the execution and delivery by the Company of this Agreement and the Ancillary Agreements to which it shall become a party, nor the consummation of the transactions contemplated hereby or thereby, nor the performance by the Company of its obligations hereunder or thereunder, shall (or, with the giving of notice or the lapse of time or both, would) (a) conflict with or violate any provision of the Company Organizational Documents; (b) (i) give rise to a material conflict, breach or default, or any right of termination, cancellation or 
 

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 acceleration of remedies or rights, (ii) give any Person any right to purchase or sell assets or securities from or to the Company or to exercise any remedy or modify any obligation or (iii) otherwise result in a loss of benefits to the Company under the provisions of any note, bond, mortgage, indenture, license, agreement or other instrument or obligation to which the Company is a party or by which it or its properties or assets is otherwise bound; (c) violate in any material respect any Law applicable to the Company or any of its properties or assets; (d) result in the creation or imposition of any Lien on any of the properties or assets of the Company (other than Permitted Liens); or (e) contravene, conflict with, or result in a violation of any of the terms or requirements of, or give rise to any right to revoke, suspend, terminate or modify, any Permit.
 3.4
 Interests in Other Entities.
   The Company does not, (a) have any Subsidiaries or (b) directly or indirectly (i) own, of record or beneficially, any shares of voting stock or any other equity securities of any Person, (ii) have any other ownership or equity or debt interest, of record or beneficially, in any Person, or (iii) have any obligation or right, fixed or contingent, to purchase or subscribe for any interest in, advance or loan monies to, or in any way make an investment in, any Person or to share any profits or capital investments in any other Person.
 3.5
 Governmental Authorizations; Third-Party Consents.
   Except as set forth in Schedule 3.5, no Consents are required to be obtained by the Company.
 3.6
 Financial Statements.
 (a)
 Attached as Schedule 3.6(a) are true and complete copies of the Company’s (i) audited balance sheets as of March 31, 2009 and March 31, 2010 and the related audited profit and loss accounts for the fiscal years then ended and (ii) unaudited balance sheet as of February 28, 2011 (the “Interim Balance Sheet”) and the related unaudited statements profit and loss account for the eleven-month period then ended (collectively, the financial statements referenced in clauses (i) and (ii) are referred to herein as the “Company Financial Statements”).  The Company Financial Statements, including any notes thereto, were prepared in accordance with GAAP (except for the absence of notes in the unaudited financial statements), applied on a consistent basis throughout the periods involved. The Company Financial Statements fairly present in all material respects the financial condition, operating results and cash flows of the Company as of the dates indicated and the results of its operations for the periods covered thereby (subject, in the case of unaudited statements, to normal year end adjustments).
 (b)
 Except as set forth on Schedule 3.6(b), the Company Financial Statements contain (as appropriate and required under GAAP and other applicable Laws) specific provisions, accruals or reserves in respect of, or full particulars in notes, all Taxes (including deferred Taxes) and other Liabilities of the Company as of the dates specified therein.
 (c)
 All accounts, books and ledgers related to the business of the Company are properly kept, are accurate and complete in all material respects, and there are no material inaccuracies or discrepancies of any kind contained or reflected therein.
 

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 (d)
 The Company does not have any Liabilities, including guarantees and indemnities by the Company of Liabilities of any other Person, except (i) Liabilities as and to the extent reflected on the Interim Balance Sheet; (ii) Liabilities incurred by it in the Ordinary Course of Business since the date of the Interim Balance Sheet (none of which is a Liability for breach of contract, breach of warranty, tort, infringement, claim, lawsuit or other proceeding) and adequately reflected on the books and records of the Company; (iii) obligations not in default under Contracts existing as of the date hereof or entered into after the date hereof in accordance with Section 6.2; and (iv) Liabilities set forth on Schedule 3.6(d).  
 (e)
 Schedule 3.6(e)(i) sets forth a description of each item of Company Indebtedness (whether incurred pursuant to a written or oral agreement), including (i) the name of the Company Creditor; (ii) the aggregate amount that the Company owes to such Company Creditor as of the date hereof; (iii) whether such Company Indebtedness was incurred pursuant to a written or oral agreement; (iv) whether such Company Indebtedness is secured by any Lien on any property or asset of the Company; and (v) if applicable, whether such Company Indebtedness relates to Capex Loans or Opex Loans.   Schedule 3.6(e)(ii) sets forth a description of each loan or advance made by the Company to a third-party (“Company Debtor”) (whether pursuant to a written or oral agreement), including (A) the name of the Company Debtor; (B) the aggregate amount loaned or advanced by the Company to such Company Debtor as of the date hereof; (C) whether such loan or advance was made by the Company pursuant to a written or oral agreement; and (D) whether such loan or advance is secured by any Lien on any property or asset of such Company Debtor.
 (f)
 The Company has not received any grants, subsidies or other financial assistance from a Governmental Authority.
 3.7
 Absence of Certain Changes.
   Except as set forth on the Disclosure Schedules below, since March 31, 2010, the Company has conducted the Business in the ordinary course consistent with past practice and has maintained and preserved its organization, goodwill and properties.  Since March 31, 2010, the Company has not:
 (a)
 suffered any Material Adverse Effect; 
 (b)
 except as set forth on Schedule 3.7(b), incurred any material Liabilities (other than Indebtedness), except those incurred in the Ordinary Course of Business, none of which exceed $50,000 (counting obligations or liabilities arising from a series of related or similar transactions, and all periodic installments or payments under any lease or other agreement providing for periodic installments or payments, as a single obligation or liability), or experienced any increase in, or change in any underlying assumption or method used in calculating, any bad debt, contingency or other reserve;
 (c)
 except as set forth on Schedule 3.7(c), paid any amount in respect of Indebtedness, except for regularly scheduled payments of principal and interest that were required in accordance with the express terms thereof; 
 

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 (d)
 except as set forth on Schedule 3.7(d), paid, discharged or satisfied any claim, liability or obligation (absolute, accrued, contingent or otherwise), other than the payment, discharge or satisfaction in the Ordinary Course of Business of liabilities and obligations (i) reflected or reserved against on the March 31, 2010 audited balance sheet or (ii) incurred since the date thereof in the Ordinary Course of Business;
 (e)
 except as set forth on Schedule 3.7(e), caused, permitted or allowed any of its property or assets (real, personal or mixed, tangible or intangible) to be subjected to any Lien other than Permitted Liens;
 (f)
 written off as uncollectible any notes or accounts receivable, except for write-offs in the Ordinary Course of Business and consistent with past practice, none of which is material and all of which together do not exceed $50,000 in the aggregate;
 (g)
 canceled any debts or waived or suffered to lapse any claims or rights of material value, or sold, transferred or otherwise disposed of any of its tangible properties or assets, except in the Ordinary Course of Business;
 (h)
 disposed of or suffered to lapse any right to use any material item of Company Intellectual Property or disclosed to any Person, other than pursuant to a valid and binding non-disclosure agreement, any trade secret, formula, process or know-how or any other material Confidential Information relating to the Company;
 (i)
 granted any increase in the compensation (including any increase pursuant to any bonus, pension, profit-sharing or other plan) payable or to become payable to any officer or employee, and no such increase is customary or required by any agreement or understanding;
 (j)
 except as set forth on Schedule 3.7(j), made any single capital expenditure or commitment in excess of $50,000 for additions to property, plant, equipment or intangible assets or made aggregate capital expenditures or commitments in excess of $250,000 for additions to property, plant, equipment and/or intangible assets;
 (k)
 subject to Section 6.10, issued, granted, redeemed or repurchased any shares of its share capital or any options, warrants or other rights to acquire any of its share capital, or declared, paid or set aside for payment any dividend or other distribution in respect of any of its share capital;
 (l)
 made any change in any of its methods of accounting or accounting practices or principles;
 (m)
 except as set forth on Schedule 3.7(m), paid, loaned or advanced any amount, or sold, transferred or leased any properties or assets (real, personal or mixed, tangible or intangible) to, or entered into any agreement or arrangement with, any of its officers, directors or employees or any Seller or any Affiliate of any of the Company’s officers, directors or employees or of any Seller; 
 

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 (n)
 acquired any assets or properties other than in the Ordinary Course of Business; 
 (o)
 except as set forth on Schedule 3.7(o), made or suffered any material changes in any policies of insurances covering their business, assets, properties or operations; or
 (p)
 agreed, in writing or otherwise, to take any action described in this Section 3.7.
 3.8
 Contracts. 
 (a)
 Schedule 3.8(a) sets forth a true and complete list of each contract, purchase order, agreement, mortgage, note, commitment, obligation and undertaking (collectively, “Contracts”) to which the Company is a party or by which it is otherwise bound that:
 (i)
 is an employment, consulting, severance, change of control, retention, indemnification or contribution agreement; 
 (ii)
 is a franchise, distributorship, manufacturing, development, licensing, dealership, supply or sales agency agreement (whether or not exclusive); 
 (iii)
 is an agreement that (A) limits or purports to limit the ability of the Company to compete in any line of business or with any Person or in any geographic area or during any period of time (except with respect to the use of information pursuant to any confidentiality or non-disclosure agreement), (B) requires the Company to use any supplier or third party for all or substantially all of the Company’s requirements or needs for any product or service in connection with the Business, (C) limits or purport to limit the ability of the Company to solicit customers or clients of the other parties thereto, (D) requires the Company to provide to the other parties thereto “most favored nations” pricing or any type of exclusive dealing or other similar arrangement, (E) requires the Company to market or co-market any products or services of a third party, or (F) contains any “take-or-pay” provisions or similar arrangements requiring the Company to make a minimum payment for goods or services from third party suppliers irrespective of usage;
 (iv)
 is an agreement providing for a joint venture, partnership arrangement, or other arrangement involving a sharing of profits, losses, costs or liabilities by the Company with a third party, including a joint venture, partnership arrangement or other agreement that has been terminated within the last twelve (12) months;
 (v)
 is an agreement by which the Company grants or receives rights in or to (e.g., licenses, assignments, non-assertions, covenants not to sue and/or escrow agreements) any of the Company Intellectual Property; 
 

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 (vi)
 is an agreement providing for the sale, acquisition or lease of any of the properties or assets of the Company or used in the Business in excess of $50,000, other than the purchase or sale of inventory in the Ordinary Course of Business; 
 (vii)
 is a mortgage, pledge, security agreement or other similar agreement with respect to any tangible or intangible property of the Company; 
 (viii)
 is a loan agreement, credit agreement, promissory note, guaranty, letter of credit, derivative contract (including foreign exchange facilities, options and swap contracts) or other similar agreement; 
 (ix)
 is an engagement agreement with attorneys, accountants, investment bankers or other professional advisers; 
 (x)
 is an agreement with any Governmental Authority; 
 (xi)
 is an agreement referred to in Section 3.24; 
 (xii)
 is an agreement providing for the purchase of any of the share capital or a material portion of the assets of any other Person; 
 (xiii)
 to the extent not disclosed pursuant to any of the clauses above, is an agreement not made in the Ordinary Course of Business or that requires payments or performance during its term involving an amount in excess of $50,000; 
 (xiv)
 is an agreement otherwise material to the operations, business or financial condition of the Company; or
 (xv)
 is a commitment or agreement to enter into any of the foregoing (collectively, the “Material Contracts”).  
 (b)
 True and complete copies of all written Material Contracts required to be set forth on Schedule 3.8(a) and summaries of all oral Material Contracts required to be set forth on Schedule 3.8(a) have been furnished to the Buyer and each of them is in full force and effect.  Neither the Company nor, to the Knowledge of the Company and the Major Sellers, any other Person that is a party to a Material Contract or is otherwise bound thereby is in default or breach thereunder, and no event, occurrence, condition or act exists that, with the giving of notice or the lapse of time or both, would give rise to any default, breach or right of cancellation or modification thereunder.  To the Knowledge of the Company and the Major Sellers, there has been no threatened cancellation of any of the Material Contracts and there are no outstanding disputes thereunder.  Except as set forth on Schedule 3.8(b), there are no agreements, understandings or arrangements with any other Person in respect of the Material Contracts that (i) give any Person the right to renegotiate or require a reduction in the price paid under such Contract or the repayment of any amount previously paid, (ii) provide for the sharing of any revenues or profits by or with the Company or (iii) provide for discounts, allowances or extended payment terms.  The Material Contracts are in all respects consistent with applicable 
 

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 Law and, to the Knowledge of the Company and the Major Sellers, are not the subject of any investigation, inquiry, proceeding or audit by a Governmental Authority.
 3.9
 Certain Business Matters.
   
 (a)
 The Company does not have any sole-source supplier of significant goods or services (other than utilities) with respect to which practical alternative sources are not reasonably available on equivalent terms and conditions, except as set forth on Schedule 3.9(a).
 (b)
 The Company does not provide and is not bound by any express warranties relating to its product or services and, to the Knowledge of the Company and the Major Sellers, there has been no assertion of any breach of warranty against the Company.
 (c)
 The Company is not a party to or otherwise bound by any agreement or arrangement that limits its freedom to compete in any line of business or any geographic area or with any Person or that requires it to transact business exclusively with any Person, except as set forth on Schedule 3.9(c).
 (d)
 Except as set forth on Schedule 3.9(d), neither the Company nor any Major Seller has received any notice, written or oral, or otherwise has any knowledge or information, that any material supplier of the Company intends or expects to stop, or materially decrease the rate of, supplying materials, products or services to the Company in the 12-month period following the Closing Date.
 3.10
 Tax Matters.
   Except as set forth below:
 (a)
 the Company has filed (on a timely basis) with the appropriate Governmental Authority all Tax Returns required to be filed by it and has timely paid in full any Taxes due, and all such Tax Returns were true and complete in all respects;
 (b)
 the Company is not the beneficiary of any extension of time within which to file any Tax Return;
 (c)
 the Company has provided the Buyer with true and complete copies of all Tax Returns filed by it since the Company’s fiscal year ended March 31, 2007;
 (d)
 the Company has possession, custody or control of all records and documentation that it is obliged to hold, preserve and retain for the purposes of any Tax and sufficient information to enable it to compute correctly its liability for Taxes insofar as the information relates to any event occurring on or before Closing;
 (e)
 there is no claim for Taxes that is a Lien (other than Permitted Liens) against the Company’s properties or, to the Knowledge of the Company and the Major Sellers, proposed or threatened Tax assessment against the Company;
 (f)
 the Company has not waived any statute of limitations in respect of Taxes or executed or filed with any Governmental Authority any agreement extending the period 
 

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 for the assessment or collection of any Taxes, and the Company is not a party to any pending or threatened suit, action or proceeding by any Governmental Authority for the assessment or collection of Taxes;
 (g)
 there is no pending unresolved claim by a Governmental Authority in any jurisdiction where the Company does not file Tax Returns that the Company is or may be subject to taxation by such jurisdiction;
 (h)
 there has been no examination or audit by any Tax authority with respect to Taxes with respect to any year since the Company’s fiscal year ended March 31, 2007;
 (i)
 the Company has timely withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, Seller or other Person;
 (j)
 no agreements or rulings relating to Taxes have been entered into or issued by any Governmental Authority with or in respect of the Company;
 (k)
 except as set forth on Schedule 3.10(k), the Company: (i) is not a party to or otherwise bound by any tax indemnification, allocation or sharing agreement; (ii) is not a party to an agreement with any Governmental Authority providing for any tax incentives, credits, inducements or similar benefits, nor is it otherwise participating in or claiming benefits under such a program; (iii) is not (and has not been) a member of an affiliated consolidated, combined or unitary group filing an affiliated, consolidated, combined or unitary Tax Return; and (iv) has no liability for the Taxes of any other Person as a transferee, successor, or alter ego of another Person, by contract or otherwise;
 (l)
 the Company will not be required to include any item of income in, or exclude any item of deduction from, its taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any:  (i) change in method of accounting for a taxable period ending on or prior to the Closing Date; or (ii) prepaid amount received on or prior to the Closing Date;
 (m)
 the Company does not own any interest in real property in any jurisdiction in which a Tax is imposed, or the value of the interest is reassessed, on the transfer of any interest in real property and which treats the transfer of an interest in an entity that owns an interest in real property as a transfer of the interest in real property; 
 (n)
 the Company has not executed any power of attorney with respect to any Tax; and
 (o)
 the Company does not operate through a branch, permanent establishment, fixed base, joint venture, partnership, subsidiary, liaison or representative office or otherwise, in any jurisdiction, other than India.
 3.11
 Litigation.
   Except as set forth on Schedule 3.11, there are no claims, suits or actions, administrative, arbitration or other proceedings, or governmental investigations or 
 

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 audits pending or, to the Knowledge of the Company and the Major Sellers, threatened against the Company, any of its properties, assets or businesses or the transactions contemplated hereby.  Except as set forth on Schedule 3.11, no Person has, in the past four (4) years, notified the Company of a material claim against the Company seeking an injunction, seeking to limit, invalidate or cancel any rights in Company Intellectual Property, or alleging any injury, loss or damage to economic or personal interests incurred as a result of or relating to (a) the use of any products sold by or on behalf of the Company, (b) services rendered by the Company or (c) acts by or omissions of the Company.  Except as set forth on Schedule 3.11, to the Knowledge of the Company and the Major Sellers, no event has occurred and no circumstance exists that may give rise to or serve as a reasonable basis for any claim, suit, action or other proceeding to be brought or threatened against the Company.  There are no outstanding judgments, orders, stipulations, injunctions, decrees or awards against the Company or that relate to the Business that have not been fully satisfied.
 3.12
 Compliance with Applicable Laws.
   Except as set forth on Schedule 3.12, the Company is and has been in compliance, in all material respects, with all Laws applicable to it, to the conduct of its businesses or operations or to the use of its properties or assets, including all Tax, privacy, employment and human rights Laws, the FDCA, regulations and requirements adopted by the FDA or any other Governmental Authority and Laws established by Governmental Authorities responsible for regulating the research, development, testing, manufacture, labeling, packaging, storage, handling, shipping, distribution, sale, import or export of the Products.  The Company has not received written notice of any violation or alleged violation of any Law by the Company.  To the Knowledge of the Company and the Major Sellers, no event has occurred and no circumstance exists that could reasonably be expected to constitute or result in (with or without notice or lapse of time or both) a violation of or failure to comply in any material respect with (a) any Law by the Company or (b) an order of any court with respect to which the Company or any of its assets or properties is subject.  
 3.13
 Environmental Matters. 
 (a)
 All activities at or upon the Facility by or on behalf of the Company and, to the Knowledge of the Company and the Major Sellers, any other Person have been and are being conducted in material compliance with all Environmental Laws, including drinking water standards.  Except as set forth on Schedule 3.13, to the Knowledge of the Company and the Major Sellers, there have been no environmental inspections, investigations, studies, audits, tests, reviews or other analyses conducted in relation to any property or business now or previously owned, operated or leased by the Company.  In relation to the environment assessments which to the Knowledge of the Company and the Major Sellers have been conducted on the Facility (other than the environmental assessment presently being conducted by Buyer’s consultant), if any, the Company has disclosed full details of all such environmental assessments and has carried out or procured the carrying out of all recommendations contained in such environmental assessments and reports.
 (b)
 No Hazardous Substance is present in any medium at the Facility in such a manner or amount as requires remediation under any applicable Environmental Law.  To the Knowledge of the Company and the Major Sellers, there have not been any releases or 
 

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 discharges of Hazardous Substances, on, at or beneath the Facility.  No employee has brought a claim, or threatened to bring a claim, against the Company that such employee was harmed by workplace exposure to a Hazardous Substance or due to a violation of Environmental Law, nor, to the Knowledge of the Company and the Major Sellers, is there any reasonable basis for such claim.  There are no pending civil, criminal or administrative claims liabilities, investigations or proceedings against the Company under any Environmental Law arising out of or relating to the condition of the Facility or the Company’s activities (or failure to act) thereon and, to the Knowledge of the Company and the Major Sellers, there is no reasonable basis for any such proceeding or investigation.  The Company has not received any notice, demand, letter, claim or request for information alleging that the Company or any Person who is operating or maintaining the Company’s drinking water system is in violation of any Environmental Laws.  The Company is not subject to any order, decree, injunction or other arrangement with any Governmental Authority or is subject to any indemnity or other agreement with any third party relating to liability under any Environmental Law.  To the Knowledge of the Company and the Major Sellers, there are no facts, circumstances or conditions that could reasonably be expected to result in a claim or action against the Company pursuant to any Environmental Law, including any obligations or liabilities arising from any contractual arrangements involving the manufacture, use, transport, disposal of any Hazardous Substances.
 3.14
 Permits.
   A true and complete list of all governmental permits, approvals, licenses, certificates, franchises, authorizations, consents and orders necessary for the operation of the Business in the manner that it is presently conducted is set forth on Schedule 3.14, (collectively, “Permits”), including all such Permits required by the FDA or any other Governmental Authority engaged in the regulation of clinical trials, pharmaceuticals, biologics or biohazardous substances or materials.  Except as set forth on Schedule 3.14, the Company has all such Permits, and all such Permits are valid and remain in full force and effect, and will remain so immediately following the Closing.  The Company has not engaged in any activity that could reasonably be expected to cause revocation or suspension of any such Permits and no action or proceeding seeking or contemplating the revocation or suspension of any Permit is pending or, to the Knowledge of the Company and the Major Sellers, threatened.  The Company has not received notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from the FDA or any other Governmental Authority or third party alleging that any product, testing and research, operation or activity is in violation of any Permits.
 3.15
 Title to Properties; Real Property.  
 (a)
 Title to Properties.  Except for (i) assets acquired after the date of the Interim Balance Sheet, (ii) inventory that has been sold or otherwise disposed of since the date of the Interim Balance Sheet, (iii) cash spent in the Ordinary Course of Business and (iv) as set forth on Schedule 3.15(a), the assets reflected on the Interim Balance Sheet are all of the material tangible assets that are necessary for the conduct of the Business as currently conducted by the Company.  Except as set forth on Schedule 3.15(a), the Company has good title to all of the properties and assets (personal and mixed, tangible and intangible) that it purports to own, including those properties and assets reflected on the Interim Balance Sheet (other than inventory 
 

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 sold or otherwise disposed of and cash spent in the Ordinary Course of Business since the date of the Interim Balance Sheet), free and clear of all Liens (other than Permitted Liens).  
 (b)
 Owned Real Property.  The Facility is the only real property owned (beneficially or of record) by the Company. The Company has good, marketable, fee simple title to the Facility, free and clear of all Liens (other than Permitted Liens and Liens set forth on Schedule 3.15(a) which will be terminated on or prior to the Closing). All documents of title relating to the Facility have been validly executed, adequately stamped and duly registered in the name of the Company as required under Law. Except as set forth on Schedule 3.15(b), (i) the Company has not leased or otherwise granted to any Person the right to use or occupy the Facility or any portion thereof; and (ii) there are no outstanding options, rights of first offer or rights of first refusal to purchase the Facility or any portion thereof or interest therein.  The Company is not a party to any agreement or option to purchase any real property or interest therein relating to, or intended to be used in the operation of, the Business.  The Company has not received any written notice (which remains outstanding) from any Governmental Authority alleging that the Company does not possess any license, permit or approval necessary for the continued use of the Facility as presently used in the conduct of the Business.  The Facility is in material compliance with all applicable Laws.  There are no actual or, to the Knowledge of the Company and the Major Sellers, threatened suits, actions or proceedings with respect to the Facility for eminent domain. The plants, buildings, and structures located at the Facility are in good operating condition and repair (ordinary wear and tear excepted) and are suitable for their present uses and are structurally sound.  To the Knowledge of the Company and the Major Sellers, except as set forth on Schedule 3.15(b), the Facility currently has (i) access to public ways that have been accepted by the appropriate local jurisdiction and (ii) connections to water supply, storm and sanitary sewer facilities, telephone, gas and electrical connections, fire protection, drainage and other public utilities, as is necessary for the conduct of the Business. To the Knowledge of the Company and the Major Sellers, there is no existing plan to modify or realign any street or highway abutting the Facility or any existing or proposed eminent domain proceeding that would prevent or hinder or interfere with, in any material respect, the use, occupancy or operation of the Facility for the conduct of the Business.  The Company has delivered or made available to Buyer true and complete copies of all surveys, property plans and instruments creating the interests in the Facility, title insurance policies, Permits and material certificates (including certificates of occupancy), in each case relating to its ownership of the Facility, but only to the extent the same are in its possession or control and not otherwise recorded in the applicable public land records.  
 (c)
 Leased Property. Except for that certain Rental Agreement between R. Hemalatha and the Company, dated April 1, 2010, the Company is not a party to any leases (whether by or to the Company) or contracts for the purchase, sale or lease (whether as lessor or lessee) of any real property or personal property.  All of the tangible properties (whether owned or leased) of the Company are located at the Facility.
 3.16
 Fixed Assets
 .  Schedule 3.16 sets forth a true and complete list of each item of Equipment having a GAAP book value in excess of $25,000.  Each such item of Equipment is in good operating condition, normal wear and tear excepted, and is adequate for the use to which it is being put.  
 

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 3.17
 Intellectual Property.   
 (a)
 The Company has all good title to or valid and enforceable rights under contract to use all Company Intellectual Property material to or necessary to conduct the Business as it is presently conducted and as presently contemplated by the Company, free and clear of all Liens (other than Permitted Liens and Liens set forth on Schedule 3.15(a) which will be terminated on or prior to the Closing).  No Seller and no officer, director or employee of the Company, or any of their respective Affiliates, has any ownership, royalty, license or other interest in any of the Company Intellectual Property, and all such Persons who have developed, in whole or in part, any Company Intellectual Property have duly executed a valid and enforceable agreement assigning all rights therein to the Company and agreeing to maintain the confidentiality of all confidential or proprietary information.  Except as set forth on Schedule 3.17(a), the validity and enforceability of any of the Company Intellectual Property or the title of the Company thereto has not been questioned in any litigation, governmental inquiry or proceeding and, to the Knowledge of the Company and the Major Sellers, there are no facts or information that would raise any colorable questions about the validity, enforceability or ownership of Company Intellectual Property.  The Company has taken all actions necessary and appropriate to preserve the confidentiality of all trade secrets, proprietary and other Confidential Information material relating to the Business.  The Company does not have any Company Intellectual Property Registrations.  Other than as set forth in Schedule 3.8(a)(v) and Schedule 3.8(a)(viii), there is no agreement or arrangement by which the Company grants or receives rights in or to (e.g., licenses, assignments, non-assertions, covenants not to sue and/or escrow agreements) any of the Company Intellectual Property.  
 (b)
 The use of the computer systems by the Company does not infringe the intellectual property rights of any Person. The Company has exclusive control of the operation of the computer systems and of the storage, processing and retrieval of all data stored on the computer systems.
 (c)
 To the Knowledge of the Company and the Major Sellers, the conduct of the Business by the Company has not and, if conducted as currently conducted and as presently contemplated by the Company, will not constitute an infringement or other violation of any copyright, trade secret, trademark, patent, invention, proprietary information, nondisclosure or any other rights of any Person.  Except as set forth on Schedule 3.17(c), the Company has not received any notice and is not aware of infringement of or conflict with, any license, patent, copyright, trademark, service mark or other intellectual property right of any other Person.  
 (d)
 Schedule 3.17(d) sets forth a true and complete list of all domain names owned or used by the Company in the conduct of the Business.  Neither the Seller nor any officer, director or employee of the Seller, the Company or any of their respective Affiliates has any ownership or other interest in the domain names set forth on Schedule 3.17(d).  None of the domain names infringe or conflict with any trademarks, trademark rights, trade names, trade name rights, service marks or other rights of any Person in India or the United States.  No right to or interest in any domain name required to be listed on Schedule 3.17(d) has been obtained in violation of any Law.
 

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 3.18
 Regulatory Matters.
 (a)
 Schedule 3.18 sets forth a true and complete list of all of the Products, including the dosage form, active ingredient and strength of each such Product.  In respect of the Products, Schedule 3.18 sets forth (i) a description of the regulatory status thereof (as of the date hereof), including the ANDAs that the Company has filed in respect of such Products (“Filed ANDAs”) and other documentation filed with the FDA or any other Governmental Authority in connection with the safety, efficacy, sale, distribution or use of each such Product; and (ii) whether the particular regulatory status has been presented to the FDA or any other Governmental Authority under the name of the Company or under the name of another Person.
 (b)
 The Filed ANDAs and any other filings or submissions made by the Company with the FDA or any other Governmental Authority in connection with the Products were complete and accurate when filed, made in good faith upon the best information available to Company at such time, and did not contain any material omissions.  To the Knowledge of the Company and the Major Sellers, no fact or circumstance exists which may cause the FDA to refuse to grant full approval of the Filed ANDAs, the Requested ANDAs or any other Products manufactured, shipped or distributed or, as of the date hereof and the Closing Date, intended to be manufactured, shipped or distributed by the Company.  The Company has complied with all obligations arising from or related to any commitments to or requirements of any applicable Governmental Authority involving the Products, including manufacturing the Products in accordance with their respective ANDAs and complying with cGMPs.
 (c)
 All of the Products tested, produced, manufactured, labeled, packaged, shipped, imported, or exported, whether for research and development, storage and handling, or distribution and sale (and the preparation thereof), by the Company, including all component ingredients and packaging and labeling materials, comply with all Laws relating to their research, development, safety, manufacture, labeling, packaging, storage, handling, distribution, import, export and stability testing.  
 (d)
 No Products in process or in inventory are, and no Products manufactured, packaged, distributed, imported or exported by the Company at the time of delivery were, “adulterated” or “misbranded” within the meaning of said laws and regulations, nor did any such Product constitute an article prohibited from introduction into interstate commerce.
 (e)
 There exists no set of facts (i) which could reasonably be expected to furnish a basis for the withdrawal or suspension of any Product, including all component ingredients and packaging and labeling materials or (ii) which could otherwise cause the Company to withdraw or suspend any such Product from the market due to safety or effectiveness concerns or a change in regulatory status of any such Product by the FDA or any other Governmental Authority.  
 (f)
 There are no defects in the designs, specifications, process or manufacture with respect to any Product, including all component ingredients and packaging and 
 

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 labeling materials, that is reasonably likely to give rise to any Losses or that will cause such Product to not be useable as intended, shipped, distributed, imported or exported.
 (g)
 The Company has not received from the FDA or any other Governmental Authority any notice of adverse findings, FDA Form 483s, notices of violations, warning letters, clinical holds, civil or criminal proceeding notices, or notices of investigation under the FDCA, or other similar communication from the FDA or any other Governmental Authority regarding the Products, and there have been no seizures or suspensions conducted or threatened by the FDA or any other Governmental Authority.  
 (h)
 The Company has not, either voluntarily or involuntarily, initiated, conducted, or issued or caused to be initiated, conducted or issued, any market withdrawal or replacement, field notification, safety alert, warning or other similar notice or action relating to the alleged lack of safety or efficacy of any of the Products or any alleged product defect or violation including misbranding or adulteration, and to the Knowledge of the Company and the Major Sellers, neither the FDA or any other Governmental Authority has initiated, conducted or intends to initiate any such notice or action.
 (i)
 To the extent required by applicable Laws of the FDA or any other Governmental Authority, the Company has submitted to the FDA an Investigational New Drug Application or amendment or supplement thereto or other required documentation for each clinical trial it has conducted or sponsored or is conducting or sponsoring, all such submissions were in compliance with applicable Laws when submitted and no material deficiencies have been asserted by the FDA or any other applicable Governmental Authority with respect to any such submissions.  The preclinical studies and tests and clinical trials conducted by or on behalf of the Company were, and, if still pending, are being, conducted in accordance with experimental protocols, procedures and controls pursuant to, where applicable, accepted professional and scientific standards for products or product candidates comparable to those being developed by the Company, including human subject protections and Institutional Review Board requirements; and such preclinical studies and tests and clinical trials were and, if still pending, are being conducted in accordance with applicable Laws of the FDA or any other applicable Governmental Authority; and the Company has not received any notice or correspondence from the FDA or any other applicable Governmental Authority exercising comparable authority, or any Institutional Review Board or comparable authority requiring the termination, suspension, clinical hold, material delay or material modification of any tests, studies or trials.  Neither the Company nor the Sellers are aware of any facts which are reasonably likely to cause (i) a material change in the marketing classification of any such products or (ii) a termination or suspension of marketing authorization or clearance of any such products, or clinical trials being conducted by or on behalf of the Company. 
 3.19
 Insurance.
   Schedule 3.19 sets forth a true and complete list of all policies of insurance under which the Company or any of their officers or directors (in such capacity) is an insured party, beneficiary or loss payable payee. The Company has obtained insurance policies which, taken together, provide adequate insurance coverage for the assets (movable, immovable as well as tangible and intangible, owned or licensed by the Company) and the operations of the Business for all risks normally insured against by a Person carrying on the same 
 

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 business as the Company. True and complete copies of all such policies have been previously provided to the Buyer.  Such policies are in full force and effect.  The Company is not in default with respect to any provision contained in any such policy and the Company has not received or given a notice of cancellation or non-renewal with respect to any such policy.  No claims have been made by the Company under any such policy, and, to the Knowledge of the Company and the Major Sellers, no event has occurred and no state of facts exists in respect of which the Company is entitled to make a claim under any such policy.
 3.20
 Bank Accounts; Credit Cards; Corporate Accounts; and Powers of Attorney.
   A true and complete list showing the names of all:  (a) banks in which the Company has an account or safe deposit box and the names of all Persons authorized to draw thereon and who have access thereto is set forth on Schedule 3.20(a); (b) credit card issuers with whom the Company has an account and the names of all Persons authorized to use such accounts or who have access thereto is set forth on Schedule 3.20(b); (c) cellular telephone, phone card or other corporate accounts with whom the Company has an account and the names of all Persons authorized to use such accounts or who have access thereto is set forth on Schedule 3.20(c); and (d) Persons holding powers of attorney from the Company is set forth on Schedule 3.20(d).  There are no automatic, periodic or scheduled withdrawals or debits with respect to any of the bank or corporate accounts required to be set forth on Schedules 3.20(a) – (d).
 3.21
 Employee Arrangements.
 (a)
 Schedule 3.21(a) sets forth a true and complete list of all Benefit Plans.  The Company has provided to the Buyer the correct and complete copies of the following (where applicable) with  respect to each Benefit Plan: (i) all plan documents (or, in the case of any unwritten Benefit Plan, a written summary of the terms of such Benefit Plan); summary plan descriptions, summaries of material modifications, amendments, and resolutions related to such plans; (ii) the most recent audited financial statement and actuarial valuation; and (iii) all related administrator, service and vendor agreements, insurance contracts and other agreements which implement each such Benefit Plan.
 (b)
 Except as set forth on Schedule 3.21(b), (i) there are no claims pending (other than routine claims for benefits) or, to the Knowledge of the Company and the Major Sellers, threatened against any Benefit Plan or against the assets of any Benefit Plan, nor are there any current or, to the Knowledge of the Company and the Major Sellers, threatened Liens on the assets of any Benefit Plan, (ii) all Benefit Plans conform to, and in their operation and administration are, in all material respects, in compliance with, the terms thereof and requirements prescribed by any and all applicable Laws, orders, or governmental rules and regulations currently in effect with respect thereto (including all applicable requirements for notification, reporting and disclosure to participants or any Governmental Authority), (iii) the Company has performed all obligations required to be performed by it under, is not in default under or in violation of, and, to the Knowledge of the Company and the Major Sellers, there is no default or violation by any other party with respect to, any of the Benefit Plans, (iv) all contributions due and payable on or before the Closing Date in respect of any Benefit Plan, the terms of the Benefit Plan or any collective bargaining agreement, have been or will be made in full and proper form on or before their due dates, and a reasonable amount has been accrued and 
 

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 provided for in accordance with and to the extent required by GAAP in the Company Financial Statements for all other contributions or amounts in respect of each Benefit Plan for the applicable periods covered by such Company Financial Statements.
 (c)
 Except as set forth on Schedule 3.21(c) and except to the extent required by applicable Laws, no Benefit Plan or written or oral agreement exists which obligates the Company to provide health care coverage, medical, surgical, hospitalization, death or similar benefits (whether or not insured) to any current or former employee, director, consultant or agent of the Company following such employee’s, director’s, consultant’s or agent’s termination of employment or service with the Company, including retiree medical, health or life benefits.
 (d)
 Except as set forth on Schedule 3.21(d), no Benefit Plan is self-funded, self-insured or funded through the general assets of the Company.
 (e)
 Except as set forth on Schedule 3.2(c) or Schedule 3.2(d), no current or former employee, officer, director, consultant, agent or investor of the Company holds any option, warrant or other right to purchase shares of the share capital of the Company.
 (f)
 The consummation of the transactions contemplated by this Agreement will not (i) entitle any individual to severance or separation pay, or (ii) directly or indirectly result in an increase to benefits or compensation, acceleration of vesting or acceleration of timing for payment of any benefit or compensation.
 (g)
 With respect to each Benefit Plan, except as set forth on Schedule 3.21(g), (i) there are no restrictions on the ability of the sponsor of each Benefit Plan to amend, terminate or assign any Benefit Plan, or any related service, vendor or administrative agreement, insurance policy or contract, or other agreement which implements or otherwise relates to any such Benefit Plan, at any time without penalty or cost, and (ii) the Company has expressly reserved in itself the right to amend, modify, terminate or assign any such Benefit Plan, or any portion of it, and has made no representations (whether orally or in writing) which would conflict with or contradict such reservation or right.
 (h)
 Except as set forth on Schedule 3.21(h), the Company (i) is not a party to any written or oral agreement with any current or former employee, director, consultant or agent, the benefits of which are contingent upon, or the terms of which will be materially altered by, the consummation of transactions contemplated by this Agreement, or (ii) has not announced or otherwise made a commitment to implement any arrangement in the future that, if implemented, would be a Benefit Plan.
 3.22
 Employees.
 (a)
 Schedule 3.22(a) sets forth a true and correct summary of the following information for each current employee of the Company, including each employee on leave of absence, disability or layoff status:  name; job title; employment status; current base pay and current bonus target and actual amount of the last bonus paid and any change(s) in compensation since March 31, 2010; vacation time accrued; and service years credited for purposes of vesting or eligibility to participate in any Benefit Plan.
 

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 (b)
 The Company does not have any union, collective bargaining, employment, management, severance or consulting agreements or arrangements to which the Company is a party or by which it is otherwise bound.
 (c)
 To the Knowledge of the Company and the Major Sellers, no union or other labor organization is seeking to organize, or to be recognized as, a collective bargaining unit of any group of employees that includes any employees of the Company on account of employment with the Company.  There is no pending or, to the Knowledge of the Company and the Major Sellers, threatened representation proceeding or petition, strike, work stoppage, work slowdown, unfair labor practice charge or complaint or other material labor dispute affecting any employee of the Company.
 (d)
 To the Knowledge of the Company and the Major Sellers, no officer or employee of the Company is a party to or is otherwise bound by any agreement or arrangement, including any confidentiality, non-competition or proprietary rights agreement, with any Person (other than the Company) that in any way limits or adversely affects or will limit or affect (i) the performance of his duties as an employee, officer or director of the Company after the Closing or (ii) the ability of the Company to conduct the Business as presently conducted or any other businesses presently contemplated by the Company to be conducted.  
 (e)
 Other than routine claims for health and welfare benefits under Benefit Plans, (i) there have not been any employment related claims under applicable Law, including wage and hour claims relating to the Business or the Company during the period of time prior to the Closing Date that is equivalent to the statute of limitations under applicable Law for such claim, nor, (ii) to the Knowledge of the Company and the Major Sellers, are there any employment related claims under applicable Law, including wage and hour claims, currently threatened against the Company or relating to the Business.  To the Knowledge of the Company and the Major Sellers, there are no facts which would give rise to material Liabilities in connection with any employment related claims under applicable Law.
 (f)
 The Company has complied in all material respects with its obligations to its employees, applicants for employment, former employees and all unions or other labor organizations, including all obligations (including obligations relating to discharging in a timely manner all payments and any delayed payments along with the requisite penalty or interest as applicable) in respect of wages, working hours, unfair labor practices or other employment practices, discrimination, contract labor, payment of provident fund contribution, employee state insurance contribution, gratuity and other applicable employee welfare laws, including the (Indian) Payment of Gratuity Act, 1972, the (Indian) Employees Provident Fund and the Miscellaneous Provisions Act, 1952, the (Indian) Payment of Bonus Act, 1965, the (Indian) Contract Labor (Regulation and Abolition) Act, 1970, the (Indian) Workmen’s Compensation Act, 1923, and the (Indian) Minimum Wages Act, 1948, in each case, as amended from time to time.  All statutory funding with respect to each employee of the Company has been fully funded.
 

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 (g)
 All individuals who performed, are performing or have performed consulting or other services for the Company have been correctly classified as either “independent contractors” or “employees” of the Company, as the case may be, based on the jurisdiction in which such individuals are performing or have performed such services.  There are no pending or, to the Knowledge of the Company and the Major Sellers, threatened actions, claims or proceedings against the Company or in connection with the Business by or on behalf of or related to any individuals currently or formerly classified by the Company, as the case may be, as “independent contractors” or consultants.  To the Knowledge of the Company and the Major Sellers, there are no facts which would give rise to material Liabilities for violations of any applicable Law concerning the classification of individuals performing services for the Company.
 (h)
 The Company is, and has at all times been, in compliance with all applicable immigration Laws in each jurisdiction in which it employs any employees, including compliance with the requirements under applicable Law for those individuals to be granted the relevant work permit or employment visa or any other necessary approval before he is or was employed by the Company in such jurisdiction.
 (i)
  The Company has, or will have no later than the Closing Date, paid all accrued salaries, bonuses, commissions, wages and vacation pay and any other benefits, in each case which is due and payable on or before the Closing Date, in accordance with the Company’s normal payroll practices as in effect on the date of this Agreement and is not liable for any fines or penalties for failure to pay any of the foregoing or other sums due to employees of the Company. 
 (j)
 To the Knowledge of the Company and the Major Sellers, the Company is, and has at all times been, in compliance with all applicable Laws which prohibit discrimination and harassment against employees of the Company. 
 (k)
 Each employee of the Company has executed a nondisclosure and assignment-of-rights agreement for the benefit of the Company, as applicable, vesting all rights in work product created in the Company. 
 (l)
 To the Knowledge of the Company and the Major Sellers, no employee of the Company intends to resign following the Closing or the transactions contemplated by this Agreement.
 (m)
 To the Knowledge of the Company and the Major Sellers, the Company has not entered into any arrangement with any entity such that a joint employer relationship exists.  There are no pending or, to the Knowledge of the Company and the Major Sellers, threatened actions, claims or proceedings against the Company or in connection with the Business by or on behalf of or related to any individuals currently or formerly classified by as employees under a “joint employer” theory.  There are no facts which would give rise to material Liabilities for violations of any applicable Law concerning a joint employer relationship between the Company and any third parties.
 

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 (n)
 The Company has in relation to each of its employees (and so far as relevant to each of its former employees) complied in all material respects with all obligations imposed on it by all applicable Law and relevant statutes, regulations and codes of conduct and practice affecting its employment of any Persons and all relevant orders and awards made thereunder and has maintained current, adequate and suitable records regarding the service, terms and conditions of employment of each of its employees.
 3.23
 Absence of Certain Business Practices.
 (a)
 Neither the Company nor, to the Knowledge of the Company and the Major Sellers, any director, officer, employee, agent or representative of the Company, has directly or indirectly in violation of any applicable Law paid, offered or authorized any bribe, influence payment, kickback, or other improper contribution (whether in the form of money, services, or gifts and entertainment in excess of reasonable and customary business courtesies) to any  government official for the purpose of (i) obtaining or retaining business for the Company, or (ii) securing any improper advantage for the Company. The Company has not established or maintained any material fund or asset of the Company that has not been recorded in the books and records of the Company.
 (b)
 There is no pending or, to the Knowledge of the Company and the Major Sellers, threatened, judicial, administrative or arbitral action, claim, suit or proceeding, investigation, complaint or action against the Company, nor is there any order, injunction, judgment, decree, debarment, ruling, writ, assessment or award imposed (or, to the Knowledge of the Company and the Major Sellers, threatened to be imposed) upon the Company by or before any Governmental Authority, in each case, in connection with an alleged violation of applicable Law relating to illegal payments and gratuities.
 3.24
 Affiliated Transactions.
   Except as set forth on Schedule 3.24, no Seller and no director or officer of the Company (or any of their respective Affiliates or Associates) (a) is a party to or otherwise a beneficiary of any agreement, transaction or arrangement (oral or written) with or involving the Company or (b) has any claim, monetary or otherwise, against the Company.  
 3.25
 Import and Export Controls.  
 (a)
 The Company has not violated in any material respect any Laws of any jurisdiction regarding the export, transshipment, re-export or other transfer of data, goods, software, technology or services to any end users, end uses or destinations.
 (b)
 There is no pending or, to the Knowledge of the Company and the Major Sellers, threatened, judicial, administrative or arbitral action, claim, suit or proceeding, investigation, complaint or action against the Company by any Governmental Authority, nor is there any order, injunction, judgment, decree, ruling, writ, assessment or award imposed (or, to the Knowledge of the Company and the Major Sellers, threatened to be imposed) upon the Company  by or before any Governmental Authority, in each case, in connection with an alleged violation of applicable Law relating to the import, export, transshipment, re-export or other 
 

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 transfer of data, goods, software, technology or services to any foreign jurisdiction against which any country maintains sanctions or export controls.
 3.26
 Prior Transactions
 .  Other than this Agreement and as set forth on Schedule 3.26, there has been no transaction involving the Company or any present or past shareholder of the Company pursuant to or as a result of which (a) any of the Company Stock or (b) any asset owned, purportedly owned or otherwise held by the Company, may be transferred or re-transferred to another Person or which gives, or may give rise to, a right of compensation or other payment in favor of another Person under the Law of any relevant jurisdiction.
 3.27
 Brokers.
  No agent, broker, firm or other Person acting on behalf of the Company, or under the authority of any of the foregoing, is or shall be entitled to a brokerage commission, finder’s fee or similar payment in connection with any of the transactions contemplated hereby from the Company, any of the Sellers or the Buyer.  Any such fee authorized by the Company shall be paid solely by the Major Sellers.
 3.28
 Disclosure.
   No representation or warranty made by the Company or the Major Sellers herein, and no statement provided in any certificate or other document furnished or to be furnished by or on behalf of the Company at the Closing, contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact that is necessary in order to make the statements herein or therein not misleading.
 3.29
 Disclaimer of Other Representations and Warranties
 .  The Company and the Sellers do not make, and have not made, any representations or warranties in connection with this Agreement or the transactions contemplated hereby other than those expressly set forth herein or in any certificates delivered by the Company or the applicable Sellers in connection with the Closing.  
 4.
 REPRESENTATIONS AND WARRANTIES OF THE SELLERS.
   Each of the Sellers (provided in the case of Section 4.5, each Major Seller, and in the case of Section 4.3(b), M. Shanmugam), severally, and not jointly, hereby represents and warrants to the Buyer with respect to himself, herself or itself, as of the date hereof and as of the Closing Date, as follows:
 4.1
 Organization; Good Standing; Power
 .  Such Seller, if not a natural person, is a corporation duly organized, validly existing and in good standing under the Laws of India, and has all requisite corporate power and authority to enter into this Agreement and the Ancillary Agreements to which such Seller is a party, to perform its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby.  If such Seller is a natural person, such Seller has the legal capacity to execute and deliver this Agreement and the Ancillary Agreements to which he or she shall become a party, perform his or her obligations hereunder and thereunder and consummate the transactions contemplated hereby and thereby.
 4.2
 Due Authorization; Validity; No Conflicts
 .  If such Seller is not a natural person, the execution and delivery by such Seller of this Agreement and each of the Ancillary Agreements to which it shall become a party, the performance by such Seller of its 
 

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 obligations hereunder and thereunder, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action on the part of such Seller. This Agreement and each of the Ancillary Agreements to which such Seller shall become a party has been (or will be) duly executed and delivered by such Seller and is, or will be when duly executed by such Seller (assuming the due execution of the other parties hereto or thereto), the valid and binding obligations of such Seller, enforceable against such Seller in accordance with their respective terms, except to the extent that enforceability thereof may be limited by general equitable principles or the operation of bankruptcy, insolvency, reorganization, moratorium or similar Laws.  Assuming all of the Consents are obtained, neither the execution and delivery by such Seller of this Agreement and the Ancillary Agreements to which he, she or it shall become a party, nor the consummation of the transactions contemplated hereby or thereby by such Seller, nor the performance by such Seller of his, her or its obligations hereunder or thereunder, shall (a)(i) conflict with, or result in any breach or default (or would constitute a default but for any requirement of notice or lapse of time or both) under, or (ii) give rise to a right of termination, cancellation or acceleration of any obligation or to a loss of a benefit under, or (iii) give any Person any right to purchase or sell assets or securities from or to the Company or to exercise any remedy or modify any obligation or term, or (iv) result in the creation or imposition of any Lien on any of the assets or properties of the Company, pursuant to any agreement, contract, note, mortgage, indenture, lease, sublease, instrument, permit, concession, franchise or license to which such Seller is a party or by which such Seller or any of his, her or its properties or assets may be bound or affected, or (b) conflict with or result in a violation of any Law applicable to such Seller.
 4.3
 Stock Ownership.  
 (a)
 Except as set forth on Schedule 4.3, such Seller is the sole record and beneficial owner of the number of shares of Company Stock set forth next to such Seller’s name on Schedule 3.2(a), as of the date of this Agreement, and will be the sole record and beneficial owner of the number of shares of Company Stock set forth next to such Seller’s name on Schedule 3.2(a), as of the Closing Date.  All shares of Company Stock are owned free and clear of all Liens and restrictions on transfer (other than restrictions of general applicability under securities Laws or ownership laws of India, including in respect of foreign ownership) and Taxes.  Except as set forth on Schedule 3.2(c) or Schedule 3.2(d), such Seller is not a party to any option, warrant, right, agreement or commitment providing for the disposition or acquisition of any shares of Company Stock (other than this Agreement) or any other share capital of the Company.  Such Seller is not a party to (or has irrevocably terminated) any voting trust, proxy or other agreement or understanding with respect to the transfer or voting of any shares of Company Stock.  The resale of shares of Company Common Shares by such Seller as provided herein shall, upon the Closing, vest the Buyer with good and marketable title to such shares of Company Common Shares, free and clear of all Liens and restrictions on transfer (other than restrictions of general applicability under securities Laws or ownership laws of India, including in respect of foreign ownership) and Taxes.
 (b)
 M. Shanmugam has, and as of the Closing Date shall have, continuously held his Company Common Shares for a period of more than 12 months.
 

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 4.4
 Governmental Authorizations; Third-Party Consents
 .  Except as set forth in Schedule 4.4, no Consents are required to be obtained by such Seller.
 4.5
 No Competing Interests.
   Neither such Major Seller nor any of his or its Affiliates has any ownership or other interest in any business or activity that competes or can reasonably be expected to compete, directly or indirectly, with the Business.  Except as set forth on Schedule 4.5, neither such Major Seller nor any of his or its Affiliates has or shares with the Company any ownership or similar interest in any asset or property (including any intellectual property) that is being (or has been in the past twelve-month period) used in connection with the operation of the Business.
 4.6
 Adequate Consideration; No Tax Proceeding
 .  With respect to J. Jayaseelan, Clan Laboratories, S. Suresh and TIPS, such Seller represents and warrants that (a) the Company Common Shares are being transferred for adequate consideration, (b) there are no proceedings pending under the Tax Act with respect to the Company Common Shares and (c) no amount is due and payable by such Seller in respect of the Company Common Shares held by such Seller under the Tax Act.
 4.7
 Brokers
 .  No agent, broker, firm or other Person acting on behalf of such Seller or under the authority of such Seller is or shall be entitled to a brokerage commission, finder’s fee or similar payment in connection with any of the transactions contemplated hereby from the Company or any of the Sellers or the Buyer.  Any such fee authorized by such Seller shall be paid by such Seller.
 5.
 REPRESENTATIONS AND WARRANTIES OF THE BUYER.
   The Buyer hereby represents and warrants to the Company and the Sellers, as of the date hereof and as of the Closing Date, as follows:
 5.1
 Organization and Power.
   The Buyer is a corporation duly organized, validly existing and in good standing under the Laws of Delaware and has all requisite corporate power and authority to own, lease and operate its assets and properties, to carry on its business as presently conducted by it, to enter into this Agreement and each Ancillary Agreement to which the Buyer is (or will be) a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.
 5.2
 Due Authorization; Validity; No Conflicts. 
 (a)
 The execution and delivery by the Buyer of this Agreement and of each of the Ancillary Agreements to which it shall become a party, the performance by the Buyer of its obligations under this Agreement and such Ancillary Agreements, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action on the part of Buyer.  This Agreement and the Ancillary Agreements to which it shall become a party have been (or will be) duly executed and delivered by the Buyer and are or, when executed and delivered by Buyer, will be the valid and binding obligations of the Buyer, enforceable against Buyer in accordance with their respective terms, except to the extent that enforceability thereof may be limited by general equitable principles or the operation of bankruptcy, insolvency, reorganization, moratorium or similar Laws.  Neither the execution and delivery by the Buyer of this Agreement 
 

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 and the Ancillary Agreements to which it shall become a party, nor the consummation of the transactions contemplated hereby or thereby, nor the performance by the Buyer of its obligations hereunder or thereunder, shall (or, with the giving of notice or the lapse of time or both, would) (i) conflict with or violate any provision of the Certificate of Incorporation or Bylaws of the Buyer or (ii) violate any Law applicable to the Buyer any of its properties or assets.
 (b)
 No declaration, filing or registration with, or notice to, or authorization, consent, order or approval of, any Governmental Authority is required to be obtained or made in connection with or as a result of the execution and delivery of this Agreement and the Ancillary Agreements by the Buyer or the performance by the Buyer of the transactions contemplated by this Agreement and Ancillary Agreements, other than such declarations, filings, registrations, notices, authorizations, consents or approvals which, if not made or obtained, as the case may be, could not reasonably be expected to result in the Buyer’s inability to consummate the transactions contemplated by this Agreement and Ancillary Agreements or in an unreasonable delay in the Buyer’s ability to consummate the transactions contemplated by this Agreement and the Ancillary Agreements.
 5.3
 Financing
 .  The Buyer’s obligation to effect the Closing is not subject to the receipt by Buyer of additional financing and the Buyer currently has, and at Closing will have, available sufficient funds (through existing credit facilities and cash on hand) to pay the Closing Consideration in full at the Closing and the additional payments under Section 2.2(c) if and when due.
 5.4
 Brokers
 .  No agent, broker, investment banker, financial advisor or other Person is entitled to any brokerage, finder’s, financial advisor’s or other similar fee or commission for which any of the Sellers could become liable in connection with the transactions contemplated by this Agreement as a result of any action taken by or on behalf of the Buyer or any of its Affiliates.
 6.
 COVENANTS.
 6.1
  Investigation by the Buyer. 
 (a)
 From the date hereof until the earlier of the Closing Date and the termination of this Agreement in accordance with its terms, the Buyer may, through its representatives (including its counsel, accountants, lenders, and consultants), make such investigations of the properties, offices and operations of the Company and such audit of the financial condition of the Company as it reasonably deems necessary in connection with the transactions contemplated hereby, including any investigations enabling it to familiarize itself with such properties, offices, operations, financial condition and employees; such investigations shall not, however, affect or limit the Company’s or the Sellers’ representations, warranties and agreements hereunder.  The Company and the Major Sellers shall permit the Buyer and its authorized representatives to have reasonable access, upon reasonable prior notice, to the premises and to all books and records and Tax Returns of the Company, and the Buyer shall have the right to make copies thereof and excerpts therefrom.  In connection with such review, upon notice to the Major Sellers, the Buyer and its representatives may contact and communicate with key employees, suppliers, customers, lenders and creditors of the Company.  The Company and the Major Sellers shall timely furnish the Buyer with such financial and operating data and other 
 

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 information with respect to the Company and its operations as the Buyer may from time to time reasonably request.
 (b)
 Representatives of the Buyer shall be entitled to hold meetings and conferences during normal working hours with the Company’s employees upon reasonable notice to the Company, to explain and answer questions about the conditions, policies and benefits of employment in the Buyer’s organization.  Further, the Company and the Major Sellers shall cooperate with the Buyer in communicating to the Company’s employees any information concerning employment in the Buyer’s organization and shall encourage the Company’s employees to remain in the employment of the Company after the Closing.  The Company shall be entitled to have one or more representatives attend all such meetings.
 6.2
 Carry on in Ordinary Course.
   Except as set forth on Schedule 6.2, from the date hereof until the earlier of the Closing Date and the termination of this Agreement in accordance with its terms: 
 (a)
 the Company shall, and the Major Sellers shall (i) cause the Company to, conduct the Business and operations of the Company in the Ordinary Course of Business, except as required by this Agreement or as otherwise approved by Buyer in writing and (ii) use commercially reasonable best efforts to preserve the present relationships between the Company and its material suppliers, distributors and customers; and 
 (b)
 the Company shall not, except with the Buyer’s prior written consent: 
 (i)
 declare, make or pay any distributions or dividends on or in respect of its share capital now or hereafter outstanding or return any capital to any of the Company’s shareholders in their capacities as such, or redeem, purchase or acquire (other than pursuant to Section 6.10) any of the Company’s share capital now or hereafter outstanding, or make any other distribution or payment to the holders of share capital and/or options to purchase share capital of the Company, other than salaries (and expressly excluding any bonuses) due in the Ordinary Course of Business; 
 (ii)
 make or grant any increases in salary or other compensation or bonuses to employees or grant any employee any severance or termination pay or establish, adopt, enter into or amend any Benefit Plan (except, in each case, as required by applicable Law); 
 (iii)
 make any general adjustment in the type or hours of work of its employees (except as required by applicable Law); 
 (iv)
 enter into or amend any agreement, arrangement or transaction with any Seller or any Associate or Affiliate of the Company or of any Seller (other than agreements with respect to the Opex Loans); 
 

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 (v)
 permit or engage in any of the actions or transactions set forth in Sections 3.7 or 3.24 (if and to the extent not otherwise covered by this Section 6.2), other than actions or transactions in connection with the Opex Loans and the Capex Loans;
 (vi)
 acquire, exchange, lease, license or dispose of any properties or assets of the Company, other than the disposal of cash in the Ordinary Course of Business and the purchase of raw materials in the Ordinary Course of Business; 
 (vii)
 other than as contemplated by Section 6.10, issue or grant any shares of share capital, options, warrants or other securities, whether or not such are then exercisable for, convertible into or exchangeable for shares of share capital or such other securities; 
 (viii)
 amend or repeal any of the Company Organizational Documents; 
 (ix)
 incur any Indebtedness (other than the Opex Loans) or grant or permit any of its assets or property, including any Company Intellectual Property, to become subject to, any Lien (other than Permitted Liens and the Liens set forth on Schedule 3.15(a) which shall be terminated as of the Closing Date); 
 (x)
 terminate or amend any agreement set forth on Schedule 3.8(a) or enter into any agreement or arrangement that would, if in effect as of the date hereof, otherwise be required to be set forth on such Schedule 3.8(a); 
 (xi)
 discount or write-off any notes receivable or, other than in the Ordinary Course of Business, any accounts receivable; 
 (xii)
 fail to pay any accounts payable when due or, if no due date is specified or payment is due on receipt, within thirty (30) days of receipt of the applicable invoice or bill; 
 (xiii)
 waive any statute of limitations in respect of Taxes or execute or file with any Governmental Authority any agreement extending the period of assessment or collection of any Taxes;
 (xiv)
 change any method of accounting for Tax purposes;
 (xv)
 make or amend any elections for Tax purposes;
 (xvi)
 amend any Tax Returns or file any claim for Tax refunds, enter into any material closing agreement, settle any Tax claim, audit or assessment or surrender any right to claim a Tax refund, offset or other reduction in Tax liability;
 (xvii)
 change its taxable year; or 
 

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 (xviii)
 enter into any agreement or arrangement to take any of the foregoing actions.
 6.3
 Exclusive Dealings.
   From the date hereof until the earlier of the Closing Date and the termination of this Agreement in accordance with its terms, the Company and the Sellers shall not, and shall cause the Company’s directors, officers, employees, agents, Affiliates not to, directly or indirectly, solicit or initiate the submission of proposals from, or solicit, encourage, entertain or enter into any arrangement, agreement, letter of intent or understanding with, or engage in any negotiations with, or furnish any information to, any Person, other than the Buyer or any representative(s) or agent(s) thereof, with respect to the direct or indirect acquisition of all or any material portion of the business, operations, properties or assets of the Company or any of its securities.  Should the Company, any Seller or any of their respective Affiliates or representatives, during such period, receive any offer or inquiry relating to any such acquisition, or obtain information that such an offer is likely to be made, such Seller or the Company, as applicable, will provide the Buyer with immediate written notice thereof. 
 6.4
 Reasonable Best Efforts
 . Each of the parties shall act in good faith and use reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary or advisable to consummate the transactions contemplated by this Agreement as soon as reasonably practicable.  If all of the conditions to a party’s obligation to close hereunder shall have been satisfied, (other than those conditions precedent that by their nature are to be satisfied at Closing) such party shall diligently proceed to close.  Without limiting the foregoing, the Company and each Seller shall, and shall cause its respective Affiliates to:  (a) use their commercially reasonable best efforts to obtain, on or prior to the Closing, all Consents and waivers applicable to such party and in respect of such party provide all necessary notices to, and make all filings with and applications and submissions to, any Governmental Authority or Person required for the consummation of the transactions contemplated by this Agreement as promptly as reasonably practicable; provided, however, that to the extent that any of such Consents applicable to such party are not obtained by the Closing Date, each such party shall continue to use his, her or its commercially reasonable best efforts thereafter to obtain them; (b) provide all such information concerning such party and its officers, directors, employees, trustees and Affiliates as may be necessary or reasonably requested by another party in connection with the foregoing; and (c) in respect of such party, avoid the entry of, or have vacated or terminated, any injunction, decree, order or judgment that would restrain, prevent or materially delay the consummation of the transactions contemplated by this Agreement, including defending through litigation any claim asserted in any court by any Governmental Authority or other Person.  Notwithstanding the foregoing, neither the Company nor any Seller will be obligated to pay any third party in order to obtain any Consent or waiver.
 6.5
 Supplemental Disclosure.
   (a) The Company and the Major Sellers agree that, with respect to the representations and warranties made by them in Section 3 of this Agreement, they shall have a continuing obligation up through the Closing promptly to provide detailed disclosure to Buyer with respect to any matter, to their actual knowledge, hereafter arising or discovered that, if existing or known at the date of this Agreement or on the Closing Date, would otherwise have been required to be set forth or described on the Disclosure Schedules; and (b) each Seller agrees with respect to the representations and warranties made by 
 

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 such Seller in Section 4 of this Agreement, such Seller shall have a continuing obligation up through the Closing to provide detailed disclosure to Buyer with respect to any matter, to such Seller’s actual knowledge, hereafter arising or discovered, that, if existing or known at the date of this Agreement or on the Closing Date, would otherwise have been required to be set forth or described on the Disclosure Schedules; provided, however, that, in each case, none of such disclosure shall be deemed to modify, amend or supplement the representations and warranties made in this Agreement or the Disclosure Schedules unless the other party(ies) shall have so consented in writing.
 6.6
 Compounding Actions
 .  Promptly after the date hereof and prior to the Closing Date, the Company shall apply for a compounding order with the Reserve Bank of India for violations of the foreign exchange laws of India committed by the Company and shareholders of the Company relating to the issue and/or transfer of the Company Preference Shares to or from non-residents of India (if applicable). On or prior to the Closing Date, the Company shall have completed all corrective measures required pursuant to such compounding order issued by the Reserve Bank of India.
 6.7
 Tax Certificates
 .  Promptly after the date hereof, J. Jayaseelan, Clan Laboratories, S. Suresh and TIPS shall use commercially reasonable efforts to procure and, if received provide to, Buyer a “No Objection Certificate” issued by the appropriate assessing officer under Section 281 of the Tax Act in connection with the purchase and sale of Company Common Shares hereunder.  
 6.8
 Licenses and Certifications
 .  Promptly after the date hereof and prior to the Closing Date, the Company shall apply, at the Company’s expense, for any licenses, permits or certifications from any Governmental Authority if such license, permit or certification is necessary and proper for the conduct of the Business by the Company.  After the date hereof and prior to the Closing Date, the Company shall apply, at the Buyer’s expense, for any licenses, permits or certifications from any Governmental Authority requested by Buyer, that the Buyer reasonably deems necessary and proper for the conduct of the Business upon consummation of the transactions contemplated hereby.  The Company shall use reasonable best efforts to obtain all licenses, permits or certifications filed for in accordance with this Section 6.8.
 6.9
 Corporate Compliance
 .  Promptly after the date hereof and prior to the Closing Date, the Company shall:
 (a)
 update the minute books pertaining to the meetings of the Board of Directors and shareholders of the Company in accordance with the provisions of Section 193(1A) of the Act;
 (b)
 make all necessary filings with the Registrar of Companies in respect of any issue or transfer of the Company Stock, including filing the prescribed Form 2 with the Registrar of Companies in connection with issuance and allotment of 480 (four hundred and eighty) Company Common Shares to Clan Laboratories; 
 

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 (c)
 use commercially reasonable efforts to update the Permits as required to change the name appearing thereon from Novel Therapeutics Limited to Edict Pharmaceuticals Private Limited; and
 (d)
 update and correct the statutory registers, including the register of members and the register of transfers.
 6.10
 Company Preference Shares
 .  Prior to the Closing Date, the Company and each of the Preference Shareholders shall take all actions necessary to convert the Company Preference Shares held by such Preference Shareholder into Company Common Shares and the present and past preference shareholders of the Company shall terminate all agreements executed by them with the Company (in connection with the preference shares of the Company subscribed by them) and waive any outstanding rights thereunder.  In the event the total number of Company Common Shares upon conversion of the Company Preference Shares would exceed the Company Common Shares authorized by the Company, the Company shall increase the authorized share capital of the Company to facilitate the issue of such additional Company Common Shares upon conversion of the Company Preference Shares.
 6.11
 Records
 .  On the Closing Date, the Sellers shall deliver or cause to be delivered to the Buyer at the Company’s office all Company records, including original agreements, documents, books, stock ledgers, minutes, correspondence, and corporate and other records and files, including records and files stored on computer disks or tapes or any other storage medium, in the possession or control of any of the Sellers.
 6.12
 Maintenance of Insurance
 .  From the date hereof until the earlier of the Closing Date and the termination of this Agreement in accordance with its terms, the Company shall maintain in full force and effect its current insurance policies, unless simultaneously with any termination or lapse thereof, replacement policies shall be in full force and effect that provide coverage for the same risks and at levels and amounts equal to or greater than the coverage provided under such policies as of the date hereof.  
 6.13
 Resignations; Powers of Attorney
 .  On or prior to the Closing Date, the Company and the Major Sellers shall cause to be delivered to the Buyer duly executed resignations, effective as of the Closing, of those officers and directors of the Company and duly executed terminations of such powers of attorney relating to the Company, effective as of the Closing Date, in each case, as shall be requested by the Buyer on or before the Closing Date.  
 6.14
 Payoff of Company Indebtedness
 .  No later than five (5) business days prior to the Closing Date, the Company will cause to be delivered to the Buyer payoff letters (the “Payoff Letters”) from each of the Company Creditors, which letters shall specify the aggregate amount required to be paid in order to repay in full the Company Indebtedness related to such Payoff Letter (including any and all accrued but unpaid interest and prepayment penalty obligations due upon repayment) and payment instructions on the projected Closing Date, as well as the per diem amount to be added thereto in the event that the actual Closing Date is a date subsequent to the projected Closing Date.  Each such Payoff Letter shall be in a form reasonably satisfactory to the Buyer and will include customary undertakings to deliver, upon payment of 
 

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 the amounts set forth in such Payoff Letters, (a) a charge release and loan facility satisfaction letter to the Buyer, which letter shall include an agreement by such Company Creditor to file a Form 17, (b) any collateral in the possession of such Company Creditor, including, with respect to the State Bank of India, all original title documents with respect to the Facility, and (c) such other instruments as may be required to effect or evidence the release of the Liens held by such Company Creditor.
 6.15
 Termination of Guaranty
 .  On or prior to the Closing Date, the Company shall cause the Guaranty to be terminated pursuant to a termination agreement in a form reasonably satisfactory to the Buyer.
 6.16
 Public Announcements
 .  The Company and the Sellers agree that the Buyer shall control the public announcement of the transactions contemplated by this Agreement, and neither the Company nor any of the Sellers shall issue any press release or otherwise make any public statement with respect to this Agreement or the transactions contemplated hereby without the prior written consent of the Buyer.
 6.17
 Sellers’ Further Assurances
 .  From time to time on and after the Closing Date, and without any further consideration but at the Buyer’s expense, each Seller shall, and shall cause its Affiliates and Associates to, execute and deliver such other instruments of conveyance, assignment, transfer and delivery and take such other actions as the Buyer may reasonably request in order more effectively to transfer to and to place the Buyer in possession or control of, all of the rights, properties, assets and businesses intended to be transferred hereby, to assist in the collection and enforcement of any and all such rights, properties and assets and to enable the Buyer to exercise and to enjoy all of the rights and benefits of the Company with respect thereto.
 6.18
 Buyer’s Further Assurances
 .  After the Closing Date, the Buyer shall, and the Buyer shall cause the Company to, use reasonable best efforts to pursue timely completion of each of the achievements set forth in Sections 2.2(c)(i), (ii) and (iii) in good faith based on the Buyer’s reasonable business judgment. Without limiting the generality of the foregoing, and subject thereto, the Buyer shall take, and cause the Company to take, the following actions: (a) file any necessary forms, documents, information reports or notices in connection with the Requested ANDAs, (b) timely submit responses to information, document or other requests from the FDA or any other Governmental Authority, (c) pay any application or filing fees and (d) permit FDA or any other Governmental Authority to inspect the Facility.
 7.
 CERTAIN TAX MATTERS
 .
 7.1
 Tax Indemnification
 .  The Major Sellers hereby jointly and severally agree to indemnify, defend and hold harmless the Company, the Buyer and their respective directors, officers, shareholders, agents, Affiliates, successors and permitted assigns from and against, and shall pay and reimburse the foregoing Persons for, any and all losses, liabilities, claims, obligations, penalties, damages, costs and expenses (including all reasonable attorneys’ fees and disbursements and other costs incurred or sustained by an Indemnitee in connection with the investigation, defense or prosecution of any such claim or any action or proceeding 
 

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 between the Indemnitee and the Indemnifying Party or between the Indemnitee and any third party or otherwise), whether or not involving a third-party claim (collectively, “Losses”), relating to or arising out of (a) all Taxes of the Company for all taxable periods ending on or prior to the Closing Date and the portion of the taxable period through the end of the Closing Date for any taxable period that includes (but does not end on) the Closing Date (the “Pre-Closing Tax Period”); (b) all Taxes of any member of an affiliated, consolidated, combined or unitary group of which the Company (or any predecessor of the Company) is or was a member on or prior to the Closing Date; (c) all Taxes of any Person (other than the Company) imposed on the Company as a transferee, successor or as the alter ego of any such Person, by contract or pursuant to Law to the extent such Taxes are related to the execution of a contract, completion of a transaction or other similar event occurring on or prior to the Closing; and (d) any and all Taxes or Losses that may be imposed or incurred on or by the Buyer on account of the provisions of Section 281 of the Tax Act; provided that the Major Sellers shall not be responsible for penalties or interest in respect to any Tax liability of the Company as a result of a failure to file or a late filing of any Tax Return after the Closing Date which is the responsibility of the Buyer to prepare and file in accordance with Section 7.3.  Subject to the indemnification procedures of Section 10.4 relating to Third Party Claims, the Major Sellers shall, jointly and severally, reimburse the Buyer for any Taxes of the Company covered by this Section 7.1 or that are the responsibility of the Major Sellers pursuant to this Section 7.1 within five (5) days after notice to the Major Sellers of the payment of such Taxes by the Buyer or the Company.   Other than for fraud, in no event shall the Major Sellers be liable under this Section 7 for punitive damages for Direct Claims.  For the avoidance of doubt, the parties acknowledge and agree that punitive damages awarded in favor of a third-party in connection with a claim that is indemnifiable hereunder shall constitute direct damages of the Indemnitee and shall be fully recoverable hereunder subject to the limitations set forth in Section 10.
 7.2
 Straddle Period
 .  In the case of any taxable period that includes, but does not end on, the Closing Date (a “Straddle Period”), the amount of any Taxes based on or measured by receipts of the Company and any sales, use and other similar Taxes for the Pre-Closing Tax Period shall be determined based on an interim closing of the books as of the close of business on the Closing Date and the amount of other Taxes of the Company for a Straddle Period that relate to the Pre-Closing Tax Period shall be deemed to be the amount of such Tax for such entire Straddle Period multiplied by a fraction, the numerator of which shall be the number of days in the taxable period ending on the Closing Date and the denominator of which shall be the total number of days in such Straddle Period.
 7.3
 Tax Periods Ending on or before the Closing Date
 .  The Buyer shall prepare (or cause to be prepared) and file (or cause to be filed) all Tax Returns for the Company for all periods ending on or prior to the Closing Date that are filed after the Closing Date and all Straddle Period Tax Returns; provided that the Buyer shall provide copies of such Tax Returns and all other relevant documents or work papers to the Sellers and the Sellers’ accountants a reasonable period of time in advance of the filing deadline or the filing of such Tax Returns.  Buyer will consult with Sellers and Sellers’ accountants in respect of such Tax Returns.
 7.4
 Cooperation on Tax Matters.
 

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 (a)
 The Buyer, the Company and the Sellers shall cooperate, as and to the extent reasonably requested by any other party, in connection with the filing of Tax Returns and any audit, litigation or other proceeding with respect to Taxes pursuant to this Section 7.  Such cooperation shall include the retention and (upon the other party’s request) the provision of records and information that are reasonably relevant to any such audit, litigation or other proceeding and making employees or representatives available on a mutually convenient basis to provide additional information and explanation of any materials provided hereunder.  The Company (after the Closing) shall (i) retain all books and records with respect to Tax matters pertinent to the Company relating to any taxable period beginning before the Closing Date until the expiration of the applicable statute of limitations for the respective taxable periods, and (ii) abide by all record retention agreements entered into with any taxing authority.
 (b)
 Each of the Buyer and the Sellers shall, upon request from the other party, use reasonable best efforts to obtain any certificate or other document from any Governmental Authority or other Person as may be necessary to mitigate, reduce, defer or eliminate any Tax that could be imposed (including, but not limited to, any Tax with respect to the transactions contemplated hereby).
 7.5
 Certain Taxes
 .  All transfer (including real property), documentary, sales, stamp, registration and other similar Taxes and fees (including any penalties and interest) incurred in connection with this Agreement shall be paid by the Buyer when due.  The Sellers will, at their own expense, file all necessary Tax Returns and other documentation with respect to all such transfer, documentary, sales, stamp, registration and other similar Taxes and fees.  If required by applicable Law, the Buyer will, and will cause its Affiliates to, join in the execution of any such Tax Returns and other documentation.
 7.6
 Treatment of Indemnity Payments
 .  It is the intent of the parties that amounts paid under this Section 7 and Section 10 shall represent an adjustment to the Purchase Price and the parties will report such payments consistent with such intent.  
 8.
 CONDITIONS TO CLOSING.
 8.1
 Conditions to the Buyer’s Obligation to Close
 .  The obligation of the Buyer to close the transactions contemplated by this Agreement is subject to the satisfaction of each of the following conditions, any one or more of which may be waived by the Buyer in writing at or prior to the Closing:
 (a)
 Agreements and Conditions.  On or before the Closing Date, the Sellers and the Company shall have complied with and duly performed, in all material respects, all agreements, covenants and conditions on their part to be complied with and performed pursuant to or in connection with this Agreement on or before the Closing Date.
 (b)
 Representations and Warranties. The representations and warranties of the Sellers and the Company contained in this Agreement shall have been true and correct in all material respects as of the date of this Agreement, and shall be true and correct in all material respects on and as of the Closing Date, without giving effect to any supplement to 
 

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 the Disclosure Schedules, except (i) any representation and warranty made as of a specified date shall continue to be true and correct in all material respects as of such date and (ii) any representation and warranty that is qualified by the term “material,” or contains terms such as “Material Adverse Effect” shall be true and correct in all respects on and as of the Closing Date as so written.
 (c)
 No Legal Proceedings.  No injunction or decree prohibiting or materially restricting or delaying the consummation of the transactions contemplated hereby shall have been issued by any Governmental Authority and remain in force.  As of the Closing Date, (i) no court or governmental suit, action or proceeding shall have been instituted or threatened (in writing) to restrain or prohibit the transactions contemplated hereby and (ii) except as set forth on Schedule 3.11 on the date hereof, no court or governmental suit, action or proceeding that involves a demand for injunctive relief or patent infringement or a judgment or Liability, whether or not covered by insurance, in excess of $1,500,000 shall have been instituted against the Company.
 (d)
 Loss, Damage or Destruction.  Between the date hereof and the Closing Date, there shall not have been any loss, damage or destruction to the Facility in excess of $1,000,000 in the aggregate.
 (e)
 No Material Adverse Effect.  There shall have been no Material Adverse Effect since March 31, 2010.
 (f)
 Sellers’ and Officer’s Certificate.  The Buyer shall have received a certificate dated the Closing Date and executed by the Sellers and the Chief Executive Officer or Chief Financial Officer of the Company to the effect that the conditions set forth in Sections 8.1(a) through 8.1(e) shall have been satisfied.
 (g)
 Secretary’s/Director’s Certificate of the Company.  The Buyer shall have received a certificate, dated the Closing Date and executed by the Secretary or a director of the Company (i) certifying the incumbency and signatures of the officers of the Company authorized to act on behalf of the Company in connection with the transactions contemplated hereby, (ii) certifying that the outstanding shares of Company Common Shares are fully paid, validly issued and registered in the name of the Sellers, and (iii) attaching and certifying as true and complete copies of (A) the Company Organizational Documents, all as may have been amended up through the Closing Date and (B) the resolutions duly adopted by the Board of Directors at a meeting of the Board of Directors (1) authorizing and approving the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, and (2) endorsing and delivering original share certificates for the Company Common Shares evidencing the Buyer as the lawful and beneficial owner of the Company Common Shares.
 (h)
 Secretary’s Certificate of Clan Laboratories.  The Buyer shall have received a certificate, dated the Closing Date and executed by the Secretary of Clan Laboratories, (i) certifying the incumbency and signatures of the officers of Clan Laboratories authorized to act on behalf of Clan Laboratories in connection with the transactions contemplated hereby and (ii) 
 

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 attaching and certifying as true and complete copies of (A) the Certificate of Incorporation, Memorandum of Association and Articles of Association of Clan Laboratories, all as may have been amended up through the Closing Date and (B) the resolutions duly adopted by the Board of Directors of Clan Laboratories authorizing and approving the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.
 (i)
 Secretary’s Certificate of TIPS.  The Buyer shall have received a certificate, dated the Closing Date and executed by the Secretary of TIPS, (i) certifying the incumbency and signatures of the officers of TIPS authorized to act on behalf of TIPS in connection with the transactions contemplated hereby and (ii) attaching and certifying as true and complete copies of (A) the Certificate of Incorporation, Memorandum of Association and Articles of Association of TIPS, all as may have been amended up through the Closing Date and (B) the resolutions duly adopted by the Board of Directors of TIPS authorizing and approving the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.
 (j)
 Environmental Assessment.  The environmental assessment reports delivered by the Buyer’s environmental consultant, ERM, shall not indicate (i) the presence of any hazardous substance, hazardous waste, contaminant or pollutant that would require remediation, corrective action or removal resulting in the expenditure of more than or equal to $1,000,000; or (ii) any violation of any permit or environmental law or regulation that would result in the expenditure of more than or equal to $1,000,000 to cure such violation.
 (k)
 Opinion of Counsel.  The Sellers and the Company shall have furnished the Buyer with opinions of Zukerman Gore Brandeis & Crossman, LLP and HSB Partners, counsel for the Company and the Sellers, dated as of the Closing Date, in form and substance reasonably satisfactory to the Buyer.
 (l)
 Consents.  All Consents shall have been obtained and delivered to the Buyer. 
 (m)
 Compounding Actions. The Company shall have obtained a compounding order from the Reserve Bank of India for each of the violations of the foreign exchange laws of India relating to the issue and/or transfer of the Company Preference Shares to or from non-residents of India, if applicable, and completed all corrective measures required pursuant to such compounding order.
 (n)
 Employment Agreement.  The Buyer shall have received the Employment Agreement and the related Secondment Letter between the Buyer, the Seller and M. Shanmugam, both of which shall have been duly executed and delivered by M. Shanmugam on the date of this Agreement, and which shall be binding on M. Shanmugam, on the terms and conditions thereof, as of the Closing Date.
 (o)
 Consulting Agreement.  The Buyer shall have received the Consulting Agreement, which shall have been duly executed and delivered by J. Jayaseelan on 
 

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 the date of this Agreement, and which shall be binding on J. Jayaseelan, on the terms and conditions thereof, as of the Closing Date.  
 (p)
 Seller Releases.  The Buyer shall have received all of the Seller Releases duly executed and delivered by the Sellers.
 (q)
 Terminations of Powers of Attorney.  The Buyer shall have received terminations of powers of attorney requested by the Buyer pursuant to Section 6.13.  
 (r)
 Liens.  The Company shall have delivered to the Buyer satisfactory evidence that all Liens set forth on Schedule 3.15(a) in respect of the properties and assets of the Company (other than Permitted Liens) shall be discharged at or prior to Closing.
 (s)
 Termination of Guaranty.  The Company shall have delivered to the Buyer a duly executed termination of the Guaranty, in form and substance reasonably satisfactory to Buyer.
 (t)
 Cancellation of Promissory Note.  The Company shall have delivered to the Buyer a duly executed cancellation of the Demand Promissory Note in the principal amount of Rs. 25,00,00,000/-, dated July 11, 2009, issued by the Company to J. Jayaseelan in connection with the Memorandum of Understanding, dated July 11, 2009, by and between M. Shanmugam and J. Jayaseelan, in form and substance reasonably satisfactory to the Buyer.
 (u)
 Conversion of the Company Preference Shares. The Company and the Preference Shareholders shall have converted all Company Preference Shares into Company Common Shares.
 (v)
 Title Insurance.  The Buyer shall be in a position to obtain title insurance on the Facility in form and substance reasonably satisfactory to it by insuring title to property.
 (w)
 Tax Certificates.  The Buyer shall have received from J. Jayaseelan, Clan Laboratories, S. Suresh and TIPS “No Objection Certificates” issued by the appropriate assessing officer under Section 281 of the Tax Act in connection with the purchase and sale of Company Common Shares hereunder.
 (x)
 Other Closing Deliveries.  The Buyer shall have received at or prior to the Closing such other documents, instruments and certificates as the Buyer may reasonably request in order to effectuate the transactions contemplated hereby.
 8.2
 Conditions to the Sellers’ Obligations to Close
 .  The obligations of each Seller to close the transactions contemplated by this Agreement are subject to the satisfaction of each of the following conditions, any one or more of which may be waived by the Sellers in writing at or prior to the Closing:
 

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 (a)
 Agreements and Conditions.  On or before the Closing Date, the Buyer shall have complied with and duly performed, in all material respects, all agreements, covenants and conditions on its part to be complied with and performed pursuant to or in connection with this Agreement on or before the Closing Date, including payment of the Closing Consideration to the Sellers on the Closing Date.
 (b)
 Representations and Warranties. The representations and warranties of the Buyer contained in this Agreement shall have been true and correct in all material respects as of the date of this Agreement, and shall be true and correct in all material respects on and as of the Closing Date, without giving effect to any supplement to the Disclosure Schedules, except (i) any representation and warranty made as of a specified date shall continue to be true and correct in all material respects as of such date and (ii) any representation and warranty that is qualified by the term “material,” or contains terms such as “Material Adverse Effect” shall be true and correct in all respects on and as of the Closing Date as so written.
 (c)
 No Legal Proceedings.  No injunction or decree prohibiting or materially restricting or delaying the consummation of the transactions contemplated hereby shall have been issued by any Governmental Authority and remain in force, and no court or governmental suit, action or proceeding shall have been instituted or overtly threatened to restrain or prohibit the transactions contemplated hereby.
 (d)
 Officer’s Certificate.  The Sellers shall have received a certificate dated the Closing Date and executed by an authorized officer of the Buyer to the effect that the conditions set forth in Sections 8.2(a), 8.2(b) and 8.2(c) shall have been satisfied.
 (e)
 Incumbency Certificate of Buyer.  The Sellers shall have received a certificate, dated the Closing Date and executed by the Secretary of the Buyer, certifying the incumbency and signatures of the officers of the Buyer authorized to act on behalf of the Buyer in connection with the transactions contemplated hereby.
 9.
 TERMINATION
 9.1
 Termination
 .  Subject to the provisions of Section 9.2, this Agreement may be terminated at any time prior to the Closing Date by any of the following:
 (a)
 by the mutual written agreement of the Buyer and the Company;
 (b)
 by either the Buyer or the Company, if the Closing shall not have occurred by August 31, 2011, upon written notice by such terminating party; provided that at the time such notice is given, a material breach of this Agreement by such terminating party shall not be the principal reason for the failure of the Closing to occur;
 (c)
 by the Buyer, by written notice to the Company and the Sellers, if there has been a material violation or breach of any of the Sellers’ or the Company’s covenants or agreements made herein or if any representation or warranty of the Sellers or the Company contained herein is materially inaccurate or misleading; 
 

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 (d)
 by the Buyer, by written notice to the Company, if:
 (i)
 any third-party attempts to acquire title or rights in or to the Facility; or 
 (ii)
 in the event of an occurrence of a Material Adverse Effect.
 (e)
 by the Company and the Major Sellers, by written notice to the Buyer, if there has been a material violation or breach of any of the Buyer’s covenants or agreements made herein or if any representation or warranty of the Buyer contained herein is inaccurate or misleading.
 9.2
 Effects of Termination
 .  If this Agreement shall be terminated as provided in Section 9.1, then this Agreement shall forthwith become void and there shall be no continuing obligation on the part of the parties (or any of their respective shareholders, officers, directors, employees, legal beneficiaries, successors or Affiliates); provided, that no party shall be relieved of any Losses occurring or sustained as a result of a breach of any of such party’s representations, warranties, covenants or agreements contained herein.  Notwithstanding any termination of this Agreement, the provisions of Section 6.16 and 12 and this Section 9 shall survive.
 10.
 SURVIVAL; INDEMNIFICATION.
 10.1
 Survival of Representations, Warranties and Covenants
 .  Notwithstanding any right of the Buyer to investigate the Business and condition of the Company, the Buyer shall be entitled to rely upon the representations, warranties, covenants and agreements of the Company and the Sellers.  All representations and warranties contained in this Agreement (as qualified by the Disclosure Schedules) and in all certificates required hereby to be delivered shall survive the Closing Date for a period of ****, and shall automatically terminate at the end of such period; provided, however, that (a) any such representations and warranties shall survive the time(s) that they would otherwise terminate with respect to claims of which notice has been given as provided in Section 10.4 prior to such termination and, in such case, the applicable representations and warranties shall survive until final resolution of such claim; and (b) such time limitation shall not apply to the representations and warranties contained in (i) Sections 3.6(e) (Indebtedness), 3.13 (Environmental Matters) and 3.15 (Title to Properties; Real Property), which shall survive for a period of ****, (ii) Sections 3.10 (Tax Matters), 3.27 (Brokers) and 4.6 (Adequate Consideration; No Tax Proceeding), which shall survive until ****, and (iii)  Sections 3.1 (Organization; Good Standing; Power), 3.2 (Capitalization; Options; Seller Rights), 3.3 (Due Authorization; Validity; No Conflicts), 4.1 (Organization; Good Standing; Power), 4.2 (Due Authorization; Validity; No Conflicts), 4.3 (Stock Ownership), 5.1 (Organization and Power) and 5.2 (Due Authorization; Validity; No Conflicts), which shall survive ****.  Each covenant and agreement contained in this Agreement will survive the Closing in accordance with its terms.  
 10.2
 Indemnification by the Sellers. 
 (a)
 Subject to the limitations set forth in Sections 10.1, 10.4 and 10.5, after the Closing Date, the Major Sellers shall jointly and severally 
 

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 indemnify, defend and hold harmless the Buyer, its Affiliates (including the Company) and their directors, officers, shareholders, agents, successors and permitted assigns (collectively, the “Buyer Indemnified Persons”) from and against, and shall pay and reimburse the foregoing Persons for, any and all Losses relating to or arising out of: 
 (i)
 the breach (or alleged breach if asserted by a third party) of any representation or warranty in Section 3 of this Agreement or in any certificate delivered by or on behalf of the Company in connection herewith, or any covenant or agreement of any of the Sellers (other than breaches of Sections 6.7 or 11) or the Company contained in this Agreement or in any certificate delivered by or on behalf of the Company in connection herewith;
 (ii)
 acts or omissions of the Company or the conduct of the business or operations of the Company prior to September 25, 2007; or
 (iii)
 the failure of the Sellers to pay or reimburse the Company for any Seller Transaction Expenses in accordance with Section 12.5.
 (b)
 Subject to the limitations set forth in Sections 10.1, 10.4 and 10.5, after the Closing Date, each Seller shall severally and not jointly indemnify, defend and hold harmless Buyer Indemnified Persons from and against, and shall pay and reimburse the foregoing Persons for, any and all Losses relating to or arising out of the breach (or alleged breach if asserted by a third party) of any representation or warranty of such Seller in Section 4 of this Agreement or in any certificate delivered by or on behalf of such Seller in connection herewith or the breach by such Seller of any covenant or agreement of such Seller in Sections 6.2, 6.3, 6.4, 6.5, 6.7, 6.10, 6.11, 6.13, 6.16, 6.17 or 11 of this Agreement.
 10.3
 Indemnification by the Buyer
 .  The Buyer shall indemnify, defend and hold harmless the Sellers and their Affiliates, successors and permitted assigns (collectively, the “Seller Indemnified Persons”) from and against, and shall pay and reimburse the foregoing Persons for, any and all Losses relating to or arising out of the breach (or alleged breach if asserted by a third party) of any representation, warranty, covenant or agreement of the Buyer contained in this Agreement or any certificate delivered by or on behalf of the Buyer in connection herewith.
 10.4
 Procedures for Indemnification; Defense
 .  The party making a claim under Section 7.1 or this Section 10 is referred to as the “Indemnitee,” and the party against whom such claims are asserted under this Section 10 is referred to as the “Indemnifying Party.”
 (a)
 Third Party Claims.  If any Indemnitee receives notice of the assertion or commencement of any action made or brought by any Person who is not a party to this Agreement or an Affiliate of a party to this Agreement or a representative of the foregoing (a “Third Party Claim”) against such Indemnitee with respect to which the Indemnifying Party is obligated to provide indemnification under this Agreement, the Indemnitee shall give the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than ten (10) calendar days after receipt of such notice of such Third Party Claim.  The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its 
 

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 indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure.  Such notice by the Indemnitee shall describe the Third Party Claim in reasonable detail, shall include copies of all material written evidence thereof to the extent reasonably available and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnitee.  The Indemnifying Party shall have the right to participate in, or if it shall have acknowledged in writing its obligation to provide indemnification to the Indemnitee in respect thereof, to assume the defense of any Third Party Claim at the Indemnifying Party’s expense and by the Indemnifying Party’s own counsel, and the Indemnitee shall cooperate in good faith in such defense; provided that if the Indemnifying Party is a Seller, such Indemnifying Party shall not have the right to defend or direct the defense of any such Third Party Claim that seeks an injunction or other equitable relief against the Indemnitee.  In the event that the Indemnifying Party assumes the defense of any Third Party Claim, subject to Section 10.4(b), it shall have the right to take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third Party Claim in the name and on behalf of the Indemnitee.  The Indemnitee shall have the right to participate in the defense of any Third Party Claim with counsel selected by it subject to the Indemnifying Party’s right to control the defense thereof.  The fees and disbursements of such counsel shall be at the expense of the Indemnitee; provided that if in the reasonable opinion of counsel to the Indemnitee, (A) there are legal defenses available to an Indemnitee that are different from or additional to those available to the Indemnifying Party; or (B) there exists a conflict of interest between the Indemnifying Party and the Indemnitee that is not waived, the Indemnifying Party shall be liable for the reasonable fees and expenses of counsel to the Indemnitee in each jurisdiction for which the Indemnitee determines counsel is required.  If the Indemnifying Party elects not to compromise or defend such Third Party Claim, fails to promptly notify the Indemnitee in writing of its election to defend, or fails to diligently prosecute the defense of such Third Party Claim, the Indemnitee may pay, compromise and defend such Third Party Claim and seek indemnification for any and all Losses based upon, arising from or relating to such Third Party Claim.  Seller and Buyer shall cooperate with each other in all reasonable respects in connection with the defense of any Third Party Claim, including making available, subject to the provisions of Section 11.4, records relating to such Third Party Claim and furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending party, management employees of the non-defending party as may be reasonably necessary for the preparation of the defense of such Third Party Claim.
 (b)
 Settlement of Third Party Claims.   Notwithstanding any other provision of this Agreement, neither the Indemnifying Party nor, in the case of a Third Party Claim seeking injunctive or other equitable relief, the Indemnitee shall enter into a settlement or compromise of any Third Party Claim without the prior written consent of the other party, which consent shall not be unreasonably withheld, delayed or conditioned.
 (c)
 Direct Claims.  Any action by an Indemnitee on account of a Loss which does not result from a Third Party Claim (a “Direct Claim”) shall be asserted by the Indemnitee giving the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than ten (10) days after the Indemnitee becomes aware of such Direct Claim.  The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits 
 

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 rights or defenses by reason of such failure.  Such notice by the Indemnitee shall describe the Direct Claim in reasonable detail, shall include copies of all material written evidence thereof to the extent reasonably available and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnitee.  The Indemnifying Party shall have thirty (30) days after its receipt of such notice to respond in writing to such Direct Claim.  The Indemnitee shall allow the Indemnifying party and its professional advisors to investigate the matter or circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim and the Indemnitee shall assist the Indemnifying Party’s investigation by giving such information and assistance (including access to the Indemnitee’s premises and personnel and the right to examine and copy any accounts, documents or records) as the Indemnifying Party or any of its professional advisors may reasonably request.  If the Indemnifying Party does not so respond within such thirty (30) day period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnitee shall be free to pursue such remedies as may be available to the Indemnitee on the terms and subject to the provisions of this Agreement.
 (d)
 Cooperation.  Upon a reasonable request by the Indemnifying Party, each Indemnitee seeking indemnification hereunder in respect of any Direct Claim, hereby agrees to consult with the Indemnifying Party and act reasonably to take actions reasonably requested by the Indemnifying Party in order to attempt to reduce the amount of Losses in respect of such Direct Claim.  Any costs or expenses associated with taking such actions shall be included as Losses hereunder.
 10.5
 Limitations on Indemnification.  
 (a)
 Notwithstanding any provision contained in this Section 10 to the contrary, (i) the Buyer Indemnified Persons shall not be entitled to assert any claim for indemnification in respect of breach(es) of representations and warranties under Section 10.2 until such time as all claims for indemnification under Section 10.2 by the Buyer Indemnified Persons against the Sellers hereunder shall exceed **** in the aggregate (the “Basket”), but then all such amounts shall be recoverable and (ii) any indemnification obligations of the Sellers under this Agreement for breaches of representations and warranties shall not exceed an aggregate amount of **** (the “Claims Limitation”); provided, however, that the Basket and the Claims Limitation shall not apply (A) if the Indemnifying Party shall have provided information to the Buyer or to the Company and the Sellers, as the case may be, in connection herewith or made any representation or warranty contained herein that, in either case, was fraudulent or was known to be inaccurate when made or (B) to any breach(es) of the representations and warranties contained in Sections 3.2 (Capitalization; Options; Seller Rights), 3.3 (Due Authorization; Validity; No Conflicts), 3.6(e) (Indebtedness), 3.10 (Tax Matters), 3.13 (Environmental Matters), 3.15 (Title to Properties; Real Property), 3.27 (Brokers), Section 4.2 (Due Authorization; Validity; No Conflicts), 4.3 (Stock Ownership) or 4.6 (Adequate Consideration; No Tax Proceeding).  There shall be no duplications of amounts payable by the Major Sellers under Section 7 and Section 10 in respect to any Tax matter.
 (b)
 Except for the indemnification provisions set forth in this Section 10 or Section 7, no provision of this Agreement is intended to confer any third party beneficiary 
 

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 rights, including any extension of any statute of limitations pertaining to suits, actions or proceedings brought by third parties.
 (c)
 The amount of any claim by an Indemnitee pursuant to Section 10.2 or 10.3 will be reduced by the amount of any insurance proceeds actually realized by the Indemnitee in respect of such claim or the facts or events giving rise to such indemnity obligation.  If the indemnified party realizes such insurance proceeds after the date on which an indemnity payment has been made to the indemnified party, the indemnified party shall promptly make payment to the indemnifying party in an amount equal to such insurance proceeds; provided such payment shall not exceed the amount of the indemnity payment.
 (d)
 Other than for fraud, in no event shall any party be liable under this Section 10 for punitive damages for Direct Claims.  For the avoidance of doubt, the parties acknowledge and agree that punitive damages awarded in favor of a third-party in connection with a claim that is indemnifiable hereunder shall constitute direct damages of the Indemnitee and shall be fully recoverable hereunder subject to the limitations set forth in this Section 10.5.
 10.6
 Indemnification in Case of Strict liability or Indemnitee Negligence
 .  The indemnification provisions in this Section 10 shall be enforceable regardless of whether the liability is based upon past, present or future acts, claims or legal requirements and regardless of whether any Person (including the Person from whom indemnification is sought) alleges or proves the sole, concurrent, contributory or comparative negligence of the Person seeking indemnification or the sole or concurrent strict liability imposed upon the Person seeking indemnification.  
 10.7
 Right to Offset
 .  Subject to the limitations set forth in Sections 10.1, 10.4 and 10.5, the Buyer shall have the right to offset against any amounts to be paid by the Buyer to the Sellers pursuant to Section 2.2 to satisfy an indemnification claim brought by the Buyer in accordance with this Section 10.  
 10.8
 Exclusive Remedy
 .  If the Closing occurs, the remedies provided for in this Section 10 and Section 7 shall be the sole and exclusive remedies and shall be in lieu of all other remedies for any breach of any representation or warranty or the failure to perform or comply with any covenant, agreement or other provision of this Agreement; provided, however, that the foregoing clause of this sentence will not be deemed a waiver by either party of any right to specific performance or injunctive relief in accordance with applicable Law and, provided, further, that nothing in this Agreement (including this Section 10.8) will limit or restrict either party’s right to maintain or recover any amounts in connection with any action or claim based upon fraud or willful misrepresentations. 
 11.
 NON-COMPETITION; CONFIDENTIALITY.
 11.1
 Non-Competition
 .  Each Major Seller acknowledges that (a) the Buyer would not have entered into this Agreement but for the agreements and covenants contained in this Section 11 and (b) the agreements and covenants contained in this Section 11 are essential to protect the business and goodwill of the Company and the Business.  To induce the Buyer to 
 

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 enter into this Agreement, each Major Seller hereby severally, and not jointly, agrees that following the Closing Date and for a period of **** thereafter (the “Restricted Period”), such Major Seller shall not, directly or indirectly, own, manage, operate, join, control or participate in the ownership, management, operation or control of, or be employed or retained by, render services to, provide financing (equity or debt) or advice to any business engaged in the business of researching, developing, distributing and/or manufacturing generic pharmaceutical products for distribution, directly or through a third party in (i) any country where the Buyer or any of its Affiliates has commenced distribution, marketing or sales of generic pharmaceutical products prior to the date that such other business has commenced distribution, marketing or sales of generic pharmaceutical products in such country or (ii) in the United States of America; provided, however, that nothing contained herein shall (A) prevent the purchase or ownership by any Major Seller of less than ten (10%) percent of the outstanding equity securities of any class of securities of a company registered under Section 12 of the Securities and Exchange Act of 1934, as amended, or (B) restrict or prevent any Major Seller from, directly or indirectly, owning, managing, operating, joining, controlling or participating in the ownership, management, operation or control of, or being employed or retained by, rendering services to, providing financing (equity or debt) or advice to, or otherwise be connected in any manner with any business engaged in the business of researching, developing, distributing and/or manufacturing generic pharmaceutical products solely for distribution (whether directly or through a third party) (1) outside both (x) countries where the Buyer or any of its Affiliates has commenced distribution, marketing or sales of generic pharmaceutical products and (y) the United States of America or (2) in a country other than the United States of America in which such business is engaged in such conduct before the Buyer or any of its Affiliates has commenced distribution, marketing or sales of generic pharmaceutical products, regardless of the location of the facilities, offices, management, properties or assets of such business.
 

 11.2
 Non-Solicitation.
   Except as set forth on Schedule 11.2, during the Restricted Period, each Seller severally, and not jointly, agrees that such Seller shall not, directly or indirectly, hire, engage, offer to hire, divert, entice away, solicit or in any other manner persuade or attempt to persuade (a “Solicitation”) any Person who is, or was, at any time within the 12-month period prior to such Solicitation, an officer, director, employee, agent, licensor, licensee, customer, or supplier of the Buyer or the Company to discontinue, terminate or adversely alter his, her or its relationship therewith.
 11.3
 Non-Disruption.
   Except as set forth on Schedule 11.2, During the Restricted Period, each Seller severally, and not jointly, agrees that such Seller shall not, directly or indirectly, interfere with, disrupt or attempt to disrupt any present or prospective relationship, contractual or otherwise, between the Buyer or the Company or any of their Affiliates, on the one hand, and any of their customers, contractees, suppliers or employees, on the other hand.
 11.4
 Confidentiality.
   From and after the Closing Date, each Seller severally, and not jointly, agrees that such Seller shall not at any time, directly or indirectly, use, exploit, communicate, disclose or disseminate any Confidential Information in any manner whatsoever (except disclosure to their personal financial or legal advisors and as may be required under legal process by subpoena or other court order; provided, that such Seller will take reasonable steps to 
 

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 provide the Buyer with sufficient prior written notice in order to contest such requirement or order).
 11.5
 Remedies upon Breach.
   Each Seller severally, and not jointly, acknowledges and agrees that: (a) the Buyer (and the Company) would be irreparably injured in the event of a breach by such Seller of any of his, her or its obligations under this Section 11; (b) monetary damages would not be an adequate remedy for such breach; (c) the Buyer (and the Company) shall be entitled (without the need to post any bond) to injunctive relief, in addition to any other remedy that they may have, in the event of any such breach; and (d) the existence of any claims that such Seller may have against the Buyer (or the Company), whether under this Agreement, any Ancillary Agreement or otherwise, shall not be a defense to (or reason for the delay of) the enforcement by the Buyer (and the Company) of any of their rights or remedies under this Agreement.
 12.
 MISCELLANEOUS PROVISIONS.
 12.1
 Execution in Counterparts.
   This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same document, and will become effective when all counterparts which together contain the signatures of each party hereto will have been delivered to the Company, the Sellers and Buyer, which delivery may be by facsimile transmission or other electronic means.
 12.2
 Notices.
   All notices, requests, demands and other communications that are required or may be given pursuant to the terms of this Agreement shall be in writing and shall be delivered personally delivered by a recognized overnight courier or express mail service for next business day delivery (and requiring proof of delivery or receipt) or posted in the United States mail by registered or certified mail, with postage pre-paid, return receipt requested, and shall be deemed given when so delivered personally, the next day after delivered to such overnight courier or express mail service or five (5) business days after the date of mailing, as follows:
 	 	 
	 (a)
 If to the Buyer (and following

 the Closing, the Company) to:
 

 300 Tice Boulevard
 Woodcliff Lake, NJ 07677
 Attention: General Counsel
 Tel. No.: 201-802-4215
	 with a copy to 
(which shall not constitute notice):
 

 K&L Gates LLP
 599 Lexington Avenue
 New York, NY  10022
 Attn:  Whitney J. Smith, Esq.
 Tel. No.:  212-536-3930

	 (b)
 If to the Sellers or the Sellers’ Representative (and prior to
Closing, the Company):
  
  
  
 -49-
  
 
 
 Edict Pharmaceuticals Private Limited
 1/58, Pudupakkam Main Road,
 Pudupakkam, Kelambakka - 603
 103, Chennai,
 Tamil Nadu, India
 Attn:  Mr. J. Jayaseelan
 Tel. No.:  +91 44-27474516
  
 
	 with a copy to 
(which shall not constitute notice):
  
  
 
 
 

  
 
 
  
 Zukerman Gore Brandeis & Crossman, LLP 
 875 Third Avenue
 New York, NY 10022
 Attn:  Joseph E. Maloney, Esq.
 Tel. No.:  212-223-6700

	  
 Clan Laboratories Private Limited
 1/58, Pudupakkam Main Road,
 Pudupakkam, Kelambakkam - 603
 103, Chennai
 Tamil Nadu, India
 Attn:  Mr. J. Jayaseelan
 ****
	  

	  
 Muthusamy Shanmugam 
 9 Revere Road
 Monmouth Junction, NJ 08852
 ****
  
	  

	 Jaganathan Jayaseelan
 ****
	  

	 Seema Suresh
 ****
	  

	 Thertha Investment & Portfolio 
                         Services Private Limited, 
 Flat No. 1, Prasanna Enclave, No. 30, 
                          Bharathi Avenue, 2nd Street,
 Kotturpuram, Chennai – 600085, 
                         Tamil Nadu, India
 Attn:  Mrs. Seema Suresh
 Tel. No.:  ****
	  

 Any party may, by notice given in accordance with the provisions of this Section 12.2 to the other parties, designate another address or individual for receipt of notices hereunder. 
 

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 12.3
 Amendments; Waivers.
   This Agreement may be amended or modified at any time and any provision(s) waived, but only by a written instrument executed by all of the parties.
 12.4
 Entire Agreement.
   This Agreement and the Ancillary Agreements constitute the entire agreement between the parties with respect to the subject matter hereof and thereof, and supersede all prior term sheets, agreements and understandings, oral and written, between the parties with respect to the subject matter hereof and thereof.
 12.5
 Fees and Disbursements.
   The Buyer shall pay all costs and expenses, including the fees and disbursements of any counsel, accountants or other advisors retained or incurred by it in connection with the preparation, execution, delivery and performance of this Agreement, the Ancillary Agreements and the transactions contemplated hereby or thereby, whether or not the transactions contemplated hereby or thereby are consummated.  The Sellers (and not the Company) shall be responsible for all costs and expenses, including the fees and disbursements of any counsel, accountants or other advisors retained or incurred by the Sellers or the Company in connection with the preparation, execution, delivery and performance of this Agreement, the Ancillary Agreements and the transactions contemplated hereby or thereby and any costs, expenses or penalties resulting from or arising out of any compounding applications filed by the Company or any Seller with the Reserve Bank of India (“Seller Transaction Expenses”), if the transactions contemplated hereby or thereby are consummated.  Two days before the Closing, the Sellers and the Company shall provide an accounting of any Seller Transaction Expenses paid by the Company prior to the Closing Date. Any Seller Transaction Expenses paid by the Company prior to the Closing Date shall be reimbursed by the Sellers to the Company from the Closing Consideration if not reimbursed to the Company prior to the Closing Date.  If the transactions contemplated hereunder are not consummated the Company and the Sellers shall be responsible for all Seller Transaction Expenses.
 12.6
 Assignment.
   This Agreement may not be assigned by the Company or the Sellers without the prior written consent of the Buyer; provided, however, that the Buyer may assign or delegate any or all rights or obligations hereunder to an Affiliate; provided that such Affiliate has the financial capability to make all payments that may be required under Section 2.2; and provided, further, that the Buyer may assign or delegate any or all of its rights or obligations hereunder, including its rights under Sections 7 and 10, to any subsequent purchaser of the Business, the Company or the Buyer or all or substantially all of the Buyer’s or the Company’s assets; provided that the applicable assignee or transferee has the financial capability to make all payments that may be required under Section 2.2.
 12.7
 Binding Effect; Benefits.
   This Agreement shall inure to the benefit of, and be binding upon, the parties and their respective heirs, legal representatives, successors and permitted assigns.  Except as provided in Sections 10.2 and 10.3, nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the parties, and their respective heirs, legal representatives, successors and permitted assigns, any rights, remedies, obligations or liabilities under, in connection with or by reason of this Agreement.
 

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 12.8
 Severability
 .  If in any jurisdiction any term or provision hereof is determined to be invalid or unenforceable, (a) the remaining terms and provisions hereof shall be unimpaired, (b) any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction, and (c) the invalid or unenforceable term or provision shall, for purposes of such jurisdiction, be deemed replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision.
 12.9
 Appointment and Duties of Sellers’ Representative.  
 (a)
 Each Seller hereby irrevocably appoints Jaganathan Jayaseelan to act as the “Sellers’ Representative” on his, her or its behalf hereunder and under all other agreements and certificates contemplated by this Agreement, including any certificates required to be delivered pursuant to Section 8.1, and to perform his, her or its obligations hereunder and thereunder.  Each Seller hereby irrevocably authorizes the Sellers’ Representative to take such actions on his, her or its behalf and to exercise such powers as are provided to the Sellers’ Representative by the terms and provisions of this Agreement, together with such actions and powers as are reasonably incidental thereto.  Jaganathan Jayaseelan hereby accepts such appointment as Sellers’ Representative.  
 (b)
 The Buyer may rely upon written instructions from the Sellers’ Representative with respect to the giving of any notices to any Seller as an “Indemnitee” or “Indemnifying Party” hereunder or otherwise in connection with this Agreement.  The Buyer shall not be liable for any acts or omissions of the Sellers’ Representative in connection with the performance by the Sellers’ Representative of his obligations hereunder.  Each Seller hereby irrevocably appoints the Sellers’ Representative as his, her or its agent for purposes of the first sentence of this subsection (b).
 12.10
 Governing Law; Arbitration.
   
 (a)
 This Agreement and the legal relations among the parties shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to the conflict of laws principles thereof that would result in the application of the law of a different jurisdiction).
 (b)
 Each of the parties hereby agrees that any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or validity thereof (“Dispute”), shall, on the demand of any party, be finally settled by arbitration administered by the American Arbitration Association (“AAA”) in accordance with its rules for large, complex commercial disputes.  Prior to making a demand for arbitration, the parties agree to attempt in good faith to negotiate a resolution to any Dispute promptly.  In the event that the parties are unable to negotiate a resolution in thirty (30) days after delivery of a notice of Dispute, either party may make a demand for arbitration hereunder.
 (c)
 The arbitration shall be decided by three (3) arbitrators, all of whom need not be from the AAA’s panel of arbitrators.  Each party shall choose one arbitrator of 
 

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 its choice within thirty (30) days of the demand for arbitration.  The third arbitrator, who shall serve as the chairman of the arbitral tribunal, shall be a neutral and independent arbitrator mutually selected by the two party-appointed arbitrators within fifteen (15) days of the selection of the two party-appointed arbitrators.  Notwithstanding the AAA rules, the neutral arbitrator: (i) shall be knowledgeable in the subject matter of the dispute; (ii) shall not be employed by, have an interest in or otherwise be affiliated with any of the parties or their representative counsels; and (iii) need not be selected from AAA’s panel of arbitrators.  If the arbitrators are not selected within the above-stated time periods, the arbitrators shall be selected by AAA in accordance with its rules.  
 (d)
 The parties shall be afforded the discovery rights as established under the applicable AAA rules or as provided for by the arbitrators.  
 (e)
 The award rendered in any arbitration commenced hereunder shall constitute an award under the Federal Arbitration Act, Title 9 US Code and the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, shall be final and binding upon the parties and judgment thereon may be entered in any court of competent jurisdiction.  The arbitral tribunal may order any remedy permitted by Law and this Agreement, including damages and specific performance of this Agreement or any portion thereof.  The fees and expenses of the arbitrators, administrative costs of the arbitration and fees and expenses of the prevailing party shall be paid by the non-prevailing party.  For purposes hereof, the prevailing party shall be, as applicable, the party for whom the judgment was rendered or the party whose demand in the dispute most closely approximated the arbitration judgment, as determined by the arbitrators.
 (f)
 The language of the arbitration shall be English.  The place of arbitration shall be New York, New York, United States.
 (g)
 By agreeing to arbitration, the parties do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment, or other order in aid of arbitration proceedings and/or the enforcement of any award.  Without prejudice to such provisional remedies as may be available under the jurisdiction of a national court, the arbitral tribunal shall have full authority to grant provisional remedies and to direct the parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any party to respect the arbitral tribunal’s orders to that effect.  Each of the parties irrevocably and unconditionally submits to the exclusive jurisdiction of the federal and New York State courts located in Manhattan (NYC) for the purpose of an order to compel arbitration, for provisional relief in aid of arbitration or to maintain the status quo or prevent irreparable harm prior to the appointment of the arbitral tribunal, and to the non-exclusive jurisdiction of such courts for the enforcement of any award issued hereunder.  With respect to any action, suit or other proceeding for which it has submitted to jurisdiction pursuant to this Section 12.10, each party irrevocably consents to service of process in the manner provided for the giving of notices pursuant to Section 12.2 of this Agreement.  Nothing in this Section 12.10 shall affect the right of any party to serve process in any other manner permitted by applicable law.
 

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 12.11
 Appointment for Service of Process
  
The Company (before the Closing) and each of the Sellers irrevocably appoint Muthusamy Shanmugam, 9 Revere Road, Monmouth Junction, New Jersey 08852  to be his, her or its agent for the service of process.  The Company and each of the Sellers agree that any legal process may be effectively served on it in connection with legal proceedings by service on such agent.
 (b)
 If the agent at any time ceases for any reason to act as such for the Company or any of the Sellers, the Company (if before Closing) and such Seller, as applicable, shall appoint a replacement agent having an address for service of process in New York or New Jersey and shall notify the other parties of the name and address of the replacement agent.  The provisions of this clause applying to service on an agent apply equally to service on a replacement agent.  A copy of any document served on an agent shall be copied to all parties to this Agreement.  Failure or delay in so doing shall not prejudice the effectiveness of service of the legal process.
 [signatures appear on the following pages]
 

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 IN WITNESS WHEREOF, the parties have executed this Share Purchase Agreement the day and year first above written. 
 

 

 Par Pharmaceutical, Inc.
 

 

 

 By:/s/ Paul Campanelli
 Name: Paul Campanelli
 Title:   President, Par Pharmaceutical
 

 

 

 

 Edict Pharmaceuticals Private Limited
 

 

 

 By:/s/ Muthusamy Shanmugam
 Name: Muthusamy Shanmugam
 Title:    CEO
 

 

 

 Clan Laboratories Pvt. Ltd.
 

 

 

 By:/s/ Jaganathan Jayaseelan
 Name: Jaganthan Jayaseelan
 Title:   Director
 

 

 

 /s/ Muthusamy Shanmugam
 Muthusamy Shanmugam
 

 

 

 

 /s/ Jaganathan Jayaseelan
 Jaganathan Jayaseelan
 

 

 

 Signature Page to Share Purchase Agreement
 

 

 
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 /s/ Seema Suresh
 Seema Suresh
 

 

 

 Thertha Investment & Portfolio Services Private Limited
 

 

 

 By:/s/ Suresh Bhojraj
 Name: Suresh Bhojraj 
 Title:   Director
 

 

 

 Jaganathan Jayaseelan, as Sellers’ Representative
 

 

 

 By: /s/ Jaganathan Jayaseelan
 Name: Jaganthan Jayaseelan
 Title:   Director
  
 

 Signature Page to Share Purchase Agreement
 

 

 
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 Annex A
 Definitions
 

 The following terms have the respective meanings set forth below:
 “Act” means the (Indian) Companies Act, 1956.
 “Affiliate” means, with respect to any Person, any Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified.
 “Ancillary Agreements” means the Consulting Agreement, Employment Agreement and the Seller Releases and any other agreement executed pursuant to or in connection with this Agreement.
 “ANDA” means an abbreviated new drug application filed with the FDA pursuant to 21 U.S.C. § 355(j) and 21 C.F.R. § 314.3.
 “Associate” means, when used to indicate a relationship with any Person, (a) a corporation or organization (other than the Company) of which such Person is an officer or partner or is, directly or indirectly, the beneficial owner of 10 percent or more of any class of equity securities, (b) any trust or other estate in which such Person has a substantial beneficial interest or as to which such Person serves as trustee or in a similar capacity, and (c) any relative or spouse of such Person, or any relative of such spouse, who has the same home as such Person or who is a director or officer of the Company or any of its parents or subsidiaries.  
 “Benefit Plan” means each funded or unfunded, written or oral, employee benefit plan, contract, agreement, incentive, salary, wage, retention or other compensation plan or arrangement, including each pension and profit sharing plan, savings plan, bonus, deferred compensation, incentive compensation, stock purchase, supplemental retirement, severance, change of control or termination payment, stock option, hospitalization, medical, life insurance, dental, disability, salary continuation, vacation, supplemental unemployment benefit, union contract, employment contract, consulting agreement, retiree health or life benefit, and each other employee benefit program, plan, policy or arrangement, maintained, contributed to, or required to be contributed to by the Company for the benefit of employees or former employees and their dependents and beneficiaries, officers, directors, agents or consultants of the Company or for or as to which the Company may be responsible or have any Liability, whether or not legally binding and whether or not terminated.
 “cGMPs” means those practices in the manufacture of pharmaceutical products that are recognized as the current good manufacturing practices by the FDA in accordance with FDA regulations, guidelines, other administrative interpretations, and rulings in connection therewith, including those regulations cited in 21 C.F.R. parts 210 and 211, all as they may be amended and in effect from time to time.
 “Company Creditors” means the lender or creditor with respect to any Company Indebtedness.  
 

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 “Company Indebtedness” means the Indebtedness of the Company, including (a) amounts owing under that certain (i) Sanction Letter Agreement between State Bank of India and the Company, dated January 25, 2010, (ii) Memorandum of Agreement, between the Company and State Bank of India, dated February 4, 2010, and (iii) amounts owing to Clan Laboratories, J. Jayaseelan, M. Shanmugam, their respective family members and Affiliates, (b) share application money with respect to which shares have not been issued by the Company, (c) any obligations of the Company to redeem the Company Preference Shares or Company Common Shares, and (d) dividends due to the Preference Shareholders with respect to the Company Preference Shares, in each case along with related interest due (whether or not accrued,) fees, premiums and prepayment penalties, if any.
 “Company Intellectual Property” means all intangible property owned or used by the Company in the conduct of the Business (other than “off-the-shelf” or standard software products) and includes all embodiments and stored/recorded copies of such property (e.g., software and information on electronic media). Company Intellectual Property includes any and all rights, anywhere in the world, with respect to (a) inventions, discoveries, formulations, syntheses, manufacturing processes, or improvements, including patents, patent applications, utility models and certificates of invention thereon; (b) trade secrets, Confidential Information, know-how, and technical and engineering drawings and information; (c) indicators of source or origin, including trademarks, service marks, trade dress, designs, logos, and slogans; (d) works of authorship or expression, including copyrights and moral rights; (e) data, databases, data models, and schema; (f) industrial designs and design patents; (g) computer code, including source code and object code; and (h) any other similar intellectual property, all whether or not registered or registrable.
 “Company Intellectual Property Registrations” means all grants and acknowledgements by a Governmental Authority and all recordals and registrations with a Governmental Authority of intangible property rights that are included in or that comprise the Company Intellectual Property, along with all applications for any such grants, recordals, and registrations; for the avoidance of doubt, these include patents, trademark registrations, copyright registrations, and the applications for them.
 “Company Organizational Documents” means the Company’s Certificate of Incorporation, Memorandum of Association and Articles of Association, as amended.
 “Confidential Information” means any and all secret, confidential or proprietary information or data (oral or written) relating to the Company, the Business and/or the Buyer and its Affiliates or any of their operations or activities, including the terms of this Agreement, information relating to existing or proposed research and development efforts, patent applications, trade secrets, plans, promotion and pricing techniques, procurement and sales activities and procedures, business methods and strategies (including acquisition strategies), software, software codes, advertising, sales, marketing and other materials, customers and supplier lists, data processing reports, customer sales analyses, invoice, price lists or information, and information pertaining to any lawsuits or governmental investigation, except such information that is in the public domain (such information not being deemed to be in the public 
 

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 domain merely because it is embraced by more general information that is in the public domain) other than as a result of a breach of any of the provisions hereof.
 “Consent” means, with respect to the Company or a Seller, as the context requires, any approval, consent, waiver, exemption, order, authorization or other action by, or notice to or filing with, any Governmental Authority or any Person, and any lapse of a waiting period that is required to be obtained by the Company or such Seller (so as not to cause any of the results as set forth in Section 3.3(a) through (e) or Section 4.2(a) and (b)) in connection with (or in order to permit) the execution, delivery or performance by the Company or such Seller of this Agreement or any of the Ancillary Agreements to which the Company or such Seller is a party or the consummation of the transactions contemplated hereby or thereby by the Company or such Seller.
 “Consulting Agreement” means the Consulting Agreement between the Company and J. Jayaseelan, executed as of the date hereof, substantially in the form attached as Exhibit A.
 “EIA Notification” means the environment impact assessment notification dated September 14, 2006, issued by the Ministry of Environments and Forests (MoEF), in exercise of powers under section 3(2)(v) and 3(1) of the Environment Protection Act, 1986, read with Rule 5(3)(d) of Environment Protection Rules, 1986.
 “Employment Agreement” means the Employment Agreement between the Buyer and M. Shanmugam, executed as of the date hereof, substantially in the form attached as Exhibit B.
 “Environmental Law” means all Laws (including common law) and Permits relating to the environment, natural resources, property transfer, safety, or health of humans or other living organisms, including the manufacture, distribution in commerce, and use of, or discharge to the environment of, Hazardous Substances.  
 “Equipment” means machinery, equipment and other fixed assets of the Company used or useful in connection with the operation of the Business.
 “Facility” means the real property located at No. 41, Pudupakkam Village, Chengpalet Taluk, Kancheepuram District, Patta No. 1426, together with all buildings and material fixtures and improvements erected thereon.
 “FDA” means the U.S. Food and Drug Administration, or any successor Governmental Authority.
 “FDCA” means the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. Section 301 et seq.
 “Final Payoff Amount” means the amount necessary to fully and finally extinguish the Company Indebtedness in accordance with the Payoff Letters and consisting of all outstanding principal, accrued interest, fees and penalties thereon.
 “GAAP” means generally accepted accounting principles and practices in India.
 

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 “Governmental Authority” means any national, provincial, state, foreign or local government or any court, tribunal, administrative agency or commission or other governmental enforcement or other regulatory authority, body or agency, including any self-regulatory organization. 
 “Guaranty” means that certain Guaranty, dated December 8, 2009, executed by the Company in favor of in favor of the State Bank of India with respect to loans to Delvin Formulations Pvt. Ltd. and any additional, supplement or supplemental guaranty.
 “Hazardous Substances” means any pollutant, chemical, contaminant, hazardous or toxic substances or wastes, pollutants, contaminants, or any constituent thereof, that is regulated, limited or prohibited in any manner pursuant to Environmental Law, including petroleum products, petroleum by-products, asbestos, special waste, radioactive material or waste, and polychlorinated biphenyls and medical waste.
 “Indebtedness” of any Person means, without duplication, (i) the principal of and accrued interest, fees and premium (if any) in respect of (A) indebtedness of such Person for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable; (ii) all obligations of such Person under leases required to be capitalized in accordance with GAAP; (iii) all obligations of such Person for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction; (iv) all derivative contracts (including foreign exchange facilities, options and swap contracts); (v) obligations of such Person to redeem any portion of its outstanding share capital, (vi) dividends due to the shareholders of such Person with respect to the share capital of such Person, and (vii) all obligations of the type referred to in clauses (i) through (vi) of other Persons for the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, including guarantees of such obligations; and (viii) all obligations of the type referred to in clauses (i) through (vii) of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person).
 “Knowledge of the Company and the Major Sellers” means facts or other information actually known by any Major Seller or Sampath Kumar or facts of which a prudent individual in a senior manager position with the Company could be expected to discover in the course of conducting a reasonably comprehensive investigation of the relevant subject matter.
 “Law” means all national, provincial, state, local and foreign laws, statutes, ordinances, rules or regulations, administrative policies or guidance documents, orders, injunctions, decrees and administrative rulings promulgated by any court or Governmental Authority.
 “Liabilities” means any debts, liabilities, commitments or obligations, whether absolute or contingent, asserted or unasserted, known or unknown, liquidated or unliquidated, due or to become due, fixed or unfixed.
 “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of 
 

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 a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset, (c) the interest of a licensee under a lease agreement and (d) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
 “Material Adverse Effect” means (a) any effect, occurrence, development or change that has had or could reasonably be expected to have a materially adverse effect on the business, assets, liabilities, operations or financial condition or results of operation, of the Company, taken as a whole or the ability of the Company or the Sellers to consummate the transactions contemplated hereby on a timely basis, other than in each instance any change, event or circumstance arising out of: (i) general economic, legal, regulatory or political conditions in the United States of America or India; (ii) conditions generally affecting the industries in which the Company operates (provided, that the impact on the Company is not materially disproportionate to the impact on other similarly situated entities); (iii) the announcement or pendency of the this transaction or the entry into this Agreement or any agreement contemplated hereunder and the consummation of the transactions contemplated hereby including, but not limited to, the impact thereof on or with respect to its relationship, contractual or otherwise, with the Company’s clients, affiliates, licensors, independent contractors, employees, agents or representatives; (iv) the Company’s performance of its obligations under this Agreement and compliance with the covenants set forth herein; (v) any change in the securities markets generally; or (vi) the commencement or escalation of a war or armed hostilities or the occurrence of acts of terrorism or sabotage (provided, that the impact on the Company is not materially disproportionate to the impact on other similarly situated entities, or (b) any action by a Governmental Authority that has a material adverse effect on the Company’s ability to operate the Facility or conduct the Business as currently conducted by the Company.
 “Ordinary Course of Business” means any action taken by a Person that is consistent in nature, scope and magnitude with the past practices of such Person and is taken in the ordinary and usual course of the normal, day-to-day operations of such Person.
 “Permitted Liens” means(a) Liens for Taxes assessments and charges of Governmental Authorities that are not yet due and payable (or being contested in good faith; provided, that adequate reserves have been posted or set aside therefor); (b) mechanics’, carriers’, workers’ and other similar Liens arising or incurred in the Ordinary Course of Business, in each case that individually or in the aggregate with other such title defects and imperfections, does not materially impair the value of the property subject to such Liens or other such title defect or the use of such property in the conduct of the Business and (c) landlord’s liens.
 “Person” means a natural person, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, any other business entity, or a governmental entity (or any department, agency, or political subdivision thereof).
 “Products” means all products subject to the FDCA or to any similar Law and to the jurisdiction of the FDA, U.S. Drug Enforcement Administration or any similar state, local or 
 

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 (TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION)
 ASTERISKS DENOTE SUCH OMMISSION
 

 

 foreign public health agency, board of health or other Governmental Authority that are or have been manufactured, developed, researched, tested, labeled, packaged, distributed, marketed, shipped or sold by the Company, including products that are in development or in inventory.
 “Seller Releases” means the releases from each of the Sellers to the Company and the Buyer, substantially in the form attached as Exhibit C, releasing the Company from any and all debts, obligations, claims or liabilities of any kind or nature, known or unknown.
 “Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association, or other business entity of which (a) if a corporation, a majority of the total voting power of shares of share capital entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other subsidiaries of that Person or a combination thereof, or (b) if a limited liability company, partnership, association, or other business entity (other than a corporation), a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more subsidiaries of that Person or a combination thereof (for purposes of this clause (b), a Person or Persons own a majority ownership interest in such a business entity if such Person or Persons shall be allocated a majority of such business entity’s gains or losses or shall be or control any managing director or general partner of such business entity).
 “Supply Agreement” means that certain Product Supply and Development Agreement, between the Buyer and the Company, dated December 22, 2010.
 “Tax” or “Taxes” means any income taxes, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, service, customs, duties, share capital, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated or other tax, of any kind, whatsoever, imposed by any Governmental Authority, which includes any interest, penalty or addition thereto, whether disputed or not, and including any obligations to indemnify or otherwise assume or succeed to the Tax Liability of any other Person.  
 “Tax Act” means the Indian Income Tax Act, 1961. 
  “Tax Returns” means any return (including any information return), report, statement, schedule, notice, form, or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Authority in connection with the determination, assessment, collection, or payment of any Tax or in connection with the administration, implementation, or enforcement of or compliance with any Law relating to any Tax.
  
 A-6
  

  
  Other Terms.  The following terms are defined in the body of this Agreement in the Sections indicated.
 	 	 
	 Term
	 Section

	 AAA
	 Section 12.10(b)

	 Agreement
	 Preamble

	 Approved Capex Loan Amount
	 Section 2.3(c)

	 Approved Opex Loan Amount
	 Section 2.3(b)

	 Basket
	 Section 10.5 

	 Board of Directors
	 Section 2.6(d)

	 Business
	 Recitals

	 Buyer
	 Preamble

	 Buyer Indemnified Persons
	 Section 10.2(a)

	 Capex Loans
	 Section 2.3

	 Claims Limitation
	 Section 10.5

	 Clan Laboratories
	 Preamble

	 Closing
	 Section 2.6(a)

	 Closing Consideration
	 Section 2.2(b)

	 Closing Date
	 Section 2.6(a)

	 Company
	 Preamble

	 Company Common Shares
	 Recitals

	 Company Debtor
	 Section 3.6(e)

	 Company Financial Statements
	 Section 3.6.

	 Company Preference Shares
	 Recitals

	 Company Stock
	 Recitals

	 Contracts
	 Section 3.8(a) 

	 Direct Claim
	 Section 10.4(c)

	 Disclosure Schedules
	 Section 1.3

	 Dispute
	 Section 12.10(b)

	 Filed ANDA
	 Section  3.18(a)

	 Indemnifying Party
	 Section  10.4

	 Indemnitee
	 Section  10.4

	 Interim Balance Sheet
	 Section 3.6

	 J. Jayaseelan
	 Preamble

	 Losses
	 Section 7.1

	 M. Shanmugam
	 Preamble

	 Major Sellers
	 Preamble

	 Material Contracts
	 Section 3.8(a)(xv)

	 Opex Loans
	 Section 2.3

	 Payoff Letters
	 Section 6.14

	 Permits
	 Section 3.14

	 Pre-Closing Tax Period
	 Section 7.1

	 Preference Shareholders
	 Recitals

	 Purchase Price
	 Section 2.2(a)

	 Requested ANDA
	 Section 2.2(c)(iii)

	 Restricted Period
	 Section 11.1

	 S. Suresh
	 Preamble

	 Seller Indemnified Persons
	 Section 10.3

	 Seller Transaction Expenses
	 Section 12.5

	 Sellers
  
  
	 Preamble

	 A-7
  

  
 
 Sellers’ Representative
	  
  

  
 
 Section 12.9(a)

	 Solicitation
	 Section 11.2

	 Straddle Period
	 Section 7.2

	 Third Party Claim
	 Section 10.4(a)

	 TIPS
	 Preamble

 

 

 A-8EX10.2 Credit Agreement

EXHIBIT 10.2

CREDIT AGREEMENT

DATED AS OF MAY 9, 2011

AMONG

CARGO AIRCRAFT MANAGEMENT, INC., 
AS BORROWER

THE LENDERS FROM TIME TO TIME PARTY HERETO,

SUNTRUST BANK,
AS ADMINISTRATIVE AGENT,

REGIONS BANK
AND
JPMORGAN CHASE BANK, N.A.

AS SYNDICATION AGENTS

AND

BANK OF AMERICA, N.A., 
AS DOCUMENTATION AGENT

SUNTRUST ROBINSON HUMPHREY, INC.,
REGIONS CAPITAL MARKETS, a Division of Regions Bank,
and
J.P. MORGAN SECURITIES LLC

as Joint Lead Arrangers and Joint Bookrunners

509265-1208-08319-NY01.2591273.3
        
LEGAL02/32478098v8

Page

TABLE OF CONTENTS

Section 1    Definitions and Rules of Interpretation.    1
Section 1.1    Definitions    1
Section 1.2    Rules of Interpretation    24
Section 2    Amount and Terms of Credit.    25
Section 2.1    Commitment    25
Section 2.2    Minimum Borrowing Amounts, etc.    27
Section 2.3    Notice of Borrowing    27
Section 2.4    Disbursement of Funds    28
Section 2.5    Evidence of Indebtedness    28
Section 2.6    Conversions/Continuations    29
Section 2.7    Pro Rata Borrowings    30
Section 2.8    Interest    30
Section 2.9    Interest Periods    30
Section 2.10    Increased Costs, Illegality, etc.    31
Section 2.11    Compensation    33
Section 2.12    Change of Lending Office    33
Section 2.13    Replacement of Lenders    33
Section 2.14    Incremental Facility    34
Section 2.15    Defaulting Lenders    36
Section 3    Letters of Credit.    38
Section 3.1    Letters of Credit    38
Section 3.2    Letter of Credit Requests; Notices of Issuance    39
Section 3.3    Agreement to Repay Letter of Credit Drawings    39
Section 3.4    Letter of Credit Participations    40
Section 3.5    Increased Costs; Illegality    41
Section 4    Fees; Commitments.    42
Section 4.1    Fees    42
Section 4.2    Voluntary Reduction of Commitments    43
Section 4.3    Commitment Terminations    43
Section 5    Payments.    43
Section 5.1    Voluntary Prepayments    43
Section 5.2    Mandatory Prepayments.    44
Section 5.3    Method and Place of Payment    46
Section 5.4    Net Payments    46
Section 6    Conditions Precedent.    47
Section 6.1    Conditions Precedent to Closing Date    47
Section 6.2    Conditions Precedent to All Credit Events    51
Section 7    Representations and Warranties.    52
Section 7.1    Corporate Status; Compliance with Law    52

Page

Section 7.2    Power and Authority    52
Section 7.3    No Violation    52
Section 7.4    Litigation    53
Section 7.5    Use of Proceeds; Margin Regulations    53
Section 7.6    Governmental Approvals    53
Section 7.7    Investment Company Act    53
Section 7.8    True and Complete Disclosure    53
Section 7.9    Financial Condition; Financial Statements    54
Section 7.10    Security Interests    54
Section 7.11    Tax Returns and Payments    55
Section 7.12    Compliance with ERISA    55
Section 7.13    Subsidiaries    55
Section 7.14    Intellectual Property    56
Section 7.15    Pollution and Other Regulations    56
Section 7.16    Properties    56
Section 7.17    Labor Matters    56
Section 7.18    No Default    57
Section 7.19    No Material Adverse Change    57
Section 7.20    Insurance    57
Section 7.21    Accounts    57
Section 7.22    Material Contracts    57
Section 7.23    Indebtedness to be Refinanced    57
Section 7.24    Foreign Assets Control    57
Section 7.25    Patriot Act    57
Section 7.26    [Intentionally Deleted.]    57
Section 7.27    Aircraft    57
Section 8    Affirmative Covenants    58
Section 8.1    Information Covenants    58
Section 8.2    Books, Records and Inspections    60
Section 8.3    Maintenance of Insurance    61
Section 8.4    Payment of Taxes    61
Section 8.5    Franchises    61
Section 8.6    Compliance with Contractual Obligations and Laws, Statutes, etc.    62
Section 8.7    Maintain Property    62
Section 8.8    Environmental Laws    62
Section 8.9    Use of Proceeds    62
Section 8.10    Collateral Pool; Release of Aircraft; Additional Guarantees    63
Section 8.11    Hedging Agreements    64
Section 8.12    Aircraft Appraisals    64
Section 8.13    Further Assurances    64
Section 9    Negative Covenants    65
Section 9.1    Changes in Business    65
Section 9.2    Consolidation, Merger, Sale of Assets, etc.    65
Section 9.3    Liens    65
Section 9.4    Indebtedness    66
Section 9.5    Advances, Investments and Loans    67
Section 9.6    Amendments to Documents, etc.    68

ii
LEGAL02/32478098v8

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Section 9.7    Dividends, Restrictive Agreements.    68
Section 9.8    Transactions with Affiliates    69
Section 9.9    Sales and Leasebacks    70
Section 9.10    Changes in Fiscal Periods    70
Section 9.11    Activities of Holdings    70
Section 9.12    Fixed Charge Coverage Ratio    70
Section 9.13    Total Leverage Ratio    70
Section 9.14    Collateral to Loan Value Ratio    71
Section 10    Events of Default.    71
Section 10.1    Payments    71
Section 10.2    Representations etc.    71
Section 10.3    Covenants    71
Section 10.4    Default Under Other Agreements    71
Section 10.5    Bankruptcy, etc.    72
Section 10.6    ERISA    72
Section 10.7    Credit Documents    72
Section 10.8    Restraint of Business    73
Section 10.9    Loss of Authority    73
Section 10.10    Judgments    73
Section 10.11    Certified Air Carrier Status    73
Section 10.12    Change in Control    73
Section 10.13    Payments Subsequent to Declaration of Event of Default    74
Section 11    The Administrative Agent.    75
Section 11.1    Appointment    75
Section 11.2    Delegation of Duties    75
Section 11.3    Exculpatory Provisions    75
Section 11.4    Reliance by Administrative Agent    76
Section 11.5    Notice of Default    76
Section 11.6    Non-Reliance on Administrative Agent and Other Lenders    76
Section 11.7    Indemnification    77
Section 11.8    The Administrative Agent and Joint Lead Arrangers in their Individual Capacity    77
Section 11.9    Successor Administrative Agent    77
Section 11.10    Withholding Tax    78
Section 11.11    Administrative Agent May File Proofs of Claim    78
Section 12    Miscellaneous.    79
Section 12.1    Payment of Expenses, etc.    79
Section 12.2    Right of Setoff    80
Section 12.3    Notices/Electronic Delivery of Information    80
Section 12.4    Benefit of Agreement    81
Section 12.5    No Waiver; Remedies Cumulative    83
Section 12.6    Payments Pro Rata    83
Section 12.7    Calculations; Computations    84
Section 12.8    Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial    84
Section 12.9    Counterparts    85
Section 12.10    Effectiveness    85

iii
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Section 12.11    Headings    86
Section 12.12    Amendment or Waiver    86
Section 12.13    Survival    88
Section 12.14    Domicile of Loans    88
Section 12.15    USA Patriot Act    88
Section 12.16    Confidentiality    88
Section 12.17    Release of Liens and Guarantees    89
Section 12.18    Integration    89
Section 12.19    Acknowledgments    89
Section 12.20    Interest Rate Limitation    90
Section 12.21    Independence of Covenants    91
Section 12.22    No Advisory or Fiduciary Relationship    91

iv
LEGAL02/32478098v8

ANNEXES:
1.1A    Commitments and Addresses
3.1    Existing Letters of Credit
7.3    No Violation
7.11    Taxes
7.13    Subsidiaries
7.15    Environmental Matters
7.20    Insurance
7.22    Material Contracts
8.10    Closing Date Collateral Pool
9.4(c)    Existing Indebtedness
9.5(d)    Existing Investments
9.8    Affiliate Transactions

EXHIBITS:
A    Form of Notice of Borrowing 
B-1    Form of Term Note 
B-2    Form of Revolving Note
C    Form of Assignment Agreement
D    Form of Letter of Credit Request
E    Form of Exemption Certificate 
F-1    Form of Opinion of Vorys, Sater, Seymour and Pease LLP, counsel to Holdings and its     Subsidiaries
F-2    Form of Opinion of W. Joseph Payne, Esq., General Counsel to Holdings, and its Subsidiaries 
F-3    Form of Opinion of Daugherty, Fowler, Peregrin, Haught & Jenson, P.C., special FAA counsel to Holdings and its Subsidiaries
F-4    Form of Opinion of Greenberg Traurig, P.A., special Florida counsel to the Borrower and certain of the Guarantors
F-5    Form of Opinion of Jones Vargas, special Nevada counsel to Air Transport International Limited Liability Company
G    Form of Closing Certificate
H    Form of Guarantee and Collateral Agreement
I    Form of Solvency Certificate 
J    Form of Compliance Certificate 

#PageNum#

CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of May 9, 2011, among CARGO AIRCRAFT MANAGEMENT, INC., a Florida corporation (“Borrower”), AIR TRANSPORT SERVICES GROUP, INC., a Delaware corporation (“Holdings”), the lending and other financial institutions listed from time to time on Annex 1.1A hereto (each a “Lender” and, collectively, the “Lenders”) and SUNTRUST BANK, as administrative agent (in such capacity, the “Administrative Agent”).  Unless otherwise defined herein, all capitalized terms used herein and defined in Section 1 are used herein as so defined.
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make available to the Borrower (i) a term loan in the initial aggregate principal amount of $150,000,000 and (ii) a revolving credit loan in the initial aggregate principal amount of $175,000,000, in each case to provide funding for the purposes set forth in Section 8.9;
NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1    DEFINITIONS AND RULES OF INTERPRETATION.
Section 1.1   Definitions.  As used herein, the following terms shall have the meanings herein specified unless the context otherwise requires.  
“Adjustment Date” shall be as defined in the Applicable Margin.
“Administrative Agent” shall have the meaning provided in the introductory paragraph of this Agreement and shall include any successor to the Administrative Agent appointed pursuant to Section 11.9.
“Affiliate” shall mean, as to any Person, (a) any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person or (b) any Person who is a director, officer, shareholder, member or partner (i) of such Person, (ii) of any Subsidiary of such Person or (iii) of any Person described in the preceding clause (a).  For purposes of this definition, “control” of a Person shall mean the power, directly or indirectly, either to (i) vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (ii) direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
“Agreement” shall mean this Credit Agreement.
“Aircraft” shall mean all aircraft of the Borrower and/or its Affiliates now or hereafter owned, leased or used in their business for the transportation of passengers and/or cargo and all related components, parts and property used in the operation of the aircraft which are attached to, connected with or located on such aircraft (including, without limitation, all Engines installed on an Aircraft, all galleys, seats, instruments, avionics, electronics, equipment, parts, attachments, APUs and accessories).

“Aircraft Appraisal” shall mean an appraisal of Holdings’ and its Subsidiaries fleet of Boeing 757 and 767 Aircraft, as well as any other type of Aircraft that the Borrower determines to include in the Collateral Pool, conducted by an independent, third party appraiser acceptable to the Administrative Agent and in form and substance reasonably satisfactory to the Administrative Agent.  Except as otherwise agreed between the Borrower and Administrative Agent from time to time, the form and substance of all Aircraft Appraisals shall be consistent with the Aircraft Appraisal prepared in anticipation of the Closing Date.
“Anticipated Reinvestment Amount” shall mean, with respect to any Reinvestment Election, the amount specified in the Reinvestment Notice delivered by the Borrower in connection therewith as the amount of the Net Cash Proceeds from the related Asset Sale or Recovery Event that the Borrower intends to use to purchase, construct, convert, improve or otherwise acquire Reinvestment Assets.
“Applicable Margin” shall mean, for each Type and Class of Loan, the rate per annum set forth under the relevant column heading and opposite the relevant category below:

	
					
	Level
	Total Leverage Ratio
	Applicable Margin for Eurodollar Rate Loans
	Applicable Margin for Base Rate Loans
	Commitment Fee for Revolver

	I
	Greater than or equal to 2.50x
	2.5%
	1.5%
	0.4%

	II
	Less than 2.50x but greater than or equal to 2.25x
	2.375%
	1.375%
	0.375%

	III
	Less than 2.25x but greater than or equal to 2.00x
	2.25%
	1.25%
	0.35%

	IV
	Less than 2.00x but greater than or equal to 1.75x
	2%
	1%
	0.3%

	V
	Less than 1.75x but greater than or equal to 1.50x
	1.875%
	0.875%
	0.275%

	VI
	Less than 1.50x but greater than or equal to 1.25x
	1.75%
	0.75%
	0.25%

	VII
	Less than 1.25x but greater than or equal to 1.00x
	1.625%
	0.625%
	0.225%

2

	
					
	Level
	Total Leverage Ratio
	Applicable Margin for Eurodollar Rate Loans
	Applicable Margin for Base Rate Loans
	Commitment Fee for Revolver

	VIII
	Less than 1.00x
	1.5%
	0.5%
	0.2%

For the purposes hereof, changes in the Applicable Margin resulting from changes in the Total Leverage Ratio shall become effective on the date (the “Adjustment Date”) that is three Business Days after the date on which financial statements are delivered to the Lenders pursuant to Section 8.1 and shall remain in effect until the next change to be effected pursuant to this paragraph; provided, that the foregoing is subject in all events to the last paragraph of Section 8.1 (c).  If any financial statements referred to above are not delivered within the time periods specified in , then, until the date that is three Business Days after the date on which such financial statements are delivered, the highest rate set forth in each column of the table above shall apply.  Each determination of the Total Leverage Ratio pursuant to the above table shall be made in a manner consistent with the determination thereof pursuant to Section 9.13.  Notwithstanding the foregoing, the Applicable Margin from the Closing Date until the third Business Day after the Borrower delivers the required financial statements under Section 8.1 for the Fiscal Quarter ending June 30, 2011 shall be at Level IV.
“Approved Fund” shall mean (a) a CLO and (b) with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.
“APU” shall mean any auxiliary power unit currently installed on any Aircraft, together with any and all parts incorporated in or installed on or attached to any such auxiliary power unit and any and all parts removed therefrom so long as title thereto shall remain vested in Holdings or its Subsidiaries after removal from any such auxiliary power unit.  
“Asset Sale” shall mean the sale, transfer or other disposition by any Credit Party of any asset or property constituting Collateral to any Person other than such Credit Party.
“Authorized Officer” shall mean, as applied to any Person, any individual holding the position of chairman of the board (if an officer), chief executive officer, president or one of its vice presidents (or the equivalent thereof), and such Person’s chief financial officer or treasurer.
“Aviation Authority” shall mean, with respect to any Aircraft or Engine, the FAA or (if the jurisdiction of registration of such Aircraft or Engine ceases to be the United States of America) the authority and/or Governmental Authority which, under the laws of the jurisdiction of registration, from time to time (i) has control or supervision of civil aviation, or (ii) has jurisdiction over registration, airworthiness or operation of such Aircraft or Engine.
“Bankruptcy Code” shall have the meaning provided in Section 10.5.
“Base Rate” shall mean, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1⁄2

3

of 1% per annum and (c) the Eurodollar Rate determined on a daily basis for an Interest Period of 1 month plus 1.00%.  For purposes hereof:  “Prime Rate” shall mean the rate of interest per annum publicly announced from time to time by the Administrative Agent as its prime rate in effect at its principal office in Atlanta, Georgia, and “Federal Funds Effective Rate” shall mean, for any day, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it.  If for any reason the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate, for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms hereof, the Base Rate shall be determined without regard to clause (b) of the first sentence of this definition, as appropriate, until the circumstances giving rise to such inability no longer exist.  Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.
“Base Rate Loans” shall mean Loans the rate of interest applicable to which is based upon the Base Rate.
“Borrower” shall have the meaning provided in the introductory paragraph of this Agreement.
“Borrowing” shall mean the incurrence of one Type of Loan pursuant to a single Facility by the Borrower from all of the Lenders having Commitments with respect to such Facility on a pro rata basis on a given date (or resulting from conversions on a given date), having in the case of Eurodollar Rate Loans the same Interest Period; provided that Base Rate Loans incurred pursuant to Section 2.10(b) shall be considered part of any related Borrowing of Eurodollar Rate Loans.
“Business Day” shall mean (i) for all purposes other than as covered by clause (ii) below, any day excluding Saturday, Sunday and any day which shall be in Atlanta, Georgia or the City of New York a legal holiday or a day on which banking institutions are authorized by law or other governmental actions to close and (ii) with respect to all notices and determinations in connection with, and payments of principal and interest on, Eurodollar Rate Loans, any day which is a Business Day described in clause (i) and which is also a day for trading by and between banks in Dollar deposits in the interbank Eurodollar market.
“CMI Service Agreement” shall mean the Air Transportation Services Agreement, effective as of March 31, 2010 between DHL Network Operations (USA), Inc. and ABX Air, Inc.
“Cape Town Convention” shall mean the Convention on International Interests in Mobile Equipment, and its Protocol on Matters Specific to Aircraft Equipment.
“Capital Expenditures” shall mean, for any period, expenditures (including the aggregate amount of Capitalized Lease Obligations required to be paid during such period) incurred by any Person to acquire or construct fixed assets, plant and equipment (including renewals, improvements, replacements, and Maintenance Capital Expenditures) during such period, which would be required to be capitalized on the balance sheet of such Person in accordance with GAAP;

4

 provided, however, that non-refundable deposits made in respect of any such expenditures shall in any event be deemed to be Capital Expenditures.
“Capital Lease” as applied to any Person shall mean any lease of (or arrangement conveying the right to use) any property (whether real, personal or mixed) by that Person as lessee which, in conformity with GAAP (subject to changes in GAAP as provided in Section 12.7), is classified and accounted for as a capital lease on the balance sheet of that Person.
“Capital Stock” of any Person shall mean any and all shares, interests, rights to purchase, warrants, options, participation or other equivalents of or interests in (however designated) equity of such Person, including any preferred stock, any limited or general partnership interest and any limited liability company membership interest.
“Capitalized Lease Obligations” shall mean all obligations under Capital Leases of Holdings and its Subsidiaries, in each case, taken at the amount thereof accounted for as liabilities in accordance with GAAP.
“Cash Collateralize” shall mean, in respect of any obligations, to provide and pledge (as a first priority perfected security interest) cash collateral for such obligations in Dollars (in amounts, unless otherwise specified herein, equal to 100% of such obligations), with a depository institution, and pursuant to documentation in form and substance, reasonably satisfactory to the Administrative Agent (and “Cash Collateralization” has a corresponding meaning).
“Cash Equivalents” shall mean (i) direct obligations of the United States or any agency thereof with the full faith and credit of the United States government, or obligations guaranteed by the United States government or any agency thereof with the full faith and credit of the United States government, and for Foreign Subsidiaries, direct obligations of the government of the country in which such Foreign Subsidiary is located or any agency thereof with the full faith and credit of the United States government, or obligations guaranteed by such foreign government or any agency thereof with the full faith and credit of the United States government, (ii) time deposits, including certificates of deposit, repurchase agreements, bankers acceptances and Eurodollar time deposits issued by any office of any bank or trust company, provided in each case that such investment matures within one year from the date of acquisition thereof, (iii) demand deposits made in the Ordinary Course of Business, (iv) commercial paper rated in either of the two highest grades by a nationally recognized credit rating agency, (v) money market funds whose investments consist substantially of the foregoing, and (vi) any security rated at least A3 by Moody’s or A- by Standard & Poor’s with a maximum maturity of 18 months and an average maturity for all such securities of not more than 12 months.
“Cash Proceeds” shall mean, with respect to any Asset Sale or any Recovery Event, the aggregate cash payments (including any cash received by way of deferred payment pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise issued in connection with such Asset Sale or Recovery Event, other than the portion of such deferred payment constituting interest, but only as and when so received) received by any Credit Party from such Asset Sale or Recovery Event.
“Certified Air Carrier” shall mean, as to any Person, an air carrier holding a certificate issued by the FAA pursuant to Section 44705 of Title 49 of the United States Code or any other Federal aviation laws.

5

“Change in Control” shall mean, at any time, (i) any Person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended (the “1934 Act”)) (a) shall have acquired, directly or indirectly, beneficial or record ownership (within the meaning of Rule 13d-3 under the 1934 Act) of 30% or more on a fully diluted basis of the total voting power represented by the Capital Stock of Holdings or (b) shall have obtained the power (whether or not exercised) to elect a majority of the members of the board of directors (or similar governing body) of Holdings (other than pursuant to proxies solicited by the board of directors of Holdings in connection with an election of directors); (ii) Holdings shall cease to beneficially own (as defined in Rule 13d-3 under the 1934 Act) 100% on a fully diluted basis of the Capital Stock of the Borrower; or (iii) the majority of the seats (other than vacant seats) on the board of directors of Holdings cease to be occupied by individuals who are Incumbent Directors (as defined below).  For purposes of this definition, an “Incumbent Director” is any individual who was a member of the board of directors of Holdings on the Closing Date; provided, however, that any individual who becomes a director of Holdings subsequent to the Closing Date whose election or nomination for election by the Company’s stockholders, is approved by a vote of at least a majority of the directors then comprising Incumbent Directors, shall be considered an Incumbent Director.
“Change in Law” the adoption or effectiveness of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by such Lender or its holding company with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency.
“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Swingline Loans or Term Loans and when used in reference to any Commitment, refers to whether such Commitment is a Revolving Commitment, a Swingline Commitment or a Term Loan Commitment.
“CLO” shall mean any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender.
“Closing Date” shall have the meaning provided in Section 12.10.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and the rulings issued thereunder.  Section references to the Code are to the Code, as in effect at the Closing Date and any subsequent provisions of the Code, amendatory thereof, supplemental thereto or substituted therefor.
“Collateral” shall mean the Aircraft of the Credit Parties included in the Collateral Pool, upon which a Lien is purported to be created by any Security Document.
“Collateral Pool” shall consist of each Qualified Aircraft admitted to the Collateral Pool pursuant to Section 8.10(a) or (b).  An Aircraft shall be excluded from the determinations of the Collateral Pool (a) at any time such Aircraft ceases to be a Qualified Aircraft or (b) the Administrative Agent shall cease to hold a valid, perfected and first priority Lien in such Aircraft.

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“Collateral to Loan Value Ratio” shall mean, at any time of determination, the ratio of (a) the aggregate appraised value of the Qualified Aircraft included in the Collateral Pool, as reasonably determined by the Administrative Agent by reference to the most recent Aircraft Appraisal delivered to the Administrative Agent to (b) the sum of (i) the Revolving Credit Commitments of all Lenders at the time of determination plus (ii) the outstanding principal amount of the Term Loans at the time of determination.
“Commitment” shall mean, with respect to each Lender, such Lender’s Term Commitment and Revolving Commitment.
“Commitment Fee for Revolver” shall have the meaning provided in Section 4.1(a).
“Commitment Fee Rate for Revolver” shall mean 0.30% per annum; provided that commencing with the date of delivery of financial statements pursuant to Section 8.1(b) for the Fiscal Quarter of Holdings ended June 30, 2011, the Commitment Fee Rate for Revolver shall be calculated in accordance with the Applicable Margin.
“Compliance Certificate” shall have the meaning provided in Section 8.1(c).
“Confidential Information Memorandum” shall mean the Confidential Information Memorandum dated April 14, 2011, with respect to the Facilities.
“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income of such Person for such period plus, without duplication and to the extent reflected as a deduction in the statement of such Consolidated Net Income for such period, the sum of (i) total income tax expense during such period, plus (ii) Consolidated Interest Expense during such period, plus (iii) depreciation and amortization expense, plus (iv) amortization of intangibles (including, but not limited to, goodwill), plus (v) any non-recurring expenses incurred in connection with the closing of this Agreement, plus (vi) any extraordinary expenses or losses, and (vii) minus any extraordinary income or gains (including, whether or not otherwise includable as a separate item in the statement of such Consolidated Net Income for such period, gains or losses on the sales of assets outside of the Ordinary Course of Business).  
“Consolidated Fixed Charges” shall mean, for any period, the sum, without duplication, of the amounts determined for Holdings and its Subsidiaries on a consolidated basis equal to (i) Consolidated Interest Expense to the extent paid in cash during such period, (ii) scheduled payments of principal on Consolidated Total Debt during such period (excluding the Refinancing and excluding any voluntary prepayment made pursuant to Section 5.1) and (iii) Dividends paid during such period.
“Consolidated Interest Expense” shall mean, for any period, total interest expense determined in accordance with GAAP (including that attributable to Capital Leases in accordance with GAAP) of Holdings and its Subsidiaries on a consolidated basis with respect to all outstanding Indebtedness of Holdings and its Subsidiaries, including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing.
“Consolidated Net Income” shall mean for any period, the net income (or loss) of Holdings and its Subsidiaries on a consolidated basis for such period taken as a single accounting 

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period determined in conformity with GAAP, provided that there shall be excluded (i) the income (or loss) of any Person in which any other Person has a joint interest, in each case except to the extent of the amount of dividends or other distributions actually received by Holdings or any of its Subsidiaries from such Person during such period, (ii) the income of any Subsidiary of Holdings (other than a Credit Party) to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary and (iii) the income statement effect of FASB 52 foreign currency gains and losses.  
“Consolidated Total Debt” shall mean, as at any date of determination, the aggregate amount of all Indebtedness of Holdings and its Subsidiaries determined on a consolidated basis in accordance with GAAP.
“Contingent Obligations” shall mean as to any Person (the “guaranteeing person”), any obligation of (a) the guaranteeing person or (b) another Person (including, without limitation, any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the “primary obligations”) of any other third Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the Ordinary Course of Business.  The amount of any Contingent Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Contingent Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Contingent Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith.
“Contractual Obligation” shall mean, as to any Person, any provision of any Capital Stock issued by such Person or of any agreement, lease, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“Credit Documents” shall mean this Agreement, the Notes and the Security Documents.
“Credit Event” shall mean and include the making of a Loan or the issuance of a Letter of Credit.

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“Credit Party” shall mean the Borrower, Holdings and each Subsidiary Guarantor.
“Default” shall mean any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default.
“Defaulting Lender” shall mean, at any time, a Lender as to which the Administrative Agent has notified the Borrower that (i) such Lender has failed for three or more Business Days to comply with its obligations under this Agreement to make a Revolving Loan, make a payment to the Issuing Bank in respect of a Letter of Credit (including failure to make a payment in respect of an LC Disbursement) and/or make a payment to the Swingline Lender in respect of a Swingline Loan (each a “funding obligation”) unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding or the making of such payment (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, (ii) such Lender has notified the Administrative Agent, or has stated publicly, that it will not comply with any such funding obligation hereunder or has defaulted on its funding obligations under any other loan agreement, credit agreement or similar or other financing agreement and such default is related to a Lender Insolvency Event with respect to such Lender, unless such Lender’s failure is based on such Lender’s reasonable and good faith determination that the conditions precedent to funding such obligation have not been satisfied and such Lender has notified the Administrative Agent in writing of the same, (iii) such Lender has, for three or more Business Days, failed to confirm in writing to the Administrative Agent, in response to a written request of the Administrative Agent, that it will comply with its funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (iii) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (iv) a Lender Insolvency Event has occurred and is continuing with respect to such Lender.  The Administrative Agent will promptly send to all parties hereto a copy of any notice to the Borrower provided for in this definition. 
“DHL Note” shall mean that certain Amended and Restated First Non-Negotiable Promissory Note, dated May 8, 2009, issued by ABX to DHL Network Operations (USA), Inc. in the original principal amount of $31,000,000.
“Dividends” shall have the meaning provided in Section 9.7.
“Dollars” and “$” shall mean dollars in lawful currency of the United States.
“Domestic Subsidiary” shall mean each Subsidiary of Holdings other than a Foreign Subsidiary.
“DOT” shall mean the United States Department of Transportation, and any successor or replacement Governmental Authority having the same or similar authority and responsibilities. 
“Engines” shall mean goods of Holdings or its Subsidiaries consisting of aircraft engines having 1750 pounds of thrust or 550 or more rated takeoff horsepower which are owned by Holdings or its Subsidiaries and used in connection with the operation of their Aircraft, whether now owned or hereafter acquired and wherever located, and all related components, parts and other property used in the operation of the aircraft engines which are incorporated into such aircraft engines. 

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“Environmental Claims” shall mean any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations or proceedings relating in any way to any Environmental Law or any permit issued, or any written approval given, under any such Environmental Law (hereafter, “Claims”), including, without limitation, (a) any and all Claims by Governmental Authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any Environmental Law, and (b) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief arising from alleged injury or threat of injury to health, safety or the environment, in each case in this clause (b) resulting from Hazardous Materials.
“Environmental Law” shall mean any applicable Federal, state, foreign or local statute, law, rule, regulation, ordinance, code and rule of common law in each case as amended, including any judicial or administrative order, consent decree or judgment, relating to the environment, or the use, generation, release or disposal of, or exposure to, Hazardous Materials, including, without limitation, the Comprehensive Environmental Response Compensation, and Liability Act, as amended, 42 U.S.C. §9601 et seq.; the Resource Conservation and Recovery Act, as amended, 42 U.S.C. §6901 et. seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. § 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 300f et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq. and any applicable state and local or foreign counterparts or equivalents.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, and the regulations promulgated and rulings issued thereunder.  Section references to ERISA are to ERISA, as in effect at the Closing Date and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.
“ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA) which together with a Credit Party or a Subsidiary of a Credit Party would be deemed to be a “single employer” within the meaning of Section 414 of the Code.
“ERISA Event” shall mean any of the following: (a) the occurrence of a Reportable Event; (b) the failure of any Credit Party or an ERISA Affiliate to make required contributions when due to a Multiemployer Plan or Plan or an application has been made, or is reasonably likely to be made, to the Secretary of the Treasury for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code with respect to a Plan; (c) a Plan which has an Unfunded Current Liability has been or is likely to be terminated; (d) that a Plan has an Unfunded Current Liability and there is a failure to make a required contribution, which gives rise to a lien under ERISA or the Code; (e) proceedings are reasonably likely to be or have been instituted to terminate a Plan which has an Unfunded Current Liability or to appoint a trustee to administer a Plan; (f) that a proceeding has been instituted pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan; (g) Holdings, any Subsidiary of Holdings or any ERISA Affiliate has incurred, or is reasonably likely to incur, any material liability (including any indirect, contingent or secondary liability) to or on account of the termination of or withdrawal from a Plan under Section 4062, 4063, 4064 or 4069 of ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409, 502(1) or 502(i) of ERISA, or to or on account of the withdrawal from a Multiemployer Plan pursuant to Section 4201, 4204 or 4212 of ERISA; (h) Holdings, any Subsidiary of Holdings, or any ERISA Affiliate receives any notice, or a Multiemployer Plan has received from Holdings, any 

10

Subsidiary of Holdings or any ERISA Affiliate any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA; or (i) a determination that a Plan is, or is reasonably expected to be, in “at-risk” status (within the meaning of Section 430 of the Code or Section 303 ERISA).  
“Eurocurrency Reserve Requirements” shall mean, for any day as applied to a Eurodollar Rate Loan, the aggregate (without duplication) of the rates (expressed as a decimal) of the maximum reserve requirements in effect on such day (including, without limitation, basic, supplemental, marginal and emergency reserves under any regulations of the Board or other Governmental Authority having jurisdiction with respect thereto) dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of such Board) maintained by a member bank of such System.
“Eurodollar Base Rate” shall mean, with respect to each day during each Interest Period pertaining to a Eurodollar Rate Loan, the rate per annum (rounded upward, if necessary, to the nearest 1/100 of 1%) determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on Reuters Screen LIBOR01 Page (or any successor page) as of 11:00 a.m., London, England time, two Business Days prior to the beginning of such Interest Period.  In the event that such rate does not appear on Reuters Screen LIBOR01 Page (or any successor page) (or otherwise on such screen), the “Eurodollar Base Rate” shall be determined by reference to such other comparable publicly available service for displaying eurodollar rates as may be selected by the Administrative Agent or, in the absence of such availability, by reference to the rate at which the Administrative Agent is offered Dollar deposits at or about 11:00 a.m., two Business Days prior to the beginning of such Interest Period in the interbank eurodollar market where the eurodollar and foreign currency and exchange operations in respect of its Eurodollar Rate Loans are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein and in an amount comparable to the amount of its Eurodollar Rate Loan to be outstanding during such Interest Period.
“Eurodollar Rate” shall mean, with respect to each day during each Interest Period, a rate per annum determined for such day in accordance with the following formula (rounded upward to the nearest 1/100th of 1%):
	
	
	Eurodollar Base Rate

	1.00 – Eurocurrency Reserve Requirements

“Eurodollar Rate Loan” shall mean a Loan based on the Eurodollar Rate.
“Event of Default” shall have the meaning provided in Section 10.
“Existing Credit Agreement” shall mean that certain Credit Agreement dated as of December 31, 2007 by and among ABX Air, Inc. and Cargo Holdings International, Inc., as the Borrowers, SunTrust Bank as administrative agent and the lenders from time to time party thereto. 
“Existing Indebtedness” shall have the meaning provided in Section 9.4(c).

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“FAA” shall mean the Federal Aviation Administration of the United States Department of Transportation, and any successor or replacement Governmental Authority having the same or similar authority and responsibilities.
“Facility” shall mean any of the credit facilities established under this Agreement, i.e., the Term Facility or the Revolving Facility.
“Fair Market Value” shall mean the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the chief financial officer or Board of Directors (or similar governing body) of the Person required to make such determination.
“FARs” shall mean the Federal Aviation Regulations and any Special Federal Aviation Regulations (Title 14 C.F.R. Part 1 et seq.), together with all successor regulations thereto.
“Fees” shall mean all amounts payable pursuant to, or referred to in, Section 4.1.
“Final Maturity Date” shall mean the collective reference to the Term Facility Final Maturity Date and the Revolving Facility Final Maturity Date.
“Fiscal Quarter” shall mean a fiscal quarter of any Fiscal Year.
“Fiscal Year” shall mean the fiscal year of Holdings and its Subsidiaries ending on December 31 of each calendar year.
“Fixed Charge Coverage Ratio” shall mean the ratio as of the last day of any Fiscal Quarter of (a) (i) Consolidated EBITDA of Holdings and its Subsidiaries for the Test Period of determination minus (ii) Maintenance Capital Expenditures of Holdings and its Subsidiaries made during such Test Period minus (iii) income taxes paid by Holdings and its Subsidiaries in cash during such period to (b) Consolidated Fixed Charges of Holdings and its Subsidiaries for such Test Period.
“Foreign Subsidiary” shall mean each Subsidiary of Holdings (other than the Borrower) incorporated or organized, and doing business, in a jurisdiction other than the United States, the District of Columbia or any state or territory thereof.
“Fronting Fee” shall have the meaning provided in Section 4.1(c).
“GAAP” shall mean generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the accounting profession), or in such other statements by such other entity as may be in general use by significant segments of the accounting profession, as in effect from time to time; it being understood and agreed that determinations in accordance with GAAP for purposes of Section 9, including defined terms as used therein, are subject (to the extent provided therein) to Section 12.7.
“Governmental Authority” shall mean any nation or government (whether foreign or domestic), any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

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“Guarantee and Collateral Agreement” shall have the meaning set forth in Section 6.1(g)(i).
“Guaranties” shall mean the guaranties provided by Holdings and the Subsidiary Guarantors pursuant to the Guarantee and Collateral Agreement, and “Guaranty” shall mean the guaranty provided by any one of the Guarantors pursuant to the Guarantee and Collateral Agreement.
“Guarantor” shall mean each of Holdings and the Subsidiary Guarantors.  
“Hazardous Materials” shall mean (a) any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, transformers or other equipment containing polychlorinated biphenyls, and radon gas and (b) any chemicals, materials or substances defined as or included in the definition of “hazardous substances,” “hazardous waste,” “hazardous materials,” “extremely hazardous waste,” “restricted hazardous waste,” “toxic substances,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of similar import, under any Environmental Law.
“Hedge Agreements” shall mean any commodity, interest rate or currency swap, cap, floor, collar, forward agreement or other exchange or protection agreements or any option with respect to any such transaction.
“Holdings” shall have the meaning provided in the introductory paragraph of this Agreement.
“ICA” shall have the meaning provided in Section 7.7.
“Incremental Commitments” shall have the meaning provided in Section 2.14(a).
“Incremental Commitments Effective Date” shall have the meaning provided in Section 2.14(d).
“Incremental Facility Amendment” shall have the meaning provided in Section 2.14(c).
“Incremental Lender” shall have the meaning provided in Section 2.14(c).
“Incremental Revolving Commitment” shall have the meaning provided in Section 2.14(a).
“Incremental Revolving Lender” shall have the meaning provided in Section 2.14(e).
“Incremental Term Commitment” shall have the meaning provided in Section 2.14(a).
“Incremental Term Loan Tranche” shall have the meaning provided in Section 2.14(b).
“Incremental Term Loans” shall have the meaning provided in Section 2.14(b).

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“Indebtedness” of any Person shall mean without duplication (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (other than trade payables incurred in the Ordinary Course of Business of such Person; provided, that trade payables overdue by more than 120 days shall be included in this definition) and all obligations of such Person under any conditional sale or other title retention agreement(s) relating to property acquired by such Person, (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all Capitalized Lease Obligations of such Person, (e) all obligations, contingent or otherwise, of such Person as an account party to reimburse any bank or other Person under acceptance, letter of credit or similar facilities, (f) all obligations of such Person to purchase, redeem, retire or otherwise acquire for value any Capital Stock of such Person other than such repurchases from present or former directors, officers or employees made pursuant to stock option agreements, (g) all Contingent Obligations of such Person, (h) off-balance sheet liability retained in connection with asset securitization programs, “synthetic leases” (meaning any lease of goods or other property, whether real or personal, which is treated as an operating lease under GAAP and as a loan or financing for U.S. income tax purposes), sale and leaseback transactions or other similar obligations arising with respect to any other transaction but which does not constitute a liability on the consolidated balance sheet of such Person and its Subsidiaries, (i) every obligation of any other third Person secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property or other assets (including, without limitation, accounts and contract rights) of such Person, even though such Person has not assumed or become liable for the payment or performance of such obligation and (j) all obligations of such Person in respect of Hedge Agreements (after giving effect to any applicable netting provisions under such Hedge Agreement); for the avoidance of doubt, clause (j) shall not include any underlying notional amounts.  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor.  
The “amount” or “principal amount” of any Indebtedness at any time of determination represented by (1) any obligation under clause (i) shall be the lesser of (i) the amount of the applicable obligation and (ii) the Fair Market Value of the property to which such obligation relates, (2) any Indebtedness, issued at a price that is less than the principal amount at maturity thereof, shall be the accreted value at such time of determination, (3) any Capitalized Lease Obligation shall be the amount that is required to be capitalized in accordance with GAAP, (4) any “synthetic lease” under clause (h) shall be the stipulated loss value, termination value or other equivalent amount, (5) any Hedge Agreement shall be the maximum amount of any termination or loss payment required to be paid by such Person if such agreement were, at the time of determination, to be terminated by reason of any event of default or early termination event thereunder, whether or not such event of default or early termination event has in fact occurred, and (6) any Contingent Obligation shall be an amount equal to the stated or determinable amount of the primary obligation in respect of which such guaranty or other contingent obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder). 
“Interest Period” with respect to any Loan shall mean the interest period applicable thereto, as determined pursuant to Section 2.9.

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“Investment” shall mean (i) any direct or indirect purchase or other acquisition of, or of a beneficial interest in, any Capital Stock of any other Person; (ii) any direct or indirect purchase or other acquisition (in one transaction or in a series of transactions) of all or substantially all the assets or property of another Person or assets consisting of a business unit, line of business or division of such Person; (iii) any direct or indirect loan, advance or capital contribution to any other Person, including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise from sales to that other Person in the Ordinary Course of Business; and (iv) any direct or indirect guaranty of Indebtedness of any other Person.  The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write‐ups, write‐downs or write‐offs with respect to such Investment.  
“Joint Lead Arrangers” shall mean each of SunTrust Robinson Humphrey, Inc., Regions Capital Markets, a division of Regions Bank and J.P. Morgan Securities LLC in their capacities as Joint Lead Arrangers and Joint Bookrunners.
“Leasehold” of any Person shall mean all of the right, title and interest of such Person as lessee or licensee in, to and under leases or licenses of ground or land.
“Lender” shall have the meaning provided in the introductory paragraph of this Agreement.
“Lender Affiliate” shall mean (a) any Affiliate of any Lender, (b) any Person that is administered or managed by any Lender or any Affiliate of any Lender and that is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business and (c) with respect to any Lender which is a fund that invests in commercial loans and similar extensions of credit, any other fund that invests in commercial loans and similar extensions of credit and is managed or advised by the same investment advisor as such Lender or by an Affiliate of such Lender or investment advisor.
“Lender Insolvency Event” shall mean that (i) a Lender or its Parent Company is insolvent, or is generally unable to pay its debts as they become due, or admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of its creditors, or (ii) a Lender or its Parent Company is the subject of a bankruptcy, insolvency, reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, custodian or the like has been appointed for such Lender or its Parent Company, or such Lender or its Parent Company has taken any action in furtherance of or indicating its consent to or acquiescence in any such proceeding or appointment, or (iii) a Lender or its Parent Company has been adjudicated as, or determined by any Governmental Authority having regulatory authority over such Person or its assets to be, insolvent; provided that, for the avoidance of doubt, a Lender Insolvency Event shall not be deemed to have occurred solely by virtue of the ownership or acquisition of any equity interest in or control of a Lender or its Parent Company by a Governmental Authority.
“Letter of Credit” shall have the meaning provided in Section 3.1.
“Letter of Credit Exposure” shall mean, with respect to any Lender, such Lender’s Revolving Percentage of all Letter of Credit Outstandings at such time.
“Letter of Credit Fee” shall have the meaning provided in Section 4.1(b).

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“Letter of Credit Issuer” shall mean and include SunTrust Bank.
“Letter of Credit Outstandings” shall mean, at any time, the sum of, without duplication, (i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all Letters of Credit.
“Letter of Credit Request” shall have the meaning provided in Section 3.2.
“Lien” shall mean any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement or any lease in the nature thereof).
“Loan” shall have the meaning provided in Section 2.1.
“Maintenance Capital Expenditures” shall mean, for any period, expenditures incurred by any Person to repair or maintain fixed assets, plant and equipment during such period, which would be required to be capitalized on the balance sheet of such Person in accordance with GAAP.
“Maintenance Requirements” shall mean, with respect to any Aircraft, Engine or APU, all compliance requirements set forth in or under (i) all mandatory service bulletins issued, supplied, or available by or through the manufacturer thereof, (ii) all applicable airworthiness directives issued by the Aviation Authority with respect thereto and (iii) the Aviation Authority approved maintenance program with respect thereto.
“Mandatory Borrowing” shall have the meaning provided in Section 2.1(c).
“Material Adverse Effect” shall mean a material adverse effect on and/or material adverse developments (including, without limitation, any adverse determination in any litigation, arbitration or governmental investigation or proceeding) with respect to (i) the business operations, properties, assets, condition (financial or otherwise) or prospects of Holdings and its Subsidiaries taken as a whole; (ii) a significant portion of the industry or business segment in which Holdings and/or its Subsidiaries operate or rely upon if such effect or development is reasonably likely to have a material adverse effect on Holdings and its Subsidiaries taken as a whole; (iii) the ability of any Credit Party to fully and timely perform its Obligations; (iv) the legality, validity, binding effect or enforceability against a Credit Party of a Credit Document to which it is a party; or (v) the rights, remedies and benefits available to, or conferred upon, the Administrative Agent, any Lender or any Secured Party under any Credit Document.
“Material Agreement Default” shall mean, any event or condition that, with the giving of notice, the lapse of time, the occurrence of any event or condition or the failure to meet any standard or condition, or any of the foregoing together, could be or become a default or event of default under any Material Contract (including, without limitation, the CMI Service Agreement).
“Material Contract” shall mean any contract or other arrangement to which Holdings or any of its Subsidiaries is a party (other than the Credit Documents) for which breach, nonperformance, cancellation or failure to renew would reasonably be expected to have a Material Adverse Effect.
“Maximum Rate” shall have the meaning provided in Section 12.20.

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“Minimum Borrowing Amount” shall mean (i) for Base Rate Loans, $100,000 or a whole multiple of $100,000 in excess thereof and (ii) for Eurodollar Rate Loans, $500,000 or a whole multiple of $100,000 in excess thereof.
“Moody’s” shall mean Moody’s Investors Service, Inc., and its successors.
“Multiemployer Plan” shall mean a multiemployer plan as defined in Section 3(37) of ERISA or Section 4001(a)(3) of ERISA.
“Negative Pledge” means, with respect to a given asset, any provision of a document, instrument or agreement (other than any Credit Document) which prohibits or purports to prohibit the creation or assumption of any Lien on such asset as security for Indebtedness of the Person owning or having an ownership interest in, such asset.
“Net Cash Proceeds” shall mean, with respect to any Asset Sale or Recovery Event, the Cash Proceeds resulting therefrom net of expenses of sale or recovery (including, without limitation, reasonable and documented attorneys’, accountants’, other advisors’ and banking and investment banking fees, and all taxes paid or reasonably estimated to be payable, as a consequence of such Asset Sale or Recovery Event and the payment of principal and interest of Indebtedness secured by the asset which is the subject of the Asset Sale or Recovery Event and required to be, and which is, repaid under the terms thereof as a result of such Asset Sale or Recovery Event (other than any Lien in favor of the Administrative Agent for the benefit of the Lenders)).
“Non-Consenting Lender” shall mean any Lender which has not consented to any proposed amendment, modification, waiver or termination of the Credit Documents pursuant to Section 12.12 requiring the consent of all affected Lenders in respect of which the consent of the Required Lenders is obtained.
“Non-Defaulting Lender” shall mean each Lender other than a Defaulting Lender.
“Notes” shall be a collective reference to any promissory notes evidencing the Loans.
“Notice of Borrowing” shall have the meaning provided in Section 2.3.
“Notice of Conversion/Continuation” shall have the meaning provided in Section 2.6.
“Notice Office” shall mean the office of the Administrative Agent at 303 Peachtree Street, 25th Floor, Atlanta, Georgia 30308, Attn: Agency Services or such other office as the Administrative Agent may designate to the Borrower from time to time.
“Obligations” shall mean the unpaid principal of and interest on (including interest accruing after the maturity of the Loans and Reimbursement Obligations and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans and all other obligations and liabilities of the Borrower to the Administrative Agent or to any Lender (or, in the case of Specified Hedge Agreements, any Lender Affiliate), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under or pursuant to this Agreement, any other Credit Document, the Letters of Credit or any Specified Hedge Agreement whether on account of principal, interest, Reimbursement Obligations, fees, indemnities, costs, 

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expenses (including all fees, charges and disbursements of counsel to the Administrative Agent or to any Lender that are required to be paid by the Borrower pursuant hereto) or otherwise.
“OFAC” shall mean U.S. Department of the Treasury’s Office of Foreign Assets Control and any successor Governmental Authority.
“Operational Control” shall mean the exercise of authority over initiating, conducting or terminating a particular flight of an Aircraft.
“Ordinary Course of Business” shall mean, with respect to any Person, the ordinary course of business consistent with past practices of such Person.
“Parent Company” shall mean, with respect to a Lender, the bank holding company (as defined in Federal Reserve Board Regulation Y), if any, of such Lender, and/or any Person owning, beneficially or of record, directly or indirectly, a majority of the shares of such Lender.
“Participant” shall have the meaning provided in Section 3.4(a).
“Payment Office” shall mean the office of the Administrative Agent at SunTrust Bank, 303 Peachtree Street, N.E., Atlanta, Georgia 30308, or such other office as the Administrative Agent may designate to the Borrower from time to time.
“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.
“Permitted Liens” shall mean all Liens permitted pursuant to Section 9.3.
“Person” shall mean any individual, partnership, joint venture, firm, corporation, association, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof.
“Plan” shall mean any single-employer plan as defined in Section 4001 of ERISA, which is maintained or contributed to by (or to which there is an obligation to contribute of) a Credit Party, a Subsidiary of a Credit Party or an ERISA Affiliate, and each such plan for the five year period immediately following the latest date on which a Credit Party, a Subsidiary of a Credit Party or an ERISA Affiliate maintained, contributed to or had an obligation to contribute to such plan.
“Qualified Aircraft” means an Aircraft which satisfies all of the following requirements: (a) such Aircraft is 100% owned by the Borrower and/or a Guarantor; (b) such Aircraft is in compliance with all applicable Requirements of Law; (c) such Aircraft is duly registered with the FAA or applicable Aviation Authority; (d) the Borrower or the applicable Guarantor has obtained all licenses, permits, authorizations, approvals and authority from the FAA, the DOT, the TSA and each other applicable Governmental Authority necessary to conduct its business as presently conducted, including, without limitation, a certificate of airworthiness issued by the FAA or other Aviation Authority covering such Aircraft; (e) the Borrower or the applicable Guarantor operates and maintains, or causes to be operated and maintained, such Aircraft, in all material respects, in a safe, skilled and competent manner and in accordance with all applicable Requirements of Law, including, without limitation, noise, environmental and emission standards and requirements, and including those of the FAA, the DOT, the TSA and the airports served, and, except for Aircraft and flights that are the subject of a dry lease or interchange arrangement, has Operational Control of such Aircraft 

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and provides qualified flight crews for each flight made by such Aircraft in accordance with all applicable Requirements of Law; and (f) such Aircraft is not subject to (i) any Lien (other than a Lien in favor of the Administrative Agent for the benefit of the Secured Parties) or (ii) a Negative Pledge.
“Qualified Aircraft to Loan Value Ratio” shall mean, at any time of determination, the ratio of (a) the aggregate appraised value of all Qualified Aircraft (without regard to whether such Qualified Aircraft are included in the Collateral Pool), as reasonably determined by the Administrative Agent by reference to the most recent Aircraft Appraisal delivered to the Administrative Agent to (b) the sum of (i) the Revolving Commitments of all Lenders at the time of determination plus (ii) the outstanding principal amount of the Term Loans at the time of determination.
“Real Property” of any Person shall mean all of the right, title and interest of such Person in and to land, improvements and fixtures, including Leaseholds.
“Records” shall mean any and all logs, manuals, certificates and data and inspection, modification, maintenance, engineering, technical, and overhaul records (whether in written or electronic form) with respect to any Aircraft required to be maintained by the Aviation Authority.
“Recovery Event” shall mean any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any asset of Holdings and/or any of its Subsidiaries constituting Collateral.
“Refinancing” shall mean the payment in full of all obligations, and termination of all commitments, under the Existing Credit Agreement.
“Register” shall have the meaning set forth in Section 12.4(c).
“Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.
“Reimbursement Obligation” shall mean the obligation of the Borrower to reimburse the Issuing Lender pursuant to  for amounts drawn under Letters of Credit.
“Reinvestment Assets” shall mean any replacement assets of a like kind to those assets subject to the Asset Sale or Recovery Event giving rise to a Reinvestment Election; provided, however, that (i) such replacement assets shall be employed in the business of, and be owned by, Holdings and/or its Subsidiaries and (ii) such replacement assets shall not be subject to any Liens. 
“Reinvestment Election” shall have the meaning provided in Section 5.2(a)(iii).
“Reinvestment Notice” shall mean a written notice signed by an Authorized Officer of the Borrower stating that the Borrower, in good faith, intends and expects to use all or a specified portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to purchase, construct or otherwise acquire Reinvestment Assets as provided in Section 5.2(a)(iii).
“Reinvestment Prepayment Amount” shall mean, with respect to any Reinvestment Election, the amount, if any, on the Reinvestment Prepayment Date relating thereto by which (a) the Anticipated Reinvestment Amount in respect of such Reinvestment Election exceeds (b) the 

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aggregate amount thereof expended by the Borrower and its Subsidiaries to acquire Reinvestment Assets as provided in Section 5.2(a)(iii).
“Reinvestment Prepayment Date” shall mean, with respect to any Reinvestment Election, the earliest of (i) the date on which a Default or Event of Default occurs following any such Reinvestment Election, (ii) the date occurring 180 days after such Reinvestment Election if the related reinvestment in Reinvestment Assets has not been completed by such date and (iii) the date on which the Borrower shall have determined not to, or shall have otherwise ceased to, proceed with the purchase, construction or other acquisition of Reinvestment Assets with the related Anticipated Reinvestment Amount.
“Reinvestment Test” shall be satisfied if no Default or Event of Default then exists.
“Relief Fund” shall mean ABX Air Employee Catastrophic Relief Fund, an Ohio non-profit corporation. 
“Replaced Lender” shall have the meaning provided in Section 2.13.
“Replacement Lender” shall have the meaning provided in Section 2.13.
“Reportable Event” shall mean an event described in Section 4043(c) of ERISA with respect to a Plan as to which the 30-day notice requirement has not been waived by the PBGC.
“Required Lenders” shall mean Non-Defaulting Lenders whose outstanding Term Loans and Revolving Commitments (or, if after the Total Revolving Commitment has been terminated, Total Revolving Extensions of Credit) constitute at least a majority of the sum of (i) the total outstanding Term Loans of Non-Defaulting Lenders and (ii) the Total Revolving Commitment less the aggregate Revolving Commitments of Defaulting Lenders (or, if after the Total Revolving Commitment has been terminated, the Total Revolving Extensions of Credit of Non-Defaulting Lenders).
“Requirement of Law” shall mean, as to any Person or Aircraft, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject, including, with respect to any Aircraft, the airworthiness certificate issued with respect to such Aircraft, the Cape Town Convention, all FARs and special FARs, or the equivalent issued by an applicable Aviation Authority other than the FAA, and airworthiness directives applicable to such Aircraft.
“Revolving Commitment” shall mean, with respect to each Lender, (x) the amount set forth opposite such Lender’s name in Annex 1.1A hereto directly below the column entitled “Revolving Commitment”, as the same may be reduced from time to time pursuant to Section 4.2, Section 4.3 and/or Section 10 or (y) adjusted from time to time as a result of assignments to or from such Lender pursuant to Section 12.4.
“Revolving Commitment Increase” has the meaning given such term in Section 2.14.

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“Revolving Extensions of Credit” shall mean as to any Revolving Lender at any time, an amount equal to the sum of (a) the aggregate principal amount of all Revolving Loans held by such Lender then outstanding, (b) such Lender’s Revolving Percentage of the Letter of Credit Outstandings then outstanding and (c) such Lender’s Revolving Percentage of the aggregate principal amount of Swingline Loans then outstanding.
“Revolving Facility” shall mean the Facility evidenced by the Total Revolving Commitment.
“Revolving Facility Final Maturity Date” shall mean the date which is the fifth (5th) anniversary of the Closing Date or, if earlier, the date on which the Revolving Commitments are terminated pursuant to Section 10 hereof.
“Revolving Lender” shall mean each Lender that has a Revolving Commitment or that holds Revolving Loans.
“Revolving Loan” shall have the meaning provided in Section 2.1(b).
“Revolving Percentage” shall mean at any time for each Lender with a Revolving Commitment, the percentage obtained by dividing such Lender’s Revolving Commitment by the Total Revolving Commitment or, at any time after the Revolving Commitments shall have expired or terminated, the percentage which the aggregate amount of such Lender’s Revolving Extensions of Credit then outstanding constitutes of the aggregate amount of the Total Revolving Extensions of Credit then outstanding.
“Sanctioned Entity” shall mean (a) an agency of the government of, (b) an organization directly or indirectly controlled by, or (c) a Person resident in, in each case, a country that is subject to a sanctions program identified on the list maintained by the OFAC and published from time to time, as such program may be applicable to such agency, organization or Person.
“Sanctioned Person” shall mean a Person named on the list of Specially Designated Nationals or Blocked Persons maintained by the OFAC as published from time to time.
“SEC” shall have the meaning provided in Section 8.1(j).
“Secured Parties” shall have the meaning provided in the Security Documents.
“Security Documents” shall mean the Guarantee and Collateral Agreement and all other security documents hereafter delivered to the Administrative Agent granting a Lien on any property of any Person to secure the obligations and liabilities of any Credit Party under any Credit Document.  
“Specified Hedge Agreement” shall mean any Hedge Agreement entered into by any Credit Party and any Lender or Lender Affiliate.
“Standard & Poor’s” shall mean Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc., and its successors.
“Stated Amount” of each Letter of Credit shall mean the maximum available to be drawn thereunder (regardless of whether any conditions for drawing could then be met).

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“Subsidiary” of any Person shall mean and include (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries and (ii) any partnership, association, joint venture or other entity in which such Person directly or indirectly through Subsidiaries, has more than a 50% equity interest at the time.  Unless otherwise expressly provided, all references herein to “Subsidiary” shall mean a Subsidiary of Holdings.
“Subsidiary Guarantor” shall mean any Domestic Subsidiary of Holdings (other than the Borrower) which is a party to the Guarantee and Collateral Agreement; provided that the Relief Fund shall not be a Subsidiary Guarantor.
“Swingline Commitment” shall mean $5,000,000.
“Swingline Expiry Date” shall mean the date which is one Business Day prior to the Revolving Facility Final Maturity Date.
“Swingline Exposure” shall mean, with respect to each Lender, the principal amount of the Swingline Loans in which such Lender is legally obligated either to make a Mandatory Borrowing or to purchase a participation in accordance with Section 2.1(c), which shall equal such Lender’s Revolving Percentage of all outstanding Swingline Loans. 
“Swingline Facility” shall mean the Facility evidenced by the Swingline Commitment.
“Swingline Lender” shall mean SunTrust Bank. 
“Swingline Loan” shall have the meaning provided in Section 2.1(c).
“Taxes” mean present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein and all interest, penalties or similar liabilities with respect thereto, provided, however, that Taxes shall exclude (i)  any tax imposed on or measured by the net income (or any franchise tax based on such net income) of such recipient pursuant to the laws of the United States or of the jurisdiction (or any political subdivision or taxing authority thereof or therein) under which such recipient is organized or in which the principal office or applicable lending office of such recipient is located and (ii) any amounts due by reason of the failure of a Lender to comply with its obligations under sections 1271-1474 of the Code.
“Term Commitment” shall mean, with respect to each Lender, the amount set forth opposite such Lender’s name in Annex 1.1A hereto directly below the column entitled “Term Loan Commitment”, pursuant to which such Lenders made Term Loans on the Closing Date.
“Term Facility” shall mean the Facility evidenced by the Term Commitments.
“Term Facility Final Maturity Date” shall mean the date which is the fifth (5th) anniversary of the Closing Date or, if earlier, the date on which the Term Loans are declared immediately due and payable pursuant to  Section 10 hereof.

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“Term Loan” shall have the meaning provided in Section 2.1(a).
“Term Loan Scheduled Repayment” shall have the meaning provided in Section 5.2(a)(ii).
“Test Period” shall mean, at any time of determination, the four consecutive Fiscal Quarters of Holdings (taken as one accounting period) then last ended.
“Total Commitment” shall mean the sum of the Total Term Commitment and the Total Revolving Commitment.
“Total Leverage Ratio” shall mean at any date the ratio of Consolidated Total Debt of Holdings and its Subsidiaries at such date to Consolidated EBITDA of Holdings and its Subsidiaries for the Test Period ending on or immediately preceding such date.
“Total Revolving Commitment” shall mean the sum of the Revolving Commitments of each of the Lenders.  
“Total Revolving Commitment Excess Amount” shall have the meaning provided in Section 5.2(a)(i).
“Total Revolving Extensions of Credit” shall mean at any time, the aggregate amount of the Revolving Extensions of Credit of the Revolving Lenders outstanding at such time.
“Total Term Commitment” shall mean the sum of the Term Loan Commitments.  
“Total Unutilized Revolving Commitment” shall mean, at any time, (i) the Total Revolving Commitment at such time less (ii) the sum of the aggregate principal amount of all Revolving Loans at such time plus the Letter of Credit Outstandings at such time.
“TSA” shall mean the United States Transportation Security Administration, and any successor or replacement Governmental Authority having the same or similar authority and responsibilities.
“Type” shall mean any type of Loan determined with respect to the interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar Rate Loan.
“UCC” shall mean the Uniform Commercial Code.
“Unfunded Current Liability” of any Plan shall mean the amount, if any, by which the projected benefit obligation under the Plan as of the close of its most recent plan year exceeds the Fair Market Value of the assets allocable thereto, each determined in accordance with Statement of Financial Accounting Standards No. 87, based upon the actuarial assumptions used by the Plan’s actuary in the most recent annual valuation of the Plan.
“Unpaid Drawing” shall have the meaning provided in Section 3.3(a).
“Unutilized Commitment” for any Lender at any time shall mean the excess of (i) the Revolving Commitment of such Lender over (ii) the sum of (x) the aggregate outstanding principal amount of Revolving Loans made by such Lender plus (y) an amount equal to such Lender’s

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Revolving Percentage, if any, of the Letter of Credit Outstandings at such time; provided that solely for purposes of calculating the Commitment Fee pursuant to Section 4.1(a), Swingline Loans shall be deemed not to be outstanding.  
“Withdrawal Liability” shall mean a liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle B of Title IV of ERISA.
“Written” or “in writing” shall mean any form of written communication or a communication by facsimile transmission or electronic mail.
Section 1.2    Rules of Interpretation.  Any definition of or reference to any document, instrument or agreement (including this Agreement) shall include such document, instrument or agreement as amended, restated, modified or supplemented from time to time in accordance with its terms and the terms of this Agreement.
(a)The singular includes the plural and the plural includes the singular.
(b)A reference to any law includes any amendment or modification to such law.
(c)A reference to any Person includes its permitted successors and permitted assigns.
(d)Accounting terms not otherwise defined herein have the meanings assigned to them by GAAP applied on a consistent basis by the accounting entity to which they refer.
(e)The words “include”, “includes” and “including” are not limiting.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Reference to a particular “Section”, “Exhibit” or “Schedule” refers to that section, exhibit or schedule of this Agreement unless otherwise indicated. The words “herein”, “hereof”, “hereunder” and words of like import shall refer to this Agreement as a whole and not to any particular section or subdivision of this Agreement.  Unless otherwise expressly indicated, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each mean “to but excluding,” and the word “through” means “to and including.”
(f)All terms not specifically defined herein or by GAAP, which terms are defined in the Uniform Commercial Code, have the meanings assigned to them in the Uniform Commercial Code of the relevant jurisdiction, with the term “instrument” being that defined under Article 9 of the Uniform Commercial Code of such jurisdiction.
(g)This Agreement and the other Credit Documents may use several different limitations, tests or measurements to regulate the same or similar matters.  All such limitations, tests and measurements are, however, cumulative and are to be performed in accordance with the terms thereof.
(h)To the extent that any of the representations and warranties contained in  under this Agreement or in any of the other Credit Documents is qualified by “Material Adverse Effect”, the qualifier “in all material respects” contained in Section 6.2 and the qualifier “in any material respect” contained in Section 10.2 shall not apply.

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(i)Whenever the phrase “to the knowledge of” or words of similar import relating to the knowledge of a Person are used herein, such phrase shall mean and refer to (x) the actual knowledge of the Authorized Officers of such Person, or (y) the knowledge that such officers would have obtained if they had engaged in good faith in the diligent performance of their duties, including the making of such reasonable specific inquiries as may be necessary in the reasonable credit judgment of such officers to ascertain the accuracy of the matter to which such phrase relates.
(j)This Agreement and the other Credit Documents are the result of negotiation among, and have been reviewed by counsel to, among others, the Administrative Agent and the Credit Parties, and are the product of discussions and negotiations among all parties.  Accordingly, this Agreement and the other Credit Documents are not intended to be construed against the Administrative Agent or any of the Lenders merely on account of the Administrative Agent's or any Lender's involvement in the preparation of such documents.
(k)Unless otherwise indicated, all references to a specific time shall be construed to Eastern Standard Time or Eastern Daylight Savings Time, as the case may be.  Unless otherwise expressly provided herein, all references to dollar amounts shall mean Dollars.
(l)References in this Agreement to any document, instrument or agreement (a) shall include all exhibits, schedules and other attachments thereto, (b) shall include all documents, instruments or agreements issued or executed in replacement thereof, to the extent permitted hereby and (c) shall mean such document, instrument or agreement, or replacement or predecessor thereto, as amended, supplemented, restated or otherwise modified as of the date of this Agreement and from time to time thereafter to the extent not prohibited hereby and in effect at any given time.
SECTION 2   AMOUNT AND TERMS OF CREDIT.
Section 2.1    Commitment.  Subject to and upon the terms and conditions herein set forth, each Lender severally agrees to make a loan or loans (each a “Loan” and, collectively, the “Loans”) to the Borrower, which Loans shall be drawn, to the extent such Lender has a Commitment under such Facility, under the Term Facility, the Revolving Facility, the Swingline Facility and the Incremental Facility, as set forth below:
(a)Loans under the Term Facility (each a “Term Loan” and, collectively, the “Term Loans”) (i) shall be made pursuant to a single borrowing on the Closing Date and (ii) shall not exceed in aggregate principal amount for any Lender at the time of incurrence thereof the Term Commitment, if any, of such Lender.  Once repaid, Term Loans borrowed on the Closing Date may not be reborrowed.
(b)Loans under the Revolving Facility (each a “Revolving Loan” and, collectively, the “Revolving Loans”) (i) shall be made at any time and from time to time on or after the Closing Date and prior to the Revolving Facility Final Maturity Date, (ii) except as hereinafter provided, may, at the option of the Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans or Eurodollar Rate Loans, provided that all Revolving Loans made as part of the same Borrowing shall, unless otherwise specifically provided herein, consist of Revolving Loans of the same Type, (iii) may be repaid and reborrowed in accordance with the provisions hereof, (iv) shall not exceed for any Lender at any time outstanding that aggregate principal amount which, when added to the product of (x) such Lender’s Revolving Percentage and (y) the sum of (I) the aggregate amount of Letter of Credit Outstandings at such time and (II) the aggregate principal

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amount of all Swingline Loans then outstanding, equals the Revolving Commitment of such Lender at such time and (v) shall not exceed in aggregate principal amount at any time outstanding, when added to the sum of (x) the aggregate amount of Letters of Credit Outstandings at such time and (y) the aggregate principal amount of all Swingline Loans then outstanding, the Total Revolving Commitment.  The Borrower shall repay all outstanding Revolving Loans on the Revolving Facility Final Maturity Date.  
(c)Subject to and upon the terms and conditions herein set forth, the Swingline Lender, in its individual capacity, agrees, at any time and from time to time after the Closing Date and prior to the Swingline Expiry Date, to make a loan or loans (each a “Swingline Loan” and, collectively, the “Swingline Loans”) to the Borrower, which Swingline Loans (i) shall be made and maintained as Base Rate Loans, (ii) shall not exceed at any time outstanding the Swingline Commitment, (iii) shall not exceed in aggregate principal amount at any time outstanding, when combined with (x) the aggregate principal amount of all Revolving Loans then outstanding and (y) all Letter of Credit Outstandings at such time, the Total Revolving Commitment then in effect, and (iv) may be repaid and reborrowed in accordance with the provisions hereof.  The Borrower shall repay in full each Swingline Loan on the earlier to occur of (1) the date five (5) Business Days after such Swingline Loan is made and (2) the Swingline Expiry Date; provided, that the Borrower shall not request, and the Swingline Lender shall not make, any Swingline Loan to refinance another outstanding Swingline Loan.  The Swingline Lender shall not make any Swingline Loan after receiving a written notice from the Borrower or any Lender stating that a Default or an Event of Default exists and is continuing until such time as the Swingline Lender shall have received written notice of (i) rescission of all such notices from the party or parties originally delivering such notice (which notice of rescission such Person or Persons shall give to the Swingline Lender promptly upon the discontinuance of such Default or Event of Default) or (ii) the waiver of such Default or Event of Default in accordance with this Agreement.  Also, the Swingline Lender shall not have any obligation to make any Swingline Loan in the event there is a Defaulting Lender (unless the Swingline Exposure of such Defaulting Lender has been reallocated or cash collateralized in accordance with Section 2.15).  On any Business Day, the Swingline Lender may in its sole discretion, give notice to the Lenders that all then outstanding Swingline Loans shall be funded with a Borrowing of Revolving Loans (provided that such notice shall be deemed to have been automatically given upon the occurrence of an Event of Default), in which case a Borrowing of Revolving Loans constituting Base Rate Loans (each such Borrowing, a “Mandatory Borrowing”) shall be made on the immediately succeeding Business Day by all Lenders with a Revolving Commitment pro rata based on such Lender’s Revolving Percentages and the proceeds thereof shall be applied directly to the Swingline Lender to repay such outstanding Swingline Loans.  Each Lender with a Revolving Loan Commitment hereby irrevocably agrees to make such Revolving Loans upon one Business Day’s notice pursuant to each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the date specified to it in writing by the Swingline Lender notwithstanding (i) that the amount of the Mandatory Borrowing may not comply with the minimum amount for a Borrowing specified in Section 2.2, (ii) whether any conditions specified in Section 6.2 are then satisfied, (iii) the date of such Mandatory Borrowing and (iv) any reduction in the Total Revolving Commitment after such Swingline Loans were made.  In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code in respect of the Borrower), each Lender with a Revolving Commitment hereby agrees that it shall forthwith purchase from the Swingline Lender (without recourse or warranty), by assignment, such outstanding Swingline Loans as shall be necessary to cause such Lenders to share in such 

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Swingline Loans ratably based upon their respective Revolving Percentages, provided that all interest payable on such Swingline Loans shall be for the account of the Swingline Lender until the date the respective purchase is made and, to the extent attributable to such purchase, shall be payable to such Lender purchasing same from and after such date of purchase.  Each Lender’s obligations pursuant to the preceding sentence shall be absolute and unconditional.  
(d)In addition to the foregoing, Incremental Revolving Commitments and/or Incremental Term Loans may be provided under this Agreement as described in Section 2.14.
(e)Notwithstanding any contrary provision of this Agreement, the Borrower and the Swingline Lender may enter into a separate agreement providing for the operation of the Swingline Facility, including without limitation, the integration of the Swingline Facility into the Borrower’s operating accounts.  The terms of any such separate agreement shall control over any contrary provision of this Agreement, provided that such separate agreement may not alter (i) the rates of interest applicable to Swingline Loans, (ii) the amount of the Swingline Commitment, (iii) the amount of the Revolving Commitment, (iv) the Swingline Expiry Date or the date on which any Swingline Loan is required to be paid, or (v) increase or otherwise change the Lenders’ respective obligations to fund Mandatory Borrowings or purchase Swingline Loans as set forth herein.
Section 2.2    Minimum Borrowing Amounts, etc.  The aggregate principal amount of each Borrowing under a Facility shall be the Minimum Borrowing Amount for such Facility (except that Mandatory Borrowings shall be made in the amounts required by Section 2.1(c)).  More than one Borrowing may be incurred on any day, provided that at no time shall there be outstanding more than an aggregate of ten (10) Borrowings of Eurodollar Rate Loans.
Section 2.3   Notice of Borrowing   (a)  Whenever the Borrower desires to incur Loans under any Facility (other than the Swingline Facility and any Mandatory Borrowings), it shall give the Administrative Agent at its Notice Office, prior to 11:00 a.m., at least three Business Days’ prior written notice of each Borrowing of Eurodollar Rate Loans and at least one Business Day’s prior written notice of each Borrowing of Base Rate Loans to be made hereunder.  Each such notice (each a “Notice of Borrowing”) shall be in the form of Exhibit A, shall be irrevocable once given, and shall specify (i) the Facility pursuant to which such Borrowing is being made, (ii) the aggregate principal amount of the Loans to be made pursuant to such Borrowing, (iii) the date of Borrowing (which shall be a Business Day) and (iv) whether the respective Borrowing shall consist of Base Rate Loans or Eurodollar Rate Loans, and in the case of Eurodollar Rate Loans, the Interest Period to be initially applicable thereto.  The Administrative Agent shall promptly give each applicable Lender written notice (or telephonic notice promptly confirmed in writing) of each proposed Borrowing, of such Lender’s proportionate share thereof and of the other matters covered by the Notice of Borrowing.
(b)Whenever the Borrower desires to incur Swingline Loans hereunder, it shall give the Swingline Lender no later than 11:00 a.m. on the day such Swingline Loan is to be made, written notice (or telephonic notice promptly confirmed in writing) of such incurrence.  Each such notice shall specify in each case (i) the date of Borrowing (which shall be a Business Day) and (ii) the aggregate principal amount of the Swingline Loans to be made pursuant to such Borrowing.  Without in any way limiting the obligation of the Borrower to confirm in writing any telephonic notice permitted to be given hereunder with respect to Swingline Loans, the Administrative Agent may act prior to receipt of written confirmation without liability upon the basis of such telephonic notice believed by the Administrative Agent in good faith to be from an Authorized Officer of the Borrower as a person entitled to give telephonic notices under this Agreement on behalf of the 

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Borrower.  In each such case, the Administrative Agent’s record of the terms of such telephonic notice shall be conclusive absent manifest error.
(c)Mandatory Borrowings shall be made upon the notice specified in Section 2.1(c), with the Borrower irrevocably agreeing, by its incurrence of any Swingline Loans, to the making of Mandatory Borrowings as set forth in such Section.
Section 2.4   Disbursement of Funds.   (a)    No later than 11:00 a.m. on the date specified in each Notice of Borrowing, each Lender with a Commitment under the respective Facility will make available its pro rata share of each Borrowing requested to be made on such date in the manner provided below.  All amounts shall be made available to the Administrative Agent in Dollars and immediately available funds at the Payment Office, and the Administrative Agent promptly will make available to the Borrower by depositing to its account at the Payment Office the aggregate of the amounts so made available in the type of funds received.  Unless the Administrative Agent shall have been notified by any Lender prior to the date of Borrowing that such Lender does not intend to make available to the Administrative Agent its portion of the Borrowing or Borrowings to be made on such date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date of Borrowing, and the Administrative Agent, in reliance upon such assumption, may (in its sole discretion and without any obligation to do so) make available to the Borrower a corresponding amount.  If such corresponding amount is not in fact made available to the Administrative Agent by such Lender and the Administrative Agent has made available same to the Borrower, the Administrative Agent shall be entitled to recover such corresponding amount from such Lender.  If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower, and the Borrower shall immediately pay such corresponding amount to the Administrative Agent.  The Administrative Agent shall also be entitled to recover from such Lender or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to the Borrower to the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (x) if paid by such Lender, the overnight Federal Funds Effective Rate or (y) if paid by the Borrower, the then applicable rate of interest, calculated in accordance with Section 2.8, for the respective Loans.
(b)Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its commitments hereunder or to prejudice any rights which the Borrower may have against any Lender as a result of any default by such Lender hereunder.
Section 2.5   Evidence of Indebtedness.  (a)  Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Borrower to such Lender resulting from each Loan of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.
(b)The Administrative Agent, on behalf of the Borrower, shall maintain the Register pursuant to Section 12.4(c), and a subaccount therein for each Lender, in which shall be recorded (i) the amount of each Loan made hereunder and any Note evidencing such Loan, the Type thereof and each Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) both the amount of any sum received by the Administrative Agent hereunder from the Borrower and each Lender’s share thereof.

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(c)The accounts of each Lender and the entries made in the Register maintained pursuant to Section 2.5(a) and , respectively, shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain the Register or any such account, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans made to the Borrower by such Lender in accordance with the terms of this Agreement.
(d)The Borrower agrees that they will execute and deliver to each Lender upon such Lender’s request therefor a promissory note of the Borrower evidencing any Term Loans or Revolving Loans, as the case may be, of such Lender, substantially in the form of Exhibit B-1 or B-2, respectively, with appropriate insertions as to date and principal amount.
Section 2.6    Conversions/Continuations.  So long as no Default or Event of Default is in existence, the Borrower shall have the option to convert on any Business Day all or a portion at least equal to the applicable Minimum Borrowing Amount of the outstanding principal amount of the Loans owing pursuant to a single Facility (other than under the Swingline Facility, with all Swingline Loans to at all times be maintained as Base Rate Loans) into a Borrowing or Borrowings pursuant to such Facility of another Type of Loan, provided that (i) except as otherwise provided in Section 2.10(b), Eurodollar Rate Loans may be converted into Base Rate Loans only on the last day of an Interest Period applicable thereto and no partial conversion of a Borrowing of Eurodollar Rate Loans shall reduce the outstanding principal amount of the Eurodollar Rate Loans made pursuant to such Borrowing to less than the Minimum Borrowing Amount applicable thereto, (ii) Base Rate Loans may only be converted into Eurodollar Rate Loans if no Default or Event of Default is in existence on the date of the conversion, and (iii) Borrowings of Eurodollar Rate Loans resulting from this Section 2.6 shall be limited in numbers as provided in Section 2.2.  So long as no Default or Event of Default shall be in existence, the Borrower shall have the option to continue any Eurodollar Rate Loan as a Eurodollar Rate Loan by selecting a new Interest Period for such Eurodollar Rate Loan.  Each new Interest Period selected under this Section shall commence on the last day of the immediately preceding Interest Period.  If the Borrower shall fail to select in a timely manner a new Interest Period for any Eurodollar Rate Loan in accordance with this Section, such Loan will automatically, on the last day of the current Interest Period therefor, be continued as provided in Section 2.9(b).  Each such conversion or continuation shall be effected by the Borrower giving the Administrative Agent at its Notice Office, prior to 11:00 a.m., at least three Business Days’ (or one Business Day’s, in the case of a conversion into Base Rate Loans) prior written notice (or telephonic notice promptly confirmed in writing) (each a “Notice of Conversion/Continuation”) specifying the Loans to be so converted, the Type of Loans to be converted into and, if to be converted into a Borrowing of Eurodollar Rate Loans, the Interest Period to be initially applicable thereto or, as the case may be, specifying the Loans to be so continued and the Interest Period applicable to such continuation.  The Administrative Agent shall give each Lender prompt notice of any such proposed conversion or continuation affecting any of its Loans.  Notwithstanding the foregoing or the provisions of Section 2.9, if a Default or an Event of Default is in existence at the time any Interest Period in respect of any Borrowing of Eurodollar Rate Loans is to expire and the Administrative Agent or the Required Lenders have determined that a continuation of Eurodollar Rate Loans as such is not appropriate, such Loans may not be continued as Eurodollar Rate Loans but instead shall be automatically converted on the last day of such Interest Period into Base Rate Loans.  

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Section 2.7    Pro Rata Borrowings.  All Borrowings of Term Loans and Revolving Loans under this Agreement shall be made by the Lenders pro rata on the basis of their Term Commitments or Revolving Commitments, respectively.  It is understood that the obligations of the Lenders hereunder are several (and not joint), that no Lender shall be responsible for any default by any other Lender in its obligation to make Loans hereunder and that each Lender shall be obligated to make the Loans provided to be made by it hereunder, regardless of the failure of any other Lender to fulfill its commitments hereunder.
Section 2.8    Interest.  (a)  The unpaid principal amount of each Base Rate Loan shall bear interest from the date of the Borrowing thereof until maturity (whether by acceleration or otherwise) at a rate per annum which shall at all times be the Applicable Margin plus the Base Rate in effect from time to time.
(b)The unpaid principal amount of each Eurodollar Rate Loan shall bear interest from the date of the Borrowing thereof until maturity (whether by acceleration or otherwise) at a rate per annum which shall at all times be the Applicable Margin plus the relevant Eurodollar Rate.
(c)After the occurrence and during the continuance of an Event of Default, and after acceleration, all Loans and all other Obligations (including, without limitation, the Letter of Credit Fee) shall bear interest until paid in full at a rate per annum that is two percent (2.0%) in excess of the rate otherwise applicable thereto and such interest shall be payable on demand; provided, however, that, Eurodollar Rate Loans outstanding at the end of an Interest Period therefor shall thereafter bear interest until paid in full at a rate per annum equal to the Base Rate then in effect plus the Applicable Margin plus two percent (2.0%).  If this Agreement or the other Credit Documents do not specify an interest rate for a particular Obligation, such Obligation shall, for purposes of this Section 2.8, be deemed to be a Base Rate Loan. 
(d)Interest shall accrue from and including the date of any Borrowing to but excluding the date of any repayment thereof and shall be payable (i) in respect of each Base Rate Loan, quarterly in arrears on the last Business Day of each March, June, September and December, commencing June 30, 2011, (ii) in respect of each Eurodollar Rate Loan, on the last day of each Interest Period applicable thereto and, in the case of an Interest Period of six months, on the date occurring every three months after the first day of such Interest Period during such Interest Period and (iii) in respect of each Loan (x) other than a Revolving Loan that is an Base Rate Loan, on any prepayment, conversion or continuation (on the amount so prepaid, converted or continued) and (y) at maturity (whether by acceleration or otherwise) and, after such maturity, on demand.
(e)All computations of interest hereunder shall be made in accordance with Section 12.7.
(f)The Administrative Agent, upon determining the interest rate for any Borrowing of Eurodollar Rate Loans for any Interest Period, shall promptly notify the Borrower and the Lenders thereof.
Section 2.9   Interest Periods.  (a)  At the time the Borrower gives a Notice of Borrowing or Notice of Conversion in respect of the making of, or conversion into, a Borrowing of Eurodollar Rate Loans (in the case of the initial Interest Period applicable thereto) or prior to 11:00 a.m. on the third Business Day prior to the expiration of an Interest Period applicable to a Borrowing of Eurodollar Rate Loans, the Borrower shall have the right to elect by giving the 

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Administrative Agent written notice (or telephonic notice promptly confirmed in writing) of the Interest Period applicable to such Borrowing, which Interest Period shall, at the option of the Borrower, be a one, two, three or six month period.  Notwithstanding anything to the contrary contained above:
(i)the initial Interest Period for any Borrowing of Eurodollar Rate Loans shall commence on the date of such Borrowing (including the date of any conversion from a Borrowing of Base Rate Loans), and each Interest Period occurring thereafter in respect of such Borrowing shall commence on the day on which the next preceding Interest Period expires;
(ii)if any Interest Period begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last Business Day of such calendar month;
(iii)if any Interest Period would otherwise expire on a day which is not a Business Day, such Interest Period shall expire on the next succeeding Business Day, provided that if any Interest Period would otherwise expire on a day which is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day;
(iv)no Interest Period shall extend beyond the applicable Final Maturity Date;
(v)no Interest Period with respect to any Borrowing of Term Loans may be elected that would extend beyond any date upon which a Term Loan Scheduled Repayment in respect of such Term Loans is required to be made if, after giving effect to the selection of such Interest Period, the aggregate principal amount of Term Loans maintained as Eurodollar Rate Loans with Interest Periods ending after such date would exceed the aggregate principal amount of Term Loans permitted to be outstanding after such Term Loan Scheduled Repayment; and
(vi)no Interest Period may be elected at any time when a Default or an Event of Default is then in existence.
(b)If upon the expiration of any Interest Period, the Borrower has failed to (or may not) elect a new Interest Period to be applicable to the respective Borrowing of Eurodollar Rate Loans as provided above, the Borrower shall be deemed to have elected to continue such Borrowing for a new Interest Period of the same duration as the current Interest Period, effective as of the expiration date of such current Interest Period.  
Section 2.10    Increased Costs, Illegality, etc.  (a)  In the event that (x) in the case of clause (i) below, the Administrative Agent or (y) in the case of clauses (ii) and (iii) below, any Lender shall have determined (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto):
(i)on any date for determining the Eurodollar Rate for any Interest Period that, by reason of any changes arising after the date of this Agreement

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affecting the interbank Eurodollar market, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of Eurodollar Rate; or
(ii)at any time that such Lender shall incur increased costs or reductions in the amounts received or receivable hereunder in an amount which such Lender deems material with respect to any Eurodollar Rate Loans (other than any increased cost or reduction in the amount received or receivable resulting from a change in the rate of income taxes) because of any change in any applicable law, governmental rule, regulation, guideline or order (or in the interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation, guideline or order) (such as, for example, but not limited to, a change in official reserve requirements, but, in all events, excluding reserves required under Regulation D to the extent included in the computation of the Eurodollar Rate); or
(iii)at any time, that the making or continuance of any Eurodollar Rate Loan has become unlawful by compliance by such Lender in good faith with any change in any law, governmental rule, regulation, guideline or order (or interpretation or application thereof);
then, and in any such event, such Lender (or the Administrative Agent in the case of clause (i) above) shall (x) on such date and (y) within ten Business Days of the date on which such event no longer exists give notice (by telephone confirmed in writing) to the Borrower and to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the other Lenders).  Thereafter (x) in the case of clause (i) above, Eurodollar Rate Loans shall no longer be available until such time as the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice by the Administrative Agent no longer exist, and any Notice of Borrowing or Notice of Conversion given by the Borrower with respect to Eurodollar Rate Loans which have not yet been incurred shall be deemed rescinded by the Borrower or, in the case of a Notice of Borrowing, shall, at the option of the Borrower, be deemed converted into a Notice of Borrowing for Base Rate Loans to be made on the date of Borrowing contained in such Notice of Borrowing, (y) in the case of clause  above, the Borrower shall pay to such Lender, upon written demand therefor, such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its reasonable discretion shall determine in good faith) as shall be required to compensate such Lender for such increased costs or reductions in amounts receivable hereunder (a written notice as to the additional amounts owed to such Lender, showing the basis for the calculation thereof, submitted to the Borrower by such Lender shall, absent manifest error, be final and conclusive and binding upon all parties hereto) and (z)  in the case of clause  above, the Borrower shall take one of the actions specified in Section 2.10(b) as promptly as possible and, in any event, within the time period required by law.
(b)At any time that any Eurodollar Rate Loan is affected by the circumstances described in Section 2.10(a)(ii) or (iii), the Borrower may (and in the case of a Eurodollar Rate Loan affected pursuant to Section 2.10(a)(iii) the Borrower shall) either (i) if the affected Eurodollar Rate Loan is then being made pursuant to a Borrowing, by giving the Administrative Agent telephonic notice (confirmed promptly in writing) thereof on the same date that the Borrower was notified by a Lender pursuant to Section 2.10(a)(ii) or (iii), cancel said Borrowing or convert the related Notice of Borrowing into one requesting a Borrowing of Base Rate Loans, or (ii) if the affected Eurodollar Rate Loan is then outstanding, upon at least one Business Day’s notice to the Administrative Agent, 

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require the affected Lender to convert each such Eurodollar Rate Loan into a Base Rate Loan, provided that if more than one Lender is affected at any time, then all affected Lenders must be treated the same pursuant to this Section 2.10(b).
(c)If any Lender shall have determined that after the Closing Date a Change in Law occurs has or would have the effect of reducing by an amount deemed by such Lender to be material the rate of return on such Lender’s or Parent Company’s capital or assets as a consequence of its commitments or obligations hereunder to a level below that which such Lender or Parent Company could have achieved but for such adoption, effectiveness, change or compliance (taking into consideration such Lender’s policies with respect to capital adequacy), then from time to time, within 15 days after demand by such Lender (with a copy to the Administrative Agent), the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or Parent Company for such reduction.  Each Lender, upon determining in good faith that any additional amounts will be payable pursuant to this Section 2.10(c), will give prompt written notice thereof to the Borrower, which notice shall set forth the basis of the calculation of such additional amounts, although the failure to give any such notice shall not release or diminish any of the Borrower’s obligations to pay additional amounts pursuant to this Section 2.10(c) upon the subsequent receipt of such notice.
Section 2.11    Compensation.  The Borrower shall compensate each Lender, upon its written request (which request shall set forth the basis for requesting and the method of calculating such compensation), for all reasonable losses, expenses and liabilities (including, without limitation, any loss, expense or liability incurred by reason of the liquidation or reemployment of deposits or other funds required by such Lender to fund its Eurodollar Rate Loans) which such Lender may sustain: (i) if for any reason (other than a default by such Lender or the Administrative Agent) a Borrowing of Eurodollar Rate Loans does not occur on a date specified therefor in a Notice of Borrowing or Notice of Conversion (whether or not withdrawn by the Borrower or deemed withdrawn pursuant to (a)); (ii) if any repayment or conversion of any of its Eurodollar Rate Loans occurs on a date which is not the last day of an Interest Period applicable thereto; (iii) if any prepayment of any of its Eurodollar Rate Loans is not made on any date specified in a notice of prepayment given by the Borrower; or (iv) as a consequence of (x) any other default by the Borrower to repay its Eurodollar Rate Loans when required by the terms of this Agreement or (y) an election made pursuant to Section 2.10(b).
Section 2.12   Change of Lending Office.  Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 2.10(a)(ii) or (iii), Section 3.5 or Section 5.4 with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event, provided that such designation is made on such terms that such Lender and its lending office suffer no economic, legal or regulatory disadvantage, with the object of avoiding the consequence of the event giving rise to the operation of any such Section.  Nothing in this Section 2.12 shall affect or postpone any of the obligations of the Borrower or the right of any Lender provided in Section 2.10 or Section 5.4.
Section 2.13    Replacement of Lenders.  If any Lender is owed increased costs or additional amounts, or the Borrower receives notice from any Lender or the Administrative Agent, under Section 2.10, Section 3.5 or Section 5.4, or any Lender becomes a Defaulting Lender or a Non-Consenting Lender, then the Borrower shall have the right, unless such Lender has theretofore removed or cured the conditions which resulted in the obligation to pay such increased costs or 

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additional amounts or which caused it to be a Defaulting Lender or a Non-Consenting Lender, to replace in its entirety such Lender (the “Replaced Lender”), on ten Business Days’ (or three Business Days’, in the case of the replacement of a Non-Consenting Lender) prior written notice to the Administrative Agent and such Replaced Lender, with one or more other Persons (collectively, the “Replacement Lender”) reasonably acceptable to the Administrative Agent and, to the extent required by Section 12.4(b), reasonably acceptable to the Borrower (which acceptance in either case shall not be unreasonably withheld); provided, that: (i) at the time of any replacement pursuant to this Section 2.13, the Replaced Lender and the Replacement Lender shall enter into one or more Assignment Agreements, substantially in the form of Exhibit C (appropriately completed), pursuant to which the Replacement Lender shall acquire all of the Commitments (including all participation interests in Letters of Credit) and outstanding Loans of the Replaced Lender and, in connection therewith, shall pay to the Replaced Lender in respect thereof an amount equal to the sum of (a) an amount equal to the principal of, and all accrued but unpaid interest on, all outstanding Loans of the Replaced Lender and (b) an amount equal to all accrued, but theretofore unpaid, Fees owing to the Replaced Lender pursuant to Section 4.1 and (c) any other amounts payable to the Replaced Lender under this Agreement (including, without limitation, amounts payable under Section 2.11) and (ii) a Defaulting Lender shall be a Replaced Lender only to the extent not prohibited by law.  Upon the execution of the respective assignment documentation, the payment of amounts referred to in the preceding sentence and, if so requested by the Replacement Lender, delivery to the Replacement Lender of appropriate Notes executed by the Borrower, the Replacement Lender shall become a Lender hereunder, and the Replaced Lender shall cease to constitute a Lender hereunder, except with respect to indemnification provisions arising under this Agreement, which shall survive as to such Replaced Lender. 
Section 2.14    Incremental Facility.  (a)  Upon notice to the Administrative Agent (whereupon the Administrative Agent shall promptly notify the Lenders), at any time after the Closing Date, the Borrower may from time to time request (i) additional Commitments under the Term Facility (each an “Incremental Term Commitment” and all of them, collectively, the “Incremental Term Commitments”) or (ii) increases in the aggregate amount of the Revolving Commitments (each such increase, an “Incremental Revolving Commitment” and, together with the Incremental Term Commitments, the “Incremental Commitments”); provided that (x) both before and after giving effect to any such addition, the aggregate amount of Incremental Commitments that have been added pursuant to this  shall not exceed $50,000,000, (y) any such addition or increase shall be in an amount of not less than $10,000,000 and (z) there shall be not more than three (3) such increases.
(b)Any Loans made in respect of any Incremental Revolving Commitments shall be made by increasing the Total Revolving Commitment with the same terms (including pricing) as the existing Revolving Loans (each, a “Revolving Commitment Increase”).  Any Loans made in respect of any Incremental Term Commitments (the “Incremental Term Loans”) may be made, at the option of the Borrower, by either (i) increasing the Total Term Commitment with the same terms (including pricing) as the existing Term Loans, or (ii) creating a new tranche of terms loans (an “Incremental Term Loan Tranche”).  Any Revolving Commitment Increases or Incremental Term Loans (A) shall not have a final maturity earlier than the Revolving Facility Final Maturity Date or Term Facility Final Maturity Date or a weighted average life which is shorter than the then remaining average life of the Term Loans, as the case may be, (B) shall rank pari passu in right of payment and of security (including Guaranties) with the Revolving Loans and the Term Loans and (C) shall have such other terms and provisions, to the extent not consistent with the Revolving Loans or the Term Loans, as the case may be, as are reasonably satisfactory to the Joint Lead Arrangers.

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(c)Each notice from the Borrower pursuant to this Section 2.14 shall set forth the requested amount and proposed terms of the Incremental Commitments.  Incremental Term Loans (or any portion thereof) may be made, and Revolving Commitment Increases may be provided, by any existing Lender or by any other bank, financial institution or other investing entity (any such bank, financial institution or other investing entity, an “Incremental Lender”), in each case on terms permitted in this Section 2.14 and otherwise on terms reasonably acceptable to the Administrative Agent, provided that the Administrative Agent (and, in the case of a Revolving Commitment Increase, the Letter of Credit Issuer and the Swingline Lender) shall have consented (not to be unreasonably withheld) to such Lender's or Incremental Lender's, as the case may be, making such Incremental Term Loans or providing such Revolving Commitment Increase if such consent would be required under Section 12.4 for an assignment of Loans or Revolving Commitments, as applicable, to such Lender or Incremental Lender, as the case may be.  No Lender shall be obligated to provide any Incremental Term Loans or Revolving Commitment Increases, unless it so agrees.  Any Incremental Commitments shall become Commitments (or in the case of any Revolving Commitment Increase to be provided by an existing Revolving Lender, an increase in such Revolving Lender's Revolving Commitment) under this Agreement pursuant to an amendment (an “Incremental Facility Amendment”) to this Agreement and, as appropriate, the other Credit Documents, executed by the Borrower, each Lender agreeing to provide such Commitment, if any, each Incremental Lender, if any, and the Administrative Agent.  An Incremental Facility Amendment may, without the consent of any other Lenders, effect such amendments to any Credit Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 2.14.  At the time of the sending of such notice, the Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Lenders).  Each Lender shall notify the Administrative Agent within such time period whether or not it agrees to provide an Incremental Commitment and, if so, whether by an amount equal to, greater than, or less than its pro rata share of such requested increase (which shall be calculated on the basis of the amount of the funded and unfunded exposure under all the Facilities held by each Lender).  Any Lender not responding within such time period shall be deemed to have declined to provide an Incremental Commitment.  The Administrative Agent shall notify the Borrower and each Lender of the Lenders' responses to each request made hereunder.  To achieve the full amount of a requested increase, the Borrower may, after first offering such increase to the existing Lenders as provided above, invite Incremental Lenders to become Lenders pursuant to a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent and its counsel.
(d)If any Incremental Commitments are added in accordance with this Section 2.14, the Administrative Agent and the Borrower shall determine the effective date (the “Incremental Commitments Effective Date”) and the final allocation of such addition; provided, that any existing Lender electing to participate in the proposed Incremental Commitments shall have the right to participate in the proposed increase or addition on a pro rata basis in accordance with such Lender’s Revolving Commitment (in the case of an increase of the Revolving Commitments) or the outstanding Term Loans held by such Lender (in the case of Incremental Term Commitments) as of the Business Day prior to the Incremental Commitments Effective Date.  The Administrative Agent shall promptly notify the Borrower and the Lenders of the final allocation of such addition and the Incremental Commitments Effective Date.  As a condition precedent to such addition, the Borrower shall deliver to the Administrative Agent (i) a pro forma Compliance Certificate after giving effect to such addition and (ii) a certificate of the Borrower dated as of the Incremental Commitments Effective Date signed by a Responsible Officer of the Borrower certifying that, before and after 

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giving effect to such increase, (A) the representations and warranties contained in Section 7 and the other Credit Documents are true and correct in all material respects on and as of the Incremental Commitments Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall have been true and correct in all material respects as of such earlier date, (B) no Default or Event of Default exists before or after giving effect to such addition and (C) all conditions set forth in Section 6.2 are satisfied as of such date.  On each Incremental Commitments Effective Date, each Lender or Incremental Lender which is providing an Incremental Commitment (x) shall become a “Lender” for all purposes of this Agreement and the other Credit Documents, (y) shall have, as applicable, an Incremental Term Commitment and/or an Incremental Revolving Commitment which shall become “Commitments” hereunder and (z) in the case of an Incremental Term Commitment, shall make an Incremental Term Loan to the Borrower in a principal amount equal to such Incremental Term Commitment, and such Incremental Term Loan shall be a “Term Loan” for all purposes of this Agreement and the other Credit Documents (except that the interest rate applicable to any Incremental Term Loan under an Incremental Term Loan Tranche may be different).
(e)Upon each Revolving Commitment Increase pursuant to this Section 2.14, (i) each Revolving Lender immediately prior to such increase will automatically and without further act be deemed to have assigned to each existing Revolving Lender, if any, and each Incremental Lender, if any, in each case providing a portion of such Revolving Commitment Increase (each an “Incremental Revolving Lender”), and each such Incremental Revolving Lender will automatically and without further act be deemed to have assumed, a portion of such Revolving Lender's risk participation hereunder in outstanding Letters of Credit and Swingline Loans such that, after giving effect to such Revolving Commitment Increase and each such deemed assignment and assumption of such risk participations, the percentage of the aggregate outstanding (A) risk participations hereunder in Letters of Credit and (B) risk participations in Swingline Loans, in each case, held by each Revolving Lender (including each such Incremental Revolving Lender) will equal such Revolving Lender's pro rata share of the outstanding Revolving Loans based on each such Revolving Lender's Revolving Percentage immediately after giving effect to such Revolving Commitment Increase and (ii) if, on the date of such Revolving Commitment Increase, there are any Revolving Loans outstanding, the Administrative Agent shall take those steps which it deems, in its sole discretion, necessary and appropriate to result in each Revolving Lender (including each Incremental Revolving Lender) having a pro rata share of the outstanding Revolving Loans based on each such Revolving Lender's Revolving Percentage immediately after giving effect to such Revolving Commitment Increase, provided that any prepayment made in connection with the taking of any such steps shall be accompanied by accrued interest on the Revolving Loans being prepaid and any costs incurred by any Lender in accordance with Section 2.11.  The Administrative Agent and the Lenders hereby agree that the minimum borrowing, pro-rata borrowing and pro-rata payment requirements contained elsewhere in this Agreement shall not apply to any transaction that may be effected pursuant to the immediately preceding sentence.
(f)This Section 2.14 shall supersede any provisions in Section 12.12 to the contrary.
Section 2.15    Defaulting Lenders.  (a)  If any Lender becomes, and during the period it remains, a Defaulting Lender, the following provisions shall apply, notwithstanding anything to the contrary in this Agreement:  

36

(i)the Letter of Credit Exposure and Swingline Exposure of such Defaulting Lender will, subject to the limitation in the first proviso below, automatically be reallocated (effective on the day such Lender becomes a Defaulting Lender) among the Non-Defaulting Lenders pro rata in accordance with their respective Revolving Commitments; provided that (a) the sum of each Non-Defaulting Lender’s total Revolving Credit Exposure may not in any event exceed the Revolving Commitment of such Non-Defaulting Lender as in effect at the time of such reallocation and (b) neither such reallocation nor any payment by a Non-Defaulting Lender pursuant thereto will constitute a waiver or release of any claim the Borrower, the Administrative Agent, the Letter of Credit Issuer, the Swingline Lender or any other Lender may have against such Defaulting Lender or cause such Defaulting Lender to be a Non-Defaulting Lender; 
(ii)to the extent that any portion (the “unreallocated portion”) of the Letter of Credit Exposure and Swingline Exposure of any Defaulting Lender cannot be so reallocated, for any reason, the Borrower will, not later than two (2) Business Days after demand by the Administrative Agent (at the direction of the Letter of Credit Issuer and/or the Swingline Lender), (a) Cash Collateralize the obligations of the Borrower to the Letter of Credit Issuer or Swingline Lender in respect of such Letter of Credit Exposure or Swingline Exposure, as the case may be, in an amount equal to the aggregate amount of the unreallocated portion of the Letter of Credit Exposure and Swingline Exposure of such Defaulting Lender, or (b) in the case of such Swingline Exposure, prepay and/or Cash Collateralize in full the unreallocated portion thereof, or (c) make other arrangements satisfactory to the Administrative Agent, the Letter of Credit Issuer and the Swingline Lender in their sole discretion to protect them against the risk of non-payment by such Defaulting Lender; provided that (a) the sum of each Non-Defaulting Lender’s Revolving Credit Exposure may not in any event exceed the Revolving Commitment of such Non-Defaulting Lender, and (b) neither any such reallocation nor any payment by a Non-Defaulting Lender pursuant thereto nor any such Cash Collateralization or reduction or other arrangements will constitute a waiver or release of any claim the Borrower, the Administrative Agent, the Letter of Credit Issuer, the Swingline Lender or any other Lender may have against such Defaulting Lender, or cause such Defaulting Lender to be a Non-Defaulting Lender;
(iii)except as otherwise provided herein, any amount paid by the Borrower for the account of a Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity payments or other amounts) will be retained by the Administrative Agent in a segregated non-interest bearing account until the termination of the Revolving Commitments at which time the funds in such account will be applied by the Administrative Agent, to the fullest extent permitted by law, in the following order of priority:  first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent under this Agreement, second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the Letter of Credit Issuer or the Swingline Lender under this Agreement, third, if so determined by the Administrative Agent or requested by the Letter of Credit Issuer or Swingline Lender, to be held as cash collateral for future funding obligations of such Defaulting Lender in respect of any participation in any Swingline Loan or Letter of Credit, fourth, to the payment of any amounts owing to 

37

the Lenders, the Letter of Credit Issuer or Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Letter of Credit Issuer or Swingline Lender against that Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement, fifth, so long as no Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement, and sixth, to pay amounts owing under this Agreement to such Defaulting Lender or as a court of competent jurisdiction may otherwise direct.  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this clause (iii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
(b)If the Borrower, the Administrative Agent, the Letter of Credit Issuer and the Swingline Lender agree in writing that any Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, the Letter of Credit Exposure and the Swingline Exposure of the other Lenders shall be readjusted to reflect the inclusion of such Lender’s Revolving Commitment, and such Lender will purchase at par such portion of outstanding Revolving Loans of the other Lenders and/or make such other adjustments as the Administrative Agent may determine to be necessary to cause the Revolving Credit Exposure of the Lenders to be on a pro rata basis in accordance with their respective Revolving Commitments, whereupon such Lender will cease to be a Defaulting Lender and will be a Non-Defaulting Lender (and such Revolving Credit Exposure of each Lender will automatically be adjusted on a prospective basis to reflect the foregoing), and if any cash collateral has been posted with respect to such Defaulting Lender, the Administrative Agent will promptly return such cash collateral to the Borrower; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while such Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Non-Defaulting Lender will constitute a waiver or release of any claim of any party hereunder.
SECTION 3    LETTERS OF CREDIT.
Section 3.1    Letters of Credit.  (a)  Subject to and upon the terms and conditions herein set forth, the Borrower may request the Letter of Credit Issuer at any time and from time to time on any Business Day on or after the Closing Date and prior to the Revolving Facility Final Maturity Date to issue, for the account of the Borrower and in support of (i) obligations of Holdings and/or any Subsidiary, contingent or otherwise, incurred in the Ordinary Course of Business of such Persons, (ii) obligations of Holdings and its Subsidiaries under insurance policies or related to self-insurance obligations, (iii) obligations of Holdings and its Subsidiaries related to surety bonds and (iv) such other obligations of Holdings and its Subsidiaries to any other Person that are reasonably acceptable to the Administrative Agent, and subject to and upon the terms and conditions herein set forth, the Letter of Credit Issuer agrees to issue from time to time, irrevocable letters of credit in such form as may be approved by the Letter of Credit Issuer and the Administrative Agent (each such letter of credit, a “Letter of Credit” and collectively, the “Letters of Credit”).  Letters of Credit listed on Annex 3.1 issued under the Existing Credit Agreement (“Existing Letters of Credit”) shall 

38

automatically be deemed to constitute and continue as Letters of Credit issued hereunder on the Closing Date.
(b)Notwithstanding the foregoing, (i) each Letter of Credit shall be denominated in Dollars, (ii) no Letter of Credit shall be issued, the Stated Amount of which, when added to the Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and prior to or at the time of, the issuance of the relevant Letter of Credit) at such time, would exceed either (x) $75,000,000 or (y) when added to the aggregate principal amount of all Revolving Loans and Swingline Loans then outstanding, an amount equal to the Total Revolving Commitment at such time (after giving effect to any reductions to the Total Revolving Commitment on such date), and (iii) each Letter of Credit shall have an expiry date occurring not later than the earlier of (x) one year after such Letter of Credit’s date of issuance although any Letter of Credit may be automatically renewable for successive periods, which shall in no event extend beyond the date referred to in clause (y) below, of up to 12 months (unless notice of non-renewal is given to the Borrower by the Letter of Credit Issuer, or such Letter of Credit does not include an automatic renewal provision) and (z) unless Cash Collateralized ten (10) Business Days prior to the Revolving Facility Final Maturity Date, on terms acceptable to the Administrative Agent and the Letter of Credit Issuer, the Revolving Facility Final Maturity Date.
Section 3.2    Letter of Credit Requests; Notices of Issuance.  (a)  Whenever it desires that a Letter of Credit be issued, the Borrower shall give the Administrative Agent and the Letter of Credit Issuer written notice (including by way of telecopier) in the form of Exhibit D prior to 11:00 a.m. at least five Business Days (or such shorter period as may be acceptable to the Letter of Credit Issuer) prior to the proposed date of issuance (which shall be a Business Day) (each a “Letter of Credit Request”), which Letter of Credit Request shall include an application for such Letter of Credit and any other documents that the Letter of Credit Issuer customarily requires in connection therewith.  The Administrative Agent shall promptly notify each Revolving Lender of each Letter of Credit Request.
(b)The Letter of Credit Issuer shall, on the date of each issuance of a Letter of Credit by it, give the Administrative Agent, each Revolving Lender and the Borrower written notice of the issuance of such Letter of Credit, accompanied by a copy to the Administrative Agent of the Letter of Credit or Letters of Credit issued by it.
Section 3.3    Agreement to Repay Letter of Credit Drawings.  (a)  The Borrower hereby agrees to reimburse the Letter of Credit Issuer (whether with its own funds or with the proceeds of Revolving Loans), by making payment to the Administrative Agent in immediately available funds at the Payment Office, for any payment or disbursement made by the Letter of Credit Issuer under any Letter of Credit (each such amount so paid or disbursed until reimbursed, an “Unpaid Drawing”), not later than 2:00 p.m., on the Business Day immediately following the day that the Borrower receives notice from the Letter of Credit Issuer of such Unpaid Drawing, with interest on the amount so paid or disbursed by such Letter of Credit Issuer, to the extent not reimbursed prior to 2:00 p.m.  on the date of such payment or disbursement, from and including the date paid or disbursed to but not including the date the Letter of Credit Issuer is reimbursed therefor at a rate per annum which shall be the rate then applicable to Revolving Loans that are Base Rate Loans pursuant to Section 2.8(a) (plus an additional 2% per annum if not reimbursed by the third Business Day after the date of such payment or disbursement), such interest also to be payable on demand.  

39

(b)The Borrower’s obligation under this Section 3.3 to reimburse the Letter of Credit Issuer with respect to Unpaid Drawings (including, in each case, interest thereon) shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Borrower may have or have had against the Letter of Credit Issuer, the Administrative Agent or any Lender, including, without limitation, any defense based upon the failure of any drawing under a Letter of Credit to conform to the terms of the Letter of Credit or any non-application or misapplication by the beneficiary of the proceeds of such drawing; provided that, to the extent the Borrower has derived no direct or indirect benefit therefrom, the Borrower shall not be obligated to reimburse the Letter of Credit Issuer for any wrongful payment made by such Letter of Credit Issuer under a Letter of Credit as a result of acts or omissions constituting willful misconduct or gross negligence on the part of such Letter of Credit Issuer.
Section 3.4    Letter of Credit Participations.  (a)  Immediately upon the issuance by the Letter of Credit Issuer of any Letter of Credit, the Letter of Credit Issuer shall be deemed to have sold and transferred to each Revolving Lender, and each Revolving Lender (each a “Participant”) shall be deemed irrevocably and unconditionally to have purchased and received from such Letter of Credit Issuer, without recourse or warranty, an undivided interest and participation, to the extent of such Revolving Lender’s Revolving Percentage, in such Letter of Credit, each substitute letter of credit, each drawing made thereunder and the obligations of the Borrower under this Agreement with respect thereto (although Letter of Credit Fees shall be payable directly to the Administrative Agent for the account of the Revolving Lenders as provided in Section 4.1(b) and the Participants shall have no right to receive any portion of any Fronting Fees) and any security therefor or guaranty pertaining thereto.  Upon any change in the Revolving Commitments of the Revolving Lenders pursuant to Section 12.4(b), it is hereby agreed that, with respect to all then outstanding Letters of Credit and Unpaid Drawings, there shall be an automatic adjustment to the participations pursuant to this Section 3.4 to reflect the new Revolving Percentages of the assigning and assignee Revolving Lender.
(b)In determining whether to pay under any Letter of Credit, the Letter of Credit Issuer shall not have any obligation relative to the Participants other than to determine that any documents required to be delivered under such Letter of Credit have been delivered and that they appear to comply on their face with the requirements of such Letter of Credit.  Any action taken or omitted to be taken by the Letter of Credit Issuer under or in connection with any Letter of Credit, if taken or omitted in the absence of gross negligence or willful misconduct, shall not create for the Letter of Credit Issuer any resulting liability.
(c)In the event that the Letter of Credit Issuer makes any payment under any Letter of Credit and the Borrower shall not have reimbursed such amount in full to the Letter of Credit Issuer pursuant to Section 3.3(a), the Letter of Credit Issuer shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify each Participant of such failure, and each Participant shall promptly and unconditionally pay to the Administrative Agent for the account of the Letter of Credit Issuer, the amount of such Participant’s Revolving Percentage of such payment in Dollars and in same day funds.  If the Administrative Agent so notifies any Participant required to fund a payment under a Letter of Credit prior to 11:00 a.m. on any Business Day, such Participant shall make available to the Administrative Agent for 

40

the account of the Letter of Credit Issuer such Participant’s Revolving Percentage of the amount of such payment on such Business Day in same day funds.  If and to the extent such Participant shall not have so made its Revolving Percentage of the amount of such payment available to the Administrative Agent for the account of the Letter of Credit Issuer, such Participant agrees to pay to the Administrative Agent for the account of the Letter of Credit Issuer, forthwith on demand such amount, together with interest thereon, for each day from such date until the date such amount is paid to the Administrative Agent for the account of the Letter of Credit Issuer at the overnight Federal Funds Effective Rate.  The failure of any Participant to make available to the Administrative Agent for the account of the Letter of Credit Issuer its Revolving Percentage of any payment under any Letter of Credit shall not relieve any other Participant of its obligation hereunder to make available to the Administrative Agent for the account of the Letter of Credit Issuer its Revolving Percentage of any payment under any Letter of Credit on the date required, as specified above, but no Participant shall be responsible for the failure of any other Participant to make available to the Administrative Agent for the account of the Letter of Credit Issuer such other Participant’s Revolving Percentage of any such payment.
(d)Whenever the Letter of Credit Issuer receives a payment of a Reimbursement Obligation as to which the Administrative Agent has received for the account of the Letter of Credit Issuer any payments from the Participants pursuant to Section 3.4(c), the Letter of Credit Issuer shall pay to the Administrative Agent and the Administrative Agent shall promptly pay to each Participant which has paid its Revolving Percentage thereof, in Dollars and in same day funds, an amount equal to such Participant’s Revolving Percentage of the principal amount thereof and interest thereon accruing after the purchase of the respective participations.
(e)The obligations of the Participants to make payments to the Administrative Agent for the account of the Letter of Credit Issuer with respect to Letters of Credit shall be irrevocable and not subject to counterclaim, set-off or other defense or any other qualification or exception whatsoever and shall be made in accordance with the terms and conditions of this Agreement under all circumstances, including, without limitation, any of the following circumstances:
(i)any lack of validity or enforceability of this Agreement or any of the other Credit Documents;
(ii)the existence of any claim, set-off, defense or other right which the Borrower may have at any time against a beneficiary named in a Letter of Credit, any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), the Administrative Agent, the Letter of Credit Issuer, any Lender, or other Person, whether in connection with this Agreement, any Letter of Credit, the transactions contemplated herein or any unrelated transactions (including any underlying transaction between the Borrower and the beneficiary named in any such Letter of Credit);
(iii)any draft, certificate or other document presented under the Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;
(iv)the surrender or impairment of any security for the performance or observance of any of the terms of any of the Credit Documents; or
(v)the occurrence of any Default or Event of Default.
Section 3.5   Increased Costs; Illegality.  (a)  If a Change of Law occurs after the Closing Date which shall either (i) impose, modify or make applicable any reserve, deposit, capital 

41

adequacy or similar requirement against Letters of Credit issued by the Letter of Credit Issuer or such Lender’s participation therein, or (ii) shall impose on the Letter of Credit Issuer or any Lender any other conditions affecting this Agreement, any Letter of Credit or such Lender’s participation therein; and the result of any of the foregoing is to increase the cost to the Letter of Credit Issuer or such Lender of issuing, maintaining or participating in any Letter of Credit, or to reduce the amount of any sum received or receivable by the Letter of Credit Issuer or such Lender hereunder (other than any increased cost or reduction in the amount received or receivable resulting from a change in the rate of income taxes), then, upon demand to the Borrower by the Letter of Credit Issuer or such Lender (a copy of which notice shall be sent by the Letter of Credit Issuer or such Lender to the Administrative Agent), the Borrower shall pay to the Letter of Credit Issuer or such Lender such additional amount or amounts as will compensate the Letter of Credit Issuer or such Lender for such increased cost or reduction.  A certificate submitted to the Borrower by the Letter of Credit Issuer or any Lender, as the case may be (a copy of which certificate shall be sent by the Letter of Credit Issuer or such Lender to the Administrative Agent), setting forth the basis for the determination of such additional amount or amounts necessary to compensate the Letter of Credit Issuer or any such Lender as aforesaid shall be conclusive and binding on the Borrower absent manifest error, although the failure to deliver any such certificate shall not release or diminish any of the Borrower’s obligations to pay additional amounts pursuant to this Section.
SECTION 4   FEES; COMMITMENTS.
Section 4.1   Fees.  (a)  The Borrower agrees to pay to the Administrative Agent a commitment fee (“Commitment Fee for Revolver”) for the account of each Revolving Lender for the period from and including the Closing Date to but not including the date the Total Revolving Commitment has been terminated, in an amount equal to the Commitment Fee Rate for Revolver then in effect multiplied by the average daily Unutilized Commitment of each Lender.  Such Commitment Fee for Revolver shall be due and payable in arrears on the last Business Day of each March, June, September and December, commencing on June 30, 2011, and on the first date upon which the Total Revolving Commitments shall have been terminated.
(b)The Borrower agrees to pay to the Administrative Agent for the account of each Lender pro rata on the basis of its Revolving Percentage, a fee in respect of each outstanding Letter of Credit (the “Letter of Credit Fee”) for each day computed at the rate equal to the Applicable Margin for Revolving Loans that are Eurodollar Rate Loans for such day on the Stated Amount of such Letter of Credit on such day.  Accrued Letter of Credit Fees shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December of each year, commencing on June 30, 2011, and on the date upon which the Total Revolving Commitment is terminated.
(c)The Borrower agrees to pay to the Administrative Agent for the account of the Letter of Credit Issuer a fee in respect of each Letter of Credit (the “Fronting Fee”) computed at the rate of 0.125% per annum on the average daily Stated Amount of such Letter of Credit.  Accrued Fronting Fees shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December of each year, commencing on June 30, 2011, and on the date upon which the Total Revolving Commitment is terminated.
(d)The Borrower agrees to pay directly to the Letter of Credit Issuer upon each issuance of, drawing under, and/or amendment or transfer by a beneficiary of, a Letter of Credit such amount as shall at the time of such issuance, drawing, transfer or amendment be the administrative 

42

charge which the Letter of Credit Issuer is customarily charging for issuances of, drawings under or amendments or transfers of, letters of credit issued by it.
(e)The Borrower agrees to pay to the Administrative Agent (x) on the Closing Date for its own account and/or for distribution to the Lenders such fees as have heretofore been agreed to by the Borrower and the Administrative Agent and (y) for its own account such other fees as may be agreed to from time to time between the Borrower and the Administrative Agent, when and as due.
(f)All computations of Fees shall be made in accordance with Section 12.7.
(g)Anything herein to the contrary notwithstanding, during such period as a Lender is a Defaulting Lender, such Defaulting Lender will not be entitled to any fees accruing during such period pursuant to clauses (a) and (b) of this Section (without prejudice to the rights of the Lenders other than Defaulting Lenders in respect of such fees) (and, with respect to the fees referenced in clause (a) of this Section, Borrower shall not be required to pay such fees to, or for the account of, such Defaulting Lender), or any amendment fees hereafter offered to any Lender, and the pro rata payment provisions of Section 12.6 will automatically be deemed adjusted to reflect the provisions of this Section; provided that (a) to the extent that a portion of the Letter of Credit Exposure of a Defaulting Lender is reallocated to the Non-Defaulting Lenders pursuant to clause (a)(i) of Section 2.15, such fees that would have accrued for the benefit of such Defaulting Lender will instead accrue for the benefit of and be payable to such Non-Defaulting Lenders, pro rata in accordance with their respective Revolving Commitments and (b) to the extent any portion of such Letter of Credit Exposure cannot be so reallocated, an amount equal to one-half (1/2) of such fees will instead accrue for the benefit of and be payable to the Letter of Credit Issuer.
Section 4.2   Voluntary Reduction of Commitments.  Upon at least three Business Days’ prior written notice (or telephonic notice confirmed in writing) to the Administrative Agent at its Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders), the Borrower shall have the right, without premium or penalty, to terminate or partially reduce the Total Unutilized Revolving Commitment, provided that (x) any such termination shall apply to proportionately and permanently reduce the Revolving Commitment of each of the Lenders with such a Commitment and (y) any partial reduction pursuant to this clause Section 4.2 shall be in the amount of at least $5,000,000 or a whole multiple thereof.
Section 4.3   Commitment Terminations.  Unless earlier terminated pursuant to the terms of the Agreement:
(a)The Total Revolving Commitment (and the Revolving Commitment of each Lender) shall terminate on the Revolving Facility Final Maturity Date.
(b)The Swingline Commitment shall terminate on the Swingline Expiry Date.
SECTION 5    PAYMENTS.
Section 5.1    Voluntary Prepayments.  (a)  The Borrower shall have the right to prepay Term Loans and/or Revolving Loans and/or Swingline Loans, in whole or in part, without premium or penalty, from time to time on the following terms and conditions: (i) the Borrower shall give the Administrative Agent at the Payment Office written notice (or telephonic notice promptly 

43

confirmed in writing) of its intent to prepay the Loans, whether such Loans are Term Loans, Revolving Loans or Swingline Loans, the amount of such prepayment and (in the case of Eurodollar Rate Loans) the specific Borrowing(s) pursuant to which made, which notice shall be received by the Administrative Agent by 11:00 a.m. (x) one Business Day prior to the date of such prepayment in the case of Base Rate Loans, (y) three Business Days’ prior written notice in the case of Eurodollar Rate Loans and (z) 11:00 a.m. on the date of prepayment, in the case of Swingline Loans, which notice shall promptly be transmitted by the Administrative Agent to each of the Lenders; (ii) each partial prepayment of any Borrowing shall be in an aggregate principal amount of at least $500,000 or a whole multiple of $100,000 in excess thereof; provided that no partial prepayment of Eurodollar Rate Loans made pursuant to a Borrowing shall reduce the aggregate principal amount of the Loans outstanding pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount applicable thereto; (iii) each prepayment in respect of any Loans made pursuant to a Borrowing shall be applied pro rata among such Loans; and (iv) each prepayment of Term Loans pursuant to this  Section 5.1 shall be applied to the then remaining applicable Term Loan Scheduled Repayments on a pro rata basis (based upon the then remaining principal amount of each such Term Loan Scheduled Repayment).  Any prepayment made pursuant to this Section shall be subject to Section 2.11.
Section 5.2    Mandatory Prepayments.
(a)Requirements:
(i)If on any date (after giving effect to any other repayments or prepayments on such date) the sum of (i) the aggregate outstanding principal amount of Revolving Loans and Swingline Loans plus (ii) the aggregate amount of Letter of Credit Outstandings exceeds the Total Revolving Commitment as then in effect, the Borrower shall repay on such date that principal amount of Swingline Loans and, after Swingline Loans have been paid in full, Unpaid Drawings and, after Unpaid Drawings have been paid in full, Revolving Loans, in an aggregate amount equal to such excess.  If, after giving effect to the prepayment of all outstanding Swingline Loans, Unpaid Drawings and Revolving Loans, the aggregate amount of Letter of Credit Outstandings exceeds the Total Revolving Commitment as then in effect (any such excess, a “Total Revolving Commitment Excess Amount”), the Borrower shall pay to the Administrative Agent an amount in cash and/or Cash Equivalents equal to such Total Revolving Commitment Excess Amount, and the Administrative Agent shall hold such payment as security for the obligations of the Borrower hereunder pursuant to a cash collateral agreement to be entered into in form and substance reasonably satisfactory to the Administrative Agent and the Borrower which shall permit certain investments in Cash Equivalents satisfactory to the Administrative Agent and the Borrower, until the proceeds are applied to the Obligations, and which shall provide that a portion of the balance, if any, held in a cash collateral account established under such cash collateral agreement equal to the amount by which such balance exceeds the Total Revolving Commitment Excess Amount from time to time, shall be released to the Borrower, provided that (x) as a result of such release, a mandatory prepayment shall not be required under the first sentence of this paragraph (a)(i) unless such prepayment is made concurrently with such release, and (y) immediately after giving effect thereto, no Default or Event of Default shall have occurred or be continuing or would result from such release.

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(ii)The Borrower shall be required to repay the principal amount of the Term Loans on the last day of March, June, September and December of each year and on the Term Facility Final Maturity Date, commencing June 30, 2012 (each such repayment, a “Term Loan Scheduled Repayment”), each such installment on any such date to be in the amount set forth below opposite such date: 
	
		
	Date
	Installment Amount

	June 30, 2012
	$1,875,000

	September 30, 2012
	$1,875,000

	December 31, 2012
	$1,875,000

	March 31, 2013
	$1,875,000

	June 30, 2013
	$3,750,000

	September 30, 2013
	$3,750,000

	December 31, 2013
	$3,750,000

	March 31, 2014
	$3,750,000

	June 30, 2014
	$3,750,000

	September 30, 2014
	$3,750,000

	December 31, 2014
	$3,750,000

	March 31, 2015
	$3,750,000

	June 30, 2015
	$3,750,000

	September 30, 2015
	$3,750,000

	December 31, 2015
	$3,750,000

	March 31, 2016
	$3,750,000

	Term Facility Final Maturity
	All amounts outstanding in

	Date
	respect of the Term Loans

(iii)On or before the third Business Day following the date of receipt thereof by Holdings or any of its Subsidiaries of the Cash Proceeds from any Asset Sale or Recovery Event, an amount equal to 100% of the Net Cash Proceeds then received from such Asset Sale or Recovery Event shall be applied as a mandatory repayment of principal of the then outstanding Term Loans, provided that Net Cash Proceeds from Recovery Events in an aggregate amount not to exceed $75,000,000 in any Fiscal Year shall not be required to be used to so repay Term Loans to the extent the Borrower elects, as hereinafter provided, to cause such Net Cash Proceeds to be reinvested in Reinvestment Assets (a “Reinvestment Election”) on or prior to the Reinvestment Prepayment Date; provided, further, that if any such Net Cash Proceeds are not so reinvested on or prior to the Reinvestment Prepayment Date, such Net Cash Proceeds shall promptly thereafter be applied toward prepayments of the Term Loans in accordance with this Section 5.2.  The Borrower may exercise its Reinvestment Election (within the parameters specified in the preceding sentence) with respect to a Recovery Event, if (x) the Reinvestment Test is satisfied on the date of delivering the Reinvestment Notice referred to below and (y) the Borrower delivers a Reinvestment Notice to the Administrative Agent by the third Business Day following the date of such Recovery Event, with such Reinvestment Election being effective with respect to the Net Cash Proceeds of such Recovery Event equal to the Anticipated Reinvestment Amount specified in such Reinvestment Notice. 
(iv)On or before the third Business Day following the date of the receipt thereof by Holdings and/or any of its Subsidiaries, an amount equal to 100% of the 

45

cash proceeds (net of reasonable and documented underwriting discounts and commissions, other banking and investment banking fees, attorneys’, advisors’, consultants’ and accountants’ fees) of the incurrence of Indebtedness by Holdings and/or any of its Subsidiaries (other than Indebtedness permitted by ), shall be applied as a mandatory repayment of principal of the then outstanding Term Loans.
(v)On the Reinvestment Prepayment Date with respect to a Reinvestment Election, an amount equal to the Reinvestment Prepayment Amount, if any, for such Reinvestment Election shall be applied as a repayment of the principal amount of the then outstanding Term Loans.
(b)Application:
(i)Each mandatory repayment of Term Loans required to be made pursuant to Section 5.2(a) (iii), (iv) or (v) shall be applied to the repayment of the then remaining Term Loan Scheduled Repayments in inverse order of their maturity.  Following the repayment in full of the Term Loans, each mandatory repayment required to be made pursuant to Section 5.2(a) (iii), (iv) or (v) shall thereafter be applied to the repayment of the Revolving Loans (without any permanent reduction in the Revolving Commitment of any Lender).
(ii)With respect to each prepayment of Loans required by Section 5.2, the Borrower may designate the Types of Loans which are to be prepaid and the specific Borrowing(s) under the affected Facility pursuant to which made, provided that (i) the Borrower shall first so designate all Base Rate Loans and Eurodollar Rate Loans under an affected Facility with Interest Periods ending on the date of repayment prior to designating any other Eurodollar Rate Loans and (ii) each prepayment of any Loans made pursuant to a Borrowing shall be applied pro rata among such Loans.  
Section 5.3    Method and Place of Payment.  Except as otherwise specifically provided herein, all payments under this Agreement shall be made to the Administrative Agent for the ratable (based on its pro rata share) account of the Lenders entitled thereto, not later than 2:00  p.m. on the date when due and shall be made in immediately available funds and in lawful money of the United States of America at the Payment Office, it being understood that prior written notice by the Borrower to the Administrative Agent to make a payment from the funds in the Borrower’s account at the Payment Office shall constitute the making of such payment to the extent of such funds held in such account.  The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof.  Any payments made by the Borrower under this Agreement which are made later than 2:00 p.m. shall be deemed to have been made by the Borrower on the next succeeding Business Day.  Whenever any payment to be made hereunder shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest shall be payable during such extension at the applicable rate in effect immediately prior to such extension.
Section 5.4    Net Payments.  (a)  All payments made by the Borrower hereunder, under any Note or any other Credit Document, will be made without setoff, counterclaim or other 

46

defense.  Except as provided for in this Section 5.4(a), all such payments will be made free and clear of, and without deduction or withholding for, any Taxes.  If any Taxes are so levied or imposed, the Borrower agrees to pay the full amount of such Taxes and such additional amounts (after payment of all Taxes) as may be necessary so that every payment of all amounts due hereunder, under any Note or under any other Credit Document, after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein or in such Note or in such other Credit Document, provided, however, that the Borrower shall not be required to increase any such amounts payable to any Lender with respect to any Taxes to the extent such Taxes are (i) attributable to such Lender’s failure to comply with the requirements of Section 5.4(b) or (ii) United States withholding Taxes that exceed the Taxes imposed on amounts payable to such Lender at the time the Lender becomes a party to this Agreement (or designates a new lending office).  The Borrower will furnish to the Administrative Agent within 45 days after the date the payment of any Taxes, or any withholding or deduction on account thereof, is due pursuant to applicable law certified copies of tax receipts evidencing such payment by the Borrower.  The Borrower will indemnify and hold harmless the Administrative Agent and each Lender, and reimburse the Administrative Agent or such Lender upon its written request, for the amount of any Taxes levied or imposed and paid or withheld by the Administrative Agent or such Lender.
(b)Each Lender that is not a United States person as such term is defined in Section 7701(a)(30) of the Code (a “Non-U.S. Lender”) agrees to deliver to the Borrower and the Administrative Agent (i) on or prior to the date the Lender becomes a Lender two accurate and complete original signed copies of Internal Revenue Service Form W-8BEN or W-8ECI (or successor forms) certifying to such Lender’s entitlement to a complete exemption from United States withholding tax (or, upon the written consent of the Borrower, a reduced rate of withholding tax, in which case the amount of such withholding tax due when the Lender becomes a party to this Agreement shall not be considered to be described in clauses (i) or (ii) of Section 5.4(a)) with respect to payments to be made under this Agreement and under any Note and under any other Credit Document, or (ii) if the Non-U.S. Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code and is claiming an exemption from U.S. withholding tax under Sections 871(h), 881(c) and/or 1441(c)(9) of the Code with respect to payments of “portfolio interest,” (x) a duly executed certificate substantially in the form of Exhibit E (any such certificate, an “Exemption Certificate”) and (y) two accurate and complete original signed copies of Internal Revenue Service Form W-8BEN or W-8ECI (or successor forms).  In addition, each Non-U.S. Lender agrees that from time to time upon the reasonable request by the Borrower or the Administrative Agent when a lapse in time or change in circumstances renders the previous certification obsolete or inaccurate in any material respect, it will deliver to the Borrower and the Administrative Agent two new accurate and complete original signed copies of the relevant form or Exemption Certificate, as the case may be, and such other forms as may be required in order to conform or establish the entitlement of such Non-U.S. Lender to a continued complete exemption from (or reduction in, as the case may be) United States withholding tax with respect to payments under this Agreement and any Note, or it shall immediately notify the Borrower and the Administrative Agent of its inability to deliver any such form or Exemption Certificate.  Notwithstanding any other provision of this Section 5.4, a Non‐U.S. Lender shall not be required to deliver any form pursuant to this Section 5.4(b) that such Non‐U.S. Lender is not legally able to deliver.
SECTION 6   CONDITIONS PRECEDENT.
Section 6.1    Conditions Precedent to Closing Date.  The obligation of the Lenders to make each Loan hereunder, and the obligation of the Letter of Credit Issuer to issue Letters of 

47

Credit hereunder, in each case, on the Closing Date are subject to the satisfaction on or prior to the Closing Date of each of the following conditions:
(a)Execution of Agreement.  On or prior to the Closing Date, (i) this Agreement shall have been executed and delivered as provided in Section 12.10 and (ii) there shall have been delivered to the Administrative Agent, for the account of each Lender that has requested Notes pursuant to Section 2.5(d), Notes conforming to the requirements hereof and executed by a duly Authorized Officer of the Borrower.
(b)Opinions of Counsel.  On the Closing Date, the Administrative Agent shall have received opinions, addressed to the Administrative Agent and each of the Lenders from:
(i)Vorys, Sater, Seymour and Pease LLP, counsel to Holdings and its Subsidiaries, which opinion shall be dated the Closing Date and shall be in the form of Exhibit F-1; and
(ii)W. Joseph Payne, Esq., General Counsel to Holdings, Borrower and all of the Subsidiaries, which opinion shall be dated the Closing Date and shall be in the form of Exhibit F-2; and 
(iii)Daugherty, Fowler, Peregrin, Haught & Jenson, P.C., special FAA counsel to Holdings and its Subsidiaries, which opinion shall be in the form of Exhibit F-3; 
(iv)Greenberg Traurig, P.A., special Florida counsel to the Borrower and certain Guarantors, which opinion shall be dated the Closing Date and shall be in the form of Exhibit F-4; and 
(v)Jones Vargas, special Nevada counsel to Air Transport International Limited Liability Company, a Nevada limited liability company, which opinion shall be dated the Closing Date and shall be in the form of Exhibit F-5.
(c)Proceedings.  (i)  On the Closing Date, the Administrative Agent shall have received from each Credit Party a certificate, dated the Closing Date, signed by the Secretary of such Credit Party in the form of Exhibit G (together with certifications as to incumbency and signatures of such officers) with appropriate insertions and deletions, together with (x) copies of the articles or certificate of incorporation, the limited liability company agreement, the partnership agreement, any certificate of designation, the by-laws, or other organizational documents of each such Credit Party, (y) the resolutions, or such other administrative approval, of each such Credit Party referred to in such certificate to be reasonably satisfactory to the Administrative Agent and (z) in the case of the certificate delivered by the Borrower, a statement that all of the applicable conditions set forth in  have been satisfied as of such date.
(ii)    On the Closing Date, all corporate, limited liability company, partnership and legal proceedings and all instruments and agreements in connection with the transactions contemplated by this Agreement and the other Credit Documents shall be reasonably satisfactory in form and substance to the Administrative Agent, and the Administrative Agent shall have received all information and copies of all certificates, documents and papers, including long-form 

48

good standing certificates and any other records of corporate, partnership or limited liability company proceedings and governmental approvals, if any, which the Administrative Agent may have reasonably requested in connection therewith, such documents and papers, where appropriate, to be certified by proper corporate or Governmental Authority.
(iii)    A Notice of Borrowing for the Loans to be made on the Closing Date, as well as a memorandum of funds flow, in each case executed by the Borrower.
(d)Adverse Change, etc.  There shall not have been any change, effect, event, occurrence, state of facts or development that has had or could reasonably be expected to have a Material Adverse Effect.
(e)Consummation of the Refinancing.  The Administrative Agent shall have received reasonably satisfactory evidence that the Indebtedness under the Existing Credit Agreement shall have been repaid or canceled, all documentation representing such Indebtedness shall have been terminated (other than provisions that survive such termination) and all guarantees, liens and security interests associated therewith have been released, or that adequate measures shall have been taken to terminate such documentation and release such guarantees, liens and security interests, except as otherwise agreed by the Administrative Agent.
(f)[Intentionally Deleted.]
(g)Security Documents.  (i)  On the Closing Date, each of Holdings and the Domestic Subsidiaries of Holdings shall have duly authorized, executed and delivered the Guarantee and Collateral Agreement substantially in the form of Exhibit H (as modified, amended or supplemented from time to time in accordance with the terms thereof and hereof, the “Guarantee and Collateral Agreement”).
(ii)On the Closing Date, each of Holdings and the Domestic Subsidiaries of Holdings shall have delivered to the Administrative Agent:
		
	(1)
	Financing Statements (Form UCC-1) in appropriate form for filing under the UCC of each jurisdiction as may be necessary to perfect the security interests purported to be created by the Guarantee and Collateral Agreement;

		
	(2)
	evidence that FAA form “Aircraft Security Agreements” and/or “Amended and Restated Aircraft Security Agreements”, the substance of which shall be satisfactory to the Administrative Agent, covering the Aircraft and Engines included in the Collateral have been filed with the FAA, and evidence satisfactory to Administrative Agent that the Liens in such Aircraft and Engines have been registered under the Cape Town Convention; and

		
	(3)
	evidence that all other actions necessary or, in the reasonable opinion of the Administrative Agent, desirable to perfect and protect the security interests purported to be created by the Security Documents have been taken.

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(h)Governmental Approvals and Consents..  Each Credit Party shall have obtained all permits, registrations, filings, licenses, authorizations, consents, orders or approvals of or from any Governmental Authority and all consents of other Persons, in each case that are necessary or advisable in connection with the transactions contemplated by the Credit Documents (including the Refinancing) and each of the foregoing shall be in full force and effect and in form and substance reasonably satisfactory to Administrative Agent.  All applicable waiting periods shall have expired without any action being taken or threatened by any competent authority which would restrain, prevent or otherwise impose adverse conditions on the transactions contemplated by the Credit Documents (including the Refinancing) and no action, request for stay, petition for review or rehearing, reconsideration, or appeal with respect to any of the foregoing shall be pending, and the time for any applicable agency to take action to set aside its consent on its own motion shall have expired.
(i)Solvency.  On the Closing Date, the Administrative Agent shall have received from the president, chief financial officer or another senior financial or accounting officer of each of Holdings and the Borrower a solvency certificate in the form attached hereto as Exhibit I that shall document the solvency of Holdings, the Borrower and their respective Subsidiaries on a consolidated basis after giving effect to the Refinancing and the other transactions contemplated hereby.
(j)Fees.  On the Closing Date, the Administrative Agent and the Joint Lead Arrangers shall have received all fees required to be paid, and all expenses required to be paid, on or before the Closing Date.
(k)[Intentionally Deleted.] 
(l)Evidence of Insurance.  The Administrative Agent shall have received a certificate from the Borrower’s insurance broker or other evidence satisfactory to it that all insurance required to be maintained pursuant to Section 8.3 is in full force and effect, together with endorsements naming the Administrative Agent, for the benefit of Lenders, as additional insured and lender’s loss payee thereunder to the extent required under Section 8.3, or an undertaking by the Borrower to deliver or cause the same to be delivered to the Administrative Agent reasonably promptly following the Closing Date.
(m)No Litigation.  There shall not exist any action, suit, investigation, litigation or proceeding or other legal or regulatory developments, pending or threatened in any court or before any arbitrator or Governmental Authority that, in the reasonable opinion of Administrative Agent, singly or in the aggregate, could have a material adverse effect on the business operations, properties, assets, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
(n)Total Leverage Ratio.  A certificate signed by the Chief Financial Officer of Holdings in form and substance satisfactory to the Administrative Agent evidencing that, on the Closing Date after giving effect to the Refinancing and the initial Borrowings, the Total Leverage Ratio shall not be greater than 3.00 to 1.00.   
(o)Appraisals.  Receipt by the Administrative Agent and the Joint Lead Arrangers of the Aircraft Appraisal dated not earlier than April 14, 2011.

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Section 6.2    Conditions Precedent to All Credit Events.  The obligation of the Lenders to make each Loan hereunder, and the obligation of the Letter of Credit Issuer to issue Letters of Credit hereunder, is subject, at the time of each such Credit Event, to the satisfaction of the conditions that at the time of each Credit Event and also after giving effect thereto, (a) there shall exist no Default or Event of Default, (b) all representations and warranties contained herein or in the other Credit Documents shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of the date of such Credit Event (except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representation and warranty shall have been true and correct in all material respect as of such earlier date) and (c) since December 31, 2010, there shall have been no event, change, condition or occurrence that has had, or could reasonably be expected to have, a Material Adverse Effect.  
In addition to other conditions precedent herein set forth, if any Lender is a Defaulting Lender at the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, the Letter of Credit Issuer will not be required to issue, amend or increase any Letter of Credit and the Swingline Lender will not be required to make any Swingline Loans, unless in each case it is satisfied that all related Letter of Credit Exposure and Swingline Exposure of such Defaulting Lender is fully covered or eliminated by any combination satisfactory to the Letter of Credit Issuer or the Swingline Lender, as the case may be, of the following:
(i)in the case of a Defaulting Lender, the Letter of Credit Exposure and Swingline Exposure of such Defaulting Lender is reallocated, as to outstanding and future Letters of Credit and Swingline Exposure, to the Non-Defaulting Lenders as provided in Section 2.15(a)(i); and 
(ii)in the case of a Defaulting Lender, without limiting the provisions of Section 2.15(a)(ii), the Borrower Cash Collateralizes its payment and reimbursement obligations with respect to such Letter of Credit or Swingline Loan in an amount at least equal to the aggregate amount of the unreallocated obligations of such Defaulting Lender in respect of such Letter of Credit (whether such obligations are contingent or otherwise) or Swingline Loan, or the Borrower makes other arrangements satisfactory to the Administrative Agent, the Letter of Credit Issuer and the Swingline Lender, as the case may be, to protect them against the risk of non-payment by such Defaulting Lender;
provided that (a) the sum of each Non-Defaulting Lender’s Revolving Extensions of Credit may not in any event exceed the Revolving Commitment of such Non-Defaulting Lender, and (b) neither any such reallocation nor any payment by a Non-Defaulting Lender pursuant thereto nor any such Cash Collateralization or reduction will constitute a waiver or release of any claim the Borrower, the Administrative Agent, the Letter of Credit Issuer, the Swingline Lender or any other Lender may have against such Defaulting Lender, or cause such Defaulting Lender to be a Non-Defaulting Lender.
The acceptance of the benefits of each Credit Event shall constitute a representation and warranty by the Borrower to each of the Lenders that all of the applicable conditions specified in Section 6.1, and/or Section 6.2, as the case may be, exist as of that time.  All of the certificates, legal opinions and other documents and papers referred to in this Section 6, unless otherwise specified, 

51

shall be delivered to the Administrative Agent at its Notice Office for the benefit of each of the Lenders.
SECTION 7   REPRESENTATIONS AND WARRANTIES.
To induce the Lenders to enter into this Agreement and to make the Loans and issue and/or participate in Letters of Credit provided for herein, Holdings and the Borrower make the following representations and warranties to, and agreements with, the Lenders, all of which shall survive the execution and delivery of this Agreement and the making of the Loans (with the making of each Credit Event thereafter being deemed to constitute a representation and warranty that the matters specified in this  are true and correct in all material respects on and as of the date of each such Credit Event unless such representation and warranty expressly indicates that it is being made as of any specific date (in which case such representation and warranty shall have been true and correct in all material respect as of such specific date)):
Section 7.1    Corporate Status; Compliance with Law.  Each of Holdings and its Subsidiaries (i) is a duly organized and validly existing corporation or limited liability company in good standing under the laws of the jurisdiction of its organization and has the corporate or limited liability company power and authority to own its property and assets and to transact the business in which it is engaged and presently proposes to engage on the date hereof, (ii) has duly qualified and is authorized to do business and is in good standing in all jurisdictions where it is required to be so qualified and where the failure to be so qualified would have, individually or in the aggregate, a Material Adverse Effect and (iii) is in compliance with all Requirements of Law and all Contractual Obligations of Holdings and its Subsidiaries, except where the failure to so comply would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 7.2    Power and Authority.  Each Credit Party has the corporate or limited liability company power and authority to execute, deliver and carry out the terms and provisions of the Credit Documents to which it is a party and has taken all necessary corporate or limited liability company action to authorize the execution, delivery and performance of the Credit Documents to which it is a party.  Each Credit Party has duly executed and delivered each Credit Document to which it is a party, and each such Credit Document constitutes the legal, valid and binding obligation of such Person enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
Section 7.3    No Violation.  Neither the execution, delivery and performance by any Credit Party of the Credit Documents to which it is a party nor compliance with the terms and provisions thereof, nor the consummation of the Refinancing or the other transactions contemplated therein (i) will contravene any applicable provision of any law, statute, rule, regulation, order, writ, injunction or decree of any Governmental Authority, (ii) will, except as set forth on Annex 7.3, conflict or be inconsistent with or result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under, or (other than pursuant to the Security Documents) result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of the property or assets of Holdings or any of its Subsidiaries pursuant to the terms of any indenture, debt instrument or agreement, mortgage, deed of trust, agreement or other instrument to which Holdings or any of its Subsidiaries is a party or by which it or any of its property or assets are bound or to which it may be subject (including, without limitation, the CMI Service Agreement), (iii) will violate 

52

any provision of the charter or by-laws or limited liability company agreement of Holdings or any of its Subsidiaries or (iv) require any approval of stockholders, members or partners or any approval or consent of any Person under any Contractual Obligation of Holdings and its Subsidiaries, other than, in the case of clause (i), any contravention which could not reasonably be expected to have a Material Adverse Effect.    
Section 7.4    Litigation.  There are no actions, suits or proceedings pending or threatened with respect to Holdings or any of its Subsidiaries (i) that are likely to have a material adverse effect on the business, assets, liabilities (contingent or otherwise), operations, financial condition or prospects of any such Person, after giving effect to the Refinancing or (ii) that could reasonably be expected to have a material adverse effect on the validity or enforceability of this Agreement or any of the other Credit Documents or the rights or remedies of the Administrative Agent or the Lenders hereunder or thereunder.
Section 7.5   Use of Proceeds; Margin Regulations.  (a)  The proceeds of Term Loans shall be utilized (i) for the Refinancing and (ii) to pay costs and expenses related to the Refinancing.  The proceeds of all Revolving Loans shall be utilized to finance, in part (and to the extent necessary), the transactions described in this clause (a), and thereafter for working capital needs and other general corporate purposes of Holdings and its Subsidiaries.
(b)No part of the proceeds of any Loans will be used for any purpose which violates the provisions of the Regulations of the Board of Governors of the Federal Reserve System and any successor thereto.
Section 7.6    Governmental Approvals.  Except for any filings required under the Security Documents, no order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any Governmental Authority is required to authorize or is required in connection with (i) the execution, delivery and performance of any Credit Document or (ii) the legality, validity, binding effect or enforceability of any Credit Document.
Section 7.7    Investment Company Act.  None of Holdings or any of its Subsidiaries is (i) an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “ICA”) or a company “controlled” by an “investment company” within the meaning of the ICA or (ii) subject to any regulation under any other federal or state statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render all or any party of the Obligations unenforceable or voidable.
Section 7.8   True and Complete Disclosure.  (a)  All information and data (excluding projections) concerning Holdings, the Borrower and their respective Subsidiaries and the transactions contemplated herein which have been prepared by or on behalf of the Credit Parties and that have been made available to the Administrative Agent or any Lender by or on behalf of the Credit Parties prior to the Closing Date in connection with the transactions contemplated herein (including the Confidential Information) do not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading.  
(b)All other factual information furnished on or after the Closing Date by or on behalf of the Credit Parties or any of their Subsidiaries in writing to the Administrative Agent or any Lender (including, without limitation, all information contained in the Credit Documents) for 

53

purposes of or in connection with this Agreement or any transaction contemplated herein is, and will be, true and accurate in all material respects on the date as of which such information is dated or certified and not incomplete by omitting to state any material fact necessary to make such information not misleading at such time in light of the circumstances under which such information was provided.  The projections and pro forma financial information contained in such materials are based on good faith estimates and assumptions believed by such Persons to be reasonable at the time made, it being recognized by the Lenders that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results.  There is no fact known to any Credit Party which materially and adversely affects the business, operations, property, assets, liabilities or condition (financial or otherwise) of any such Credit Party and its respective Subsidiaries which has not been disclosed herein or in such other documents, certificates and statements furnished to the Lenders for use in connection with the transactions contemplated hereby.
Section 7.9    Financial Condition; Financial Statements.  (a)  On and as of the Closing Date, on a pro forma basis after giving effect to the Refinancing and to all Indebtedness incurred, and to be incurred, and Liens created, and to be created, by each Credit Party and its respective Subsidiaries in connection therewith, (x) the sum of the assets, at a fair market valuation, of each Credit Party and its respective Subsidiaries will exceed its debts, (y) no such Credit Party or its Subsidiaries will have incurred or intended to, or believes that it will, incur debts beyond its ability to pay such debts as such debts mature and (z) each such Credit Party and its Subsidiaries taken as a whole will have sufficient capital with which to conduct its business.  For purposes of this Section 7.9, “debt” means any liability on a claim, and “claim” means (i) right to payment whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or (ii) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured.
(b)The audited financial statements of Holdings and its Subsidiaries for the 2010 Fiscal Year consisting of balance sheets and the related consolidated statements of income, stockholders’ equity and cash flows for such Fiscal Year, were prepared in conformity with GAAP and fairly present, in all material respects, the financial position, on a consolidated basis, of the Persons described in such financial statements as at the respective dates thereof and the results of operations and cash flows, on a consolidated basis, of the Persons described therein for each of the periods then ended.  As of the Closing Date, none of Holdings, the Borrower or any of their respective Subsidiaries has any contingent liability or liability for taxes, long‐term lease or unusual forward or long‐term commitment that is not reflected in the foregoing financial statements or the notes thereto and which in any such case is material in relation to the business, operations, properties, assets, condition (financial or otherwise) or prospects of Holdings, the Borrower or any of their respective Subsidiaries.  Since December 31, 2010, no event, circumstance or change has occurred that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect.
Section 7.10    Security Interests.  On and after the Closing Date, each of the Security Documents creates, as security for the Obligations purported to be secured thereby, a valid and enforceable (and, to the extent perfection thereof can be accomplished pursuant to the filings or other actions required by the Security Documents and such filings or other actions are required to have been made or taken, perfected) security interest in and Lien on all of the Qualified Aircraft included in the Collateral Pool, superior to and prior to the rights of all third Persons and subject to no other 

54

Liens (except that the Qualified Aircraft included in the Collateral Pool may be subject to Permitted Liens relating thereto), in favor of the Administrative Agent for the benefit of the Lenders.  No filings or recordings are required in order to perfect the security interests created under any Security Document that are required by the Security Documents to be perfected except for filings or recordings which shall have been made upon or prior to the execution and delivery thereof.
Section 7.11    Tax Returns and Payments.  Except as set forth on Annex 7.11, Holdings and its Subsidiaries have filed all federal and state income tax returns and all other material tax returns, domestic and foreign, required to be filed by them and have paid Federal and state income taxes and all other all material taxes and assessments payable by them which have become due, other than those not yet delinquent and except for those contested in good faith, and Holdings and each of its Subsidiaries has paid, or has provided adequate reserves in accordance with GAAP (in the good faith judgment of the management of Holdings) for the payment of, all federal, state and foreign income taxes applicable for all prior Fiscal Years and for the current Fiscal Year to the date hereof.
Section 7.12    Compliance with ERISA.  Each Plan is in substantial compliance with ERISA and the Code; no Reportable Event has occurred with respect to a Plan; no Plan has applied for an extension of any amortization period within the meaning of Section 412 of the Code; all contributions required to be made with respect to a Plan have been timely made; neither a Credit Party, nor any Subsidiary of a Credit Party, nor any ERISA Affiliate has incurred any material liability to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064 or 4069 of ERISA or Section 4971 or 4975 of the Code or to or an account of a Multiemployer Plan pursuant to Section 4201 or 4204 of ERISA or expects to incur any liability (including any indirect, contingent or secondary liability) under any of the foregoing Sections with respect to any Plan; no proceedings have been instituted to terminate or appoint a trustee to administer any Plan; no condition exists which presents a material risk to a Credit Party or any Subsidiary of a Credit Party or any ERISA Affiliate of incurring a liability to or on account of a Plan pursuant to the foregoing provisions of ERISA and the Code; no Credit Party, Subsidiary of a Credit Party, or ERISA Affiliate has received any notice, and no Multiemployer Plan has received from any Credit Party, any Subsidiary of a Credit Party or any ERISA Affiliate any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA; and no lien imposed under the Code or ERISA on the assets of a Credit Party, or any Subsidiary of a Credit Party or any ERISA Affiliate exists or is reasonably likely to arise on account of any Plan, except to the extent that all events described in the preceding clauses of this Section 7.12 and then in existence would not, in the aggregate, be likely to have a Material Adverse Effect.  
Section 7.13    Subsidiaries.  (a)  The Capital Stock of each direct and indirect Subsidiary of Holdings has been duly authorized and validly issued and is fully paid and non‐assessable.  Annex 7.13 hereto correctly sets forth the ownership interest of Holdings and each of its Subsidiaries in their respective Subsidiaries as of the Closing Date.  Holdings will at all times own directly or indirectly the percentages specified in said Annex 7.13 of the outstanding Capital Stock of all of said entities except to the extent otherwise permitted pursuant to Section 9.2 or Section 9.5.  Except as set forth on Annex 7.13, as of the Closing Date, there is no existing option, warrant, call, right, commitment or other agreement to which any Subsidiary of Holdings is a party requiring, and there is no membership interest or other Capital Stock of any Subsidiary of Holdings outstanding which upon conversion or exchange would require, the issuance by Holdings or any of its Subsidiaries of any additional membership interests or other Capital Stock of Holdings or any of 

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its Subsidiaries or other securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase, a membership interest or other Capital Stock of Holdings or any of its Subsidiaries.  None of the Capital Stock of the direct or indirect Subsidiaries of Holdings is subject to any Lien.
(b)There are no restrictions on Holdings or any of its Subsidiaries which prohibit or otherwise restrict the transfer of cash or other assets from any Subsidiary of Holdings to the Borrower, other than prohibitions or restrictions permitted by Section 9.7(b), and there are no restrictions on Holdings or any of its Subsidiaries which prohibit such Person from granting Liens in the Capital Stock of any of the direct or indirect Subsidiaries of Holdings.
Section 7.14    Intellectual Property.  Holdings and each of its Subsidiaries owns, or is licensed to use, all material trademarks, trade names, copyrights, technology, know-how, patents, servicemarks, licenses and processes and other rights (“Intellectual Property”) free from burdensome restrictions that are necessary for the conduct of their business as currently conducted and as proposed to be conducted.
Section 7.15    Pollution and Other Regulations.  Except as set forth on Annex 7.15, (a) each of Holdings and its Subsidiaries is in compliance with all Environmental Laws governing or relating to its business, and to the knowledge of Holdings and the Borrower, there is no condition or circumstance that would be likely to prevent or interfere with such compliance in the future, except in each case, individually or in the aggregate, as could not reasonably be expected to have a Material Adverse Effect, (b) all licenses, permits, registrations or approvals required for the business of Holdings and each of its Subsidiaries, as conducted as of the Closing Date, under any Environmental Law have been secured, and Holdings and each of its Subsidiaries is in compliance therewith, except, in each case, either individually or in the aggregate, as could not be reasonably be expected to have a Material Adverse Effect, (c) neither Holdings nor any of its Subsidiaries has received any written communication from any Person alleging that it is in noncompliance with, breach of or default under, any applicable writ, order, judgment, injunction, or decree, in each case arising under or relating to Environmental Law, to which Holdings or such Subsidiary is a party or which would affect the ability of Holdings or such Subsidiary to operate its business or any Real Property, except in each such case, such noncompliance, breaches or defaults that individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, (d) there are no facts, circumstances, conditions or occurrences relating to the business of Holdings or any of its Subsidiaries or on or relating to any Real Property that could reasonably be expected to form the basis of an Environmental Claim against Holdings or any of its Subsidiaries or any Real Property of Holdings or any of its Subsidiaries that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
Section 7.16    Properties.  Holdings and each of its Subsidiaries have good and valid title to all Qualified Aircraft included in the Collateral Pool, free and clear of all Liens, other than as permitted by Section 9.3.  
Section 7.17    Labor Matters.  (a) There are no strikes or other material labor disputes against any Credit Party pending or, to the knowledge of Holdings or the Borrower, threatened; (b) hours worked by and payments made to employees of the Credit Parties have not been in violation of the Fair Labor Standards Act or any other applicable Requirement of Law dealing with such matters; and (c) all payments due from the Credit Parties on account of employee health and welfare insurance have been paid or accrued as a liability on the books of the Credit Parties.

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Section 7.18    No Default.  Neither Holdings nor any of its Subsidiaries is in default under or with respect to any of its Contractual Obligations in any respect that could reasonably be expected to have a Material Adverse Effect.  No Default or Event of Default has occurred and is continuing.
Section 7.19    No Material Adverse Change.  Since December 31, 2009, no event, circumstance or change has occurred that has caused or evidences, either in any single case or in the aggregate, a Material Adverse Effect.
Section 7.20    Insurance.  Set forth on Annex 7.20 is a true, complete and correct description of all material insurance maintained by or on behalf of Holdings and its Subsidiaries as of the Closing Date.  As of such date, such insurance is in full force and effect and complies with Section 8.3.
Section 7.21    Accounts.  None of the “accounts” (as such term is defined in the UCC) of Holdings or any of its Subsidiaries is subject to any Lien, other than Permitted Liens, and no restrictions exist that prohibit Holdings or any of its Subsidiaries from granting Liens in its accounts.
Section 7.22    Material Contracts.  Annex 7.22 contains a true, correct and complete list of all the Material Contracts in effect on the Closing Date, and except as described thereon, all such Material Contracts are in full force and effect and no defaults currently exist thereunder.
Section 7.23    Indebtedness to be Refinanced.  All Indebtedness of Holdings and its Subsidiaries outstanding immediately prior to the Closing Date shall either be repaid on the Closing Date or is permitted pursuant to Section 9.4.
Section 7.24    Foreign Assets Control.  None of Holdings or any Subsidiary or Affiliate of Holdings: (i) is a Sanctioned Person, (ii) has any of its assets in Sanctioned Entities, or (iii) derives any of its operating income from investments in, or transactions with, Sanctioned Persons or Sanctioned Entities.
Section 7.25    Patriot Act.  Each Credit Party is in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (ii) the Uniting And Strengthening America By Providing Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act of 2001).  No part of the proceeds of any Loan, and no Letters of Credit, will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.
Section 7.26    [Intentionally Deleted.]
Section 7.27    Aircraft.  Each Aircraft included in the Collateral Pool (including, without limitation, the Aircraft listed on Annex 8.10), is a Qualified Aircraft.

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SECTION 8    AFFIRMATIVE COVENANTS.  Holdings and the Borrower covenant and agree that on the Closing Date and thereafter and until the Commitments have terminated, no Letters of Credit or Notes are outstanding and the Loans and Unpaid Drawings, together with interest, Fees and all other Obligations incurred hereunder, are paid in full:
Section 8.1    Information Covenants.  Holdings will furnish to Administrative Agent for each Lender:
(a)Annual Financial Statements.  As soon as available, and in any event within 90 days after the end of each Fiscal Year (i) the consolidated balance sheets of Holdings and its Subsidiaries as at the end of such Fiscal Year and the related consolidated statements of income, stockholders' equity and cash flows of Holdings and its Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the previous Fiscal Year, in reasonable detail, and (ii) with respect to such consolidated financial statements a report thereon of Deloitte & Touche LLP or other independent certified public accountants of recognized national standing selected by Holdings, and reasonably satisfactory to Administrative Agent (which report shall be unqualified as to going concern and scope of audit, and shall state that such consolidated financial statements fairly present, in all material respects, the consolidated financial position of Holdings and its Subsidiaries as of the dates indicated and the results of their operations and their cash flows for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except as otherwise disclosed in such financial statements), that the audit by such accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards).
(b)Quarterly Financial Statements.  As soon as available, and in any event within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year, the unaudited consolidated balance sheets of Holdings and its Subsidiaries as at the end of such Fiscal Quarter and the related consolidated statements of income, stockholders’ equity and cash flows of Holdings and its Subsidiaries for such Fiscal Quarter and for the period from the beginning of the then current Fiscal Year to the end of such Fiscal Quarter, setting forth in each case in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year, all in reasonable detail.
All such financial statements delivered pursuant to paragraphs  and  above shall present fairly in all material respects in accordance with GAAP the consolidated financial condition of Holdings and its Subsidiaries as at the applicable dates, and the consolidated results of their operations, their changes in equity (deficit) and their consolidated cash flows for the periods reflected therein, and shall be prepared in accordance with GAAP applied consistently throughout the periods reflected therein (except, in the case of unaudited financial statements, for the absence of footnotes).
(c)Officer’s Certificates.  At the time of the delivery of the financial statements provided for in Section 8.1(a) and (b), a certificate of the chief financial officer or treasurer of Holdings, substantially in the form of Exhibit J (a “Compliance Certificate”), to the effect that no Default or Event of Default exists or, if any Default or Event of Default does exist, specifying the nature and extent thereof and any proposed action with respect thereto, which Compliance Certificate shall set forth the calculations required to establish the Total Leverage Ratio, the Fixed Charge Coverage Ratio and the Consolidated EBITDA then in effect for the Test Period ending on the last day of such fiscal period or year and the Collateral to Loan Value Ratio as of such date.  The Compliance Certificate shall also state whether any change in GAAP or the application thereof has 

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occurred since the date of the audited financial statements described in Section 7.9(b), and, if any change has occurred, specifying the effect of such change on the financial statements accompanying such Compliance Certificate.  If, as a result of any change in accounting principles and policies from those used in the preparation of the financial statements of Holdings described in Section 7.9(b), the consolidated financial statements of Holdings and its Subsidiaries delivered pursuant to clauses (a) and (b) immediately above will differ in any material respect from the consolidated financial statements that would have been delivered pursuant to such clauses had no such change in accounting principles and policies been made, then, together with the first delivery of such financial statements after such change, one or more statements of reconciliation for all such prior financial statements in form and substance satisfactory to Administrative Agent.
In the event that any financial statement or Compliance Certificate delivered pursuant to this Section 8.1 is shown to be inaccurate regardless of whether this Agreement or any Commitment is in effect when such inaccuracy is discovered and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “Applicable Period”) than the Applicable Margin applied for such Applicable Period, then (i) Holdings shall immediately deliver to the Administrative Agent a correct Compliance Certificate for such Applicable Period, (ii) the Applicable Margin shall be determined as if the highest level set forth in the definition of Applicable Margin (i.e. Level I) were applicable for such Applicable Period, and (iii) the Borrower shall immediately pay to the Administrative Agent the accrued additional interest owing as a result of such increased Applicable Margin for such Applicable Period, which payment shall be promptly applied by the Administrative Agent to the Obligations.  This Section 8.1 shall not limit the rights of the Administrative Agent or the Lenders with respect to Section 2.8(c) and Section 10.  
(d)Notice of Default or Litigation.  Prompt (and in any event within three Business Days after such event) notice of (x) the occurrence of any event which constitutes a Default or Event of Default, which notice shall specify the nature thereof, the period of existence thereof and what action the Credit Parties propose to take with respect thereto, (y) the commencement of or any material development in any litigation or governmental proceeding pending against Holdings or any of its Subsidiaries in which the amount involved is $15,000,000 or more or is reasonably likely to have a material adverse effect on the ability of any Credit Party to perform its obligations hereunder or under any other Credit Document or (z) any order, judgment or decree that is reasonably likely to have a material adverse effect on the ability of any Credit Party to perform its obligations hereunder having been entered against Holdings or any of its Subsidiaries or any of their respective properties or assets.
(e)ERISA Events.  Prompt notice of the development of any ERISA Event that, together with all other ERISA Events that have developed or occurred, could reasonably be expected to have a Material Adverse Effect, together with a certificate of the chief financial officer of Holdings setting forth details as to such occurrence and such action, if any, which Holdings, its Subsidiaries or an ERISA Affiliate is required or proposes to take, together with any notices required or proposed to be given to or filed with or by Holdings or its Subsidiaries, the ERISA Affiliate, the PBGC, a Plan participant (other than notices relating to an individual participant’s benefits) or the Plan administrator with respect thereto.  Upon request of the Administrative Agent, Holdings will deliver to the Administrative Agent a complete copy of the annual report (Form 5500) of each Plan required to be filed with the Internal Revenue Service.  In addition to the foregoing, copies of any material notices received by Holdings, its Subsidiaries or any ERISA Affiliate, with respect to a Plan shall be delivered to the Administrative Agent no later than 15 days after the same are received by Holdings, such Subsidiary or the ERISA Affiliate, as applicable.  

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(f)Modification of Organizational Documents.  A copy of any amendment or other modification to the articles or certificate of incorporation, bylaws, partnership agreement, operating agreement or other similar organizational documents of Holdings or its Subsidiaries within 15 Business Days after the effectiveness thereof.
(g)Change of Management or Financial Condition; Collateral Loss.  Prompt notice of (x) any change in the senior management of Holdings or any of its Subsidiaries, (y) any change in the business, assets, liabilities, financial condition or results of operations of Holdings and its Subsidiaries which has had or could reasonably be expected to have a Material Adverse Effect or (z) any material damage, loss or destruction of any material portion of the Collateral.
(h)Aircraft Appraisals.  No later than April 30 of each calendar year, the Borrower shall deliver to the Administrative Agent an Aircraft Appraisal dated as of March 31 of such calendar year.
(i)Notice Regarding Material Contracts.  
(i)Promptly, and in any event within five (5) Business Days (i) after any Material Contract of Holdings or any of its Subsidiaries is terminated or amended in a manner that is materially adverse to Holdings or such Subsidiary, as the case may be, or (ii) any new Material Contract is entered into, a written statement describing such event, with copies of such material amendments or new contracts, delivered to Administrative Agent, and an explanation of any actions being taken with respect thereto.
(ii)Promptly, and in any event within two (2) Business Days after any Credit Party becoming aware of the same, notice of any Material Agreement Default.  
(iii)Promptly, and in any event within two (2) Business Days after receipt by any Credit Party, notice of the acceleration of Indebtedness under the DHL Note or demand for the payment or prepayment of the DHL Note prior to the scheduled maturity thereof.
(j)Other Information.  Promptly after their filing with the Securities and Exchange Commission or any successor thereto (the “SEC”) copies of any filings and registrations with, and reports to, the SEC by Holdings or its Subsidiaries and, with reasonable promptness, such other information or documents (financial or otherwise) as the Administrative Agent on its own behalf or on behalf of the Required Lenders may reasonably request from time to time.  Holdings may deliver such filings, registrations, reports, information or documents by posting such items to EDGAR so long as the Administrative Agent receives notice from Holdings that such items have been posted to EDGAR; receipt by the Administrative Agent of such notice shall constitute delivery.
(k)FAA Legal Opinion.  Within five (5) Business Days after the Closing Date (or such longer period as may be reasonably acceptable to the Administrative Agent), a duly executed opinion of Daugherty, Fowler, Peregrin, Haught & Jenson, P.C., special FAA counsel to Holdings and its Subsidiaries, in the form of Exhibit F-3.
Section 8.2    Books, Records and Inspections.  Holdings will, and will cause each of its Subsidiaries to, maintain books and records pertaining to their respective business operations in 

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such detail, form and scope as is consistent with good business practice and in accordance with GAAP.  Holdings will, and will cause its Subsidiaries to, permit, upon two (2) Business Days’ notice to any Authorized Officer of Holdings (except if a Default or Event of Default has occurred and is continuing, no prior notice shall be required), officers and designated representatives of the Administrative Agent (which designated representatives may include one or more Lenders) to visit and inspect any of the properties or assets of Holdings and any of its Subsidiaries in whomsoever’s possession, and to examine the books of account of Holdings and any of its Subsidiaries and discuss the affairs, finances and accounts of Holdings and of any of its Subsidiaries with, and be advised as to the same by, its and their officers and independent accountants, all at such reasonable times and intervals and to such reasonable extent as the Administrative Agent or, if applicable, the Required Lenders may desire.  Further, upon the occurrence and during the continuance of an Event of Default, Holdings will, and will cause its Subsidiaries to, permit officers and designated representatives of any Lender, at the sole cost and expense of such Lender, to visit and inspect any of the properties or assets of Holdings and any of its Subsidiaries in whomsoever’s possession, and to examine the books of account of Holdings and any of its Subsidiaries and discuss the affairs, finances and accounts of Holdings and of any of its Subsidiaries with, and be advised as to the same by, its and their officers and independent accountants.
Section 8.3    Maintenance of Insurance.  Holdings will, and will cause each of its Subsidiaries to, at all times maintain or cause to be maintained in full force and effect insurance in such amounts, covering such risks and liabilities and with such deductibles or self-insured retentions as are in accordance with normal industry practice or otherwise as are acceptable to the Administrative Agent in its reasonable discretion determined in good faith, including with respect to the Qualified Aircraft included in the Collateral Pool, all risk ground, taxiing, and flight aircraft hull insurance.  Holdings will cause its Subsidiaries (as applicable) to maintain a policy of FAA War Risk Hull and Liability Insurance or its commercial equivalent, in amounts that are not less than the comprehensive aircraft and general liability and property damage insurance and of the type and covering the same risks as applicable on the Closing Date with respect to the Qualified Aircraft included in the Collateral Pool.  All such insurance shall (i) provide that no cancellation, material reduction in amount or material change in coverage thereof shall be effective until at least 30 days after receipt by the Administrative Agent of written notice thereof and name the Administrative Agent as an additional insured and lender’s loss payee.  Holdings will, and will cause each of its Subsidiaries to, furnish or cause to be furnished annually to the Administrative Agent certificates of insurance carried and other evidence of such insurance, if any, that comply with the immediately preceding sentence.
Section 8.4    Payment of Taxes.  Holdings will pay and discharge, and will cause each of its Subsidiaries to pay and discharge, all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits, or upon any properties belonging to it, prior to the date on which penalties attach thereto, and all lawful claims which, if unpaid, might become a Lien or charge upon any properties of Holdings or any of its Subsidiaries, provided that neither Holdings nor any of its Subsidiaries shall be required to pay any such tax, assessment, charge, levy or claim which is being contested in good faith and by proper proceedings if it has maintained adequate reserves (in the good faith judgment of the management of Holdings) with respect thereto in accordance with GAAP.
Section 8.5    Franchises.  Holdings will do, and will cause each of its Subsidiaries to do, or cause to be done, all things necessary to preserve and keep in full force and effect its existence and its rights, franchises, licenses and privileges in the jurisdiction of its incorporation or 

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formation and qualify and remain qualified and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification and authorization and where the failure to be so authorized and qualified could reasonably be expected to have a Material Adverse Effect, provided that any transaction permitted by Section 9.2 will not constitute a breach of this Section 8.5.
Section 8.6    Compliance with Contractual Obligations and Laws, Statutes, etc.  Holdings will, and will cause each of its Subsidiaries to, comply with all Contractual Obligations, applicable laws, statutes, regulations and orders of, and all applicable restrictions imposed by, all Governmental Authorities, in respect of the conduct of its business and the ownership of its property, other than those the non-compliance with which could not reasonably be expected to have a Material Adverse Effect. 
Section 8.7    Maintain Property.  Holdings will, and will cause each of its Subsidiaries to, protect and preserve all of its properties, including, without limitation, its material patents, trademarks, copyrights, franchises and other intellectual property, and ensure that its properties and equipment used or useful in its business in whomsoever’s possession they may be, are kept in good repair, working order and condition, normal wear and tear excepted.  In addition, and not in limitation of the generality of the foregoing, Holdings and the Borrower will, and will cause the operator of any Qualified Aircraft to, (i) maintain, inspect, service, repair, overhaul and test each such Aircraft in accordance with all Maintenance Requirements and all Requirements of Law and (ii) maintain all Records in accordance with all Requirements of Law and all Maintenance Requirements.  All maintenance procedures shall be performed in accordance with all Requirements of Law and by properly trained, licensed, and certified maintenance sources and maintenance personnel utilizing replacement parts approved by the applicable Aviation Authority, so as to keep it and any Engines and APUs attached thereto in good operating condition, ordinary wear and tear, excepted, and to enable the airworthiness certificate for such Aircraft to be continually maintained.  Without limiting the foregoing, Holdings and the Borrower will, and will cause the operator of any Qualified Aircraft to, comply with all mandatory service bulletins and airworthiness directives by causing compliance to such bulletins and/or directives not later than the date by which such bulletins and directives make compliance mandatory.
Section 8.8    Environmental Laws.  Holdings will, and will cause each of its Subsidiaries and each operator of any Aircraft to (a) comply with all applicable Environmental Laws except for such non-compliance as would not reasonably be expected to have a Material Adverse Effect, and obtain and comply in all respects with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws the failure to obtain or comply with which would reasonably be expected to have a Material Adverse Effect and (b) conduct and complete, in all material respects, all investigations, studies, sampling and testing, and all remedial, removal and other actions, required under Environmental Laws and comply in all material respects with all lawful and binding orders and directives of all Governmental Authorities regarding Environmental Laws, except with respect to all matters above to the extent Holdings and/or its Subsidiaries, as applicable, challenge or appeal any such requirements, orders or directives, so long as such challenges or appeals are made in good faith by appropriate proceedings (which proceedings are being diligently pursued) by Holdings and/or its Subsidiaries, as applicable, and with respect to which adequate reserves are being maintained in accordance with GAAP.
Section 8.9    Use of Proceeds.  All proceeds of the Loans and all Letters of Credit shall be used as provided in Section 7.5.  No part of the proceeds of any Loan or Letter of Credit will 

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be used (a) for the purpose of buying or carrying “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or to extend credit to others for the purpose of purchasing or carrying any such margin stock, in each case in violation of such Regulation U or (b) to fund any operations in, to finance any investments or activities in, or to make any payments to, a Sanctioned Person or Sanctioned Entity.
Section 8.10    Collateral Pool; Release of Aircraft; Additional Guarantees.   (a) The Aircraft set forth on Annex 8.10 shall be included in the Collateral Pool as of the Closing Date.
(b)If after the Closing Date the Borrower desires to (or is required to pursuant to Section 9.14) include additional Aircraft into the Collateral Pool, the Borrower shall provide the Administrative Agent with prior written notice thereof, which such notice shall reasonably identify such Aircraft and shall include a certification that such Aircraft is a Qualified Aircraft.  No Aircraft shall be admitted into the Collateral Pool until the Borrower shall have delivered, or caused to be delivered, each of the following, in form and substance satisfactory to the Administrative Agent:
(i)an Aircraft Appraisal with respect to such Aircraft;
(ii)a supplement or amendment to the Guarantee and Collateral Agreement and other Security Documents as the Administrative Agent reasonably requests (including, without limitation, security documents to be filed with the FAA or other applicable Aviation Authority) in order to grant to the Administrative Agent, for the benefit of the Secured Parties, a security interest in such Aircraft; and
(iii)a legal opinion in substantially the form of Exhibit F-3 with respect to such Aircraft; and 
(iv)take all actions reasonably requested by the Administrative Agent to grant to the Administrative Agent, for the benefit of the Lenders, a perfected security interest in such property having the priority required by the Guarantee and Collateral Agreement, including the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be reasonably requested by the Administrative Agent (including, in the case of Qualified Aircraft included in the Collateral Pool, security documents to be filed with the FAA or other applicable Aviation Authority).
(c)From time to time the Borrower may request, upon not less than 15 Business Days prior written notice to the Administrative Agent (or such shorter period as may be acceptable to the Administrative Agent), that a Qualified Aircraft included in the Collateral Pool be released from the Liens created by the Security Documents applicable thereto, which release (the “Aircraft Release”) shall be effected by the Administrative Agent if the Administrative Agent determines all of the following conditions are satisfied as of the date of such Aircraft Release:
(i)No Default or Event of Default exists or will exist immediately after giving effect to such Aircraft Release and the reduction in the Collateral Pool by reason of the release of such Aircraft;
(ii)all representations and warranties contained herein shall be true and correct in all material respects with the same effect as though such representations 

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and warranties had been made on and as of the date of such Aircraft Release (except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representation and warranty shall have been true and correct in all material respect as of such earlier date); and
(iii)the Administrative Agent shall have received a pro forma Compliance Certificate demonstrating, among other things, compliance with the covenants set forth in Section 9.12, Section 9.13 and Section 9.14, after giving effect to the Aircraft Release.
Except as set forth in this Section 8.10(c), no Qualified Aircraft included in the Collateral Pool shall be released from the Liens created by the Security Documents.
(d)With respect to any new Domestic Subsidiary created or acquired by any Credit Party after the Closing Date, the Borrower shall promptly (i) cause such new Domestic Subsidiary (A) to become a party to the Guarantee and Collateral Agreement and (B) to deliver to the Administrative Agent a certificate of such Subsidiary, substantially in the form of Exhibit G, with appropriate insertions and attachments, and (ii) if reasonably requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent.
Section 8.11    Hedging Agreements.  Not later than sixty (60) days following the Closing Date, the Borrower will, at its sole cost and expense, enter into and thereafter maintain in full force and effect one or more Hedging Agreements, including in Borrower’s discretion, forward Hedging Agreements, in any combination, providing protection against fluctuations in interest rates with respect to not less than fifty percent (50%) of the Term Loans made on the Closing Date, which Hedging Agreements, including any such forward Hedging Agreements, shall provide for not less than a three (3) year term and shall contain such protections and other terms as are customary and are reasonably satisfactory to Administrative Agent.
Section 8.12    Aircraft Appraisals.  If Holdings or any of its Subsidiaries sells or otherwise disposes of, or grants a Lien in, any Aircraft not included in the Collateral Pool, which results in the Qualified Aircraft to Loan Value Ratio being less than 1.65 to 1.00, the Administrative Agent may, in its reasonable discretion made in good faith, require the Borrower to deliver a new Aircraft Appraisal within 30 days of each such sale or grant of such Lien.
Section 8.13    Further Assurances.  Holdings shall, and shall cause it Subsidiaries to, upon request of the Administrative Agent, execute and deliver or cause to be executed and delivered, to the Administrative Agent such further instruments, documents and certificates, and do and cause to be done such further acts that may be reasonably necessary or advisable in the reasonable opinion of the Administrative Agent to carry out more effectively the provisions and purposes of this Agreement and the other Credit Documents.  

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SECTION 9    NEGATIVE COVENANTS.  Holdings and the Borrower hereby covenant and agree that as of the Closing Date and thereafter until the Commitments have terminated, no Letters of Credit or Notes are outstanding and the Loans and Unpaid Drawings, together with interest, Fees and all other Obligations incurred hereunder, are paid in full:  
Section 9.1    Changes in Business.  Except as otherwise permitted by Section 9.2, Holdings will not, and will not permit any of its Subsidiaries to, engage in any business or operations other than aviation-related services, mail or freight transportation services, and logistics services.
Section 9.2    Consolidation, Merger, Sale of Assets, etc.  Holdings will not, and will not permit any of its Subsidiaries to, wind up, liquidate or dissolve its affairs, or enter into any transaction of merger or consolidation, sell or otherwise dispose of all or any part of its property or assets (other than Cash Equivalents sold in the Ordinary Course of Business) or agree to do any of the foregoing at any future time, except that the following shall be permitted:
(a)any Subsidiary of Holdings may be merged or consolidated with or into, or be liquidated or dissolved into, a Credit Party (so long as (i) a Credit Party is the surviving entity, (ii) if any such merger or consolidation involves the Borrower, the surviving entity shall be the Borrower and (iii) if any such merger or consolidation involves a Domestic Subsidiary, but not the Borrower, a Domestic Subsidiary (other than the Relief Fund) is the surviving entity, or all or any part of its business, properties and assets may be conveyed, leased, sold or transferred to the Borrower or any Subsidiary Guarantor which must be a Domestic Subsidiary if the transaction involves the conveyance, lease, sale or transfer of all or substantially all the properties and assets of a Domestic Subsidiary), provided that in each case all Liens on any Collateral owned by a Subsidiary affected by any of the foregoing events shall remain in full force and effect after giving effect thereto;
(b)the Investments, Dividends, acquisitions and transfers or dispositions of properties expressly permitted pursuant to Section 9.5 and Section 9.7;
(c)sales of Aircraft, other assets or the Capital Stock of a Subsidiary of Holdings that are not included in the Collateral Pool, so long as: (i) the sale of such Aircraft does not result in a Qualified Aircraft to Loan Value Ratio of less than 1.65 to 1.00 as of the date of such sale, provided that the sale of Qualified Aircraft to an Acquired Person, as such term is defined in Section 9.5(j) hereof, shall be included in the calculation of the Qualified Aircraft to Loan Value Ratio for purposes of this Section 9.5(c), and provided, further, that, for purposes of such calculation, the appraised value of such Qualified Aircraft shall be adjusted in proportion to Holdings or its Subsidiaries percentage ownership of the Capital Stock of such Acquired Person; and (ii)  the book value of such other assets or Capital Stock proposed to be sold, when aggregated with all such other assets or Capital Stock sold during the term of this Agreement, does not exceed twenty percent (20%) of the book value of the total assets of Holdings prior to giving effect to such sale; and
(d)leases or subleases granted to others not interfering in any material respect with the business of the Borrower or any of its Subsidiaries. 
Section 9.3    Liens.  Holdings will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with respect to (i) any Qualified Aircraft included in the Collateral Pool, (ii) any Accounts (as such term is defined in the UCC) of Holdings or any of its Subsidiaries or (iii) any Capital Stock of any Subsidiary of Holdings (the assets described in the immediately preceding clauses (i), (ii) and (iii) referred to as “Restricted Assets”) or sell any 

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such Restricted Asset subject to an understanding or agreement, contingent or otherwise, to repurchase such Restricted Asset or assign any right to receive income, or file or authorize the filing of any financing statement under the UCC or any other similar notice of Lien under any similar recording or notice statute with respect to such Restricted Asset, except:
(a)Liens for taxes and assessments not yet due and payable or Liens for taxes being contested in good faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of Holdings) have been established;
(b)Liens in respect of Restricted Assets of Holdings or any of its Subsidiaries imposed by law which were incurred in the Ordinary Course of Business, such as operators’, vendors’, repairmens’, construction, carriers’, warehousemen’s and mechanics’ Liens, statutory landlord’s Liens, and other similar Liens arising in the Ordinary Course of Business, and (x) which do not in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Borrower or its Subsidiaries or (y) which are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property or asset subject to such Lien; 
(c)Liens created by or pursuant to this Agreement or the other Credit Documents;
(d)Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 10.10; and
(e)leases or subleases of Aircraft granted to others not interfering in any material respect with the business of Holdings or any of its Subsidiaries. 
Section 9.4    Indebtedness.  Holdings will not, and will not permit any of its Subsidiaries to, contract, create, incur, assume or suffer to exist any Indebtedness, except:
(a)Indebtedness incurred pursuant to this Agreement and the other Credit Documents, including Letters of Credit; 
(b)Indebtedness of any Subsidiary Guarantor to the Borrower or any other Subsidiary Guarantor, or of the Borrower to any Subsidiary Guarantor;
(c)existing Indebtedness listed on Annex 9.4(c) hereto (“Existing Indebtedness”) and any renewals, extensions, refundings or refinancings of such Indebtedness, provided the amount thereof is not increased and the maturity of principal thereof is not shortened;
(d)Indebtedness under Hedge Agreements (provided that such Agreements are entered into to hedge actual risks and not for speculative purposes);
(e)guarantees (i) by any Credit Party of any Indebtedness of any other Credit Party otherwise permitted hereunder, (ii) by any Subsidiary that is not a Credit Party of any Indebtedness of any Subsidiary that is not a Credit Party (other than the Relief Fund) so long as the Indebtedness so guaranteed is otherwise permitted hereunder and (iii) by Holdings or any Subsidiary making an Investment in a Person permitted by Section 9.5(j) of any Indebtedness of such Person, so long as such guarantee is limited to the Fair Market Value (determined as of the date of such Investment) of the Investment made in such Person; 

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(f)Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the Ordinary Course of Business, provided that such Indebtedness is extinguished within two Business Days of its incurrence; 
(g)the DHL Note; 
(h)Capital Leases in an aggregate amount outstanding not to exceed at any time $250,000,000; and
(i)other Indebtedness of Holdings and its Subsidiaries in an aggregate outstanding principal amount not to exceed at any time $100,000,000.
Section 9.5    Advances, Investments and Loans.  Holdings will not, and will not permit any of its Subsidiaries to, make or permit to exist any Investment in any Person, except:
(a)Holdings and its Subsidiaries may invest in cash and Cash Equivalents;
(b)Holdings and any of its Subsidiaries may acquire and hold receivables owing to them, if created or acquired in the Ordinary Course of Business and payable or dischargeable in accordance with customary trade terms;
(c)the intercompany Indebtedness described in Section 9.4(b);
(d)the Investments owned by Holdings and each of its Subsidiaries on the Closing Date and set forth in Annex 9.5(d) may continue to be owned by the Borrower and such Subsidiary;
(e)Holdings and any of its Subsidiaries may acquire and own investments (including, without limitation, debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the Ordinary Course of Business;
(f)Hedge Agreements permitted by Section 9.4(d);
(g)Dividends permitted by Section 9.7; 
(h)promissory notes issued to Holdings or any of its Subsidiaries by the purchasers of assets sold in accordance with Section 9.2(c); 
(i)Investments in any Domestic Subsidiary of Holdings (other than the Relief Fund); provided that either (i) such Investment is approved by the Required Lenders in their sole discretion or (ii) the Domestic Subsidiary in which such Investment is made has become a party to the Guarantee and Collateral Agreement and Holdings and such Domestic Subsidiary have complied with each of the provisions of Section 8.10(d) contemporaneously with the making of such Investment; and
(j)Investments in a Person (the “Acquired Person”) in which Holdings or the applicable Subsidiary acquires less than 50% of the outstanding Capital Stock of such Acquired Person so long as the Acquired Person is in a line of business of a type described in Section 9.1.

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Section 9.6    Amendments to Documents, etc.  (a)  Holdings will not, and will not permit any of its Subsidiaries to, amend, modify or change (i) in any manner materially adverse to the interests of the Lenders or (ii) in a manner having, or reasonably expected to have, an adverse effect on any Credit Party’s ability to pay or perform any Obligations, the certificate or articles of incorporation, by-laws, partnership agreement, limited liability company agreement or other charter documents of Holdings or any Subsidiary of Holdings, or any agreement entered into by Holdings or any of its Subsidiaries with respect to its Capital Stock, or enter into any new agreement in any manner materially adverse to the interests of the Lenders with respect to the Capital Stock of Holdings or any of its Subsidiaries.
(b)Holdings will not, and will not permit any of its Subsidiaries to, amend, restate, supplement, modify or change the DHL Note in any manner, individually or in the aggregate, which is adverse to the Lenders or their interests, the determination of which will be in the sole and absolute discretion of the Administrative Agent.
Section 9.7    Dividends, Restrictive Agreements.  (a)  Holdings will not, and will not permit any of its Subsidiaries to declare or pay any dividends (other than dividends payable solely in Capital Stock of such Person) or return any capital to, its stockholders or other equity holders, or authorize or make any other distribution, payment or delivery of property or cash to its stockholders or equity holders as such, or redeem, retire, purchase or otherwise acquire, directly or indirectly, for consideration, any shares of any class of its Capital Stock now or hereafter outstanding (or any warrants for or options or stock appreciation rights in respect of any of such shares), or set aside any funds for any of the foregoing purposes, or permit any of its Subsidiaries to purchase or otherwise acquire for consideration any shares of any class of the Capital Stock of Holdings or any of its Subsidiaries, as the case may be, now or hereafter outstanding (or stock appreciation or similar rights issued by such Person with respect to its Capital Stock) (all of the foregoing “Dividends”), except that:
(i)any Subsidiary of Holdings may pay Dividends to the holders of its Capital Stock;
(ii)Holdings may make noncash repurchases of Capital Stock deemed to occur upon exercise of stock options if such Capital Stock represents a portion of the exercise price of such options; 
(iii)Holdings may pay cash Dividends to the holders of its common stock after the Closing Date; provided that (w) no Default or Event of Default is then in existence or would result from such payment of Dividends, (x) after giving effect to the payment of such Dividends and any related Borrowing, the Total Leverage Ratio of Holdings is less than 2.00 to 1.00 for the Test Period ending on, or most recently ended prior to, the proposed making of such Dividend payment, such compliance determined on a pro forma basis as if such Borrowing and such Dividend payments occurred on the first day of such Test Period, (y) after giving effect to such payment of Dividends and any related Borrowing, Holdings and its Subsidiaries shall be in compliance with Section 9.12, Section 9.13 and Section 9.14, such compliance determined on a pro forma basis giving effect to such Borrowing and such Dividend payments and (z) the aggregate amount of all cash Dividends paid under this clause (iii) shall not exceed $50,000,000 in any Fiscal Year of Holdings; and

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(iv)Holdings may make cash repurchases of Capital Stock pursuant to employee compensation arrangements; so long as no Default or Event of Default is then in existence or would result therefrom.
(b)Holdings will not, and will not permit any of its Subsidiaries to, create or otherwise cause or suffer to exist any encumbrance or restriction which prohibits or otherwise restricts (A) the ability of any other Subsidiary to (a) pay Dividends or make other distributions or pay any Indebtedness owed to Holdings, the Borrower or any other Subsidiary, (b) make loans or advances to Holdings, the Borrower or any other Subsidiary or (c) transfer any of its properties or assets to Holdings, the Borrower or any Subsidiary or (B) the ability of Holdings, the Borrower or any of their respective Subsidiaries to create, incur, assume or suffer to exist any Lien upon its property or assets to secure the Obligations, other than prohibitions or restrictions existing under or by reason of:
(i)this Agreement and the other Credit Documents;
(ii)applicable law;
(iii)customary non-assignment provisions entered into in the Ordinary Course of Business, but only with respect to assets that are not Restricted Assets; 
(iv)customary provisions restricting subletting or assignment of any lease governing a leasehold interest of a Subsidiary, provided that such restrictions apply only to leasehold interest created by such lease; 
(v)customary restrictions and conditions contained in any agreement relating to the sale of any property permitted under Section 9.2 pending the consummation of such sale, provided that such restrictions or conditions apply only to the property subject to such sale; and
(vi)any restriction in effect at the time such Subsidiary becomes a Subsidiary of Holdings, so long as such agreement was not entered into in connection with or in contemplation of such person becoming a Subsidiary of Holdings.
(c)If an Event of Default has occurred and is continuing, Holdings will not, and will not permit any of its Subsidiaries to, make any payment or prepayment of principal of, premium, if any, or interest on, or any redemption, purchase, retirement, defeasance, sinking fund or similar payment with respect to, the DHL Note unless such payment, in the case of interest, is reimbursed by DHL Network Operations (USA), Inc. under the CMI Services Agreement.
Notwithstanding anything in this Agreement to the contrary (except as provided in clause (c) immediately above), so long as there is any principal outstanding under the DHL Note and demand for payment of principal has not been made, Holdings or its Subsidiaries may make or cause to be made regularly scheduled payments of interest on the DHL Note in accordance with the terms of the DHL Note.
Section 9.8    Transactions with Affiliates.  Holdings will not, and will not permit any of its Subsidiaries to, enter into any transaction or series of transactions, whether or not in the Ordinary Course of Business, with any Affiliate other than on terms and conditions substantially as 

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favorable to Holdings or such Subsidiary as would be obtainable by Holdings or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate; provided that the foregoing restrictions shall not apply to (i) transactions set forth in Annex 9.8 (as in existence on the Closing Date, without giving effect to any amendment or modification thereto after the Closing Date), (ii) transactions between or among any of Holdings and its Subsidiaries that are Credit Parties, (iii) transactions expressly permitted by Section 9.2, Section 9.5, Section 9.6 or Section 9.7 and (iv) compensation arrangements for the directors and senior management of Holdings and its Subsidiaries and approved by Holdings’ or its Subsidiaries’ board of directors or compensation committee; provided, further that in no event shall transactions between any Credit Party and the Relief Fund be permitted.
Section 9.9    Sales and Leasebacks.  Holdings will not, and will not permit any of its Subsidiaries to, enter into any arrangement with any Person providing for the leasing by any Credit Party of any Qualified Aircraft that is included in the Collateral Pool that has been or is to be sold or transferred by such Credit Party to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of such Credit Party.
Section 9.10    Changes in Fiscal Periods.  Holdings shall not change its Fiscal Year to end on a day other than as set forth in the definition of “Fiscal Year” in Section 1 or change its method of determining Fiscal Quarters, except that Holdings may make such changes as are required by GAAP.
Section 9.11    Activities of Holdings.  Holdings shall not (a) incur, directly or indirectly, any Indebtedness or any other obligation or liability whatsoever other than (i) the Indebtedness and obligations under the Credit Documents and (ii) obligations under the Securities Exchange Act of 1934, as amended; (b) create or suffer to exist any Lien upon any property or assets now owned or hereafter acquired by it other than the Liens created under the Security Documents to which it is a party or permitted pursuant to ; (c) engage in any business or activity or own any assets other than (i) holding 100% of the Capital Stock of the Borrower, (ii) performing its obligations and activities incidental thereto under the Credit Documents; and (iii) making Dividends expressly permitted by Section 9.7 and Investments expressly permitted by Section 9.5; (d) consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, any Person; (e) sell or otherwise dispose of any Capital Stock of any of its Subsidiaries; or (f) create or acquire any Subsidiaries after the Closing Date, unless such Subsidiary is a Domestic Subsidiary, such Subsidiary becomes a party to the Guarantee and Collateral Agreement and Holdings and such Subsidiary have complied with each of the provisions of Section 8.10(d) promptly after its creation or acquisition.
Section 9.12    Fixed Charge Coverage Ratio.  Holdings will not permit the Fixed Charge Coverage Ratio for any Test Period to be less than 1.50 to 1.00.  For the purposes of calculating the financial covenant set forth in this Section, the Relief Fund shall be deemed not to be a “Subsidiary.”
Section 9.13    Total Leverage Ratio.  Holdings will not permit the Total Leverage Ratio at the end of any Test Period ending on March 31, June 30, September 30 and December 31 of any calendar year to be more than 3.00 to 1.00.  For the purposes of calculating the financial covenant set forth in this Section, the Relief Fund shall be deemed not to be a “Subsidiary.”

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Section 9.14    Collateral to Loan Value Ratio.  Holdings will not at any time permit the Collateral to Loan Value Ratio to be less than 1.50 to 1.00; provided, however, if Holdings shall fail to maintain the Collateral to Loan Value Ratio as set forth in this Section, the Borrower shall as soon as reasonably practicable, but not in any event later than 45 days after the occurrence of such failure, cause one or more Qualified Aircraft to be admitted to the Collateral Pool in order to cause the Collateral to Loan Value Ratio to be greater than or equal to 1.50 to 1.00.
SECTION 10   EVENTS OF DEFAULT.
Upon the occurrence of any of the following specified events (each an “Event of Default”):
Section 10.1    Payments.  The Borrower shall (i) default in the payment when due of any principal of the Loans or any Unpaid Drawing, or (ii) default, and such default shall continue for three (3) or more days, in the payment when due of any interest on the Loans or any Fees or any other amounts owing hereunder or under any other Credit Document; or
Section 10.2    Representations etc.  Any representation, warranty or statement made by Holdings or any of its Subsidiaries herein or in any other Credit Document or in any statement or certificate delivered or required to be delivered pursuant hereto or thereto shall prove to be untrue or incorrect in any material respect on the date as of which made or deemed made; or
Section 10.3    Covenants.  Holdings or any of its Subsidiaries shall (a) default in the due performance or observance by it of any term, covenant or agreement contained in Section 8.1, the second sentence of Section 8.2, Section 8.3, Section 8.5 (solely with respect to the continued existence of a Credit Party), Section 8.9, Section 8.10, Section 8.12 or Section 9, or (b) default in the due performance or observance by it of any term, covenant or agreement (other than those referred to in Section 10.1, Section 10.2 or clause (a) of this Section 10.3) contained in this Agreement or any other Credit Document and such default shall continue unremedied for a period of at least 20 days after the earlier of: (i) notice to the defaulting party by the Administrative Agent or any Lender and (ii) any officer of Holdings or any of its Subsidiaries shall have become aware of any such default; or
Section 10.4    Default Under Other Agreements.  Holdings or any of its Subsidiaries shall (i) default in any payment with respect to any Indebtedness (other than the Obligations), (ii) default in the observance or performance of any agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist (except for an event of default relating to such Indebtedness or any instrument or agreement evidencing, securing or relating thereto to the extent such event of default is either based on an alleged material adverse event or other subjective criteria (a “Subjective Cross-Default”), but only so long as the Administrative Agent agrees in its reasonable discretion that such Subjective Cross-Default should be disregarded for purposes of this Section), the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, any such Indebtedness to become due prior to its stated maturity, or to require the obligor(s) of such Indebtedness to offer to prepay, repurchase or redeem any obligations under such Indebtedness or (iii) breach, default under, fail to observe or perform, cancel or fail to renew any Contractual Obligation and such breach, default, cancellation or failure could (x) reasonably be expected to have a Material Adverse Effect or (y) result in liquidated damages owing by Holdings or its Subsidiaries in an aggregate amount of $20,000,000 or more; provided that it shall not constitute an Event of 

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Default pursuant to this Section 10.4 unless at the time of such default, defaults, events or conditions of the type described in clauses (i) and (ii) of this Section 10.4 shall have occurred and be continuing with respect to Indebtedness the aggregate outstanding principal amount of which exceeds $20,000,000; or
Section 10.5    Bankruptcy, etc.  Holdings or any of its Subsidiaries shall commence a voluntary case concerning itself under Title 11 of the United States Code entitled “Bankruptcy”, as now or hereafter in effect, or any successor thereto (the “Bankruptcy Code”); or an involuntary case is commenced against  Holdings or any of its Subsidiaries and the petition is not dismissed within 60 days, after commencement of the case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge of, all or substantially all of the property of  Holdings or any of its Subsidiaries; or  Holdings or any of its Subsidiaries commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to Holdings or any of its Subsidiaries; or there is commenced against Holdings or any of its Subsidiaries any such proceeding which remains undismissed for a period of 60 days; or Holdings or any of its Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or  Holdings or any of its Subsidiaries suffers any appointment of any custodian or the like for it or any substantial part of its property to continue undischarged or unstayed for a period of 60 days; or  Holdings or any of its Subsidiaries makes a general assignment for the benefit of creditors; or any corporate action is taken by Holdings or any of its Subsidiaries for the purpose of effecting any of the foregoing; or
Section 10.6    ERISA.  (a)  A Plan shall fail to satisfy the minimum funding standard required by Section 412 of the Code for any plan year or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 of the Code or shall provide security to induce the issuance of such waiver or extension, (b) any Plan is or shall have been or is likely to be terminated or the subject of termination proceedings under ERISA or an event has occurred entitling the PBGC to terminate a Plan under Section 4042(a) of ERISA, (c) any Plan shall have had or is likely to have a trustee appointed to administer such Plan, (d) a contribution required to be made to a Plan has not been timely made, (e) any Plan shall have an Unfunded Current Liability, (f) Holdings or any of its Subsidiaries or any ERISA Affiliate has incurred or is likely to incur a material liability to or on account of a termination of or a withdrawal from a Plan under Section 4062, 4063, 4064 or 4069 of ERISA or Section 401(a)(29) of the Code, (g) Holdings or any of its Subsidiaries or any ERISA Affiliate has incurred or is likely to incur a material liability to or on account of the withdrawal from a Multiemployer Plan pursuant to Section 4201, 4204 or 4212 of ERISA or (h) Holdings or any of its Subsidiaries or any ERISA Affiliate has received any notice, or a Multiemployer Plan has received from Holdings or any of its Subsidiaries or any ERISA Affiliate any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA; and there shall result from any such event or events described in the preceding clauses of this Section 10.6 the imposition of a lien upon the assets of Holdings or any of its Subsidiaries, the granting of a security interest, or a liability or a material risk of incurring a liability to the PBGC or a Plan or a trustee appointed under ERISA or a penalty under Section 4971 of the Code, which in any of the foregoing cases, could have a Material Adverse Effect; or
Section 10.7    Credit Documents.  (a)  Any Security Document shall be cancelled, terminated, revoked, rescinded or otherwise ceases to be in full force and effect (except to the extent resulting from a sale or liquidation of the applicable Credit Party (other than the Borrower) expressly 

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permitted hereby), (b) any Security Document shall cease to give the Administrative Agent perfected Liens having the priority contemplated by the Security Documents, (c) any Credit Party shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to any such Guaranty or Security Document (subject to any grace period provided for therein)) or (d) any action at law, suit or in equity or other legal proceeding to cancel, revoke or rescind any of the Credit Documents shall be commenced by or on behalf of a Credit Party thereto or any of their respective stockholders, or any court or any other Governmental Authority shall make a determination that, or issue a judgment, order, decree or ruling to the effect that, any one or more of the Credit Documents is illegal, invalid or unenforceable in accordance with the terms thereof, or any Credit Party denies that it has any further liability under any Credit Document to which it is party, or gives notice to such effect; or
Section 10.8    Restraint of Business.  (a)  Any Credit Party shall be enjoined, restrained or in any way prevented by the order of any Governmental Authority from conducting any material part of the business of such Credit Party and such order shall continue in effect for more than thirty (30) days, (b) there shall occur any damage to, or loss, theft, attachment, levy or destruction of, any material part of the Collateral, whether or not insured, or (c) any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy or terrorism, or other casualty, which in any such case causes, for more than fifteen (15) consecutive days, the cessation or substantial curtailment of revenue producing activities of a  Credit Party if such event or circumstance is not covered by business interruption insurance and would have a Material Adverse Effect.
Section 10.9    Loss of Authority.  The loss, suspension or revocation of, or failure to renew, any license, permit or authorization now held or hereafter acquired by any Credit Party, or any other action shall be taken by any Governmental Authority in response to any alleged failure by any Credit Party to be in compliance with applicable law if such loss, suspension, revocation or failure to renew or other action, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect
Section 10.10    Judgments.  One or more judgments or decrees shall be entered against Holdings or any of its Subsidiaries involving in the aggregate a liability (not paid or fully covered by insurance as to which the relevant insurance company has confirmed coverage) of $15,000,000 or more and (i) such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 30 days from the entry thereof or (ii) enforcement proceedings shall have been commenced by any creditor upon such judgment or order; or
Section 10.11    Certified Air Carrier Status. Any of ABX Air, Inc., Air Transport International, LLC or Capital Cargo International Airlines, Inc. shall cease to be classified a Certified Air Carrier, except pursuant to a merger or consolidation permitted by Section 9.2(a); or
Section 10.12    Change in Control.  A Change in Control shall have occurred; 
then, and in any such event, and at any time thereafter, if any Event of Default shall then be continuing, the Administrative Agent shall, upon the written request of the Required Lenders, by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Administrative Agent or any Lender to enforce its claims against the Borrower, except as otherwise specifically provided for in this Agreement (provided that, if an Event of Default specified in Section 10.5 shall occur, the result which would occur upon the giving of written notice by the 

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Administrative Agent as specified in clauses (i) and (ii) below shall occur automatically without the giving of any such notice): (i) declare the Total Commitment terminated, whereupon the Commitment of each Lender shall forthwith terminate immediately and any Commitment Fee shall forthwith become due and payable without any other notice of any kind; (ii) declare the principal of and any accrued interest in respect of all Loans and all obligations owing hereunder (including Unpaid Drawings) and thereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; (iii) enforce, as Administrative Agent (or direct the Administrative Agent to enforce), any or all of the Liens and security interests created pursuant to the Security Documents; (iv) terminate any Letter of Credit which may be terminated in accordance with its terms; and (v) direct the Borrower to pay (and the Borrower hereby agrees upon receipt of such notice, or upon the occurrence of any Event of Default specified in Section 10.5 in respect of the Borrower, it will pay) to the Administrative Agent at the Payment Office such additional amounts of cash, to be held as security for the Borrower’s Reimbursement Obligations then outstanding equal to the aggregate Stated Amount of all Letters of Credit then outstanding.  Notwithstanding anything herein or otherwise to the contrary, any Event of Default occurring hereunder shall continue to exist (and shall be deemed to be continuing) until such time as such Event of Default is waived in writing in accordance with the terms of Section 12.12 notwithstanding (i) any attempted cure or other action taken by the Borrower or any other Person subsequent to the occurrence of such Event of Default or (ii) any action taken or omitted to be taken by the Administrative Agent or any Lender prior to or subsequent to the occurrence of such Event of Default (other than the granting of a waiver in writing in accordance with the terms of Section 12.12).
Except as expressly provided in this Section and in the Security Documents, presentment, demand, protest and all other notices of any kind are hereby expressly waived with respect to the exercise of remedies upon an Event of Default.
Section 10.13    Payments Subsequent to Declaration of Event of Default.  Subsequent to the acceleration of the Loans under Section 10, payments made under this Agreement and/or the Notes to the Administrative Agent and the Lenders or otherwise received by any of such Persons (from realization on the Collateral or otherwise) shall be paid over to the Administrative Agent (if necessary) and distributed by the Administrative Agent as follows:  first, to the Administrative Agent's reasonable costs and expenses, if any, incurred in connection with the collection of such payment, including, without limitation, any and all reasonable costs incurred by it in connection with the sale or disposition of any Collateral and all amounts under Section 12.1; second, to the Lenders or the Administrative Agent for any Fees hereunder or under any of the other Credit Documents then due and payable; third, to the Swing Line Lender, toward the payment of any unpaid interest which may have accrued on the Swing Line Loans; fourth, to the Lenders pro rata on the basis of their respective unpaid principal amounts outstanding under the Loans (other than Swing Line Loans), toward the payment of any unpaid interest which may have accrued on the Loans; fifth, to the Swing Line Lender until all Swing Line Loans have been paid in full; sixth, to the Lenders pro rata based on the unpaid principal amount of the Loans then outstanding until all Loans have been paid in full (and, for purposes of this clause, (x) obligations under Hedge Agreements permitted under Section 9.4(d) with the Lenders (or their Affiliates) or any of them and (y) Reimbursement Obligations owing to the Letter of Credit Issuer shall be paid on a pro rata basis with the Loans); seventh, to Cash Collateralize Letters of Credit then outstanding; eighth, to the Lenders pro rata on the basis of their respective unpaid amounts, to the payment of any other unpaid Obligations; and ninth, to the Borrower or as otherwise required by law.

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SECTION 11    THE ADMINISTRATIVE AGENT.
Section 11.1    Appointment.  Each Lender hereby irrevocably designates and appoints SunTrust Bank as Administrative Agent of such Lender (such term to include for purposes of this Section 11, SunTrust Bank acting as Administrative Agent) to act as specified herein and in the other Credit Documents, and each such Lender hereby irrevocably authorizes SunTrust Bank as the Administrative Agent for such Lender, to (i) enter into the Security Documents on behalf of the Lenders and (ii) take such action on its behalf under the provisions of this Agreement and the other Credit Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement and the other Credit Documents, together with such other powers as are reasonably incidental thereto.  The Administrative Agent agrees to act as such upon the express conditions contained in this Section 11.  Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein or in the other Credit Documents, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or otherwise exist against the Administrative Agent.  The provisions of this Section 11 are solely for the benefit of the Administrative Agent and the Lenders, and, except as provided in Section 11.9, no Credit Party shall have any rights as a third party beneficiary of any of the provisions hereof.  In performing its functions and duties under this Agreement, the Administrative Agent shall act solely as agent of the Lenders and does not assume and shall not be deemed to have assumed any obligation or relationship of agency or trust with or for any Credit Party.
Section 11.2    Delegation of Duties.  The Administrative Agent may execute any of its duties under this Agreement or any other Credit Document by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care except to the extent otherwise required by Section 11.3.
Section 11.3    Exculpatory Provisions.  Neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by Holdings or any of its Subsidiaries or any of their respective officers contained in this Agreement, any other Credit Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement, any other Credit Document or for any failure of Holdings or any of its Subsidiaries or any of their respective officers to perform its obligations hereunder or thereunder.  The Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement, or to inspect the properties, books or records of Holdings or any of its Subsidiaries.  The Administrative Agent shall not be responsible to any Lender for the effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of this Agreement or any other Credit Document or for any representations, warranties, recitals or statements made herein or therein or made in any written or oral statement or in any financial or other statements, instruments, reports, certificates or any other documents in connection herewith or therewith furnished or made by the Administrative Agent to the Lenders or by or on behalf of Holdings and its Subsidiaries to the Administrative Agent or any Lender or be required to ascertain or inquire as to the 

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performance or observance of any of the terms, conditions, provisions, covenants or agreements contained herein or therein or as to the use of the proceeds of the Loans or of the existence or possible existence of any Default or Event of Default.
Section 11.4    Reliance by Administrative Agent.  The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, facsimile transmission, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Credit Parties), independent accountants and other experts selected by the Administrative Agent.  The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Credit Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.  The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Credit Documents in accordance with a request of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders.
Section 11.5    Notice of Default.  The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent has received notice from a Lender or the Borrower or any other Credit Party referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”.  In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give prompt notice thereof to the Lenders.  The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders, provided that unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders.
Section 11.6    Non-Reliance on Administrative Agent and Other Lenders.  Each Lender expressly acknowledges that neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates have made any representations or warranties to it and that no act by the Administrative Agent hereinafter taken, including any review of the affairs of Holdings or any of its Subsidiaries, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender.  Each Lender represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, assets, operations, property, financial and other conditions, prospects and creditworthiness of Holdings and its Subsidiaries and made its own decision to make its Loans hereunder and enter into this Agreement.  Each Lender also represents that it will, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement, and to make such investigation as it deems necessary to inform itself as to the business, assets, operations, property, financial and other conditions, prospects and creditworthiness of Holdings and its Subsidiaries.  The Administrative Agent shall not have any duty or responsibility 

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to provide any Lender with any credit or other information concerning the business, operations, assets, property, financial and other conditions, prospects or creditworthiness of Holdings or any of its Subsidiaries which may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates.  Each of the Lenders acknowledges and agrees that outside legal counsel to the Administrative Agent in connection with the preparation, negotiation, execution, delivery and administration (including any amendments, waivers and consents) of this Agreement and the other Credit Documents is acting solely as counsel to the Administrative Agent and is not acting as counsel to any Lender (other than the Administrative Agent and its Affiliates) in connection with this Agreement, the other Credit Documents or any of the transactions contemplated hereby or thereby.
Section 11.7    Indemnification.  The Lenders agree to indemnify the Administrative Agent in its capacity as such ratably according to their respective percentages of Loans and Commitments used in determining Required Lenders at such time (with such percentages to be determined as if there are no Defaulting Lenders), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, reasonable expenses or disbursements of any kind whatsoever which may at any time (including without limitation at any time following the payment of the Obligations) be imposed on, incurred by or asserted against the Administrative Agent in its capacity as such in any way relating to or arising out of this Agreement or any other Credit Document, or any documents contemplated by or referred to herein or the transactions contemplated hereby or any action taken or omitted to be taken by the Administrative Agent under or in connection with any of the foregoing, but only to the extent that any of the foregoing is not paid by Holdings or any of its Subsidiaries; provided that no Lender shall be liable to the Administrative Agent for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to the extent resulting solely from the Administrative Agent’s gross negligence or willful misconduct.  The agreements in this Section 11.7 shall survive the payment of all Obligations.  
Section 11.8    The Administrative Agent and Joint Lead Arrangers in their Individual Capacity.  The Administrative Agent, the Joint Lead Arrangers and their respective Affiliates may make loans to, accept deposits from and generally engage in any kind of business with Holdings or any of its Subsidiaries as though the Administrative Agent and the Joint Lead Arrangers were not the Administrative Agent hereunder or the Joint Lead Arrangers with respect to the Facilities.  With respect to the Loans made by it and all Obligations owing to it, the Administrative Agent shall have the same rights and powers under this Agreement as any Lender and may exercise the same as though it were not the Administrative Agent, and the terms “Lender” and “Lenders” shall include the Administrative Agent in its individual capacity.
Section 11.9    Successor Administrative Agent.  The Administrative Agent may resign as the Administrative Agent upon 20 days’ notice to the Borrower and the Lenders.  The Required Lenders shall appoint a successor Administrative Agent for the Lenders (which may be an existing Lender) subject to prior approval, so long as no Default or Event of Default then exists, by the Borrower (such approval not to be unreasonably withheld), whereupon such successor agent shall succeed to the rights, powers and duties of the Administrative Agent, and the term “Administrative Agent” shall include such successor agent effective upon its appointment, and the resigning Administrative Agent’s rights, powers and duties as the Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement.  After the retiring Administrative Agent’s resignation hereunder as the 

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Administrative Agent, the provisions of this Section 11 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement.
Section 11.10    Withholding Tax.  To the extent required by any applicable law, the Administrative Agent may withhold from any interest payment to any Lender an amount equivalent to any applicable withholding tax.  If the Internal Revenue Service or any authority of the United States or other jurisdiction asserts a claim that the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered, was not properly executed, or because such Lender failed to notify the Administrative Agent of a change in circumstances that rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason), such Lender shall indemnify the Administrative Agent (to the extent that the Administrative Agent has not already been reimbursed by the Borrower and without limiting the obligation of the Borrower to do so) fully for all amounts paid, directly or indirectly, by the Administrative Agent as tax or otherwise, including penalties and interest, together with all expenses incurred, including legal expenses, allocated staff costs and any out of pocket expenses.
Section 11.11    Administrative Agent May File Proofs of Claim.  (a)  In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Credit Party, the Administrative Agent (irrespective of whether the principal of any Loan or any Revolving Extensions of Credit shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise: 
(i)to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans or Revolving Extensions of Credit and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Letter of Credit Issuer, the Swingline Lender and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Letter of Credit Issuer, the Swingline Lender and the Administrative Agent and its agents and counsel and all other amounts due the Lenders, the Letter of Credit Issuer, the Swingline Lender and the Administrative Agent under Section 12.1) allowed in such judicial proceeding; and 
(ii)to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and 
(b)Any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender, the Swingline Lender and the Letter of Credit Bank to make such payments to the Administrative Agent and, if the Administrative Agent shall consent to the making of such payments directly to the Lenders, the Swingline Lender and the Letter of Credit Bank, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 12.1. 
(c)Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender, the Swingline Lender or 

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the Issuing Bank any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding. 
SECTION 12    MISCELLANEOUS.
Section 12.1    Payment of Expenses, etc.  The Borrower agrees to: (i) whether or not the transactions herein contemplated are consummated, pay all reasonable out-of-pocket costs and expenses of the Administrative Agent and the Joint Lead Arrangers in connection with the syndication of the Facilities, the negotiation, preparation, execution, delivery and administration of this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein and any amendment, waiver or consent relating hereto or thereto (including, without limitation, the reasonable fees and disbursements of Crowe & Dunlevy, special FAA counsel to the Administrative Agent, and Alston & Bird LLP, counsel to the Administrative Agent and SunTrust Robinson Humphrey, Inc.) and the creation and perfection of the Liens created under the Security Documents; (ii) pay all out-of-pocket costs and expenses of the Administrative Agent, the Joint Lead Arrangers and each of the Lenders in connection with the enforcement (including pursuant to the administration of any bankruptcy proceeding relating to any Credit Party) or preservation of any rights under this Agreement and the other Credit Documents and the documents and instruments referred to therein (including, without limitation, the fees and disbursements of counsel for the Administrative Agent, the Letter of Credit Issuer and for each of the Lenders), including such out-of-pocket costs and expenses incurred during any refinancing, work-out or restructuring (pursuant to any insolvency or bankruptcy proceeding or otherwise) in respect of this Agreement, the Loans or Letters of Credit; (iii) pay and hold each of the Lenders harmless from and against any and all present and future stamp, court or documentary taxes or any other excise or property taxes or charges and other similar taxes with respect to the foregoing matters and save the Administrative Agent and each of the Lenders and the Letter of Credit Issuer harmless from and against any and all liabilities with respect to or resulting from any delay or omission to pay such taxes; and (iv) indemnify the Administrative Agent, the Letter of Credit Issuer and each Lender, and each of their respective officers, directors, employees, representatives, agents, affiliates, trustees and investment advisors from and hold each of them harmless against any and all liabilities, obligations (including removal or remedial actions), losses, damages, penalties, claims, actions, judgments, suits, costs, expenses and disbursements (including reasonable attorneys’ and consultants’ fees and disbursements) incurred by, imposed on or assessed against any of them as a result of, or arising out of, or in any way related to, or by reason of, (x) any investigation, litigation or other proceeding (whether or not the Administrative Agent, the Letter of Credit Issuer or any Lender is a party thereto and whether or not such investigation, litigation or other proceeding is brought by or on behalf of any Credit Party) related to the entering into and/or performance of this Agreement or any other Credit Document or the use of any Letter of Credit or the proceeds of any Loans hereunder or the consummation of the Refinancing or any other transactions contemplated herein or in any other Credit Document or the exercise of any of their rights or remedies provided herein or in the other Credit Documents, or (y) the actual or alleged presence of Hazardous Materials in the air, surface water or groundwater or on the surface or subsurface of any Real Property at any time owned, leased or operated by either of Holdings or any of its Subsidiaries, the generation, storage, transportation, handling or disposal of Hazardous Materials by Holdings or any of its Subsidiaries at any location, whether or not owned, leased or operated by Holdings or any of its Subsidiaries, the non-compliance by Holdings or any of its Subsidiaries with any Environmental Law (including applicable permits thereunder) applicable to any Real Property, or any Environmental Claim asserted against Holdings or any of its Subsidiaries or any Real Property at any time owned, leased or operated by Holdings or 

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any of its Subsidiaries, including, in each case, without limitation, the reasonable fees and disbursements of counsel and other consultants incurred in connection with any such investigation, litigation or other proceeding (but excluding any losses, liabilities, claims, damages or expenses (x) to the extent incurred by reason of the gross negligence or willful misconduct of, or the breach in bad faith of its commitments by, the Person to be indemnified or (y) to the extent arising directly out of or resulting directly from claims of one or more Person to be indemnified hereunder against another Person to be indemnified hereunder (other than claims of a Person to be indemnified hereunder against the Administrative Agent, the Letter of Credit Issuer, their Affiliates and their respective officers, directors, employees, attorneys, agents and representatives, in each case as finally determined by a court of competent jurisdiction in a final and non-appealable decision).  To the extent that the undertaking to indemnify, pay or hold harmless the Administrative Agent, the Letter of Credit Issuer or any Lender set forth in the preceding sentence may be unenforceable because it is violative of any law or public policy, the Borrower agrees to make the maximum contribution to the payment and satisfaction of each of the indemnified liabilities which is permissible under applicable law.    
Section 12.2    Right of Setoff.  In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, during the continuance of an Event of Default, the Administrative Agent and each Lender is hereby authorized at any time or from time to time, without presentment, demand, protest or other notice of any kind to any Credit Party or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other Indebtedness at any time held or owing by the Administrative Agent or such Lender (including, without limitation, by branches and agencies of the Administrative Agent or such Lender wherever located) to or for the credit or the account of any Credit Party against and on account of the Obligations and liabilities of such Credit Party then due and payable to the Administrative Agent or such Lender under this Agreement or under any of the other Credit Documents, including, without limitation, all interests in Obligations of such Credit Party purchased by such Lender pursuant to Section 12.6(b), and all other claims of any nature or description then due and payable arising out of or connected with this Agreement or any other Credit Document, irrespective of whether or not the Administrative Agent or such Lender shall have made any demand hereunder and although said deposits or Indebtedness owing by the Administrative Agent or such Lender, or any of them, shall be contingent or unmatured.
Section 12.3    Notices/Electronic Delivery of Information.  (a)  Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including telecopier communication) and mailed, telecopied or delivered, if to a Credit Party, at the address specified opposite its signature below or in the other relevant Credit Documents, as the case may be; if to any Lender, at its address specified for such Lender on Annex 1.1A hereto; or, at such other address as shall be designated by any party in a written notice to the other parties hereto.  All such notices and communications shall be mailed, telecopied or sent by overnight courier, and shall be effective when received. 
(b)In addition to the foregoing, Holdings and the Borrower may deliver documents, materials and other information required to be delivered pursuant to Section 8.1 (collectively, “Information”) in pdf format or any other electronic format acceptable to the Administrative Agent by e-mailing any such Information to an e‐mail address of the Administrative Agent as specified by the Administrative Agent from time to time.  The Administrative Agent will promptly provide such Information to the Lenders.

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(c)Notwithstanding anything in this Section to the contrary (i) Holdings and the Borrower shall deliver paper copies (which may include .pdf copies) of Information to the Administrative Agent if requested until a written request to cease delivering paper copies is given to Holdings and the Borrower by the Administrative Agent and (ii) in every instance Holdings and the Borrower shall be required to provide to the Administrative Agent a paper original of the Compliance Certificate required by Section 8.1(c).
Section 12.4    Benefit of Agreement.  (a)  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto, provided that neither Holdings nor the Borrower may assign or transfer any of its rights or obligations hereunder without the prior written consent of all the Lenders.  Each Lender may, in accordance with applicable law, at any time grant participations in any of its rights hereunder or under any of the Notes to another financial institution or any fund that regularly invests in bank loans, provided that in the case of any such participation, the participant shall not have any rights under this Agreement or any of the other Credit Documents (the participant’s rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the participant relating thereto) and all amounts payable by the Borrower hereunder shall be determined as if such Lender had not sold such participation, except that the participant shall be entitled to the benefits of Section 2.10, Section 2.11, Section 3.5 and Section 5.4 of this Agreement to the extent that such Lender would be entitled to such benefits if the participation had not been entered into or sold and the participant shall, to the maximum extent permitted by applicable law, be deemed to have the right of setoff in respect of its participation in amounts owing under this Agreement to the same extent as if the amount of its participation were owing directly to it as a Lender under this Agreement provided that, in purchasing such participation, such participant shall be deemed to have agreed to share with the Lenders the proceeds thereof as provided in Section 12.6(b) as fully as if it were a Lender hereunder, and, provided, further, that no Lender shall transfer, grant or assign any participation under which the participant shall have rights to approve any amendment to or waiver of this Agreement or any other Credit Document except to the extent such amendment or waiver would (i) waive any Term Loan Scheduled Repayment or extend the final scheduled maturity of any Loan or Note in which such participant is participating (it being understood that any waiver of the application of any prepayment or the method of any application of any prepayment to, the amortization of the Term Loans shall not constitute a waiver of any Term Loan Scheduled Repayment or an extension of the final maturity date), or reduce the rate or extend the time of payment of interest or Fees thereon (except in connection with a waiver of the applicability of any post-default increase in interest rates), or reduce the principal amount thereof, or increase such participant’s participating interest in any Commitment over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the Total Commitment, or a mandatory prepayment, shall not constitute a change in the terms of any Commitment), (ii) release Holdings or all or substantially all of the Subsidiary Guarantors from their obligations under their respective Guaranties except in accordance with the terms thereof, (iii) release all or substantially all of the Collateral except in accordance with the Credit Documents or (iv) consent to the assignment or transfer by Holdings or the Borrower of any of its rights and obligations under this Agreement or any other Credit Document.
(b)Notwithstanding the foregoing, in accordance with applicable law at any time and from time to time, any Lender may assign all or a portion of its Loans and/or Commitments and its rights and obligations under this Agreement to one or more other Persons (other than Holdings, the Borrower or any of their Affiliates) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:

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(i)the Borrower, provided that no consent of the Borrower shall be required (x) for an assignment of any Term Loan to a Lender, an Affiliate of a Lender or an Approved Fund, (y) for an assignment of any Revolving Commitment to a Lender with a Revolving Commitment immediately prior to such assignment or (z) if an Event of Default has occurred and is continuing; 
(ii)the Administrative Agent, provided that no consent of the Administrative Agent shall be required for an assignment of any Term Loan to a Lender, an Affiliate of a Lender or an Approved Fund; and
(iii)in the case of any assignment of any Revolving Commitment, the Letter of Credit Issuer.
Any assignment pursuant to this Section 12.4(b) need not be ratable as among the Term Loans and the Revolving Commitments of the assigning Lender except as provided in the next sentence.  Unless the Borrower and the Administrative Agent otherwise agree, no assignment pursuant to the immediately preceding sentence shall to the extent such assignment represents an assignment to an institution other than one or more Lenders or their Affiliates or an Approved Fund hereunder, be in an aggregate amount less than $1,000,000 unless the entire Commitment and Loans and other interests of the assigning Lender (and of all Lenders which are Approved Funds managed by the same investment advisor as the assigning Lender) are so assigned.  In the case of an assignment by a Lender to its CLO, the assigning Lender shall retain the sole right to approve any amendment, modification or waiver of any provision of this Agreement, provided that the Assignment Agreement between such Lender and such CLO may provide that such Lender will not, without the consent of such CLO, agree to any amendment, modification or waiver described in the third proviso to the second sentence of Section 12.4(a) that directly affects such CLO.  If any Lender so sells or assigns all or a part of its interests hereunder or under the Notes, any reference in this Agreement or the Notes to such assigning Lender shall thereafter refer to such Lender and to the respective assignee to the extent of their respective interests, and the respective assignee shall have, to the extent of such assignment (unless otherwise provided therein), the same rights and benefits as it would if it were such assigning Lender.  Each assignment pursuant to this Section 12.4(b) shall be effected by the assigning Lender and the assignee Lender executing an Assignment Agreement substantially in the form of Exhibit C (appropriately completed) and either the assigning or the assignee Lender shall pay to the Administrative Agent a nonrefundable assignment fee of $3,500.  At the time of any assignment pursuant to this Section 12.4(b), (i) Annex 1.1A shall be deemed to be amended to reflect the Commitment of the respective assignee (which shall result in a direct reduction to the Commitment of the assigning Lender) and of the other Lenders, and (ii) if any such assignment occurs after the Closing Date, the Borrower will, if requested by the assignee or assignor, issue new Notes to the respective assignee and to the assigning Lender in conformity with the requirements of Section 2.5.  Each Lender and the Borrower agrees to execute such documents (including, without limitation, amendments to this Agreement) as shall be necessary to effect the foregoing.  Nothing in this clause (b) shall prevent or prohibit any Lender from pledging its Notes or Loans, including, without limitation, to a Federal Reserve Bank in support of borrowings made by such Lender from such Federal Reserve Bank.  
(c)The Administrative Agent acting on behalf of the Borrower shall maintain at its Payment Office a copy of each Assignment Agreement delivered to it (as required hereby) and a register (the “Register”) for the recordation of the names and addresses of the Lenders and the Commitment of, and principal amount of the Loans owing to, each Lender from time to time 

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(whether or not evidenced by a Note).  The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register as the owner of the Loan or Note evidencing a Loan recorded therein for all purposes of this Agreement, notwithstanding any notice to the contrary.  Any assignment of any Loan whether or not evidenced by a Note shall be effective only upon appropriate entries with respect thereto being made in the Register (and each Note shall expressly so provide).  Any assignment or transfer of all or part of a Loan evidenced by a Note shall be registered on the Register only upon surrender for registration of assignment or transfer of the Note evidencing such Loan, accompanied by a duly executed Assignment Agreement, and thereupon one or more new Notes in the same aggregate principal amount shall be issued to the designated assignee and the old Notes shall be returned by the Administrative Agent to the Borrower marked “cancelled”.  The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.
Section 12.5   No Waiver; Remedies Cumulative.  No failure or delay on the part of the Administrative Agent or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between any Credit Party and the Administrative Agent or any Lender shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder.  The rights and remedies herein expressly provided are cumulative and not exclusive of any rights or remedies which the Administrative Agent or any Lender would otherwise have.  No notice to or demand on any Credit Party in any case shall entitle any Credit Party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Administrative Agent or the Lenders to any other or further action in any circumstances without notice or demand.
Section 12.6    Payments Pro Rata.  (a)  Subject to the next sentence, and subject to Section 4.2 and Section 5.1 hereof, the Administrative Agent agrees that promptly after its receipt of each payment from or on behalf of any Credit Party in respect of any Obligations of such Credit Party hereunder, it shall distribute such payment to the Lenders pro rata based upon their respective shares, if any, of the Obligations with respect to which such payment was received.  If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, Reimbursement Obligations, interest, indemnities and Fees then due hereunder, such funds shall be applied (i) first, towards payment of interest, indemnities, Fees and expenses then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest, indemnities, Fees and expenses then due to such parties; provided, that any interest, indemnities, Fees and expenses and owing to the Administrative Agent (excluding any such amounts owing to the Administrative Agent in its capacity as a Lender, Issuing Bank or Swingline Lender) shall first be paid before any Lender or the Letter of Credit Issuer is paid any amount under this clause (i), (ii) second, towards payment of principal, obligations in respect of any Hedge Agreements with any Lender or any Affiliate of any Lender and Reimbursement Obligations then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal, obligations in respect of any Hedge Agreements and Reimbursement Obligations then due to such parties and (iii) third, towards the payment of other Obligations ratably among the parties entitled thereto.
(b)Each of the Lenders agrees that, if it should receive any amount hereunder (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or banker’s lien, by counterclaim or cross action, by the enforcement of any right under the Credit 

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Documents, or otherwise) which is applicable to the payment of the principal of, or interest on, the Loans, Fees or Reimbursement Obligations, of a sum which with respect to the related sum or sums received by other Lenders is in a greater proportion than the total of such Obligation then owed and due to such Lender bears to the total of such Obligation then owed and due to all of the Lenders immediately prior to such receipt, then such Lender receiving such excess payment shall purchase for cash without recourse or warranty from the other Lenders an interest in the Obligations of the respective Credit Party to such Lenders in such amount as shall result in a proportional participation by all of the Lenders in such amount, provided that if all or any portion of such excess amount is thereafter recovered from such Lender, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.
Section 12.7    Calculations; Computations.  The financial statements to be furnished to the Administrative Agent and the Lenders pursuant hereto shall be made and prepared in accordance with GAAP as in effect from time to time during the periods involved (except as set forth in the notes thereto or as otherwise disclosed in writing by Holdings or the Borrower to the Administrative Agent).  Any changes in GAAP after the Closing Date, as applied in the preparation of such financial statements, or changes in the presentation of such financial statements that are mandated or otherwise required by a Governmental Authority, will be incorporated in such calculations, computations and presentation unless Holdings, by written notice to the Administrative Agent, or the Administrative Agent or the Required Lenders, by written notice to Holdings, objects to the inclusion of such changes in GAAP or presentation, whereupon such changes in GAAP or presentation shall be excluded from calculations and computations hereunder until such time as the parties hereto have amended this Agreement to reflect appropriately the effect of such change in GAAP or presentation, and, in any event, Holdings shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP or presentation.  Interest and Fees shall be calculated on the basis of a 360-day year for the actual days elapsed.  Any change in the interest rate on a Loan resulting from a change in the Base Rate or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change in the Base Rate is announced or such change in the Eurocurrency Reserve Requirements becomes effective, as the case may be.
Section 12.8    Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial.  (a)  THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.  Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the non-exclusive jurisdiction of the Federal District Court of the Southern District of New York, and of any state court of the State of New York located in the Borough of Manhattan and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Credit Document or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York state court or , to the extent permitted by applicable law, such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement or any other Credit Document shall affect any right that the Administrative Agent, the Letter of Credit Issuer or any Lender may otherwise have to 

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bring any action or proceeding relating to this Agreement or any other Credit Document against Holdings or the Borrower or their properties in the courts of any jurisdiction.  With respect to the choice of law provided for in this paragraph, the parties hereto expressly acknowledge that, given the large number of state jurisdictions which have relationships to one or more of the parties or to the transactions in question, thoughtful negotiations were had in respect to that issue and the parties ultimately selected the State of New York for a number of reasons, including that (i) the State of New York had direct relationships to certain of the parties and the related transactions (e.g., the transactional documents initially were being delivered by the Borrower and the Guarantors to the Administrative Agent’s counsel in the State of New York, and the Administrative Agent’s counsel and certain of the Lenders maintain places of business in the State of New York) and (ii) the parties and their respective counsel uniformly were comfortable with the law of the State of New York based upon their prior experiences which involved application of that law in similarly sophisticated commercial transactions.  In that regard, the parties hereto further expressly acknowledge and agree that a reasonable basis existed for their selection of the choice of law arrangement provided for in this paragraph.
(b)Each party hereto hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Agreement or any other Credit Document brought in the courts referred to in clause (a) above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.
(c)Each party to this Agreement irrevocably consents to the service of process in the manner provided for notices in Section 12.3.  Nothing in this Agreement or in any other Credit Document will affect the right of any party hereto to serve process in any other manner permitted by law.
(d)EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 12.9    Counterparts.  This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, including by means of facsimile, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.  A set of counterparts executed by all the parties hereto shall be lodged with the Borrower and the Administrative Agent.
Section 12.10    Effectiveness.  This Agreement shall become effective on the date (the “Closing Date”) on which (a) Holdings, the Borrower, the Administrative Agent and each of the Lenders shall have signed a copy hereof (whether the same or different copies) and shall have delivered the same to the Administrative Agent or, in the case of the Lenders, shall have given to the Administrative Agent telephonic (confirmed in writing), written or facsimile transmission notice (actually received) at such office that the same has been signed and mailed to it and (b) each of the conditions precedent set forth in Section 6.1 shall have been satisfied.

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Section 12.11    Headings.  The headings of the several sections and subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.
Section 12.12    Amendment or Waiver.  Neither this Agreement nor any other Credit Document nor any terms hereof or thereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or termination is in writing signed by each applicable Credit Party and the Required Lenders, provided that no such change, waiver, discharge or termination shall:
(i)waive any Term Loan Scheduled Repayment, defer any Term Loan Scheduled Repayment or extend the Term Facility Final Maturity Date or the Revolving Facility Final Maturity Date or the date for any scheduled payment of principal (it being understood that any waiver of the application of any prepayment of, or the method of application of any prepayment to the amortization of, the Loans shall not constitute a waiver of any such Term Loan Scheduled Repayment or any such extension), or reduce the rate or extend the time of payment of any interest (except (x) as a result of waiving the applicability of any post-default increase in interest rates and (y) that any amendment or modification of defined terms used in the definition of “Total Leverage Ratio” shall not constitute a reduction in interest rate for purposes of this clause (i)) or Fees payable hereunder, or forgive or reduce the principal of any amounts payable hereunder or under any other Credit Documents, or increase the Commitment of any Lender over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the Total Commitment shall not constitute a change in the terms of any Commitment of any Lender), in each case without the written consent of each Lender (other than a Defaulting Lender) directly affected thereby; provided that no increase of the Commitment of any Defaulting Lender will be effective without the consent of such Defaulting Lender;
(ii)release or subordinate all or any material portion of the Collateral (other than in connection with the sale of such Collateral to the extent permitted herein) or release all or substantially all of the Guarantors from their respective Guaranties (in each case except as expressly provided in the Credit Documents) without the written consent of each Lender (other than a Defaulting Lender) directly affected thereby;
(iii)amend, modify or waive any provision of this Section 12.12 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder without the written consent of each Lender (other than a Defaulting Lender) directly affected thereby;
(iv)reduce the percentage specified in, or otherwise modify, the definition of Required Lenders without the written consent of each Lender (other than a Defaulting Lender) directly affected thereby;
(v)consent to the assignment or transfer by any Credit Party of any of its rights and obligations under this Agreement without the written consent of each Lender (other than a Defaulting Lender) directly affected thereby;

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(vi)alter any allocation of mandatory prepayments under Section 5.2 between the Term Loans or the Revolving Facility without the written consent of a majority in interest of the Lenders of the Term Loans or the Revolving Facility, as the case may be, adversely affected thereby (provided that, with the written consent of the Required Lenders, mandatory prepayments under clauses (iii), (iv) and (v) of Section 5.2 may be reduced or eliminated); 
(vii)change Section 5.3 or Section 12.6, or change Section 6.5 of the Guarantee and Collateral Agreement, in each case, in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly affected thereby; 
(viii)change Section 12.4(b) in a manner that would place addtional restrictions on a Lender’s ability to assign its Commitments or Loans without the written consent of each Lender directly affected thereby;
(ix)amend, modify or waive any provision of Section 2.14(f) or Section 11 without the written consent of the Letter of Credit Issuer or the Administrative Agent, respectively; or
(x)amend Section 2.9(a) to permit Interest Periods of greater than six months without the unanimous written consent of the Lenders under the applicable Facility.
In addition, (i) no amendment, waiver or consent shall, unless in writing and signed by the Letter of Credit Issuer in addition to the Lenders required above, affect the rights or duties of the Letter of Credit Issuer under this Agreement or any Letter of Credit Request relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swingline Lender in addition to the Lenders required above, affect the rights or duties of the Swingline Lender under this Agreement; and (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Credit Document. 
Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Credit Parties, the Lenders, the Administrative Agent and all future holders of the Loans.  In the case of any waiver, the Credit Parties, the Lenders and the Administrative Agent shall be restored to their former position and rights hereunder and under the other Credit Documents, and any Default or Event of Default waived in accordance with the terms of this Agreement shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon.
Notwithstanding the foregoing, this Agreement, including this Section 12.12, and the other Credit Documents may be amended (or amended and restated) pursuant to Section 2.14(a) in order to add new Term Loans and Additional Revolving Commitments to this Agreement and (a) to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement (including the rights of the Incremental Lenders who have made new Term Loans pursuant to Section 2.14(a) to share ratably with the Term Facility in prepayments pursuant to Section 5.1 and Section 5.2) and the other Credit 

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Documents with the Term Loans and Total Revolving Extensions of Credit and the accrued interest and fees in respect thereof, (b) to include appropriately the Lenders holding such credit facility in any determination of the Required Lenders and (c) to amend other provision of the Credit Documents so that the Lenders that made new Term Loans or that made Additional Revolving Commitments are appropriately incorporated (including this Section 12.12).
In addition, notwithstanding the foregoing, this Agreement may be amended with the written consent of the Administrative Agent, Holdings, the Borrower and the Lenders (or new lenders) providing the relevant Replacement Term Loans (as defined below) to permit the refinancing or modification of all outstanding Term Loans (“Refinanced Term Loans”) with a replacement term loan tranche hereunder (“Replacement Term Loans”), provided that (a) the aggregate principal amount of such Replacement Term Loans shall not exceed the aggregate principal amount of such Refinanced Term Loans plus the amount of any Incremental Commitments, (b) the Applicable Margin for such Replacement Term Loans shall not be higher than the Applicable Margin for such Refinanced Term Loans, (c) the weighted average life to maturity of such Replacement Term Loans shall not be shorter than the weighted average life to maturity of such Refinanced Term Loans at the time of such refinancing and (d) all other terms applicable to such Replacement Term Loans shall be agreed upon by the Borrower and the Administrative Agent.
Section 12.13    Survival.  All indemnities set forth herein including, without limitation, in Section 2.10, Section 2.11, Section 3.5, Section 5.4, Section 11.7 or Section 12.1 shall survive the execution and delivery of this Agreement and the making and repayment or assignment of the Loans.
Section 12.14    Domicile of Loans.  Each Lender may transfer and carry its Loans at, to or for the account of any branch office, subsidiary or affiliate of such Lender, provided that the Borrower shall not be responsible for costs arising under Section 2.10, Section 3.5 or Section 5.4 resulting from any such transfer (other than a transfer pursuant to Section 2.12) to the extent not otherwise applicable to such Lender prior to such transfer.
Section 12.15    USA Patriot Act.  Each Lender hereby notifies Holdings and the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the “Act”), it is required to obtain, verify and record information that identifies Holdings and the Borrower, which information includes the name and address of Holdings and the Borrower and other information that will allow such Lender to identify Holdings the Borrower in accordance with the Act.
Section 12.16    Confidentiality.   Each of the Administrative Agent and each Lender agrees to keep confidential all non-public information provided to it hereunder with respect to any Credit Party pursuant to this Agreement that is designated by such Credit Party as confidential; provided that nothing herein shall prevent the Administrative Agent or any Lender from disclosing any such information (a) to the Administrative Agent, any other Lender or, subject to an agreement to comply with the provisions of this Section, any Lender Affiliate, (b) subject to an agreement to comply with the provisions of this Section, to any assignee or participant or prospective assignee or participant or any actual or prospective direct or indirect counterparty to any Hedge Agreement (or any professional advisor to such counterparty), (c) on a need-to-know basis, to its employees involved in the administration of this Agreement or any other Credit Document, directors, agents, attorneys, accountants, consultants and other professional advisors or those of any of its Affiliates (each of whom shall be instructed to hold the same in confidence), (d) upon the request or demand of 

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any Governmental Authority having supervisory authority over such Lender, (e) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Requirement of Law, (f) that has been publicly disclosed other than in breach of this Agreement, (g) to the National Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to information about a Lender’s investment portfolio in connection with ratings issued with respect to such Lender, (h) in connection with the exercise of any remedy hereunder or under any other Credit Document, (i) with the consent of the Borrower or (j) that becomes available to the Administrative Agent or any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower or any of its Subsidiaries.
Section 12.17    Release of Liens and Guarantees.  In the event that the Borrower or any Subsidiary conveys, sells, leases, assigns, transfers or otherwise disposes of all or any portion of any of the Capital Stock, assets or property of the Borrower or any of its Subsidiaries in a transaction expressly permitted by this Agreement or any other Credit Document, the Administrative Agent shall promptly (and the Lenders hereby authorize the Administrative Agent to) take such action and execute any such documents as may be reasonably requested by the Borrower and at the Borrower’s expense to release any Liens created by any Credit Document in respect of such Capital Stock, assets, property, including the release and satisfaction of record or partial release of record of any mortgage or deed of trust granted in connection herewith, and, in the case of a disposition of all or substantially all the Capital Stock or assets of any Subsidiary Guarantor, terminate such Subsidiary Guarantor’s obligations under the Guarantee and Collateral Agreement and release all Liens on the assets of such Subsidiary Guarantor.  In addition, the Administrative Agent agrees to take such actions as are reasonably requested by the Borrower and at the Borrower’s expense to terminate the Liens and security interests created by the Credit Documents when all the Obligations are paid in full and all Letters of Credit and Commitments are terminated.
Section 12.18    Integration.  This Agreement and the other Credit Documents represent the agreement of the Borrower, the other Credit Parties, the Administrative Agent and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the other Credit Documents.
Section 12.19    Acknowledgments.  Holdings and the Borrower hereby acknowledge that:
(i)no amendment, modification or waiver of any provision of Section 2.14(f) or Section 11 shall be or become effective without the written consent of the Letter of Credit Issuer or the Administrative Agent, respectively; or
(ii)they have been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Credit Documents; or 
(iii)neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to Holdings or the Borrower arising out of or in connection with this Agreement or any of the other Credit Documents, and the relationship between Administrative Agent and Lenders, on one hand, and Holdings and the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

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(iv)no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among Holdings, the Borrower and the Lenders.
(b)The parties hereto acknowledge and agree that the each of the “Joint Lead Arrangers” and the “Documentation Agents” (in their respective capacities as such) shall have no obligations, duties or liabilities under this Agreement or the other Credit Documents. 
Section 12.20    Interest Rate Limitation.  Notwithstanding any terms or provisions contained herein or any of the other Credit Documents, in no event or contingency shall the aggregate amount of Interest (as defined below) contracted for, reserved, charged, collected, taken or received by any Lender pursuant to or in connection with the terms of any of the Credit Documents exceed the maximum amount permissible (the “Maximum Rate”) under the Usury Laws.  No agreements, conditions, provisions or stipulations contained in any of the Credit Documents or the exercise by any Lender or the Administrative Agent of the rights to accelerate the payment or the maturity of all or any portion of the Obligations, or the exercise of any option whatsoever contained in any of the Credit Documents, or the prepayment by the Borrower of any of the Obligations, or the occurrence of any contingency whatsoever, shall entitle any Lender to charge, collect or receive Interest in excess of the Maximum Rate and in no event shall the Borrower be obligated to pay Interest exceeding the Maximum Rate.  All agreements, conditions or stipulations, if any, which may in any event or contingency operate to bind, obligate or compel the Borrower to pay Interest exceeding the Maximum Rate shall be without binding force or effect, at law or in equity, but only to the extent of the excess of Interest over such Maximum Rate.  If any Interest is contracted for, charged, collected, taken or received in excess of the Maximum Rate (“Excess”), the Borrower acknowledges and agrees that any such obligation, charge, collection or receipt shall be the result of a bona fide error, and such Excess, to the extent received, shall be applied first to reduce the principal amount of the Obligations and the balance, if any, returned to the Borrower; it being the intent of the parties hereto not to enter into a usurious or otherwise illegal relationship.  All monies paid to any Lender under any of the Credit Documents, whether at maturity or by prepayment, shall be subject to rebate of unearned interest as and to the extent required by the Usury Laws.  By the execution of this Agreement, the Borrower covenants and agrees that (i) the credit or return of any Excess shall constitute the acceptance by the Borrower of such Excess, and (ii) the Borrower shall not seek or pursue any other remedy, legal or equitable, against any Lender, based in whole or in part upon contracting for, charging, collecting or receiving any Interest in excess of the Maximum Rate.  For the purpose of determining whether or not any Excess has been contracted for, charged, collected or received by any Lender, all Interest at any time contracted for, charged, collected or received from the Borrower in connection with any of the Credit Documents shall, to the extent permitted by the Usury Laws, be amortized, prorated, allocated and spread in equal parts throughout the full term of the Obligations.  The Borrower and each Lender shall, to the maximum extent permitted under the Usury Laws, (i) characterize any non-principal payment as an expense rather than as Interest and (ii) exclude voluntary prepayments and the effects thereof.  The provisions of this Section shall be deemed to be incorporated into every Credit Document (whether or not any provision of this Section is referred to therein).  For purposes hereof, the term “Interest” shall mean any and all interest, fees, premiums and other charges for the use of money or the extension of credit and shall include any “interest” (or any amount or sum deemed to be “interest”) under and as defined in the Usury Laws; and the term “Usury Laws” shall mean any applicable laws, statutes (including, without limitation, Title 7, Chapter 4 of the Official Code of Georgia), rules, regulations or ordinances limiting, governing or otherwise regulating the rate or amount of Interest or the manner which Interest may be calculated, charged, collected, paid, contracted for or disclosed.

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Section 12.21    Independence of Covenants.  All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or would otherwise be within the limitations of, another covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken or condition exists.
Section 12.22    No Advisory or Fiduciary Relationship.  In connection with all aspects of the transactions contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Credit Document), the Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent, the Lenders and the Joint Lead Arrangers are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Administrative Agent, the Lenders and the Joint Lead Arrangers, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Credit Documents; (ii) (A) each of the Administrative Agent, the Lenders and each Joint Lead Arranger is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) neither the Administrative Agent nor any Lender or Joint Lead Arrangers has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Credit Documents; and (iii) the Administrative Agent, each Lender and each Joint Lead Arranger and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and neither the Administrative Agent nor any Lender or Joint Lead Arrangers has any obligation to disclose any of such interests to the Borrower or any of its Affiliates.  To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against the Administrative Agent or any Lender or any Arranger with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.
[Signatures on Following Page]

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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.
	
		
	 
	 

	Address: 

	CARGO AIRCRAFT MANAGEMENT, INC.

	145 Hunter Drive
	 

	Wilmington, Ohio 45177
	By:___/S/  RICHARD F. CORRADO_________

	Attention:     Quint O. Turner
	      Name:    Richard F. Corrado

	Chief Financial Officer
	      Title:   President

	E-mail: quint.turner@atsginc.com
	 

	Facsimile: (937) 382-2452
	 

	 
	AIR TRANSPORT SERVICES GROUP, INC.

	with a copy to:
 
	 

	145 Hunter Drive
	 

	Wilmington, Ohio 45177
	By:____/S/  JOSEPH C. HETE______________

	Attention:     Joseph E. Roux
	      Name:    Joseph C. Hete

	Director, Treasury 
	      Title:   President & Chief Executive Officer

	E-mail: joe.roux@atsginc.com 
	 

	Facsimile: (937) 382-2452
	 

	 
	 

	with a copy to: 

	By:_____/S/  QUINT O. TURNER___________

	145 Hunter Drive
	      Name:    Quint O. Turner

	Wilmington, Ohio 45177
	      Title:    Chief Financial Officer

	Attention:     W. Joseph Payne
	 

	General Counsel
	 

	E-mail: joe.payne@atstinc.com
	 

	Facsimile: (937) 382-2452
	 

	 
	 

	 
	 

	Address:
	SUNTRUST BANK, as Administrative Agent and as

	303 Peachtree Street NE
	a Lender

	10th Floor
	 

	Atlanta, Georgia 30308
	 

	Attention:     Bob Anderson
	By:____/S/  KEITH COX____________________

	Managing Director
	      Name:   Keith Cox

	E-mail:       robert.h.anderson@suntrust.com
	      Title:   Managing Director

	Facsimile:
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	
		
	 
	REGIONS BANK, as a Lender

	 
	 

	 
	 

	 
	 

	 
	By:____/S/  TODD H. BANES___________

	 
	      Name:  Todd H. Banes

	 
	      Title:   Senior Vice President

	 
	 

	 
	 

[Signature Page to Credit Agreement with Cargo Aircraft Management, Inc.]

	
		
	 
	JPMORGAN CHASE BANK, N.A., as a Lender

	 
	 

	 
	 

	 
	 

	 
	By:____/S/  JOHN B. MIDDELBERG_____

	 
	      Name:  John B. Middelberg

	 
	      Title:   SVP

	 
	 

	 
	 

[Signature Page to Credit Agreement with Cargo Aircraft Management, Inc.]

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

	 
	 

	 
	 

	 
	 

	 
	By:____/S/  JOHN BEARDSLEE___________

	 
	      Name:  John Beardslee

	 
	      Title:  Senior Vice President

	 
	 

	 
	 

[Signature Page to Credit Agreement with Cargo Aircraft Management, Inc.]

	
		
	 
	PNC BANK, NATIONAL ASSOCIATION, as a

	 
	Lender

	 
	 

	 
	 

	 
	By:____/S/  JEFFREY L. STEIN______________

	 
	      Name:  Jeffrey L. Stein

	 
	      Title:  Vice President

	 
	 

	 
	 

[Signature Page to Credit Agreement with Cargo Aircraft Management, Inc.]

	
		
	 
	HUNTINGTON NATIONAL BANK, as a Lender

	 
	 

	 
	 

	 
	 

	 
	By:____/S/ JOE TONGES________________

	 
	      Name:   Joe Tonges

	 
	      Title:  VP

	 
	 

	 
	 

[Signature Page to Credit Agreement with Cargo Aircraft Management, Inc.]

	
		
	 
	THE PRIVATEBANK AND TRUST COMPANY,

	 
	as a Lender

	 
	 

	 
	 

	 
	By:___/S/  NICHOLAS FADEL_______________

	 
	      Name:  Nicholas Fadel

	 
	      Title:  Associate Managing Director

	 
	 

	 
	 

[Signature Page to Credit Agreement with Cargo Aircraft Management, Inc.]

	
		
	 
	BRANCH BANKING AND TRUST COMPANY,

	 
	as a Lender

	 
	 

	 
	 

	 
	By:___/S/  BRIAN R. JONES___________________

	 
	      Name:  Brian R. Jones

	 
	      Title:  Vice President

	 
	 

	 
	 

[Signature Page to Credit Agreement with Cargo Aircraft Management, Inc.]

	
		
	 
	THE NORTHERN TRUST COMPANY, as a

	 
	Lender

	 
	 

	 
	 

	 
	By:____/S/  MICHAEL J. KINGSLEY________

	 
	      Name:  Michael J. Kingsley

	 
	      Title:  Senior Vice President

	 
	 

	 
	 

[Signature Page to Credit Agreement with Cargo Aircraft Management, Inc.]

	
		
	 
	STELLARONE BANK, as a Lender

	 
	 

	 
	 

	 
	 

	 
	By:___/S/  JUDSON G. FOSTER____________

	 
	      Name:  Judson G. Foster

	 
	      Title:  Vice President

	 
	 

	 
	 

[Signature Page to Credit Agreement with Cargo Aircraft Management, Inc.]

	
		
	 
	ATLANTIC CAPITAL BANK, as a Lender

	 
	 

	 
	 

	 
	 

	 
	By:____/S/  J. CHRISTOPHER DEISLEY_____________

	 
	      Name:  J. Christopher Deisley

	 
	      Title:  Senior Vice President

	 
	 

	 
	 

[Signature Page to Credit Agreement with Cargo Aircraft Management, Inc.]

	
		
	 
	TRISTATE CAPITAL BANK, as a Lender

	 
	 

	 
	 

	 
	 

	 
	By:____/S/  TRICIA BALSER____________

	 
	      Name:  Tricia Balser

	 
	      Title:  Vice President

	 
	TRISTATE CAPITAL

	 
	 

[Signature Page to Credit Agreement with Cargo Aircraft Management, Inc.]

	
		
	 
	COMPASS BANK, as a Lender

	 
	 

	 
	 

	 
	 

	 
	By:___/S/  DAVID C. MORINIERE___________

	 
	      Name:  David C. Moriniere

	 
	      Title:  Senior Vice President

	 
	 

	 
	 

[Signature Page to Credit Agreement with Cargo Aircraft Management, Inc.]

Annex 1.1A

	
						
	Institution
	Revolving Commitment
	Term Loan Commitment
	Address

	SunTrust Bank
	$28,500,000
	$
	24,500,000
	

	303 Peachtree Street NE
10th Floor
Atlanta, Georgia 30308
Attn:  Bob Anderson
Fax:  (404) 588-8833

	Regions Bank
	$26,900,000
	$
	23,100,000
	

	201 Milan Parkway
Birmingham, Alabama 35211
Attn: Stephanie Reid
Fax: (205) 801-5250

	JPMorgan Chase Bank, N.A.
	$26,900,000
	$
	23,100,000
	

	10 S Dearborn
Floor 07
Chicago, Illinois 60603
Attn:  Non Agented Servicing Team
Fax:  (312) 256-2608

	Bank of America, N.A.
	$17,500,000
	$15,000,000
	

	901 Main Street
Dallas, Texas 75202
Attn:  Susheel Jaiswal
Fax:  (972) 728-9506

	PNC Bank, N.A.
	$14,800,000
	$12,700,000
	

	6750 Miller Road
Brecksville, Ohio 44141
Attn:  Mary Ann Cruz
Fax: (866) 932-2125

	The Huntington National Bank
	$10,800,000
	$9,200,000
	

	2361 Morse Road
Columbus, Ohio 43229
Attn: Amy L. Pierce
Fax: (614) 480-2249

	The PrivateBank and Trust Company
	$9,400,000
	$8,100,000
	

	120 South LaSalle Street
Chicago, Illinois 60602
Attn:  Daniel Arehart
Fax: (312) 564-1794

	Branch Banking and Trust Company
	$8,100,000
	$6,900,000
	

	200 W Second Street
16th Floor
Winston Salem, NC 27101
Attn:  Wendy Gerringer
Fax:  (336) 733-2740

	The Northern Trust Company
	$8,100,000
	$6,900,000
	

	50 South LaSalle Street
Chicago, Illinois 60603
Attn: Mary Green
Fax: (312) 630-1566

LEGAL02/32478098v8

	
				
	Institution
	Revolving Commitment
	Term Loan Commitment
	Address

	StellarOne Bank
	$6,700,000
	$5,800,000
	105 Arbor Drive
Christiansburg, Virginia 24073
Attn: Jim Rice
   cc: Sofie Rodriguez
Fax: (540) 394-6884
  cc: (804) 290-4328

	Atlantic Capital Bank
	$6,500,000
	$5,500,000
	3525 Piedmont Road, NE
Building 7, Suite 510
Atlanta, Georgia 30305
Attn: Trudy Robinson
Fax: (404) 995-5804

	TriState Capital Bank
	$5,400,000
	$4,600,000
	301 Grant Street
Suite 2700
Pittsburgh, Pennsylvania 15219
Attn: Lori Mingone
Fax: (412) 304-0391

	Compass Bank
	$5,400,000
	$4,600,000
	8080 N Central Expressway
Suite 320
Dallas, Texas 75206
Attn:  Kathy Kirk
Fax:  (866) 984-8668

	Total
	$175,000,000
	$150,000,000
	 

LEGAL02/32478098v8

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