Document:

Exhibit

Exhibit 10.1

CREDIT AGREEMENT
among
GULF ISLAND FABRICATION, INC.,
as Borrower,
WHITNEY BANK,
as Administrative Agent and LC Issuer,
and
THE LENDERS FROM TIME TO TIME PARTIES HERETO,
and
WHITNEY BANK,
as Sole Lead Arranger and Bookrunner
Dated:  June 9, 2017

TABLE OF CONTENTS
Article I DEFINITIONS    1
1.1Definitions    1
1.2Other Definitional Provisions    22
1.3Accounting Terms    22
1.4UCC Terms    23
1.5Rounding    23
1.6References to Agreement and Laws    23
1.7Time    23
Article II COMMITMENTS, LOANS, AND LCS    23
2.1Credit Facilities    23
2.2Method of Borrowing    23
2.3Funding of Loans    24
2.4Continuations and Conversions.    24
2.5Minimum Amounts and Interest Period Limitations    24
2.6Letters of Credit.    25
2.7Reduction of Committed Amount    28
2.8Cash Collateral    28
2.9Defaulting Lenders.    29
Article III INTEREST, FEES, AND PAYMENTS    31
3.1Interest Rates.    31
3.2Payment of Principal and Interest.    31
3.3Prepayments.    31
3.4Computations of Interest and Fees.    33
3.5General Payment Terms.    34
3.6Pro Rata Treatment and Sharing of Payments.    35
3.7Right of Setoff    36
3.8Fees.    37
Article IV TAXES, YIELD PROTECTION AND ILLEGALITY    38
4.1Taxes.    38
4.2Increased Costs.    40
4.3Illegality    41
4.4Inability to Determine LIBOR    41
4.5Funding Losses    41
4.6Requests for Compensation    42
4.7Mitigation of Obligations; Replacement of Lenders.    42
4.8Survival    43
Article V COLLATERAL AND GUARANTIES    43
5.1Collateral    43

2

5.2UCC Financing Statements    44
5.3Additional Borrowers    44
5.4Further Assurances; Collateral    45
5.5Liens Granted to Agent    45
Article VI CONDITIONS PRECEDENT    45
6.1Initial Credit Extension    45
6.2Conditions to All Credit Extensions    48
Article VII REPRESENTATIONS AND WARRANTIES    48
7.1Existence and Power    48
7.2Authorization and No Conflicts    48
7.3Enforceability    48
7.4Subsidiaries.    49
7.5Debt    49
7.6Liens    49
7.7Ownership and Location of Assets.    49
7.8Intellectual Property    50
7.9Place of Business    50
7.10Financial Information.    50
7.11Compliance with Laws    50
7.12Funded Debt; Material Contracts    50
7.13Litigation    50
7.14Taxes    50
7.15Environmental Matters    51
7.16Insurance    51
7.17Margin Regulations    51
7.18Trade Names    51
7.19Transactions with Affiliates    51
7.20ERISA    51
7.21Labor Matters    51
7.22Investment Company Act    52
7.23Anti-Corruption Laws and Sanctions    52
7.24Solvency    52
7.25No Burdensome Restrictions    52
7.26Use of Proceeds; Commercial Use    52
Article VIII AFFIRMATIVE COVENANTS    52
8.1Reporting Requirements    52
8.2Books and Records    56
8.3Inspections    56
8.4Maintenance of Existence    56
8.5Maintenance of Borrower    56
8.6Insurance.    57

3

8.7Compliance with Laws    58
8.8Compliance with Agreements    58
8.9Payment of Taxes    58
8.10Payment and Performance of Obligations    58
8.11Lien Claims    58
8.12ERISA    58
8.13Conduct Business    58
8.14Banking Relationship    58
8.15Use of Proceeds    59
8.16Preserve Collateral    59
8.17Accuracy of Information    59
8.18Further Assurances    59
8.19Keepwell    59
8.20Collateral Access Agreements    60
8.21Deposit Account Control Agreements    60
Article IX NEGATIVE COVENANTS    60
9.1Debt    60
9.2Limitation on Liens    61
9.3Fundamental Changes    62
9.4Disposition of Assets    62
9.5Restricted Payments.    63
9.6Investments, Loans, Advances, Guarantees and Acquisitions    63
9.7Compliance with Environmental Laws; Compliance with Insurance Requirements.    65
9.8Change of Business    65
9.9Transactions With Affiliates    65
9.10Hedge Agreements    65
9.11Compliance with Government Regulations    66
9.12Organizational Documents    66
9.13Assignment    66
9.14Taxes    66
9.15Prepayment of Debt; Payment on Subordinated Debt.    66
9.16Sale and Leaseback Transactions    66
9.17Restrictive Agreements    67
Article X FINANCIAL COVENANTS    67
10.1Current Ratio    67
10.2Minimum Tangible Net Worth    67
10.3Funded Debt to Tangible Net Worth Ratio    67
Article XI DEFAULT    67
11.1Default    67
11.2Remedies Upon Default    70
11.3Cash Collateral    70

4

11.4Performance by Agent    70
11.5Crediting of Payments and Proceeds    70
Article XII THE ADMINISTRATIVE AGENT    71
12.1Appointment and Authority    71
12.2Rights as a Lender    72
12.3Exculpatory Provisions.    72
12.4Authorization to Distribute Certain Materials to Lenders    74
12.5Reliance by Agent; Notice of Default.    74
12.6Delegation of Duties    74
12.7Resignation of Agent.    75
12.8Non-Reliance on and Other Lenders    75
12.9No Other Duties, etc    76
12.10File Proofs of Claim    76
12.11Credit Bidding.    77
12.12Collateral and Guaranty Matters.    77
12.13Secured Hedge Agreements and Secured Cash Management Agreements    78
Article XIII MISCELLANEOUS    78
13.1Notices.    78
13.2No Deemed Waiver; Cumulative Remedies    80
13.3Expenses; Indemnity; Damage Waiver; Costs and Expenses.    80
13.4Survival    82
13.5Governing Law; Submission to Jurisdiction    82
13.6Waiver of Jury Trial    82
13.7Successors and Assigns.    83
13.8Amendments, Consents and Waivers.    87
13.9Limitation of Liability    88
13.10Survival of Indemnification and Representation and Warranties.    88
13.11USA Patriot Act    88
13.12Foreign Lender Reporting Requirements    88
13.13Document Imaging    88
13.14Counterparts; Integration; Effectiveness; Electronic Execution.    89
13.15Treatment of Certain Information; Confidentiality    89
13.16ENTIRE AGREEMENT    90

5

SCHEDULES AND EXHIBITS
Schedule 1(a)    Lenders and Commitments
Schedule 2    Parties, Contact Information and Wiring Instructions
Schedule 7.4    Subsidiaries
Schedule 7.7    Ownership of Assets
Schedule 9.1    Existing Debt
Schedule 9.2    Existing Liens
Schedule 9.6    Existing Investments

Exhibit A    Revolving Credit Note
Exhibit B-1    Borrowing Request
Exhibit B-2    Conversion/Continuation Request
Exhibit C    Compliance Certificate
Exhibit D    Assignment and Assumption Agreement

6

CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of June 9, 2017 (as amended, restated, supplemented, or otherwise modified from time to time, this “Agreement”), is among Gulf Island Fabrication, Inc., a Louisiana corporation (“Borrower”), Whitney Bank, a Mississippi state chartered bank (“Whitney Bank”), in its capacity as Administrative Agent and LC Issuer, and the Lenders from time to time parties hereto.
RECITALS
A.Borrower has requested that Agent and the Lenders extend credit to Borrower in the form of a revolving credit facility in the aggregate principal amount of up to $40,000,000.
B.Agent and the Lenders have agreed to provide such revolving credit facility on the terms and conditions set out in this agreement.
The parties hereto agree as follows:

1

Article I 
 
DEFINITIONS

1.1    Definitions.  As used in this Agreement, the following terms have the following meanings:
Account has the meaning assigned to such term in the Security Agreement.
Account Debtor means any Person obligated on an Account.
Acquisition means the acquisition, whether through a single transaction or a series of related transactions, of (a) a controlling equity interest or other controlling ownership interest in another Person (including the purchase of an option, warrant or convertible or similar type security to acquire such a controlling interest at the time it becomes exercisable by the holder thereof), whether by purchase of such equity or other ownership interest or upon the exercise of an option or warrant for, or conversion of securities into, such equity or other ownership interest, or (b) assets of another Person which constitute all or substantially all of the assets of such Person or of a division, line of business or other business unit of such Person.
Additional Secured Obligations means (a) all obligations arising under secured Cash Management Agreements and Hedge Agreements and (b) all costs and expenses incurred in connection with enforcement and collection of the foregoing, including the fees, charges and disbursements of counsel, in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Company or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as  the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding; provided that, Additional Secured Obligations of a Company shall exclude any Excluded Hedge Obligations with respect to such Company.
Administrative Questionnaire means an Administrative Questionnaire in a form supplied by Agent.
Affiliate means, with respect to a specified Person, another Person that directly or indirectly, through one or more intermediaries, Controls or is Controlled by or is under common Control with the specified Person.  For purposes of this definition, the term “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract, or otherwise, and the terms “Controls,” “Controlling,” and “Controlled” have meanings correlative thereto.
Agent means Whitney Bank in its capacity as administrative agent, and any successor administrative agent to Whitney Bank appointed pursuant to Section 12.6.
Agent’s Office means Agent’s address and, as appropriate, account as set out on Schedule 2, or such other address or account as Agent may from time to time provide notice to Borrower and the Lenders.
Agreement is defined in the preamble above.

2

Anti-Corruption Laws means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or its Affiliates from time to time concerning or relating to bribery or corruption.
Applicable Margin means (a) for LIBOR Loans, 2.00%, and (b) for Base Rate Loans, 0.00%.
Approved Fund means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
Assignment and Assumption means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 13.7), and accepted by Agent, substantially in the form of Exhibit D or any other form approved by Agent.
Auto-Renewal LC is defined in Section 2.6(a)(iv).  
Bankruptcy Code means the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time.
Base Rate means, when determined, a fluctuating rate per annum equal to the Prime Rate.  Changes in the Base Rate will not occur more often than once each day.
Base Rate Loan means a Loan which accrues interest based on the Base Rate
Board of Directors means, with respect to any Person, (a) in the case of any corporation, the board of directors of such Person, (b) in the case of any limited liability company, the board of managers, sole member, managing member, or other governing body of such Person, (c) in the case of any partnership, the Board of Directors of the general partner of such Person, and (d) in any other case, the functional equivalent of the foregoing.
Borrower is defined in the preamble above.
Borrower Joinder Agreement means a Borrower Joinder Agreement in Proper Form which is fully completed and executed by a Responsible Officer.
Borrowing means the Revolving Loans of the same Type, made, Converted, or Continued on the same date and, in the case of LIBOR Loans, as to which a single Interest Period is in effect.
Borrowing Request means a written request substantially in the form of Exhibit B‐1, which is fully completed and executed by a Responsible Officer.
Business Day means any day other than a Saturday, Sunday or other day on which commercial banks in New Orleans, Louisiana are required or authorized by Law to remain closed, and when used in connection with a LIBOR Loan, the term "Business Day " shall also exclude any day for which banks are not open for dealings in Dollar deposits in the London interbank market.
Capital Expenditure means, for any Person, all expenditures (or liabilities incurred) for assets which are required to be capitalized and so shown on the balance sheet of any such Person in accordance with GAAP, but excluding (a) such amounts to the extent financed with the proceeds of Funded Debt permitted 

3

to be incurred hereunder, (b) such amounts to the extent financed with insurance or condemnation proceeds received with respect to loss of, damage to or taking of property of any Company, and (c) such amounts recovered or recoverable in the price of a contract with a customer of any Company.
Capital Lease Obligation means, for any Person, the obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) real or personal property, which obligations are required to be classified and accounted for as a liability on a balance sheet of any such Person in accordance with GAAP.
Cash Collateral means cash, deposit account balances, or other collateral acceptable to Agent (and any combination thereof).
Cash Collateralize means to deposit with Agent or pledge to Agent under documentation in Proper Form, Cash Collateral in an amount equal to 105% of the applicable LC Exposure, for the benefit of one or more of the (a) LC Issuers, as collateral for LC Exposure or (b) the Lenders as collateral for the obligations of Lenders to fund participations in respect of LC Exposure.
Cash Equivalents means any of the following types of Investments, to the extent owned by any Loan Party or any of its Subsidiaries free and clear of all Liens (other than Permitted Liens):
(a)readily marketable obligations issued or directly and fully guaranteed or insured by the U.S. or any agency or instrumentality thereof having maturities of not more than three hundred sixty days (360) days from the date of acquisition thereof; provided that the full faith and credit of the U.S. is pledged in support thereof;
(b)    time deposits with, or insured certificates of deposit or bankers’ acceptances of, any commercial bank that (i) (A) is a Lender or (B) is organized under the Laws of the U.S., any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the Laws of the U.S., any state thereof or the District of Columbia, and is a member of the Federal Reserve System, (ii) issues (or the parent of which issues) commercial paper rated as described in clause (c) of this definition and (iii) has combined capital and surplus of at least $500,000,000, in each case with maturities of not more than ninety (90) days from the date of acquisition thereof;
(c)    commercial paper issued by any Person organized under the Laws of any state of the U.S. and rated at least “Prime‐1” (or the then equivalent grade) by Moody’s or at least “A‐1” (or the then equivalent grade) by S&P, in each case with maturities of not more than one hundred eighty (180) days from the date of acquisition thereof; and
(d)    Investments, classified in accordance with GAAP as current assets of such Loan Party or any of its Subsidiaries, in money market investment programs registered under the Investment Company Act of 1940, which are administered by financial institutions that have the highest rating obtainable from either Moody’s or S&P, and the portfolios of which are  limited solely to Investments of the character, quality and maturity described in clauses (a), (b) and (c) of this definition.

4

Cash Management Agreement means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements.
Cash Management Bank means any Person that, at the time it enters into a Cash Management Agreement, is a Lender, an Affiliate of a Lender, Agent or an Affiliate of Agent, in its capacity as a party to such Cash Management Agreement.
Cash Management Liabilities means the indebtedness, obligations and liabilities of a Borrower to any Cash Management Bank (including all obligations and liabilities owing to such provider in respect of any returned items deposited with such provider).
CFC means a “controlled foreign corporation” within the meaning of Section 957 of the Internal Revenue Code.
CFC Holdco means a Domestic Subsidiary, substantially all of the assets of which consist of Equity Interests of CFCs.
Change of Control means (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of thirty-five percent (35)% or more of the Equity Interests of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully-diluted basis (and taking into account all such securities that such “person” or “group” has the right to acquire pursuant to any option right); or (b)during any period of twelve (12) consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body.
Change in Law means the occurrence, after the date of this Agreement, of any of the following:  (a)  the adoption or taking effect of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority; or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything in this Agreement to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking 

5

Supervision (or any successor or similar authority) or the U.S. or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
Closing Date means the date on which this Agreement has been executed and delivered by the parties hereto and the conditions set out in Section 6.1 have been satisfied or waived in writing in accordance with this Agreement.
Collateral has the meaning specified in Section 5.1.
Commitment means the Revolving Commitment.
Commitment Percentage means, as to any Lender, such Lender’s Revolving Commitment Percentage.
Commodity Exchange Act means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended, and all related rules, regulations and published interpretations.
Company means each of, and Companies means all of, Borrower and its Subsidiaries.
Compliance Certificate means a certificate substantially in the form of Exhibit C, fully completed and executed by a Responsible Officer.
Connection Income Taxes means Other Connection Taxes that are imposed on or measured by net income or profits (however denominated) or that are franchise Taxes or branch profits Taxes.
Consolidated Net Income means, for any period, the net income (or loss) of the Companies for such period taken as a single accounting period determined in conformity with GAAP.
Continue, Continuation and Continued refers to the continuation of a LIBOR Loan from one Interest Period to the next Interest Period in accordance with Section 2.4.
Control means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have meanings correlative thereto.
Convert, Conversion, and Converted refers to a conversion of one Type of Loan into another Type of Loan in accordance with Section 2.4.
Conversion/Continuation Request means a written request substantially in the form of Exhibit B‐2, which is fully completed and executed by Responsible Officer.

Credit Extension means the making, Conversion, or Continuation of a Loan or the issuance, amendment, or renewal of an LC.

6

Current Financials means, when determined, the financial statements of the Companies most recently delivered to Agent in accordance with Section 8.1.
Debt means, when determined for any Person and without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds (other than, for the avoidance of doubt, surety bonds obtained from a third party surety in the ordinary course of business), notes, debentures, or other similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable (paid within 120 days) incurred in the ordinary course of business), (e) all indebtedness of others secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the indebtedness secured thereby has been assumed, (f) all guarantees by such Person of indebtedness of others (other than guarantees by Borrower for the benefit of a Subsidiary), (g) all Capital Lease Obligations of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit or letters of guarantee, (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (j) all obligations of such Person to repurchase accounts, chattel paper, or notes receivable sold by such Person, (k) all obligations of such Person in respect of Disqualified Equity Interest and all other obligations of such Person to redeem or repurchase any of such Person’s Equity Interests, (l)  the net obligation of such Person under any Hedge Agreement (which, on any date, shall be deemed to be the Hedge Termination Value as of such date), (m) all liabilities of such Person in respect of unfunded vested benefits under  any ERISA employee plan, and (n) all other obligations required by GAAP to be classified upon such Person’s balance sheet as liabilities (excluding capital stock, surplus, surplus reserves and deferred credits).  The Debt of any Person shall include indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefore 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 provide that such Person is not liable therefor.
Debtor Relief Laws means the Bankruptcy Code and all other applicable liquidation, conservatorship, bankruptcy, fraudulent transfer, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments, or similar debtor relief Laws of the U.S. or other applicable jurisdictions from time to time in effect.
Default has the meaning specified in Section 11.1.
Default Rate means the lesser of (a) the Maximum Rate, and (b) the sum of the Base Rate, plus the Applicable Margin for Base Rate Loans, plus two percent (2.00%).
Defaulting Lender means any Lender that
(a)    has failed to (i) fund all or any portion of its Loans within two (2) Business Days of the date such Loans were required to be funded under this Agreement unless such Lender notifies Agent and Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable Default or Potential Default, shall be specifically identified in such writing) has not been 

7

satisfied, or (ii) pay to Agent, any LC Issuer, or any other Lender any other amount required to be paid by it under this Agreement (including in respect of its participation in LCs) within two (2) Business Days of the date when due,
(b)    has notified Borrower, Agent, or any LC Issuer in writing that it does not intend to comply with its funding obligations under this Agreement, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan under this Agreement and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable Default or Potential Default, shall be specifically identified in such writing or public statement) cannot be satisfied),
(c)    has failed, within three (3) Business Days after written request by Agent or Borrower, to confirm in writing to Agent and Borrower that it will comply with its prospective funding obligations under this Agreement (provided that such Lender shall cease to be a Defaulting Lender pursuant to this paragraph (c) upon receipt of such written confirmation by Agent and Borrower), or
(d)    has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity;
provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the U.S. or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender upon delivery of written notice of such determination to Borrower, each LC Issuer, and each Lender.
Disposition means the sale, lease, transfer, conveyance, assignment, license, or other disposition of any asset by any Person (including any sale and leaseback transaction), and any sale, assignment, transfer, conveyance, or other disposition, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.
Disqualified Equity Interest means any Equity Interest, which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition, (a) matures or is mandatorily redeemable (other than solely for Equity Interests which are not Disqualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Obligations that are accrued 

8

and payable and the termination of the Commitments), (b) is redeemable at the option of the holder thereof (other than solely for Equity Interests which are not Disqualified Equity Interests) (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Obligations that are accrued and payable and the termination of the Commitments), in whole or in part, (c) provides for the scheduled payment of dividends in cash, or (d) is or becomes convertible into or exchangeable for Debt or any other Equity Interest that would constitute Disqualified Equity Interests, in each case, prior to the first anniversary of the Revolving Credit Termination Date.
Distribution means (a) any dividend, distribution, or other payment (whether in cash, securities, or other property) in respect of the Equity Interests of a Person, (b) any redemption, purchase, retirement or other acquisition by a Person of any of its Equity Interests, or (c) the establishment of any fund for any such distribution, dividend, payment, redemption, purchase, retirement, or acquisition, including any sinking fund or similar arrangement.
Dollar, Dollars and $ means currency of the U.S. which is at the time of payment legal tender for the payment of public and private debts in the U.S.
Domestic Subsidiary means any Subsidiary that is organized under the laws of any state of the United States or the District of Columbia.
Electronic Applications is defined in Section 2.6(f).
Eligible Assignee means any Person that meets the requirements to be an assignee under Section 13.7(b)(iii) and (v) (subject to such consents, if any, as may be required under Section 13.7(b)(iii)).
Eminent Domain Event means any Governmental Authority, or any Person acting under, for, or on behalf of, a Governmental Authority, institutes proceedings to condemn, seize or appropriate all or part of any asset of a Loan Party.
Eminent Domain Proceeds means all amounts received by any Loan Party as a result of any Eminent Domain Event.
Employee Plan means a pension, profit-sharing, or stock bonus plan intended to qualify under Section 401(a) of the Tax Code, maintained or contributed to by Borrower, including any multiemployer plan within the meaning of Section 4001(a)(3) of ERISA.
Environmental Law means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Substance or to health and safety matters.
Environmental Liability means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) any violation of any Environmental Law, (b) the 

9

generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Substance, (c) any exposure to any Hazardous Substance, (d) the Release or threatened Release of any Hazardous Substance into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
Equity Interest and Equity Interests mean, with respect to any Person, any and all shares, interests, participations or other equivalents, including membership interests (however designated, whether voting or nonvoting), or equity of such Person, including, if such Person is a partnership, partnership interests (whether general or limited) and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of property of, such partnership, in each case, whether outstanding on the date hereof or issued after the date hereof.
ERISA means the Employee Retirement Income Security Act of 1974, as amended, and its related rules, regulations, and published interpretations.
ERISA Event means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30‐day notice period is waived); (b) the failure to satisfy the “minimum funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal of the Borrower or any ERISA Affiliate from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition upon the Borrower or any ERISA Affiliate 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.
Exchange Act means the Securities Exchange Act of 1934 and the rules of the Securities Exchange Commission thereunder as in effect on the Closing Date.
Excluded Hedge Obligation means, with respect to any Guarantor any Hedge Obligation if, and to the extent that, all or a portion of the Guaranty of such Guarantor of, or the grant by such Guarantor of a Lien to secure, such Hedge Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act (or the application or official interpretation thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act (determined after giving effect to Section 8.19 and any other “keepwell”, support or other agreement for the benefit of such Guarantor and any and all guarantees of such Guarantor’s Hedge Obligations by other Companies) at the time the Guaranty of such Guarantor, or grant by such Guarantor of a Lien, becomes effective with respect to such Hedge Obligation.  If a Hedge Obligation arises under a master agreement governing more than one Hedge Agreement, such exclusion shall apply only to the portion of such Hedge 

10

Obligation that is attributable to Hedge Agreements for which such Guaranty or Lien is or becomes excluded in accordance with the first sentence of this definition.
Excluded Taxes means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes; (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by Borrower under Section 4.7) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 4.1, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office; (c) Taxes attributable to such Recipient’s failure to comply with Section 4.1(g); and (d) any U.S. federal withholding Taxes imposed under FATCA.
Facilities means the Revolving Credit Facility and any other revolving loan or other credit facility that is provided under this Agreement after the Closing Date.
FATCA means Sections 1471 through 1474 of the Tax Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof.
Federal Funds Rate means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System, as published in the Federal Reserve Bank of New York Statistical Daily Rates for the applicable day (or, if such source is not available, such alternate source as determined by Lender).
Field Audit means audits, verifications and inspections of (a) the Collateral, (b) the accounting and financial processes and procedures of the Companies and the other Loan Parties pertaining to the Collateral, and (c) the books, records and documents of the Companies and the other Loan Parties pertaining to the Collateral, in each case conducted by a Person (who may be an employee of Agent or any Lender or who may be an independent third party) satisfactory to Agent.
Foreign Lender means (a) if Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which Borrower is resident for tax purposes.
Foreign Subsidiary means any Subsidiary that is not a Domestic Subsidiary.
Fronting Exposure means, at any time there is a Defaulting Lender, with respect to any LC Issuer, such Defaulting Lender’s Revolving Commitment Percentage of the outstanding LC Exposure with respect to LCs issued by such LC Issuer other than LC Exposure as to which such Defaulting Lender’s participation 

11

obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms of this Agreement.
Fund means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
Funded Debt means, when determined, for any Person (a) all Debt for borrowed money, whether or not evidenced by notes, bonds, debentures or similar instruments, and whether as a direct obligor, a reimbursement obligor on a letter of credit, a guarantor, or otherwise, (b) all Capital Lease Obligations, and (c) the LC Exposure and liabilities related to other letters of credit.
GAAP means generally accepted accounting principles in the U.S. set out in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and the Financial Accounting Standards Board as in effect from time to time.
Governmental Authority means the government of the U.S. or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
Guarantor means (a) any Person which executes a Guaranty in favor of Agent (including without limitation all of the Persons required to be Guarantors pursuant to Section 5.3), and (b) with respect to Additional Secured Obligations owing by any Company or any of its Subsidiaries and any Hedge Obligation of a Specified Loan Party (determined before giving effect to Sections 5.3 and 8.19 under the Guaranty), Borrower.
Guarantee of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.
Guaranty means a guaranty executed by a Guarantor in favor of Agent in Proper Form to, directly or indirectly, guarantee the Obligations and Additional Secured Obligations (for each Guarantor as applicable to this Agreement, subject to the proviso in this defined term, its “Guaranteed Obligations”); provided that, 

12

the “Guaranteed Obligations” of a Guarantor hereunder shall exclude any Excluded Hedge Obligations with respect to such Guarantor.
Hazardous Substance means (a) any explosive or radioactive substance or waste, all hazardous or toxic substances, waste, or other pollutants, and any other substance the presence of which requires removal, remediation or investigation under any applicable Environmental Law, (b) any substance that is defined or classified as a hazardous waste, hazardous material, pollutant, contaminant, or toxic or hazardous substance under any applicable Environmental Law, or (c) petroleum, petroleum distillates, petroleum products, oil, polychlorinated biphenyls, radon gas, infectious medical wastes, and asbestos or asbestos-containing materials.
Hedge Agreement means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”) including any such obligations or liabilities under any Master Agreement.
Hedge Bank means any Person that, at the time it enters into a Hedge Agreement permitted under Article IX, is a Lender, an Affiliate of a Lender, Agent or an Affiliate of Agent, in its capacity as a party to such Hedge Agreement.
Hedge Obligations means with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section l a(47) of the Commodity Exchange Act.
Hedge Termination Value means, in respect of any one or more Hedge Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Hedge Agreements, (a) for any date on or after the date such Hedge Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedge Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedge Agreements (which may include a Lender or any Affiliate of a Lender).
ICC is defined in Section 2.6(e).

13

Indemnified Taxes means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.
Information is defined in Section 13.15(b).
Insurance Proceeds means all cash and non-cash proceeds in respect of any insurance policy maintained by any Company other than (a) key man life insurance proceeds and (b) unless a Default then exists, any business interruption insurance proceeds.
Interest Expense means for the Companies on a combined basis, for any period, the sum of all cash interest expense paid or required by its terms to be paid during such period, as determined in accordance with GAAP consistently applied in accordance with historical practices.
Interest Period means with respect to any LIBOR Loan, the period commencing on the date such Loan is made, Continued, or Converted, and ending on the numerically corresponding day in the calendar month that is one month thereafter, as Borrower may elect under Sections 2.4, or 2.6; provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, and (b) if any Interest Period begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month of such Interest Period.
Investment means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to, guarantee or assumption of Debt of, or purchase or other acquisition of any other Debt or interest in, another Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit or all or a substantial part of the business of, such Person.  For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.
Laws means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority (whether or not such orders, requests, licenses, authorizations, permits or agreements have the force of law) including all Environmental Laws.
LC means any letter of credit issued by an LC Issuer for the account of any Loan Party on or after the Closing Date under the terms of this Agreement (and the applicable LC Application).

14

LC Application means the standard form of letter of credit application and agreement for the issuance or amendment of LCs which is from time to time in use by the applicable LC Issuer.
LC Credit Extension means, with respect to any LC, the issuance, extension of the expiry date, amendment, renewal, or increase of the amount of such LC.
LC Credit Extension Date means the date on which an LC Credit Extension occurs.
LC Disbursement means an extension of credit resulting from a drawing under any LC which has not been reimbursed or refinanced as a Loan under the Revolving Credit Facility.
LC Exposure means, when determined and without duplication, the sum of (a) the aggregate undrawn maximum face amount of each LC at such time, plus (b) the aggregate unpaid obligations of the Companies to reimburse the Revolving Lenders for amounts paid by the Revolving Lenders under LCs (including all LC Disbursements and excluding any Revolving Loans to fund such reimbursement obligations under Section 2.6).  The LC Exposure of any Revolving Lender at any time shall be its Revolving Commitment Percentage of the total LC Exposure at such time.
LC Issuer means Whitney Bank, in its capacity as issuer of LCs under this Agreement, or such other Lender as Borrower may from time to time select as an LC Issuer under this Agreement pursuant to Section 2.6; provided that, such Lender has agreed to be an LC Issuer.
LC Sublimit means $40,000,000.
Lenders means the Persons listed on Schedule 1(a) and any other Person that shall have become party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.
Lending Office means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify Borrower and Agent.
LIBOR means, the One Month London InterBank Offered Rate in U.S. Dollars as calculated and published by the Intercontinental Exchange Benchmark Administration Ltd. (“ICE,” or the successor thereto if ICE is no longer making a London Interbank Offered Rate available) and in effect on the first day of each calendar month. The One Month ICE LIBOR shall be obtained by Agent from an intermediary rate reporting source such as Bloomberg, L.P. or other authoritative rate reporting source as selected by Agent, and is based on an average of interbank offered rates for one month deposits in U.S. Dollars based on quotes from designated banks in the London market.  The One Month ICE LIBOR shall be rounded up to the nearest one-eighth (1/8th) of one percent by Agent to determine the index (the "LIBOR Index").  Notwithstanding anything in this Agreement to the contrary, if the One Month ICE LIBOR as reported by Bloomberg, L.P or other rate reporting source is less than zero, then it shall be deemed to be zero percent (0.0%) and the LIBOR Index shall be rounded up to one-eighth (1/8th) of one percent. The LIBOR Index shall be adjusted on the first day of each calendar month.  The LIBOR Index is not necessarily the lowest rate charged by Agent for any particular class of borrowers or credit extensions.  Borrower understands that Agent may make loans based on other rates as well. If the LIBOR Index becomes unavailable during the term of this Agreement, 

15

Agent may designate a substitute index by notice to Borrower.  Borrower may obtain the current LIBOR Index from Agent upon Borrower’s request. Agent’s determination of the LIBOR Index shall be conclusive absent demonstrable error.
LIBOR Loan means a Loan accruing interest based on LIBOR.
Lien means any lien (including statutory liens), mortgage, security interest, financing statement, collateral assignment, pledge, negative pledge assignment, charge, hypothecation, deposit arrangement, preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing lease having substantially the same economic effect as any of  the foregoing), or encumbrance of any kind, and any other right of or arrangement with any creditor (whether based on common law, constitutional provision, statute or contract) to have its claim satisfied out of any property or assets, or their proceeds, before the claims of the general creditors of the owner of the property or assets.
Litigation means any action by or before any Governmental Authority, arbitrator, or arbitration panel.
Loan Documents means (a) this Agreement, all certificates and requests delivered under this Agreement, and all exhibits and schedules to this Agreement, (b) the Notes, (c) all Guaranties, (d)  the Security Documents, (e) all Subordination  Agreements, (f)  all LCs and LC Applications, (g)  all Secured Cash Management Agreements, (h) all other agreements, documents, and instruments in favor of Agent, any Lender, or any LC Issuer ever delivered in connection with or under this Agreement (excluding any Secured Hedge Agreement), and (i) all renewals, extensions, amendments, modifications, supplements, restatements,  and  replacements of, or substitutions for, any of the foregoing.
Loan Party means each of, and Loan Parties means all of, Borrower and the Guarantors.
Loan or Loans means the Revolving Loans.
Material Adverse Effect means (a) the material impairment of the ability of any Loan Party to perform any of its payment or other material obligations under any Loan Document, (b) the material impairment of the ability of Agent to enforce any Loan Party’s material obligations, or Agent’s rights, under any Loan Document, (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party, and (d) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent), or condition (financial or otherwise) of the Loan Parties, taken as a whole, as represented in the initial financial statements delivered to Agent on or about the Closing Date in respect of the Loan Parties.
Material Adverse Event means any circumstance or event that, individually or collectively with other circumstances or events, could reasonably be expected to have a Material Adverse Effect.
Material Contract means “material contract” as defined in Item 601(b)(10) of Regulation S-K of the Exchange Act.
Maximum Rate means the maximum rate of nonusurious interest permitted from day-to-day by applicable Law

16

Minimum Collateral Amount means, at any time, (a) with respect to Cash Collateral consisting of cash or deposit account balances, an amount equal to 105% of the Fronting Exposure of all LC Issuers with respect to LCs issued and outstanding at such time, and (b) otherwise, an amount determined by Agent and the LC Issuers in their sole discretion.
Multiemployer Plan means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
Net Proceeds means (a) with respect to any Disposition of any asset by any Person, the aggregate amount of cash and non-cash proceeds from such Disposition received by, or paid to or for the account of, such Person, net of customary and reasonable out-of-pocket costs, fees, and expenses, (b) with respect to the issuance of Equity Interests or Subordinated Debt or the making of any cash capital contributions, the cash and non-cash proceeds received from such issuance, incurrence, or contribution net of attorneys’ fees, investment banking fees, accountants fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection with such issuance, (c) with respect to Insurance Proceeds, all cash proceeds received by any Loan Party, Agent, or any Lender from an insurer under any insurance policy maintained by such any Company or any Loan Party, and (d) with respect to Eminent Domain Proceeds, all cash proceeds received by any Loan Party from any Governmental Authority net of attorney’s fees and other customary and reasonable out of pocket costs, fees, and expenses.  Non-cash proceeds include any proceeds received by way of deferred payment of principal pursuant to a note, installment receivable, purchase price adjustment receivable, or otherwise, but only as and when received.
Net Worth means, when determined, (a) the aggregate amount at which all assets of the Companies would be shown on a balance sheet at such date, less (b) Total Liabilities of the Companies.
New Loan Party is defined in Section 5.3 below.
Non-Consenting Lender means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of all affected Lenders in accordance with the terms of Section 13.8 and (b) has been approved by the Required Lenders.
Non-Defaulting Lender means, at any time, each Lender that is not a Defaulting Lender at such time.
Nonrenewal Notice Date is defined in Section 2.6(a)(iv).
Notes means the Revolving Credit Notes.
Obligations means all present and future Debt, liabilities and obligations (including the Loans, the LC Exposure, the Cash Management Liabilities, and indemnity obligations), whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, and all renewals, increases and extensions thereof, or any part thereof, now or in the future owed to Agent, any Lender, or any LC Issuer by any Loan Party under this Agreement or any of the other Loan Documents, together with all interest accruing thereon, reasonable fees, costs and expenses payable under the Loan Documents or in connection with the enforcement of rights under the Loan Documents, including (a) fees and expenses under this Agreement, and (b) interest and fees that accrue after the commencement of any proceeding under any 

17

Debtor Relief Law naming any Loan Party or any Affiliate thereof as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.
Organizational Documents means, for any Person, (a) the articles of incorporation or certificate of formation and bylaws of such Person if such Person is a corporation, (b) the articles of organization or certificate of formation and regulations or limited liability company agreement (or other similar governing document) of such Person if such Person is a limited liability company, (c) the certificate of limited partnership or certificate of formation and the limited partnership agreement of such Person if such Person is a limited partnership, or (d) the documents under which such Person was created and is governed if such person is not a corporation, limited liability company or limited partnership.
Other Connection Taxes means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
Other Taxes means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 4 7).
Participant is defined in Section 13.7(d).
Participant Register is defined in Section 13.7(d).
Patriot Act is defined in Section 13.11.
Permitted Debt means Debt permitted in Section 9.1.
Permitted Encumbrances means:
(a)    Liens imposed by law for Taxes that are not yet due or are being contested in compliance with Section 8.9;
(b)    carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 8.9;
(c)    pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;
(d)    deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

18

(e)    judgment Liens in respect of judgments that do not constitute a Default under Section 11.1(g); and
(f)    easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary;
provided that, the term “Permitted Encumbrances” shall not include any Lien securing Debt, except with respect to clause (e) above.
Permitted Investments means:
(a)    direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the U.S. (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the U.S.), in each case maturing within one year from the date of acquisition thereof;
(b)    investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;
(c)    investments in certificates of deposit, bankers’ acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the U.S. or any state thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;
(d)    fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; and
(e)    money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000.
Permitted Liens means Liens permitted in Section 9.2.
Person means any natural person, partnership, limited partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, syndicate, Governmental Authority or other entity or organization of whatever nature.
Plan means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

19

Potential Default means the occurrence of any event or the existence of any circumstance that would, with the giving of notice or lapse of time or both, become a Default.
Prime Rate means, when determined, the fluctuating rate of interest most recently published by the Wall Street Journal and designated as the Prime Rate for the U.S. as published in the “Money Rates” section of the Wall Street Journal (the “Prime Index”).  In the event the Prime Rate is published as a range of rates, the highest rate in the quoted range shall be the Prime Index.  The Prime Rate will change when and as the Prime Index changes. The Prime Index is not necessarily the lowest rate charged by Agent for any particular class of borrowers or credit extensions.  Borrower understands that Agent may make loans based on other rates as well. If the Prime Index becomes unavailable during the term of this Agreement, Agent may designate a substitute index by notice to Borrower.  Borrower may obtain the current Prime Index from Agent upon Borrower’s request.  Agent’s determination of the Prime Index shall be conclusive absent demonstrable error.  
Proper Form means in form and substance reasonably satisfactory to Agent and its legal counsel.
Qualified ECP Guarantor means, at any time, each Company with total assets exceeding $10,000,000 or that otherwise qualifies at such time as an “eligible contract participant” under the Commodity Exchange Act and can cause another Person to qualify as an “eligible contract participant” at such time under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
Recipient means (a) Agent, (b) any Lender, and (c) any LC Issuer, as applicable.
Register is defined in Section 13.7(c).
Regulation D means Regulation D of the Board of Governors of the Federal Reserve System as the same may be amended or supplemented.
Related Parties means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, members, advisors or any other agent or Representative of such Person or of such Person’s Affiliates.
Release means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, disposing, or dumping of any substance into the environment.
Removal Effective Date is defined in Section 12.6(b).
Report means reports prepared by Agent or another Person showing the results of appraisals, field examinations or audits pertaining to the Borrower’s assets from information furnished by or on behalf of Borrower, after Agent has exercised its rights of inspection pursuant to this Agreement, which Reports may be distributed to the Lenders by Agent.
Representatives of any Person means representatives, officers, directors, members, managers, employees, consultants, contractors, attorneys, authorized agents or any other Person authorized by such Person’s Board of Directors to act on behalf of such Person.
Required Lenders means, at any time, Lenders having Total Credit Exposure representing more than 66.67% of the Total Credit Exposure of all Lenders; provided that, for any period in which there are 

20

less than three (3) Lenders, Required Lenders shall be all Lenders.  The Total Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.
Resignation Effective Date is defined in Section 12.6(a).
Responsible Officer means (a) the president, chief executive officer, chief financial officer,  chief operating officer or secretary of Borrower, or (b) another natural person who is designated in writing to Agent by Borrower as a Person authorized to take specific actions on behalf of Borrower and the other Loan Parties.
Restricted Payment means any dividend or other distribution  (whether in cash, securities or other property) with respect to any Equity Interests in Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests or any option, warrant or other right to acquire any such Equity Interests.
Revolving Commitment means (a) as to all Revolving Lenders, the aggregate commitment of all Revolving Lenders to make Revolving Loans and participate in LCs, in an aggregate principal amount at any time outstanding not to exceed the Revolving Committed Amount, and (b) as to any Revolving Lender, the obligation of such Revolving Lender to make Revolving Loans and participate in LCs under this Agreement in an aggregate principal amount at any time outstanding not to exceed the Revolving Committed Amount for such Revolving Lender.
Revolving Commitment Percentage means, when determined for any Revolving Lender, the ratio of (a) the amount of the Revolving Committed Amount of such Revolving Lender to (b) the Revolving Committed Amount of all the Revolving Lenders.
Revolving Committed Amount means (a) as to all Revolving Lenders, the aggregate amount set out for the Revolving Lenders on Schedule 1(a) (as such amount may be modified at any time or from time to time pursuant to the terms of this Agreement) and (b) as to any Revolving Lender, the amount set out opposite such Revolving Lender’s name on Schedule 1(a) as its Revolving Committed Amount (as such amount may be modified at any time or from time to time pursuant to the terms of this Agreement).  The aggregate Revolving Committed Amount of all Revolving Lenders on the Closing Date is $40,000,000
Revolving Credit Exposure means, when determined, (a) for any Revolving Lender, the sum of the Revolving Principal Amount and the LC Exposure of such Revolving Lender, and (b) for all Revolving Lenders, the sum of the Revolving Principal Amount and the LC Exposure of all Revolving Lenders.
Revolving Credit Facility means the revolving credit facility established pursuant to Section 2.1.  
Revolving Credit Limit means, when determined, the Revolving Committed Amount of all Revolving Lenders.
Revolving Credit Note means a promissory note made by Borrower in favor of a Revolving Lender in the amount of the Revolving Committed Amount of such Revolving Lender and evidencing the Revolving Loans made by such Revolving Lender, substantially in the form attached as Exhibit A, and any amendments, 

21

supplements and modifications thereto, any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.
Revolving Credit Termination Date means the earliest to occur of (a) June 9, 2019, (b) the date of termination of the entire Revolving Commitment by Borrower pursuant to Section 2.7, or (c) the date of termination of the Revolving Commitment pursuant to Section 11.2.
Revolving Lender means any of, and Revolving Lenders means all of, the Lenders with a Revolving Commitment.  As of the Closing Date, the Revolving Lenders are set out on Schedule 1(a).
Revolving Loan means any revolving loan made to Borrower as part of a Borrowing pursuant to Section 2.1.
Revolving Principal Amount means, when determined, (a) for all Revolving Lenders, the aggregate outstanding principal balance of the Revolving Credit Notes, and (b) for any Revolving Lender, such Lender’s Revolving Commitment Percentage of the aggregate outstanding principal balance of the Revolving Credit Notes.
Sanctioned Person means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State or by the United Nations Security Council, the European Union or any EU member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person controlled by any such Person.
Sanctions means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.
Secured Cash Management Agreement means any Cash Management Agreement that is entered into by and between any Loan Party and any Cash Management Bank.
Secured Hedge Agreement means any Hedge Agreement (a) required pursuant to Section 8.17 or (b) permitted under Article IX, in each case that is entered into by and between any Loan Party and any Hedge Bank.
Secured Obligations means, collectively, (a) the Obligations and (b) all existing or future payment and other obligations owing by any Loan Party under (i) any Secured Hedge Agreement and (ii) any Secured Cash Management Agreement.
Secured Parties means, collectively, Agent, the Lenders, each LC Issuer, the Hedge Banks, the Cash Management Banks, each co-agent or sub-agent appointed by Agent from time to time pursuant to Section 12.5, any other holder from time to time of any of any Secured Obligations and, in each case, their respective successors and permitted assigns.

22

Security Agreement means each Security and Pledge Agreement in Proper Form executed by any Loan Party, as debtor, and by Agent, as secured party, granting Agent a Lien on, and security interest in, among other things, such Loan Party’s personal property assets.
Security Documents means all Security Agreements, deeds of trust, mortgages, and all other documents executed in connection therewith, in each case to create or perfect a Lien in favor of Agent, for the ratable benefit of the Secured Parties, on the assets of the Loan Parties.
Solvent means, with respect to any Person as of a particular date, that on such date (a) such Person is able to pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (b) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature in their ordinary course, (c) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s assets would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged or is to engage and (d) the book value of the assets of such Person as set out on such Person’s balance sheet is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person.  In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed as the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
Specified Loan Party means any Company that is not then an “eligible contract participant” under the Commodity Exchange Act (determined prior to giving effect to Section 8.19).
Subordinated Debt means all Debt of the Companies which is contractually subordinated in right of payment, collection, enforcement and lien rights to the prior payment in full of the Obligations on terms satisfactory to Agent, and includes Debt in the form of subordinated convertible debentures or subordinated promissory notes.
Subordination Agreement means each subordination agreement in Proper Form between Agent and the holders of Subordinated Debt, in each case, and as the same may be amended, restated, or supplemented.
Subsidiary of a Person (the “parent”) means, when determined, (a) any Person the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, (b) any other corporation, limited liability company, association or other business entity of which securities or other ownership interests representing more than 50% of the voting power of all Equity Interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Board of Directors thereof are, as of such date, owned, Controlled or held by the parent and/or one or more subsidiaries of the parent, (c) any partnership (i) the sole general partner or the managing general partner of which is the parent and/or one or more subsidiaries of the parent or (ii) the only general partners of which are the parent and/or one or more subsidiaries of the parent, and (d) any other Person that is otherwise Controlled by the parent and/or one or more subsidiaries of the parent.  Unless the context requires otherwise, all references in this Agreement or the Loan Documents to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or to Subsidiaries of Borrower.

23

Tangible Net Worth means, when determined, the sum of common stock, preferred stock, capital surplus, retained earnings and Subordinated Debt less the sum of all receivable due from shareholders and affiliates, loans receivable from shareholders and affiliates, treasury stock and the sum of all intangible assets (including, without limitation, good will, franchises, licenses, patents, trademarks, trade names, copyrights, service marks and brand names).
Tax Code means the Internal Revenue Code of 1986, as amended, and related rules, regulations and published interpretations.
Tax Distribution means any Distribution made by Borrower or any Subsidiary in amounts which are sufficient to permit the owners of such Borrower or Subsidiary to pay their federal, state or local income taxes (or taxes based on income) which arise solely and directly as a result of their ownership interest in such Borrower or Subsidiary, as evidenced by the applicable Borrower’s tax returns for the applicable year.
Taxes means, for any Person, all present and future taxes, levies, imposts, duties, deductions, withholdings (including backup withholdings), assessments, fees or other charges imposed by any Governmental Authority upon that Person, its income, or any of its properties, franchises or assets (including any applicable interest, additions to tax, or penalties applicable thereto).
Total Credit Exposure means, when determined for any Lender, the Revolving Credit Exposure of such Lender at such time.
Total Liabilities means, when determined, all obligations required by GAAP to be classified as liabilities upon the Companies’ balance sheet, including the aggregate amount of all Debt, liabilities (including tax and other proper accruals) and reserves of the Companies.
Type when used in reference to a Loan or Borrowing, refers to whether the Loan (or the Loans made in connection with a Borrowing) are Base Rate Loans or LIBOR Loans.
UCC means the Uniform Commercial Code in effect from time to time in the State of Louisiana.
Unreimbursed Amount is defined in Section 2.6(b).
U.S. means United States of America.
Whitney Bank is defined in the preamble above.
Withdrawal Liability means 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 E of Title IV of ERISA.
Withholding Agent means any Loan Party and Agent.

1.2    Other Definitional Provisions.  With reference to this Agreement and each other Loan Document, unless otherwise specified in this Agreement or in such other Loan Document:

24

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

1.3    Accounting Terms. All accounting terms not specifically or completely defined in this Agreement shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP, applied on a consistent basis, as in effect from time to time and in a manner consistent with that used in preparing the financial statements required by Section 8.1, except as otherwise specifically prescribed in this Agreement and, in the case of unaudited statements, without footnotes and year-end adjustments.  Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Debt of Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 on financial liabilities shall be disregarded.

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

1.5    Rounding. Any financial ratios required to be maintained by the Loan Parties pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio or percentage is expressed in this 

25

Agreement and rounding the result up or down to the nearest number (with a rounding­ up if there is no nearest number).

1.6    References to Agreement and Laws. Unless otherwise expressly provided herein, (a) references to Organizational Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.

1.7    Time. Unless otherwise specified, all references in this Agreement to times of day shall be references to Central time (daylight or standard, as applicable).

ARTICLE II     
COMMITMENTS, LOANS, AND LCS

2.1    Credit Facilities
(a)    Revolving Credit Facility.  
(ii)    Subject to Sections 6.1 and 6.2, and the other the terms and conditions of this Agreement, from time to time prior to the Revolving Credit Termination Date, each Revolving Lender agrees to make Revolving Loans to Borrower ratably in accordance its Revolving Commitment Percentage and in an aggregate principal amount which shall not cause (i) such Revolving Lender’s Revolving Credit Exposure to exceed its Revolving Committed Amount or (ii) the Revolving Credit Exposure of all Revolving Lenders to exceed the Revolving Credit Limit. Within the foregoing limits and subject to the terms and conditions of this Agreement, Borrower may borrow, repay, and re-borrow Revolving Loans. Revolving Loans may be Base Rate Loans or LIBOR Loans, as Borrower may elect, subject to the terms set out in this Agreement.
(iii)    Each Revolving Loan shall be made as part of a Borrowing and each Revolving Loan shall be made by a Revolving Lender ratably in accordance its Revolving Commitment Percentage of such Borrowing.

2.2    Method of Borrowing
(a)    By no later than 10:00 a.m. (i) on the date of the requested Borrowing of Loans that will be Base Rate Loans and (ii) three (3) Business Days prior to the date of the requested Borrowing of Loans that will be LIBOR Loans, Borrower shall telephone Agent (and in the case of a requested Base Rate Loan, Agent shall notify the Lenders) as well as submit (A) a written completed Borrowing Request to Agent.

26

(b)    If Borrower fails to specify (i) the Type of Loan requested, then such Loan shall be deemed to be a Base Rate Loan, or (ii) an Interest Period, then such LIBOR Loan shall be deemed to have an Interest Period of one month. All Loans made on the Closing Date shall be Base Rate Loans until the commencement of the next Interest Period, whereupon all or any portion of the Loans may be converted into LIBOR Loans in accordance with the terms of Section 2.4.
(c)    From time to time, Whitney Bank, as a Cash Management Bank, may provide certain treasury or cash management services to Borrower under which Borrower incurs Loans under the Revolving Credit Facility. While a Cash Management Agreement with Whitney Bank is in effect, Borrower may repay the Revolving Principal Amount under the terms of the Cash Management Agreement without notice. Borrower hereby authorizes Whitney Bank to honor all checks or other drafts received against the accounts subject to the Cash Management Agreement. Loans borrowed under the terms of any Cash Management Agreement between Borrower and Whitney Bank shall be Base Rate Loans in accordance with the terms of this Agreement. In the event of any conflict between the terms of any Cash Management Agreement with Whitney Bank and this Agreement, the terms of this Agreement shall control.

2.3    Funding of Loans. Upon receipt of a Borrowing Request, Agent shall promptly inform the Lenders as to the terms thereof. Each Lender shall make its Commitment Percentage of the requested Borrowing available to Agent in Dollars and in immediately available funds at Agent’s Office not later than 12:00 noon on the Business Day specified in the applicable Borrowing Request. Upon satisfaction of the conditions set out in Sections 6.1 and 6.2, the amount of the requested Loans will then be made available to the applicable Borrower by Agent either by (a) crediting the account of Borrower on the books of Agent with the amount of such funds, or (b) wire transfer of such funds, in each case in accordance with instructions provided by Borrower to (and reasonably acceptable to) Agent.

2.4    Continuations and Conversions.
(a)    Subject to the terms below, Borrower shall have the option, on any Business Day prior to the Revolving Credit Termination Date, to continue existing LIBOR Loans for a subsequent Interest Period, to Convert Base Rate Loans into LIBOR Loans, or to Convert LIBOR Loans into Base Rate Loans. By no later than 10:00 a.m. (i) on the date of the requested Conversion of a LIBOR Loan to a Base Rate Loan and (ii) three (3) Business Days prior to the date of the requested Continuation of a LIBOR Loan or Conversion of a Base Rate Loan to a LIBOR Loan, Borrower shall provide telephonic notice to Agent, followed promptly by a written Continuation/Conversion Request setting out whether Borrower wishes to Continue or Convert such Loans.
(b)    Notwithstanding anything in this Agreement to the contrary, (i) except as provided in Sections 4.3 and 4.4, LIBOR Loans may only be Continued or Converted into Base Rate Loans on the last day of the Interest Period applicable thereto, (ii) LIBOR Loans may not be Continued, nor may Base Rate Loans be Converted into LIBOR Loans, during the existence and continuation of a Default, and (iii) any request to Continue a LIBOR Loan that fails to comply with the terms hereof or any failure to request a Continuation of a LIBOR Loan at the end of an Interest Period 

27

shall be deemed a request to Convert such LIBOR Loan to a Base Rate Loan on the last day of the applicable Interest Period.

2.5    Minimum Amounts and Interest Period Limitations. Each request for a Borrowing, Conversion, or Continuation under this Agreement shall be subject to the following requirements: (a) for LIBOR Loans it shall be in a minimum amount of the lesser of $500,000 (and in integral multiples of $100,000 in excess thereof) or the remaining amount available to be borrowed, (b) for Base Rate Loans it shall be in a minimum amount of the lesser of $500,000 (and in integral multiples of $100,000 in excess thereof) or the remaining amount available to be borrowed, and (c) there may not be more than four (4) Interest Periods in effect for all LIBOR Loans. For the purposes of this Section 2.5, all LIBOR Loans with the same Interest Periods that begin and end on the same date shall be considered as one Interest Period, but LIBOR Loans with different Interest Periods, even if they begin on the same date, shall be considered separate Interest Periods.

2.6    Letters of Credit.
(a)         The LC Commitment.
(ii)    Subject to the terms and conditions set out in this Agreement, each LC Issuer agrees, from time to time on any Business Day during the period from the Closing Date until the Revolving Credit Termination Date, to issue LCs for the account of a Borrower or any other Loan Party or make any other LC Credit Extension; provided that, an LC Issuer shall not be obligated to make any LC Credit Extension if, as of the LC Credit Extension Date, (A) the Revolving Credit Exposure would exceed the Revolving Credit Limit (after giving effect to such LC Credit Extension), (B) the LC Exposure would exceed the LC Sublimit (after giving effect to such LC Credit Extension), (C) the expiry date of such requested LC would occur more than one year after the date of issuance or beyond thirty (30) days prior to the Revolving Credit Termination Date, unless LC Issuer has approved such expiry date, (D) the LC is to be denominated in a currency other than dollars, (E) the LC is in an amount less than $100,000, (F) any Litigation shall by its terms purport to enjoin or restrain LC Issuer from making such LC Credit Extension, (G) the beneficiary of such LC does not accept the LC or any proposed amendment to, or renewal of, such LC, or (H) a Default or Potential Default exists.
(iii)    Each LC Credit Extension shall be made upon the request of Borrower delivered to LC Issuer in the form of an LC Application, appropriately completed and signed by a Responsible Officer. Such LC Application must be received by LC Issuer not later than 11:00 a.m. at least five (5) Business Days prior to the proposed LC Credit Extension Date.
(A)    In the case of a request for an initial issuance of an LC, such LC Application shall specify in form and detail satisfactory to LC Issuer (1) the proposed issuance date of the requested LC (which shall be a Business Day), (2) the amount of the requested LC, (3) the expiry date of the requested LC, (4) the name and address of the beneficiary of the requested LC, (5) the documents to be presented by such beneficiary in case of any drawing under the requested LC, (6) the full text 

28

of any certificate to be presented by such beneficiary in case of any drawing under the requested LC, and (7) such other matters as the LC Issuers may reasonably require.
(B)    In the case of a request for an amendment of any outstanding LC, such LC Application shall specify in form and detail satisfactory to LC Issuer (1) the LC to be amended, (2) the proposed date of the amendment (which shall be a Business Day), (3) the nature of the proposed amendment, and (4) such other matters as LC Issuer may reasonably require.
(iv)    Promptly after receipt of any LC Application, LC Issuer will confirm that the requested LC Credit Extension is permitted in accordance with the terms of this Agreement, then, subject to the terms and conditions hereof, LC Issuer shall, on the requested date, issue an LC for the account of the applicable Loan Party or enter into the applicable amendment, as the case may be, in each case in accordance with LC Issuer’s usual and customary business practices.
(v)    If Borrower so requests in any applicable LC Application, LC Issuer may, in its sole and absolute discretion, agree to issue an LC that has automatic renewal provisions (each, an “Auto-Renewal LC”); provided that, any such Auto­ Renewal LC must permit LC Issuer to prevent any such renewal at least once in each twelve-month period (commencing with the date of issuance of such LC) by giving prior notice to the beneficiary thereof not later than a day (the “Nonrenewal Notice Date”) in each such twelve-month period to be agreed upon at the time such LC is issued. Unless otherwise directed by LC Issuer, Borrower shall not be required to make a specific request to LC Issuer for any such renewal. LC Issuer may elect not to renew any auto-renewal LC for any reason, including, (A) LC Issuer has reasonably determined that it would have no obligation at such time to issue such LC in its renewed form under the terms hereof (by reason of the provisions of Section 2.6(a)(i) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is two (2) Business Days before the Nonrenewal Notice Date (1) that beneficiary has elected not to permit such renewal or (2) that one or more of the applicable conditions specified in Section 6.2 is not then satisfied.
(b)    Drawings and Reimbursements.
(ii)    Upon receipt from the beneficiary of any LC of any notice of a drawing under such LC, LC Issuer shall notify Borrower thereof. Not later than 4:30 p.m. on the date of any payment by an LC Issuer under an LC (each such date, an “Honor Date”), Borrower shall reimburse an LC Issuer in an amount equal to the amount of such drawing. If Borrower fail to so reimburse the applicable LC Issuer by such time, Borrower shall be deemed to have requested a Base Rate Loan under the Revolving Credit Facility to be disbursed on the Honor Date in an amount equal to the amount of the unreimbursed drawing (the “Unreimbursed Amount”), without regard to the minimum and multiples specified in Section 2.5 for the principal amount of Loans, but subject to the conditions set out in Section 

29

6.2. Any notice given by an LC Issuer pursuant to this Section 2.6(b)(i) may be given by telephone if immediately confirmed in writing; provided that, the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.
(iii)    With respect to any Unreimbursed Amount that is not fully refinanced by a Loan because the conditions set out in Section 6.2 cannot be satisfied, there are not sufficient available funds under the Revolving Credit Facility, or for any other reason, Borrower shall be deemed to have incurred from LC Issuer an LC Disbursement in the amount of the Unreimbursed Amount that is not so refinanced, which LC Disbursement shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate.
(c)    Obligations Absolute. The obligation of Borrower to reimburse the LC Issuers for each drawing under each LC and to repay each LC Disbursement shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances. Borrower shall promptly examine a copy of each LC and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with a Borrower’s instructions or other irregularity, Borrower will immediately notify the applicable LC Issuer. Borrower shall be conclusively deemed to have waived any such claim against such LC Issuer and its correspondents unless such notice is timely given.
(d)    Cash Collateral. Upon the request of an LC Issuer, (i) if such LC Issuer has honored any full or partial drawing request under any LC and such drawing has resulted in an LC Disbursement, or (ii) if, as of the Revolving Credit Termination Date, any LC for any reason remains outstanding and partially or wholly undrawn, Borrower shall immediately Cash Collateralize the then outstanding LC Exposure in an amount equal to 105% of such LC Exposure determined as of the date of such LC Disbursement or the Revolving Credit Termination Date, as the case may be. If LCs are to be outstanding after the Revolving Credit Termination Date, not later than ten (10) Business Days prior to the Revolving Credit Termination Date, Borrower shall Cash Collateralize the LC Exposure for each such LC as provided in this Section 2.6(d). Borrower hereby grants to LC Issuer a security interest in and Lien upon all such cash, deposit accounts and all balances therein and all proceeds of the foregoing. All such Cash Collateral shall be maintained in blocked, non-interest bearing deposit accounts at LC Issuer.
(e)    Applicability of ISP98 and UCP. Unless otherwise expressly agreed by LC Issuer and Borrower when an LC Credit Extension is made (including any such agreement applicable to an Existing LC), (i) the rules of the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each standby LC, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce (the “ICC”) at the time of issuance (including the ICC decision published by the Commission on Banking Technique and Practice on April 6, 1998, regarding the European single currency (euro)) shall apply to each documentary LC.

30

(f)    Provisions Regarding Electronic Issuance of Letters of Credit. LC Issuer may adopt procedures pursuant to which Borrower may request the issuance of LCs by electronic means an LC Issuer may issue LCs based on such electronic requests.  Such procedures may include the entering by Borrower into the LC Applications electronically. All the procedures, actions and documents referred to in the two preceding sentences are referred to as “Electronic Applications”. Borrower holds LC Issuer harmless with respect to actions taken by LC Issuer based upon Electronic Applications. Borrower further agrees to be bound by all the terms and provisions contained in the LC Applications, including, without limitation, the terms and provisions of the LC Applications contained on the reverse side of the paper copies thereof, including the release and indemnification provisions contained therein.
(g)    Lenders. By the issuance of any LC and without any further action on the part of any LC Issuer or any Revolving Lender in respect thereof, LC Issuer hereby grants to each Revolving Lender, and each Revolving Lender hereby agrees to acquire from LC Issuer, a participation in each such LC and the related LC Exposure, effective upon the issuance thereof without recourse or warranty, equal to such Revolving Lender’s Revolving Commitment Percentage of such LC and the LC Exposure related to such LC.  LC Issuer shall provide a copy of each LC to Agent promptly after issuance thereof. This agreement to grant and acquire participations is an agreement between LC Issuer and Revolving Lenders, and neither Borrower nor any beneficiary of an LC shall be entitled to rely thereon. Borrower agrees that each Revolving Lender purchasing a participation from LC Issuer pursuant to this Section 2.6(g) may exercise all of its rights to payment against Borrower including the right of setoff, with respect to such participation as fully as if such Revolving Lender were the direct creditor of Borrower in the amount of such participations.

2.7    Reduction of Committed Amount.  Borrower shall have the right, upon notice by Borrower to Agent, to permanently terminate or reduce the aggregate unused amount of the Revolving Committed Amount at any time and from time to time; provided that (a) such notice must be received by Agent not later than 10:00 a.m. five (5) Business Days prior to the date of termination or reduction, (b) each partial reduction shall be in an aggregate amount at least equal to $1,000,000 and in integral multiples of $500,000 above such amount, and (c) no reduction shall be made which would reduce the Revolving Committed Amount to an amount less than the aggregate outstanding Revolving Credit Exposure. Any reduction in (or termination of) the Revolving Committed Amount shall be permanent and may not be reinstated. The Revolving Committed Amount will automatically be reduced to zero on the Revolving Credit Termination Date.

2.8    Cash Collateral.  At any time that there shall exist a Defaulting Lender, within one (1) Business Day following the written request of Agent or any LC Issuer (with a copy to Agent) Borrower shall Cash Collateralize the LC Issuers’ Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to Section 2.9(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.
(a)    Grant of Security Interest. Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to Agent, for the benefit of the LC Issuers, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lenders’ obligation to fund participations in respect of LCs, to be applied pursuant to Section 2.8

31

(b). If at any time Agent determines that Cash Collateral is subject to any right or claim of any Person other than Agent and the LC Issuers as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, Borrower will, promptly upon demand by Agent, pay or provide to Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).
(b)    Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 2.8 or Section 2.9 in respect of LCs shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of LC Exposure (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.
(c)    Termination of Requirement. Cash Collateral (or the appropriate portion thereof) provided to reduce any LC Issuer’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section 2.8 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by Agent and each LC Issuer that there exists excess Cash Collateral; provided that, subject to Section 2.9 the Person providing Cash Collateral and each LC Issuer may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations and provided that to the extent that such Cash Collateral was provided by Borrower, such Cash Collateral shall remain subject to the security interest granted pursuant to the Loan Documents.

2.9    Defaulting Lenders.
(a)    Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:
(ii)    Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set out in the definition of Required Lenders.
(iii)    Lender Waterfall. Any payment of principal, interest, fees or other amounts received by Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article XI or otherwise) or received by Agent from a Defaulting Lender pursuant to Section 3.7 shall be applied at such time or times as may be determined by Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to Agent under this Agreement; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any LC Issuer under this Agreement; third, to Cash Collateralize the Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.8; fourth, as Borrower may request (so long as no Default or Potential Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined 

32

by Agent; fifth, if so determined by Agent and Borrower, to be held in a deposit account and released pro rata in order to (A) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (B) Cash Collateralize the LC Issuers’ future Fronting Exposure with respect to such Defaulting Lender with respect to future LCs issued under this Agreement, in accordance with Section 2.8; sixth, to the payment of any amounts owing to the Lenders or the LC Issuers as a result of any judgment of a court of competent jurisdiction obtained by any Lender or the LC Issuers against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Potential Default exists, to the payment of any amounts owing to Borrower as a result of any judgment of a court of competent jurisdiction obtained by Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (1) such payment is a payment of the principal amount of any Loans or LC Disbursements in respect of which such Defaulting Lender has not fully funded its appropriate share, and (2) such Loans were made or the related LCs were issued at a time when the conditions set out in Section 6.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and LC Exposure owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or LC Exposure owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in LC Exposure are held by the Lenders pro rata in accordance with the Commitments under the Revolving Credit Facility giving effect to Section 2.9(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.9(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
(iv)    Certain Fees. No Defaulting Lender shall be entitled to receive any applicable commitment fee or unused fee (if any) for any period during which that Lender is a Defaulting Lender (and Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender). Each Defaulting Lender shall be entitled to receive LC Fees under Section 3.8 for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Revolving Commitment Percentage of the stated amount of LCs for which it has provided Cash Collateral pursuant to Section 2.8.
(v)    Reallocation of Participations to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in LC Exposure shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Revolving Commitment Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that (A) the conditions set out in Section 6.2 are satisfied at the time of such reallocation (and, unless Borrower shall have otherwise notified Agent at such time, Borrower shall be deemed to have represented and warranted that such conditions are 

33

satisfied at such time), and (B) such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving Committed Amount. No reallocation under this Agreement shall constitute a waiver or release of any claim of any party under this Agreement against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.
(vi)    Cash Collateral. If the reallocation described in Section 2.9(a)(iv) above cannot, or can only partially, be effected, Borrower shall, without prejudice to any right or remedy available to it under this Agreement or under law, Cash Collateralize the LC Issuers’ Fronting Exposure in accordance with the procedures set forth in Section 2.8.
(b)    Defaulting Lender Cure. If Borrower, Agent and LC Issuer agree in writing that a Lender is no longer a Defaulting Lender, Agent will so notify the parties hereto, whereupon as the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as Agent may determine to be necessary to cause the Loans and funded and unfunded participations in LCs to be held pro rata by the Lenders in accordance with the Commitments under the applicable Facility (without giving effect to Section 2.9(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.
(c)    Letters of Credit. So long as any Lender is a Defaulting Lender, no LC Issuer shall be required to issue, extend, renew or increase any LC unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

ARTICLE III     
 
INTEREST, FEES, AND PAYMENTS

34

3.1    Interest Rates.
(a)    Interest. All Base Rate Loans shall accrue interest at the Base Rate plus the Applicable Margin for Base Rate Loans. Each LIBOR Loan shall accrue interest at LIBOR applicable to such Loan plus the Applicable Margin for LIBOR Loans.
(b)    Default Rate. Upon the occurrence, and during the continuation, of a Default, interest on the Revolving Principal Amount and any other amounts owing under this Agreement or under the other Loan Documents, shall accrue interest at a per annum rate equal to the Default Rate.
(c)    Late Payment and NSF Charges.  In the event any installment payment of principal and/or interest is more than ten (10) days past due, Borrower promises to pay, in addition to the amount otherwise due hereunder, a delinquency charge of 5.00% of the unpaid portion of the regularly schedule payment, but not more than $1,000.00.  In the event that any payment hereunder by check or preauthorized charge is later dishonored or returned to any Lender unpaid due to insufficient funds, Borrower agrees to pay to such applicable Lender an additional NSF check charge equal to $25.00.  

3.2    Payment of Principal and Interest.  
(a)    Revolving Credit Facility.
(ii)    Accrued and unpaid interest on the Revolving Principal Amount shall be due and payable (A) for Base Rate Loans, on the last Business Day of each month commencing June 30, 2017 and continuing on the last day of each month thereafter, (B) for LIBOR Loans, on the last Business Day of each month, and (C) on the Revolving Credit Termination Date.
(iii)    The Revolving Principal Amount shall be due and payable in full on the Revolving Credit Termination Date.
(b)    Payment of Default Rate Interest.  Notwithstanding the foregoing, interest payable in the Default Rate shall be payable from time to time on written demand from Agent to Borrower.
(c)    Payment in Full at Maturity.  On the Revolving Credit Termination Date, Borrower unconditionally promises to pay in full, and there shall become due and payable in full, the entire outstanding Revolving Principal Amount, together with accrued and unpaid interest and all fees and other sums then owing under the Loan Documents, including, without limitation, the amounts needed to Cash Collateralize all outstanding LC Exposure and to satisfy all other Obligations then owing.

3.3    Prepayments.
(a)    Voluntary Prepayment. Borrower may prepay all or any part of the Revolving Principal Amount at any time without premium or penalty upon notice to Agent.  Each voluntary prepayment is subject to the following conditions:

35

(ii)    Agent must receive Borrower’s written or telephonic prepayment notice not later than 11:00 a.m. (A) three (3) Business Days’ prior to any date of prepayment of LIBOR Loans and (B) on the date of prepayment of Base Rate Loans;
(iii)    Borrower’s prepayment notice shall (A) specify the prepayment date, (B) specify the amount of the Loan to be prepaid, (C) specify whether the Revolving Principal Amount is being prepaid (and if not specified, such prepayment will be applied to the Revolving Principal Amount), and (D) constitute an irrevocable and binding obligation of Borrower to make a prepayment in such amount on the designated prepayment date; and
(iv)    each such partial prepayment of (A) LIBOR Loans shall be in the minimum principal amount of $100,000 and integral multiples of $10,000 and (B) Base Rate Loans shall be in the minimum principal amount of $100,000 and integral multiples of $10,000 or, in the case of clauses (A) and (B), if less than such minimum amounts, the entire principal amount thereof then outstanding;
(b)    Mandatory Prepayment.
(ii)    If at any time the Revolving Credit Exposure (for any Revolving Lender or for all Revolving Lenders) exceeds the Revolving Credit Limit, Borrower shall immediately prepay the outstanding Revolving Loans by the amount of the excess plus all accrued and unpaid interest on the amount so prepaid or, if no (or insufficient) Revolving Loans are outstanding, Borrower shall Cash Collateralize the LC Exposure.
(iii)    On the date such amounts are received by, or for the account of, Borrower (or the applicable Loan Party) on or after the date hereof, the following amounts shall be paid to Agent for the ratable benefit of the Lenders in the form received with any necessary endorsement or assignment:
(A)    100% of all cash capital contributions and any Net Proceeds from the issuance of any Equity Interests which are used for a purpose other than Capital Expenditures;
(B)    100% of any Net Proceeds in excess of $2,000,000 in the aggregate over the term of this Agreement in respect of any casualty event affecting Collateral; provided that, if within 20 days after the date of such casualty event, Borrower shall notify Agent that it wishes to reinvest such Net Proceeds to replace the damaged assets, then Borrower shall be permitted to defer such prepayment for a period of up to 180 days after the date the applicable Borrower receives such Net Proceeds and on such 180th day shall be required to make such prepayment to the extent that such reinvestment has not been made;
(C)    100% of all Net Proceeds from an Eminent Domain Event; and
(D)    100% of the Net Proceeds from the Disposition of any Collateral, except for (i) those Dispositions of equipment that occur in the ordinary course of 

36

business in connection with replacing used or obsolete equipment, when the proceeds of such Disposition are used to purchase replacement equipment within 90 days from the date of such Disposition and (ii) those Dispositions of real property owned by any Loan Party permitted under Section 9.4, including the Subject Disposition.
(c)    Application of Prepayments.
(ii)    All prepayments under Section 3.3(a) shall be applied for payments under the Revolving Credit Facility, to the Revolving Principal Amount with no corresponding reduction in the Revolving Committed Amount.
(iii)    All prepayments under Section 3.3(b) shall be applied (A) as to the Revolving Credit Facility (1) first, to Cash Collateralize LC Exposure until all the LC Exposure is Cash Collateralized, (2) second, to the Cash Management Liabilities and Hedge Liabilities (other than Excluded Hedge Liabilities), and (3) third, to the Revolving Principal Amount, (B) as between Base Rate Loans and LIBOR Loans, first to Base Rate Loans, and second to LIBOR Loans in direct order of Interest Period maturities (applied first against those soonest to mature), and (C) accompanied by the interest on the principal amount prepaid through the date of prepayment.
(iv)    Amounts prepaid pursuant to this Section 3.3 shall be applied based on each Lender’s respective Commitment Percentages.

3.4    Computations of Interest and Fees.
(a)    Calculation of Interest. All computations of interest and fees under this Agreement shall be made on the basis of the actual number of days elapsed over a year of 360 days.  Interest shall accrue from and including the first date of Borrowing (or from the date of any Continuation or Conversion thereof) to but excluding the last day occurring in the period for which such interest is payable.
(b)    Maximum Rate. It is the intent of the Lenders and Borrower to conform to and contract in strict compliance with applicable usury law from time to time in effect. All agreements between the Lenders and Borrower are hereby limited by the provisions of this paragraph which shall override and control all such agreements, whether now existing or hereafter arising and whether written or oral. In no way, nor in any event or contingency (including but not limited to prepayment or acceleration of the maturity date of the Obligations), shall the interest taken, reserved, contracted for, charged, or received under this Agreement, under the Notes or otherwise, exceed the maximum non-usurious amount permissible under applicable Law.  If, from any possible construction of any of the Loan Documents or any other document, interest would otherwise be payable in excess of the maximum non-usurious amount, any such construction shall be subject to the provisions of this paragraph and interest owing pursuant to such documents shall be automatically reduced to the maximum non-usurious amount permitted under applicable Law, without the necessity of execution of any amendment or new document. If any Lender shall ever receive anything of value which is 

37

characterized as interest on the Loans under applicable Law and which would, apart from this provision, be in excess of the maximum lawful amount, an amount equal to the amount which would have been excessive interest shall, without penalty, be applied to the reduction of the principal amount owing on the Loans and not to the payment of interest, or refunded to Borrower or the other payor thereof if and to the extent such amount which would have been excessive exceeds such unpaid principal amount of the Loans. The right to demand payment of the Loans or any other Debt evidenced by any of the Loan Documents does not include the right to receive any interest which has not otherwise accrued on the date of such demand, and the Lenders do not intend to charge or receive any unearned interest in the event of such demand. All interest paid or agreed to be paid to the Lenders with respect to the Loans shall, to the extent permitted by applicable Law, be amortized, prorated, allocated, and spread throughout the full stated term (including any renewal or extension) of the Loans so that the amount of interest on account of the Loans does not exceed the maximum non-usurious amount permitted by applicable Law.

3.5    General Payment Terms.
(a)    Payments by Borrower. Except as otherwise expressly provided in this Agreement (i) all payments by Borrower under this Agreement shall be made to Agent, for the account of the respective Lenders to which such payment is owed, at Agent’s Office in Dollars and in immediately available funds not later than 1:00 p.m. on the date specified herein, (ii) Agent will promptly distribute to each Lender its Commitment Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office, and (iii) all payments received by Agent after 1:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. All payments to be made by Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff.
(b)    Payment Dates. If any payment or prepayment to be made by Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.
(c)    Advances by Agent. Unless Borrower or any Lender has notified Agent, prior to the time any payment is required to be made by it to Agent under this Agreement, that Borrower or such Lender, as the case may be, will not make such payment, Agent may assume that Borrower or such Lender, as the case may be, has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto. If and to the extent that such payment was not in fact made to Agent in Dollars and in immediately available funds, then:
(ii)    if Borrower failed to make such payment, each Lender shall forthwith on demand repay to Agent the portion of such assumed payment that was made available to such Lender in Dollars and in immediately available funds, together with interest thereon in respect of each day from and including the date such amount was made available by Agent to such Lender to the date such amount is repaid to Agent in immediately available funds at the Federal Funds Rate from time to time in effect; and

38

(iii)    if any Lender failed to make such payment, such Lender shall forthwith on demand pay to Agent the amount thereof in Dollars and in immediately available funds, together with interest thereon for the period from the date such amount was made available by Agent to Borrower to the date such amount is recovered by Agent at a rate per annum equal to the Federal Funds Rate from time to time in effect. If such Lender pays such amount to Agent, then such amount shall constitute such Lender’s Loan included in the applicable Borrowing.  If such Lender does not pay such amount forthwith upon Agent’s demand therefor, Agent may make a demand therefor upon Borrower, and Borrower shall pay such amount to Agent, together with interest thereon for the period from the date such amount was made available by Agent to Borrower to the date such amount is recovered by Agent at a rate per annum equal to the rate of interest applicable to such Borrowing. Nothing in this Agreement shall be deemed to relieve any Lender from its obligation to fulfill its Commitment or to prejudice any rights which Agent or Borrower may have against any Lender as a result of any default by such Lender under this Agreement.
A notice of Agent to any Lender or Borrower with respect to any amount owing under this Section 3.5(c) shall be conclusive, absent manifest error.
(d)    Several Obligations. The obligations of the Lenders under this Agreement to make Loans and to fund or purchase participation interests in LCs are several and not joint. The failure of any Lender to make any Loan or to fund or purchase any participation interest on any date required under this Agreement shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or fund its participation interest.
(e)    Funding Offices. Nothing in this Agreement shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.
(f)    Notes. The obligation of Borrower to repay the Revolving Loans shall be evidenced by Revolving Credit Notes executed by Borrower and payable to the order of each Revolving Lender in the principal amount of such Revolving Lender’s Revolving Committed Amount.
(g)    Lender. If any Lender shall fail to make any payment required to be made by it pursuant to Section 3.5(c) or Section 3.6, then Agent may, in its discretion and notwithstanding any contrary provision hereof, apply any amounts thereafter received by Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

3.6    Pro Rata Treatment and Sharing of Payments.
(a)    Except to the extent otherwise provided herein, each Borrowing, each payment or prepayment of principal of any Loan, each payment of interest, each payment of fees (other than administrative fees paid to Agent for its own account), each Conversion or Continuation and each 

39

reduction in the Revolving Committed Amount shall be allocated pro rata among the relevant Lenders in accordance with their Commitment Percentages; provided that, if any Lender shall have failed to pay its Commitment Percentage of any Loan or purchase or fund its participation interest in any LC, then any amount to which such Lender would otherwise be entitled pursuant to this Section 3.6 shall instead be payable to Agent until the share of such Loan or such participation interest not purchased or funded by such Lender has been purchased or funded unless such Lender’s obligations are the subject of a good faith dispute.
(b)    In the event any principal, interest, fee or other amount paid to any Lender pursuant to this Agreement or any other Loan Document is rescinded or must otherwise be returned by Agent, (i) such principal, interest, fee or other amount that had been satisfied by such payment shall be revived, reinstated and continued in full force and effect as if such payment had not occurred and (ii) such Lender shall, upon the request of Agent, repay to Agent the amount so paid to such Lender, with interest for the period commencing on the date such payment is returned by Agent until the date Agent receives such repayment at a rate per annum equal to the Federal Funds Rate if repaid within two (2) Business Days after such request and thereafter the Base Rate plus the Applicable Margin for Base Rate Loans.
(c)    Lenders agree among themselves that, except to the extent otherwise provided in this Agreement, in the event that any Lender shall obtain payment in respect of any Loan or any other obligation owing to such Lender under this Agreement through the exercise of a right of setoff, banker’s lien or counterclaim, or pursuant to a secured claim under Section 506 of the Bankruptcy Code or other security or interest arising from, or in lieu of, such secured claim, received by such Lender under any applicable Debtor Relief Law or other similar law or otherwise, or by any other means,
(ii)    in excess of its Commitment Percentage of such payment as provided for in this Agreement, such Lender shall promptly pay in cash or purchase from the other Lenders a participation in such Loans and other obligations in such amounts, and make such other adjustments from time to time, as shall be equitable to the end that all Lenders share such payment in accordance with their respective Commitment Percentages; or
(iii)    such payment shall be rescinded or must otherwise be returned, each Lender which shall have shared the benefit of such payment shall, by payment in cash or a repurchase of a participation theretofore sold, return its share of that benefit (together with its share of any accrued interest payable with respect thereto) to each Lender whose payment shall have been rescinded or otherwise returned.
Borrower agrees that (A) any Lender so purchasing such a participation may, to the fullest extent permitted by law, exercise all rights of payment, including setoff, banker’s lien or counterclaim, with respect to such participation as fully as if such Lender were a holder of such Loan or other obligation in the amount of such participation and (B) the Obligations that have been satisfied by a payment that has been rescinded or otherwise returned shall be revived, reinstated and continued in full force and effect as if such payment had not occurred.

40

(d)    Except as otherwise expressly provided in this Agreement, if any Lender or Agent shall fail to remit to any other Lender or Agent an amount payable by such Lender or Agent to such other Lender or Agent pursuant to this Agreement on the date when such amount is due, such payments shall be made together with interest thereon for each date from the date such amount is due until the date such amount is paid to Agent or such other Lender at a rate per annum equal to the Federal Funds Rate. If under any applicable Debtor Relief Law or other similar law, any Lender receives a secured claim in lieu of a setoff to which this Section 3.6 applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders under this Section 3.6 to share in the benefits of any recovery on such secured claim.

3.7    Right of Setoff.  If any Default shall have occurred and be continuing, each Lender, each LC Issuer, and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable Law, to set off and apply all property of Borrower or any other Loan Party, including any such property Borrower or such Loan Party holds jointly with someone else, that is now or hereafter on deposit with, in the possession of, under the control of or held by such Lender, LC Issuer or any such Affiliate, including, without limitation, all cash, deposit accounts, funds on deposit, instruments, certificates of deposit, items, chattel paper, and other property (except IRA, pension, other tax-deferred retirement accounts and any accounts or property held in a trust or fiduciary capacity for which set off would be prohibited by law), together with all property added to or substituted for any of the foregoing, and all interest, dividends, income, fruits, accessions and proceeds of any of the foregoing  against any and all of the obligations of Borrower or such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender or such LC Issuer or their respective Affiliates, irrespective of whether or not such Lender, LC Issuer or Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of Borrower or such Loan Party may be contingent or unmatured or are owed to a branch, office or Affiliate of such Lender or such LC Issuer different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (a) all amounts so set off shall be paid over immediately to Agent for further application in accordance with the provisions of Section 2.8 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of Agent, the LC Issuers, and the Lenders, and (b) the Defaulting Lender shall provide promptly to Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, each LC Issuer and their respective Affiliates under this Section 3.7 are in addition to other rights and remedies (including other rights of setoff) that such Lender, such LC Issuer or their respective Affiliates may have. Each Lender and LC Issuer agrees to notify Borrower and Agent promptly after any such setoff and application; provided that, the failure to give such notice shall not affect the validity of such setoff and application.  Each Loan Party releases each Lender, LC Issuer and each of their respective Affiliates from any obligation with respect to the collateral including any obligation to collect any proceeds of or preserve any of each Loan Party’s rights, including, without limitation, rights against prior parties, in any collateral in which Bank possesses a security interest.   Any responsibility of any Lender or LC Issuer with respect to any collateral in which such Lender or LC Issuer possesses a security interest, whether arising contractually or as a matter of law, is hereby expressly waived.

41

3.8    Fees.
(a)    LC Fees. For each LC, Borrower shall pay to Agent for the ratable benefit of Revolving Lenders a per annum letter of credit fee payable quarterly in arrears in an amount equal to the Applicable Margin for LIBOR Loans on the stated amount of such LC.  At the time of issuance of each LC, Borrower shall also pay to Agent for the account of the applicable LC Issuer a fronting fee in an amount equal to the greater of (i) 2.00% of the stated amount of such LC and (ii) $500. In addition, Borrower shall pay to LC Issuer (i) at the time of issuance, or any renewal, of any LC, an issuance fee of 0.15% of the stated amount of such LC plus all out-of-pocket costs incurred by LC Issuer in connection with the issuance of such LC, (ii) upon the payment of any LC, all applicable payment fees, and (iii) upon the amendment (including the extension) of any LC, all applicable amendment fees.
(b)    Unused Fee-Revolving Credit Facility.  The Borrower shall pay to the Agent, for the ratable benefit of each Revolving Lender based on its Revolving Committed Amount, a per annum fee equal to 0.40% for each day during the period of determination multiplied by the amount by which the then Revolving Committed Amount for all Revolving Lenders on such day exceeds the Revolving Principal Amount outstanding on such day.  This fee shall commence to accrue on the Closing Date and shall be due and payable quarterly in arrears (as well as on the Revolving Credit Termination Date and on any date that the Revolving Committed Amount is reduced) for the quarter period (or portion thereof) then ending, beginning with the first of such dates to occur after the Closing Date.
(c)    Fees Generally.  The fees provided for in this Section 3.8 shall be fully earned when paid and shall not be refundable for any reason whatsoever.

ARTICLE IV     
 
TAXES, YIELD PROTECTION AND ILLEGALITY

4.1    Taxes.
(a)    LC Issuer. For purposes of this Section 4.1, the term “Lender” includes LC Issuer.
(b)    Free of Taxes. Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 4.1) the applicable 

42

Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(c)    Payment of Other Taxes by Borrower.  The Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable Law, or at the option of Agent timely reimburse it for the payment of, any Other Taxes.
(d)    Indemnification by the Loan Parties. The Loan Parties shall jointly and severally indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 4.1) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to Borrower by a Lender (with a copy to Agent), or by Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(e)    Indemnification by the Lenders. Each Lender shall severally indemnify Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 13.7 relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by Agent to the Lender from any other source against any amount due to Agent under this Section 4.1.
(f)    Evidence of Payments. As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 4.1 such Loan Party shall deliver to Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Agent.
(g)    Status of Lenders.
(ii)    Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to Borrower and Agent, at the time or times reasonably requested by Borrower or Agent, such properly completed and executed documentation reasonably requested by Borrower or Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by Borrower or Agent, shall deliver such 

43

other documentation prescribed by applicable Law or reasonably requested by Borrower or Agent as will enable Borrower or Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.
(iii)    If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Tax Code, as applicable), such Lender shall deliver to Borrower and Agent at the time or times prescribed by law and at such time or times reasonably requested by Borrower or Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Tax Code) and such additional documentation reasonably requested by Borrower or Agent as may be necessary for Borrower and Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 4.1(g)(ii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(iv)    Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify Borrower and Agent in writing of its legal inability to do so.
(h)    Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 4.1 (including by the payment of additional amounts pursuant to this Section 4.1), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 4.1 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (h), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (h) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This paragraph (h) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(i)    Survival. Each party’s obligations under this Section 4.1 shall survive the resignation or replacement of Agent or any assignment of rights by, or the replacement of, a Lender, the 

44

termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.

4.2    Increased Costs.
		
	(a)
	Increased Costs Generally. If any Change in Law shall:

(ii)    impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in LIBOR) or any LC Issuer;
(iii)    subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b), (c) and (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
(iv)    impose on any Lender or any LC Issuer or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or any LC or participation therein;
and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, Converting to, Continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender, such LC Issuer or such other Recipient of participating in, issuing or maintaining any LC (or of maintaining its obligation to participate in or to issue any LC), or to reduce the amount of any sum received or receivable by such Lender, LC Issuer or other Recipient under this Agreement (whether of principal, interest or any other amount) then, upon request of such Lender, LC Issuer or other Recipient, Borrower will pay to such Lender, LC Issuer or other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, LC Issuer or other Recipient, as the case may be, for such additional costs incurred or reduction suffered.
(b)    Capital Requirements. If any Lender or LC Issuer determines that any Change in Law affecting such Lender or LC Issuer or any lending office of such Lender or such Lender’s or LC Issuer’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender’s or LC Issuer’s capital or on the capital of such Lender’s or LC Issuer’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in LCs held by, such Lender, or the LC issued by any LC Issuer, to a level below that which such Lender or LC Issuer or such Lender’s or LC Issuer’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or LC Issuer’s policies and the policies of such Lender’s or LC Issuer’s holding company with respect to capital adequacy and liquidity), then from time to time Borrower will pay to such Lender or LC Issuer, as the case may be, such additional amount or 

45

amounts as will compensate such Lender or LC Issuer or such Lender’s or LC Issuer’s holding company for any such reduction suffered.
(c)    Certificates for Reimbursement. A certificate of a Lender or LC Issuer setting out the amount or amounts necessary to compensate such Lender or LC Issuer or its holding company, as the case may be, as specified in Sections 4.2(a) or (b) above, and delivered to Borrower, shall be conclusive absent manifest error. Borrower shall pay such Lender or LC Issuer, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.
(d)    Delay in Requests.  Failure or delay on the part of any Lender or LC Issuer to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or LC Issuer’s right to demand such compensation; provided that, Borrower shall not be required to compensate a Lender or LC Issuer pursuant to this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or LC Issuer, as the case may be, notifies Borrower of the Change in Law giving rise to such increased costs or reductions, and of such Lender’s or LC Issuer’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

4.3    Illegality.  If a Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for such Lender or its Lending Office to make, maintain or fund LIBOR Loans, or to determine or charge interest rates based upon LIBOR, then, on notice thereof by such Lender to Borrower, any obligation of such Lender to make or Continue LIBOR Loans or to Convert Base Rate Loans to LIBOR Loans shall be suspended until such Lender notifies Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, Borrower shall, upon demand from such Lender, prepay or, if applicable, Convert all applicable LIBOR Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such LIBOR Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such LIBOR Loans. Upon any such prepayment or Conversion, Borrower shall also pay accrued interest on the amount so prepaid or Converted. Each Lender agrees to designate a different Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender.

4.4    Inability to Determine LIBOR.  If Agent determines that for any reason adequate and reasonable means do not exist for determining LIBOR for any requested Interest Period with respect to a proposed LIBOR Loan, or that LIBOR for any requested Interest Period with respect to a proposed LIBOR Loan does not adequately and fairly reflect the cost to the Lenders of funding such Loan, Agent will promptly so notify Borrower. Thereafter, the obligation of the Lenders to make or maintain LIBOR Loans shall be suspended until Agent revokes such notice. Upon receipt of such notice, Borrower may revoke any pending request for a Borrowing of, Conversion to or Continuation of a LIBOR Loan or, failing that, will be deemed to have converted such request into a request for a Borrowing of a Base Rate Loan in the amount specified therein.

46

4.5    Funding Losses.  Upon demand of any Lender from time to time, Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:
(a)    any Continuation, Conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or
(b)    any failure by Borrower (for a reason other than the failure of such Lender to make a Loan) to borrow, Continue, Convert or prepay any Loan other than a Base Rate Loan on the date or in the amount notified by Borrower, including any loss, cost or expense (other than loss of the Applicable Margin) arising from the liquidation or reemployment of funds obtained by such Lender to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by Borrower to a Lender under this Section 4.5, such Lender shall be deemed to have funded each LIBOR Loan at LIBOR used in determining LIBOR for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such LIBOR Loan was in fact so funded.

4.6    Requests for Compensation.  A certificate of a Lender claiming compensation under this Article IV and setting out the additional amount or amounts to be paid to it under this Agreement shall be conclusive in the absence of manifest error. In determining such amount, a Lender may use any reasonable averaging and attribution methods.

4.7    Mitigation of Obligations; Replacement of Lenders.
(a)    Designation of a Different Lending Office. If any Lender requests compensation under Section 4.2, or requires Borrower to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.1, then such Lender shall (at the request of Borrower) use reasonable efforts to designate a different lending office for funding or booking its Loans under this Agreement or to assign its rights and obligations under this Agreement to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 4.1 or Section 4.2, as the case may be, in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b)    Replacement of Lenders. If any Lender requests compensation under Section 4.2, or if Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.1 and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with 

47

Section 4.7(a), or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then Borrower may, at their sole expense and effort, upon notice to such Lender and Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 13.7), all of its interests, rights (other than its existing rights to payments pursuant to Section 4.1 or Section 4.2) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:
(ii)    Borrower shall have paid to Agent the assignment fee (if any) specified in Section 13.7;
(iii)    such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Exposure, accrued interest thereon, accrued fees and all other amounts payable to it under this Agreement and under the other Loan Documents (including any amounts under Section 4.5) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or Borrower (in the case of all other amounts);
(iv)    in the case of any such assignment resulting from a claim for compensation under Section 4.2 or payments required to be made pursuant to Section 4.1, such assignment will result in a reduction in such compensation or payments thereafter;
(v)    such assignment does not conflict with applicable Law; and
(vi)    in the case of any assignment resulting from a Lender becoming a Non- Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver, or consent.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling Borrower to require such assignment and delegation cease to apply.

4.8    Survival.  All of Borrower’s obligations under this Article IV shall survive termination of the Commitments and repayment of all Obligations.

ARTICLE V     
 
COLLATERAL AND GUARANTIES

5.1    Collateral.  To secure full and complete payment and performance of the Obligations, each Loan Party shall execute and deliver, or cause to be executed and delivered, the Security Documents described below pledging to Agent a first priority Lien (subject to Permitted Liens, as applicable) on the assets of the Loan Parties (together with any other property and collateral which may now or hereafter secure the Obligations or any part thereof, the “Collateral”):

48

(a)    Borrower and each other Company shall execute and deliver a Security Agreement under which it shall grant to Agent a first priority security interest in, and Lien on, all of the following: accounts; accounts receivable; inventory; goods; equipment; machinery; chattel paper; documents; instruments; deposit accounts; general intangibles; and all products, proceeds and accessions to or improvements of, each of the foregoing. Notwithstanding the foregoing, any Loan Party that is a Domestic Subsidiary which is a CFC Holdco and any Loan Party that is a Foreign Subsidiary will not be required to execute a Security Agreement if such Security Agreement by CFC Holdco or such Foreign Subsidiary would, in the good faith judgment of Borrower, result in adverse income tax consequences to the Loan Parties, taken as a whole, under Section 956 of the Internal Revenue Code taking into account actual anticipated repatriation of funds, foreign tax credits and all relevant factors so long as CFC Holdco or such Foreign Subsidiary, as the case may be, does not grant a Lien on its assets to secure other Debt of the Loan Parties which would result in substantially similar tax consequences.
(b)    Each Loan Party will cause 100% of the issued and outstanding Equity Interests of each of its Domestic Subsidiaries to be subject at all times to a first priority, perfected Lien in favor of Agent for the benefit of Agent and the other Secured Parties, pursuant to the terms and conditions of the Loan Documents or other security documents as Agent shall reasonably request
(c)    Borrower and each other Company shall execute and deliver a Security Agreement or assignment under which it shall grant to Agent a first priority security interest in, and Lien upon, all of its patents, trademarks, trade names, and all other intellectual property whether now owned or hereafter acquired, and all products and proceeds thereof.
(d)    If any material assets (other than real property) are acquired by any Loan Party after the Closing Date (other than assets constituting Collateral under the Security Agreement that become subject to the Lien under the Security Agreements upon acquisition thereof), Borrower will (A) notify Agent and the Lenders thereof, and, if requested by Agent or the Required Lenders, cause such assets to be subjected to a Lien securing the Secured Obligations and (B) take, and cause each applicable Loan Party to take, such actions as shall be necessary or reasonably requested by Agent to grant and perfect such Liens, including actions described in  clause (ii) of this Section 5.1, all at the expense of the Loan Parties.

5.2    UCC Financing Statements.  Borrower and each other Loan Party hereby authorizes Agent to file, and agrees to execute, if requested, financing statements, continuation statements, or termination statements (each in Proper Form), or take other action reasonably requested by Agent relating to the Collateral, including any Lien search required by Agent.

5.3    Additional Borrowers.  Each Company (other than Borrower) shall guarantee the complete payment and performance of the Secured Obligations and Additional Secured Obligations (excluding Excluded Hedge Obligations) by executing and delivering a Guaranty to Agent on the Closing Date (for each Company in existence on the Closing Date), and for each Company formed or acquired after the Closing Date, within ten (10) Business Days after such Company is formed or acquired. Notwithstanding the foregoing, any Loan Party that is a Domestic Subsidiary which is a CFC Holdco and any Foreign Subsidiary 

49

will not be required to become a Guarantor if such Guarantee by CFC Holdco or such Foreign Subsidiary would, in the good faith judgment of Borrower, result in adverse income tax consequences to the Loan Parties, taken as a whole, under Section 956 of the Internal Revenue Code taking into account actual anticipated repatriation of funds, foreign tax credits and all relevant factors so long as CFC Holdco or such Foreign Subsidiary, as the case may be, does not Guarantee other Debt of the Loan Parties which would result in substantially similar tax consequences. Notwithstanding the foregoing, Gulf Marine Fabricators, Limited Partner, L.L.C., Gulf Marine Fabricators General Partner, L.L.C. and Gulf Marine Fabricators, L.P. shall not be required to provide collateral security as otherwise required by the Borrower’s Subsidiaries under this Agreement. Nothing in this Section 5.3 shall be construed as permitting the acquisition or creation of a Subsidiary by Borrower; provided that, the Loan Parties shall give written notice to the Agent not less than ten (10) Business Days prior to creating such Subsidiary that will become a Loan Party pursuant to, or as required by, this Agreement (or such shorter period of time as agreed to by the Agent in its reasonable discretion), or acquiring the Equity Interests of any such Person (in any case in this Section 5.3, a “New Loan Party”).  In connection with the foregoing, the Loan Parties shall deliver to the Agent, with respect to each New Loan Party, (a) to the extent such New Loan Party will become a “Borrower” under this Agreement and the other Loan Documents, (i) a Borrower Joinder Agreement and (ii) an amendment to this Agreement as Agent may request to incorporate such New Loan Party as a Borrower into the terms, conditions and provisions of this Agreement, and (b) in all cases, the Loan Documents (including but not limited to, a Guaranty (to the extent such New Loan Party will not become a Borrower) and the Security Documents) and substantially the same documentation required pursuant to this Article V and Sections 6.1(b), (c), (i), (j), (k) and (m) and such other documents or agreements as the Agent may reasonably request.

5.4    Further Assurances; Collateral.  Each Loan Party (at its expense) shall obtain, or cooperate with Agent to obtain, agreements, documents, instruments, and papers (all in Proper Form) as Agent may from time to time request to attach or preserve the attachment, and to perfect or preserve the perfection and priority, of Agent’s security interests granted under the Loan Documents (including, landlord subordination agreements, creditor and mortgagee subordination agreements, and Lien release documents). Borrower hereby appoints and empowers Agent or its representatives, as its attorney‐in‐fact, to execute and/or endorse (and file, as appropriate) on its behalf any documents, agreements, papers, checks, financing statements and other documents which, in Agent’s sole judgment, are necessary to be executed, endorsed and/or filed in order to (a) perfect or preserve the perfection and priority of Agent’s security interests granted under the Loan Documents and (b) collect or realize upon the Collateral or otherwise exercise its rights and remedies under any of the Loan Documents or applicable Law.

5.5    Liens Granted to Agent.  Liens granted to Agent under the Loan Documents are granted to Agent for the ratable benefit of the Secured Parties.

ARTICLE VI     
 
CONDITIONS PRECEDENT

6.1    Initial Credit Extension.  The obligations of the Lenders to make Loans and of the LC Issuers to issue LCs under this Agreement shall not become effective until the date on which Agent has 

50

received each of the following in Proper Form (or has waived in writing the requirement in accordance with Section 13.8):
(a)    Executed Loan Documents; Perfected Liens. (i) Receipt by Agent of duly executed copies of this Credit Agreement, the Notes in favor of each Lender, the Security Documents, and the other Loan Documents, and (ii) Liens granted to Agent under the Loan Documents have been perfected in accordance with applicable Law.
(b)    Corporate Documents. Receipt by Agent of the following:
(ii)    Documents. The Organizational Documents of each Loan Party that is a legal entity certified by a Responsible Officer of such Loan Party and reasonably acceptable to Agent.
(iii)    Resolutions. Copies of resolutions of the Board of Directors of Borrower and each other Loan Party that is a legal entity approving the transactions contemplated by this Credit Agreement and authorizing certain officers of Borrower to negotiate, execute, and deliver the Loan Documents, certified by a secretary or assistant secretary of Borrower to be true and correct and in full force and effect as of the Closing Date.
(iv)    Incumbency. An incumbency certificate of Borrower and each other Loan Party that is a legal entity certified by a secretary or assistant secretary of Borrower or such Loan Party to be true and correct as of the Closing Date.
(v)    Good Standing. Copies of certificates of good standing, existence, or their equivalent with respect to Borrower and each Loan Party that is a legal entity, certified as of a recent date by the appropriate Governmental Authority of the state of its organization and, to the extent requested by Agent, each other state in which it is qualified to do business.
(c)    Opinions of Counsel. Receipt by Agent of such opinions from legal counsel to Borrower and each other Loan Party, addressed to the Agent and Lenders, dated as of the Closing Date, and covering matters that customarily are addressed in connection with the transactions contemplated by this Credit Agreement.
(d)    Financial Statements. Receipt by Agent of (i) the financial statements (including balance sheets, income statements and cash flow statements) of Borrower and their respective Subsidiaries for the fiscal year ended December 31, 2016, (ii) financial statements (including balance sheets, income statements and cash flow statements) of Borrower and their respective Subsidiaries for the fiscal quarter ended March 31, 2017, and (iii) such other financial information regarding Borrower and each other Loan Party as Agent may reasonably request.
(e)    Compliance Certificate. Agent shall have received a Compliance Certificate demonstrating Borrower’s compliance, on a pro forma basis, with the financial covenants under Article X below.

51

(f)    Existing Indebtedness of the Loan Parties.  All of the existing Indebtedness for borrowed money of Borrower (other than Indebtedness permitted to exist pursuant to Section 9.1) shall be repaid in full and all guarantees and security interests related thereto shall be terminated on or prior to the Closing Date.
(g)    Borrowing Request.  Agent shall have received a Borrowing Request with respect to Loans, if any, to be made on the Closing Date.  
(h)    Litigation. There shall be no material Litigation or material investigations pending or, to the knowledge of Borrower or any other Loan Party, threatened against Borrower or any other Loan Party which have not been disclosed to Agent in writing and which could have or could reasonably be expected to have a Material Adverse Effect.
(i)    Officer’s Certificate. Agent shall have received a certificate or certificates executed by a Responsible Officer as of the Closing Date stating that (i)  Borrower and each other Loan Party is in compliance in all material respects with all existing material financial obligations, (ii) no Litigation or investigation is pending or, to such Responsible Officer’s knowledge, threatened in any court or before any arbitrator or governmental instrumentality that purports to affect Borrower or any other Loan Party or any transaction contemplated by the Loan Documents, (iii) the financial statements and information delivered to the Lenders on or before the Closing Date were prepared in good faith and in accordance with GAAP except to the extent of items that are immaterial in the aggregate and except that the  financial statements are unaudited and are subject to year-end adjustments, and (iv) immediately after giving effect to this Agreement, the other Loan Documents, and all the transactions contemplated therein to occur on such date, (A) no Potential Default or Default exists, (B) all representations and warranties contained herein and in the other Loan Documents are true and correct in all material respects on and as of the date made or deemed made, and (C) Borrower and the other Loan Parties are Solvent.
(j)    Insurance. Evidence of all insurance policies required by Section 8.6, together with loss payable endorsements in favor of Agent with respect to all insurance policies covering Collateral.
(k)    Lien Searches. Agent shall have received the results of a Lien search (including, to the extent required by Agent, a search as to judgments, pending litigation, bankruptcy, tax and intellectual property matters), in form and substance reasonably satisfactory to Agent, made against Borrower or any other Company under the UCC (or applicable judicial docket) as in effect in each jurisdiction in which filings or recordations under the UCC should be made to evidence or perfect security interests in all assets of Borrower or any such Loan Party, indicating among other things that the assets of Borrower and each such other Company are free and clear of any Lien (except for Permitted Liens) and those Liens to be terminated on the Closing Date.
(l)    Consents; Defaults.
(ii)    Governmental and Third Party Approvals. Borrower and the other Loan Parties shall have received all material governmental, shareholder and third party consents and approvals necessary (or any other material consents as determined in the reasonable 

52

discretion of Agent) in connection with the transactions contemplated by this Agreement and the other Loan Documents, and all applicable waiting periods shall have expired without any action being taken by any Person that could reasonably be expected to restrain, prevent or impose any material adverse conditions on Borrower or any other Loan Party or such other transactions or that could seek or threaten any of the foregoing, and no Law or regulation shall be applicable which in the reasonable judgment of Agent could reasonably be expected to have such effect.
(iii)    No Injunction, Etc. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain substantial damages in respect of, or which is related to or arises out of this Agreement or the other Loan Documents or the consumption of the transactions contemplated hereby or thereby, or which, in Agent’s sole discretion, would make it inadvisable to consummate the transactions contemplated by this Agreement or the other Loan Documents or the consummation of the transactions contemplated hereby or thereby.
(iv)    No Default.  No Potential Default or Default shall exist.
(m)    Reserved.
(n)    Pledged Equity Interests; Stock Powers; Pledged Notes. Agent shall have received (i) the certificates representing the Equity Interests pledged pursuant to the Security Agreement (if any), together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and (ii) each promissory note (if any) pledged to Agent pursuant to the Security Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof.
(o)    Tax Identification Number; KYC Requirements; Other Due Diligence. Agent and Lenders shall have received the tax identification number or social security number and driver’s license, as the case may be, and other background or identification information of each Loan Party and Agent and Lenders shall have completed all “know your customer” requirements, background checks and other due diligence (including legal, tax and other regulatory matters) on Borrower, Guarantors and other senior management and “key personnel” (as identified by Agent and Lenders) of the Companies and the transactions contemplated by the Loan Documents, in any case as required by Agent and Lenders.
(p)    Fees and Expenses. Payment by Borrower of all fees and expenses invoiced by, and owed by it to, Agent or any Lender and evidence that the costs and expenses (including reasonable attorneys’ fees) have been paid in full by Borrower.
(q)    Material Adverse Event. Since December 31, 2016, there has occurred no Material Adverse Event.

53

(r)    Other.  Receipt by the Agent and Lenders of such other documents, instruments, agreements or information as reasonably requested by Agent or any Lender.

6.2    Conditions to All Credit Extensions.  The obligation of Lenders to make any Loan or LC Issuer to issue any LC (including the initial Revolving Loan and the initial LC) is subject to (a) receipt by Agent, of the items required by Section 2.4 and Section 2.6, as applicable, and such additional approvals, opinions or documents as Agent may reasonably request, (b) all of the representations and warranties contained in Article VII hereof and the other Loan Documents being true and correct on and as of the date of such Credit Extension, with the same force and effect as if such representations and warranties had been made on and as of such date, (c) no Material Adverse Event has occurred, and (d) no Default or Potential Default is existing and continuing. Each Borrowing Request, Conversion/Continuation Request, and LC Application delivered to Agent constitutes a representation and warranty by Borrower that the conditions in this Section 6.2 are true and correct in all material respects.

ARTICLE VII     
 
REPRESENTATIONS AND WARRANTIES
To induce Agent, LC Issuers, and Lenders to enter into this Agreement, the Companies (and as to Sections in this Article VII below that are expressly applicable to the other Loan Parties) represent and warrant to Agent and Lenders that:

7.1    Existence and Power.  Each Company (a) is duly organized, validly existing, and in good standing under the Laws of the jurisdiction in which it is organized, (b) is qualified to do business and is in good standing in all jurisdictions where such qualification is required (except where failure to so qualify could not reasonably be expected to have a Material Adverse Effect), (c) has the necessary power and authority, and all necessary permits, licenses, franchises, patents, copyrights, trademarks and trade names, or rights, to conduct its business, and (d) has the necessary power and authority to execute this Agreement and the other Loan Documents to which it is a party.

7.2    Authorization and No Conflicts.  The execution and delivery by each Loan Party of the Loan Documents to which it is a party, and each Loan Party’s performance of its obligations under the Loan Documents, (a) have been duly authorized by such Loan Party that is a legal entity, (b) with respect to each Loan Party that is a legal entity, do not conflict with any of its Organizational Documents, (c) do not conflict with any Law or Material Contract by which such Loan Party is bound, (d) do not require any material consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect, and (e) will not result in the creation or imposition of any Lien on any of its assets, except those in favor of Agent.

7.3    Enforceability.  Each Loan Document has been duly executed and delivered to Agent by each Loan Party which is a party to it, and each such Loan Document constitutes a legal, valid, and binding obligation of the Loan Party thereto and is enforceable against such Loan Party in accordance with its respective terms, except as enforceability may be limited by applicable Debtor Relief Laws, other laws of general application relating to the enforcement of creditors’ rights, and general principles of equity.

54

7.4    Subsidiaries.
(a)    For each Subsidiary of Borrower, Schedule 7.4 sets out such Person’s name, address, U.S. taxpayer identification number, entity type and jurisdiction of organization, the amount of issued and outstanding Equity Interests of such Person, and the names of the owners of its Equity Interests as of the Closing Date.
(b)    Except as set out on Schedule 7.4, (i) Borrower and each of its Subsidiaries owns, free and clear of Liens, and has the unencumbered right to vote, all outstanding Equity Interests in each Person shown to be held by it in said Schedule, (ii) all of the issued and outstanding Equity Interests of each such Person is validly issued, fully paid, and non-assessable, and (iii) there are no outstanding options, warrants or other rights with respect to such Equity Interests.
(c)    There are no restrictions on the right or ability of Borrower’s Subsidiaries to pay dividends or make Distributions to Borrower.

7.5    Debt.  No Company has any Debt except Permitted Debt.

7.6    Liens.  
(a)    No Lien exists on any asset of any Company, other than Permitted Liens.
(b)    The provisions of this Agreement and the other Loan Documents create legal and valid Liens on all the Collateral in favor of Agent, for the benefit of the Secured Parties, and such Liens constitute perfected and continuing Liens on the Collateral, securing the Secured Obligations, enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except in the case of (a) Permitted Liens, to the extent any such Permitted Liens would have priority over the Liens in favor of Agent pursuant to any applicable Law and (b) Liens perfected only by possession (including possession of any certificate of title), to the extent Agent has not obtained or does not maintain possession of such Collateral.

7.7    Ownership and Location of Assets.
(a)    Schedule 7.7 sets out (i) a complete and correct list of all real property interests held by the Companies indicating in each case whether the respective property is owned or leased, the identity of the owner or lessee, and the location of the respective property, and (ii) the location of all of the inventory, equipment or goods for each Company (other than goods on consignment, in transit, or in the possession of a Person under the terms of a contract with a Company).
(b)    Each Company has (i) indefeasible title to its real property, (ii) a vested leasehold interest in all of its material leased properties, and (iii) good and marketable title to its personal property, except, in each case, for (A) minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes and (B) Permitted Liens.

55

7.8    Intellectual Property.  Each Company owns, or is licensed to use, all trademarks, trade names, copyrights, patents and other intellectual property material to its business and its use thereof does not infringe on the rights of any Person (and no claim of infringement has been made), other than infringements or claims which, if successfully asserted against or determined adversely to any Company, could not, individually or collectively, reasonably be expected to have a Material Adverse Effect.

7.9    Place of Business.  The location of each Company’s place of business or chief executive office is set out on Schedule 7.7. The books and records of each Company are located at its place of business or chief executive office.

7.10    Financial Information.
(a)    The Companies have delivered to Agent, on or about the Closing Date, financial statements of each Company (consisting of a balance sheet and statement of income) for the three-month period ended March 31, 2017. In each case such financial statements (including, in each case, any notes thereto) fairly present, in all material respects, the financial condition and results of operations, changes in stockholders’ equity and cash flows for the Companies as at the respective dates of and for the periods referred to in such financial statements, all in accordance with GAAP.
(b)    There has been no Material Adverse Event since December 31, 2016.

7.11    Compliance with Laws.  Each Loan Party is in compliance with all Laws applicable to it or to its property, except where the failure to comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

7.12    Funded Debt; Material Contracts.  No Loan Party is a party to any Funded Debt agreement other than the Loan Documents. No Loan Party is in violation of, or default under, any Material Contract or Funded Debt obligation to which it is a party beyond any applicable grace or cure period except where such violation or default, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

7.13    Litigation.  For each Loan Party, there is no Litigation pending, or to such Loan Party’s knowledge, threatened in writing, involving any Loan Party or any Subsidiary of any Company which (a) purports to affect or pertain to this Agreement, any other Loan Document, or any of the transactions contemplated by the Loan Documents, or (b) would reasonably be expected to have a Material Adverse Effect. There are no outstanding judgments, arbitration awards or unpaid settlement agreements against any Loan Party or any Subsidiary of any Company.

7.14    Taxes.  All tax returns of each Loan Party and each Subsidiary of any Company required to be filed have been timely filed (or extensions have been granted) and all Taxes imposed upon any Loan Party or any Subsidiary of any Company that are due and payable have been paid before delinquency, other than (a) taxes which are being contested in good faith by lawful proceedings diligently conducted, against which reserves (or other provision required by GAAP) have been established in accordance with GAAP, or (b) the failure to pay ad valorem, property, franchise, or similar Taxes or levies do not materially affect any Loan Parties’ or any such Subsidiary’s operations or assets if such Loan Party or such Subsidiary has not 

56

received notice of such failure from the applicable Governmental Authority.  Loan Parties know of no pending investigation, other than audits in the ordinary course of business, of any Loan Party or any Subsidiary of any Company by any Governmental Authority or of any pending but unassessed tax liability of any Loan Party or any Subsidiary of any Company.

7.15    Environmental Matters.  Except as disclosed in any environmental reports provided to Agent or otherwise disclosed in writing to Agent, each Loan Party and each Subsidiary of each Company and its properties are in compliance in all material respects with all applicable Environmental Laws and no Loan Party or any Subsidiary of any Company is subject to any liability or obligation for remedial action thereunder.  There is no pending or, to Loan Parties’ knowledge, threatened investigation or inquiry by any Governmental Authority of any Loan Party or any Subsidiary of any Company, or any of their respective properties pertaining to any Hazardous Substance. Except as disclosed in any environmental reports provided to Agent or otherwise disclosed in writing to Agent and except in the ordinary course of business and in compliance with all Environmental Laws, (a) there are no Hazardous Substances located on or under any of the properties of any Loan Party or any Subsidiary of any Company, and (b) no Loan Party or any Subsidiary of any Company has caused or permitted any Hazardous Substance to be disposed of on or under or released from any of its properties that could reasonably be expected to have a Material Adverse Effect. Each Company has obtained all permits, licenses, and authorizations which are required under and by all Environmental Laws, except for such permits, licenses, and authorizations which, if not obtained, would result in a Material Adverse Effect.

7.16    Insurance.  The Companies maintain insurance required under Section 8.6.

7.17    Margin Regulations.  No Loan Party and no Subsidiary of any Company is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations T, U, or X of the Board of Governors of the Federal Reserve System), and no part of the proceeds of any Credit Extension will be used to purchase or carry any such margin stock or to extend credit to others for the purpose of purchasing or carrying margin stock.

7.18    Trade Names.  Each Company is in compliance with all applicable trade name or “d/b/a” statutes in each state in which such Loan Party does business and  no Loan Party has used or transacted business under any other corporate name, d/b/a, or trade name in the five-year period preceding the Closing Date (including names of all Persons with which any Loan Party has merged or consolidated, or from which any Company has acquired all or a substantial portion of such Person’s assets).

7.19    Transactions with Affiliates.  No Loan Party is a party to an agreement or transaction with any of any of its Affiliates other than transactions in the ordinary course of business and upon fair and reasonable terms not materially less favorable than it could obtain or could become entitled to in an arm’s-length transaction with a Person that was not its Affiliate.

7.20    ERISA.  No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards 

57

No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $1,000,000 the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $1,000,000 the fair market value of the assets of all such underfunded Plans.

7.21    Labor Matters.  As of the Closing Date, there are no collective bargaining agreements covering the employees of any Company or any of their respective Subsidiaries and there is not pending, nor (to the knowledge the Loan Parties) is there threatened, any strike, walkout, slowdown or work stoppage, or any unfair labor practice complaint or grievance or arbitration proceeding arising out of or under any collective bargaining agreement covering the employees of any Loan Party or any of their respective Subsidiaries that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

7.22    Investment Company Act.  No Company is, or is affiliated with, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

7.23    Anti-Corruption Laws and Sanctions.  Each Loan Party has implemented and maintains in effect policies and procedures designed to ensure compliance by such Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and such Loan Party, its Subsidiaries and their respective officers and employees and to the knowledge of such Loan Party its directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects. None of (a) any Loan Party, any Subsidiary or any of their respective directors, officers or employees, or (b) to the knowledge of any such Loan Party or Subsidiary, any agent of such Loan Party or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person.  No Borrowing or Letter of Credit, use of proceeds, Transaction or other transaction contemplated by this Agreement or the other Loan Documents will violate Anti-Corruption Laws or applicable Sanctions.

7.24    Solvency.  Each Loan Party, on an individual basis, is Solvent.  The Loan Parties taken as a whole are Solvent.  The Loan Parties will continue to be Solvent after the execution and performance of this Agreement and the other Loan Documents.

7.25    No Burdensome Restrictions.  No Loan Party and no Subsidiary of any Company is a party to any agreement, or subject to any provision of Law, compliance with which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

7.26    Use of Proceeds; Commercial Use.  
(a)    The proceeds of the Loans have been used and will be used, whether directly or indirectly as set forth in Section 8.15. 
(b)    All Loans and LCs hereunder are and will be for business, commercial, or other similar purpose and are not primarily for personal, family, or household purposes.

58

ARTICLE VIII     
 
AFFIRMATIVE COVENANTS
So long as Lenders are committed to make any Credit Extension under this Agreement, and thereafter until the Obligations are paid in full (other than contingent indemnification obligations and other provisions under the Loan Documents which by their terms expressly survive payment of the Obligations and termination of the Loan Documents), each Company (and as to Sections in this Article VIII below that are expressly applicable to the other Loan Parties) covenants and agrees as follows: 

8.1    Reporting Requirements.  The Loan Parties will deliver, or cause to be delivered, to Agent and Lenders, in each case in Proper Form:
(a)    Annual Financial Statements. Promptly after preparation, and no later than 120 days after the last day of each fiscal year of the Companies (commencing with the fiscal year ending December 31, 2017), audited financial statements (including statements of income, statements of retained earnings and cash flows, and a balance sheet) showing the consolidated financial condition and results of operations of the Companies as of, and for the year ended on, that last day and accompanied by the unqualified opinion of a firm of independent certified public accountants reasonably satisfactory to Agent, based on an audit using GAAP, that the financial statements were prepared in accordance with the GAAP and present fairly, in all material respects, the consolidated financial condition and results of operations of the Companies.
(b)    Quarterly Financial Statements.  Promptly after preparation, but in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Companies (commencing with the fiscal quarter ending June 30, 2017), a consolidated balance sheet of the Companies as at the end of such fiscal quarter, and the related consolidated statements of income and cash flows for such fiscal quarter and for the portion of the Companies’ fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail, certified by the president, chief executive officer or chief financial officer of Borrower as fairly presenting the financial condition, results of operations, shareholders’ equity and cash flows of Companies in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes.
(c)    Compliance Certificates. Concurrently with any delivery of the Financial Statements, a Compliance Certificate of a Responsible Officer (i) certifying, in the case of the Financial Statements delivered under clause (a) or (b) above, as presenting fairly in all material respects the financial condition and results of operations of Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes, (ii) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (iii) setting forth reasonably detailed calculations demonstrating compliance with the financial covenants under Article X of this Agreement, and (iv) stating whether 

59

any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 7.10 and, if any such change has occurred, specifying the effect of such change on the Financial Statements accompanying such certificate.
(d)    Other Reports; Budget.  The following reports and other information:
(ii)    within 90 days after the end of each fiscal year of Borrower, its annual report on Form 10-K;
(iii)    within 45 days after the end of each of the first three fiscal quarters of Borrower, its quarterly report on Form 10-Q; and
(iv)    no later than May 10 of each calendar year, a company prepared budget for Borrower and its Subsidiaries for such calendar year.
Notwithstanding the foregoing, (i) in the event that Borrower delivers to Agent an Annual Report for Borrower on Form 10-K for such fiscal year, as filed with the SEC, within 90 days after the end of such fiscal year, such Form 10-K shall satisfy all requirements of Section 8.1(a) to the extent that it contains the information required by Section 8.1(a)  and (ii) in the event that Borrower delivers to Agent a Quarterly Report for Borrower on Form 10-Q for such fiscal quarter, as filed with the SEC, within 45 days after the end of such fiscal quarter, such Form 10-Q shall satisfy all requirements of Section 8.1(b) to the extent that it contains the information required by Section 8.1(b) (for the avoidance of doubt, notwithstanding the foregoing, Borrower will still be required to deliver comparative financial information required under Sections 8.1(a)  and 8.1(b) and Compliance Certificates as required under Section 8.1(c)). Documents required to be delivered pursuant to the Section 8.1 or otherwise (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which Borrower posts such documents, or provides a link thereto on Borrower’s website on the Internet or (ii) on which such documents are posted on Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and Agent have access (whether a commercial, third-party website or whether sponsored by Agent).
(e)    Audit Reports; Management Letters; Recommendations.  Promptly after any request by Agent or any Lender, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of any Loan Party by independent accountants in connection with the accounts or books of any Loan Party or any of its Subsidiaries, or any audit of any of them.
(f)    Annual Reports; Etc.  Promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Borrower, and copies of all annual, regular, periodic and special reports and registration statements which Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Exchange Act, and in any case not otherwise required to be delivered to Agent pursuant hereto.
(g)    Debt Securities Statements and Reports.  Promptly after the furnishing thereof, copies of any statement or report furnished to any holder of debt securities of any Loan Party or of 

60

any of its Subsidiaries pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Lenders pursuant any other clause of this Section 8.1.
(h)    SEC Notices.  Promptly, and in any event within five (5) Business Days after receipt thereof by any Loan Party or any Subsidiary thereof, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other  inquiry by such agency regarding financial or other operational results of any Loan Party or any Subsidiary thereof.
(i)    Notice of Litigation, Defaults and Other Material Events.   
(ii)    The occurrence of any Default;
(iii)    receipt of any notice of any investigation by a Governmental Authority or any litigation or proceeding commenced or threatened against any Loan Party or any Subsidiary that (A) seeks damages in excess of $500,000, (B) seeks injunctive relief, (C) is asserted or instituted against any Plan, its fiduciaries or its assets, (D) alleges criminal misconduct by any Loan Party or any Subsidiary, (E) alleges the violation of, or seeks to impose remedies under, any Environmental Law or related Law, or seeks to impose Environmental Liability, or (F) asserts liability on the part of any Loan Party or any Subsidiary in excess of $500,000 in respect of any tax, fee, assessment, or other governmental charge;
(iv)    the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Loan Parties and their Subsidiaries in an aggregate amount exceeding $1,000,000;
(v)    within two (2) Business Days after the occurrence thereof, any Loan Party entering into a Hedge Agreement or an amendment to a Swap Agreement, together with copies of all agreements evidencing such Swap Agreement or amendment; 
(vi)    any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect; 
(vii)    promptly after any request therefor by Agent or any Lender, copies of (A) any documents described in Section 101(k)(1) of ERISA that Borrower or any ERISA Affiliate may request with respect to any Multiemployer Plan and (B) any notices described in Section 101(l)(1) of ERISA that Borrower or any ERISA Affiliate may request with respect to any Multiemployer Plan; provided that if the Borrower or any ERISA Affiliate has not requested such documents or notices from the administrator or sponsor of the applicable Multiemployer Plan, Borrower or the applicable ERISA Affiliate shall promptly make a request for such documents and notices from such administrator or sponsor and shall provide copies of such documents and notices promptly after receipt thereof; and 

61

(viii)    if requested, copies of all periodic and other reports, proxy statements and other materials filed by any Loan Party or any Subsidiary with the SEC, or any Governmental Authority succeeding to any or all of the functions of the SEC, or with any national securities exchange, or distributed by Borrower to its shareholders generally, as the case may be.
Each notice delivered under this Section 8.1(i) (other than such notice delivered under Section 8.1(i)(vii)) shall be accompanied by a statement of a Responsible Officer or other executive officer of Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto. 
(j)    Notice of Changes by a Loan Party. At least thirty (30) days’ prior written notice of (i) any proposed relocation of any Company’s chief executive office or principal place of business or of any change in executive and management personnel, (ii) any proposed relocation of the place where each Company’s primary books and records relating to accounts, general intangibles and the Collateral are kept, (iii) a change of any Company’s name or type of organizational structure, (iv) any proposed relocation of any of the Collateral (other than with respect to goods in transit between facilities or customer job sites, temporary warehousing for up to six months, or sales of inventory in the ordinary course of business or the sale of other Collateral to the extent permitted by the Credit Agreement) to a location other than those set out on Schedule 7.7, to a customer job site, or one or more temporary locations leased by a Company in the ordinary course of business, and (v) any acquisition or creation of a Subsidiary by any Company, or that any Person has become a Subsidiary of any Company. Nothing in this Section 8.1 shall be construed as permitting the acquisition or creation of a Subsidiary.
(k)    General Information. Promptly, upon reasonable request by any Lender, such other information and documents not otherwise required to be furnished under the Loan Documents respecting the business affairs, assets and liabilities of the Loan Parties or any other Company.
The Borrower hereby acknowledges that (A)  Agent and/or an Affiliate thereof may, but shall not be obligated to, make available to the Lenders and the L/C Issuer materials and/or information provided by or on behalf of Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks, Syndtrak, ClearPar or a substantially similar electronic transmission system (the “Platform”) and (B) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities.  Borrower hereby agrees that it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that (1) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (2) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized Agent, any Affiliate thereof, the L/C Issuer and the Lenders to treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to Borrower or its securities for purposes of United States federal and state securities laws (provided that, to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 13.15); (3) all Borrower Materials 

62

marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information;” and (4) Agent and any Affiliate thereof shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information.”  

8.2    Books and Records.  Borrower will maintain, and each other Loan Party will maintain, proper books of record and account in which full, true, and correct entries in conformity with GAAP shall be, and are made, of all dealings and transactions in relation to its business and activities.

8.3    Inspections.  Each Loan Party will, and will cause each Subsidiary to permit any representatives designated by Agent or any Lender (including employees of Agent, any Lender or any consultants, accountants, lawyers, agents and appraisers retained by Agent), upon reasonable prior notice, to visit and inspect its properties, conduct at the Loan Party’s premises field examinations of the Loan Party’s assets, liabilities, books and records, including examining and making extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested but in no event more than two times per calendar year unless an Event of Default has occurred and is continuing. The Loan Parties acknowledge that Agent, after exercising its rights of inspection, may prepare and distribute to the Lenders certain Reports pertaining to the Loan Parties’ assets for internal use by Agent and the Lenders.

8.4    Maintenance of Existence.  Each Company will do all things necessary to preserve, renew, and keep in effect (a) its existence and good standing in its jurisdiction of organization and its authority to transact business and good standing in all other jurisdictions where the nature and extent of its business and properties require due qualification and good standing, and (b) all permits, licenses, franchises, patents, copyrights, trademarks and trade names, or rights material to the conduct of its business where failure to do so could reasonably be expected to result in a Material Adverse Event.

8.5    Maintenance of Borrower.  Borrower will maintain, and will cause each other Company to maintain, its assets and properties material to the conduct of its business in good working order, condition and repair (ordinary wear and tear excepted) and make all necessary repairs and replacements to such assets and properties.

8.6    Insurance.
(a)    Borrower will maintain, and will cause their Subsidiaries to maintain, in full force and effect (i) casualty insurance on all real and personal property included in the Collateral on an all-risks basis (including the perils of flood and quake) covering the repair and replacement cost of all such property, (ii) public liability insurance (including products/completed operations liability coverage), in each case of the kinds customarily carried or maintained by Persons of established reputation engaged in similar businesses and in amounts acceptable to Agent, and (iii) such other insurance coverage in such amounts and with respect to such risks as Agent may reasonably request. All such insurance shall be provided by financially sound and reputable insurance companies not Affiliates of Borrower and having a minimum A.M. Best rating of A, size category VII. On or prior to the Closing Date, and at all times thereafter, Borrower will cause Agent (for itself and for the ratable benefit of Lenders) to be named as an additional insured, assignee and loss payee (which 

63

shall include, as applicable, identification as mortgagee), as applicable, on each insurance policy required to be maintained pursuant to this Section 8.6(a) pursuant to endorsements in form and content acceptable to Agent. Borrower will deliver to Agent (i) on or before the Closing Date, a certificate from Borrower’s insurance broker dated such date showing the amount of coverage as of such date, and that such policies will include effective waivers (whether under the terms of any such policy or otherwise) by the insurer of all claims for insurance premiums against all loss payees and additional insureds and all rights of subrogation against all loss payees and additional insureds, and that if all or any part of such policy is canceled, terminated or expires, the insurer will forthwith give notice thereof to each additional insured, assignee and loss payee and that no cancellation, reduction in amount or material change in coverage thereof shall be effective until at least 30 days after receipt by each additional insured, assignee and loss payee of written notice thereof, (ii) on an annual basis, and upon the request of Agent from time to time full information as to the insurance carried, within five days of receipt of notice from any insurer, a copy of any notice of cancellation, nonrenewal or material change in coverage from that existing on the date of this Agreement, and immediately, notice of any cancellation or nonrenewal of coverage by Borrower.  In the event Borrower fails to provide Agent with evidence of the insurance coverage required by this Agreement 7 days following request to furnish such certificates from Agent , Agent (for itself and for the ratable benefit of Lenders) may purchase insurance at Borrower’s expense to protect Agent and Lenders’ interest in the Collateral.  The coverage purchased by Agent may, but need not, protect Borrower’s interests.  Borrower may later cancel any insurance purchased by Agent, but only after providing Agent with evidence that Borrower has obtained insurance as required by this Agreement.  If Agent purchases insurance for the Collateral, to the fullest extent provided by law, Borrower will be responsible for the costs of that insurance, including interest and other charges imposed by the Lender in connection with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance.  The costs of the insurance may be added to the Obligations.  Borrower acknowledges that the costs of insurance purchased by Agent may be more than the cost of insurance that Borrower would be able to obtain on its own.
(b)    If any portion of any mortgaged property is at any time located in an area identified by the Federal Emergency Management Agency (or any successor agency) as a Special Flood Hazard Area with respect to which flood insurance has been made available under the National Flood Insurance Act of 1968 (as now or hereafter in effect or successor act thereto), then Borrower shall, or shall cause each Loan Party to (i) maintain, or cause to be maintained, with a financially sound and reputable insurer, flood insurance up to the maximum legal limit available under NFIP and/or otherwise available in the commercial market and (ii) deliver to the Agent evidence of such compliance in form and substance reasonably acceptable to the Agent.
(c)    All written communications, documents, certificates of insurance or other material relating to insurance sent to Agent shall be delivered to Agent pursuant to the notice provisions contained in Section 13.1.

8.7    Compliance with Laws.  Each Loan Party will, and will cause each Subsidiary to, (i) comply with Law applicable to it or its property (including without limitation Environmental Laws) and (ii) perform in all material respects its obligations under Material Contracts to which it is a party, except, in each case, 

64

where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Each Loan Party will maintain in effect and enforce policies and procedures designed to ensure compliance by such Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.

8.8    Compliance with Agreements.  Borrower will comply, and each other Loan Party will comply, in all material respects, with all Material Contracts and all agreements relating to Funded Debt of Borrower or such Loan Party.

8.9    Payment of Taxes.  Borrower will pay or discharge, and each other Loan Party will pay or discharge, at or before maturity or before becoming delinquent, all Taxes, levies, assessments, and governmental charges imposed on it or its income or profits or any of its property; provided that, no Loan Party shall be required to pay or discharge any Taxes or other governmental charges which are being contested in good faith by appropriate proceedings diligently pursued, if Borrower or such other Loan Party has set aside on its books adequate reserves against such Taxes or charge.

8.10    Payment and Performance of Obligations.  Borrower unconditionally and irrevocably covenant that they will (a) promptly pay the principal of, interest on and any other amount due on the Notes and the other Obligations in the amounts, on the dates and in the manner provided herein, in the Notes, and each other document evidencing the Obligations, and (b) promptly perform and comply with all other terms conditions and provisions set out in this Agreement and the other Loan Documents applicable to Borrower.  The Loan Parties (other than Borrower) will promptly perform and comply with all terms conditions and provisions set out in this Agreement and the other Loan Documents applicable to such Loan Party.

8.11    Lien Claims.  Borrower will pay or discharge, and will cause each other Company to pay or discharge, at or before maturity or before becoming delinquent all lawful claims for labor, material, and supplies, which, if unpaid, would become a Lien upon any of its property; provided that no Loan Party shall be required to pay or discharge any such claims which are being contested in good faith by appropriate proceedings diligently pursued, if Borrower or such other Company has set aside on its books adequate reserves against such claims.

8.12    ERISA.  Borrower will comply, and will cause each other Company to comply, with all minimum funding requirements, and all other material requirements, of ERISA, if applicable, so as not to give rise to any liability thereunder and if any such liability shall arise, to pay same promptly.

8.13    Conduct Business.  Borrower will continue to conduct, and will cause each other Company to continue to conduct, its primary business as conducted as of the Closing Date, and will conduct its business affairs in a reasonable and prudent manner. Borrower will maintain executive and management personnel with substantially the same qualifications and experience as the present executive and management personnel.

8.14    Banking Relationship.  No later than 30 days after the Closing Date, each Loan Party and each Subsidiary will maintain either Agent or any Lender as its principal depository bank, including for the maintenance of operating, administrative, cash management, collection activity, and other deposit accounts for the conduct of its business; provided that, for each account maintained with an institution that is not Agent, a control agreement shall be executed by such Loan Party or Subsidiary in favor of Agent for the 

65

benefit of the Secured Parties except for (i) deposit accounts established solely as payroll and other zero balance accounts and (ii) other deposit accounts, so long as at any time the balance in any such account does not exceed $250,000 and the aggregate balance in all such accounts does not exceed $500,000.

8.15    Use of Proceeds.  The proceeds of the Revolving Credit Facility will be used to repay on the Closing Date certain existing senior secured indebtedness of Borrower, if any, and thereafter for Borrower’s working capital, Capital Expenditures, and general corporate purposes

8.16    Preserve Collateral.  In the event any claim is asserted in respect of any Collateral or Lender’s Lien on such Collateral, the applicable Company shall appear in and defend any such action or proceeding at Borrower’s reasonable expense.  In the event of any default by any Company or any other party under or in connection with any material portion (individually or collectively) of the Collateral, the Companies will immediately use commercially reasonable efforts to remedy the same or immediately demand that the same be remedied.

8.17    Accuracy of Information. The Loan Parties will ensure that any information, including financial statements or other documents, furnished to Agent or the Lenders in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder contains no material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and the furnishing of such information shall be deemed to be a representation and warranty by Borrower on the date thereof as to the matters specified in this Section 8.17; provided that, with respect to projections, Borrower will cause such projections to be prepared in good faith based upon assumptions believed to be reasonable at the time.

8.18    Further Assurances.  Borrower will execute and deliver, and each other Loan Party will execute and deliver, promptly upon the request of Agent, (a) correct any defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as Agent may reasonably require from time to time in order to (i) carry out more effectively the purposes of the Loan Documents, (ii) to the fullest extent permitted by applicable Law, subject any Company’s properties, assets, rights or interest to the Liens now or hereafter intended to be covered by any of the Security Documents, (iii) perfect and maintain the validity, effectiveness, and priority of any of the Security Documents and any of the Liens intended to be created thereunder, and (iv) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto Agent and the Secured Parties the rights granted or hereafter intended to be granted to Agent and the Secured Parties under any Security Documents or any other Loan Documents.

8.19    Keepwell.  Each Company that is a Qualified ECP Guarantor at the time the Guaranty or the grant of a Lien under the Loan Documents, in each case, by any Specified Loan Party becomes effective with respect to any Hedge Obligation, hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide such funds or other support to each Specified Loan Party with respect to such Hedge Obligation as may be needed by such Specified Loan Party from time to time to honor all of its obligations under the Loan Documents in respect of such Hedge Obligation (but, in each case, only up to 

66

the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP Guarantor’s obligations and undertakings under this Section 8.19 voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations and undertakings of each Qualified ECP Guarantor under this Section 8.19 shall remain in full force and effect until the Secured Obligations have been indefeasibly paid and performed in full. Each Company intends this Section 8.19 to constitute, and this Section 8.19 shall be deemed to constitute, a guarantee of the obligations of, and a “keepwell, support, or other agreement” for the benefit of, each Specified Loan Party for all purposes of the Commodity Exchange Act.

8.20    Collateral Access Agreements. In addition to any requirements set out herein or in the Security Agreement, each Loan Party and each Subsidiary shall use commercially reasonable efforts to obtain a collateral access agreement or landlord waiver in any case in Proper Form (i) within 45 days from the Closing Date for any real property leased as of the Closing Date and (ii) for any real property leased after the Closing Date (which for the avoidance of doubt shall not require the payment of a material amount of any kind or concession thereto to the party from which such agreement or waiver is sought).

8.1    Deposit Account Control Agreements.  Within 30 days from the Closing Date, each Loan Party shall deliver to Agent a deposit account control agreement with respect to each deposit account not maintained with Agent.

ARTICLE IX     
 
NEGATIVE COVENANTS
So long as Lenders are committed to make any Credit Extension under this Agreement, and thereafter until the Obligations are paid in full (other than contingent indemnification obligations and other provisions under the Loan Documents which by their terms expressly survive payment of the Obligations and termination of the Loan Documents), each Company (and as to Sections in this Article IX below that are expressly applicable to the other Loan Parties) covenants and agrees as follows:  

9.1    Debt.  No Loan Party will, nor will it permit any Subsidiary to, create, incur, assume or suffer to exist any Debt, except:
(a)    the Secured Obligations;
(b)    Debt existing on the date hereof and set forth in Schedule 9.1 (representing and evidencing only the existing letters of credit set in an aggregate principal amount not exceeding $4,851,040.53); provided that such letters of credit will not be permitted beyond the earlier to occur of (A) the return of all such letters of credit to J.P. Morgan Chase, N.A. or (B) 45 days from the Closing Date);
(c)    Debt of the Borrower to any Loan Party and of any Loan Party to the Borrower or any other Loan Party;
(d)    Debt which represents extensions, renewals, refinancing or replacements (such Indebtedness being so extended, renewed, refinanced or replaced being referred to herein as the 

67

“Refinance Debt”) of any of the Debt described in clauses (b) hereof (such Indebtedness being referred to herein as the “Original Debt”); provided that, (i) such Refinance Debt does not increase the principal amount or interest rate of the Original Debt, (ii) any Liens securing such Refinance Debt are not extended to any additional property of any Loan Party or any Subsidiary, (iii) no Loan Party or any Subsidiary that is not originally obligated with respect to repayment of such Original Debt is required to become obligated with respect to such Refinance Debt, (iv) such Refinance Debt does not result in a shortening of the average weighted maturity of such Original Debt, (v) the terms of such Refinance Debt are not less favorable to the obligor thereunder than the original terms of such Original Debt and (vi) if such Original Debt was subordinated in right of payment to the Secured Obligations, then the terms and conditions of such Refinance Debt must include subordination terms and conditions that are at least as favorable to Agent and the Lenders as those that were applicable to such Original Debt; (g) Debt owed to any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business;
(e)    Debt of any Loan Party in respect of performance bonds, bid bonds, appeal bonds, surety bonds and similar obligations, in each case provided in the ordinary course of business; 
(f)    other Debt which would not exceed $15,000,000 individually or in the aggregate during any calendar year;
(g)    Debt owed to any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business; and 
(h)    Guarantees of the Borrower or any Guarantor in respect of Debt otherwise permitted hereunder of the Borrower or any other Guarantor.

9.2    Limitation on Liens.  No Loan Party will, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including Accounts) or rights in respect of any thereof, except (collectively under this Section 9.2, “Permitted Liens”):
(a)    Liens created pursuant to any Loan Document;
(b)    Permitted Encumbrances;
(c)    any Lien on any property or asset of Borrower or any Subsidiary existing on the date hereof and set forth in Schedule 9.2; provided that (i) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

68

(d)    Liens of a collecting bank arising in the ordinary course of business under Section 4‐208 of the UCC in effect in the relevant jurisdiction covering only the items being collected upon;
(e)    Liens arising out of Sale and Leaseback Transactions permitted by Section 9.16;
(f)    Liens granted by a Subsidiary that is not a Loan Party in favor of Borrower or another Loan Party in respect of Indebtedness owed by such Subsidiary;
(g)    Liens on other assets not exceeding $10,000,000 individually or in the aggregate in value; provided that, such Liens shall not affect any Collateral or real property (including without limitation tracts of land, buildings or component parts or leases and rents thereof) of Borrower or any of its Subsidiaries; and 
(h)    Liens arising out of judgments or awards not resulting in a Default; provided the applicable Loan Party or Subsidiary shall in good faith be diligently prosecuting an appeal or proceedings for review.
(i)    Liens on cash collateral required to cash collateralize the existing letters of credit in an amount not exceeding $$4,851,040.53; provided that such Liens will not be permitted beyond the earlier to occur of (A) the return of all such letters of credit to J.P. Morgan Chase, N.A. or (B) 45 days from the Closing Date.

9.3    Fundamental Changes.  
(a)    No Loan Party will, nor will it permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing, (i) any Subsidiary of Borrower may merge into Borrower in a transaction in which the Borrower is the surviving entity, (ii) any Loan Party (other than Borrower) may merge into any other Loan Party in a transaction in which the surviving entity is a Loan Party) and (iii) any Subsidiary that is not a Loan Party may liquidate or dissolve if Borrower determines in good faith that such liquidation or dissolution is in the best interests of Borrower and is not materially disadvantageous to the Lenders; provided that, any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 9.6.
(b)    No Loan Party will, nor will it permit any Subsidiary to change its fiscal year or any fiscal quarter from the basis in effect on the Closing Date.
(c)    No Loan Party will change the accounting basis upon which its financial statements are prepared.

9.4    Disposition of Assets.  No Company may (whether in one transaction or a series of transactions) make any Disposition, or enter into any agreement to make any Disposition (other than to Borrower or another Subsidiary in compliance with Section 9.6), except:

69

(a)    Dispositions of (i) Inventory in the ordinary course of business and (ii) used, obsolete, worn out or surplus Equipment or property in the ordinary course of business;
(b)    Dispositions of assets to Borrower or any Loan Party (other than sales, transfers and dispositions of assets otherwise permitted hereunder);
(c)    Dispositions of all or substantially all of the assets of Gulf Marine Fabricators, L.P. in one or more transactions; provided that the Net Proceeds from such Dispositions are received by Borrower as a dividend declared and made by Gulf Marine Fabricators, L.P. (through its general and limited partners)or otherwise received by Borrower promptly and in any event within 10 days after consummation of each transaction.
(d)    Dispositions of Accounts (excluding sales or dispositions in a factoring arrangement) in connection with the compromise, settlement or collection thereof;
(e)    Dispositions of Permitted Investments;
(f)    Sale and Leaseback Transactions permitted by Section 9.6;
(g)    Dispositions resulting from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of the Borrower or any Subsidiary; 
(h)    provided that no Default or Potential Default shall then exist or arise as a result, the Subject Dispositions,
(i)    Dispositions permitted by Section 9.3(a); and
(j)    other Dispositions not to exceed individually or in the aggregate during any calendar year, $20,000,000.

9.5    Restricted Payments.
(a)    No Loan Party will, nor will it permit any Subsidiary to, declare or make, or agree to declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, during the continuance of a Default or that would result in a Default.
(b)    No Loan Party will, nor will it permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Debt, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except:
(ii)    payment of Debt created under the Loan Documents;

70

(iii)    payment of regularly scheduled interest and principal payments as and when due in respect of any Debt permitted under Section 9.1, other than payments in respect of the Subordinated Indebtedness prohibited by the subordination provisions thereof;
(iv)    refinancings of Debt to the extent permitted by Section 9.1; and
(v)    payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness to the extent such sale or transfer is permitted by the terms of Section 9.16.

9.6    Investments, Loans, Advances, Guarantees and Acquisitions.  No Loan Party will, nor will it permit any Subsidiary to, form any subsidiary after the Effective Date, or purchase, hold or acquire (including pursuant to any merger with any Person that was not a Loan Party and a wholly owned Subsidiary prior to such merger) any Equity Interests, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (whether through purchase of assets, merger or otherwise), except:
(a)    Permitted Investments, subject to control agreements in favor of Agent for the benefit of the Secured Parties or otherwise subject to a perfected security interest in favor of Agent for the benefit of the Secured Parties;
(b)    Investments in existence on the date hereof and described in Schedule 9.6;
(c)    Investments by Borrower and the Loan Parties in Equity Interests in other Loan Parties;
(d)    loans or advances made by any Loan Party to any other Loan Party;
(e)    Guarantees constituting Debt permitted by Section 9.1; provided that, any Guarantees of Debt of Gulf Marine Fabricators, Limited Partner, L.L.C., Gulf Marine Fabricators General Partner, L.L.C. and Gulf Marine Fabricators, L.P. shall be under construction contracts only and shall not exceed $3,000,000 individually or in the aggregate at any time outstanding;
(f)    loans or advances made by a Loan Party to its employees on an arms-length basis in the ordinary course of business consistent with past practices for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of $100,000 in the aggregate at any one time outstanding;
(g)    notes payable, or stock or other securities issued by Account Debtors to a Loan Party pursuant to negotiated agreements with respect to settlement of such Account Debtor’s Accounts in the ordinary course of business, consistent with past practices;
(h)    investments in the form of Hedge Agreements permitted by Section 9.10;

71

(i)    investments of any Person existing at the time such Person becomes a Subsidiary of Borrower or consolidates or merges with Borrower or any Subsidiary (including in connection with a permitted acquisition), so long as such investments were not made in contemplation of such Person becoming a Subsidiary or of such merger;
(j)    investments received in connection with the disposition of assets permitted by Section 9.4;
(k)    investments constituting deposits described in Section 9.2(g) and Section 9.2(j);
(l)    formation of new Subsidiaries after the Effective Date; provided, that in each case (i) such Subsidiary becomes a Loan Party at formation, (ii) such Subsidiary shall be a formed and existing under the laws of a state of the United States of America, and (iii) at such formation, the terms and conditions of Article V are complied with;
(m)    acquisitions of Equity Interests in any other Person in one or more series of related transactions after the Effective Date; provided, that (i) upon any such acquisition the Person acquired shall be a Subsidiary, (ii) such Person becomes a Loan Party at the time of such acquisition, (iii) such Person is formed and existing under the laws of a state of the United States of America, (iv) at the time of such acquisition, the terms and conditions of Article V are complied with, (v) the maximum potential acquisition price for Equity Interests in such Person (plus any other Acquisitions under this clause (m) and clause (n)) does not exceed $15,000,000 individually or in the aggregate for any calendar year, (vi) prior to such acquisition, Borrower provides evidence satisfactory to the Agent that at the time of such acquisition the Borrower will be in pro forma compliance with the financial covenants set forth in Article X, and (vii) no Default or Potential Default exists before or after giving effect to any such acquisition; and
(n)    acquisitions of assets or Equity Interests in any other Person in one or more series of related transactions after the Effective Date; provided that (i) at the time of such acquisition, the terms and conditions of Article V are complied with, (ii) the maximum potential acquisition price for such assets (plus any other acquisitions under this clause (n) and clause (m)) does not exceed $15,000,000 individually or in the aggregate for any calendar year, (iii) prior to such acquisition, the Borrower provides evidence satisfactory to the Agent that at the time of such acquisition the Borrower will be in pro forma compliance with the financial covenants set forth in Article X, and (iv) no Default or Potential Default exists before or after giving effect to any such acquisition. 

9.7    Compliance with Environmental Laws; Compliance with Insurance Requirements.
(a)    No Loan Party will, and no Loan Party will permit any Subsidiary to, (i) use (or permit any tenant to use) any of their respective properties or assets for the handling, processing, storage, transportation, or disposal of any Hazardous Substance, except in the ordinary course of business and in compliance in all material respects with all Environmental Laws, (ii) generate any Hazardous Substance in violation of any Environmental Law, (iii) conduct any activity which is likely to cause a release or threatened release of any Hazardous Substance in violation of any Environmental Law, 

72

or (iv) otherwise conduct any activity or use any of their respective properties or assets in any manner that is likely to violate any Environmental Law.
(b)    No Loan Party with bring or keep any article on any of its property or assets, or cause or allow any condition to exist, if the presence of such article or the occurrence of such condition could reasonably cause the invalidation of any insurance required by Section 8.6(a) or would otherwise be prohibited by the terms thereof.

9.8    Change of Business.  No Company will enter into, and no Company will permit any Subsidiary to enter into, any type of business which is materially different from the business in which Person is engaged as of the Closing Date.

9.9    Transactions With Affiliates.  No Loan Party will, nor will it permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) transactions that (i) are in the ordinary course of business and (ii) are at prices and on terms and conditions not less favorable to such Loan Party or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among the Loan Parties not involving any other Affiliate, (c) any investment permitted by Sections 9.6(c) or 9.6(d), (d) any Debt permitted under Section 9.1(c), (e) any Restricted Payment permitted by Section 9.5, (f) loans or advances to employees permitted under Section 9.6(f), (g) the payment of reasonable fees to directors of Borrower or any Subsidiary who are not employees of Borrower or any Subsidiary, and compensation and employee benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees of Borrower or its Subsidiaries in the ordinary course of business, (h) any issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, stock options and stock ownership plans approved by Borrower’s board of directors.

9.10    Hedge Agreements.  No Loan Party will, nor will it permit any Subsidiary to, enter into any Hedge Agreement, except (a) Hedge Agreements entered into to hedge or mitigate risks to which the Borrower or any Subsidiary has actual exposure (other than those in respect of Equity Interests of the Borrower or any Subsidiary), and (b) Hedge Agreements entered into in order to effectively cap, collar or exchange interest rates (from floating to fixed rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower or any Subsidiary.

9.11    Compliance with Government Regulations.  No Loan Party will, and no Loan Party will permit any other Loan Party or Company to, (a) at any time be in violation of any Law if such ’s violation of such Law would result in (i) any Lender being prohibited from making any Credit Extension to any Company, (ii) any limitation on the ability of any Lender to make a Credit Extension to any Company, or (iii) any Lender being prohibited from otherwise conducting business with any Loan Party, or (b) fail to provide documentary and other evidence of any Loan Party’s identity as may be requested by Agent or any Lender at any time to enable Agent or such Lender to verify such Loan Party’s identity or to comply with any applicable Law, including, without limitation Section 326 of the Patriot Act.

9.12    Organizational Documents; Material Agreements.  No Loan Party will, nor will it permit any Subsidiary to, amend, modify or waive any of its rights under (a)  any agreement relating to any 

73

Subordinated Debt, or (b) its charter, articles or certificate of organization or incorporation and bylaws or operating, management or partnership agreement, or other organizational or governing documents, to the extent any such amendment, modification or waiver would be adverse to the Lenders.

9.13    Assignment.  No Loan Party may assign or transfer any of its rights, duties or obligations under any of the Loan Documents.

9.14    Taxes.  No Company may use any portion of the proceeds of any Loan to pay the wages of employees, unless a timely payment to or deposit with the appropriate Governmental Authority of all amounts of Tax required to be deducted and withheld with respect to such wages is also made.

9.15    Prepayment of Debt; Payment on Subordinated Debt.
(a)    No Loan Party may voluntarily prepay principal of, or interest on, any Debt (including without limitation, any Subordinated Debt), other than the Obligations, if a Default or Potential Default exists or would result after giving effect to such payment. No Loan Party may prepay, pay, repay, repurchase, redeem or defease Subordinated Debt prior to the irrevocable payment and performance in full of the Obligations and permanent termination of Lenders; commitments to extend credit hereunder and under any other Loan Documents, except as expressly permitted by this Agreement and in accordance with any applicable subordination, intercreditor or similar agreement with Agent and Lenders.
(b)    No Loan Party may prepay, repurchase, redeem or defease Subordinated Debt prior to the irrevocable payment and performance in full of the Obligation except in accordance with any applicable subordination, intercreditor or similar agreement with Agent and Lenders or otherwise without the prior written consent of Required Lenders.

9.16    Sale and Leaseback Transactions. No Loan Party will, nor will it permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred (a “Sale and Leaseback Transaction”), except for any such sale of any fixed or capital assets by the Borrower or any Subsidiary that is made for cash consideration in an amount not less than the fair value of such fixed or capital asset and is consummated within 90 days after Borrower or such Subsidiary acquires or completes the construction of such fixed or capital asset.

9.17    Restrictive Agreements. No Loan Party will, nor will it permit any Subsidiary to, directly or indirectly enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of such Loan Party or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any Equity Interests or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Debt of the Borrower or any other Subsidiary; provided that, (i) the foregoing shall not apply to restrictions and conditions imposed by any Law or by any Loan Document, (ii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the 

74

Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Debt permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Debt and (v) clause (a) of the foregoing shall not apply to customary provisions in leases restricting the assignment thereof.

ARTICLE X     
 
FINANCIAL COVENANTS
So long as Lenders are committed to make any Credit Extension under this Agreement, and thereafter until the Obligations are paid in full (other than contingent indemnification obligations and other provisions under the Loan Documents which by their terms expressly survive payment of the Obligations and termination of the Loan Documents), Borrower covenants and agrees as follows:

10.1    Current Ratio.  Borrower will maintain a ratio of current assets to current liabilities of not less than 1.25:1.00.  For purposes of this Section 10.1, “current assets” and “current liabilities” shall have the meaning assigned to such terms under GAAP.  The financial covenant under this Section 10.1 shall be calculated and tested on a quarterly basis as of the last day of each fiscal quarter of the Borrower, commencing with the fiscal quarter ending June 30, 2017.

10.2    Minimum Tangible Net Worth.  Borrower shall not permit at any time the sum of Tangible Net Worth to be less than the sum of (i) $230,000,000, plus (ii) an amount equal to 50% of Consolidated Net Income for each fiscal quarter ending after June 30, 2017 (with no deduction for a net loss in any such fiscal quarter except for any gain or loss in connection with the Subject Dispositions), plus (iii) 100% of all net proceeds of any issuance of any stock or other equity after deducting of any fees, commissions, expenses and other costs incurred in such offering.  The financial covenant in this Section 10.2 shall be calculated and tested on a quarterly basis as of the last day of each fiscal quarter of the Borrower, commencing with the fiscal quarter ending June 30, 2017.

10.3    Funded Debt to Tangible Net Worth Ratio.  Borrower will maintain a ratio of Funded Debt to Tangible Net Worth of not more than 0.50:1.00.  The financial covenant under this Section 10.3 shall be calculated and tested on a quarterly basis as of the last day of each fiscal quarter of the Borrower, commencing with the fiscal quarter ending June 30, 2017.

ARTICLE XI     
 
DEFAULT

11.1    Default.  The term “Default” means the occurrence of any one or more of the following events:
(a)    Default in Payment. Borrower shall fail to pay (i) any principal of or interest on the Obligations when due, (ii) any reimbursement obligation in respect of any LC, or (iii) any other amount due under this Agreement or any Loan Document when due and such failure under this 

75

clause (iii) shall continue unremedied for five (5) Business Days following notice from the Agent of such failure.
(b)    Inaccuracy of Representations. Any representation or warranty made or deemed made by any Loan Party (or any respective officers of any Company) in this Agreement, any other Loan Document, or in any amendment of this Agreement or any other Loan Document, or in any certificate, report, notice, or financial statement furnished at any time in connection with this Agreement, any other Loan Document, or in any amendment of this Agreement or any other Loan Document, shall prove to have been incorrect in any material respect when made or deemed to have been made.
(c)    Breach of Covenants. Any Loan Party shall fail to perform, observe or comply with (i) any covenant, agreement or term applicable to it contained in Section 8.1, 8.3, 8.4, 8.6, 8.7, 8.9, 8.10, 8.12, 8.14, 8.15, 8.16, 8.17, Article IX or Article X of this Agreement or (ii) any covenant, agreement or term in this Agreement or any other Loan Document applicable to it (other than Section 11.1(a) or the preceding clause (i)) and, with respect to this clause (ii), such failure shall have continued unremedied for a period of 30 days.
(d)    Insolvency – Voluntary Proceedings. Any Loan Party shall (i) voluntarily commence any proceeding or file any petitions seeking liquidation, reorganization, or other relief under any Debtor Relief Law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in Section 11.1(e) below, (iii) apply for or consent to an appointment of a receiver, trustee, custodian, sequestrator, conservator, or similar official or such Loan Party or for its substantial part of its assets, (iv) file an answer admitting a material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) take any corporate or other action for the purpose of effecting any of the foregoing.
(e)    Insolvency – Involuntary Proceedings. An involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization, or other relief in respect of any Loan Party or its debt, or a substantial part of its assets, under any Debtor Relief Law now or hereafter in effect, or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator, or similar official for any Loan Party, or for a substantial part of its assets, and, in each such case, such proceeding or petitions shall continue undismissed for 60 days or an order or a decree approving or ordering any of the foregoing shall be entered.
(f)    Insolvency. Any Loan Party shall become unable, admit in writing its inability, or fail generally to pay its debts as they become due.
(g)    Judgments. One or more final non-appealable judgments for the payment of money in an aggregate amount in excess of $750,000 shall be rendered against Borrower or any other Loan Party or any Subsidiary of any Company, or any combination thereof, and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of Borrower or any other Loan Party or any Subsidiary of any Company to enforce any such judgment.

76

(h)    Cross-Default.
(ii)    Material Debt. Any Loan Party shall (A) fail to pay when due any principal of or interest on any Debt (other than the Obligations), the aggregate outstanding amount (or unfunded commitment) of which is in excess of $500,000, and such failure beyond the period of grace if any, provided for in the instrument or agreement governing such Debt or under which such Debt was created, or (B) default in the observance or performance of any other agreement or condition relating to any Debt (other than the Obligations), the aggregate outstanding amount (or unfunded commitment) of which is in excess of $500,000, or contained in any instrument or agreement evidencing, securing or relating to such Debt, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Debt (or a trustee or agent on behalf of such holder or holders) to cause, with the giving of notice and/or lapse of time, if required, any such Debt to become due prior to its stated maturity or required to be prepaid, defeased or redeemed (any applicable grace period having expired).
(iii)    Subordinated Debt. An event of default or default (however therein described) shall occur in any document evidencing any Subordinated Debt and shall continue beyond the period of grace if any, provided for in the instrument or agreement governing such Subordinated Debt or under which such Subordinated Debt was created.
(i)    Invalidity of Loan Documents. This Agreement or any other Loan Document shall cease to be in full force and effect or shall be declared null and void or the validity or enforceability thereof shall be contested or challenged by any Loan Party or any of their respective owners, or any Loan Party shall deny that it has any further liability or obligation under any of the Loan Documents, or any Lien or security interest created by the Loan Documents shall for any reason cease to be a valid, first priority perfected security interest in and Lien upon any of the Collateral purported to be covered thereby.
(j)    ERISA Event.  An ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect.
(k)    Change of Control. (a) A Change of Control occurs, or (b) an agreement or agreement in principle is executed with respect to any proposed transaction or event or series of transactions or events which, individually or in the aggregate, could reasonably be expected to result in a Change of Control.
(l)    Hedge Conditions. The occurrence or existence of any default or other similar condition or event (however described) with respect to any Hedge Agreement or any Company shall fail to pay or perform its obligations under any Hedge Agreement when due (after the expiration of any applicable grace or forbearance period).
(m)    LCs. LC Issuer is served with, or becomes subject to, a court order, injunction, or other process or decree restraining or seeking to restrain it from paying any amount under any LC 

77

and either (i) a drawing has occurred under the LC and the applicable Loan Party has refused to reimburse LC Issuer for payment or (ii) the expiration date of the LC has occurred but the right of any beneficiary thereunder to draw under the LC has been extended past the expiration date in connection with the pendency of the related court action or proceeding and Borrower have failed to Cash Collateralize the then existing LC Exposure.
(n)    Forfeiture.  Any Loan Party is criminally convicted under any law that may reasonably be expected to lead to a forfeiture of any property of such Loan Party having a fair market value in excess of $500,000.
(o)    Material Adverse Event. Any event or other conditions shall occur and be continuing that is reasonably likely to result in a Material Adverse Event.

11.2    Remedies Upon Default.  If any Default shall occur, Agent may, and, upon the direction of the Required Lenders, shall, do any one or more of the following: (a) declare the outstanding principal of and accrued and unpaid interest on the Notes and the Obligations or any part thereof to be immediately due and payable, and the same shall thereupon become immediately due and payable, without notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent to accelerate, notice of intent to demand, protest, or other formalities of any kind, all of which are hereby expressly waived by Borrower, (b) terminate Commitments without notice to Borrower, (c) foreclose or otherwise enforce any Lien granted to Agent to secure payment and performance of the Obligations, demand payment from the Guarantors, and (d) exercise any and all rights and remedies afforded by the applicable Law, by any of the Loan Documents, by equity or otherwise; provided that upon the occurrence of a Default under Section 11.1(d) or Section 11.1(e), the obligation of each Lender to make Loans and any obligation of the LC Issuers to make LC Credit Extensions shall automatically terminate, and the outstanding principal of and accrued and unpaid interest on the Notes and the other Obligations shall become immediately due and payable without notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent to accelerate, notice of intent to demand, protest, or other formalities of any kind, all of which are hereby expressly waived by Borrower.

11.3    Cash Collateral.  If any Default shall occur, Borrower shall, if requested by Required Lenders, immediately Cash Collateralize the LC Exposure as security for the Obligations.

11.4    Performance by Agent.  If any Loan Party shall fail to perform within any applicable grace or cure period any covenant, duty, or agreement contained in any of the Loan Documents, Agent may perform or attempt to perform such covenant, duty, or agreement on behalf of such Loan Party. Agent is further authorized by Borrower and the Lenders to make expenditures from time to time which Agent, in its reasonable business judgment, deems necessary or desirable to (i) preserve or protect the business conducted by Borrower, the Collateral, or any portion thereof and/or (ii) enhance the likelihood of, or maximize the amount of, repayment of the Loans and other Obligations. Borrower hereby agrees to reimburse Agent on demand for any and all costs, liabilities and obligations incurred by Agent pursuant to this Section 11.4, together with interest thereon at the Default Rate from the date of such expenditure until paid. Each Lender hereby agrees to indemnify Agent upon demand for any and all costs, liabilities and obligations incurred by Agent pursuant to this Section 11.4. Notwithstanding the foregoing, it is expressly agreed that neither Agent nor 

78

any Lender shall have any liability or responsibility for the performance of any obligation of any Loan Party under this Agreement or any other Loan Document.

11.5    Crediting of Payments and Proceeds.  In the event that the Obligations have been accelerated pursuant to Section 11.2 or Agent or any Lender has exercised any remedy set forth in this Agreement or any other Loan Document, all payments received by the Lenders upon the Secured Obligations and all net proceeds from the enforcement of the Secured Obligations shall be applied:
First, to payment of that portion of the Secured Obligations constituting fees, indemnities, expenses and other amounts, including attorney fees, payable to Agent in its capacity as such, each LC Issuer in its capacity as such, ratably among Agent, each LC Issuer in proportion to the respective amounts described in this clause First payable to them;
Second, to payment of that portion of the Secured Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders under the Loan Documents, including attorney fees, ratably among the Lenders in proportion to the respective amounts described in this clause Second payable to them;
Third, to payment of that portion of the Secured Obligations constituting accrued and unpaid interest on the Loans and LC Exposure, ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them;
Fourth, to payment of that portion of the Secured Obligations constituting unpaid principal of the Loans, LC Exposure and payment obligations then owing under Secured Hedge Agreements and Secured Cash Management Agreements, ratably among the Lenders, each LC Issuer, the Hedge Banks and the Cash Management Banks in proportion to the respective amounts described in this clause Fourth held by them;
Fifth, to Agent for the account of each LC Issuer, to cash collateralize any LC Exposure then outstanding; and
Sixth, the balance, if any, after all of the Secured Obligations have been indefeasibly paid in full, to Borrower or as otherwise required by applicable Law.
Notwithstanding the foregoing, Secured Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements shall be excluded from the application described above if Agent has not received written notice thereof, together with such supporting documentation as Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be. Each Cash Management Bank or Hedge Bank not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of Agent pursuant to the terms of Article XII for itself and its Affiliates as if a “Lender’’ party hereto. The provisions of this Section 11.5 shall govern and control over any conflicting provisions in this Agreement or any Loan Document.

79

ARTICLE XII     
 
THE ADMINISTRATIVE AGENT

12.1    Appointment and Authority.  Each of the Lenders and the LC Issuers hereby irrevocably appoints Whitney Bank to enter into each of the Loan Documents to which it is a party (other than this Agreement) on its behalf and to act on its behalf as Agent under this Agreement and under the other Loan Documents and authorizes Agent to take such actions on its behalf and to exercise such powers as are delegated to Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of Agent, the Lenders and the LC Issuers, and neither Borrower nor any other Loan Party shall have rights as a third-party beneficiary of any of such provisions. Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders (including in its capacity as a potential Hedge Bank or Cash Management Bank) and the LC Issuers hereby irrevocably appoints and authorizes Agent to act as the agent of such Lender and such LC Issuers for purposes of acquiring, holding, perfecting and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Secured Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, Agent, as “collateral agent” and any co-agents, sub­ agents and attorneys-in-fact appointed by Agent pursuant to this Article XII for purposes of holding, perfecting or enforcing any Lien on the Collateral (or any portion thereof) granted under the Security Documents, or for exercising any rights and remedies thereunder at the direction of Agent, shall be entitled to the benefits of all provisions of Articles XII and XIII (including Section 13.3, as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.  Should any Lender (other than Agent) obtain possession or control of any such assets, such Lender shall notify Agent thereof, and, promptly upon Agent’s request therefor, shall deliver such assets to Agent or in accordance with Agent’s instructions or transfer control to Agent in accordance with Agent’s instructions. Each Lender agrees that it will not have any right individually to enforce or seek to enforce any Security Document or to realize upon any Collateral for the Loans unless instructed to do so by Agent, it being understood and agreed that such rights and remedies may be exercised only by Agent.  It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law.  Instead, such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

12.2    Rights as a Lender.  The Person serving as Agent under this Agreement shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not Agent, and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as Agent under this Agreement in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, Borrower or any Subsidiary or other Affiliate thereof as if such Person were not Agent under this Agreement and without any duty to account therefor to the Lenders.

80

12.3    Exculpatory Provisions.
(a)    Agent shall not have any duties or obligations except those expressly set out in this Agreement and in the other Loan Documents, and its duties under this Agreement shall be administrative in nature. Without limiting the generality of the foregoing, Agent:
(ii)    shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;
(iii)    shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose Agent to liability or that is contrary to any Loan Document or applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may affect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and
(iv)    shall not, except as expressly set out in this Agreement and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Loan Party or any of its Affiliates that is communicated to or obtained by the Person serving as Agent or any of its Affiliates in any capacity.
(b)    Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 13.8 and 11.2), or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment.  Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to Agent in writing by Borrower, a Lender or an LC Issuer.  Agent may at any time request instructions from Lenders with respect to any actions or approvals which by the terms of this Agreement or of any of the Loan Documents Agent is permitted or desires to take or to grant, and if such instructions are promptly requested, Agent shall be absolutely entitled to refrain from taking any action or to withhold any approval and shall not be under any liability whatsoever to any Person for refraining from any action or withholding any approval under any of the Loan Documents until it shall have received such instructions from Required Lenders or all or such other portion of the Lenders as shall be prescribed by this Agreement. Without limiting the foregoing, no Lender shall have any right of action whatsoever against Agent as a result of Agent acting or refraining from acting under this Agreement or any of the other Loan Documents in accordance with the instructions of Required Lenders (or all or such other portion of the Lenders as shall be prescribed by this Agreement) and, notwithstanding the instructions of Required Lenders (or such other applicable portion of the Lenders), Agent shall have no obligation to take any action if it believes, in good faith, 

81

that such action would violate applicable Law or exposes Agent to any liability for which it has not received satisfactory indemnification in accordance with the provisions of Section 13.3.
(c)    Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered under this Agreement or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set out herein or therein or the occurrence of any Default or Potential Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, any Lien purported to be created or perfected thereby or any other instrument or writing furnished in connection therewith, (v) the satisfaction of any condition set out in Article VI or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to Agent, or (vi) the financial condition of any Loan Party or any other Person.
(d)    Agent shall not be liable for any apportionment or distribution of payments made by it in good faith and if any such apportionment or distribution is subsequently determined to have been made in error the sole recourse of any Lender to whom payment was due but not made, shall be to recover from other Lenders any payment in excess of the amount to which they are determined to be entitled (and such other Lenders hereby agree to return to such Lender any such erroneous payments received by them).

12.4    Authorization to Distribute Certain Materials to Lenders.
(a)    If Borrower does not file this Agreement with the SEC, then Borrower hereby authorizes the Agent to distribute the execution version of this Agreement and the Loan Documents to all Lenders. Borrower acknowledges its understanding that Public-Siders and their firms may be trading in any of the Loan Parties’ respective securities while in possession of the Loan Documents.
(b)    Borrower represents and warrants that none of the information in the Loan Documents constitutes or contains material non-public information within the meaning of federal and state securities laws. To the extent that any of the executed Loan Documents constitutes at any time material non-public information within the meaning of the federal and state securities laws after the date hereof, Borrower agrees that it will promptly make such information publicly available by press release or public filing with the SEC.

12.5    Reliance by Agent; Notice of Default.
(a)    Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.  Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition under this Agreement to the making of a Credit Extension that by 

82

its terms must be fulfilled to the satisfaction of a Lender or the applicable LC Issuer, Agent may presume that such condition is satisfactory to such Lender or such applicable LC Issuer unless Agent shall have received notice to the contrary from such Lender, or such LC Issuer prior to the making of such Credit Extension. Agent may consult with legal counsel, independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
(b)    Agent shall not be deemed to have knowledge or notice of the occurrence of any Potential Default or Default except with respect to defaults in the payment of principal, interest and fees required to be paid to Agent for the account of Lenders, unless Agent shall have received written notice from a Lender or Borrower referring to this Agreement, describing such Potential Default or Default and stating that such notice is a “notice of default”.  Agent will notify each Lender of its receipt of any such notice.  Agent shall take such action with respect to such Potential Default or Default as may be requested by Required Lenders (or all or such other portion of the Lenders as shall be prescribed by this Agreement) in accordance with the terms hereof.  Unless and until Agent has received any such request, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Potential Default or Default as it shall deem advisable or in the best interests of Lenders.

12.6    Delegation of Duties.  Agent may perform any and all of its duties and exercise its rights and powers under this Agreement or under any other Loan Document by or through any one or more sub­ agents appointed by Agent. Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of Agent and any such sub­ agent, and shall apply to their respective activities in connection with the syndication of the Revolving Credit Facility and the as well as activities as Agent.  Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and non-appealable judgment that Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

12.7    Resignation of Agent.
(a)    Agent may at any time give notice of its resignation to the Lenders, the LC Issuers and Borrower.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with Borrower, to appoint a successor, which shall be a bank with an office in Houston, Texas, or an Affiliate of any such bank with an office in Houston, Texas.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Agent may (but shall not be obligated to), on behalf of the Lenders and the LC Issuers, appoint a successor Agent meeting the qualifications set out above.  Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

83

(b)    If the Person serving as Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Required Lenders may, to the extent permitted by applicable Law, by notice in writing to Borrower and such Person remove such Person as Agent and, in consultation with Borrower, appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.
(c)    With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (i) the retiring or removed Agent shall be discharged from its duties and obligations under this Agreement and under the other Loan Documents (except that in the case of any Collateral security held by Agent on behalf of the Lenders, the LC Issuers under any of the Loan Documents, the retiring or removed Agent shall continue to hold such Collateral security until such time as a successor Agent is appointed) and (ii) except for any indemnity payments owed to the retiring or removed Agent, all payments, communications and determinations provided to be made by, to or through Agent shall instead be made by or to each Lender and LC Issuer directly, until such time, if any, as the Required Lenders appoint a successor Agent as provided for above.  Upon the acceptance of a successor’s appointment as Agent under this Agreement, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed Agent (other than any rights to indemnity payments owed to the retiring or removed Agent), and the retiring or removed Agent shall be discharged from all of its duties and obligations under this Agreement or under the other Loan Documents. The fees payable by Borrower to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between Borrower and such successor.  After the retiring or removed Agent’s resignation or removal under this Agreement and under the other Loan Documents, the provisions of this Article XII and Section 13.3 shall continue in effect for the benefit of such retiring or removed Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Agent was acting as Agent.

12.8    Non-Reliance on and Other Lenders.  
(a)    Each Lender acknowledges and agrees that the extensions of credit made hereunder are commercial loans and letters of credit and not investments in a business enterprise or securities. Each Lender further represents that it is engaged in making, acquiring or holding commercial loans in the ordinary course of its business and has, independently and without reliance upon Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement as a Lender, and to make, acquire or hold Loans hereunder. Each Lender shall, independently and without reliance upon Agent or any other Lender and based on such documents and information (which may contain material, non-public information within the meaning of the U.S. securities laws concerning Borrower and its Affiliates) as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document, any related agreement or any document furnished hereunder or thereunder and in deciding whether or to the extent to which 

84

it will continue as a Lender or assign or otherwise transfer its rights, interests and obligations hereunder.
(b)    Each Lender hereby agrees that (i) it has requested a copy of each Report prepared by or on behalf of Agent; (ii) Agent (A) makes no representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein or any inaccuracy or omission contained in or relating to a Report and (B) shall not be liable for any information contained in any Report; (iii) the Reports are not comprehensive audits or examinations, and that any Person performing any field examination will inspect only specific information regarding the Loan Parties and will rely significantly upon the Loan Parties’ books and records, as well as on representations of the Loan Parties’ personnel and that Agent undertakes no obligation to update, correct or supplement the Reports; (iv) it will keep all Reports confidential and strictly for its internal use, not share the Report with any Loan Party or any other Person except as otherwise permitted pursuant to this Agreement; and (v) without limiting the generality of any other indemnification provision contained in this Agreement, (A) it will hold Agent and any such other Person preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any extension of credit that the indemnifying Lender has made or may make to Borrower, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a Loan or Loans; and (B) it will pay and protect, and indemnify, defend, and hold Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable attorneys’ fees) incurred by Agent or any such other Person as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

12.9    No Other Duties, etc.  Anything in this Agreement to the contrary notwithstanding, none of the syndication agents, documentation agents, co-agents, book managers, lead managers, arrangers, lead arrangers or co-arrangers listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as Agent, a Lender, or an LC Issuer under this Agreement.

12.10    File Proofs of Claim.  In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, Agent (irrespective of whether the principal of any Loan or LC Exposure shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether Agent shall have made any demand on Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:
(a)    to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, LC Exposure, 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 LC Issuers and Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the LC Issuers and Agent and their respective agents and counsel and all other amounts due the Lenders, the LC Issuers and Agent under Sections 3.8 and 13.3) allowed in such judicial proceeding; and

85

(b)    to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and LC Issuer to make such payments to Agent and, in the event that Agent shall consent to the making of such payments directly to the Lenders and the LC Issuers, to pay to Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Agent and its agents and counsel, and any other amounts due Agent under Sections 3.8 and 13.3.

12.11    Credit Bidding.
(a)    Agent, on behalf of itself and the Lenders, shall have the right to credit bid and purchase for the benefit of Agent and the Lenders all or any portion of Collateral at any sale thereof conducted by Agent under the provisions of the UCC, including pursuant to Sections 9-610 or 9-620 of the UCC, at any sale thereof conducted under the provisions of the Bankruptcy Code, including Section 363 thereof, or a sale under a plan of reorganization, or at any other sale or foreclosure conducted by the Agent (whether by judicial action or otherwise) in accordance with applicable Laws.
(b)    Each Lender hereby agrees that, except as otherwise provided in any Loan Documents or with the written consent of Agent and the Required Lenders, it will not take any enforcement action, accelerate obligations under any Loan Documents, or exercise any right that it might otherwise have under applicable Laws to credit bid at foreclosure sales, UCC sales or other similar dispositions of Collateral.

12.12    Collateral and Guaranty Matters.
(a)    The Lenders (including in its or any of its Affiliate’s capacities as a potential Hedge Bank or Cash Management Bank), and the LC Issuers irrevocably authorize Agent, at its option and in its discretion,
(ii)    to release any Lien on any property granted to or held by Agent, for the ratable benefit of the Secured Parties, under any Loan Document (A) upon termination of all Commitments and payment in full of all Obligations (other than (1) contingent indemnification obligations and (2) obligations and liabilities under Secured Cash Management Agreements or Secured Hedge Agreements as to which arrangements satisfactory to the applicable Cash Management Bank or Hedge Bank shall have been made) and the expiration or termination of all LCs (other than LCs as to which other arrangements satisfactory to Agent and the applicable LC Issuer shall have been made), (B) that is sold or otherwise disposed of or to be sold or otherwise disposed of as part of or in connection with any sale or other disposition permitted under the Loan Documents, or (C) subject to Section 13.8, if approved, authorized or ratified in writing by the Required Lenders;

86

(iii)    to release any Lien granted to or held by Agent under any Loan Document (A) upon termination of the Revolving Commitments and payment in full of all Revolving Credit Exposure and all other obligations of Borrower under this Agreement or the other Loan Documents; (B) on property sold or to be sold or disposed of as part of or in connection with any disposition permitted under this Agreement or the other Loan Documents; or (c) subject to Section 13.8, if approved, authorized or ratified in writing by the Required Lenders. Upon request by Agent at any time, Lenders will confirm in writing Agent’s authority to release, or subordinate its interest in, particular types or items of collateral pursuant to this Section 12.12;
(iv)    to subordinate any Lien on any property granted to or held by Agent under any Loan Document to the holder of any Permitted Lien on such property which secures Funded Debt; and
(v)    to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted under the Loan Documents.
Upon request by Agent at any time, the Required Lenders will confirm in writing Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 12.12.
(b)    AGENT SHALL NOT BE RESPONSIBLE FOR OR HAVE A DUTY TO ASCERTAIN OR INQUIRE INTO ANY REPRESENTATION OR WARRANTY REGARDING THE EXISTENCE, VALUE OR COLLECTABILITY OF THE COLLATERAL, THE EXISTENCE, PRIORITY OR PERFECTION OF AGENT’S LIEN THEREON, OR ANY CERTIFICATE PREPARED BY ANY LOAN PARTY IN CONNECTION THEREWITH, NOR SHALL AGENT BE RESPONSIBLE OR LIABLE TO THE LENDERS FOR ANY FAILURE TO MONITOR OR MAINTAIN ANY PORTION OF THE COLLATERAL.

12.13    Secured Hedge Agreements and Secured Cash Management Agreements.  No Cash Management Bank or Hedge Bank that obtains the benefits of Section 11.5 or any Collateral by virtue of the provisions hereof or of any Security Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Article XII to the contrary, Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Secured Cash Management Agreements and Secured Hedge Agreements unless Agent has received written notice of such Secured Cash Management Agreements and Secured Hedge Agreements, together with such supporting documentation as the Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be.

ARTICLE XIII     
 
MISCELLANEOUS

87

13.1    Notices.
(a)    Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows:
(ii)    if to Borrower or any other Loan Party, to it at Gulf Island Fabrication, Inc., 16225 Park Ten Place, Suite 280, Houston, Texas 77084, Attention of David S. Schorlemer (Facsimile No.__________);
(iii)    if to Agent, to it at Whitney Bank, 7910 Main Street, Houma, LA, 70360, Attention of Joshua Jones (Phone No. 985-853-7407) (Facsimile No. 985-853-7479);
(iv)    if to LC Issuer, to it at Whitney Bank, 7910 Main Street, Houma, LA, 70360, Attention of Joshua Jones (Phone No. 985-853-7407) (Facsimile No. 985-853-7479), and if to any other LC Issuer, to it at the address provided in writing to Agent and Borrower at the time of its appointment as an LC Issuer under this Agreement;
(v)    if to a Lender, to it at its address (or facsimile number) set out in its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received.  Notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices delivered through electronic communications, to the extent provided in Section 13.1(b) below, shall be effective as provided in said Section 13.1(b).
(b)    Electronic Communications.
(ii)    Notices and other communications to the Lenders and the LC Issuers under this Agreement may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by Agent, provided that, the foregoing shall not apply to notices to any Lender or LC Issuer pursuant to Article II if such Lender or LC Issuer, as applicable, has notified Agent that it is incapable of receiving notices under such Section by electronic communication. Agent or Borrower may, in its discretion, agree to accept notices and other communications to it under this Agreement by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.
(iii)    Unless Agent otherwise prescribes, (A) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (B) notices or communications posted to an Internet or intranet website shall be deemed received upon 

88

the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (A), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (A) and (B) above, if such notice, e-mail or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient.
(c)    Change of Address, etc. Any party hereto may change its address or facsimile number for notices and other communications under this Agreement by notice to the other parties to this Agreement.

13.2    No Deemed Waiver; Cumulative Remedies.  No failure on the part of Agent or any Lender to exercise, and no delay in exercising, and no course of dealing with respect to, any right, power, or privilege under this Agreement, shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.  The rights and remedies provided for in this Agreement and the other Loan Documents are cumulative and not exclusive of any rights and remedies provided by law.

13.3    Expenses; Indemnity; Damage Waiver; Costs and Expenses.  
(a)    Expenses.  The Loan Parties shall pay (i) all reasonable, out-of-pocket costs and expenses of Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for Agent, in connection with the preparation and administration of the Loan Documents and any amendments, modifications or waivers thereof (whether or not the transactions contemplated in this Agreement or any other Loan Document shall be consummated), and (ii) all out-of-pocket costs and expenses (including, without limitation, the reasonable fees, charges and disbursements of outside counsel and the allocated cost of inside counsel) incurred by Agent in connection with the enforcement or protection of its rights in connection with this Agreement, including its rights under this Section, or in connection with the Revolving Credit Facility or other Obligations, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of the Revolving Credit Facility or other Obligations, and further including fees, costs and expenses incurred in connection with:
(ii)    appraisals and insurance reviews;
(iii)    field examinations and the preparation of Reports based on the fees charged by a third party retained by Agent or the internally allocated fees for each Person employed by Agent with respect to each field examination;
(iv)    background checks regarding senior management and/or key investors, as deemed necessary or appropriate in the sole discretion of Agent;
(v)    Taxes, fees and other charges for (i) lien and title searches and title insurance and (ii) recording the mortgages, filing financing statements and continuations, and other actions to perfect, protect, and continue Agent’s Liens;

89

(vi)    sums paid or incurred to take any action required of any Loan Party under the Loan Documents that such Loan Party fails to pay or take; and
(vii)    forwarding loan proceeds, collecting checks and other items of payment, and establishing and maintaining the accounts and lock boxes, and costs and expenses of preserving and protecting the Collateral.
(b)    Indemnification by Borrower. THE LOAN PARTIES SHALL INDEMNIFY AGENT (AND ANY SUB-AGENT THEREOF), EACH LENDER AND EACH LC ISSUER, AS WELL AS THEIR RESPECTIVE SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR (EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED EXPENSES (INCLUDING THE FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE), AND ALL FEES AND TIME CHARGES AND DISBURSEMENTS FOR ATTORNEYS WHO MAY BE EMPLOYEES OF ANY INDEMNITEE) INCURRED BY ANY INDEMNITEE OR ASSERTED AGAINST ANY INDEMNITEE BY ANY THIRD PARTY OR BY THE LOAN PARTIES, WHETHER OR NOT AS THE RESULT OF THE NEGLIGENCE OF ANY PARTY SO INDEMNIFIED BUT NOT ANY INDEMNIFIED PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF (I) THE EXECUTION OR DELIVERY OF THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE PERFORMANCE BY THE PARTIES hereto OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, (II) THE CREDIT FACILITY OR THE USE OR PROPOSED USE OF THE PROCEEDS THEREFROM, (III) ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS SUBSTANCES ON OR FROM, OR MIGRATING TO OR FROM, ANY PROPERTY OWNED OR OPERATED BY ANY LOAN PARTY, OR ANY ACTUAL OR ALLEGED ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO ANY LOAN PARTY OR ANY COLLATERAL, (IV) ANY BREACH OF ANY REPRESENTATION, WARRANTY OR COVENANT CONTAINED HEREIN, OR (V) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY, WHETHER BROUGHT BY A THIRD PARTY OR BY ANY LOAN PARTY, AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.
(c)    Reimbursement by Lenders. To the extent that Borrower for any reason fails to indefeasibly pay any amount required under paragraph (a) or (b) of this Section 13.3 to be paid by it to Agent (or any sub-agent thereof), any LC Issuer or any Related Party of any of the foregoing, 

90

each Lender severally agrees to pay to Agent (or any such sub­ agent), such LC Issuer, or such Related Party, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lender’s Commitment Percentage at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender); provided that with respect to such unpaid amounts owed to any LC Issuer solely in its capacity as such, only the Revolving Lenders shall be required to pay such unpaid amounts, such payment to be made severally among them based on such Revolving Lender’s Revolving Commitment Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against Agent (or any such sub-agent), such LC Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for Agent (or any such sub-agent), such LC Issuer in connection with such capacity. If any indemnity furnished to Agent for any purpose shall, in the opinion of Agent, be insufficient or become impaired, Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against even if so directed by Required Lenders until such additional indemnity is furnished.  The obligations of the Lenders under this paragraph (b) are subject to the provisions of Section 3.5(d).
(d)    Tax Indemnity.  The Loan Parties shall pay, and hold Agent, each Lender and each LC Issuer harmless from and against, any and all present and future stamp, documentary, indebtedness, and other similar taxes with respect to this Agreement and any other Loan Documents, any collateral described therein, or any payments due thereunder, and shall defend, indemnify and save the Agent, each Lender and each LC Issuer harmless from and against any and all liabilities with respect to, or resulting from any delay or omission to pay such taxes.
(e)    Waiver of Consequential Damages, Etc.  To the extent permitted by applicable law, the Loan Parties shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to actual or direct damages) arising out of, in connection with or as a result of, this Agreement or any agreement or instrument contemplated hereby, the transactions contemplated therein, any loan or the use of proceeds thereof.
(f)    Payments. All amounts due under this Section shall be payable promptly and not later than five (5) days after demand therefor.

13.4    Survival.  Each party’s obligations under this Section shall survive the termination of the Loan Documents and payment or full satisfaction of the Obligations under this Agreement.

13.5    Governing Law; Submission to Jurisdiction.  THIS AGREEMENT IS MADE AND DELIVERED IN THE STATE OF LOUISIANA AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS THEREOF WITHOUT REFERENCE TO THE CONFLICTS OF LAW PRINCIPLES THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. BORROWER AND EACH OTHER LOAN PARTY HEREBY IRREVOCABLY SUBMITS AND CONSENTS TO THE EXCLUSIVE PERSONAL JURISDICTION AND VENUE OF 

91

ANY STATE OR FEDERAL COURT IN LOUISIANA LOCATED IN THE SAME STATE JUDICIAL CIRCUIT OR FEDERAL DISTRICT COURT AND DIVISION, AS APPLICABLE, AS THE OFFICE OF AGENT AND AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING DIRECTLY, INDIRECTLY OR OTHERWISE IN CONNECTION WITH, OUT OF, RELATED TO OR FROM THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED ONLY IN ONE OF THE FOREGOING DESCRIBED COURTS. BORROWER AND EACH OTHER LOAN PARTY, FOR THEMSELVES, AND THEIR RESPECTIVE HEIRS, SUCCESSORS AND ITS ASSIGNS, AND FOR ANY PERSON CLAIMING UNDER OR THROUGH ANY OF THEM, HEREBY KNOWINGLY AND VOLUNTARILY WAIVES ANY AND ALL RIGHTS TO HAVE THE JURISDICTION AND VENUE OF ANY LITIGATION ARISING DIRECTLY, INDIRECTLY OR OTHERWISE IN CONNECTION WITH, OUT OF, RELATED TO OR FROM THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY OTHER COURT, AND HEREBY KNOWINGLY AND VOLUNTARILY WAIVES ANY AND ALL RIGHTS TO REMOVE THIS ACTION TO, OR TO TRANSFER, DISMISS, OR CHANGE VENUE TO, ANY OTHER COURT. BORROWER AND EACH OTHER LOAN PARTY FURTHER ACKNOWLEDGES AND AGREES THAT NEITHER AGENT NOR ANY PERSON ACTING ON BEHALF OF AGENT HAS IN ANY WAY AGREED WITH OR REPRESENTED TO BORROWER OR SUCH OTHER LOAN PARTY THAT THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN WAIVED OR WILL NOT BE FULLY ENFORCED BY AGENT.

13.6    Waiver of Jury Trial.  BORROWER KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS BORROWER MAY HAVE TO TRIAL BY JURY IN ANY LEGAL PROCEEDING BASED ON, ARISING OUT OF, OR IN ANY WAY RELATED TO: THIS AGREEMENT; THE OBLIGATIONS; ANY NOTES, LOAN AGREEMENTS, OR ANY OTHER LOAN DOCUMENT OR AGREEMENT EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH ANY OF THE OBLIGATIONS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. THIS JURY WAIVER ALSO APPLIES TO ANY CLAIM, COUNTERCLAIM, CAUSE OF ACTION OR DEMAND ARISING FROM OR RELATED TO (I) ANY COURSE OF CONDUCT, COURSE OF DEALING, OR RELATIONSHIP OF BORROWER, ANY OBLIGOR, OR ANY OTHER PERSON WITH BANK OR ANY EMPLOYEE, OFFICER, DIRECTOR OR ASSIGNEE OF BANK IN CONNECTION WITH THE OBLIGATIONS; OR (II) ANY STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PERSON BY OR ON BEHALF OF BANK TO BORROWER, ANY OBLIGOR, OR ANY OTHER PERSON IN CONNECTION WITH THE OBLIGATIONS, REGARDLESS OF WHETHER SUCH CAUSE OF ACTION ARISES BY CONTRACT, TORT OR OTHERWISE.  BORROWER HEREBY ACKNOWLEDGES THAT THIS WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT TO THE LENDERS IN EXTENDING CREDIT TO THE BORROWER, THAT THE LENDERS WOULD NOT HAVE EXTENDED SUCH CREDIT WITHOUT THIS JURY TRIAL WAIVER, AND THAT BORROWER HAS BEEN REPRESENTED BY AN ATTORNEY OR HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY IN CONNECTION WITH THIS JURY TRIAL WAIVER AND UNDERSTANDS THE LEGAL EFFECT OF THIS WAIVER.  BORROWER FURTHER CERTIFIES THAT NO PERSON HAS REPRESENTED TO IT, EXPRESSLY OR OTHERWISE, THAT AGENT OR ANY OTHER PERSON WOULD NOT, IN THE EVENT OF A LEGAL PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER.

92

13.7    Successors and Assigns.
(a)    Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither Borrower nor any other Loan Party may assign or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations under this Agreement except (i) to an assignee in accordance with the provisions of Section 13.7(b), (ii) by way of participation in accordance with the provisions of Section 13.7(d), or (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 13.7(e) (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in Section 13.7(d) and, to the extent expressly contemplated hereby, the Related Parties of each of Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b)    Assignments by Lenders.  Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that, in each case, any such assignment shall be subject to the following conditions:
(ii)    Minimum Amounts.
(A)    in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and/or the Loans at the time owing to it (in each case with respect to any Facility) or contemporaneous assignments to related Approved  Funds  that  equal  at least  the amount  specified  in Section 13.7(b)(i)(B) in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender, or an Approved Fund, no minimum amount need be assigned; and
(B)    in any case not described in Section 13.7(b)(i)(A), the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $2,500,000 (unless to the Agent, any Lender, an Affiliate of a Lender or an Approved Fund, in which case there shall be no minimum amount required) in the case of any assignment in respect of the Revolving Credit Facility, unless each of Agent and, so long as no Default has occurred and is continuing, Borrower otherwise consent (each such consent not to be unreasonably withheld, conditioned or delayed).

93

(iii)    Proportionate Amounts.  Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned, except that this paragraph (ii) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among separate Facilities (in the event that the Revolving Credit Facility is not the sole credit facility under this Agreement) on a non-pro rata basis.
(iv)    Required Consents.  No consent shall be required for any assignment except to the extent required by Section 13.7(b)(i)(B) and, in addition:
(A)    the consent of Borrower (such consent not to be unreasonably withheld, conditioned or delayed) shall be required unless (1) a Default, has occurred and is continuing at the time of such assignment, or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that, Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to Agent within five (5) Business Days after having received notice thereof;
(B)    the consent of Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of the Revolving Credit Facility or any unfunded Commitments with respect to the Revolving Loan if such assignment is to a Person that is not a Lender with a Commitment in respect of such Facility, an Affiliate of such Lender or an Approved Fund with respect to such Lender; and
(C)    the consent of each LC Issuer shall be required for any assignment in respect of the Revolving Credit Facility.
(v)    Assignment and Assumption.  The parties to each assignment shall execute and deliver to Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; provided that Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment.  The assignee, if it is not a Lender, shall deliver to Agent an Administrative Questionnaire.
(vi)    No Assignment to Certain Persons.  No such assignment shall be made to (A) any Loan Party or any Loan Party’s Affiliates or Subsidiaries or (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender under this Agreement, would constitute any of the foregoing Persons described in this clause (b)(v).
(vii)    No Assignment to Natural Persons.  No such assignment shall be made to a natural Person.
(viii)    Certain Additional Payments.  In connection with any assignment of rights and obligations of any Defaulting Lender under this Agreement, no such assignment shall be effective unless and until, in addition to the other conditions thereto set out herein, the 

94

parties to the assignment shall make such additional payments to Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of Borrower and Agent, the applicable Commitment Percentage of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (A) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to Agent, each LC Issuer and each other Lender under this Agreement (and interest accrued thereon), and (B) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in LCs in accordance with its Commitment Percentage.  Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender under this Agreement shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
Subject to acceptance and recording thereof by Agent pursuant to Section 13.7(c), from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 4.2 and 13.3 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party under this Agreement arising from that Lender’s having been a Defaulting Lender.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 13.7(d).
(c)    Register. Agent, acting solely for this purpose as an agent of Borrower, shall maintain at one of its offices in the United States a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive absent manifest error, and Borrower, Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender under this Agreement for all purposes of this Agreement.  The Register shall be available for inspection by Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(d)    Participations.  Any Lender may at any time, without the consent of, or notice to, Borrower or Agent, sell participations to any Person (other than a natural Person or any Loan Party 

95

or any Loan Party’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that, (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) Borrower, Agent, the LC Issuers and Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 13.3(b) with respect to any payments made by such Lender to its Participant(s).
Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that affects such Participant and required the unanimous consent of the Lenders.  Borrower agrees that each Participant shall be entitled to the benefits of Sections 4.1, 4.2, and 4.5 (subject to the requirements and limitations therein) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 13.7(b); provided that, such Participant (A) agrees to be subject to the provisions of Section 4.7 as if it were an assignee under Section 13.7(b); and (B) shall not be entitled to receive any greater payment under Sections 4.1 or 4.2, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.  Each Lender that sells a participation agrees, at Borrower’s request and expense, to use reasonable efforts to cooperate with Borrower to effectuate the provisions of Section 4.7 with respect to any Participant.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 3.7 as though it were a Lender; provided that such Participant agrees to be subject to Section 3.6 as though it were a Lender.  Each Lender that sells a participation shall, acting solely for this purpose as an agent of Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-l(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, Agent (in its capacity as Agent) shall have no responsibility for maintaining a Participant Register.
(e)    Certain Pledges.  Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such 

96

pledge or assignment shall release such Lender from any of its obligations under this Agreement or substitute any such pledgee or assignee for such Lender as a party hereto.

13.8    Amendments, Consents and Waivers.
(a)    Neither this Agreement nor any provision of this Agreement may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by Borrower and the Required Lenders or, in the case of any other Loan Documents, pursuant to an agreement or agreements in writing entered into by Agent and the Loan Party or Loan Parties that are parties thereto, in each case with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any fees payable under this Agreement, without the written consent of each Lender affected thereby, (iii) reduce the face amount of (or the amount which may be drawn upon) any LC or reduce the rate of interest thereon, or reduce any fees payable under this Agreement, without the written consent of each Lender affected thereby, (iv) postpone the scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable under this Agreement, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (v) alter the pro rata sharing of payments required under this Agreement, without the written consent of each Lender, (vi) change any of the provisions of this Section 13.8 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights under this Agreement or make any determination or grant any consent under this Agreement, without the written consent of each Lender, (vii) release all or substantially all the Guarantors from their Guarantees under their Guaranty except as expressly provided in the Guaranty, or limit the liability of the Guarantors in respect of their Guaranty, without the written consent of each Lender or (viii) release all or substantially all of the Collateral without the written consent of each Lender; provided that, nothing herein shall prohibit Agent from releasing any Collateral, or require the consent of the other Lenders for such release, if such release is expressly permitted under this Agreement; provided that no such agreement shall amend, modify or otherwise affect the rights or duties of Agent, any LC Issuer under this Agreement without the prior written consent of Agent or such LC Issuer, as the case may be.
(b)    Notwithstanding the foregoing, any provision of this Agreement may be amended by an agreement in writing entered into by Borrower, the Required Lenders and Agent (and, if their rights or obligations are affected thereby the LC Issuers) if (i) by the terms of such agreement the Commitment of each Lender not consenting to the amendment provided for therein shall terminate upon the effectiveness of such amendment and (ii) at the time such amendment becomes effective, each Lender not consenting thereto receives payment in full of the principal of and interest accrued on each Loan made by it and all other amounts owing to it or accrued for its account under this Agreement.
(c)    Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent under this Agreement, except 

97

that the Commitment of such Defaulting Lender may not be increased or extended without the consent of such Defaulting Lender.
(d)    No amendment, modification or waiver of, or consent with respect to, any provision of this Agreement or any other Loan Document shall in any event be effective unless the same shall be in writing and signed and delivered by the Required Lenders, and then any such amendment, modification, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

13.9    Limitation of Liability.  Neither Agent, any Lender nor any affiliate, officer, director, employee, attorney, or agent of such Person shall have any liability with respect to, and Borrower hereby waives, releases, and agrees not to sue any of them upon, any claim for any special, indirect, incidental, or consequential damages suffered or incurred by Borrower in connection with, arising out of, or in any way related to, this Agreement or any of the other Loan Documents, or any of the transactions contemplated by this Agreement or any of the other Loan Documents.  Borrower hereby waives, releases, and agrees not to sue Agent, any Lender or any of such Person’s Affiliates, officers, directors, employees, attorneys, or agents for punitive damages in respect of any claim in connection with, arising out of, or in any way related to, this Agreement or any of the other Loan Documents, or any of the transactions contemplated by this Agreement or any of the other Loan Documents.

13.10    Survival of Indemnification and Representation and Warranties.
(a)          Survival of Indemnification.  All indemnities set out herein shall survive the execution and delivery of this Agreement, the making of the Loans, the repayment of the Loans and the other Obligations and the termination of the Commitments under this Agreement.
(b)    Survival of Representations and Warranties.  All representations and warranties made under this Agreement and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been or will be relied upon by Agent and each Lender, regardless of any investigation made by Agent or any Lender or on their behalf and notwithstanding that Agent or any Lender may have had notice or knowledge of any Default or Potential Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Commitment remains in effect or any Loan, LC, or any other Obligation under this Agreement shall remain unpaid or unsatisfied.
(c)    Survival of Yield Protection Provisions.  The provisions of Article IV shall survive and shall continue in full force and effect as long as any Commitment remains in effect or any Loan, LC, or any other Obligation under this Agreement shall remain unpaid or unsatisfied.

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

13.12    Foreign Lender Reporting Requirements.  If any Foreign Lender becomes a party to this Agreement, such Lender will deliver to Borrower and Agent such documents and forms related to such status as Borrower or Agent may require.

13.13    Document Imaging.  Borrower understands and agrees that (a) Agent’s and one or more Lender’s document retention policy involves (or may involve) the imaging of executed loan documents and the destruction of the paper originals, and (b) Borrower waives any right that it may have to claim that the imaged copies of the Loan Documents are not originals.

13.14    Counterparts; Integration; Effectiveness; Electronic Execution.
(a)    Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement and the other Loan Documents, and any separate letter agreements with respect to fees payable to Agent, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Article VI, this Agreement shall become effective when it shall have been executed by Agent and when Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”’) format shall be effective as delivery of a manually executed counterpart of this Agreement.
(b)    Electronic Execution of Assignments.  The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

13.15    Treatment of Certain Information; Confidentiality
(a)    Each of Agent, the Lenders and the LC Issuers agree to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its Affiliates and to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (ii) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners); (iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process; (iv) to any other party hereto; (v) in connection with the exercise of any remedies under this Agreement, under any other Loan Document 

98

or any Secured Hedge Agreement or Secured Cash Management Agreement, or any action or proceeding relating to this Agreement, any other Loan Document or any Secured Hedge Agreement or Secured Cash Management Agreement, or the enforcement of rights under this Agreement or thereunder; (vi) subject to an agreement containing provisions substantially the same as those of this Section, to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement, or (B) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to Borrower and its obligations, this Agreement or payments under this Agreement; (vii) on a confidential basis to (A) any rating agency in connection with rating Borrower or their Subsidiaries or the Facilities or (B) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Facilities; (viii) with the consent of Borrower; or (ix) to the extent such Information (A) becomes publicly available other than as a result of a breach of this Section, or (B) becomes available to Agent, any Lender, any LC Issuer or any of their respective Affiliates on a non-confidential basis from a source other than Borrower who, insofar as not otherwise known to them, is not prohibited from transmitting the information.
(b)    For purposes of this Section, “Information” means all information received from Borrower or any of their Subsidiaries relating to Borrower or any of their Subsidiaries or any of their respective businesses, other than any such information that is available to Agent, any Lender or any LC Issuer on a nonconfidential basis prior to disclosure by Borrower or any of their Subsidiaries; provided that, in the case of information received from Borrower or any of their Subsidiaries after the date hereof, such information is clearly identified at the time of delivery as confidential or consists of financial and other reports required to be submitted under Section 8.1 hereof. Any Person required to maintain the confidentiality of Information as provided in this Section 13.15 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

13.16    ENTIRE AGREEMENT.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO.  THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
[Signatures appear on the following pages.]

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.
BORROWER:

99

GULF ISLAND FABRICATION, INC., a Louisiana corporation

	
		
	By:
	/s/ David S. Schorlemer

	 
	Name: David S. Schorlemer

	 
	Title: Executive Vice President

	 
	 

    

1

ADMINISTRATIVE AGENT:

WHITNEY BANK,
a Mississippi state chartered bank, as Administrative Agent

By:  /s/ Josh Jones    
Name:  Josh Jones
Title:    Senior Vice President

LC ISSUER:

WHITNEY BANK,
a Mississippi state chartered bank, as an LC Issuer

By:  /s/ Josh Jones    
Name:  Josh Jones
Title:    Senior Vice President

LENDER:

WHITNEY BANK,
a Mississippi state chartered bank, as a Lender 

By: /s/ Josh Jones    
Name:  Josh Jones
Title:    Senior Vice President

Signature Page to Credit Agreement

SCHEDULE 1(a)
Lenders and Commitments

(As of the Closing Date)

	
			
	Lender
	Revolving Commitment
	Revolving Commitment
Percentage

	Whitney Bank
	$40,000,000
	100%

	Total
	$40,000,000
	100%

Schedule 1(a)
                

SCHEDULE 2
Parties, Contact Information and Wiring Instructions

Borrower and other Companies
Gulf Island Fabrication, Inc. 
16225 Park Ten Place, Suite 280
Houston, Texas 77084
Attn:     David S. Schorlemer
Phone:    713-714-6100
E-Mail:  dschorleues@gifinc.com

Borrower’s Wire Instructions
Account Location:  Louisiana
ABA #: 065400153
Account #: 49811478
For credit to:  Gulf Island Fabrication, Inc.

Administrative Agent’s Office
Whitney Bank
7910 Main Street
Houma, Louisiana 70360
Attn:  Joshua Jones
Phone: 985-853-7407
Email: Josh.Jones@hancockwhitney.com

copy to:

Schedule 2

Haynes and Boone, LLP
1221 McKinney, Suite 2100
Houston, Texas  77010
Attn: Neal M. Kaminsky
Phone: (713) 547-2542
Fax: (713) 236-5608
Email: neal.kaminsky@haynesboone.com

Schedule 2

SCHEDULE 7.4
Subsidiaries

Gulf Island, L.L.C., a Louisiana limited liability company – FEIN # 72-1461143
Gulf Island Resources, L.L.C., a Louisiana limited liability company – FEIN  # 26-0270844
Gulf Island Shipyards, LLC, a Louisiana limited liability company- FEIN #81-0862842
Gulf Island Marine Fabricators, LLC, a Louisiana limited liability company  – FEIN # 26-3123425
Dolphin Services, L.L.C., a Louisiana limited liability company - FEIN - # 72-0890896
Dolphin Steel Sales, L.L.C., a Louisiana limited liability company- FEIN #26-3647688
Gulf Marine Fabricators, L.P., a Texas limited partnership- FEIN #20-4153734
Gulf Marine Fabricators Limited Partner, L.L.C., a Louisiana limited liability company FEIN # 72-1147390
Gulf Marine Fabricators General Partner, L.L.C., a Louisiana limited liability company FEIN #72-1147390

With respect to each Company, its principal place of business is 16225 Park Place, Suite 280, Houston, Texas 77084

Schedule 7.4

SCHEDULE 7.7
Ownership of Assets

Owned Real Property

Houma:

	
		
	Owner:
	Gulf Island Marine Fabricators, L.L.C.
Gulf Island, L.L.C.

	Property Address:
	301 Gulf Island Road, Houma, LA 70363

	Description:
	West Yard

	
		
	Owner:
	Donphin Steel Sales, L.L.C.
Gulf Island, L.L.C.

	Property Address:
	583 Thompson Road, Houma, LA 70363

	Description:
	East Yard

	
		
	Owner:
	Gulf Island Fabrication, Inc.

	Property Address:
	567 Thompson Road, Houma, LA 70363

	Description:
	Project Manager Building

	
		
	Owner:
	Gulf Island Fabrication, Inc.

	Property Address:
	702 Thompson Road, Houma, LA 70363

	Description:
	North Yard

	
		
	Owner:
	Dolphin Services, L.L.C.

	Property Address:
	400 Thompson Road, Houma, LA 70363

	Description:
	Original Yard

Schedule 7.7

	
		
	Owner:
	Dolphin Services, L.L.C.

	Property Address:
	459 Thompson Road, Houma, LA 70363

	Description:
	APA property purchased

Aransas Pass:

	
		
	Owner:
	Gulf Marine Fabricators, LP

	Property Address:
	1982 FM 2725, Aransas Pass, TX 78335

	Description:
	North Yard

Ingleside:

	
		
	Owner:
	Gufl Marine Fabricators, LP

	Property Address:
	248 FM 1069 South, Ingleside, TX 78362

	Description:
	South Yard

Schedule 7.7

Leased Real Property:

Lake Charles:

	
		
	Lease Title:
	Assignment and Assumption

	Loan Party:   
	Gulf Island Shipyards, LLC

	Property Address:
	8200 Big Lake Rd., Lake Charles, LA 70605

	Lessor:
	BG LNG Services, LLC (sublessor)

Jennings:

	
		
	Lease Title:
	Assignment and Assumption

	Loan Party:   
	Gulf Island Shipyards, LLC

	Property Address:
	111 Bunge Street, Jennings, LA 70546

	Lessor:
	The Fred B. and Ruth B. Zigler Foundation

Prospect:

	
		
	Lease Title:
	Triple Net Lease

	Loan Party:   
	Earhart Street Properties, L.L.C.

	Property Address:
	3201 Earhart Drive, Houma, LA 70363

	Lessor:
	Earhart Street Properties, L.L.C.

Houston:

	
		
	Lease Title:
	Lease Agreement

	Loan Party:   
	Gulf Island Fabrication, Inc.

	Property Address:
	16225 Park Ten Place, Ste. 280, Houston, TX 77084

	Lessor:
	BRI 1825 Park Ten, LLC

Schedule 7.7

Covington:

	
		
	Lease Title:
	Lease Agreement

	Loan Party:   
	Gulf Island Shipyards, LLC

	Property Address:
	215 N. Columbia St., Covington, LA 70433

	Lessor:
	Columbia Cowar King, LLC

Schedule 7.7

SCHEDULE 9.1
Existing Debt

Existing Debt under that certain Tenth Amended and Restated Credit Agreement dated December 16, 2016 by and among Gulf Island Fabrication, Inc., the guarantors named therein and Whitney Bank and JP Morgan Chase, N.A. (as lenders).

Schedule 9.1

SCHEDULE 9.2
Permitted Liens

	
				
	Debtor
	Jurisdiction & Filing No.
	Filing Date
	Secured Party

	Bluewater Industries LP
Bluewater Industries Holdings, Inc.
Gulf Island, L.L.C.
	Jefferson Parish
26-332383
	5/21/2013
	Exterran Energy Solutions, L.P.
Exterran (UK) Limited

	Gulf Island Marine Fabricators, L.L.C.
	Terrebonne Parish
55-1429550
	6/18/2013
	General Electric Credit Corporation of Tennessee

	Dolphin Services, Inc.
	Orleans Parish
36-113561
	1/2/1997
	First National Bank of Commerce, as Agent
Whitney National Bank

Schedule 9.2

SCHEDULE 9.6
Existing Investments

None. 

Schedule 9.6

EXHIBIT A
REVOLVING CREDIT NOTE    
$40,000,000    Houston, Texas    As of June 9, 2017
FOR VALUE RECEIVED, Gulf Island Fabrication, Inc., a Louisiana corporation (“Borrower”), hereby promises to pay to the order of WHITNEY BANK, a Mississippi state chartered bank or its registered assigns (“Lender”), in accordance with the provisions of the Credit Agreement (as hereinafter defined), the principal amount of the Loan under the Revolving Credit Facility from time to time made by Lender to Borrower under that certain Credit Agreement dated as of the date hereof (as amended, restated, or supplemented from time to time, the “Credit Agreement”), among Borrower, the Lenders from time to time party thereto, and Whitney Bank, a Mississippi state chartered bank, as Administrative Agent (in such capacity, “Agent”) for itself and the other Lenders.  Capitalized terms used but not defined herein shall have the meanings given them in the Credit Agreement.
Borrower promises to pay interest on the unpaid principal amount of each Loan under the Revolving Credit Facility from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Credit Agreement.  All payments of principal and interest shall be made to Agent for the account of Lender in Dollars in immediately available funds at the Agent’s Office.  If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Credit Agreement.
This Revolving Credit Note is one of the Revolving Credit Notes referred to in the Credit Agreement, is entitled to the benefits thereof, and may be prepaid in whole or in part subject to the terms and conditions provided therein.  This Revolving Credit Note is also entitled to the benefits of each Guaranty and is secured by the Collateral.  Upon the occurrence and continuation of one or more Defaults specified in the Credit Agreement, all amounts then remaining unpaid on this Revolving Credit Note shall become, or may be declared to be, immediately due and payable as provided in the Credit Agreement.  Loans made by Lender under the Revolving Credit Facility shall be evidenced by one or more loan accounts or records maintained by Lender in the ordinary course of business.  Lender may also attach schedules to this Revolving Credit Note and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.
Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Revolving Credit Note.
THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

[Signature is on the following page.]

Schedule 9.6

IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed by its duly authorized undersigned officer effective as of the date first written above.
BORROWER:

GULF ISLAND FABRICATION, INC., a Louisiana corporation

	
		
	By:
	 

	 
	 

	 
	 

	 
	 

Schedule 9.6

EXHIBIT B-1
BORROWING REQUEST 
[______], 2017
Whitney Bank, as Agent 
7910 Main Street
Houma, Louisiana 70360 
Attn: [  ] 

Reference is made to the Credit Agreement dated as of June 9, 2017 (as amended, supplemented or restated from time to time, the “Credit Agreement”), among the undersigned, as borrower, the lenders from time to time party thereto (each a “Lender”, and collectively, the “Lenders”), and Whitney Bank, a Mississippi state chartered bank, as Administrative Agent for itself and the other Lenders.  Capitalized terms used but not defined in this Borrowing Request shall have the meanings given such terms in the Credit Agreement.  The undersigned hereby gives you notice pursuant to Section 2.2 of the Credit Agreement that it requests a Revolving Loan under the Credit Agreement on the following terms:
(A)    Loan Date (a Business Day)         
(B)    Principal Amount of Loan*        
(C)    LIBOR Loan or Base Rate Loan        
(D)    For LIBOR Loans, Interest Period 
and the last day thereof        

Borrower hereby certifies that the following statements are true and correct on the date this Borrowing Request, and will be true and correct on the Loan Date specified above after giving effect to such Loan:  (a) all of the representations and warranties in the Loan Documents are true and correct in all material respects (except to the extent that they speak to a specific date); (b) no Material Adverse Event has occurred; and (c) no Default or Potential Default exists. 

[Signature is on the following page.]

Schedule 9.6

Very truly yours,

BORROWER:

GULF ISLAND FABRICATION, INC., a Louisiana corporation

	
		
	By:
	 

	 
	 

	 
	 

	 
	 

Exhibit B-1 – Page 2

EXHIBIT B-2
CONVERSION/CONTINUATION REQUEST
Whitney Bank, as Agent 
7910 Main Street
Houma, Louisiana 70360 
Attn: [  ] 

Reference is made to the Credit Agreement dated as of June 9, 2017 (as amended, restated, or supplemented from time to time, the “Credit Agreement”), among Gulf Island Fabrication, Inc., a Louisiana corporation (“Borrower”), the lenders from time to time party thereto (each a “Lender”, and collectively, the “Lenders”), and Whitney Bank, a Mississippi state chartered bank, as Administrative Agent for itself and the other Lenders.  Capitalized terms used but not defined in this Conversion/Continuation Notice shall have the meanings given such terms in the Credit Agreement.   Pursuant to Section 2.4 of the Credit Agreement, Borrower elects: 
(a)     to Convert a Loan from one Type to another Type on the following terms:
    
(A)    Date of Conversion or last day of applicable 
Interest Period (a Business Day)        
(B)    Principal Amount* and Type** of existing 
        Loan being Converted        
(C)    New Type of Loan selected**         
    

(b)    to Continue a LIBOR Loan on the following terms:
(A)    Principal Amount* of LIBOR Loan being Continued         
    (B)    Last day of existing Interest Period         
    (C)    Interest Period selected and the last day thereof***        

Exhibit B-2 – Page 1

EXHIBIT C
COMPLIANCE CERTIFICATE
FOR _________ ENDED ____________, 201___
Whitney Bank, as Agent 
7910 Main Street
Houma, Louisiana 70360 
Attn: [  ] 

Reference is made to the Credit Agreement dated as of June 9, 2017 (as amended, supplemented or restated from time to time, the “Credit Agreement”), among the undersigned, as borrower, the lenders from time to time party thereto (each a “Lender”, and collectively, the “Lenders”), and Whitney Bank, a Mississippi state chartered bank, as Administrative Agent for itself and the other Lenders.  Capitalized terms used but not defined in this Compliance Certificate shall have the meanings given such terms in the Credit Agreement.
This certificate is delivered pursuant to Section 8.1 of the Credit Agreement.
I certify to Agent that I am the __________________* of Borrower on the date hereof and that:
1.    The financial statements attached to this Compliance Certificate were prepared in accordance with GAAP and present fairly, in all material respects, the financial position of the Companies as at the dates indicated and the statements of operations of the Companies for the periods indicated (the “Subject Period”).
2.    During the Subject Period, no Default has occurred which has not been cured or waived (except for any Defaults described on the attached Schedule 1).
3.    Evidence of compliance by the Companies with the financial covenants of Article X of the Credit Agreement as of the last day of the Subject Period is set out on the attached calculation work sheet attached as Schedule 2.

[Signature is on the following page.]

Exhibit C – Page 1

Very truly yours,

BORROWER:

GULF ISLAND FABRICATION, INC., a Louisiana corporation

	
		
	By:
	 

	 
	 

	 
	 

	 
	 

Attachments: 
Schedule 1 – Default Disclosures 
Schedule 2 – Financial Covenant Calculation Worksheet

Exhibit C – Page 2

SCHEDULE 1
Default Disclosures

Schedule 1
Compliance Certificate
Exhibit C – Page 3

SCHEDULE 2
Financial Covenant Calculation Worksheet

Schedule 2
Compliance Certificate
Exhibit C – Page 4

EXHIBIT D
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [the][each] Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each] Assignee identified in item 2 below ([the][each, an] “Assignee”). [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees] hereunder are several and not joint.]  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the respective facilities identified below and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as, [the][an] “Assigned Interest”).  Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.

1.    Assignor[s]:    ______________________________

		
	2.
	Assignee[s]:    ______________________________ for each Assignee, indicate Affiliate of [identify Lender]

		
	3.
	Borrower:  Gulf Island Fabrication, Inc.

Annex 1 – Page 1
Assignment and Assumption

		
	4.
	Administrative Agent: Whitney Bank, as Administrative Agent (in such capacity, “Agent”) under the Credit Agreement.

		
	5.
	Credit Agreement:  Credit Agreement dated as of June 9, 2017, among Gulf Island Fabrication, Inc., a Louisiana corporation (“Borrower”), the lenders from time to time party thereto (each a “Lender”, and collectively, the “Lenders”), and the Administrative Agent for itself and the other Lenders, as the same may be amended, restated, or supplemented from time to time.

6.    Assigned Interest[s]:

	
							
	Assignor[s]
	Assignee[s]
	Facility Assigned
	Aggregate Amount of Loans
for all Lenders
	Amount of Loans
Assigned
	Percentage of 
Assigned
Loans
	CUSIP No.

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	$
	$
	%
	 

	 
	 
	 
	$
	$
	%
	 

	 
	 
	 
	$
	$
	%
	 

[7.    Trade Date:    __________________]
Effective Date: __________________, 201__ [TO BE INSERTED BY AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed:

ASSIGNOR:

[NAME OF ASSIGNOR]

By:                            
Name:                            
Title:                            

Annex 1 – Page 2
Assignment and Assumption

ASSIGNEE:

[NAME OF ASSIGNEE]

By:                            
Name:                            
Title:                            

Annex 1 – Page 3
Assignment and Assumption

[Consented to and] Accepted:

WHITNEY BANK, a Mississippi state chartered bank,
as Administrative Agent

By:                        
Name:
Title:

[Consented to:]

GULF ISLAND FABRICATION, INC., 
a Louisiana corporation

By:                        
Name:
Title:

Annex 1 – Page 4
Assignment and Assumption

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1.    Representations and Warranties.
1.1.    Assignor.  [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2.    Assignee.  [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Section 13.7(b)(v), and (vi) of the Credit Agreement (subject to such consents, if any, as may be required under Section 13.7(b)(iii) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, and (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 8.1 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest (vi) it has independently and without reliance upon Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest and (vii) if it is a foreign lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance upon Agent, [the][any] Assignor 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 decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.
2.    Payments.  From and after the Effective Date, Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date.

Annex 1 – Page 1
Assignment and Assumption

3.    General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.

Annex 1 – Page 2
Assignment and AssumptionExhibit

Exhibit 10.21

FOURTEENTH AMENDMENT TO REVOLVING CREDIT 
AND SECURITY AGREEMENT
This FOURTEENTH AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT (this “Amendment”) is entered into as of March 13, 2017 by and among VIRCO MFG. CORPORATION, a Delaware corporation (“VMC”), VIRCO INC., a Delaware corporation (“Virco”, and together with VMC, “Borrowers” and, each individually, a “Borrower”), the financial institutions from time to time party to the Credit Agreement (as defined below) as lenders (collectively, “Lenders”), and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as administrative agent for Lenders (PNC, in such capacity, “Agent”), with respect to the following:
Borrowers, Lenders and Agent have previously entered into that certain Revolving Credit and Security Agreement, dated as of December 22, 2011 (as amended, restated or otherwise modified from time to time, the “Credit Agreement”). 
Borrowers have requested that Agent and Lenders provide Borrower with an Equipment Loan and make certain other amendments to the Credit Agreement.  Agent and Lenders are agreeable to the Borrowers’ requests but only on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth in the Credit Agreement, the Loan Documents and this Amendment, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
A.Definitions Incorporated.  Initially capitalized terms used but not otherwise defined in this Amendment have the respective meanings set forth in the Credit Agreement, as amended hereby.
B.Amendments to the Credit Agreement.     The Credit Agreement is, as of the Fourteenth Effective Date and subject to the satisfaction of the applicable conditions precedent set forth in Section C of this Amendment, hereby amended as set forth in Exhibit A, with all revisions to the Credit Agreement reflected in Exhibit A in redlined format.  The amendments to the Credit Agreement and addition to the exhibits to the Credit Agreement are limited to the extent specifically set forth above and no other terms, covenants or provisions of the Credit Agreement, as applicable, are intended to be affected hereby.
C.Conditions Precedent.  The obligations of Agent and Lenders hereunder, and this Amendment, will be effective on the date (the “Fourteenth Amendment Effective Date”) of satisfaction of each of the following conditions precedent, each in a manner in form and substance acceptable to Agent:
1.Amendment.  Borrowers shall have delivered to Agent an executed original of this Amendment;
2.Equipment Note.  Borrower shall have delivered to Agent an executed original of the Equipment Note in form attached hereto as Exhibit B; 
3.Amendment to Fee Letter.  Borrower shall have delivered to Agent an executed original of the First Amendment to the Fee Letter.
4.Flood Hazard Determinations.  Agent shall have received flood hazard determinations acceptable to Agent for all Real Property described in a Mortgage; 
5.Resolutions.  Borrower shall have delivered to Agent executed corporate resolutions from each Borrower authorizing the terms of the Amendment; 
6.Representations and Warranties.  The representations and warranties contained herein and in the Credit Agreement shall be true and correct in all material respects as of the date hereof as if made on the date hereof, except for such representations and warranties limited by their terms to a specific date, in which case each such representation and warranty shall be true and correct in all material respects as of such specific date;
7.No Default.  After giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing;

8.Fee.    Borrowers shall have delivered to Agent in immediately available funds an amendment fee in the amount of $12,500; 
9.Real Estate.  At the expense of Borrowers, Borrowers will cooperate with Agent by entering into one or more  amendments to the real estate mortgages/deeds of trust encumbering the real property in Arkansas to increase the principal amount of the encumbrances to $52,500,000 and cause (a) such amendments to be recorded in the real estate records within ninety days of the date hereof and (b) the endorsement of the title policies  to reflect the amendments; and
10.Other.  All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated hereby shall be satisfactory in form and substance to Agent and its counsel.
D.Representations and Warranties.  To induce Lenders and Agent to enter into this Amendment, each Borrower represents and warrants to Lenders and Agent as of the date hereof as follows:
1.Such Borrower has full power, authority and legal right to enter into this Amendment and to perform all its respective Obligations hereunder.  This Amendment has been duly executed and delivered by such Borrower and the Credit Agreement, as amended by this Amendment constitutes the legal, valid and binding obligation of such Borrower enforceable in accordance with its terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally.  The execution, delivery and performance of this Amendment (i) are within such Borrower’s powers, have been duly authorized by all necessary company action, are not in contravention of law or the terms of such Borrower’s by-laws, certificate of incorporation, or other applicable documents relating to such Borrower’s formation or to the conduct of such Borrower’s business or of any material agreement or undertaking to which such Borrower is a party or by which such Borrower is bound, (ii) will not conflict with or violate any law or regulation, or any judgment, order, writ, injunction or decree of any court or Governmental Body, (iii) will not require the Consent of any Governmental Body or any other Person, except those Consents which will have been duly obtained, made or compiled prior to date hereof and which are in full force and effect, and (iv) will not conflict with, nor result in any breach in any of the provisions of or constitute a default under or result in the creation of any Lien except Permitted Encumbrances upon any asset of such Borrower under the provisions of any material agreement, charter document, instrument, by-law or other instrument to which such Borrower is a party or by which it or its property is a party or by which it may be bound.
2.After giving effect to this Amendment, the representations and warranties contained in the Credit Agreement are true and correct in all material respects except to the extent any such representation or warranty is expressly stated to have been made as of a specific date, in which case each such representation and warranty is true and correct in all material respects as of such specific date, and no Default or Event of Default has occurred and is continuing.
E.Reaffirmation.  Except as specifically modified by this Amendment, the Credit Agreement and the other Loan Documents remain in full force and effect in accordance with their respective terms and are hereby ratified, reaffirmed and confirmed by Borrowers.
F.Events of Default.  Any failure to comply with the terms of this Amendment will constitute an Event of Default under the Credit Agreement.
G.Integration.  This Amendment, together with the Credit Agreement and the Loan Documents, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof.
H.Severability.  If any part of this Amendment is contrary to, prohibited by, or deemed invalid under Applicable Laws, such provision shall be inapplicable and deemed omitted to the extent so contrary, prohibited or invalid, but the remainder hereof shall not be invalidated thereby and shall be given effect so far as possible.
I.Submission of Amendment.  The submission of this Amendment to the parties or their agents or attorneys for review or signature does not constitute a commitment by Agent or Lenders to amend or otherwise modify any of the provisions of the Credit Agreement and this Amendment shall have no binding force or effect until the Fourteenth Amendment Effective Date.
J.Counterparts; Facsimile Signatures.  This Amendment may be executed in any number of and by different parties hereto on separate counterparts, all of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement.  Any signature delivered by a party by facsimile transmission shall be deemed to be an original signature hereto.
K.Governing Law.  This Amendment is a Loan Document and is governed by the Applicable Law 

pertaining in the State of New York, other than those conflict of law provisions that would defer to the substantive laws of another jurisdiction.  This governing law election has been made by the parties in reliance on, among other things,  Section 5-1401 of the General Obligations Law of the State of New York, as amended (as and to the extent applicable), and other Applicable Law.
L.Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of Borrowers, Lenders, Agent, and all future holders of the Obligations and their respective successors and assigns, except that no Borrower may assign or transfer any of its rights or obligations under this Amendment without the prior written consent of Agent.
M.Attorneys’ Fees; Costs.  Borrowers agree to promptly pay, upon written demand, all reasonable and documented attorneys’ fees and costs incurred in connection with the negotiation, documentation and execution of this Amendment.  If any legal action or proceeding shall be commenced at any time by any party to this Amendment in connection with its interpretation or enforcement, the prevailing party or parties in such action or proceeding shall be entitled to reimbursement of its reasonable attorneys’ fees and costs in connection therewith, in addition to all other relief to which the prevailing party or parties may be entitled.
N.Jury Trial Waiver.  To the extent not prohibited by applicable law, each party to this Amendment hereby expressly waives any right to trial by jury of any claim, demand, action, or cause of action 1. arising under this Amendment or any other instrument, document, or agreement executed or delivered in connection herewith, or 2. in any way connected with or related or incidental to the dealings of the parties hereto or any of them with respect to this Amendment or any other instrument, document, or agreement executed or delivered in connection herewith, or the transactions related hereto or thereto in each case whether now existing or hereafter arising, and whether sounding in contract or tort or otherwise and each party hereto hereby consents that any such claim, demand, action, or cause of action shall be decided by court trial without a jury, and that any party to this Amendment may file an original counterpart or a copy of this Section with any court as written evidence of the consents of the parties hereto to the waiver of their right to trial by jury.  Without limiting the applicability of any other provision of the Credit Agreement, the terms of Article XII of the Credit Agreement, INCLUDING WITHOUT LIMITATION SECTION 12.3, shall apply to this Amendment. 
O.Total Agreement.  This Amendment, the Credit Agreement, and the other Loan Documents contain the entire understanding among Borrowers, Lenders and Agent and supersede all prior agreements and understandings, if any, relating to the subject matter hereof. Any promises, representations, warranties, or guarantees not herein contained and hereinafter made have no force and effect unless in writing, signed by Borrowers’ and Agent’s respective officers.  Neither this Amendment nor any portion or provisions hereof may be changed, modified, amended, waived, supplemented, discharged, cancelled, or terminated orally or by any course of dealing, or in any manner other than by an agreement in writing, signed by the party to be charged.  Each Borrower acknowledges that it has been advised by counsel in connection with the execution of this Amendment and the other Loan Documents and is not relying upon oral representations or statements inconsistent with the terms and provisions of this Amendment.
[Remainder of Page Intentionally Left Blank]Signature Page to Fourteenth Amendment to Revolving Credit and Security Agreement [Virco]
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the date first written above.
VIRCO MFG. CORPORATION,
a Delaware corporation, as a Borrower
By:    
		
	Name:
	Robert E. Dose

		
	Title:
	Vice President

VIRCO INC.,

a Delaware corporation, as a Borrower
By:    
		
	Name:
	Robert E. Dose

		
	Title:
	Vice President

Signature Page to Fourteenth Amendment to Revolving Credit and Security Agreement [Virco]
PNC BANK, NATIONAL ASSOCIATION,
as Lender and as Agent
By:    
		
	Name:
	Jeanette Vandenbergh

Title:        Senior Vice President

84751049
Exhibit A

53708450_1416
This CONFORMED COPY includes:  

First Amendment to Revolving Credit and Security Agreement dated June 15, 2012;
Second Amendment to Revolving Credit and Security Agreement dated July 27, 2012;
Third Amendment to Revolving Credit and Security Agreement dated September 12, 2012;
Fourth Amendment to Revolving Credit and Security Agreement dated December 6, 2012; 
Fifth Amendment to Revolving Credit and Security Agreement dated March 1, 2013; 
Sixth Amendment to Revolving Credit and Security Agreement dated January 9, 2014; 
Seventh Amendment to Revolving Credit and Security Agreement dated April 15, 2014; 
Eighth Amendment to Revolving Credit and Security Agreement dated August 18, 2014; and
Ninth Amendment to Revolving Credit and Security Agreement dated March 31, 2015.2015;
Tenth Amendment to Revolving Credit and Security Agreement dated June 18, 2015;
Eleventh Amendment to Revolving Credit and Security Agreement dated December 1, 2015;
Twelfth Amendment to Revolving Credit and Security Agreement dated April 4, 2016;
Thirteenth Amendment to Revolving Credit and Security Agreement dated October 27, 2016; and
Fourteenth Amendment to Revolving Credit and Security Agreement dated March 13, 2017

REVOLVING CREDIT
AND
SECURITY AGREEMENT
PNC BANK, NATIONAL ASSOCIATION
(AS LENDER AND AS AGENT)
WITH
VIRCO MFG. CORPORATION,
a Delaware corporation
 
AND

VIRCO INC.,
a Delaware corporation
(AS BORROWERS)
THE OTHER BORROWERS FROM TIME TO TIME PARTY HERETO

AND

THE GUARANTORS FROM TIME TO TIME PARTY HERETO

December 22, 2011
TABLE OF CONTENTS
(continued)
Page
53708450_1416
		
	ARTICLE I
	 DEFINITIONS    1

		
	1.1
	Accounting Terms    1

		
	1.2
	General Terms    1

		
	1.3
	Uniform Commercial Code Terms    2426

		
	1.4
	Certain Matters of Construction    2426

		
	ARTICLE II
	 ADVANCES, PAYMENTS    2527

		
	2.1
	Revolving Advances    2527

		
	2.2
	Procedure for Revolving Advances Borrowing    26Advance Borrowings    28

		
	2.2X
	Equipment Loans    30

		
	2.3
	Disbursement of Advance Proceeds    2831

		
	2.4
	Maximum Advances    2931

		
	2.5
	Repayment of Advances    2931

		
	2.6
	Repayment of Excess Advances    2932

		
	2.7
	Statement of Account    2932

		
	2.8
	Letters of Credit    3032

		
	2.9
	Issuance of Letters of Credit    3032

		
	2.10
	Requirements For Issuance of Letters of Credit    3033

		
	2.11
	Disbursements, Reimbursement    3133

		
	2.12
	Repayment of Participation Advances    3234

		
	2.13
	Documentation    3235

		
	2.14
	Determination to Honor Drawing Request    3335

		
	2.15
	Nature of Participation and Reimbursement Obligations    3335

		
	2.16
	Indemnity    3437

		
	2.17
	Liability for Acts and Omissions    3437

		
	2.18
	Additional Payments    3538

		
	2.19
	Manner of Borrowing and Payment    3538

		
	2.20
	Mandatory Prepayments    3739

		
	2.21
	Use of Proceeds    3740

		
	2.22
	Defaulting Lender    3840

		
	ARTICLE III
	 INTEREST AND FEES    3941

		
	3.1
	Interest    3941

		
	3.2
	Letter of Credit Fees    3941

		
	3.3
	[Intentionally Omitted.]    4042

		
	3.4
	Fee Letter    4042

		
	3.5
	Computation of Interest and Fees    4042

		
	3.6
	Maximum Charges    4042

		
	3.7
	Increased Costs    4043

		
	3.8
	Basis for Determining Interest Rate Inadequate or Unfair    4143

		
	3.9
	Capital Adequacy    4244

		
	3.10
	Gross Up for Taxes    4244

		
	3.11
	Withholding Tax Exemption    4245

		
	3.12
	Replacement of Lenders    4345

		
	ARTICLE IV
	 COLLATERAL:  GENERAL TERMS    4446

		
	4.1
	Security Interest in the Collateral    4446

		
	4.2
	Perfection of Security Interest    4446

		
	4.3
	Disposition of Collateral    4547

		
	4.4
	Preservation of Collateral    4547

		
	4.5
	Ownership of Collateral    4548

		
	4.6
	Defense of Secured Parties’ Interests    4648

		
	4.7
	Books and Records    4649

		
	4.8
	Financial Disclosure    4749

		
	4.9
	Compliance with Laws    4749

		
	4.10
	Inspections and Appraisals    4749

		
	4.11
	Insurance    4749

		
	4.12
	Failure to Pay Insurance    4850

		
	4.13
	Payment of Taxes    4851

		
	4.14
	Payment of Leasehold Obligations    4951

		
	4.15
	Receivables    4951

		
	4.16
	Inventory    5153

		
	4.17
	Maintenance of Equipment    5153

		
	4.18
	Exculpation of Liability    5154

		
	4.19
	Environmental Matters    5254

		
	4.20
	Financing Statements    5456

		
	4.21
	Deposit and Investment Accounts    5456

		
	4.22
	New and Newly Registered Intellectual Property    5456

		
	ARTICLE V
	 REPRESENTATIONS AND WARRANTIES    5557

		
	5.1
	Authority    5557

		
	5.2
	Formation and Qualification    5557

		
	5.3
	Survival of Representations and Warranties    5557

		
	5.4
	Tax Returns    5658

		
	5.5
	Financial Statements    5658

		
	5.6
	Entity Names    5658

		
	5.7
	O.S.H.A 57 and Environmental Compliance    58

		
	5.8
	Solvency; No Litigation, Violation, Indebtedness or Default    5759

		
	5.9
	Patents, Trademarks, Copyrights and Licenses    5860

		
	5.10
	Licenses and Permits    5860

		
	5.11
	Default of Indebtedness; No Default    5960

		
	5.12
	No Default    5961

		
	5.13
	No Burdensome Restrictions    5961

		
	5.14
	No Labor Disputes    5961

		
	5.15
	Margin Regulations    5961

		
	5.16
	Investment Company Act    5961

		
	5.17
	Disclosure    5961

		
	5.18
	Swaps    6061

		
	5.19
	Conflicting Agreements    6062

		
	5.20
	Application of Certain Laws and Regulations    6062

		
	5.21
	Business and Property of Credit Parties    6062

		
	5.22
	Section 20 Subsidiaries    6062

		
	5.23
	Anti-Terrorism Laws    6062

		
	5.24
	Trading with the Enemy    6163

		
	5.25
	Ricoh Financing Statement    6163

		
	5.26
	Commercial Tort Claims    6163

		
	ARTICLE VI
	 AFFIRMATIVE COVENANTS    6163

		
	6.1
	Payment of Fees    6163

		
	6.2
	Conduct of Business and Maintenance of Existence and Assets    6163

		
	6.3
	Violations    6263

		
	6.4
	Government Receivables    6264

		
	6.5
	Financial Covenants    6264

		
	6.6
	Execution of Supplemental Instruments    6365

		
	6.7
	Payment of Indebtedness    6365

		
	6.8
	Standards of Financial Statements    6465

		
	6.9
	Post-Closing Covenants    64[Reserved].    65

		
	ARTICLE VII
	 NEGATIVE COVENANTS    6465

		
	7.1
	Merger, Consolidation, Acquisition and Sale of Assets    65

		
	7.2
	Creation of Liens    6566

		
	7.3
	Guarantees    6566

		
	7.4
	Investments    6566

		
	7.5
	[Intentionally Omitted.]    6667

		
	7.6
	Capital Expenditures    6667

		
	7.7
	Dividends    6667

		
	7.8
	Indebtedness    6768

		
	7.9
	Nature of Business    6768

		
	7.10
	Transactions with Affiliates    6768

		
	7.11
	[Intentionally Omitted.]    6869

		
	7.12
	Subsidiaries    6869

		
	7.13
	Fiscal Year and Accounting Changes    6869

		
	7.14
	Pledge of Credit    6869

		
	7.15
	Amendment of Articles of Incorporation, By-Laws    6869

		
	7.16
	Compliance with ERISA    6869

		
	7.17
	Prepayment of Funded Debt    6970

		
	7.18
	Anti-Terrorism Laws    6970

		
	7.19
	Membership/Partnership Interests    6970

		
	7.20
	Trading with the Enemy Act    6970

		
	7.21
	Clean Down    6970

		
	7.22
	Leases    6970

		
	ARTICLE VIII
	 CONDITIONS PRECEDENT    7071

		
	8.1
	Conditions to Initial Advances    7071

		
	8.2
	Conditions to Each Advance    7374

		
	8.3
	Conditions to Each Equipment Loan    75

		
	ARTICLE IX
	 INFORMATION AS TO CREDIT PARTIES    7475

		
	9.1
	Disclosure of Material Matters    7475

		
	9.2
	Schedules    7475

		
	9.3
	Environmental Reports    7576

		
	9.4
	Litigation    7576

		
	9.5
	Material Occurrences    7576

		
	9.6
	Government Receivables    7677

		
	9.7
	Annual Financial Statements    7677

		
	9.8
	Quarterly Financial Statements    7677

		
	9.9
	Monthly Financial Statements    7677

		
	9.10
	Other Reports    7677

		
	9.11
	Additional Information    7677

		
	9.12
	Projected Operating Budget    7778

		
	9.13
	Variances From Operating Budget    7778

		
	9.14
	Notice of Suits, Adverse Events    7778

		
	9.15
	ERISA Notices and Requests    7778

		
	9.16
	Additional Documents    7879

		
	ARTICLE X
	 EVENTS OF DEFAULT    7879

		
	10.1
	Nonpayment    7879

		
	10.2
	Breach of Representation    7879

		
	10.3
	Noncompliance    7879

		
	10.4
	Judicial Actions    7980

		
	10.5
	Judgments    7980

		
	10.6
	Bankruptcy    7980

		
	10.7
	Inability to Pay    7980

		
	10.8
	Affiliate Actions    7980

		
	10.9
	Lien Priority    7980

		
	10.10
	Cross Default    7980

		
	10.11
	Breach of Guaranty    80

		
	10.12
	Change of Control    8081

		
	10.13
	Invalidity    8081

		
	10.14
	Licenses    8081

		
	10.15
	Seizures    8081

		
	10.16
	Operations    8081

		
	10.17
	Pension Plans    8081

		
	10.18
	Section 6.5 Covenants    81

		
	ARTICLE XI
	 LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT    8182

		
	11.1
	Rights and Remedies    8182

		
	11.2
	Agent’s Discretion    8283

		
	11.3
	Setoff    8283

		
	11.4
	Rights and Remedies not Exclusive    8283

		
	11.5
	Allocation of Payments After Event of Default    83

		
	ARTICLE XII
	 WAIVERS AND JUDICIAL PROCEEDINGS    8384

		
	12.1
	Waiver of Notice    8384

		
	12.2
	Delay    84

		
	12.3
	Jury Waiver; California Judicial Reference    84

		
	ARTICLE XIII
	 EFFECTIVE DATE AND TERMINATION    8687

		
	13.1
	Term    8687

		
	13.2
	Termination    8687

		
	ARTICLE XIV
	 REGARDING AGENT    87

		
	14.1
	Appointment    87

		
	14.2
	Nature of Duties    8788

		
	14.3
	Lack of Reliance on Agent and Resignation    8788

		
	14.4
	Certain Rights of Agent    8889

		
	14.5
	Reliance    8889

		
	14.6
	Notice of Default    8889

		
	14.7
	Indemnification    8889

		
	14.8
	Agent in its Individual Capacity    89

		
	14.9
	Delivery of Documents    8990

		
	14.10
	Borrowers’ Undertaking to Agent    8990

		
	14.11
	No Reliance on Agent’s Customer Identification Program    8990

		
	14.12
	Other Agreements    8990

		
	ARTICLE XV
	 BORROWING AGENCY; GUARANTY    90

		
	15.1
	Borrowing Agency Provisions    90

		
	15.2
	Joint and Several Liability of Borrowers    9091

		
	15.3
	Guaranty    91

		
	15.4
	Waivers and Agreements    93

		
	ARTICLE XVI
	 MISCELLANEOUS    96

		
	16.1
	Governing Law    96

		
	16.2
	Entire Understanding    9697

		
	16.3
	Successors and Assigns; Participations; New Lenders    9899

		
	16.4
	Application of Payments    100101

		
	16.5
	Indemnity    100101

		
	16.6
	Notice    101

		
	16.7
	Survival    102

		
	16.8
	Severability    102

		
	16.9
	Expenses    102

		
	16.10
	Injunctive Relief    102103

		
	16.11
	Consequential Damages    102103

		
	16.12
	Captions    103

		
	16.13
	Counterparts; Facsimile Signatures    103

		
	16.14
	Construction    103

		
	16.15
	Confidentiality; Sharing Information    103

		
	16.16
	Publicity    103104

		
	16.17
	Certifications From Banks and Participants; USA PATRIOT Act    104

vii
53708450_1416

LIST OF EXHIBITS AND SCHEDULES
EXHIBITS 
		
	Exhibit 1.2(a)
	Borrowing Base Certificate

		
	Exhibit 1.2(b)
	Compliance Certificate

		
	Exhibit 2.1(a) 
	Revolving Credit Notes

		
	Exhibit 2.2X
	Equipment Loan Notes

		
	Exhibit 8.1(k)
	Financial Condition Certificate

		
	Exhibit 16.3
	Commitment Transfer Supplement

SCHEDULES
		
	Schedule A
	Notice Addresses

		
	Schedule 1.2 
	Permitted Encumbrances

		
	Schedule 4.5 
	Equipment and Inventory Locations

		
	Schedule 4.15(h)
	Deposit and Investment Accounts

		
	Schedule 4.19
	Real Property

		
	Schedule 5.1
	Consents

		
	Schedule 5.2(a) 
	States of Qualification and Good Standing

		
	Schedule 5.2(b) 
	Subsidiaries

		
	Schedule 5.4
	Federal Tax Identification Number

		
	Schedule 5.6 
	Prior Names

		
	Schedule 5.8(b) 
	Litigation

		
	Schedule 5.8(d) 
	Plans

		
	Schedule 5.9 
	Intellectual Property, Source Code Escrow Agreements

		
	Schedule 5.10 
	Licenses and Permits

		
	Schedule 5.14 
	Labor Disputes

		
	Schedule 5.26
	Commercial Tort Claims

		
	Schedule 7.3 
	Guarantees

Schedule 7.4    Investments
Schedule 7.8     Indebtedness

100
53708450_1416

53708450_1416
REVOLVING CREDIT
AND
SECURITY AGREEMENT
This REVOLVING CREDIT AND SECURITY AGREEMENT dated as of December 22, 2011, among VIRCO MFG. CORPORATION, a corporation organized under the laws of the State of Delaware (“VMC”), VIRCO INC., a corporation organized under the laws of the State of Delaware (“Virco” and, together with VMC and each Person that becomes a party hereto pursuant to Section 7.12 as a borrower, each a “Borrower”, and collectively “Borrowers”), the Persons from time to time party hereto pursuant to Section 7.12 as a guarantor (each a “Guarantor”, and collectively “Guarantors”), the financial institutions that are now or that hereafter become a party hereto (collectively, “Lenders” and individually a “Lender”) and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as administrative agent for Lenders (PNC, in such capacity, “Agent”).

IN CONSIDERATION of the mutual covenants and undertakings herein contained, the parties hereto hereby agree as follows:
		
	ARTICLE I
	

ARTICLE II

ARTICLE IIIDEFINITIONS
1.Accounting Terms
.  As used in this Agreement, the other Loan Documents or any certificate, report or other document made or delivered pursuant to this Agreement, accounting terms not defined in Section 1.2 or elsewhere in this Agreement and accounting terms partly defined in Section 1.2 to the extent not defined, have the respective meanings given to them under GAAP; provided, however, that whenever such accounting terms are used for the purposes of determining compliance with financial covenants in this Agreement, such accounting terms shall be defined in accordance with GAAP as applied in preparation of the audited financial statements of Borrowers for the fiscal year ended January 31, 2011.  Any reference herein to GAAP “as consistently applied” shall mean GAAP as consistently applied after giving effect to any changes in GAAP, provided, that any financial statements delivered pursuant to Sections 9.7, 9.8 or 9.9 that are prepared after any such change in GAAP shall be accompanied by a reconciliation between such financial statements after giving effect to such change in GAAP and such financial statements without giving effect to such change GAAP.  Notwithstanding the foregoing, if at any time any change in GAAP would affect the computation of any financial covenant or requirement set forth in any Loan Document, and either Borrowing Agent, Agent, or Required Lenders so requests, Agent and Borrowing Agent shall negotiate in good faith to amend such covenant or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of Agent) it being understood that a Default or Event of Default under Section 6.5 shall not occur solely as a result of a change in GAAP to the extent such Default or Event of Default would not have occurred absent such change in GAAP; provided that, until so amended, (a) such covenant or requirement will continue to be determined in accordance with GAAP prior to such change, and (b) Borrowers shall provide to Agent financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such covenant or requirement made both before and after giving effect to such change in GAAP.
2.General Terms
.  For purposes of this Agreement the following terms have the following meanings:
“Accountants” has the meaning set forth in Section 9.7.
“Advance Rates” means, collectively, the Receivables Advance Rate and the Inventory Advance Rate.
“Advances” means and includes the Revolving Advances and, the Letters of Credit, and the Equipment Loans.
“Affiliate” means, with respect to any Person (the “subject Person”), (a) any Person that, directly or indirectly, is in control of, is controlled by, or is under common control with the subject Person, or (b) any Person who is a director, managing member, general partner, or officer (i) of the subject Person, (ii) of any Subsidiary of the subject Person, or (iii) of any Person described in clause (a) preceding.  For purposes of this definition, “control” of a Person means the power, direct or indirect, (y) to vote 10.0% or more of the Equity Interests having ordinary voting power for the election of directors of such Person or other Persons performing similar functions for any such Person or (z) to direct or cause the direction of the management and policies of such Person whether by ownership of Equity Interests, contract, or otherwise. 
“Agent” has the meaning set forth in the preamble to this Agreement and shall include its successors and assigns.
“Agreement” means this Revolving Credit Loan and Security Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Alternate Base Rate” means, for any day, a rate per annum equal to the highest of (a) the Base Rate in effect on such day, (b) the Federal Funds Open Rate in effect on such day plus 1/2 of 1% and (c) the Eurodollar Rate for an Interest period of one month plus 1%.
“Anti-Terrorism Laws” means any Applicable Laws relating to terrorism or money laundering, including Executive Order No. 13224, the USA PATRIOT Act, the Applicable Laws comprising or implementing the Bank Secrecy Act, and the Applicable Laws administered by the United States Treasury Department’s Office of Foreign Asset Control (as any of the foregoing Applicable Laws may from time to time be amended, renewed, extended, or replaced).
“Applicable Law” means all laws (including Environmental Laws), rules and regulations applicable to the Person, conduct, transaction, covenant, Loan Document or contract in question, including all applicable common law and equitable principles; all provisions of all applicable state, federal and foreign constitutions, statutes, rules, regulations, treaties, directives and orders of any Governmental Body, and all orders, judgments and decrees of all courts and arbitrators. 
“Applicable Margin” shall mean, as of any date of determination, the number of percentage points set forth below opposite the level then in effect, it being understood that the Applicable Margin for (i) LoansAdvances that are Domestic Rate Loans shall be the percentage set forth under the column “Domestic Rate Loans” and (ii) LoansAdvances that are Eurodollar Rate Loans shall be the percentage set forth under the column “Eurodollar Rate Loans”:
	
						
	Level
	EBITDA

(measured fiscal year to date)
	Domestic Rate Loans
	Eurodollar Rate Loans

	 
	 
	Revolving Advances
	EquipmentLoans
	Revolving Advances
	EquipmentLoans

	I
	Less than or equal to ($4,700,000)
	1.50
	1.00
	2.50
	2.00

	II
	Greater than ($4,700,000), but less than or equal to ($2,800,000)
	1.25
	1.00
	2.25
	2.00

	III
	Greater than ($2,800,000), but less than or equal to $7,400,000
	1.00
	1.00
	2.00
	2.00

	IV
	Greater than $7,400,000, but less than or equal to $10,500,000
	0.75
	1.00
	1.75
	2.00

	V
	Greater than $10,500,000
	0.50
	1.00
	1.50
	2.00

Each Applicable Margin set forth above shall be adjusted, to the extent applicable, five (5) Business Days after Parent shall have delivered Agent copies of its annual or quarterly financial statements, together with a Compliance Certificate, in each case, pursuant to Section 9.7 or 9.8 (containing the calculation of the EBITDA for the applicable measurement period set forth therein).  Prior to the delivery of such financial statements and Compliance Certificate with respect to the fiscal quarter ending on January 31, 2012, the Applicable Margins shall be set at Level III.  If VMC shall fail to deliver such financial statements and Compliance Certificate within the time periods set forth for such delivery in Section 9.7 or 9.8, as applicable, Agent may, if it elects by notice to the Borrowing Agent (provided, that no notice shall be required if an Event of Default has occurred under Section 10.6 or an event described in Section 11.1(a)(iii) has occurred), adjust the Applicable Margins to the highest (i.e., most expensive) Level over the then current Level until five (5) Business Days following the delivery of such financial statements and Compliance Certificate, following which the Applicable Margin shall thereafter be determined in accordance with the information set forth in such Compliance Certificate.  In the event Agent disputes the calculations or results of any such certificate, the Applicable Margin shall not be adjusted until such dispute is resolved.  If Agent reasonably determines that the EBITDA calculation contained in any Compliance Certificate delivered pursuant to Section 9.7 or 9.8 hereof was inaccurate at any time prior to the payment in full of all of other Obligations and such inaccuracy, if corrected, would have led to the application 

of a higher Applicable Margin for any period than the Applicable Margin actually applied for such period, then (x) VMC shall promptly deliver to Agent a correct Compliance Certificate for such period, (y) the Applicable Margins shall be determined as if the correct Applicable Margins (as set forth in the table above) were applicable for such period, and (z) Borrowers shall promptly deliver to Agent full payment in respect of the accrued additional interest as a result of such increased Applicable Margin for such period.
“ATS Inventory” means Inventory that constitutes “assemble-to-ship” Inventory.
“Authority” has the meaning set forth in Section 4.19(d).
“Availability” means (a) the lesser of (i) the Maximum Revolving Advance Amount, minus the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit, or (ii) the Formula Amount, minus (b) the aggregate amount of all outstanding Revolving Advances.
“Base Rate” means the base commercial lending rate of PNC as publicly announced to be in effect from time to time, such rate to be adjusted automatically, without notice, on the effective date of any change in such rate.  This rate of interest is determined from time to time by PNC as a means of pricing some loans to its customers and is neither tied to any external rate of interest or index nor does it necessarily reflect the lowest rate of interest actually charged by PNC to any particular class or category of customers of PNC.
“Bank Products” shall mean any one or more of the following financial products or accommodations extended to any Credit Party or its Subsidiaries by Agent or any Lender or any of Agent’s or any Lender’s respective Affiliates:  (a) credit cards, (b) credit card processing services, (c) debit cards, (d) stored value cards, (e) purchase cards (including so-called “procurement cards” or “P-‐cards”), or (f) any cash management or related services including treasury, depository, return items, overdraft, controlled disbursement, merchant store value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system) and other cash management arrangements.
“Bank Products Obligations” shall mean all obligations, liabilities, reimbursement obligations, fees, or expenses owing by any Credit Party or its Subsidiaries to Agent or any Lender or any of Agent’s or any Lender’s respective Affiliates in respect of Bank Products and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising.
“Blocked Accounts” has the meaning set forth in Section 4.15(h).
“Blocked Account Bank” has the meaning set forth in Section 4.15(h). 
“Blocked Person” has the meaning set forth in Section 5.23(b).
“Borrower” or “Borrowers” has the meaning set forth in the preamble to this Agreement and shall extend to all permitted successors and assigns of such Persons.
“Borrowers on a Consolidated Basis” means the consolidation in accordance with GAAP of the accounts or other items of Borrowers and their respective Subsidiaries.
“Borrowers’ Account” has the meaning set forth in Section 2.7.
“Borrowing Agent” means VMC.
“Borrowing Base Certificate” means a certificate in substantially the form of Exhibit 1.2(a) duly executed by the President, Vice President Finance or Controller of Borrowing Agent and delivered to Agent, appropriately completed, by which such officer shall certify to Agent the Formula Amount and calculation thereof as of the date of such certificate.

“Business Day” means any day other than Saturday or Sunday or a legal holiday on which commercial banks are authorized or required by law to be closed for business in East Brunswick, New Jersey, or Pasadena, California, and, if the applicable Business Day relates to any Eurodollar Rate Loans, such day must also be a day on which dealings are carried on in the London interbank market.
“Capital Expenditures” means expenditures made or liabilities incurred for the acquisition of any fixed assets or improvements, replacements, substitutions or additions thereto that have a useful life of more than one year, including the total principal portion of Capitalized Lease Obligations, which, in accordance with GAAP, would be classified as capital expenditures, excluding, however, any such expenditure (a) constituting leasehold improvement expenditures that are actually paid for or reimbursed by unaffiliated third parties and (b) made to restore, replace or rebuild property to the condition of such property immediately prior to any damage, loss, destruction or condemnation of such property, to the extent such expenditure is (i) not in excess of the amount of insurance proceeds or condemnation awards received in cash by the Credit Parties relating to any such damage, loss, destruction or condemnation and (ii) made within one hundred and eighty (180) days of the date of receipt of such insurance proceeds or condemnation awards.
“Capitalized Lease Obligation” means any Indebtedness of any Credit Party represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.
“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§9601, et seq.
“Change of Control” means an event or series of events by which:
(a)    any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), other than members of the Virtue Family, becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 20% or more of the equity securities of VMC entitled to vote for members of the board of directors or equivalent governing body of VMC on a fully-diluted basis (i.e., taking into account all such securities that such person or group has the right to acquire pursuant to any option right), provided that in no event may the Virtue Family hold more than 45% in the aggregate of such equity securities of VMC; or
(b)    VMC fails to own directly or indirectly 100% of the issued and outstanding Equity Interests of any of its Subsidiaries (other than pursuant to any merger, transaction or other event expressly permitted by Section 7.1).
“Charges” means all taxes, charges, fees, imposts, levies or other assessments, including all net income, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation and property taxes, custom duties, fees, assessments, liens, claims and charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts, imposed by any taxing or other authority, domestic or foreign (including the PBGC or any other Governmental Body, environmental agency or superfund), upon the Collateral or any Credit Party.
“Closing Date” means December 22, 2011.
“Code” means the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, and any successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect.
“Collateral” means and includes all of each Credit Party’s right, title and interest in and to, whether now owned or hereafter acquired and wherever located:

(a)    Receivables;
(b)    Equipment;
(c)    General Intangibles;
(d)    all Inventory;
(e)    all Investment Property;
(f)    all Real Property described in a Mortgage;
(g)    all Subsidiary Stock;
(h)    the Leasehold Interests described in a Mortgage;
(i)    (i) its respective goods and other property including all merchandise returned or rejected by Customers, relating to or securing any of the Receivables; (ii) all of such Credit Party’s rights as a consignor, a consignee, an unpaid vendor, mechanic, artisan, or other lienor, including stoppage in transit, setoff, detinue, replevin, reclamation and repurchase; (iii) all additional amounts due to such Credit Party from any Customer relating to the Receivables; (iv) other property, including warranty claims, relating to any goods securing the Obligations; (v) all of such Credit Party’s contract rights, rights of payment that have been earned under a contract right, instruments (including promissory notes), documents, chattel paper (including electronic chattel paper), warehouse receipts, deposit accounts, letters of credit and money; (vi) all commercial tort claims (whether now existing or hereafter arising); (vii) if and when obtained by such Credit Party, all real and personal property of third parties in which such Credit Party has been granted a lien or security interest as security for the payment or enforcement of Receivables; (viii) all letter of credit rights (whether or not the respective letter of credit is evidenced by a writing); (ix) all supporting obligations; and (x) any other goods, personal property or real property now owned or hereafter acquired in which such Credit Party has expressly granted a security interest or may in the future grant a security interest to Agent hereunder, or in any amendment or supplement hereto or thereto, or under any other agreement between Agent and such Credit Party;
(j)    all of such Credit Party’s ledger sheets, ledger cards, files, correspondence, records, books of account, business papers, computers, computer software (owned by such Credit Party or in which it has an interest), computer programs, tapes, disks and documents relating to clauses (a), (b), (c), (d), (e), (f), (g), (h) or (i) of this definition; and
(k)    all proceeds and products of clauses (a), (b), (c), (d), (e), (f), (g), (h), (i) and (j) of this definition in whatever form, including:  cash, deposit accounts (whether or not comprised solely of proceeds), certificates of deposit, insurance proceeds (including hazard, flood and credit insurance), negotiable instruments and other instruments for the payment of money, chattel paper, security agreements, documents, eminent domain proceeds, condemnation proceeds and tort claim proceeds.
Notwithstanding the foregoing, Collateral shall not include, and no Credit Party shall be deemed to have granted a security interest in:  (A) any rights or interests in any license, contract or agreement to which such Credit Party is a party to the extent, but only to the extent, that such a grant would, under the terms of such license, contract or agreement, result in a breach of the terms of, or constitute a default under, such license, lease, contract or agreement; (B) property owned by such Credit Party that is subject to a purchase money Lien or Capitalized Lease Obligation permitted under this Agreement if the lease, license, contract, property right or agreement to which such Lien is granted prohibits or requires the consent of any Person other than such Credit Party or its Affiliates as a condition to the creation of any other Lien on such property; (C) any voting stock of a Foreign Subsidiary in excess of 65% of all outstanding voting stock of such Foreign Subsidiary; (D) any rights or property, including any intent-to-use trademark applications to the extent that any valid and enforceable law or regulation applicable to such rights or property prohibits the creation of a security interest in such rights or property or would otherwise result in a material loss of rights from the creation of such security interest therein; or (E) any rights or interests in the Leasehold Interest for the leased Real Property of 

the Credit Parties located at 2027 Harpers Way and Torrance, CA 90501, other than in each case of the foregoing clauses (A) and (B), to the extent the terms of any of the foregoing could be rendered ineffective pursuant to 9-406, 9-407 or 9-408 of the UCC or other Applicable Law; provided, that immediately upon the ineffectiveness, lapse or termination of any such restriction, the Collateral shall include, and each Credit Party shall be deemed to have granted a security interest in, all such rights and interests or other assets, as the case may be, as if such provision had never been in effect; and provided, further, that notwithstanding any such restriction, Collateral shall, to the extent such restriction does not by its terms apply thereto, include all rights incident or appurtenant to any such rights or interests and the right to receive all proceeds derived from or in connection with the sale, assignment or transfer of such rights and interests (all of the foregoing to the extent excluded from “Collateral” pursuant to this paragraph being referred to herein as “Excluded Property”).
“Commitment Percentage” of any Lender means the percentage set forth below such Lender’s name on the signature page hereof as same may be adjusted upon any assignment by a Lender pursuant to Section 16.3(c) or 16.3(d).
“Commitment Transfer Supplement” means a document in the form of Exhibit 16.3, properly completed and otherwise in form and substance satisfactory to Agent by which the Purchasing Lender purchases and assumes a portion of the obligation of Lenders to make Advances under this Agreement.
“Compliance Certificate” means a compliance certificate in the form of that attached hereto as Exhibit 1.2(b), appropriately completed and signed by the Vice President Finance, Treasurer or Controller of Borrowing Agent.
“Consents” means all filings, licenses, permits, consents, approvals, authorizations, qualifications and orders of Governmental Bodies and other third parties, domestic or foreign, necessary to carry on the business of the Credit Parties and their Subsidiaries or necessary (including to avoid a conflict or breach under any agreement, instrument, other document, license, permit or other authorization) for the execution, delivery or performance of this Agreement, the other Loan Documents, including any Consents required under all applicable federal, state or other Applicable Law.
“Consigned Inventory” means Inventory of any Borrower that is in the possession of another Person on a consignment, sale or return, sale on approval, or other basis that does not constitute a final sale and acceptance of such Inventory.
“Controlled Group” means, at any time, each Credit Party and each of its Subsidiaries and all members of their respective controlled groups of corporations and all trades or businesses (whether or not incorporated) under common control with any Credit Party or any Subsidiary of a Credit Party and all other entities which, together with any Credit Party or any Subsidiary of a Credit Party, are treated as a single employer under Section 414 of the Code.  Any entity shall continue to be considered a member of a Controlled Group of a Credit Party or a Subsidiary thereof with respect to liabilities arising after the period in which the entity is considered a single employer with any Credit Party or any such Subsidiary for which any Credit Party or any such Subsidiary could be liable under the Code or ERISA.
“Credit Parties” shall mean Borrowers and the Guarantors, and “Credit Party” shall mean any of them.
“Customer” means and includes the account debtor with respect to any Receivable of a Person and/or the prospective purchaser of goods, services or both with respect to any contract or contract right, and/or any party who enters into or proposes to enter into any contract or other arrangement with such Person, pursuant to which such Person is to deliver any personal property or perform any services.
“Customs” has the meaning set forth in Section 2.10(b).
“Default” means an event, circumstance or condition that, with the giving of notice or passage of time or both, would constitute an Event of Default.

“Default Rate” has the meaning set forth in Section 3.1.
“Defaulting Lender” has the meaning set forth in Section 2.22(a).
“Depository Accounts” has the meaning set forth in Section 4.15(h).
“Dilution Percent” means the percentage obtained by dividing (a) bad debt write-downs or write-offs, discounts, returns, promotions, credits, credit memos and other dilutive items with respect to all Receivables, by (b) gross sales.
“Dilution Reserve” means a reserve against the Formula Amount in an amount equivalent to a 1.00% reduction in the Receivables Advance Rate for each percentage point (or portion thereof) by which the Dilution Percent exceeds 5.00%.
“Documents” has the meaning set forth in Section 8.1(c).
“Dollar” and the sign “$” means lawful money of the United States of America.
“Domestic Rate Loan” means any Advance that bears interest based upon the Alternate Base Rate.
“Drawing Date” has the meaning set forth in Section 2.11(b).
“Early Termination Date” has the meaning set forth in Section 13.1.
“Earnings Before Interest and Taxes” means for any period the sum of (a) net income (or loss) of Borrowers on a Consolidated Basis for such period (excluding extraordinary gains and losses), plus (b) all interest expense of Borrowers on a Consolidated Basis for such period, plus (c) all charges against income of Borrowers on a Consolidated Basis for such period for federal, state and local taxes actually expensed for such period.
“EBITDA” means for any period, with respect to Borrowers on a Consolidated Basis, the sum of (a) Earnings Before Interest and Taxes for such period, plus (b) depreciation expenses for such period, plus (c) amortization expenses for such period, plus (d) to the extent deducted in determining net income of the Borrowers on a Consolidated Basis, non-cash compensation expense (including deferred non-cash compensation expense), other non-cash expenses, or charges arising from the sale or issuance of stock, the granting of stock options, and the granting of stock appreciation rights and similar arrangements (including any repricing, amendment, modification, substitution or change of any such stock, stock option, stock appreciation rights or similar arrangements) or non-cash interest and accretion charges related to pension plan adjustments.
“Eleventh Amendment” means the Eleventh Amendment to Revolving Credit and Security Agreement dated as of December 1, 2015 among Borrowers, the Lenders party thereto and Agent.
“Eleventh Amendment Date” means December 1, 2015. 
“Eligible Assignee” shall mean (a) a commercial bank, or any Affiliate thereof, organized under the laws of the United States, or any state thereof, which has total assets in excess of $500,000,000 and (b) a commercial bank, or any Affiliate thereof, organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development or a political subdivision of any such country and which (i) is acting through a branch or agency located in the United States, and (ii) has total assets in excess of $500,000,000, (c) any Lender or Affiliate (other than a natural Person) of a Lender, (d) so long as no Default or Event of Default has occurred and is continuing, any other Person (other than a natural Person) approved by Borrower (which approval of Borrower shall not be unreasonably withheld, conditioned or delayed), and (e) during the continuation of a Default or an Event of Default, any other Person. 
     “Eligible ATS Inventory” means ATS Inventory that otherwise qualifies as Eligible Finished Goods Inventory except for the fact that such Inventory constitutes “assemble-to-ship” Inventory. 

“Eligible Inventory” means Eligible ATS Inventory, Eligible Finished Goods Inventory and Eligible Work In Process Inventory.
“Eligible Finished Goods Inventory” means and includes Inventory, excluding work in process and ATS Inventory, with respect to each Borrower, valued at the lower of cost or market value, determined on a first-in-first-out basis, that is not, in Agent’s Permitted Discretion, obsolete, slow moving or unmerchantable and that Agent, in its Permitted Discretion, does not deem to be ineligible Inventory, based on such considerations as Agent may from time to time deem appropriate in its Permitted Discretion, including whether the Inventory is subject to a perfected, first priority security interest in favor of Agent and no other Lien (other than a Permitted Encumbrance).  In addition, Inventory shall not be Eligible Finished Goods Inventory if it:  (a) does not conform to all applicable standards imposed by any Governmental Body that has regulatory authority over such goods or the use or sale thereof; (b) is in transit (other than in transit between locations of the Credit Parties, which locations are in the United States); (c) is located outside the United States or at a location that is not otherwise in compliance with this Agreement; (d) constitutes Consigned Inventory; (e) is the subject of an Intellectual Property Claim that Agent determines in its Permitted Discretion could have an adverse impact on the ability to sell or otherwise dispose of or realize upon such Inventory or the value thereof; (f) is subject to a License Agreement or other agreement that limits, conditions or restricts any Borrower’s or Agent’s right to sell or otherwise dispose of such Inventory, unless Agent is a party to a Licensor/Agent Agreement with the Licensor under such License Agreement; or (g) is situated at a location not owned by a Borrower unless (i) the owner or occupier of such location has executed a Lien Waiver Agreement or (ii) Agent, in its sole discretion, establishes a Landlord Reserve in lieu of a Lien Waiver.
“Eligible Receivables” means and includes with respect to each Borrower, each Receivable of such Borrower arising in the Ordinary Course of Business and that Agent, in its Permitted Discretion, does not deem to be an ineligible Receivable, based on such considerations as Agent may from time to time deem appropriate.  A Receivable shall not be deemed eligible unless such Receivable is subject to Agent’s first priority perfected security interest and no other Lien (other than Permitted Encumbrances), and is evidenced by an invoice or other documentary evidence satisfactory to Agent.  In addition, no Receivable shall be an Eligible Receivable if:
(a)    it arises out of a sale made by any Borrower to an Affiliate of any Borrower or to a Person controlled by an Affiliate of any Borrower;
(b)    it is due or unpaid more than (i) sixty (60) days after the original due date or (ii) ninety (90) days after the original invoice date;
(c)    fifty percent (50%) or more of the Receivables from such Customer are not deemed Eligible Receivables hereunder (such percentage may, in Agent’s Permitted Discretion, be increased or decreased from time to time);
(d)    any covenant, representation or warranty contained in this Agreement with respect to such Receivable has been breached;
(e)    the Customer shall:  (i) apply for, suffer, or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or call a meeting of its creditors; (ii) admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business; (iii) make a general assignment for the benefit of creditors; (iv) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect); (v) be adjudicated a bankrupt or insolvent; (vi) file a petition seeking to take advantage of any other law providing for the relief of debtors; (vii) acquiesce to, or fail to have dismissed, any petition that is filed against it in any involuntary case under such bankruptcy laws; or (viii) take any action for the purpose of effecting any of the foregoing;
(f)    the sale is to a Customer outside the United States of America or Canada, unless the sale is (i) on letter of credit, guaranty or acceptance terms, in each case acceptable to Agent in its Permitted Discretion or (ii) insured pursuant to credit insurance acceptable to Agent in its sole discretion that is issued by a credit insurer and pursuant to documentation (including an assignment to Agent of such credit insurance and the proceeds thereof) that 

is, in each case, acceptable to Agent in its sole discretion, provided, that the aggregate amount of Receivables included pursuant to this clause (f)(ii) shall not exceed a sublimit to be established by Agent from time to time in its sole discretion;
(g)    the sale to the Customer is on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment or any other repurchase or return basis or is evidenced by chattel paper;
(h)    Agent believes, in its Permitted Discretion, that collection of such Receivable is insecure or that such Receivable may not be paid by reason of the Customer’s financial inability to pay;
(i)    the Customer is the United States of America, any state or any department, agency or instrumentality of any of them, unless the applicable Borrower assigns its right to payment of such Receivable to Agent pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727, et seq. and 41 U.S.C. Sub-Section 15, et seq.), in the case of the United States of America or any department, agency or instrumentality thereof, or, if requested by Agent pursuant to Section 6.4, has otherwise complied with other applicable statutes or ordinances, in the case of any state or any department, agency or instrumentality thereof;
(j)    the goods giving rise to such Receivable have not been delivered to and accepted by the Customer or the services giving rise to such Receivable have not been performed by the applicable Borrower and accepted by the Customer or the Receivable otherwise does not represent a final sale;
(k)    the Receivables of the Customer exceed fifteen percent (15%) of the amount of all Receivables of the Borrowers;
(l)    the Receivable is subject to any offset, deduction, defense, dispute, or counterclaim, the Customer is also a creditor or supplier of a Borrower or the Receivable is contingent in any respect or for any reason, but only to the extent of such offset, deduction, defense, dispute, or counterclaim;
(m)    the applicable Borrower has made any agreement with any Customer for any deduction therefrom, except for discounts or allowances made in the Ordinary Course of Business, but only to the extent of such discount, all of which discounts or allowances are reflected in the calculation of the face value of each respective invoice related thereto;
(n)    any return, rejection or repossession of the merchandise has occurred or the rendition of services has been disputed, but only to the extent of such return, rejection, repossession, or dispute;
(o)    such Receivable is not payable to a Borrower; or
(p)    such Receivable is not otherwise satisfactory to Agent as determined by Agent in its Permitted Discretion.
“Eligible Work In Process Inventory” means Inventory that otherwise qualifies as Eligible Finished Goods Inventory except for the fact that such Inventory constitutes “work in process” Inventory (excluding (i) Eligible ATS Inventory and (ii) any such Inventory at or in transit to a third party processor  for finishing such Inventory (other than Valley Plating located in Conway, Arkansas for same day or next day finishing), including to any third party for processor for chrome plating or otherwise, provided that such Inventory may be included as “Eligible Work In Process Inventory” upon return of such Inventory by such third party to the Borrowers).
“Environmental Complaint” has the meaning set forth in Section 4.19(d).
“Environmental Laws” means all federal, state and local environmental, land use, zoning, health, chemical use, safety and sanitation laws (including common laws), statutes, ordinances and codes relating to human health and safety, pollution or the protection of the environment and/or governing the use, storage, treatment, generation, transportation, processing, handling, production or disposal of Hazardous Substances and the rules, regulations, 

policies, guidelines, interpretations, decisions, orders and directives of federal, state and local governmental agencies and authorities with respect thereto.
“Equipment” means and includes as to any Person, all of such Person’s goods (other than Inventory) whether now owned or hereafter acquired and wherever located including all equipment, machinery, apparatus, motor vehicles, fittings, furniture, furnishings, fixtures, parts, accessories and all replacements and substitutions therefor or accessions thereto.
“Equipment Loan Rate” shall mean (a) with respect to Equipment Loans that are Domestic Rate Loans, an interest rate per annum equal to the sum of the Applicable Margin for Equipment Loans plus the Alternate Base Rate and (b) with respect to Equipment Loans that are LIBOR Rate Loans, the sum of the Applicable Margin for Equipment Loans plus the LIBOR Rate.
“Equipment Loans” shall have the meaning set forth in Section 2.2X hereof.
“Equipment Notes” shall mean, collectively, the promissory notes referred to in Section 2.2X hereof.
“Equity Interests” of any Person means any and all shares, rights to purchase, options, warrants, general, limited or limited liability partnership interests, member interests, participation or other equivalents of or interest in (regardless of how designated) equity of such Person, whether voting or nonvoting, including common stock, preferred stock, convertible securities or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time and the rules and regulations promulgated thereunder.
“Eurodollar Rate” shall mean for any Eurodollar Rate Loan for the then current Interest Period relating thereto the interest rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by Agent by dividing (i) the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which US dollar deposits are offered by leading banks in the London interbank deposit market), or the rate which is quoted by another source selected by Agent which has been approved by the British Bankers’ Association as an authorized information vendor for the purpose of displaying rates at which US dollar deposits are offered by leading banks in the London interbank deposit market (an “Eurodollar Alternate Source”), at approximately 11:00 a.m., London time two (2) Business Days prior to the first day of such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Eurodollar Alternate Source, a comparable replacement rate determined by the Agent at such time (which determination shall be conclusive absent manifest error)) for an amount comparable to such Eurodollar Rate Loan and having a borrowing date and a maturity comparable to such Interest Period by (ii) a number equal to 1.00 minus the Reserve Percentage.  The Eurodollar Rate shall be adjusted with respect to any Eurodollar Rate Loan that is outstanding on the effective date of any change in the Reserve Percentage as of such effective date.  Agent shall give prompt notice to Borrowing Agent of the Eurodollar Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.
“Eurodollar Rate Loan” means an Advance at any time that bears interest based on the Eurodollar Rate.
“Event of Default” has the meaning set forth in Article X.
“Exchange Act” has the mean the Securities Exchange Act of 1934, as amended.
“Excluded Property” has the meaning set forth in the definition of “Collateral”.
“Executive Order No. 13224” means the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced. 

“Extraordinary Receipts” means all Net Cash Proceeds received by Borrowers or Guarantors not in the Ordinary Course of Business, including:  (a) foreign, United States, state or local tax refunds; (b) pension plan reversions; (c) proceeds of business interruption insurance; (d) judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action; (e) indemnity payments; (f) (i) 50% of the net proceeds for the issuance of Equity Interests expressly permitted hereunder (other than issuances to a Credit Party) and (ii) 100% of all other Equity Issuances; and (g) proceeds of any issuance of Funded Debt (other than Funded Debt permitted pursuant to Section 7.8); and (h) any purchase price adjustment received in connection with any purchase agreement.  .
“Federal Funds Effective Rate” for any day means the rate per annum (based on a year of 360 days and actual days elapsed and rounded upward to the nearest 1/100 of 1.00%) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate” as of the date of this Agreement; provided that, if such Federal Reserve Bank (or its successor) does not announce such rate on any day, the “Federal Funds Effective Rate” for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced.
“Federal Funds Open Rate” for any day shall mean the rate per annum (based on a year of 360 days and actual days elapsed) which is the daily federal funds open rate as quoted by ICAP North America, Inc. (or any successor) as set forth on the Bloomberg Screen BTMM for that day opposite the caption “OPEN” (or on such other substitute Bloomberg Screen that displays such rate), or as set forth on such other recognized electronic source used for the purpose of displaying such rate as selected by PNC (a “Federal Funds Alternate Source”) (or if such rate for such day does not appear on the Bloomberg Screen BTMM (or any substitute screen) or on any Federal Funds Alternate Source, or if there shall at any time, for any reason, no longer exist a Bloomberg Screen BTMM (or any substitute screen) or any Federal Funds Alternate Source, a comparable replacement rate determined by the PNC at such time (which determination shall be conclusive absent manifest error); provided however, that if such day is not a Business Day, the Federal Funds Open Rate for such day shall be the “open” rate on the immediately preceding Business Day.  If and when the Federal Funds Open Rate changes, the rate of interest with respect to any advance to which the Federal Funds Open Rate applies will change automatically without notice to the Borrowers, effective on the date of any such change.
“Fee Letter” means that certain amended and restated fee letter dated as of April 4, 2016 among Borrowers and PNC, as amended, restated, or otherwise modified from time to time.
“Financial Condition Certificate” has the meaning set forth in Section 8.1(k).
“Fifth Amendment” means the Fifth Amendment to Revolving Credit and Security Agreement dated as of March 1, 2013, among Borrowers, the Lenders party thereto and Agent.
“Fifth Amendment Date” means March 1, 2013.
“First Amendment” shall mean the First Amendment to Revolving Credit and Security Agreement dated as of June 15, 2012, among Borrowers, the Lenders party thereto and Agent.
“First Amendment Date” shall mean June 15, 2012.
“Fixed Charge Coverage Ratio” means, for Borrowers on a Consolidated Basis, with respect to any fiscal period, the ratio of:
(a)EBITDA, plus capitalized lease payments during such period, minus Unfinanced Capital Expenditures made during such period, minus cash taxes paid during such period; to 
(b)the sum of all cash actually expended to make (i) interest payments on any Advances hereunder (other than amortization of fees and other non-interest expense hereunder), plus (ii) payments with respect to any other 

Funded Debt (other than principal payments in respect of Revolving Advances that are not made in connection with a permanent reduction to the Maximum Revolving Advance Amount), plus (iii) payments for all fees, commissions and charges set forth herein and with respect to any Advances, plus (iv) capitalized lease payments, plus (v) Restricted Payments. 
“Foreign Subsidiary” of any Person, means any Subsidiary of such Person that is not organized or incorporated in the United States or any State or territory thereof.
“Formula Amount” has the meaning set forth in Section 2.1(a).
“Fourteenth Amendment” means the Fourteenth Amendment to Revolving Credit and Security Agreement dated as of March [__], 2017 among Borrowers, the Lenders party thereto and Agent.
“Fourteenth Amendment Date” means March [__], 2017.
“Fourth Amendment” shall mean the Fourth Amendment to Revolving Credit and Security Agreement dated as of December 6, 2012, among Borrowers, the Lenders party thereto and Agent.
“Fourth Amendment Date” shall mean December 6, 2012.
“Funded Debt” means, with respect to any Person, without duplication, all Indebtedness for borrowed money evidenced by notes, bonds, debentures, or similar evidences of Indebtedness that by its terms matures more than one year from, or is directly or indirectly renewable or extendible at such Person’s option under a revolving credit or similar agreement obligating the lender or lenders to extend credit over a period of more than one year from the date of creation thereof, and specifically including Capitalized Lease Obligations, current maturities of long-term debt, revolving credit and short-term debt extendible beyond one year at the option of the debtor, and also including, in the case of each Borrower, the Obligations and, without duplication, Indebtedness consisting of guaranties of any of the foregoing Indebtedness of other Persons.
“GAAP” means generally accepted accounting principles in the United States of America.
“General Intangibles” means and includes, with respect to any Person, all of such Person’s general intangibles, whether now owned or hereafter acquired, including all payment intangibles, all choses in action, causes of action, corporate or other business records, inventions, designs, patents, patent applications, equipment formulations, manufacturing procedures, quality control procedures, trademarks, trademark applications, service marks, trade secrets, goodwill, copyrights, design rights, software, computer information, source codes, codes, records and updates, registrations, licenses, franchises, customer lists, tax refunds, tax refund claims, computer programs, all claims under guaranties, security interests or other security held by or granted to such Person to secure payment of any of the Receivables by a Customer (other than to the extent covered by Receivables) all rights of indemnification and all other intangible property of every kind and nature (other than Receivables).
“Governmental Acts” means any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Governmental Body.
“Governmental Body” means any nation or government, any state or other political subdivision thereof or any entity, authority, agency, division or department exercising the legislative, judicial, regulatory or administrative functions of or pertaining to a government.
“Gross-Up Payment” has the meaning set forth in Section 3.10.
“Guarantor” has the meaning set forth in the preamble to this Agreement and shall extend to all permitted successors and assigns of such Persons.
“Guarantor Security Agreement” means any Security Agreement executed by any Guarantor in favor of Agent securing the Guaranty of such Guarantor, in form and substance satisfactory to the Agent.

“Guaranty” means any guaranty of the obligations of Borrowers executed by a Guarantor in favor of Agent for its benefit and for the ratable benefit of Lenders, in form and substance satisfactory to Agent, including the guaranty set forth in Section 15.3.
“Hazardous Discharge” has the meaning set forth in Section 4.19(d).
“Hazardous Substance” means, without limitation, any flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous materials, Hazardous Wastes, hazardous or Toxic Substances or related materials as defined in or regulated under CERCLA, the Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et  seq.), RCRA, Articles 15 and 27 of the New York State Environmental Conservation Law or any other applicable Environmental Law and in the regulations adopted pursuant thereto.
“Hazardous Wastes” means all waste materials subject to regulation under CERCLA, RCRA or applicable state law, and any other applicable Federal and state laws now in force or hereafter enacted relating to hazardous waste disposal.
“Hedge Liabilities” has the meaning provided in the definition of “Lender-Provided Interest Rate Hedge”.
“Inchoate Obligations” means contingent indemnification or expense reimbursement Obligations other than those related to claims, causes of action, or liabilities that have been asserted or threatened or that otherwise can be reasonably identified by the Agent or any Lender based on the then-known facts and circumstances.
“Indebtedness” of a Person at a particular date means all obligations of such Person that, in accordance with GAAP, would be classified upon a balance sheet as liabilities (except (a) capital stock and surplus earned or otherwise and (b) trade payables incurred in the Ordinary Course of Business and repayable in accordance with customary trade practices no later than sixty (60) days after the incurrence thereof) and in any event, without limitation by reason of enumeration, shall include all indebtedness, debt and other similar monetary obligations of such Person whether direct or guaranteed, and all premiums, if any, due at the required prepayment dates of such indebtedness, and  all indebtedness secured by a Lien on assets owned by such Person, whether or not such indebtedness actually has been created, assumed or incurred by such Person.  Any indebtedness of such Person resulting from the acquisition by such Person of any assets subject to any Lien shall be deemed, for the purposes hereof, to be the equivalent of the creation, assumption and incurring of the indebtedness secured thereby, whether or not actually so created, assumed or incurred.
“Indemnitees” means, collectively, all Secured Parties and each of their respective officers, directors, Affiliates, attorneys, employees and agents, and “Indemnitee” means any of the foregoing Persons, individually.
“Ineligible Security” means any security that may not be underwritten or dealt in by member banks of the Federal Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.
“Intellectual Property” means property constituting under any Applicable Law a patent, patent application, copyright, trademark, service mark, trade name, mask work, trade secret or license or other right to use any of the foregoing.
“Intellectual Property Claim” means the assertion by any Person of a claim (whether asserted in writing, by action, suit or proceeding or otherwise) that any Credit Party’s ownership, use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other property or asset violates any ownership of or right to use any Intellectual Property of such Person.
“Interest Period” means the period provided for any Eurodollar Rate Loan pursuant to Section 2.2(b).
“Interest Rate Hedge” means an interest rate exchange, collar, cap, swap, adjustable strike cap, adjustable strike corridor or similar agreements entered into by any Credit Party or its Subsidiaries in order to provide protection 

to, or minimize the impact upon, such Credit Party and/or its Subsidiaries of increasing floating rates of interest applicable to Indebtedness.
“Inventory” means and includes, with respect to any Person, all of such Person’s now owned or hereafter acquired goods, merchandise and other personal property, wherever located, to be furnished under any consignment arrangement, contract of service or held for sale or lease, all raw materials, work in process, finished goods and materials and supplies of any kind, nature or description that are or might be used or consumed in such Person’s business or used in selling or furnishing such goods, merchandise and other personal property, and all documents of title or other documents representing them.
“Inventory Sublimit” means (a) during the period commencing on December 1 of each fiscal year of VMC and ending on August 31 of such fiscal year, $30,000,000, (b) during the period commencing on September 1 of each fiscal year of VMC and ending on October 31 of such fiscal year, $20,000,000 and (c) during the period commencing on November 1 of each fiscal year of VMC and ending on the last day of DecemberNovember in such fiscal year, $12,500,000.
“Inventory Advance Rate” has the meaning set forth in Section 2.1(a)(y)(ii).
“Investment Property” means and includes, with respect to any Person, all of such Person’s now owned or hereafter acquired investment property, securities (whether certificated or uncertificated), securities entitlements, securities accounts, commodities contracts and commodities accounts.
“Issuer” means any Person who issues a Letter of Credit and/or accepts a draft pursuant to the terms hereof.
“Landlord Reserve” shall mean, as to each location at which a Borrower has Inventory or books and records located and as to which a Lien Waiver Agreement has not been received by Agent, a reserve in an amount equal to three months’ rent or expense, as applicable, for such location; provided, that for Borrowers’ leased location at 2027 Harpers Way, Torrance, California, in lieu of a Landlord Waiver Agreement, Agent will implement an immediate three month rent reserve.
“Leasehold Interests” means all of each Credit Party’s right, title and interest in and to the premises located at 2027 Harpers Way and Torrance, CA 90501  and  1655 Amity Road Conway, AR 72034
“Lender” and “Lenders” has the meaning ascribed to such term in the preamble to this Agreement and shall include each Person that becomes a transferee, successor or assign of any Lender.
“Lender-Provided Interest Rate Hedge” means an Interest Rate Hedge provided by any Lender and with respect to which Agent confirms meets the following requirements: such Interest Rate Hedge (a) is documented in a standard International Swap Dealer Association Agreement; (b) provides for the method of calculating the reimbursable amount of the provider’s credit exposure in a reasonable and customary manner, and (c) is entered into for hedging (rather than speculative) purposes.  The liabilities of any Credit Party to the provider of any Lender-Provided Interest Rate Hedge (the “Hedge Liabilities”) shall be “Obligations” hereunder, guaranteed obligations under each Guaranty and secured obligations under each Guarantor Security Agreement (unless otherwise specified in any such guaranty or Guarantor Security Agreement) and otherwise treated as Obligations for purposes of each of the Loan Documents. The Liens securing the Hedge Liabilities shall be pari passu with the Liens securing all other Obligations under this Agreement and the other Loan Documents.
“Letter of Credit Fees” has the meaning set forth in Section 3.2.
“Letter of Credit Borrowing” has the meaning set forth in Section 2.11(d).
“Letter of Credit Sublimit” means $3,000,000.
“Letters of Credit” has the meaning set forth in Section 2.8.

“License Agreement” means any agreement between any Credit Party and a Licensor pursuant to which such Credit Party is authorized to use any Intellectual Property in connection with the manufacturing, marketing, sale or other distribution of any Inventory of such Credit Party or otherwise in connection with such Credit Party’s business operations (other than any off-the-shelf, shrink wrap or other generally commercially available pre-packaged software products or licenses).
“Licensor” means any Person from whom any Credit Party obtains the right to use (whether on an exclusive or non-exclusive basis) any Intellectual Property in connection with such Credit Party’s manufacture, marketing, sale or other distribution of any Inventory or otherwise in connection with such Credit Party’s business operations.
“Licensor/Agent Agreement” means an agreement between Agent and a Licensor, in form and content satisfactory to Agent in its Permitted Discretion, by which Agent is given the right, vis-à-vis such Licensor, to enforce Agent’s Liens with respect to and to complete manufacture of and dispose of any Credit Party’s Inventory with the benefit of any Intellectual Property applicable thereto, irrespective of such Credit Party’s default under any License Agreement with such Licensor.
“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, security interest, lien (whether statutory or otherwise), Charge, claim or encumbrance, or preference, priority or other security agreement or preferential arrangement held or asserted in respect of any asset of any kind or nature whatsoever including any conditional sale or other title retention agreement, any lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction.
“Lien Waiver Agreement” means an agreement, in form and substance acceptable to Agent, executed in favor of Agent in its Permitted Discretion by a Person who owns or occupies premises at which any Collateral may be located from time to time and by which such Person shall waive any Lien that such Person may ever have with respect to any of the Collateral and shall authorize Agent from time to time to enter upon the premises to inspect or remove the Collateral from such premises or to use such premises to store or dispose of such Inventory.
“Limited Purpose Deposit Account” means the deposit account of VMC maintained with Wells Fargo Bank, National Association on the Closing Date to the extent such deposit account (a) is subject to Agent’s control on the Closing Date and sole control after notice by Agent to such account bank and (b) on and after November 15, 2012 (or such later date as Agent shall agree in its sole discretion), does not contain amounts on deposit therein in excess of (i) amounts solely used by VMC to make employee payroll and (ii) amounts not in excess of $100,000 per calendar month solely used to pay charge backs and fees in connection with merchant card services provided by Wells Fargo Bank, National Association to Borrowers.
“Loan Documents” means the Revolving Credit Notes, the Fee Letter, any Guaranty, any Guarantor Security Agreement, any Mortgage, any Pledge Agreement, any Patent Security Agreement, any Trademark Security Agreement, any Lender-Provided Interest Rate Hedge and any and all other agreements, instruments and documents, including guaranties, pledges, powers of attorney, consents, interest or currency swap agreements or other similar agreements and all other writings heretofore, now or hereafter executed by any Credit Party and/or delivered to Agent or any Lender in respect of the transactions contemplated by this Agreement.
“Material Adverse Effect” means a material adverse effect on:  (a) the condition (financial or otherwise), results of operations, assets, business, properties or prospects of any Credit Party; (b) any Credit Party’s ability to duly and punctually pay or perform the Obligations in accordance with the terms thereof; (c) the value of the Collateral, or Agent’s Liens on the Collateral or the priority of any such Lien; or (d) the practical realization of the benefits of Agent’s and each Lender’s rights and remedies under this Agreement and the other Loan Documents.
“Maximum Equipment Loan Amount” shall mean $2,500,000 less repayments of the Equipment Loans.

“Maximum Face Amount” means, with respect to any outstanding Letter of Credit, the face amount of such Letter of Credit including all automatic increases provided for in such Letter of Credit, whether or not any such automatic increase has become effective.
 “Maximum Revolving Advance Amount” means (a) during the period commencing on March 1 of each fiscal year of VMC and ending on August 31 of such fiscal year, $49,500,000, (b) during the period commencing on September 1 of each fiscal year of VMC and ending on October 31 of such fiscal year, $40,000,000 and (c) during the period commencing on November 1 of each fiscal year of VMC and ending on the last day of February in such fiscal year, $30,000,000.
“Maximum Undrawn Amount” means with respect to any outstanding Letter of Credit, the amount of such Letter of Credit that is or may become available to be drawn (whether or not any of the circumstances permitting the beneficiary to so draw exist at the time of determination), including all automatic increases provided for in such Letter of Credit, whether or not any such automatic increase has become effective.
“Modified Commitment Transfer Supplement” has the meaning set forth in Section 16.3(d).
“Mortgage” means the mortgage or deed of trust on the Real Property securing the Obligations, together with all extensions, renewals, amendments, supplements, modifications, substitutions and replacements thereto and thereof.
“Multiemployer Plan” means a “multiemployer plan” as defined in Sections 3(37) and 4001(a)(3) of ERISA to which any Credit Party or any member of the Controlled Group is required to contribute on behalf of its employees or with respect to which any Credit Party or any member of the Controlled Group has or could reasonably be expected to have liability, contingent or otherwise.
“Multiple Employer Plan” means a Plan which has two or more contributing sponsors at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA, and to which any Credit Party or any member of the Controlled Group contributes or has or could reasonably be expected to have liability, contingent or otherwise.
“Net Cash Proceeds” means gross cash proceeds less (a) bona fide direct costs incurred to non-Affiliates of any Credit Party in connection with obtaining such proceeds, including (i) legal fees and fees of accountants and consultants, and (ii) transfer or similar taxes actually payable by such Credit Party with respect thereto and (b) the amounts necessary to discharge any Permitted Encumbrances with respect thereto which have priority over Agent’s Liens.
“Net Invoice Cost” shall mean, with respect to Equipment, the net invoice cost of such Equipment (excluding taxes, shipping, delivery, handling, installation, overhead and other so called “soft” costs).
“Ninth Amendment” means the Ninth Amendment to Revolving Credit and Security Agreement dated as of March 31, 2015 among Borrowers, the Lenders party thereto and Agent.
“Ninth Amendment Date” means March 31, 2015.
“Notes” shall mean collectively, the Equipment Notes and the Revolving Credit Notes.
“Obligations” means and includes (a) any and all Indebtedness, loans, advances, debts, liabilities, obligations, covenants and duties owing by the Credit Parties (or any of them) to Lenders or Agent or to any other direct or indirect subsidiary or affiliate of Agent or any Lender of any kind or nature, present or future (including any interest or other amounts accruing thereon after maturity, or after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding relating to any Credit Party, or that would have accrued but for the commencement of such proceeding, in each case, whether or not a claim for post-filing or post-petition interest or other amounts is allowed in such proceeding), whether or not evidenced by any note, guaranty or other instrument, arising under  this Agreement and the other Loan Documents, together with all Bank Products Obligations and Hedge 

Liabilities, whether or not for the payment of money, whether arising by reason of an extension of credit, opening of a letter of credit, loan, or guarantee, under any interest or currency swap, future, option or other similar agreement (including indebtedness, liabilities, and obligations of Credit Parties with respect to any Lender-Provided Interest Rate Hedge), or in any other manner, whether arising out of overdrafts or deposit or other accounts or electronic funds transfers (whether through automated clearing houses or otherwise) or out of Agent’s or any Lenders non-receipt of or inability to collect funds or otherwise not being made whole in connection with depository transfer check or other similar arrangements, whether direct or indirect (including those acquired by assignment or participation), absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, contractual or tortious, liquidated or unliquidated, regardless of how such indebtedness or liabilities arise or by what agreement or instrument they may be evidenced or whether evidenced by any agreement or instrument, including amendments, extensions, renewals or increases, and all costs and expenses of Agent and any Lender incurred in the documentation, negotiation, modification, enforcement, collection or otherwise in connection with any of the foregoing, including reasonable attorneys’ fees and expenses and all obligations of any Credit Party to Agent or Lenders to perform acts or refrain from taking any action, (b) all obligations of any type described in the foregoing clause (a) arising in respect of Lender-Provided Interest Rate Hedges and (c) all obligations of any type described in the foregoing clause (a) arising in respect of cash management or other services provided by PNC or any of its Affiliates.
“Ordinary Course of Business” means with respect to any Credit Party, the ordinary course of such Credit Party’s business as conducted on the Closing Date, including any reasonably related extensions thereof in the same line of business conducted by such Credit Party on the Closing Date.
“Out-of-Formula Loans” has the meaning set forth in Section 16.2(b).
“Parent” of any Person means a corporation or other entity owning, directly or indirectly greater than 50% of the shares of stock or other ownership interests having ordinary voting power to elect a majority of the directors of the Person, or other Persons performing similar functions for any such Person.
“Participant” has the meaning set forth in Section 16.3(b).
“Participation Advance” has the meaning set forth in Section 2.11(d).
“Participation Commitment” means each Lender’s obligation to buy a participation of the Letters of Credit issued hereunder.
“Patent Security Agreement” means the Patent Security Agreement, dated as of the Closing Date, between Borrowers and Agent.
“Payee” shall have the meaning set forth in Section 3.10.
“Payment Office” means initially Two Tower Center Boulevard, East Brunswick, New Jersey 08816; thereafter, such other office of Agent, if any, that it may designate by notice to Borrowing Agent and to each Lender to be the Payment Office.
“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or any successor.
“Peak Season” means the period from December 1 through August 31 of each fiscal year of the Borrowers.
“Pension Benefit Plan” means any employee pension benefit plan (including a Multiple Employer Plan or a Multiemployer Plan) which is covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code or Section 302 of ERISA and either (a) is maintained or contributed to by any Credit Party or any member of the Controlled Group for employees of any Credit Party or any member of the Controlled Group; or (b) has at any time within the preceding five years been maintained or contributed to by any Credit Party or by any entity which was at such time a member of the Controlled Group.

“Pension Funding Rules” shall mean the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Benefit Plans and set forth in Section 412, 430, 431 and 432 of the Code and Sections 302, 303, 304 and 305 of ERISA.
“Permitted Discretion” shall mean a determination made in the exercise of reasonable (from the perspective of a secured asset based lender) business judgment.
“Permitted Encumbrances” means: (a) Liens in favor of Agent for the benefit of Agent, Lenders and other Secured Parties under the Loan Documents; (b) Liens for taxes, assessments, levies or other governmental charges not delinquent or being Properly Contested; (c) deposits or pledges to secure obligations under worker’s compensation, social security or similar laws, or under unemployment insurance; (d) deposits or pledges to secure bids, tenders, contracts (other than contracts for the payment of money), leases, statutory obligations, surety and appeal bonds and other obligations of like nature arising in the Ordinary Course of Business; (e) Liens arising by virtue of the rendition, entry or issuance against any Credit Party or Subsidiary thereof, or any property of any Credit Party or any Subsidiary thereof, of any judgment, writ, order, or decree for so long as each such Lien (i) is in existence for less than 20 consecutive days after it first arises or is being Properly Contested and (ii) is at all times junior in priority to any Liens in favor of Agent; (f) mechanics’, workers’, materialmen’s, carriers, laborers, landlords or suppliers, or other like Liens arising by operation of law in the Ordinary Course of Business with respect to obligations that are not delinquent or that are being Properly Contested; (g) Liens placed upon fixed assets hereafter acquired to secure a portion of the purchase price thereof or the interests of lessors under Capital Leases, provided that (i) any such lien shall not encumber any other property of the applicable Credit Party and (ii) the aggregate amount of Indebtedness secured by such Liens incurred as a result of such purchases during any fiscal year shall not exceed the amount provided for in Section 7.6; (h) the interests of lessors under operating leases and non-exclusive licensors under license agreements that do not materially interfere with or impair the use of the assets or rights of the Credit Parties or their Subsidiaries subject to such leases or license agreements, (i) with respect to any Real Property, easements, rights of way, and zoning restrictions that do not materially interfere with or impair the use or operation thereof, (j) non-exclusive licenses of patents, trademarks, copyrights, and other intellectual property rights in the Ordinary Course of Business, (k) Liens securing Refinancing Indebtedness permitted hereunder that are replacements of Permitted Encumbrances securing Indebtedness permitted hereunder existing on the Closing Date, so long as such replacement Liens only encumber those assets that secured the original Indebtedness, (l) rights of setoff or, bankers’ liens and other Liens upon deposits of cash in favor of banks or other depository institutions, solely to the extent incurred in connection with the maintenance of such deposit accounts or the provision of services described in the definition of Bank Products in each case in the Ordinary Course of Business, (m) Liens granted in the Ordinary Course of Business on the unearned portion of insurance premiums securing the financing of insurance premiums to the extent the financing is expressly permitted hereby, (n) Liens in favor of customs and revenue authorities arising as a matter of law in the Ordinary Course of Business to secure payment of customs duties in connection with the importation of goods, (o) Liens on assets of a Person (and its Subsidiaries) existing at the time such Person (and its Subsidiaries) is acquired by a Credit Party or any of its Subsidiaries (and not created in anticipation or contemplation thereof) in a transaction expressly permitted hereby, (p) customary assignments of insurance or condemnation proceeds provided to landlords (or their mortgagees) pursuant to the terms of any lease; (q) Liens and rights reserved in any lease for rent granted in the Ordinary Course of Business with respect to rent that is not delinquent, (r) Liens disclosed on Schedule 1.2; provided that such Liens shall secure only those obligations which they secure on the Closing Date and shall not subsequently apply to any other property or assets of any Credit Party, and (s) other Liens securing amounts not exceeding $250,000 in the aggregate at any one time and which (i) are incidental to the conduct of a Credit Party’s business or the ownership of its property and assets, (ii) were not incurred in connection with the incurrence of Funded Debt , (iii) do not constitute blanket liens on the assets of any Credit Party and (iv) do not materially impair the use of such assets in the operation of any Credit Party’s business;.
“Person” means any individual, sole proprietorship, partnership, corporation, business trust, joint stock company, trust, unincorporated organization, association, limited liability company, limited liability partnership, institution, public benefit corporation, joint venture, entity or Governmental Body (whether federal, state, county, city, municipal or otherwise, including any instrumentality, division, agency, body or department thereof).
“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Benefit Plan but excluding any Multiemployer Plan), maintained for employees of any Credit Party or any member 

of the Controlled Group or any such Plan to which any Credit Party or any member of the Controlled Group is required to contribute on behalf of any of its employees.
“Pledge Agreement” means any Pledge Agreement executed by any Credit Party in favor of Agent.
“PNC” has the meaning set forth in the preamble to this Agreement and shall extend to all of its successors and assigns.
“Pro Forma Balance Sheet” has the meaning set forth in Section 5.5(a).
“Pro Forma Financial Statements” has the meaning set forth in Section 5.5(b).
“Projections” has the meaning set forth in Section 5.5(b).
“Properly Contested” means, in the case of any Indebtedness or Lien, as applicable, of any Person (including any taxes) that is not paid as and when due or payable by reason of such Person’s bona fide dispute concerning its liability to pay same or concerning the amount thereof:  (a) such Indebtedness, or Lien, as applicable, is being properly contested in good faith by appropriate proceedings promptly instituted and diligently conducted; (b) such Person has established appropriate reserves as shall be required in conformity with GAAP; (c) the non-payment of such Indebtedness will not have a Material Adverse Effect and will not result in the forfeiture of any assets of such Person; (d) no Lien is imposed upon any of such Person’s assets with respect to such Indebtedness unless such Lien is at all times junior and subordinate in priority to the Liens in favor of Agent (except only with respect to property taxes that have priority as a matter of applicable state law) and enforcement of such Lien is stayed during the period prior to the final resolution or disposition of such dispute; (e) if such Indebtedness or Lien, as applicable, results from, or is determined by the entry, rendition or issuance against a Person or any of its assets of a judgment, writ, order or decree, enforcement of such judgment, writ, order or decree is stayed pending a timely appeal or other judicial review; and (f) if such contest is abandoned, settled or determined adversely (in whole or in part) to such Person, such Person forthwith pays such Indebtedness and all penalties, interest and other amounts due in connection therewith.
“Purchasing CLO” has the meaning set forth in Section 16.3(d).
“Purchasing Lender” has the meaning set forth in Section 16.3(c).
“RCRA” means the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901, et seq., as same may be amended from time to time.
“Real Property” means all of each Credit Party’s right, title and interest in and to the owned and leased premises identified on Schedule 4.19 or which is hereafter owned or leased by any Credit Party.
“Receivables” means and includes, as to any Person, all of such Person’s accounts, contract rights, instruments (including those evidencing indebtedness owed to such Person by its Affiliates), documents, chattel paper (including electronic chattel paper), General Intangibles relating to accounts, drafts and acceptances, credit card receivables and all other forms of obligations owing to such Person arising out of or in connection with the sale or lease of Inventory or the rendition of services, all supporting obligations, guarantees and other security therefor, whether secured or unsecured, now existing or hereafter created, and whether or not specifically sold or assigned to Agent hereunder.
“Receivables Advance Rate” has the meaning set forth in Section 2.1(a)(y)(i).
“Refinancing Indebtedness” means refinancings, renewals, replacements, or extensions of Funded Debt so long as: (a) such refinancings, renewals, replacements or extensions do not result in an increase in the principal amount (including the amount of unfunded commitments with respect thereto) of the Funded Debt so refinanced, renewed, replaced or extended, other than by the amount of premiums paid thereon and the fees and expenses incurred in connection therewith and (b) such refinancings, renewals, replacements or extensions do not result in a shortening of 

the average weighted maturity (measured as of the refinancing, renewal, or extension) of the Funded Debt so refinanced, renewed, replaced or extended.
“Register” has the meaning set forth in Section 16.3(e).
“Regulations” shall have the meaning set forth in Section 3.11(a).
“Reimbursement Obligation” has the meaning set forth in Section 2.11(b).
“Release” has the meaning set forth in Section 5.7(c)(i).
“Reportable Event” means a reportable event described in Section 4043(c) of ERISA or the regulations promulgated thereunder for which the thirty (30) day notice period has not been waived.
“Required Lenders” means Lenders holding at least fifty one percent (51%) of the Advances and, if no Advances are outstanding, means Lenders holding fifty one percent (51%) of the Commitment Percentages; provided, however, that for purposes of this definition only, a Defaulting Lender will be deemed not to be a Lender and not to have either Advances outstanding or a Commitment Percentage.
“Reserve Percentage” means as of any day the maximum percentage in effect on such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including supplemental, marginal and emergency reserve requirements) applicable to members of the Federal Reserve system with respect to eurocurrency funding (currently referred to as “Eurocurrency Liabilities”.
“Reserves” means reserves against the Formula Amount, including the Dilution Reserve and the Landlord Reserve, established and adjusted by Agent from time to time in its Permitted Discretion.
“Revolving Advances” means Advances made other than Letters of Credit and Equipment Loans.
“Revolving Credit Notes” means, collectively, the promissory notes referred to in Section 2.1(a).
“Revolving Interest Rate” means an interest rate per annum equal to (a) the sum of the Alternate Base Rate, plus the Applicable Margin with respect to Domestic Rate Loans or (b) the sum of the Eurodollar Rate, plus the Applicable Margin with respect to Eurodollar Rate Loans.
“SEC” means the Securities and Exchange Commission or any successor thereto.
“Second Amendment” shall mean the Second Amendment to Revolving Credit and Security Agreement dated as of July 27, 2012, among Borrowers, the Lenders party thereto and Agent.
“Second Amendment Date” shall mean July 27, 2012.
“Section 20 Subsidiary” means the Subsidiary of the bank holding company controlling PNC, which Subsidiary has been granted authority by the Federal Reserve Board to underwrite and deal in certain Ineligible Securities.
“Secured Parties” means, collectively, Agent, each Issuer, and Lenders.
“Securities Act” means the Securities Act of 1933, as amended.
“Settlement Date” means the Closing Date and thereafter Wednesday or Thursday of each week or more frequently if Agent deems appropriate unless such day is not a Business Day in which case it shall be the next succeeding Business Day.

“Seventh Amendment” means the Seventh Amendment to Revolving Credit and Security Agreement dated as of April 15, 2104 among Borrowers, the Lenders party thereto and Agent.
“Seventh Amendment Date” means April 15, 2014.
“Sixth Amendment” means the Sixth Amendment to Revolving Credit and Security Agreement dated as of January 9, 2104 among Borrowers, the Lenders party thereto and Agent.
“Sixth Amendment Date” means January 9, 2014.
“Subsidiary” of any Person means a corporation or other entity of whose Equity Interests having ordinary voting power (other than Equity Interests having such power only by reason of the happening of a contingency) to elect a majority of the directors of such corporation, or other Persons performing similar functions for such entity, are owned, directly or indirectly, by such Person.
“Subsidiary Stock” means all of the issued and outstanding Equity Interests of any Subsidiary owned by any Credit Party.
 “Temporary Equipment Line”  means a temporary line of credit terminating on July 31, 2015 of up to $1,000,000 in the aggregate outstanding to be used exclusively by Borrowers to finance up to 80% of the invoice cost of new or used equipment, net of tax, freight and installation charges.
“Tenth Amendment” means the Tenth Amendment to Revolving Credit and Security Agreement dated as of June 18, 2015 among Borrowers, the Lenders party thereto and Agent.
“Tenth Amendment Date” means June 18, 2015.
“Term” has the meaning set forth in Section 13.1.
“Termination Event” means (i) a Reportable Event with respect to any Pension Benefit Plan; (ii) the withdrawal of any Credit Party or any member of the Controlled Group from a Multiple Employer Plan during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to terminate a Pension Benefit Plan in a distress termination described in Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to terminate a Pension Benefit Plan; (v) any event or condition which could reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Benefit Plan of any Credit Party or any member of the Controlled Group; (vi) the determination that any Multiemployer Plan is in endangered or critical status within the meaning of Section 432 of the Code or Section 305 of ERISA; or (vii) the partial or complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of any Credit Party or any member of the Controlled Group from a Multiemployer Plan.
“Third Amendment” shall mean the Third Amendment to Revolving Credit and Security Agreement dated as of September 12, 2012, among Borrowers, the Lenders party thereto and Agent.
“Third Amendment Date” shall mean September 12, 2012.
“Thirteenth Amendment” means the Thirteenth Amendment to Revolving Credit and Security Agreement dated as of October 27, 2016 among Borrowers, the Lenders party thereto and Agent.
“Thirteenth Amendment Date” means October 27, 2016.
“Toxic Substance” means and includes any material present on, at, under or from the Real Property or the Leasehold Interests that has been shown to have significant adverse effect on human health or that is subject to regulation under the Toxic Substances Control Act (TSCA), 15 U.S.C. §§ 2601, et seq., or any other Applicable Law now in force 

or hereafter enacted relating to toxic substances.  “Toxic Substance” includes but is not limited to asbestos, polychlorinated biphenyls (PCBs) and lead-based paints.
“Trademark Security Agreement” means the Trademark Security Agreement, dated as of the Closing Date, between the Credit Parties and Agent.
“Trading with the Enemy Act” means the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any enabling legislation or executive order relating thereto.
“Transactions” has the meaning set forth in Section 5.5(a).
“Transferee” has the meaning set forth in Section 16.3(d).
“Twelfth Amendment” means the Twelfth Amendment to Revolving Credit and Security Agreement dated as of April 4, 2016 among Borrowers, the Lenders party thereto and Agent.
“Twelfth Amendment Date” means April 4, 2016.
“Undrawn Availability” at a particular date means Availability, minus the sum of (a) all amounts due and owing to any Credit Party’s trade creditors that are outstanding beyond normal trade terms, (b) fees and expenses for which the Credit Parties are liable but which have not been paid or charged to Borrowers’ Account, and (c) all due but unpaid taxes of the Credit Parties.
“Unfinanced Capital Expenditures” shall mean all Capital Expenditures of Borrowers on a Consolidated Basis, other than those made utilizing financing provided by the applicable seller or third party lenders.  For the avoidance of doubt, Capital Expenditures made by Borrowers and their Subsidiaries utilizing Revolving Advancesan Equipment Loan shall be deemed Unfinancedto be financed Capital Expenditures.
“Uniform Commercial Code” has the meaning set forth in Section 1.3.
“USA PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.
“Week” means the time period commencing with the opening of business on a Wednesday and ending on the end of business the following Tuesday.
“Withholding Certificate” has the meaning set forth in Section 3.11(a).
3.Uniform Commercial Code Terms
.  All terms used herein and defined in the Uniform Commercial Code as adopted in the State of New York from time to time (the “Uniform Commercial Code”) have the respective meanings given therein unless otherwise defined herein.  Without limiting the foregoing, the terms “accessions”, “accounts”, “chattel paper”, “commercial tort claims”, “commodities accounts”, “commodities contracts”, “documents”, “deposit accounts”, “electronic chattel paper”, “equipment”, “fixtures”, “general intangibles”, “goods”, “instruments”, “inventory”, “investment property”, “letter-of-credit rights”, “payment intangibles”, “proceeds”, “securities”, “securities accounts”, “securities entitlements”, “supporting obligations” and “software”, as and when used in the description of Collateral (and related underlying definitions) have the meanings given to such terms in Articles 8 or 9 of the Uniform Commercial Code.  To the extent the definition of any category or type of collateral is expanded by any amendment, modification or revision to the Uniform Commercial Code, such expanded definition will apply automatically as of the date of such amendment, modification or revision.
4.Certain Matters of Construction

.  The terms “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision.  All references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement.  Any pronoun used shall be deemed to cover all genders.  Wherever appropriate in the context, terms used herein in the singular also include the plural and vice versa.  All references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations.  Unless otherwise provided, all references to any instruments or agreements to which Agent is a party, including references to any of the Loan Documents, shall include any and all modifications or amendments thereto or restatements thereof and any and all extensions or renewals thereof.  All references herein to the time of day means the time in New York, New York.  Whenever the words “including” or “include” shall be used, such words shall be understood to mean “including, without limitation” or “include, without limitation”.  A Default or Event of Default shall be deemed to exist at all times during the period commencing on the date that such Default or Event of Default occurs to the date on which such Default or Event of Default is waived in writing pursuant to this Agreement or, in the case of a Default only, is cured within any period of cure expressly provided for in this Agreement; and an Event of Default shall “continue” or be “continuing” until such Event of Default has been waived in writing by the Required Lenders.  Any Lien referred to in this Agreement or any of the other Loan Documents as having been created in favor of Agent, any agreement entered into by Agent pursuant to this Agreement or any of the other Loan Documents, any payment made by or to or funds received by Agent pursuant to or as contemplated by this Agreement or any of the other Loan Documents, or any act taken or omitted to be taken by Agent, shall, unless otherwise expressly provided, be created, entered into, made or received, or taken or omitted, for the benefit or account of Agent and Lenders. Wherever the phrase “to the best of the Credit Parties’ knowledge” or words of similar import relating to the knowledge or the awareness of any Credit Party are used in this Agreement or other Loan Documents, such phrase means and refer to (a) the actual knowledge of a senior officer of any Credit Party or (b) the knowledge that a senior officer would have obtained if he had engaged in good faith and diligent performance of his duties, including the making of such reasonably specific inquiries as may be necessary of the employees or agents of such Credit Party and a good faith attempt to ascertain the existence or accuracy of the matter to which such phrase relates.  All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or otherwise within the limitations of, another covenant shall not avoid the occurrence of a default if such action is taken or condition exists.  In addition, all representations and warranties hereunder shall be given independent effect so that if a particular representation or warranty proves to be incorrect or is breached, the fact that another representation or warranty concerning the same or similar subject matter is correct or is not breached will not affect the incorrectness of a breach of a representation or warranty hereunder.
		
	ARTICLE IV
	

ARTICLE V

ARTICLE VIADVANCES, PAYMENTS
1.Revolving Advances
.
(a)Amount of Revolving Advances.  Subject to the terms and conditions set forth in this Agreement, including Section 2.1(b), each Lender, severally and not jointly, will make Revolving Advances to Borrowers in aggregate amounts outstanding at any time equal to such Lender’s Commitment Percentage of the lesser of (x) the applicable Maximum Revolving Advance Amount at such time, less the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit or (y) an amount equal to the sum of:
(i)up to 85%, subject to the provisions of Section 2.1(b) (“Receivables Advance Rate”), of Eligible Receivables, plus
(ii)up to the lesser of (A) 60%, subject to the provisions of Section 2.1(b) hereof, of the value of the Eligible Inventory (“Inventory Advance Rate” and together with the Receivables Advance Rate, collectively, the “Advance Rates”), (B) 85% of the appraised net orderly liquidation value of Eligible Inventory (as evidenced by an Inventory appraisal satisfactory to Agent in its discretion, reasonably exercised) or (C) the applicable Inventory Sublimit (provided, that (A) the amount of Eligible ATS Inventory included in this clause (ii) shall not exceed $7,000,0009,000,000 and (B) the amount of Eligible Work In Process Inventory included in this clause (ii) shall not exceed $1,000,000), plus

(iii)with respect to each fiscal year of the Borrowers, during the respective period set forth below for such fiscal year, the amount applicable to such period
	
		
	Period
	Amount

	December
	$8,000,000

	January
	$9,000,0008,000,000

	February
	$10,000,00011,000,000

	March
	$11,000,00014,000,000

	April
	$14,000,000

	May
	$14,000,000

	June
	$14,000,00011,000,000

	July
	$11,000,0008,000,000

	August 1 through 1531
	$8,000,000

plus (iv)     the Temporary Equipment Line, minus
(iv)(v)      the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit, minus
(v)(vi)      Reserves.
The amount derived from the sum of (x) Sections 2.1(a)(y)(i), (ii), and (iii) and (iv) minus (y) Section 2.1 (a)(y)(viv) and (viv) at any time and from time to time shall be referred to as the ‘“Formula Amount’”.  The Revolving Advances shall be evidenced by one or more secured promissory notes (collectively, the ‘“Revolving Credit Notes’”) substantially in the form attached hereto as Exhibit 2.1(a).
(b)Discretionary Rights.  The Advance Rates may be increased or decreased by Agent at any time and from time to time in its Permitted Discretion, reasonably exercised.  Each Borrower consents to any such increases or decreases and acknowledges that decreasing the Advance Rates or increasing or imposing Reserves may limit or restrict Advances requested by Borrowing Agent.  The rights of Agent under this subsection are subject to the provisions of Section 16.2(b).
2.Procedure for Revolving Advances Borrowing. Advance Borrowings
. 
(a)Borrowing Agent on behalf of any Borrower may notify Agent prior to 10:00 a.m. on a Business Day of a Borrower’s request to incur, on that day, a Revolving Advance hereunder (without requirement as to any minimum borrowing amount in the case of Domestic Rate Loans and subject to the minimum borrowing requirements of clause (b) below in the case of Eurodollar Rate Loans).  Subject to the satisfaction of the conditions set forth in Section 8.3 hereof, in the event any Borrower desires an Equipment Loan, Borrowing Agent shall give Agent at least three (3) Business Days prior written notice.  Should any amount required to be paid as interest hereunder, or as fees or other charges under this Agreement or any other agreement with Agent or Lenders, or with respect to any other Obligation, become due, same shall be deemed a request for a Revolving Advance maintained as a Domestic Rate Loan as of the date such payment is due, in the amount required to pay in full such interest, fee, charge or Obligation under this Agreement or any other agreement with Agent or Lenders, and such request shall be irrevocable.
(b)Notwithstanding the provisions of subsection (a) above, in the event any Borrower desires to obtain a Eurodollar Rate Loan, Borrowing Agent shall give Agent written notice by no later than 10:00 a.m. on the day that is three (3) Business Days prior to the date such Eurodollar Rate Loan is to be borrowed, specifying (i) the date of the proposed borrowing (which shall be a Business Day), (ii) the type of borrowing and the amount on the date of such Advance (other than Equipment Loans) to be borrowed, which amount shall be in an aggregate principal amount that is not less than $1,000,000 and integral multiples of $500,000  in excess thereof, and (iii) the duration of the first Interest Period therefor.  Interest Periods for Eurodollar Rate Loans shall be for one, two or three months; provided, that if an Interest Period would end on a day that is not a Business Day, it shall end on the next succeeding Business Day unless such day falls in the next succeeding calendar month in which case the Interest Period shall end 

on the next preceding Business Day.  No Lender shall be required to make available a Eurodollar Rate Loan to any Borrower during the continuance of a Default or Event of Default.  After giving effect to each requested Eurodollar Rate Loan, including those that are converted from a Domestic Rate Loan under Section 2.2(d), there shall not be outstanding more than five (5) Eurodollar Rate Loans, in the aggregate. 
(c)Each Interest Period of a Eurodollar Rate Loan shall commence on the date such Eurodollar Rate Loan is made and shall end on such date as Borrowing Agent may elect as set forth in Section 2.2(b)(iii); provided that the exact length of each Interest Period shall be determined in accordance with the practice of the interbank market for offshore Dollar deposits and no Interest Period shall end after the last day of the Term.
Borrowing Agent shall elect the initial Interest Period applicable to a Eurodollar Rate Loan by its notice of borrowing given to Agent pursuant to Section 2.2(b) or by its notice of conversion given to Agent pursuant to Section 2.2(d), as the case may be.  Borrowing Agent shall elect the duration of each succeeding Interest Period by giving irrevocable written notice to Agent of such duration not later than 10:00 a.m. on the day that is three (3) Business Days prior to the last day of the then current Interest Period applicable to such Eurodollar Rate Loan.  If Agent does not receive timely notice of the Interest Period elected by Borrowing Agent, Borrowing Agent shall be deemed to have elected to convert to a Domestic Rate Loan subject to Section 2.2(d).
(d)So long as no Event of Default has occurred and is continuing, Borrowing Agent may, on the last Business Day of the then current Interest Period applicable to any outstanding Eurodollar Rate Loan, or on any Business Day with respect to Domestic Rate Loans, convert any such loan into a loan of another type in the same aggregate principal amount; provided that any conversion of a Eurodollar Rate Loan shall be made only on the last Business Day of the then current Interest Period applicable to such Eurodollar Rate Loan.  Notwithstanding the foregoing, if an Event of Default has occurred and is continuing, unless Agent permits, at the direction of the Required Lenders, a continuation of Eurodollar Rate Loans, any Eurodollar Rate Loans shall be converted into Domestic Rate Loans on the last Business Day of the then current Interest Period applicable to such Eurodollar Rate Loans.  If Borrowing Agent desires to convert a loan, Borrowing Agent shall give Agent written notice by no later than 10:00 a.m. (i) on the day that is three (3) Business Days’ prior to the date on which such conversion is to occur with respect to a conversion from a Domestic Rate Loan to a Eurodollar Rate Loan, or (ii) on the day that is one (1) Business Day prior to the date on which such conversion is to occur with respect to a conversion from a Eurodollar Rate Loan to a Domestic Rate Loan, specifying, in each case, the date of such conversion, the loans to be converted and if the conversion is from a Domestic Rate Loan to any other type of loan, the duration of the first Interest Period therefor.  
(e)At its option and upon written notice given prior to 10:00 a.m. (New York time) at least three (3) Business Days’ prior to the date of such prepayment, any Borrower may prepay the Eurodollar Rate Loans in whole at any time or in part from time to time with accrued interest on the principal being prepaid to the date of such repayment.  Such Borrower shall specify the date of prepayment of Advances that are Eurodollar Rate Loans and the amount of such prepayment.  In the event that any prepayment of a Eurodollar Rate Loan is required or permitted on a date other than the last Business Day of the then current Interest Period with respect thereto, such Borrower shall indemnify Agent and Lenders therefor in accordance with Section 2.2(f).
(f)Each Borrower shall indemnify Agent and Lenders and hold Agent and Lenders harmless from and against any and all losses (other than any loss of anticipated profits) or expenses that Agent and Lenders may sustain or incur as a consequence of any prepayment, conversion of or any default by any Borrower in the payment of the principal of or interest on any Eurodollar Rate Loan or failure by any Borrower to complete a borrowing of, a prepayment of or conversion of or to a Eurodollar Rate Loan after notice thereof has been given, including any interest payable by Agent or Lenders to lenders of funds obtained by it in order to make or maintain its Eurodollar Rate Loans hereunder.  A certificate as to any additional amounts payable pursuant to the foregoing sentence submitted by Agent or any Lender to Borrowing Agent shall be conclusive absent manifest error.
(g)Notwithstanding any other provision hereof, if any Applicable Law, treaty, regulation or directive, or any change therein or in the interpretation or application thereof, shall make it unlawful for any Lender (for purposes of this subsection (g), the term “Lender” shall include any Lender and the office or branch where any Lender or any corporation or bank controlling such Lender makes or maintains any Eurodollar Rate Loans) to make or maintain its Eurodollar Rate Loans, the obligation of Lenders to make Eurodollar Rate Loans hereunder shall forthwith be cancelled and Borrowers shall, if any affected Eurodollar Rate Loans are then outstanding, promptly upon request from Agent, either pay all such affected Eurodollar Rate Loans or convert such affected Eurodollar Rate Loans 

into loans of another type (regardless of whether a Default or Event of Default has occurred and is continuing).  If any such payment or conversion of any Eurodollar Rate Loan is made on a day that is not the last day of the Interest Period applicable to such Eurodollar Rate Loan, Borrowers shall pay Agent, upon Agent’s request, such amount or amounts as may be necessary to compensate Lenders for any loss (other than any loss of anticipated profits) or expense sustained or incurred by Lenders in respect of such Eurodollar Rate Loan as a result of such payment or conversion, including any interest or other amounts payable by Lenders to lenders of funds obtained by Lenders in order to make or maintain such Eurodollar Rate Loan.  A certificate as to any additional amounts payable pursuant to the foregoing sentence submitted by Lenders to Borrowing Agent shall be conclusive absent manifest error.  Notwithstanding anything to the contrary contained herein, neither Agent nor Lender is required to acquire eurodollar deposits to fund or otherwise match fund any Eurodollar Rate Loans.
2.2X    Equipment Loans.  
(i)     Immediately prior to the effectiveness of the Fourteenth Amendment, the outstanding amount of Advances under the Temporary Equipment Line are in the aggregate amount of $90,876.15.  Upon the effectiveness of the Fourteenth Amendment, all such outstanding Advances shall be converted to an Equipment Loan (as defined below) and no further Advances shall be available to Borrowers under the Temporary Equipment Line.  As such, immediately upon the effectiveness of the Fourteenth Amendment and the conversion of outstanding Advances under the Temporary Equipment Line into an Equipment Loan, all outstanding Revolving Advances under the Temporary Equipment Line shall be reduced to $0 and thereafter Revolving Advances shall be available to Borrowers up to the Formula Amount as set forth herein.  For the avoidance of doubt, the Equipment Loan existing on the Fourteenth Amendment Date shall accrue interest at the Equipment Loan Rate and be payable monthly in accordance with Section 3.1.
(ii)    Subject to the terms and conditions of this Agreement, each Lender, severally and not jointly, shall, from time to time, make Advances (each, an “Equipment Loan” and collectively, the “Equipment Loans”) to one or more Borrowers in an amount equal to such Lender’s Commitment Percentage of the applicable Equipment Loan to finance Borrowers’ purchase of equipment for use in Borrowers’ production line business in Arkansas and Torrance, California.  All such Equipment Loans shall be in such amounts as are requested by Borrowing Agent, but in no event shall any Equipment Loan exceed eight five (85%) percent for new equipment and eighty (80%) percent for used equipment of the Net Invoice Cost of the equipment being purchased by Borrowers and the total amount of all Equipment Loans advanced hereunder shall not exceed, in the aggregate, the Maximum Equipment Loan Amount.  Once repaid, Equipment Loans may not be reborrowed.
(iii)    Equipment Loans shall be made available to Borrowers during the period commencing on the Fourteenth Amendment Date and ending on September [__], 2017 (the “Borrowing Period”).  At the end of the Borrowing Period, Agent shall calculate the aggregate principal balance of all then outstanding Equipment Loans, which amount shall amortize in equal and consecutive monthly installments of principal, based on a three (3) year amortization schedule, the first of which installments shall be due and payable on the first day of the next month after the end of the Borrowing Period, and the remaining installments of which shall be due and payable on the first day of each month thereafter (the amount of each such monthly installment, the “Borrowing Period Monthly Installment”), provided, however, that the aggregate principal balance of all Equipment Loans, together with all accrued and unpaid interest thereon, and all unpaid fees, costs and expenses payable hereunder in connection therewith, shall be due and payable in full upon the expiration of the Term, subject to acceleration upon the occurrence of an Event of Default under this Agreement or termination of this Agreement.  Equipment Loans shall be evidenced by one or more secured promissory notes (collectively, the “Equipment Note”) in substantially the form attached hereto as Exhibit 2.2X.  The Equipment Loans may consist of Domestic Rate Loans or LIBOR Rate Loans, or a combination thereof, as Borrowing Agent may request and interest is payable as set forth in Section 3.1; and in the event that Borrowers desire to obtain or extend any Equipment Loan (or any portion thereof) as a LIBOR Rate Loan or to convert any Equipment Loan (or any portion thereof) from a Domestic Rate Loan to a LIBOR Rate Loan, Borrowing Agent shall comply with the notification requirements set forth in Section 2.2(a) and (b) and the provision of Sections 2.2 shall apply.
3.Disbursement of Advance Proceeds

.  All Advances shall be disbursed from whichever office or other place Agent may designate from time to time and, together with any and all other Obligations of Borrowers to Agent or Lenders, shall be charged to Borrowers’ Account on Agent’s books.  During the Term, Borrowers may use the Revolving Advances by borrowing, prepaying and reborrowing, all in accordance with the terms and conditions hereof.  The proceeds of each Revolving Advance requested by Borrowing Agent on behalf of any Borrower or deemed to have been requested by any Borrower under Section 2.2(a) hereof shall, with respect to requested Revolving Advances to the extent Lenders make such Revolving Advances, be made available to the applicable Borrower on the day so requested by way of credit to such Borrower’s operating account at PNC, or such other bank as Borrowing Agent may designate following notification to Agent, in immediately available federal funds or other immediately available funds or, with respect to Revolving Advances deemed to have been requested by any Borrower, be disbursed to Agent to be applied to the outstanding Obligations giving rise to such deemed request.
4.Maximum Advances
.  The aggregate balance of Revolving Advances and Letters of Credit outstanding at any time shall not cause Availability to be less than zero.
5.Repayment of Advances
.
(a)The Revolving Advances shall be due and payable in full on the last day of the Term subject to earlier prepayment as herein provided.  The Equipment Loans shall be due and payable as provided in Section 2.2X hereof and in no event later than payment in full on the last day of the Term, subject to mandatory prepayments as herein provided.  Each payment (including each prepayment) by any Borrower on account of the principal of and interest on the Equipment Loans shall be applied to the applicable Equipment Loan pro rata in the inverse order of maturities thereof.
(b)Borrowers recognize that the amounts evidenced by checks, notes, drafts or any other items of payment relating to and/or proceeds of Collateral may not be collectible by Agent on the date received.  In consideration of Agent’s agreement to conditionally credit Borrower’s Account as of the next Business Day following Agent’s receipt of those items of payment, Borrower agrees that, in computing the charges under this Agreement, all items of payment shall be deemed applied by Agent on account of the Obligations one (1) Business Day after (i) the Business Day following the Agent’s receipt of such payments via wire transfer or electronic depository check or (ii) in the case of payments received by Agent in any other form, the Business Day such payment constitutes good funds in Agent’s account.  Agent is not, however, required to credit Borrower’s Account for the amount of any item of payment which is unsatisfactory to Agent and Agent may charge Borrower’s Account for the amount of any item of payment which is returned to Agent unpaid.  
(c)All payments of principal, interest and other amounts payable hereunder, or under any of the Loan Documents shall be made to Agent at the Payment Office not later than 1:00 P.M. (New York time) on the due date therefor in lawful money of the United States of America in federal funds or other funds immediately available to Agent.  Agent has the right to effectuate payment on any and all Obligations due and owing hereunder by charging Borrowers’ Account or by making Advances as provided in Section 2.2.
(d)Borrowers shall pay principal, interest, and all other amounts payable hereunder, or under any related agreement, without any deduction whatsoever, including any deduction for any setoff or counterclaim.
(e)    Unpaid advances on the Temporary Equipment Line must be repaid beginning July 31, 2015 and continuing on the first date of each month thereafter, in an amount that will reduce the 80% advance rate against each item of equipment financed through the Temporary Equipment Line by 2.77% per month.
6.Repayment of Excess Advances
.  The aggregate balance of Advances outstanding at any time in excess of the maximum amount of Advances permitted hereunder shall be immediately due and payable without the necessity of any demand, at the Payment Office, whether or not a Default or Event of Default has occurred, including, as a result of a change in the applicable Maximum Revolving Advance Amount. or the Maximum Equipment Loan Amount. 
7.Statement of Account

.  Agent shall maintain, in accordance with its customary procedures, a loan account (“Borrowers’ Account”) in the name of Borrowers in which shall be recorded the date and amount of each Advance made by Agent and the date and amount of each payment in respect thereof; provided, however, that the failure by Agent to record the date and amount of any Advance shall not adversely affect Agent or any Lender.  Each month, Agent shall send to Borrowing Agent a statement showing the accounting for the Advances made, payments made or credited in respect thereof, and other transactions between Agent and Borrowers during such month.  The monthly statements shall be deemed correct and binding upon Borrowers in the absence of manifest error and shall constitute an account stated between Lenders and Borrowers unless Agent receives a written statement of Borrowers’ specific exceptions thereto within thirty (30) days after such statement is received by Borrowing Agent.  The records of Agent with respect to the loan account shall be conclusive evidence absent manifest error of the amounts of Advances and other charges thereto and of payments applicable thereto.
8.Letters of Credit
.  Subject to the terms and conditions hereof, Agent shall issue or cause the issuance of standby Letters of Credit (“Letters of Credit”) for the account of any Borrower; provided, however, that Agent will not be required to issue or cause to be issued any Letters of Credit to the extent that the issuance thereof would then cause Availability to be less than zero.  The Maximum Undrawn Amount of outstanding Letters of Credit shall not exceed in the aggregate at any time the Letter of Credit Sublimit.  All disbursements or payments related to Letters of Credit shall be deemed to be Domestic Rate Loans consisting of Revolving Advances and shall bear interest at the Revolving Interest Rate for Domestic Rate Loans; Letters of Credit that have not been drawn upon shall not bear interest.  
9.Issuance of Letters of Credit
.
(a)Borrowing Agent, on behalf of Borrowers, may request Agent to issue or cause the issuance of a Letter of Credit by delivering to Agent at the Payment Office, prior to 10:00 a.m. (New York time), at least five (5)  Business Days’ prior (or such lesser notice as Agent may agree) to the proposed date of issuance, Agent’s form of Letter of Credit Application (the “Letter of Credit Application”) completed to the reasonable satisfaction of Agent; and, such other certificates, documents and other papers and information as Agent may reasonably request.  Borrowing Agent, on behalf of Borrowers, also has the right to give instructions and make agreements with respect to any application, any applicable letter of credit and security agreement, any applicable letter of credit reimbursement agreement and/or any other applicable agreement, any letter of credit and the disposition of documents, disposition of any unutilized funds, and to agree with Agent upon any amendment, extension or renewal of any Letter of Credit.
(b)Each Letter of Credit shall, among other things, (i) provide for the payment of sight drafts, other written demands for payment, or acceptances of usance drafts when presented for honor thereunder in accordance with the terms thereof and when accompanied by the documents described therein and (ii) have an expiry date not later than twenty-four (24) months after such Letter of Credit’s date of issuance and in no event later than the last day of the Term.  Each standby Letter of Credit shall be subject either to the Uniform Customs and Practice for Documentary Credits as most recently published by the International Chamber of Commerce at the time a Letter of Credit is issued (the “UCP”) or the International Standby Practices (ISP98 International Chamber of Commerce Publication Number 590) (the “ISP98 Rules”)), and any subsequent revision thereof at the time a standby Letter of Credit is issued, as determined by Agent, and each trade Letter of Credit shall be subject to the UCP.
(c)Agent shall use its reasonable efforts to notify Lenders of the request by Borrowing Agent for a Letter of Credit hereunder.
10.Requirements For Issuance of Letters of Credit
.  
(a)Borrowing Agent shall authorize and direct any Issuer to name the applicable Borrower as the “Applicant” or “Account Party” of each Letter of Credit.  If Agent is not the Issuer of any Letter of Credit, Borrowing Agent shall authorize and direct the Issuer to deliver to Agent all instruments, documents, and other writings and property received by the Issuer pursuant to the Letter of Credit and to accept and rely upon Agent’s instructions and agreements with respect to all matters arising in connection with the Letter of Credit, the application therefor or any acceptance therefor.

(b)In connection with all Letters of Credit issued or caused to be issued by Agent under this Agreement, each Borrower hereby appoints Agent, or its designee, as its attorney, with full power and authority if and only if an Event of Default has occurred and is continuing, (i) to sign and/or endorse such Borrower’s name upon any warehouse or other receipts, letter of credit applications and acceptances, (ii) to sign such Borrower’s name on bills of lading; (iii) to clear Inventory through the United States of America Customs Department (“Customs”) in the name of such Borrower or Agent or Agent’s designee, and to sign and deliver to Customs officials powers of attorney in the name of such Borrower for such purpose; and (iv) to complete in such Borrower’s name or Agent’s, or in the name of Agent’s designee, any order, sale or transaction, obtain the necessary documents in connection therewith, and collect the proceeds thereof.  Neither Agent nor its attorneys, officers, directors, Affiliates, employees or agents will be liable for any acts or omissions nor for any error of judgment or mistakes of fact or law, except for Agent’s or its attorneys’, officers’, directors’, Affiliates’, employees’ or agents’ gross negligence or willful misconduct as determined in a final, non-appealable order by a court of competent jurisdiction.  This power, being coupled with an interest, is irrevocable as long as any Letters of Credit remain outstanding.
11.Disbursements, Reimbursement
.
(a)Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from Agent a participation in such Letter of Credit and each drawing thereunder in an amount equal to such Lender’s Commitment Percentage of the Maximum Face Amount of such Letter of Credit and the amount of such drawing, respectively.  
(b)In the event of any request for a drawing under a Letter of Credit by the beneficiary or transferee thereof, Agent will promptly notify Borrowing Agent.  Provided that Borrowing Agent has received such notice, Borrowers shall reimburse (such obligation to reimburse Agent shall sometimes be referred to as a “Reimbursement Obligation”) Agent prior to 12:00 Noon, New York time on each date that an amount is paid by Agent under any Letter of Credit (each such date, a “Drawing Date”) in an amount equal to the amount so paid by Agent.  In the event Borrowers fail to reimburse Agent for the full amount of any drawing under any Letter of Credit by 12:00 Noon, New York time, on the Drawing Date, Agent will promptly notify each Lender thereof, and Borrowers shall be deemed to have requested that a Domestic Rate Loan be made by Lenders to be disbursed on the Drawing Date under such Letter of Credit, to the extent that Availability would be greater than zero after giving effect to such Revolving Advance and subject to Section 8.2.  Any notice given by Agent pursuant to this Section 2.11(b) may be oral if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.
(c)Each Lender shall upon any notice pursuant to Section 2.11(b) make available to Agent an amount in immediately available funds equal to its Commitment Percentage of the amount of the drawing, whereupon the participating Lenders shall (subject to Section 2.11(d)) each be deemed to have made a Domestic Rate Loan to Borrowers in that amount.  If any Lender so notified fails to make available to Agent the amount of such Lender’s Commitment Percentage of such amount by no later than 2:00 p.m., New York time on the Drawing Date, then interest shall accrue on such Lender’s obligation to make such payment, from the Drawing Date to the date on which such Lender makes such payment (i) at a rate per annum equal to the Federal Funds Effective Rate during the first three days following the Drawing Date and (ii) at a rate per annum equal to the Revolving Interest Rate applicable to Domestic Rate Loans on and after the fourth day following the Drawing Date.  Agent will promptly give notice of the occurrence of the Drawing Date, but failure of Agent to give any such notice on the Drawing Date or in sufficient time to enable any Lender to effect such payment on such date shall not relieve such Lender from its obligation under this Section 2.11(c), provided that such Lender shall not be obligated to pay interest as provided in Sections 2.11(c)(i) and (ii) until and commencing from the date of receipt of notice from Agent of a drawing.
(d)With respect to any unreimbursed drawing that is not converted into a Domestic Rate Loan to Borrowers in whole or in part as contemplated by Section 2.11(b), because of Borrowers’ failure to satisfy the conditions set forth in Section 8.2 (other than any notice requirements) or for any other reason, Borrowers shall be deemed to have incurred from Agent a borrowing (each a “Letter of Credit Borrowing”) in the amount of such drawing. Such Letter of Credit Borrowing shall be due and payable on demand (together with interest) and shall bear interest at a rate per annum equal to the Revolving Interest Rate applicable to Domestic Rate Loans.  Each Lender’s payment to Agent pursuant to Section 2.11(c) shall be deemed to be a payment in respect of its participation in such 

Letter of Credit Borrowing and shall constitute a “Participation Advance” from such Lender in satisfaction of its Participation Commitment under this Section 2.11.
(e)Each Lender’s Participation Commitment shall continue until the last to occur of any of the following events:  (x) Agent ceases to be obligated to issue or cause to be issued Letters of Credit hereunder; (y) no Letter of Credit issued or created hereunder remains outstanding and uncancelled and (z) all Persons (other than Borrowers) have been fully reimbursed for all payments made under or relating to Letters of Credit.  
12.Repayment of Participation Advances
. 
(a)Upon (and only upon) receipt by Agent for its account of immediately available funds from Borrowers (i) in reimbursement of any payment made by Agent under the Letter of Credit with respect to which any Lender has made a Participation Advance to Agent, or (ii) in payment of interest on such a payment made by Agent under such a Letter of Credit, Agent will pay to each Lender, in the same funds as those received by Agent, the amount of such Lender’s Commitment Percentage of such funds, except Agent shall retain the amount of the Commitment Percentage of such funds of any Lender that did not make a Participation Advance in respect of such payment by Agent.
(b)If Agent is required at any time to return to any Borrower, or to a trustee, receiver, liquidator, custodian, or any official in any insolvency proceeding, any portion of the payments made by Borrowers to Agent pursuant to Section 2.12(a) in reimbursement of a payment made under the Letter of Credit or interest or fee thereon, each Lender shall, on demand of Agent, forthwith return to Agent the amount of its Commitment Percentage of any amounts so returned by Agent plus interest at the Federal Funds Effective Rate.
13.Documentation
.   Each Borrower agrees to be bound by the terms of the Letter of Credit Application and by Agent’s interpretations of any Letter of Credit issued on behalf of such Borrower and by Agent’s written regulations and customary practices relating to letters of credit, though Agent’s interpretations may be different from such Borrower’s own.  In the event of a conflict between the Letter of Credit Application and this Agreement, this Agreement shall govern.  It is understood and agreed that, except in the case of gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment), Agent shall not be liable for any error, negligence and/or mistakes, whether of omission or commission, in following Borrowing Agent’s or any Borrower’s instructions or those contained in the Letters of Credit or any modifications, amendments or supplements thereto.
14.Determination to Honor Drawing Request
.   In determining whether to honor any request for drawing under any Letter of Credit by the beneficiary thereof, Agent shall be responsible only to determine that the documents and certificates required to be delivered under such Letter of Credit have been delivered and that they comply on their face with the requirements of such Letter of Credit and that any other drawing condition appearing on the face of such Letter of Credit has been satisfied in the manner so set forth.
15.Nature of Participation and Reimbursement Obligations
.   Each Lender’s obligation in accordance with this Agreement to make the Revolving Advances or Participation Advances as a result of a drawing under a Letter of Credit, and the obligations of Borrowers to reimburse Agent upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Section 2.15 under all circumstances, including the following circumstances:
(i)any set-off, counterclaim, recoupment, defense or other right that such Lender may have against Agent, any Borrower or any other Person for any reason whatsoever;
(ii)the failure of any Borrower or any other Person to comply, in connection with a Letter of Credit Borrowing, with the conditions set forth in this Agreement for the making of a Revolving Advance, it being acknowledged that such conditions are not required for the making of a Letter of Credit Borrowing and the obligation of Lenders to make Participation Advances under Section 2.11;
(iii)any lack of validity or enforceability of any Letter of Credit;
(iv)any claim of breach of warranty that might be made by Borrower or any Secured Party against the beneficiary of a Letter of Credit, or the existence of any claim, set-off, recoupment, counterclaim, cross claim, defense or other right that any Borrower or any Secured Party may have 

at any time against a beneficiary, any successor beneficiary or any transferee of any Letter of Credit or the proceeds thereof (or any Persons for whom any such transferee may be acting), any Secured Party or any other Person, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between any Borrower or any Subsidiaries of such Borrower and the beneficiary for which any Letter of Credit was procured);
(v)the lack of power or authority of any signer of (or any defect in or forgery of any signature or endorsement on) or the form of or lack of validity, sufficiency, accuracy, enforceability or genuineness of any draft, demand, instrument, certificate or other document presented under or in connection with any Letter of Credit, or any fraud or alleged fraud in connection with any Letter of Credit, or the transport of any property or provisions of services relating to a Letter of Credit, in each case even if Agent or any of Agent’s Affiliates has been notified thereof;
(vi)payment by Agent under any Letter of Credit against presentation of a demand, draft or certificate or other document that does not comply with the terms of such Letter of Credit;
(vii)the solvency of, or any acts or omissions by, any beneficiary of any Letter of Credit, or any other Person having a role in any transaction or obligation relating to a Letter of Credit, or the existence, nature, quality, quantity, condition, value or other characteristic of any property or services relating to a Letter of Credit;
(viii)any failure by Agent or any of Agent’s Affiliates to issue any Letter of Credit in the form requested by Borrowing Agent, unless Agent has received written notice from Borrowing Agent of such failure within three (3) Business Days after Agent has furnished Borrowing Agent a copy of such Letter of Credit and such error is material and no drawing has been made thereon prior to receipt of such notice;
(ix)any Material Adverse Effect on any Credit Party;
(x)any breach of this Agreement or any other Loan Document by any party thereto;
(xi)the occurrence or continuance of an insolvency proceeding with respect to any Credit Party;
(xii)the fact that a Default or Event of Default has occurred and is continuing;
(xiii)the fact that the Term has expired or this Agreement or the Obligations hereunder have been terminated; and
(xiv)any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.
16.Indemnity
.  In addition to amounts payable as provided in Section 16.5, each Borrower hereby agrees to protect, indemnify, pay and save harmless Agent and any of Agent’s Affiliates that have issued a Letter of Credit and all other Indemnitees from and against any and all claims, demands, liabilities, damages, taxes, penalties, interest, judgments, losses, costs, charges and expenses (including reasonable fees, expenses and disbursements of counsel and allocated costs of internal counsel) that Agent or any of Agent’s Affiliates and all other Indemnitees  may incur or be subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit, other than as a result of (A) the gross negligence or willful misconduct of Agent or such Indemnitee as determined by a final and non-appealable judgment of a court of competent jurisdiction or (b) the wrongful dishonor by Agent or any of Agent’s Affiliates or such Indemnitee of a proper demand for payment made under any Letter of Credit, except if such dishonor resulted from any Governmental Act.
17.Liability for Acts and Omissions
.  As between Borrowers and Agent and Secured Party, each Borrower assumes all risks of the acts and omissions of, or misuse of the Letters of Credit by, the respective beneficiaries of such Letters of Credit.  In furtherance and not in limitation of the respective foregoing, Agent shall not be responsible for:  (a) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for an issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged (even if Agent has been notified thereof); (b) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, that may prove to be invalid or ineffective for any reason; (c) the failure of the beneficiary of any such Letter of Credit, or any other party to which such Letter of Credit may be transferred, to comply fully with any conditions required in order to draw upon such Letter of Credit or any other claim of any 

Borrower against any beneficiary of such Letter of Credit, or any such transferee, or any dispute between or among any Borrower and any beneficiary of any Letter of Credit or any such transferee; (d) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, facsimile, telegraph, telex or otherwise, whether or not they be in cipher; (e) errors in interpretation of technical terms; (f) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (g) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (h) any consequences arising from causes beyond the control of Agent, including any Governmental Acts, and none of the above shall affect or impair, or prevent the vesting of, any of Agent’s, its attorneys’, officers’, directors’, Affiliates’, employees’ or agents’ rights or powers hereunder. Notwithstanding the foregoing, nothing in the preceding sentence shall relieve Agent from liability for Agent’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment) in connection with actions or omissions described in such clauses (a) through (h) of the preceding sentence.  In no event shall Agent or Agent’s Affiliates be liable to any Borrower for any indirect, consequential, incidental, punitive, exemplary or special damages or expenses (including attorneys’ fees), or for any damages resulting from any change in the value of any property relating to a Letter of Credit.
Without limiting the generality of the foregoing, Agent and each of its Affiliates (i) may rely on any oral or other communication reasonably believed by Agent or  such Affiliate to have been authorized or given by or on behalf of the applicant for a Letter of Credit, (ii) may honor any presentation if the documents presented appear on their face substantially to comply with the terms and conditions of the relevant Letter of Credit; (iii) may honor a previously dishonored presentation under a Letter of Credit, whether such dishonor was pursuant to a court order, to settle or compromise any claim of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to the same extent as if such presentation had initially been honored, together with any interest paid by Agent or its Affiliates; (iv) may honor any drawing that is payable upon presentation of a statement advising negotiation or payment, upon receipt of such statement (even if such statement indicates that a draft or other document is being delivered separately), and shall not be liable for any failure of any such draft or other document to arrive, or to conform in any way with the relevant Letter of Credit; (v) may pay any paying or negotiating bank claiming that it rightfully honored under the laws or practices of the place where such bank is located; and (vi) may settle or adjust any claim or demand made on Agent or its Affiliate in any way related to any order issued at the applicant’s request to an air carrier, a letter of guarantee or of indemnity issued to a carrier or any similar document (each an “Order”) and honor any drawing in connection with any Letter of Credit that is the subject of such Order, notwithstanding that any drafts or other documents presented in connection with such Letter of Credit fail to conform in any way with such Letter of Credit.
In furtherance and extension and not in limitation of the specific provisions set forth above, any action taken or omitted by Agent under or in connection with the Letters of Credit issued by it or any documents and certificates delivered thereunder, if taken or omitted without gross negligence (as determined by a court of competent jurisdiction in a final non-appealable judgment), shall not put Agent under any resulting liability to any Borrower or any Lender.
18.Additional Payments
.  Any sums expended by any Secured Party due to any Borrower’s failure to perform or comply with its obligations under this Agreement or any other Loan Document including any Borrower’s obligations under Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6.1, may be charged to Borrowers’ Account as a Revolving Advance and added to the Obligations.
19.Manner of Borrowing and Payment
.
(a)Each borrowing of Revolving Advances shall be advanced according to the applicable Commitment Percentages of Lenders.  
(b)Each payment (including each prepayment) by any Borrower on account of the principal of and interest on the Revolving Advances, shall be applied to the Revolving Advances pro rata according to the applicable Commitment Percentages of Lenders.  Except as expressly provided herein, all payments (including prepayments) to be made by any Borrower on account of principal, interest and fees shall be made without set off or counterclaim and shall be made to Agent on behalf of Secured Parties to the Payment Office, in each case on or prior to 1:00 P.M., New York time, in Dollars and in immediately available funds.

(i)Notwithstanding anything to the contrary contained in Sections 2.19(a) and (b) hereof, commencing with the first Business Day following the Closing Date, each borrowing of Revolving Advances shall be advanced by Agent and each payment by any Borrower on account of Revolving Advances shall be applied first to those Revolving Advances advanced by Agent.  On or before 1:00 P.M., New York time, on each Settlement Date commencing with the first Settlement Date following the Closing Date, Agent and Lenders shall make certain payments as follows: (1) if the aggregate amount of new Revolving Advances made by Agent during the preceding Week (if any) exceeds the aggregate amount of repayments applied to outstanding Revolving Advances during such preceding Week, then each Lender shall provide Agent with funds in an amount equal to its applicable Commitment Percentage of the difference between (w) such Revolving Advances and (x) such repayments and (2) if the aggregate amount of repayments applied to outstanding Revolving Advances during such Week exceeds the aggregate amount of new Revolving Advances made during such Week, then Agent shall provide each Lender with funds in an amount equal to its applicable Commitment Percentage of the difference between (y) such repayments and (z) such Revolving Advances.
(ii)Each Lender shall be entitled to earn interest at the Revolving Interest Rate or the Equipment Loan Rate, as applicable, on outstanding Advances that it has funded.
(iii)Promptly following each Settlement Date, Agent shall submit to each Lender a certificate with respect to payments received and Advances made during the Week immediately preceding such Settlement Date.  Such certificate of Agent shall be conclusive in the absence of manifest error.
(c)If any Lender or Participant (a “benefited Lender”) shall at any time receive any payment of all or part of its Advances, or interest thereon, or receive any Collateral in respect thereof (whether voluntarily or involuntarily or by set-off) in a greater proportion than any such payment to and Collateral received by any other Lender, if any, in respect of such other Lender’s Advances, or interest thereon, and such greater proportionate payment or receipt of Collateral is not expressly permitted hereunder, such benefited Lender shall purchase for cash from the other Lenders a participation in such portion of each such other Lender’s Advances, or shall provide such other Lender with the benefits of any such Collateral, or the proceeds thereof, as shall be necessary to cause such benefited Lender to share the excess payment or benefits of such Collateral or proceeds ratably with each of the other Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.  Each Lender so purchasing a portion of another Lender’s Advances may exercise all rights of payment (including rights of set-off) with respect to such portion as fully as if such Lender were the direct holder of such portion.
(d)Unless Agent has been notified by telephone, confirmed in writing, by any Lender that such Lender will not make the amount that would constitute its applicable Commitment Percentage of the Advances available to Agent, Agent may (but shall not be obligated to) assume that such Lender shall make such amount available to Agent on the next Settlement Date and, in reliance upon such assumption, make available to Borrowers a corresponding amount.  Agent will promptly notify Borrowing Agent of its receipt of any such notice from a Lender.  If such amount is made available to Agent on a date after such next Settlement Date, such Lender shall pay to Agent on demand an amount equal to the product of (i) the daily average Federal Funds Rate (computed on the basis of a year of 360 days) during such period as quoted by Agent, times (ii) such amount, times (iii) the number of days from and including such Settlement Date to the date on which such amount becomes immediately available to Agent.  A certificate of Agent submitted to any Lender with respect to any amounts owing under this paragraph (e) shall be conclusive, in the absence of manifest error.  If such amount is not in fact made available to Agent by such Lender within three (3) Business Days after such Settlement Date, Agent shall be entitled to recover such an amount, with interest thereon at the rate per annum then applicable to such Revolving Advances hereunder, on demand from Borrowers; provided, however, that Agent’s right to such recovery shall not prejudice or otherwise adversely affect Borrowers’ rights (if any) against such Lender.
20.Mandatory Prepayments
.
(a)Subject to Section 4.3, when any Credit Party sells or otherwise disposes of any Collateral other than Inventory in the Ordinary Course of Business, Borrowers shall repay the Advances in an 

amount equal to the net proceeds of such sale (i.e., gross proceeds less the reasonable costs of such sales or other dispositions), such repayments to be made promptly but in no event more than one (1) Business Day following receipt of such net proceeds, and until the date of payment, such proceeds shall be held in trust for Agent.  The foregoing shall not be deemed to be implied consent to any such sale otherwise prohibited by the terms and conditions hereof.  Such repayments shall be applied to the Revolving Advances in such order as Agent may determine, subject to Borrowers’ ability to reborrow Revolving Advances in accordance with the terms.
(b)When any Credit Party receives any Extraordinary Receipts, Borrowers shall repay the Advances in an amount equal to such Extraordinary Receipts, such repayments to be made promptly but in no event more than one (1) Business Day following receipt thereof, and until the date of repayment, all such amounts shall be held in trust for Agent.  Such repayments will be applied to the Revolving Advances in such order as Agent may determine, subject to Borrowers’ ability to reborrow Revolving Advances in accordance with the terms hereof.
21.Use of Proceeds
. 
(a)Borrowers shall apply the proceeds of Advances to (i) repay in full existing indebtedness owed to Wells Fargo Bank, National Association, (ii) pay fees and expenses relating to this transaction, and (iii) provide for its working capital and other general corporate needs and reimburse drawings under Letters of Credit.
(b)Without limiting the generality of Section 2.21(a), neither any Borrower, any other Credit Party, nor any other Person which may in the future become a Credit Party, intends to use nor shall they use any portion of the proceeds of the Advances, directly or indirectly, for any purpose in violation of the Trading with the Enemy Act.
22.Defaulting Lender
.
(a)Notwithstanding anything to the contrary contained herein, in the event any Lender (x) has refused (which refusal constitutes a breach by such Lender of its obligations under this Agreement) to make available its portion of any Advance or (y) notifies either Agent or Borrowing Agent that it does not intend to make available its portion of any Advance (if the actual refusal would constitute a breach by such Lender of its obligations under this Agreement) (each, a “Lender Default”), all rights and obligations hereunder of such Lender (a “Defaulting Lender”) as to which a Lender Default is in effect and of the other parties hereto shall be modified to the extent of the express provisions of this Section 2.22 while such Lender Default remains in effect.
(b)Advances shall be incurred pro rata from Lenders (the “Non-Defaulting Lenders”) that are not Defaulting Lenders based on their respective Commitment Percentages, and no Commitment Percentage of any Lender or any pro rata share of any Advances required to be advanced by any Lender shall be increased as a result of such Lender Default.  Amounts received in respect of principal of any type of Advances shall be applied to reduce the applicable Advances of each Lender (other than any Defaulting Lender) pro rata based on the aggregate of the outstanding Advances of that type of all Lenders at the time of such application; provided, that, Agent shall not be obligated to transfer to a Defaulting Lender any payments received by Agent for the Defaulting Lender’s benefit, nor shall a Defaulting Lender be entitled to the sharing of any payments hereunder (including any principal, interest or fees).  Amounts payable to a Defaulting Lender shall instead be paid to or retained by Agent.  Agent may hold and, in its sole discretion, re-lend to a Borrower the amount of such payments received or retained by it for the account of such Defaulting Lender.
(c)A Defaulting Lender shall not be entitled to give instructions to Agent or to approve, disapprove, consent to or vote on any matters relating to this Agreement and the other Loan Documents.  All amendments, waivers and other modifications of this Agreement and the other Loan Documents may be made without regard to a Defaulting Lender and, for purposes of the definition of “Required Lenders”, a Defaulting Lender shall be deemed not to be a Lender and not to have Advances outstanding or a Commitment Percentage.
(d)Other than as expressly set forth in this Section 2.22, the rights and obligations of a Defaulting Lender (including the obligation to indemnify Agent) and the other parties hereto shall remain unchanged.  Nothing in this Section 2.22 shall be deemed to release any Defaulting Lender from its obligations under this Agreement and the other Loan Documents, shall alter such obligations, shall operate as a waiver of any default by such Defaulting 

Lender hereunder, or shall prejudice any rights that any Borrower or any Secured Party may have against any Defaulting Lender as a result of any default by such Defaulting Lender hereunder.
(e)In the event a Defaulting Lender retroactively cures to the satisfaction of Agent the breach that caused a Lender to become a Defaulting Lender, such Defaulting Lender shall no longer be a Defaulting Lender and shall be treated as a Lender under this Agreement.
ARTICLE VII

ARTICLE VIII

ARTICLE IXINTEREST AND FEES
1.Interest
.  Interest on Advances shall be payable in arrears on the first day of each month with respect to Domestic Rate Loans and, with respect to Eurodollar Rate Loans, at the end of each Interest Period or, for Eurodollar Rate Loans with an Interest Period in excess of three months, at the earlier of (a) each three months from the commencement of such Eurodollar Rate Loan or (b) the end of the Interest Period.  Interest charges shall be computed on the actual principal amount of Advances (excluding any Equipment Loan) outstanding during the month at a rate per annum equal to the applicable Revolving Interest Rate.  Interest charges shall be computed on the actual principal amount of Equipment Loans outstanding during the month at a rate per annum equal to the Equipment Loan Rate.  Whenever, subsequent to the date of this Agreement, the Alternate Base Rate is increased or decreased, the Revolving Interest Rate and Equipment Loan Rate for Domestic Rate Loans shall be similarly changed without notice or demand of any kind by an amount equal to the amount of such change in the Alternate Base Rate during the time such change or changes remain in effect.  The Eurodollar Rate shall be adjusted with respect to Eurodollar Rate Loans without notice or demand of any kind on the effective date of any change in the Reserve Percentage as of such effective date.  Upon and after the occurrence of an Event of Default, and during the continuation thereof, at the option of Agent or at the direction of Required Lenders, upon notice to the Borrowing Agent (provided that no notice shall be required if an Event of Default has occurred under Section 10.6 or any event described in Section 11.1(a)(iii) has occurred), the Obligations shall bear interest at the rate applicable thereto plus two percent (2.0%) per annum or, if no rate is otherwise applicable thereto, two percent (2.0%) per annum (as applicable, the “Default Rate”).
2.Letter of Credit Fees
.
(a)Borrowers shall pay (x) to Agent, for the ratable benefit of Lenders, fees for each Letter of Credit for the period from and excluding the date of issuance of same to and including the date of expiration or termination, equal to the average daily face amount of each outstanding Letter of Credit multiplied by a per annum rate equal to the Applicable Margin for Eurodollar Rate Loans, such fees to be calculated on the basis of a 360-day year for the actual number of days elapsed and to be payable quarterly in arrears on the first day of each quarter and on the last day of the Term, and (y) to the Issuer, a fronting fee of one quarter of one percent (0.25%) per annum, multiplied by the Maximum Undrawn Amount of each Letter of Credit, together with any and all administrative, issuance, amendment, payment and negotiation charges with respect to Letters of Credit and all fees and expenses as agreed upon by the Issuer and Borrowing Agent in connection with any Letter of Credit, including in connection with the opening, amendment or renewal of any such Letter of Credit and any acceptances created thereunder and shall reimburse Agent for any and all fees and expenses, if any, paid by Agent to the Issuer (all of the foregoing fees, the “Letter of Credit Fees”).  All such charges shall be deemed earned in full on the date when the same are due and payable hereunder and shall not be subject to rebate or pro-ration upon the termination of this Agreement for any reason.  Any such charge in effect at the time of a particular transaction shall be the charge for that transaction, notwithstanding any subsequent change in the Issuer’s prevailing charges for that type of transaction.  All Letter of Credit Fees payable hereunder shall be deemed earned in full on the date when the same are due and payable hereunder and shall not be subject to rebate or pro-ration upon the termination of this Agreement for any reason.  Upon and after the occurrence of an Event of Default, and during the continuation thereof, at the election of Agent or Required Lenders, upon notice to the Borrowing Agent (provided that no notice shall be required if an Event of Default has occurred under Section 10.6 or any event described in Section 11.1(a)(iii) has occurred), the Letter of Credit Fees described in Section 3.2(a)(i) shall be increased by an additional two percent (2%) per annum.

(b)Upon the occurrence and during the continuance of an Event of Default, upon demand (provided that no demand shall be required if an Event of Default has occurred under Section 10.6 or any event described in Section 11.1(a)(iii) has occurred), Borrowers will cause cash to be deposited and maintained in an account with Agent, as cash collateral, in an amount equal to one hundred and five percent (105%) of the Maximum Undrawn Amount of all outstanding Letters of Credit, and each Borrower hereby irrevocably authorizes Agent, in its discretion, on such Borrower’s behalf and in such Borrower’s name, to open such an account and to make and maintain deposits therein, or in an account opened by such Borrower, in the amounts required to be made by such Borrower, out of the proceeds of Receivables or other Collateral or out of any other funds of such Borrower coming into any Secured Party’s possession at any time.  Agent will invest such cash collateral (less applicable Reserves) in such short-term money-market items as to which Agent and such Borrower mutually agree and the net return on such investments shall be credited to such account and constitute additional cash collateral.  No Borrower may withdraw amounts credited to any such account without written consent of Agent, to be given or withheld in its sole discretion, except upon the occurrence of all of the following: (x) payment and performance in full of all Obligations, (y) expiration of all Letters of Credit and (z) termination of this Agreement.
3.[Intentionally Omitted.]
4.Fee Letter
.  Borrowers shall pay the amounts required to be paid in the Fee Letter in the manner and at the times required by the Fee Letter.
5.Computation of Interest and Fees
.  Subject to Section 3.6, interest and fees hereunder shall be computed on the basis of a year of 360 days and for the actual number of days elapsed.  If any payment to be made hereunder becomes due and payable on a day other than a Business Day, the due date thereof shall be extended to the next succeeding Business Day and interest thereon shall be payable at the applicable Revolving Interest Rate or Equipment Loan Rate, as applicable, during such extension.  All fees payable under this Agreement and the other Loan Documents will be deemed earned in full on the date when same is due and payable and will not be subject to rebate or proration upon termination of this Agreement for any reason.
6.Maximum Charges
.  In no event whatsoever shall interest and other charges charged hereunder exceed the highest rate permissible under Applicable Law. In the event interest and other charges as computed hereunder would otherwise exceed the highest rate permitted under law, such excess amount shall be first applied to any unpaid principal balance owed by Borrowers, and if the then remaining excess amount is greater than the previously unpaid principal balance, Lenders shall promptly refund such excess amount to Borrowers and the provisions hereof shall be deemed amended to provide for such permissible rate.
7.Increased Costs
.  In the event that any Applicable Law, treaty or regulation enacted after the Closing Date, or any change therein or in the interpretation or application of any Applicable Law, treaty or regulation (including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and all rules and regulations promulgated thereunder) after the Closing Date, or compliance by any Lender (for purposes of this Section 3.7, the term “Lender” shall include Agent or any Lender and any corporation or bank controlling Agent or any Lender) and the office or branch where Agent or any Lender (as so defined) makes or maintains any Eurodollar Rate Loans as of the Closing Date with any request or directive enacted after the Closing Date (whether or not having the force of law) from any central bank or other financial, monetary or other authority, shall:
(a)subject Agent or any Lender to any tax of any kind whatsoever with respect to this Agreement or any other Loan Document or change the basis of taxation of payments to Agent or any Lender of principal, fees, interest or any other amount payable hereunder or under any other Loan Documents (except for changes in the rate of tax on the overall net income of Agent or any Lender by the jurisdiction in which it maintains its principal office);
(b)impose, modify or hold applicable any reserve, special deposit, assessment or similar requirement against assets held by, or deposits in or for the account of, advances or loans by, or other credit extended 

by, any office of Agent or any Lender, including pursuant to Regulation D of the Board of Governors of the Federal Reserve System; or
(c)impose on Agent or any Lender or the London interbank Eurodollar market any other condition with respect to this Agreement or any other Loan Document;
and the result of any of the foregoing is to increase the cost to Agent or any Lender of making, renewing or maintaining its Advances hereunder by an amount that Agent or such Lender deems to be material or to reduce the amount of any payment (whether of principal, interest or otherwise) in respect of any of the Advances by an amount that Agent or such Lender deems to be material, then, in any case Borrowers shall promptly pay Agent or such Lender, upon its demand, such additional amount as will compensate Agent or such Lender (on an after-tax basis) for such additional cost or such reduction, as the case may be; provided that the foregoing shall not apply to increased costs that are reflected in the Eurodollar Rate, as the case may be.  Agent or such Lender shall certify the amount of such additional cost or reduced amount to Borrowing Agent, and such certification shall be conclusive absent manifest error.
8.Basis for Determining Interest Rate Inadequate or Unfair
.  In the event that Agent or any Lender has determined that:
(a)reasonable means do not exist for ascertaining the Eurodollar Rate for any Interest Period; or
(b)Dollar deposits in the relevant amount and for the relevant maturity are not available in the London interbank Eurodollar market, with respect to an outstanding Eurodollar Rate Loan, a proposed Eurodollar Rate Loan, or a proposed conversion of a Domestic Rate Loan into a Eurodollar Rate Loan,
then Agent shall give Borrowing Agent prompt written, telephonic or telegraphic notice of such determination.  If such notice is given, (i) any such requested Eurodollar Rate Loan shall be made as a Domestic Rate Loan, unless Borrowing Agent shall notify Agent no later than 10:00 a.m. (New York City time) two (2) Business Days prior to the date of such proposed borrowing, that its request for such borrowing shall be cancelled or made as an unaffected type of Eurodollar Rate Loan, (ii) any Domestic Rate Loan or Eurodollar Rate Loan that was to have been converted to an affected type of Eurodollar Rate Loan shall be continued as or converted into a Domestic Rate Loan, or, if Borrowing Agent shall notify Agent, no later than 10:00 a.m. (New York City time) two (2) Business Days prior to the proposed conversion, shall be maintained as an unaffected type of Eurodollar Rate Loan, and (iii) any outstanding affected Eurodollar Rate Loans shall be converted into a Domestic Rate Loan, or, if Borrowing Agent shall notify Agent, no later than 10:00 a.m. (New York City time) two (2) Business Days prior to the last Business Day of the then current Interest Period applicable to such affected Eurodollar Rate Loan, shall be converted into an unaffected type of Eurodollar Rate Loan, on the last Business Day of the then current Interest Period for such affected Eurodollar Rate Loans.  Until such notice has been withdrawn, Lenders will have no obligation to make an affected type of Eurodollar Rate Loan or maintain outstanding affected Eurodollar Rate Loans and no Borrower shall have the right to convert a Domestic Rate Loan or an unaffected type of Eurodollar Rate Loan into an affected type of Eurodollar Rate Loan.
9.Capital Adequacy
.
(a)In the event that Agent or any Lender has determined that any Applicable Law, rule, regulation or guideline regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Body, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by Agent or any Lender (for purposes of this Section 3.9, the term “Lender” shall include Agent or any Lender and any corporation or bank controlling Agent or any Lender) and the office or branch where Agent or any Lender (as so defined) makes or maintains any Eurodollar Rate Loans with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on Agent or any Lender’s capital as a consequence of its obligations hereunder to a level below that which Agent or such Lender could have achieved but for such adoption, change or compliance (taking into consideration Agent’s and each Lender’s policies with respect to capital adequacy) by an amount deemed by Agent or any Lender to be material, then, from time to time, Borrowers shall pay upon demand to Agent or such Lender such additional amount or amounts as will compensate Agent or such Lender (on an after-tax basis) for such reduction.  In determining such amount or amounts, Agent or such Lender may use 

any reasonable averaging or attribution methods.  The protection of this Section 3.9 shall be available to Agent and each Lender regardless of any possible contention of invalidity or inapplicability with respect to the Applicable Law, regulation or condition.
(b)A certificate of Agent or such Lender setting forth such amount or amounts as shall be necessary to compensate Agent or such Lender with respect to Section 3.9(a) when delivered to Borrowing Agent shall be conclusive absent manifest error.
10.Gross Up for Taxes
.  If any Borrower shall be required by Applicable Law to withhold or deduct any taxes from or in respect of any sum payable under this Agreement or any of the other Loan Documents to Agent, or any Secured Party, assignee of any Secured Party, or Participant (each, individually, a “Payee” and collectively, the “Payees”), (a) the sum payable to such Payee or Payees, as the case may be, shall be increased as may be necessary so that, after making all required withholding or deductions, the applicable Payee or Payees receives an amount equal to the sum it would have received had no such withholding or deductions been made (the “Gross-Up Payment”), (b) such Borrower shall make such withholding or deductions, and (c) such Borrower shall pay the full amount withheld or deducted to the relevant taxation authority or other authority in accordance with Applicable Law.  Notwithstanding the foregoing, no Borrower shall be obligated to make any portion of the Gross-Up Payment that is attributable to any withholding or deductions that would not have been paid or claimed had the applicable Payee or Payees properly claimed a complete exemption with respect thereto pursuant to Section 3.11.
11.Withholding Tax Exemption
.
(a)Each Payee that is not incorporated under the Laws of the United States of America or a state thereof (and, upon the written request of Agent, each other Payee) agrees that it will deliver to Borrowing Agent and Agent two (2) duly completed appropriate valid Withholding Certificates (as defined under §1.1441-1(c)(16) of the Income Tax Regulations (“Regulations”)) certifying its status (i.e., U.S. or foreign Person) and, if appropriate, making a claim of reduced, or exemption from, U.S. withholding tax on the basis of an income tax treaty or an exemption provided by the Code.  The term “Withholding Certificate” means a Form W-9; a Form W-8BEN; a Form W-8ECI; a Form W-8IMY and the related statements and certifications as required under §1.1441-1(e)(2) and/or (3) of the Regulations; a statement described in §1.871-14(c)(2)(v) of the Regulations; or any other certificates under the Code or Regulations that certify or establish the status of a payee or beneficial owner as a U.S. or foreign Person.
(b)Each Payee required to deliver to Borrowing Agent and Agent a valid Withholding Certificate pursuant to Section 3.11(a) shall deliver such valid Withholding Certificate as follows:  (A) each Payee that is a party hereto on the Closing Date shall deliver such valid Withholding Certificate at least five (5) Business Days prior to the first date on which any interest or fees are payable by any Borrower hereunder for the account of such Payee; (B) each Payee shall deliver such valid Withholding Certificate at least five (5) Business Days before the effective date of such assignment or participation (unless Agent in its sole discretion shall permit such Payee to deliver such Withholding Certificate less than five (5) Business Days before such date in which case it shall be due on the date specified by Agent).  Each Payee that so delivers a valid Withholding Certificate further undertakes to deliver to Borrowing Agent and Agent two (2) additional copies of such Withholding Certificate (or a successor form) on or before the date that such Withholding Certificate expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent Withholding Certificate so delivered by it, and such amendments thereto or extensions or renewals thereof as may be reasonably requested by Borrowing Agent or Agent.  
(c)Notwithstanding the submission of a Withholding Certificate claiming a reduced rate of or exemption from U.S. withholding tax required under Section 3.11(b), Agent shall be entitled to withhold United States federal income taxes at the full 30% withholding rate if in its reasonable judgment it is required to do so under the due diligence requirements imposed upon a withholding agent under §1.1441-7(b) of the Regulations.  Further, Agent is indemnified under §1.1461-1(e) of the Regulations against any claims and demands of any Payee for the amount of any tax it deducts and withholds in accordance with regulations under §1441 of the Code.
12.Replacement of Lenders
.  If any Lender (an “Affected Lender”) (a) makes demand upon any Credit Party for (or if any Credit Party is otherwise required to pay) amounts pursuant to Section 3.7 or 3.9, (b) is unable to make or maintain Eurodollar Rate Loans as 

a result of a condition described in Section 2.2(g), or (c) is a Defaulting Lender, Borrowing Agent may, within thirty (30) days of receipt of such demand, notice (or the occurrence of such other event causing any Credit Party to be required to pay such compensation or causing Section 2.2(g) to be applicable), or Lender Default, as the case may be, by notice (a “Replacement Notice”) in writing to Agent and such Affected Lender (i) request the Affected Lender to cooperate with Borrowers in obtaining a replacement Lender satisfactory to Agent and Borrowers (a “Replacement Lender”); (ii) request the non-Affected Lenders to acquire and assume all of the Affected Lender’s Revolving Advances and Commitment Percentage as provided herein, but none of such Lenders shall be under an obligation to do so; or (iii) designate a Replacement Lender approved by Agent, such approval not to be unreasonably withheld or delayed.  If any satisfactory Replacement Lender is obtained, and/or if any one or more of the non-Affected Lenders agrees to acquire and assume all of the Affected Lender’s Revolving Advances and Commitment Percentage, then such Affected Lender shall assign, in accordance with Section 16.3, all of its Advances and Commitment Percentage and other rights and obligations under this Agreement and the other Loan Documents to such Replacement Lender or non-Affected Lenders, as the case may be, in exchange for payment of the principal amount so assigned and all interest and fees accrued on the amount so assigned, plus all other Obligations then due and payable to the Affected Lender; provided, however, that (A) such assignment shall be without recourse, representation or warranty and shall be on terms and conditions reasonably satisfactory to such Affected Lender and such Replacement Lender and/or non-Affected Lenders, as the case may be, and (B) prior to any such assignment, Borrowers shall have paid to such Affected Lender all amounts properly demanded and unreimbursed under Section 3.7 and 3.9.  Upon the effective date of such assignment, Borrowers shall issue replacement Revolving Credit Notes and/or Equipment Notes to such Replacement Lender and/or non-Affected Lenders, as the case may be, and such institution(s) shall become a “Lender” for all purposes under this Agreement and the other Documents.
		
	ARTICLE X
	

ARTICLE XI

ARTICLE XIICOLLATERAL:  GENERAL TERMS
1.Security Interest in the Collateral
.  To secure the prompt payment and performance to Agent and each Secured Party of the Obligations, each Credit Party hereby assigns, pledges and grants to Agent for its benefit and for the ratable benefit of each Secured Party a continuing security interest in and to and Lien on all of its Collateral, whether now owned or existing or hereafter acquired or arising and wheresoever located.  Each Credit Party shall mark its books and records as may be necessary or appropriate to evidence, protect and perfect Agent’s security interest and shall cause its financial statements to reflect such security interest.  Each Credit Party shall promptly provide Agent with written notice of all commercial tort claims as provided in Section 4.2(b), such notice to contain the case title together with the applicable court and a brief description of the claim(s).  Upon delivery of each such notice, such Credit Party shall be deemed to hereby grant to Agent a security interest and lien in and to such commercial tort claims and all proceeds thereof.
2.Perfection of Security Interest
.  
(a)Each Credit Party shall take all action that may be necessary or desirable, or that Agent may reasonably request, so as at all times to maintain the validity, perfection, enforceability and priority of Agent’s security interest in and Lien on the Collateral or to enable Agent to protect, exercise or enforce its rights hereunder and in the Collateral, including:  (i) promptly discharging all Liens other than Permitted Encumbrances; (ii) using commercially reasonable efforts to obtain Lien Waiver Agreements; (iii) delivering to Agent, endorsed or accompanied by such instruments of assignment as Agent may specify, and stamping or marking, in such manner as Agent may specify, all chattel paper, instruments, letters of credit and advices thereof and documents evidencing or forming a part of the Collateral, except, so long as no Default or Event of Default has occurred and is continuing, for such chattel paper, instruments, letters of credit and related documents having an aggregate value for all such items of less than $250,000; (iv) entering into warehousing, lockbox and other custodial arrangements pursuant to this Agreement in form and substance reasonably satisfactory to Agent; and (v) executing and delivering financing statements, control agreements (to the extent required hereunder), instruments of pledge, mortgages, notices and assignments, in each case in form and substance reasonably satisfactory to Agent, relating to the creation, validity, perfection, maintenance or continuation of Agent’s security interest and Lien under the Uniform Commercial Code or other Applicable 

Law.  By its signature hereto, each Credit Party hereby authorizes Agent to file against such Credit Party, one or more financing, continuation or amendment statements pursuant to the Uniform Commercial Code in form and substance satisfactory to Agent (which statements may have a description of collateral that is broader than that set forth herein, including a description of “all assets” or words of similar import).  All reasonable and documented out of pocket charges, expenses and fees Agent may incur in doing any of the foregoing, and any local taxes relating thereto, shall be charged to Borrowers’ Account as a Revolving Advance of a Domestic Rate Loan and added to the Obligations, or, at Agent’s option, shall be paid to Agent for its benefit and for the ratable benefit of Secured Parties immediately upon demand.
(b)The Credit Parties shall (i) promptly notify Agent in writing upon acquiring or otherwise obtaining any Collateral after the date hereof consisting of (x) deposit accounts required to be subject to Agent’s control pursuant to Section 4.21, and (y) investment property, letter-of-credit rights, tangible chattel paper or electronic chattel paper (as such terms are defined from time to time in the UCC) and, upon the request of Agent in the case of the foregoing clauses (x) and (y), promptly execute such other documents, and do such other acts or things deemed appropriate by Agent to deliver to Agent control with respect to such Collateral, provided that such action shall only be required with respect to Collateral of the type described in clause (y) having an aggregate value in excess of $25,000 for all such Collateral; (ii) promptly notify Agent in writing upon acquiring or otherwise obtaining any Collateral after the date hereof consisting of documents or instruments and, upon the request of Agent, promptly execute such other documents, and do such other acts or things deemed appropriate by Agent to deliver to Agent possession of such documents which are negotiable and instruments having an aggregate value in excess of $25,000, and, with respect to nonnegotiable documents, to have such nonnegotiable documents issued in the name of Agent; (iii) with respect to Collateral in the possession of a third party, other than certificated securities and goods covered by a document, obtain an acknowledgment from the third party that it is holding the Collateral for the benefit of Agent; (iv) promptly notify Agent in writing upon incurring or otherwise obtaining a commercial tort claim after the date hereof asserted against any third party, of the details thereof in the form of an amendment to Schedule 5.26 hereto, and do such other acts or things deemed appropriate by Agent to give Agent a security interest in such commercial tort claim; (v) not change its state of incorporation or organization or type of organization; (vi) not change its legal name without providing Agent with at least 30 days’ prior written notice (or such longer period as Agent shall agree in its sole discretion); and (vii) reimburse Agent for all expenses, including reasonable attorney’s fees and charges (including time charges of attorneys who are employees of Agent), incurred by Agent in seeking to collect or enforce any rights in respect of such Collateral.
3.Disposition of Collateral
.  Each Credit Party will safeguard and protect all Collateral for Agent’s general account and make no disposition thereof whether by sale, lease or otherwise except (a) the sale of Inventory in the Ordinary Course of Business and (b) the disposition or transfer of obsolete and worn-out Equipment in the Ordinary Course of Business during any fiscal year having an aggregate fair market value of not more than $200,000 and only to the extent that the proceeds of which are remitted to Agent to be applied pursuant to Section 2.20.
4.Preservation of Collateral
.  Following the occurrence and during the continuance of a Default or Event of Default, in addition to the rights and remedies set forth in Section 11.1, Agent: (a) may at any time take such steps as Agent deems necessary to protect Agent’s interest in and to preserve the Collateral, including the hiring of such security guards or the placing of other security protection measures as Agent may deem appropriate; (b) may employ and maintain at any of any Credit Party’s premises a custodian who shall have full authority to do all acts necessary to protect Agent’s interests in the Collateral; (c) may lease warehouse facilities to which Agent may move all or part of the Collateral; (d) may use any Credit Party’s owned or leased lifts, hoists, trucks and other facilities or equipment for handling or removing the Collateral; and (e) shall have, and is hereby granted, a right of ingress and egress to the places where the Collateral is located, and may proceed over and through any of Credit Party’s owned or leased property.  Each Credit Party shall cooperate fully with all of Agent’s efforts to preserve the Collateral and will take such actions to preserve the Collateral as Agent may direct.  All of Agent’s reasonable and documented out of pocket expenses of preserving the Collateral, including any expenses relating to the bonding of a custodian, shall be charged to Borrowers’ Account as a Revolving Advance maintained as a Domestic Rate Loan and added to the Obligations.
5.Ownership of Collateral
.

(a)With respect to the Collateral, at the time the Collateral becomes subject to Agent’s security interest:  (i) each Credit Party shall be the sole owner of and fully authorized and able to sell, transfer, pledge and/or grant a first priority security interest in each and every item of the its respective Collateral to Agent; and, except for Permitted Encumbrances the Collateral shall be free and clear of all Liens and encumbrances whatsoever; (ii) each Loan Document executed by each Credit Party or delivered to Agent or any Secured Party in connection with this Agreement shall be true and correct in all material respects; (iii) all signatures and endorsements of each Credit Party that appear on such documents and agreements shall be genuine and each Credit Party shall have full capacity to execute same; and (iv) each Credit Party’s Equipment (other than vehicles and Equipment out for repair) and Inventory (other than sample Inventory and other immaterial items of Collateral held by employees of the Credit Parties for marketing and sales purposes) shall be located in the United States as set forth on Schedule 4.5 or in transit to or between such locations or to a customer; provided that the Credit Parties may amend Schedule 4.5 by delivery of such amended schedule to the Agent at the time of acquisition of any new location in the United States.
(b)(i)  There is no location at which any Credit Party has any Inventory (except for Inventory in transit and sample Inventory and other immaterial items of Collateral held by employees of the Credit Parties for marketing and sales purposes) other than those locations listed on Schedule 4.5; (ii) Schedule 4.5 contains a correct and complete list, as of the Closing Date, of the legal names and addresses of each warehouse at which Inventory of any Credit Party is stored; none of the receipts received by any Credit Party from any warehouse states that the goods covered thereby are to be delivered to bearer or to the order of a named Person or to a named Person and such named Person’s assigns;  (iii) Schedule 4.5 sets forth a correct and complete list as of the Closing Date of (A) each place of business of each Credit Party and (B) the chief executive office of each Credit Party; and (iv) Schedule 4.5 sets forth a correct and complete list as of the Closing Date of the location, by state and street address, of all Real Property owned or leased by each Credit Party, together with the names and addresses of any landlords.
6.Defense of Secured Parties’ Interests
.  Until (a) payment and performance in full of all of the Obligations (other than Inchoate Obligations) and (b) termination of this Agreement, Agent’s interests in the Collateral shall continue in full force and effect.  During such period no Credit Party shall, without Agent’s prior written consent, pledge, sell (except to the extent permitted in Section 4.3), assign, transfer, create or suffer to exist a Lien upon or encumber or allow or suffer to be encumbered in any way except for Permitted Encumbrances, any part of the Collateral.  Each Credit Party shall defend Agent’s interests in the Collateral against any and all Persons whatsoever.  At any time following demand by Agent for payment of all Obligations in accordance with this Agreement, Agent shall have the right to take possession of the indicia of the Collateral and the Collateral in whatever physical form contained, including:  labels, stationery, documents, instruments and advertising materials.  If Agent exercises this right to take possession of the Collateral, the Credit Parties shall, upon demand, assemble it in the best manner possible and make it available to Agent at a place reasonably convenient to Agent.  In addition, with respect to all Collateral, Secured Parties shall be entitled to all of the rights and remedies set forth herein and further provided by the Uniform Commercial Code or other Applicable Law.  Each Credit Party shall and, after the occurrence and during the continuance of a Default or Event of Default,  Agent may, at its option, instruct all suppliers, carriers, forwarders, warehousers or others receiving or holding cash, checks, Inventory, documents or instruments in which Agent holds a security interest to deliver same to Agent and/or subject to Agent’s order and if they shall come into any Credit Party’s possession, they, and each of them, shall be held by such Credit Party in trust as Agent’s trustee, and such Credit Party will immediately deliver them to Agent in their original form together with any necessary endorsement.
7.Books and Records
.  Each Credit Party shall (a) keep proper books of record and account in which full, true and correct entries will be made of all dealings or transactions of or in relation to its business and affairs; (b) set up on its books accruals with respect to all taxes, assessments, charges, levies and claims; and (c) on a reasonably current basis set up on its books, from its earnings, allowances against doubtful Receivables, advances and investments and all other proper accruals (including by reason of enumeration, accruals for premiums, if any, due on required payments and accruals for depreciation, obsolescence, or amortization of properties), which should be set aside from such earnings in connection with its business.  All determinations pursuant to this subsection shall be made in accordance with, or as required by, GAAP consistently applied in the opinion of such independent public accountant as shall then be regularly engaged by the Credit Parties.

8.Financial Disclosure
.  Each Credit Party hereby irrevocably authorizes and directs all accountants and auditors employed by such Credit Party at any time during the Term to exhibit and deliver to Agent and each Lender copies of any of such Credit Party’s financial statements, trial balances or other accounting records of any sort in the accountant’s or auditor’s possession, and to disclose to Agent and each Lender any information such accountants may have concerning such Credit Party’s financial status and business operations.  Each Credit Party hereby authorizes all Governmental Bodies to furnish to Agent and each Lender copies of reports or examinations relating to such Credit Party, whether made by such Credit Party or otherwise; however, Agent and each Lender will attempt to obtain such information or materials directly from such Credit Party prior to obtaining such information or materials from such accountants or Governmental Bodies.
9.Compliance with Laws
.  Each Credit Party shall comply with all Applicable Laws with respect to the Collateral or any part thereof or to the operation of such Credit Party’s business the non-compliance with which could reasonably be expected to have a Material Adverse Effect.  The assets of the Credit Parties at all times shall be maintained in accordance with the requirements of all insurance carriers that provide insurance with respect to the assets of the Credit Parties so that such insurance shall remain in full force and effect.
10.Inspections and Appraisals
.  Agent and each Lender shall have access to and the right to audit, check, inspect and, subject to applicable confidentiality restrictions, make abstracts and copies from each Credit Party’s books, records, audits, correspondence and all other papers relating to the Collateral and the operation of each Credit Party’s business.  Agent and its agents may enter upon any premises of any Credit Party at any time during business hours and at any other reasonable time, and from time to time, for the purpose of inspecting the Collateral and any and all records pertaining thereto and the operation of such Credit Party’s business.  Agent shall have the right to obtain appraisals of the Collateral through one or more appraisers acceptable to Agent at any time and from time to time and the Credit Parties agree to reimburse Agent for all charges, costs and expenses of Agent in connection therewith.  In addition to the foregoing, Agent shall have the right to conduct a desktop or full appraisal, annually, provided that upon the occurrence and continuance of an Event of Default, Agent may conduct such additional desktop and full appraisals as it determines. 
11.Insurance
.  The assets and properties of each Credit Party at all times shall be maintained in accordance with the requirements of all insurance carriers that provide insurance with respect to the assets and properties of such Credit Party so that such insurance shall remain in full force and effect.  Each Credit Party shall bear the full risk of any loss of any nature whatsoever with respect to the Collateral.  At each Credit Party’s own cost and expense in amounts and with carriers acceptable to Agent, each Credit Party shall (a) keep all its insurable properties and properties in which such Credit Party has an interest insured against the hazards of fire, flood, sprinkler leakage, those hazards covered by extended coverage insurance and such other hazards, and for such amounts, as is customary in the case of companies engaged in businesses similar to such Credit Party’s including business interruption insurance; (b) maintain a bond in such amounts as is customary in the case of companies engaged in businesses similar to such Credit Party insuring against larceny, embezzlement or other criminal misappropriation of insured’s officers and employees who may either singly or jointly with others at any time have access to the assets or funds of such Credit Party either directly or through authority to draw upon such funds or to direct generally the disposition of such assets; (c) maintain public and product liability insurance against claims for personal injury, death or property damage suffered by others; (d) maintain all such worker’s compensation or similar insurance as may be required under the laws of any state or jurisdiction in which such Credit Party is engaged in business; (e) furnish Agent with (i) copies of all policies and evidence of the maintenance of such policies by the renewal thereof as soon as practicable before any expiration date therefor and in any event not less than ten (10) days’ prior to such expiration date, and (ii) appropriate loss payable endorsements in form and substance satisfactory to Agent, naming Agent as a co-insured and loss payee as its interests may appear with respect to all insurance coverage referred to in clauses (a) and (b) above, and providing (A) that all proceeds thereunder shall be payable to Agent, (B) no such insurance shall be affected by any act or neglect of the insured or owner of the property described in such policy, and (C) that such policy and loss payable clauses may not be cancelled, amended or terminated unless at least ten (10) days’ prior written notice is given to Agent for any cancellation, amendment or termination of such policy resulting from nonpayment of premiums and at least thirty (30) days’ prior written notice is given to Agent for any other reason for cancellation, amendment or termination of such policy.  In the event of any 

loss thereunder, the carriers named therein hereby are directed by Agent and the applicable Credit Party to make payment for such loss to Agent and not to such Credit Party and Agent jointly.  If any insurance losses are paid by check, draft or other instrument payable to any Credit Party and Agent jointly, Agent may endorse such Credit Party’s name thereon and do such other things as Agent may deem advisable to reduce the same to cash.  Agent is hereby authorized to adjust and compromise claims under insurance coverage referred to in clauses (a) and (b) above.  All loss recoveries received by Agent upon any such insurance may be applied to the Obligations, in such order as Agent in its sole discretion shall determine.  Any surplus shall be paid by Agent to the Credit Parties or applied as may be otherwise required by law.  Any deficiency thereon shall be paid by the Credit Parties to Agent, on demand.  
12.Failure to Pay Insurance
.  
(a)If any Credit Party fails to obtain insurance as hereinabove provided, or to keep the same in force, Agent, if Agent so elects, may obtain such insurance and pay the premium therefor on behalf of such Credit Party, and charge Borrowers’ Account therefor as a Revolving Advance of a Domestic Rate Loan and such expenses so paid shall be part of the Obligations; provided that Agent shall use commercially reasonable efforts to notify Borrowing Agent of the foregoing.
(b)Unless the Credit Parties provide Agent with evidence of the insurance coverage required by this Agreement, Agent may purchase insurance at the expense of the Credit Parties to protect Agent’s and the Lenders’ interests in the Collateral.  This insurance may, but need not, protect the Credit Parties’ interests.  The coverage that Agent purchases may not pay any claim that is made against the Credit Parties in connection with the Collateral.  The Credit Parties may later cancel any insurance purchased by Agent, but only after providing Agent with evidence that the Credit Parties have obtained insurance as required by this Agreement.  If Agent purchases insurance for the Collateral, the Credit Parties will be responsible for the costs of that insurance, including interest and any other charges that may be imposed with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance.  The costs of the insurance may be added to the amount of the Obligations.  The costs of the insurance may be more than the cost of the insurance the Credit Parties may be able to obtain.
(c)The premiums and other costs of any insurance obtained by Agent pursuant to this Section 4.12 may be charged to Borrowers’ Account as a Revolving Advance maintained as a Domestic Rate Loan and added to the Obligations.
13.Payment of Taxes
.  Each Credit Party will pay, when due, to the extent lawfully levied or assessed upon such Credit Party or any of the Collateral, all real and personal property taxes, assessments and Charges, all franchise and federal taxes, assessments and Charges, all state and local taxes, assessments and Charges in excess of $250,000 in the aggregate, and all employment, social security benefits, withholding, and sales taxes, in each case, other than those being Properly Contested.  If any tax by any Governmental Body is or may be imposed on or as a result of any transaction between any Credit Party and any Secured Party that any Secured Party may be required to withhold or pay or if any taxes, assessments, or other Charges remain unpaid after the date fixed for their payment, or if any claim shall be made that, in any Secured Party’s opinion, may possibly create a valid Lien on the Collateral, Agent may without notice to the Credit Parties pay the taxes, assessments or other Charges and each Credit Party hereby indemnifies and holds each Indemnitee harmless in respect thereof.  Agent will not pay any taxes, assessments or Charges to the extent that any applicable Credit Party has Properly Contested those taxes, assessments or Charges.  The amount of any payment by Agent under this Section 4.13 shall be charged to Borrowers’ Account as a Revolving Advance maintained as a Domestic Rate Loan and added to the Obligations and, until the Credit Parties shall furnish Agent with an indemnity therefor (or supply Agent with evidence satisfactory to Agent that due provision for the payment thereof has been made), Agent may hold without interest any balance standing to Borrowers’ credit and Agent shall retain its security interest in and Lien on any and all Collateral held by Agent.
14.Payment of Leasehold Obligations
.  Each Credit Party shall at all times pay, when and as due, its rental obligations under all leases under which it is a tenant, and shall otherwise comply, in all material respects, with all other terms of such leases and keep them in full force and effect and, at Agent’s request will provide evidence of having done so.
15.Receivables

.
(a)Nature of Receivables.  Each Credit Party represents and warrants that each of the Receivables (without representing that any such Receivable is an Eligible Receivable except to the extent otherwise expressly so represented pursuant to the Loan Documents) shall be, (i) as of the date of creation thereof, a bona fide and valid account representing a bona fide indebtedness incurred by the Customer therein named, for a fixed sum as set forth in the invoice relating thereto (provided that immaterial or unintentional invoice errors shall not be deemed to be a breach hereof) with respect to an absolute sale or lease and delivery of goods upon stated terms of a Credit Party, or work, labor or services theretofore rendered by a Credit Party and (ii) due and owing in accordance with the applicable Credit Party’s standard terms of sale without known dispute, setoff or counterclaim, except as may be stated on the most recently delivered Borrowing Base Certificate; provided that if any such dispute, setoff or counterclaim arises between delivery of Borrowing Base Certificates in an aggregate amount greater than $500,000, the Credit Parties shall have disclosed the same to Agent in writing.
(b)Solvency of Customers.  Each Customer, to the best of each Credit Party’s knowledge based on such Credit Party’s use and review of customary credit checks and other similar inspections with respect to such Customer, as of the date each Receivable is created, is not subject to any insolvency proceeding and is and will be able to pay all Receivables on which the Customer is obligated in full when due or with respect to such Customers of any Credit Party who are not so able such Credit Party has set up on its books and in its financial records bad debt reserves adequate to cover such Receivables.
(c)Location of Credit Parties.  Each Credit Party’s chief executive office is located at 2027 Harpers Way, Torrance, California.  Until written notice is given to Agent by Borrowing Agent of any other office at which any Credit Party keeps its records pertaining to Receivables (including collection thereof), all such records shall be kept at such executive office; provided that duplicate copies thereof may be kept at other locations of the Credit Parties and their Subsidiaries.
(d)Collection of Receivables.  Until any Credit Party’s authority to do so is terminated by Agent (which notice Agent may give at any time following the occurrence and during the continuance of a Default or Event of Default ), each Credit Party will, at such Credit Party’s sole cost and expense, but on Agent’s behalf and for Agent’s account, collect as Agent’s property and in trust for Agent all amounts received on Receivables, and shall not commingle such collections with any Credit Party’s funds or use the same except to pay Obligations.  Each Credit Party shall deposit in the Blocked Account or, upon request by Agent, deliver to Agent, in original form and on the date of receipt thereof, all checks, drafts, notes, money orders, acceptances, cash and other evidences of Indebtedness.
(e)Notification of Assignment of Receivables.  After the occurrence and during the continuance of a Default or Event of Default, Agent shall have the right to send notice of the assignment of, and Agent’s security interest in and Lien on, the Receivables to any and all Customers or any third party holding or otherwise concerned with any of the Collateral.  Thereafter, Agent shall have the sole right, if it has made such election, to collect the Receivables, take possession of the Collateral, or both.  Agent’s actual collection expenses, including stationery and postage, telephone and telegraph, secretarial and clerical expenses and the charges of any collection personnel used for collection, may be charged to Borrowers’ Account and added to the Obligations.
(f)Power of Agent to Act on Credit Parties’ Behalf.  Agent shall have the right to receive, endorse, assign and/or deliver in the name of Agent or any Credit Party any and all checks, drafts and other instruments for the payment of money relating to the Receivables, and each Credit Party hereby waives notice of presentment, protest and non-payment of any instrument so endorsed.  Each Credit Party hereby constitutes Agent or Agent’s designee as such Credit Party’s attorney with power (i) to endorse such Credit Party’s name upon any notes, acceptances, checks, drafts, money orders or other evidences of payment or Collateral; (ii) to sign such Credit Party’s name on any invoice or bill of lading relating to any of the Receivables, drafts against Customers, assignments and verifications of Receivables; (iii) to send verifications of Receivables to any Customer; (iv) to sign such Credit Party’s name on all financing statements or any other documents or instruments deemed necessary or appropriate by Agent to preserve, protect, or perfect Agent’s interest in the Collateral and to file same; (v) to demand payment of the Receivables; (vi) to enforce payment of the Receivables by legal proceedings or otherwise; (vii) to exercise all of such Credit Party’s rights and remedies with respect to the collection of the Receivables and any other Collateral; (viii) to settle, adjust, compromise, extend or renew the Receivables; (ix) to settle, adjust or compromise any legal proceedings brought to collect Receivables; (x) to prepare, file and sign such Credit Party’s name on a proof of claim in bankruptcy or similar document 

against any Customer; (xi) to prepare, file and sign such Credit Party’s name on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with the Receivables; and (xii) to do all other acts and things necessary to carry out this Agreement; provided, however, that Agent shall only exercise the rights described in clauses (vi) through (ix), inclusive upon the occurrence and during the continuance of a Default or Event of Default.  All acts of said attorney or designee are hereby ratified and approved, and said attorney or designee shall not be liable for any acts of omission or commission nor for any error of judgment or mistake of fact or of law, unless done maliciously or with gross (not mere) negligence (as determined by a court of competent jurisdiction in a final non-appealable judgment); this power being coupled with an interest is irrevocable while any of the Obligations (other than Inchoate Obligations) remain unpaid.  Agent shall have the right at any time following the occurrence and during the continuance of an Event of Default or Default, to change the address for delivery of mail addressed to any Credit Party to such address as Agent may designate and to receive, open and dispose of all mail addressed to any Credit Party.
(g)No Liability.  No Secured Party shall, under any circumstances or in any event whatsoever, have any liability for any error or omission or delay of any kind occurring in the settlement, collection or payment of any of the Receivables or any instrument received in payment thereof, or for any damage resulting therefrom.  Following the occurrence and during the continuance of an Event of Default or Default Agent may, without notice or consent from any Credit Party, sue upon or otherwise collect, extend the time of payment of, compromise or settle for cash, credit or upon any terms any of the Receivables or any other securities, instruments or insurance applicable thereto and/or release any obligor thereof.  Agent is authorized and empowered to accept following the occurrence and during the continuance of an Event of Default or Default the return of the goods represented by any of the Receivables, without notice to or consent by any Credit Party, all without discharging or in any way affecting any Credit Party’s liability hereunder.
(h)Establishment of a Lockbox Account, Dominion Account.  All proceeds of Collateral and all Extraordinary Receipts shall be deposited by Borrowers into either (i) a lockbox account, dominion account or such other “blocked account” (“Blocked Accounts”) established at a bank or banks (each such bank, a “Blocked Account Bank”) pursuant to an arrangement with such Blocked Account Bank as may be selected by Borrowing Agent and be acceptable to Agent or (ii) depository accounts (“Depository Accounts”) established at Agent for the deposit of such proceeds.  Each applicable Borrower, Agent and each Blocked Account Bank shall enter into a deposit account control agreement in form and substance satisfactory to Agent directing such Blocked Account Bank to transfer such funds so deposited to Agent, either to any account maintained by Agent at said Blocked Account Bank or by wire transfer to appropriate account(s) of Agent.  All funds deposited in such Blocked Accounts shall immediately become the property of Agent and Borrowing Agent shall obtain the agreement by such Blocked Account Bank to waive any offset rights against the funds so deposited.  No Secured Party assumes any responsibility for such blocked account arrangement, including any claim of accord and satisfaction or release with respect to deposits accepted by any Blocked Account Bank thereunder.  All deposit accounts and investment accounts of each Credit Party and its Subsidiaries are set forth on Schedule 4.15(h).
(i)Adjustments.  No Credit Party will, without Agent’s consent, compromise or adjust any Receivables (or extend the time for payment thereof) or accept any returns of merchandise or grant any additional discounts, allowances or credits thereon except for compromises, adjustments, returns, discounts, credits and allowances in the Ordinary Course of Business.
16.Inventory
.  All Inventory held for sale or lease by any Credit Party has been and will be manufactured and maintained in all material respects in compliance with all requirements of each Governmental Body that has regulatory authority over such Inventory or the use or sale thereof.  To the extent Inventory held for sale or lease has been produced by any Credit Party, it has been and will be produced by such Credit Party in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunder.
17.Maintenance of Equipment
.  The Equipment shall be maintained in good operating condition and repair (reasonable wear and tear excepted) and all necessary replacements of and repairs thereto shall be made so that the value and operating efficiency of the Equipment shall be maintained and preserved.  The Credit Parties shall use or operate the Equipment in compliance in all material respects with Applicable Law.  Each Credit Party shall have the right to sell Equipment to the extent expressly set forth in Section 4.3.

18.Exculpation of Liability
.  Nothing herein contained shall be construed to constitute Agent or any Lender as any Credit Party’s agent for any purpose whatsoever, nor shall Agent or any Lender be responsible or liable for any shortage, discrepancy, damage, loss or destruction of any part of the Collateral wherever the same may be located and regardless of the cause thereof.  No Secured Party, whether by anything herein or in any assignment or otherwise, assumes any of any Credit Party’s obligations under any contract or agreement assigned to Agent or such Lender, and no Secured Party shall be responsible in any way for the performance by any Credit Party of any of the terms and conditions thereof.
19.Environmental Matters
. 
(a)The Credit Parties shall ensure that the Real Property and all operations and businesses conducted thereon remains in compliance with all Environmental Laws except as could not individually or in the aggregate reasonably be expected to have a Material Adverse Effect, and they shall not place or permit to be placed any Hazardous Substances on any Real Property except as permitted by Applicable Law or appropriate Governmental Bodies except as could not individually or in the aggregate reasonably be expected to have a Material Adverse Effect.
(b)The Credit Parties shall establish and maintain a system to assure and monitor continued compliance in a reasonable manner with all applicable Environmental Laws, which system shall include periodic reviews of such compliance.
(c)The Credit Parties shall (i) employ in connection with the use of the Real Property appropriate technology necessary to maintain compliance with any applicable Environmental Laws and (ii) dispose of any and all Hazardous Waste generated at the Real Property only at facilities and with carriers that maintain valid permits under RCRA and any other applicable Environmental Laws.  The Credit Parties shall use their best efforts to obtain certificates of disposal, such as hazardous waste manifest receipts, from all treatment, transport, storage or disposal facilities or operators employed by the Credit Parties in connection with the transport or disposal of any Hazardous Waste generated at the Real Property, except, in each case, as could not individually or in the aggregate reasonably be expected to have a Material Adverse Effect.
(d)In the event any Credit Party obtains, gives or receives notice of any material Release or threat of material Release of a reportable quantity of any Hazardous Substances on, at, under or from the Real Property or any other property (any such event being hereinafter referred to as a “Hazardous Discharge”) or receives any written notice of violation, request for information or notification that it is potentially responsible for investigation or cleanup of environmental conditions at the Real Property, demand letter or complaint, order, citation, or other written notice with regard to any Hazardous Discharge or violation of Environmental Laws affecting the Real Property or any Credit Party’s interest therein (any of the foregoing is referred to herein as an “Environmental Complaint”) from any Person, including any Governmental Body responsible in whole or in part for environmental matters in the state in which the Real Property is located or the United States Environmental Protection Agency (any such person or entity hereinafter the “Authority”), then Borrowing Agent shall, within five (5) Business Days, give written notice of same to Agent detailing facts and circumstances of which any Credit Party is aware giving rise to the Hazardous Discharge or Environmental Complaint.  Such information is to be provided to allow Agent to protect its security interest in and Lien on the Real Property and the Collateral and is not intended to create nor shall it create any obligation upon Agent or any Lender with respect thereto.
(e)Borrowing Agent shall promptly forward to Agent copies of any written request for information, notification of potential liability, demand letter relating to any Credit Party’s potential material liability under Environmental Laws, including potential responsibility with respect to the investigation or cleanup of Hazardous Substances at any other site owned, operated or used by any Credit Party to dispose of Hazardous Substances and shall continue to forward copies of material correspondence between any Credit Party and the Authority regarding such claims to Agent until the claim is settled.  Borrowing Agent shall promptly forward to Agent copies of all documents and reports concerning a Hazardous Discharge that any Credit Party is required to file under any Environmental Laws, except as to such Hazardous Discharges as could not reasonably be expected to have a Material Adverse Effect.  Such information is to be provided solely to allow Agent to protect Agent’s security interest in and Lien on the Real Property and the Collateral.

(f)The Credit Parties shall respond promptly to any Hazardous Discharge or Environmental Complaint and take all necessary action under Environmental Laws in order to safeguard the health of any Person and to avoid subjecting the Collateral or Real Property to any Lien.  If any Credit Party shall fail to respond promptly to any material Hazardous Discharge or Environmental Complaint or any Credit Party shall fail to comply with any of the requirements of any Environmental Laws in all material respects, Agent on behalf of Lenders may, but without the obligation to do so, for the sole purpose of protecting Agent’s interest in the Collateral:  (A) give such notices or (B) enter onto the Real Property (or authorize third parties to enter onto the Real Property) and take such actions as Agent (or such third parties as directed by Agent) deem reasonably necessary or advisable, to clean up, remove, mitigate or otherwise deal with any such Hazardous Discharge or Environmental Complaint.  All reasonable costs and expenses incurred by Secured Parties (or such third parties) in the exercise of any such rights, including any sums paid in connection with any judicial or administrative investigation or proceedings, fines and penalties, together with interest thereon from the date expended at the Default Rate for Domestic Rate Loans constituting Revolving Advances shall be paid upon demand by the Credit Parties, and until paid shall be added to and become a part of the Obligations secured by the Liens created by the terms of this Agreement or any other agreement between any Secured Party and any Credit Party.
(g)Promptly upon the written request of Agent from time to time, the Credit Parties shall provide Agent, at the Credit Parties’ expense, with an environmental site assessment or environmental audit report prepared by an environmental engineering firm acceptable in the reasonable opinion of Agent, to assess with a reasonable degree of certainty the existence of a Hazardous Discharge and the potential costs in connection with the investigation, abatement, cleanup, removal and monitoring of any Hazardous Substances found on, under, at, from or within the owned Real Property.  Any report or investigation of such Hazardous Discharge proposed and acceptable to an appropriate Authority that is charged to oversee the clean-up of such Hazardous Discharge shall be acceptable to Agent.  If such estimates, individually or in the aggregate, exceed $25,000, Agent shall have the right to require the Credit Parties to post a bond, letter of credit or other security reasonably satisfactory to Agent to secure payment of these costs and expenses.
(h)The Credit Parties shall defend and indemnify Agent and Lenders and hold Agent, Lenders and their respective employees, agents, directors and officers harmless from and against all loss, liability, damage and expense, claims, costs, fines and penalties, including attorney’s fees, suffered or incurred by Agent or Lenders under or on account of any Environmental Laws, including the assertion of any Lien thereunder, with respect to any Hazardous Discharge, the presence of any Hazardous Substances affecting the Real Property, whether or not the same originates or emerges from the Real Property or any contiguous real estate, including any loss of value of the Real Property as a result of the foregoing except to the extent such loss, liability, damage and expense is attributable to any Hazardous Discharge resulting from actions on the part of any Secured Party.  The Credit Parties’ obligations under this Section 4.19 shall arise upon the discovery of the presence of any Hazardous Substances at the Real Property, whether or not any Governmental Body has taken or threatened any action in connection with the presence of any Hazardous Substances.  The Credit Parties’ obligation and the indemnifications hereunder shall survive the termination of this Agreement.
(i)For purposes of Sections 4.19 and 5.7, all references to Real Property shall be deemed to include all of each Credit Party’s right, title and interest in and to its currently owned and leased premises.
20.Financing Statements
.  Except as respects the financing statements filed by Agent and the financing statements described on Schedule 1.2, no financing statement covering any of the Collateral or any proceeds thereof is on file in any public office.
21.Deposit and Investment Accounts
.  Borrowers agree not to maintain any deposit or investment accounts other than accounts held at or through Agent, except that Borrowers may maintain the accounts set forth on Schedule 4.15(h) (as so updated from time to time) that are (a) deposit accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrowers’ employees (including any “rabbi trust” account used in connection with such purposes) and identified to Agent by Borrowers as such, or (b) subject to a control agreement in favor of Agent from the holder of such account, giving Agent a first-priority security interest in such account, in form and substance satisfactory to Agent; provided, that, notwithstanding the foregoing, all deposit accounts of the Credit Parties (other than (x) deposit accounts of the type described in the foregoing clause (a), (y) the Limited Purpose Deposit Account to the extent such deposit account is in compliance with the requirements set forth in the definition thereof and (z) deposit accounts at 

Comerica Bank that comply with the foregoing clause (b)) shall be maintained at PNC no later than November 15, 2012 (or such later date as Agent shall agree in its sole discretion).  On each Business Day that amounts received in the Limited Purpose Deposit Account (other amounts of the type described in clause (b) of the definition thereof deposited therein by VMC) since the last date of transfer required by this sentence (or the Closing Date, in the case of the first such transfer) are equal to or in excess of $250,000 in the aggregate, the Borrowers shall transfer on such Business Day all such amounts to the collection account of VMC maintained at PNC.
22.New and Newly Registered Intellectual Property
.  If any Credit Party (a) obtains ownership of any patent registered with the United States Patent and Trademark Office, trademark registered with the United States Patent and Trademark Office, or copyright registered with the United States Copyright Office, or (b) submits a registered application for any patent or  any trademark, then such Credit Party shall, concurrently with the delivery of the Compliance Certificate for the relevant period, provide written notice thereof to Agent and shall execute such intellectual property security agreements and other documents and take such other actions (including recording or allowing Agent to record such intellectual property security agreements with the United States Copyright Office or the United States Patent and Trademark Office, as applicable) as Agent shall request in its Permitted Discretion to perfect and maintain a first priority perfected security interest in favor of Agent.  No Credit Party shall register any copyrights or mask works in the United States Copyright Office, unless such Credit Party shall: (i) not less than five (5) Business Days prior to making the relevant filings, provide Agent written notice of such Credit Party’s filing of an application to register such copyrights or mask works together with a copy of the application to be filed with the United States Copyright Office (excluding exhibits thereto); (ii) execute an intellectual property security agreement and such other documents and take such other actions as Agent may request in its Discretion to perfect and maintain a first priority perfected security interest in favor of Agent in the copyrights or mask works intended to be registered with the United States Copyright Office; and (iii) record or allow Agent to record such intellectual property security agreement with the United States Copyright Office.  Each Credit Party shall promptly provide to Agent evidence of the recording of the intellectual property security agreement necessary for Agent to perfect and maintain a first priority perfected security interest in such property.
		
	ARTICLE XIII
	

ARTICLE XIV

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

.
(a)Each Credit Party is duly incorporated and in good standing under the laws of its state of incorporation, as listed on Schedule 5.2(a) and is qualified to do business and is in good standing as of the Closing Date in the states listed on Schedule 5.2(a), which constitute all states in which qualification and good standing are necessary for such Credit Party to conduct its business and own its property where the failure to be so qualified could reasonably be expected to have a Material Adverse Effect on such Credit Party.  Each Credit Party has delivered to Agent true and complete copies of its certificate of incorporation and by-laws and will notify Agent of any amendment or changes thereto not less than 30 days prior to each such amendment.
(b)The only Subsidiaries of each Credit Party are listed on Schedule 5.2(b).
3.Survival of Representations and Warranties
.  All representations and warranties of such Credit Party contained in this Agreement and the other Loan Documents shall be true, correct, and complete, in all material respects (except that any such representation or warranty already qualified or modified by materiality in the text thereof shall be true, correct and complete in all respects), and shall survive the execution, delivery and acceptance thereof by the parties thereto and the closing of the transactions described therein or related thereto.  
4.Tax Returns
.  Each Credit Party’s federal tax identification number, as of the Closing Date, is set forth on Schedule 5.4.  Each Credit Party has filed all material federal, state and local tax returns and other reports each is required by law to file and has paid all taxes, assessments, fees and other governmental charges that are due and payable.  Federal, state and local income tax returns of each Credit Party have been examined and reported upon by the appropriate taxing authority or closed by applicable statute and satisfied for all fiscal years prior to and including the fiscal year ending January 31, 2004.  The provision for taxes on the books of each Credit Party is adequate for all years not closed by applicable statutes, and for its current fiscal year, and no Credit Party has any knowledge of any deficiency or additional assessment in connection therewith not provided for on its books.
5.Financial Statements
.
(a)The pro forma balance sheet of Borrowers on a Consolidated Basis (the “Pro Forma Balance Sheet”) furnished to Agent on the Closing Date reflects the consummation of the transactions contemplated by and under this Agreement (collectively, the “Transactions”) and fairly reflects the financial condition of Borrowers on a Consolidated Basis as of the Closing Date after giving effect to the Transactions, and has been prepared in accordance with GAAP, consistently applied.  The Pro Forma Balance Sheet has been certified by the Vice President Finance of Borrowing Agent as fairly presenting, in all material respects, the financial condition of the Borrowers as of the date thereof.  All financial statements referred to in this subsection 5.5(a), including the related schedules and notes thereto, have been prepared, in accordance with GAAP, except as may be disclosed in such financial statements and except for the absence of footnotes and customary year-end adjustments..
(b)The twelve-month cash flow projections of Borrowers on a Consolidated Basis and their projected balance sheets as of the Closing Date, copies of which are annexed to the Financial Condition Certificate (the “Projections”) were prepared by the Vice President Finance of VMC, in good faith based upon assumptions believed by the Borrowers to be reasonable at the time made (it being understood that such projections are subject to uncertainties and contingencies and that no assurance can be given that any particular projections will be realized).  The cash flow Projections together with the Pro Forma Balance Sheet, are referred to as the “Pro Forma Financial Statements”.
and
(c)The consolidated and consolidating (if applicable) balance sheets of Borrowers, their Subsidiaries and such other Persons described therein (including the accounts of all Subsidiaries for the respective periods during which a subsidiary relationship existed) as of November 30, 2011, and the related statements of income, changes in stockholder’s equity, and changes in cash flow for the period ended on such date, all accompanied by reports thereon containing opinions without qualification by independent certified 

public accountants, copies of which have been delivered to Agent, have been prepared in accordance with GAAP, as in effect from time to time (except as expressly noted therein and except for changes in application in which such accountants concur and present fairly the financial position of Borrowers and their Subsidiaries at such date and the results of their operations for such period).  Since January 31, 2011 there has been no change in the condition, financial or otherwise, of Borrowers or their Subsidiaries as shown on the consolidated balance sheet as of such date which individually or in the aggregate could reasonably be expected to have a Materially Adverse Effect.
6.Entity Names
.  No Credit Party has changed its corporate name or used a trade name in the past five years and does not sell Inventory under any other name, nor has any Credit Party been the surviving corporation of a merger or consolidation or acquired all or substantially all of the assets of any Person during the preceding five (5) years, in each case except as set forth on Schedule 5.6.
7.O.S.H.A. and Environmental Compliance
. 
(a)Each Credit Party has duly complied with, and its facilities, business, assets, property, leaseholds, Real Property and Equipment are in compliance in all material respects with, the provisions of the Federal Occupational Safety and Health Act, the Environmental Protection Act, RCRA and all other Environmental Laws; there have been no outstanding citations, notices or orders of non-compliance issued to any Credit Party or relating to its business, assets, property, leaseholds or Equipment under any such laws, rules or regulations other than, in each case, such non-compliance as count not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(b)Each Credit Party has been issued all required federal, state and local licenses, certificates or permits relating to all applicable Environmental Laws other than those the failure of which to obtain could not individually or in the aggregate reasonably be expected to have a Material Adverse Effect.
(c)There are no visible signs of releases, spills, discharges, leaks or disposal (collectively referred to as “Releases”) of Hazardous Substances at, upon, under or within any Real Property or any premises leased by any Credit Party that could individually or in the aggregate reasonably be expected to have a Material Adverse Effect. 
8.Solvency; No Litigation, Violation, Indebtedness or Default
.
(a)The Credit Parties, taken as a whole, are solvent, able to pay their debts as they mature, have capital sufficient to carry on their businesses and all businesses in which they are about to engage, and (i) as of the Closing Date, the fair present saleable value of their assets, taken as a whole, calculated on a going concern basis, is in excess of the amount of its liabilities and (ii) subsequent to the Closing Date, the fair saleable value of their assets (calculated on a going concern basis), taken as a whole, will be in excess of the amount of its liabilities.
(b)Except as disclosed in Schedule 5.8(b), no Credit Party has (i) any pending or threatened (in writing to any Credit Party) litigation, arbitration, actions or proceedings that could reasonably be expected to have a Material Adverse Effect, and (ii) any indebtedness for borrowed money other than the Obligations and Funded Debt set forth on Schedule 7.8 hereof. 
(c)No Credit Party is in violation of any applicable statute, law, rule, regulation or ordinance in any respect that could reasonably be expected to have a Material Adverse Effect, nor is any Credit Party in violation of any order of any court, Governmental Body or arbitration board or tribunal.
(d)No Credit Party or member of the Controlled Group maintains or contributes, or has any obligation to contribute to, or liability under, any Pension Benefit Plan, any Multiemployer Plan or any Multiple Employer Plan other than (x) on the Closing Date, those listed on Schedule 5.8(d) hereto and (y) thereafter, as permitted under this Agreement.  Further, (i) each Credit Party and each member of the Controlled Group has met all applicable minimum funding requirements under the Pension Funding Rules in respect of each Pension Benefit Plan and no waiver of the Pension Funding Rules has been applied for or obtained in the past five years; (ii) each Pension Benefit Plan which is intended to be a qualified plan under Section 401(a) of the Code as currently in effect has been determined by the Internal Revenue Service to be qualified under Section 401(a) of the Code and the trust related thereto is exempt from federal income tax under Section 501(a) of the Code; (iii) no Credit Party or member of the Controlled Group 

has incurred any liability to the PBGC other than for the payment of premiums, and there are no premium payments which have become due which are unpaid; (iv) no Pension Benefit Plan has been terminated by the plan administrator thereof nor by the PBGC for which there is any unsatisfied material liability, and there is no occurrence which would reasonably be expected to cause the PBGC to institute proceedings under Title IV of ERISA to terminate any Pension Benefit Plan; (v) except as would not reasonably be expected to have a Material Adverse Effect, the present value of the aggregate benefit liabilities under each Pension Benefit Plan sponsored, maintained or contributed to by any Credit Party or any member of the Controlled Group (determined as of the end of the most recent plan year on the basis of the actuarial assumptions specified for funding purposes in the most recent actuarial valuation for such Pension Benefit Plan), did not exceed the aggregate current fair market value of the assets of such Pension Benefit Plan; (vi) except as would not reasonably be expected to have a Material Adverse Effect, no Credit Party or member of the Controlled Group has breached any of the responsibilities, obligations or duties imposed on it by ERISA with respect to any Plan; (vii) except as would not reasonably expected to have a Material Adverse Effect, no Credit Party or member of the Controlled Group has nor any fiduciary of, nor any trustee to, any Plan, has engaged in a “prohibited transaction” described in Section 406 of the ERISA or Section 4975 of the Code; (viii) no Termination Event has occurred and no Credit Party or member of the Controlled Group has taken any action which would reasonably be expected to constitute or result in a Termination Event; (ix) each Credit Party and each member of the Controlled Group have made all material contributions due and payable with respect to each Plan;  (x) no Credit Party or member of the Controlled Group has withdrawn, completely or partially, from any Multiemployer Plan so as to incur any unsatisfied liability under the Multiemployer Pension Plan Amendments Act of 1980 and there exists no fact which would reasonably be expected to result in any such liability; and (xi) no Credit Party or any member of the Controlled Group has received notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA.
9.Patents, Trademarks, Copyrights and Licenses
.  All patents and patent applications registered with the United States Patent and Trademark Office, trademarks and trademark applications registered with the United States Patent and Trademark Office, copyrights and copyright applications registered with the United States Copyright Office are set forth on Schedule 5.9, are valid and have been duly registered or filed with all appropriate Governmental Bodies and constitute all of the intellectual property rights that are necessary for the operation of the business of the Credit Parties, to the knowledge of the Credit Parties, there is no objection to or pending challenge to the validity of any such patent, trademark, or copyright, and no Credit Party is aware of any grounds for any such challenge, except as set forth in Schedule 5.9.  Each patent, patent application, patent license, trademark, trademark application, trademark license, service mark, service mark application, service mark license, design rights, copyright, copyright application and copyright license that is necessary to the conduct of the business of the Credit Parties and their Subsidiaries and owned or held by any Credit Party and all trade secrets used by any Credit Party consist of original material or property developed by such Credit Party, was lawfully acquired by such Credit Party from the proper and lawful owner thereof or is otherwise lawfully licensed or used by the Credit Parties.  With respect to all software used by any Credit Party (other than commercially available off-the-shelf software), such Credit Party is in possession of all source and object codes related to each piece of software or is the beneficiary of a source code escrow agreement, each such source code escrow agreement being listed on Schedule 5.9.
10.Licenses and Permits
.  Except as set forth in Schedule 5.10, each Credit Party (a) is in compliance with and (b) has procured and is now in possession of, all licenses or permits required by any applicable federal, state, provincial or local law, rule or regulation for the operation of its business in each jurisdiction wherein it is now conducting or proposes to conduct business and where the failure to procure such licenses or permits could reasonably be expected to have a Material Adverse Effect.
11.Default of Indebtedness; No Default
.  Upon the contemporaneous repayment in full and termination of VMC’s Wells Fargo Credit Facility, no Credit Party is in default in the payment of the principal of or interest on any Indebtedness or under any instrument or agreement under or subject to which any Indebtedness has been issued and no event has occurred under the provisions of any such instrument or agreement that, in each case, with or without the lapse of time or the giving of notice, or both, constitutes or could constitute an Event of Default hereunder.
12.No Default

.  No Credit Party is in default in the payment or performance of any of its material contractual obligations and no default thereunder has occurred, in each case that with or without the lapse of time or the giving of notice, or both, constitutes or could constitute an Event of Default hereunder.
13.No Burdensome Restrictions
.  No Credit Party is party to any contract or agreement the performance of which could reasonably be expected to have a Material Adverse Effect.  Each Credit Party has heretofore delivered or made available to Agent true and complete copies of all material contracts to which it is a party or to which it or any of its properties is subject.  No Credit Party has agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien that is not a Permitted Encumbrance.
14.No Labor Disputes
.  No Credit Party is involved in any material labor dispute; there are no material strikes or walkouts or union organization of any Credit Party’s employees threatened or in existence and no labor contract is scheduled to expire during the Term other than as set forth on Schedule 5.14.
15.Margin Regulations
.  No Credit Party is engaged, nor will it engage, principally or as one of its important activities, in the business of extending credit for the purpose of “purchasing” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect.  No part of the proceeds of any Advance will be used for “purchasing” or “carrying” “margin stock” as defined in Regulation U of such Board of Governors.
16.Investment Company Act
.  No Credit Party is an “investment company” registered or required to be registered under the Investment Company Act of 1940, as amended, nor is it controlled by such a company.
17.Disclosure
.  No representation or warranty made by any Credit Party in this Agreement or in any other Loan Document or in any financial statement, report, certificate or any other document furnished in connection herewith or therewith contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements herein or therein not misleading as of the time it was made or deemed made or delivered; provided that any Credit Party’s representation and warranty as to any forecast, projection or other statement regarding future performance, future financial results or other future development is limited to the fact that such forecast, projection or statement was prepared in good faith on the basis of information and assumptions that such Credit Party believed to be reasonable as of the date such material was prepared (it being understood that the projections are subject to uncertainties and contingencies, many of which are beyond such Credit Party’s control, and that no assurance can be given that the projections will be realized).  There is no fact known to any Credit Party or which reasonably should be known to such Credit Party that such Credit Party has not disclosed to Agent in writing with respect to the transactions contemplated by this Agreement that could reasonably be expected to have a Material Adverse Effect.
18.Swaps
.  No Credit Party is a party to, nor will it be a party to, any swap agreement whereby such Credit Party has agreed or will agree to swap interest rates or currencies unless same provides that damages upon termination following an event of default thereunder are payable on an unlimited “two-way basis” without regard to fault on the part of either party.
19.Conflicting Agreements
.  No provision of any mortgage, indenture, contract, agreement, judgment, decree or order binding on any Credit Party or affecting the Collateral conflicts with, or requires any Consent that has not already been obtained to, or would in any way prevent the execution, delivery or performance of, the terms of this Agreement or the other Loan Documents.
20.Application of Certain Laws and Regulations

.  No Credit Party is subject to any law, statute, rule or regulation that regulates the incurrence of any Indebtedness that is not applicable to businesses generally, including laws, statutes, rules or regulations relative to common or interstate carriers or to the sale of electricity, gas, steam, water, telephone, telegraph or other public utility services.
21.Business and Property of Credit Parties
.  Upon and after the Closing Date, the Credit Parties do not propose to engage in any business other than as set forth in Section 7.9 the business of manufacturing to supplying equipment and furniture to schools and activities necessary to conduct the foregoing.  On the Closing Date, each Credit Party will own all the property and possess all of the rights and Consents necessary for the conduct of the business of such Credit Party.
22.Section 20 Subsidiaries
.  No Credit Party intends to use and shall not use any portion of the proceeds of the Advances, directly or indirectly, to purchase during the underwriting period, or for 30 days thereafter, Ineligible Securities being underwritten by a Section 20 Subsidiary.
23.Anti-Terrorism Laws
.
(a)General.  No Credit Party (nor to the knowledge of any Credit Party, any Affiliate of any Credit Party) is in violation of any Anti-Terrorism Law or engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.
(b)Executive Order No. 13224.  Neither any Credit Party (nor to the knowledge of any Credit Party, any Affiliate of any Credit Party) nor its respective agents acting or benefiting in any capacity in connection with the Advances or other transactions hereunder, is any of the following (each a “Blocked Person”):
(i)a Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224; 
(ii)a Person owned or  controlled  by, or acting for or on behalf  of,  any  Person  that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224; 
(iii)a Person or entity with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law; 
(iv)a Person or entity that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order No. 13224; 
(v)a Person or entity that is named as a “specially designated national” on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official website or any replacement website or other replacement official publication of such list, or 
(vi)a Person or entity who is affiliated or associated with a Person or entity listed above.
Neither any Credit Party nor to the knowledge of any Credit Party, any of its agents acting in any capacity in connection with the Advances or other transactions hereunder (1) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (2) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order No. 13224.
24.Trading with the Enemy
.  No Credit Party has engaged, nor does it intend to engage, in any business or activity prohibited by the Trading with the Enemy Act.
25.Ricoh Financing Statement
.  The Liens evidenced by UCC-1 Financing Statement No. 2009 3342604 filed with the Delaware Secretary of State on October 16, 2009 naming Ricoh Americas Corporation (“Ricoh”), as secured party, and VMC, as debtor, only encumber office Equipment leased by VMC from Ricoh, In addition, one or more Borrowers (a) leases three mail system machines from MailFinance (one machine is in Torrance and two in Arkansas) and (b) rents from time to time equipment such as forklifts, boom lifts, or vehicles on short term rental arrangements (less than one year). 

26.Commercial Tort Claims
.  No Credit Party holds any commercial tort claim it has asserted in excess of $250,000, except as set forth on Schedule 5.26.
		
	ARTICLE XVI
	

ARTICLE XVII

ARTICLE XVIIIAFFIRMATIVE COVENANTS
Each Credit Party shall, until indefeasible payment in full in cash (or other immediately available funds) of the Obligations (other than Inchoate Obligations) and termination of this Agreement:
1.Payment of Fees
.  With respect to Borrowers, pay to Agent, without duplication: (a) all fees and other amounts required to be paid pursuant to this Agreement and the other Loan Documents, as and when the same become due; and (b) ON DEMAND all usual and customary fees and expenses that Agent incurs in connection with (i) the forwarding of Advance proceeds and (ii) the establishment and maintenance of any Blocked Accounts or Depository Accounts as provided for in Section 4.15(h).  Agent may, without making demand, charge Borrowers’ Account for all such fees and expenses.
2.Conduct of Business and Maintenance of Existence and Assets
.  (a) Conduct its business according to good business practices and maintain all of its properties useful or necessary in its business in good working order and condition (reasonable wear and tear excepted and except as may be disposed of or sold in accordance with the terms of this Agreement), including all licenses, patents, copyrights, design rights, trade names, trade secrets and trademarks and take all actions necessary to enforce and protect the validity of any intellectual property right or other right included in the Collateral; (b) keep in full force and effect its existence and comply with the laws and regulations governing the conduct of its business where the failure to do so could reasonably be expected to have a Material Adverse Effect; and (c) make all such reports and pay all such franchise and other taxes and license fees and do all such other acts and things as may be lawfully required to maintain its rights, licenses, leases, powers and franchises under the laws of the United States or any political subdivision thereof except where failure to do so could not reasonably be expected to have a Material Adverse Effect.
3.Violations
.  Promptly notify Agent in writing of any violation of any law, statute, regulation or ordinance of any Governmental Body, or of any agency thereof, applicable to any Credit Party that could reasonably be expected to have a Material Adverse Effect.
4.Government Receivables
.  Take all steps necessary to protect Agent’s interest in the Collateral under the Federal Assignment of Claims Act, the Uniform Commercial Code and all other applicable state or local statutes or ordinances, and deliver to Agent appropriately endorsed, any instrument or chattel paper connected with, any Receivable arising out of contracts between any Credit Party and the United States, any state or any department, agency or instrumentality of any of them; provided, that such actions shall only be required under such applicable state or local statutes or ordinances (i) at Agent’s request and (ii) with respect to a Receivable in excess of $500,000.
5.Financial Covenants
. 
(a)[Reserved].
(b)Fixed Charge Coverage Ratio.  Cause to be maintained a Fixed Charge Coverage Ratio of not less than 1.10 to 1.00 for the consecutive four fiscal quarter period of the Borrowers ending January 31, 2017.
(c)Minimum EBITDA.  Cause to be maintained, for the applicable consecutive fiscal month period ending as of the applicable fiscal month end set forth below, EBITDA as of such fiscal month end of not less than the amount set forth opposite the respective fiscal month period below:

	
		
	Fiscal Month Period and Fiscal Month End
	EBITDA

	Eleven consecutive fiscal months ending
December 31, 2016
	Not Measured

	Twelve consecutive fiscal months ending
January 31, 2017
	$7,304,000

	Fiscal month ending February 29, 201628, 2017
	Not Measured

	Two consecutive fiscal months ending
March 31, 20162017
	Not Measured

	Three consecutive fiscal months ending
April 30, 20162017
	$(3,626,0004,600,000)

	Four consecutive fiscal months ending
May 31, 20162017
	Not Measured

	Five consecutive fiscal months ending
June 30, 20162017
	Not Measured

	Six consecutive fiscal months ending
July 31, 20162017
	$5,256,0002,775,000

	Seven consecutive fiscal months ending
August 31, 20162017
	Not Measured

	Eight consecutive fiscal months ending
September 30, 20162017
	Not Measured

	Nine consecutive fiscal months ending
October 31, 20162017
	$10,904,000

	Ten consecutive fiscal months ending
November 30, 20162017
	Not Measured

	Eleven consecutive fiscal months ending
December 31, 20162017
	Not Measured

	Twelve consecutive fiscal months ending
January 31, 2018
	$7,400,000

	Twelve consecutive fiscal months ending
January 31, 2017
	$7,304,000

(d)Setting of Financial Covenants. The financial covenants in this Section 6.5 shall be set on thirty days prior to the first day of the first quarter of the fiscal year, based on a forecast provided by Borrowers that is acceptable to Agent.
6.Execution of Supplemental Instruments
.  Execute and deliver to Agent from time to time, upon demand, such supplemental agreements, statements, assignments and transfers, or instructions or documents relating to the Collateral, and such other instruments as Agent may reasonably request, in order that the full intent of this Agreement may be carried into effect.
7.Payment of Indebtedness
.  Pay, discharge or otherwise satisfy at or before maturity (subject, where applicable, to specified grace periods and, in the case of the trade payables, to normal payment practices) all its obligations and liabilities of whatever nature, except when the failure to do so could not reasonably be expected to have a Material Adverse Effect or when the amount or validity thereof is currently being Properly Contested, subject at all times to any applicable subordination arrangement in favor of any Secured Party.
8.Standards of Financial Statements
.  Cause all financial statements referred to in Sections 9.7, 9.8, 9.9, 9.10, 9.11, 9.12, 9.13 and 9.14 as to which GAAP is applicable to fairly present in all material respects the financial condition and results of operations of the Borrowers and their Subsidiaries (subject, in the case of interim financial statements, to normal year-end audit adjustments and the absence of footnotes) and to be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein (except as concurred in by such reporting accountants or officer, as the case may be, and disclosed therein).

9.Post-Closing Covenants.  [Reserved].
(a)    On or before the sixtieth (60th) day following the Closing Date (or such later date as Agent shall agree in its sole discretion):
(i)    cause Patent No. D471729 (App. No. 29147210 for "Four Legged Chair"), Trademark Reg. No. 0,740,021 (MARTEST), and Trademark Reg. No. 4,040,857 (PLANSCAPE) the chain of title records in the Patent and Trademark Office to properly reflect VMC as the registered owner of all such Intellectual Property; and
(ii)    deliver to Agent, in form and substance satisfactory to Agent, a Phase II environmental assessment in respect of the Real Property of Borrowers located at 1265 Bruce Street, Conway, AR 72034.
(b)    On or before the ninetieth (90th) day following the Closing Date (or such later date as Agent shall agree in its sole discretion) deliver to Agent a credit card processor agreement in form and substance acceptable to Agent for (i) credit card receivables processed by Discover and (ii) credit card receivables processed by American Express.
(c)    No later than thirty (30) days after Agent’s written request therefor (or such later date as Agent shall agree in its sole discretion), deliver each of the following items, in form and substance satisfactory to Agent and Lenders, with respect to the Real Property of Borrowers located at 1265 Bruce Street, Conway, AR 72034:

(i)    an executed Mortgage in respect of such  Real Property;
(ii)    a survey for such Real Property; and
(iii)    a fully paid mortgagee title insurance policy, in standard ALTA form, issued by a title insurance company reasonably satisfactory to Agent, in an amount equal to not less than the fair market value of such Real Property, insuring such Mortgage to create a valid Lien on such Real Property with no exceptions that Agent shall not have approved in writing and no survey exceptions.
		
	ARTICLE XIX
	

ARTICLE XX

ARTICLE XXINEGATIVE COVENANTS
No Credit Party shall, until indefeasible payment in full in cash (or other immediately available funds) of the Obligations (other than Inchoate Obligations) and termination of this Agreement:
1.Merger, Consolidation, Acquisition and Sale of Assets
.
(a)Enter into any merger, consolidation or other reorganization with or into any other Person or acquire all or a substantial portion of the assets or Equity Interests of any Person or permit any other Person to consolidate with or merge with it, except for (i) any merger, consolidation or reorganization between the Credit Parties, provided that any Borrower must be the surviving entity of any such merger, consolidation or reorganization to which it is a party or (ii) any merger, consolidation or reorganization between a Credit Party and Subsidiaries of such Credit Party that are not Credit Parties so long as such Credit Party is the surviving entity of any such merger.
(b)Sell, lease, transfer or otherwise dispose of any of its properties or assets, except (i) sales, leases, transfers and dispositions permitted by Section 4.3 and (ii) any other sales, leases, transfers or dispositions expressly permitted by this Agreement.
2.Creation of Liens
.  Create or suffer to exist any Lien or transfer upon or against any of its property or assets now owned or hereafter acquired, except Permitted Encumbrances provided that nothing herein constitutes an admission by any Secured Party 

that a Permitted Encumbrance has priority over any Lien in favor of Agent or any other Secured Party, and Agent and the other Secured Parties reserve their rights to assert such priority as against any Permitted Encumbrance.
3.Guarantees
.  Become liable upon the obligations or liabilities of any Person by assumption, endorsement or guaranty thereof or otherwise (other than to Secured Parties) except (a) as disclosed on Schedule 7.3, (b) guarantees made in the Ordinary Course of Business in respect of (i) performance bonds (other than performance bonds in respect of sales of school furniture), surety or appeal bonds, notary public bonds and bonds in support of Borrowers’ prior self-insurance program up to an aggregate amount of $250,000 and (ii) unsecured bid bonds and unsecured performance bonds in respect of sales of school furniture, (c) the endorsement of checks in the Ordinary Course of Business and (d) guarantees in respect of Indebtedness otherwise permitted hereunder.
4.Investments
.  Purchase or acquire obligations or Equity Interests of, or any other interest in, any Person, or make any investments, advances, loans or extensions of credit to any Person, including any Parent, Subsidiary or Affiliate (each, an “Investment”) except with respect to: 
(a)the following cash equivalents (i) obligations issued or guaranteed by the United States of America or any agency thereof, (ii) commercial paper with maturities of not more than 180 days and a published rating of not less than A-1 or P-1 (or the equivalent rating), (iii) certificates of time deposit and bankers’ acceptances having maturities of not more than 180 days and repurchase agreements backed by United States government securities of a commercial bank if (x) such bank has a combined capital and surplus of at least $500,000,000, or (y) its debt obligations, or those of a holding company of which it is a Subsidiary, are rated not less than A (or the equivalent rating) by a nationally recognized investment rating agency, (iv) bonds and other fixed income instruments (including tax-exempt bonds) rated investment grade from companies or public entities, and mutual funds that invest substantially all of their assets in such bonds and other fixed income instruments, either owned directly by a Credit Party or managed on a Credit Party’s behalf by any nationally recognized investment advisor who or which has assets under management in excess of $500,000,000, (v) repurchase agreements or similar arrangements with banks which have capital and surplus of not less than $500,000,000, (vi) U.S. money market funds that invest solely in obligations issued or guaranteed by the United States of America or an agency thereof and (vii) mutual funds or money market funds that  invest substantially all of their assets in instruments described in the subsections above; 
(b)advances to officers, directors and employees of the Credit Parties in an aggregate amount not to exceed $25,000 at any time outstanding, for travel, entertainment, relocation and other purposes in the Ordinary Course of Business and consistent with past practice;
(c)Investments of Borrowers in any Guarantor and Investments of any Subsidiary in any Credit Party;
(d)Investments received in satisfaction of judgments or pursuant to any plan or reorganization or similar arrangement upon the bankruptcy or insolvency of trade creditors or account debtors;
(e)guarantees permitted by Section 7.3;
(f)Investments existing as of the date hereof and set forth on Schedule 7.4 and any replacements, renewals or extensions of any such Investments; provided that the amount of any such Investment is not increased at the time of such replacement, renewal or extension of such Investment except by an amount equal to a reasonable premium or other reasonable amount paid in respect of the underlying obligations and fees and expenses reasonably incurred in connection with such replacement, renewal or extension; 
(g)Investments in respect of prepaid expenses, negotiable instruments held for collection or lease, utility, workers’ compensation, in each case in the Ordinary Course of Business; 
(h)Investments pursuant to employee wage and benefit plans for the benefit of the Credit Parties’ employees (including any “rabbi trust” account used in connection with such purposes); and
(i)additional Investments not exceeding $50,000 in the aggregate outstanding at any time.
5.[Intentionally Omitted.]  
6.Capital Expenditures
.  Contract for, purchase or make any expenditure or commitments for Capital Expenditures in the 20152016 fiscal year, or any fiscal year thereafter, in an aggregate amount for all Borrowers in excess of $5,000,000.7,400,000.  The 

limitation on the amount of Capital Expenditures which may be made in any fiscal year pursuant to the terms contained in this Section shall apply to Capital Expenditures financed with Equipment Loans.
7.Dividends
.  Declare, pay or make any dividend or distribution on any shares of the common stock or preferred stock of any Credit Party (other than dividends or distributions payable in its stock, or split-ups or reclassifications of its stock, including, in respect of VMC’s Rights Plan) or apply any of its funds, property or assets to the purchase, redemption or other retirement of any common or preferred stock, or of any options to purchase or acquire any such shares of common or preferred stock of any Credit Party (collectively, “Restricted Payments”), except that:
(a)each Subsidiary may make Restricted Payments to any Credit Party that owns an Equity Interest in such Subsidiary;
(b)each Credit Party and Subsidiary may purchase, redeem or otherwise acquire Equity Interests issued by it solely with the proceeds received from the substantially concurrent issue of new shares of its common stock or other common Equity Interests; 
(c)each Borrower and Subsidiary may purchase (i) Equity Interests in any Credit Party or options with respect to Equity Interests in any Credit Party held by directors, employees or management of any Borrower or any of its Subsidiaries (or their estates or authorized representatives) in connection with the death, disability or termination of employment of any such directors, employees or management and (ii) Equity Interests in any Credit Party for the purpose of holding such Equity Interest for future issuance under an employee stock plan; and
(d)Borrowers may make Restricted Payments to any Person that owns an Equity Interest in any Borrower on the condition that (i) such Restricted Payments shall not exceed $1,300,000 in the aggregate during any fiscal year; (ii) Borrowers must have a Fixed Charge Coverage Ratio of not less than 1.10:1.00 for the trailing twelve month period ending on the fiscal quarter immediately preceding the date of any such Restricted Payment, (iii) no Default or Event of Default shall have occurred or be continuing, and (iv) no Default or Event of Default shall result from any such Restricted Payment.
8.Indebtedness
.  Create, incur, assume or suffer to exist any Indebtedness (exclusive of trade debt) except in respect of::
(a)the Obligations; 
(b)Indebtedness in respect of Capital Expenditures permitted under Section 7.6; 
(c)without duplication, guarantees of any Credit Party or Subsidiary in respect of Indebtedness of the Borrowers expressly permitted hereunder;
(d)intercompany Indebtedness between the Credit Parties;
(e)Indebtedness of any Credit Party or Subsidiary thereof incurred in the Ordinary Course of Business in respect of bank guarantees, letters of credit or similar instruments to support local regulatory requirements;   
(f)Indebtedness disclosed on Schedule 7.8 and any permitted Refinancing Indebtedness in respect thereof;
(g)additional unsecured Indebtedness in an aggregate principal amount not to exceed $500,000 at any time outstanding;
(h)Indebtedness in respect of Capitalized Lease Obligations not in excess of $150,000 in the aggregate at any time outstanding, solely to the extent arising due to changes imposed subsequent to the Closing Date by GAAP requiring leases characterized as operating leases as of the Closing Date (or any renewal or replacement thereof) to be recharacterized as a Capital Lease Obligation; in the aggregate at any time outstanding;
(i)Guarantees permitted under Section 7.3; and
(j)other Indebtedness incurred in the Ordinary Course of Business or arising as result of operations of the Credit Parties in the Ordinary Course of Business, in each case not constituting Funded Debt and not otherwise prohibited under this Agreement or any other Loan Document.
9.Nature of Business
.  Substantially change the nature of the business in which it is presently engaged or any business substantially related or incidental thereto or any reasonable extension thereof, as determined in good faith by the Credit Parties.
10.Transactions with Affiliates

.  Directly or indirectly, purchase, acquire or lease any property from, or sell, transfer or lease any property to, or otherwise enter into any transaction or deal with, any Affiliate, except transactions on an arm’s-length basis on terms and conditions no less favorable than terms and conditions that would have been obtainable from a Person other than an Affiliate, except:
(a)any contract, agreement or business arrangement between Credit Parties; and
(b)reasonable and customary director, officer and employee compensation (including bonuses) and other benefits (including retirement, health, stock option and other benefit plans, any issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, stock options and stock ownership plans) and reasonable and customary indemnification and reimbursement arrangements with respect to such Persons, in each case incurred in the Ordinary Course of Business and consistent in all material respects with past practice.
11.[Intentionally Omitted.]  
12.Subsidiaries
.
(a)Form or acquire any Subsidiary unless (i) such Subsidiary is not a Foreign Subsidiary and such Subsidiary expressly joins in this Agreement as a borrower or becomes a Guarantor of the Obligations and grants a security interest in its assets (subject to the same exceptions and limitations as the security interest granted by the Credit Parties hereunder) and becomes jointly and severally liable for the obligations of Borrowers hereunder, under the Revolving Credit Notes and under any other agreement between any Borrower and Agent or Lenders, in each case pursuant to a joinder agreement acceptable to Agent, and (ii) Agent shall have received all documents, including legal opinions, it may reasonably require to establish compliance with each of the foregoing conditions.
(b)Enter into any partnership, joint venture or similar arrangement.
13.Fiscal Year and Accounting Changes
.  Change, without the prior written consent of Agent to be given or withheld in its sole discretion, its fiscal year end from January 31 or make any change (a) in accounting treatment and reporting practices except as required by GAAP or the Securities Act or (b) in tax reporting treatment except as required by law.
14.Pledge of Credit
.  Now or hereafter pledge any Secured Party’s credit on any purchases or for any purpose whatsoever or use any portion of any Advance in or for any business other than such Credit Party’s business as conducted on the date of this Agreement.
15.Amendment of Articles of Incorporation, By-Laws
. Amend, modify or waive any term or material provision of its Certificate of Incorporation or By-Laws in a manner adverse to Agent or any other Secured Party in any material respect (including, without limitation of those amendments which may be adverse to the Secured Parties, any such amendment that changes the manner in which members of the board of directors are elected, vacancies on such board are filled, the number of members that may constitute such board (or any provision pursuant to which the number of members may be increased or decreased) or the manner in which any class of shares is entitled to vote or the manner in which the weight of such vote is calculated, including, in all cases any amendment to Article IX of the Certificate of Incorporation of VMC, shall, in each case, be materially adverse to Agent and the Lenders).
16.Compliance with ERISA
.  (a)(i) Maintain, or permit any member of the Controlled Group to maintain, or (ii) become obligated to contribute to, or permit any member of the Controlled Group to become obligated to contribute to, any Pension Benefit Plan, other than those Pension Benefit Plans disclosed on Schedule 5.8(d) or those Pension Benefit Plans for which the Agent has provided its prior written consent; (b) engage, or permit any member of the Controlled Group to engage, in any non-exempt “prohibited transaction”, as that term is defined in section 406 of ERISA and Section 4975 of the Code that could reasonably expected to have a Material Adverse Effect, (c) fail to satisfy, or permit any member of the Controlled Group to fail to satisfy, the minimum funding standards of the Pension Funding Rules, (d) except as could not reasonably be expected to have a Material Adverse Effect terminate, or permit any member of the Controlled 

Group to terminate, any Pension Benefit Plan where such event could result in any liability of any Credit Party or any member of the Controlled Group or the imposition of a lien on the property of any Credit Party or any member of the Controlled Group pursuant to Section 430(k) of the Code or Section 4068 of ERISA, (e) incur, or permit any member of the Controlled Group to incur, any withdrawal liability to any Multiemployer Plan that could reasonably be expected to have a Material Adverse Effect; (f) fail promptly to notify Agent of the occurrence of any Termination Event that could reasonably be expected to have a Material Adverse Effect, (g) fail to comply, or permit a member of the Controlled Group to fail to comply, with the requirements of ERISA or the Code or other Applicable Laws in respect of any Plan, that could reasonably be expected to have a Material Adverse Effect or (h) postpone or delay, or allow any member of the Controlled Group to postpone or delay, any funding requirement under the Pension Funding Rules with respect of any Pension Benefit Plan.
17.Prepayment of Funded Debt
.  At any time, directly or indirectly, prepay any Funded Debt (other than the Obligations), or repurchase, redeem, retire or otherwise acquire any Funded Debt of any Credit Party, in an amount not in excess of $150,000 in the aggregate in any fiscal year of the Borrowers.
18.Anti-Terrorism Laws
.  No Credit Party shall, until satisfaction in full of the Obligations and termination of this Agreement, nor shall it permit agent to:
(a)Conduct any business or engage in any transaction or dealing with any Blocked Person, including the making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person.
(b)Deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order No. 13224. 
(c)Engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in the Executive Order No. 13224, the USA PATRIOT Act or any other Anti-Terrorism Law.  The Credit Parties shall deliver to Lenders any certification or other evidence requested from time to time by any Lender in its sole discretion, confirming the Credit Parties’ compliance with this Section 7.18.
19.Membership/Partnership Interests
.  Treat or permit any of its Subsidiaries to (a) treat its limited liability company membership interests or partnership interests, as the case may be, as securities as contemplated by the definition of “security” in Section 8-102(15) and by Section 8-103 of Article 8 of Uniform Commercial Code or (b) certificate its limited liability company membership interests or partnership interests, as the case may be, unless, in each case, such certificates are contemporaneously with such treatment delivered to Agent together with an endorsement in blank.
20.Trading with the Enemy Act
.  Engage in any business or activity in violation of the Trading with the Enemy Act. 
21.Clean Down
.  Commencing in calendar year 2015, during the period between October 1st and December 31st of each year, permit Revolving Advances in the aggregate to exceed $6,000,000 at any time for a period of 30 consecutive days during such period.
22.Leases
.  Enter as lessee into any lease arrangement for real or personal property (unless capitalized and permitted under Section 7.6) if after giving effect thereto, aggregate annual rental payments for all leased property would exceed $10,000,000 in any one fiscal year in the aggregate for all Borrowers.
		
	ARTICLE XXII
	

ARTICLE XXIII

ARTICLE XXIVCONDITIONS PRECEDENT
1.Conditions to Initial Advances

.  The agreement of Lenders to make the initial Advances requested to be made on the Closing Date , and of Agent to issue or cause to be issued any Letter(s) of Credit to be issued on the Closing Date, if any, is subject to the satisfaction, or waiver by Agent, immediately prior to or concurrently with the making of such Advances, of the following conditions precedent:
(a)Loan Documents.  Agent shall have received (i) the Revolving Credit Notes duly executed and delivered by an authorized officer of each Borrower, and (ii) each other Loan Document to be delivered on the Closing Date executed and delivered by each of the parties thereto;
(b)Filings, Registrations and Recordings.  Each document (including any Uniform Commercial Code financing statement) required by this Agreement, any related agreement or under law or reasonably requested by Agent to be filed, registered or recorded is in form appropriate for filing, registration and recordation, as applicable, in order to create, in favor of Agent, a perfected, first priority security interest in or lien upon the Collateral shall have been properly filed, registered or recorded in each jurisdiction in which the filing, registration or recordation thereof is so required or requested, and Agent shall have received an acknowledgment copy, or other evidence satisfactory to it, of each such filing, registration or recordation and satisfactory evidence of the payment of any necessary fee, tax or expense relating thereto;
(c)Corporate Proceedings of Borrowers.  Agent shall have received a copy of the resolutions in form and substance reasonably satisfactory to Agent, of the Board of Directors of each Borrower authorizing (i) the execution, delivery and performance of this Agreement, the Revolving Credit Notes, each Mortgage, and any related agreements, (collectively the “Documents”) and (ii) the granting by each Borrower of the security interests in and liens upon the Collateral in each case certified by the Secretary or an Assistant Secretary of each Borrower as of the Closing Date; and, such certificate shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded as of the date of such certificate;
(d)Incumbency Certificates of Borrowers.  Agent shall have received a certificate of the Secretary or an Assistant Secretary of each Borrower, dated the Closing Date, as to the incumbency and signature of the officers of each Borrower executing this Agreement, the other Loan Documents, any certificate or other documents to be delivered by it pursuant hereto, together with evidence of the incumbency of such Secretary or Assistant Secretary;
(e)Corporate Proceedings of Guarantors.  Agent shall have received a copy of the resolutions in form and substance reasonably satisfactory to Agent, of the Board of Directors of each Guarantor authorizing the execution, delivery and performance of the Guaranty and each other Loan Document to which it is a party certified by the Secretary or an Assistant Secretary of each Guarantor as of the Closing Date; and, such certificate shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded as of the date of such certificate;
(f)Incumbency Certificates of Guarantors.  Agent shall have received a certificate of the Secretary or an Assistant Secretary of each Guarantor, dated the Closing Date, as to the incumbency and signature of the officers of each Guarantor executing this Agreement, any certificate or other documents to be delivered by it pursuant hereto, together with evidence of the incumbency of such Secretary or Assistant Secretary;
(g)Certificates.  Agent shall have received a copy of the Articles or Certificate of Incorporation of each Borrower and each Guarantor, and all amendments thereto, certified by the Secretary of State or other appropriate official of its jurisdiction of Incorporation together with copies of the By-Laws of each Borrower and each Guarantor and all agreements of each Borrower’s and each Guarantor’s shareholders certified as accurate and complete by the Secretary of each Borrower and such Guarantor;
(h)Good Standing Certificates.  Agent shall have received good standing certificates for each Borrower and each Guarantor dated not more than 30 days prior to the Closing Date, issued by the Secretary of State or other appropriate official of each Borrower’s and each Guarantor’s jurisdiction of incorporation and each jurisdiction where the failure to be so qualified could reasonably be expected to have a Material Adverse Effect;
(i)Legal Opinion.  Agent shall have received the executed legal opinion of Gibson, Dunn & Crutcher LLP in form and substance reasonably satisfactory to Agent, which shall cover such matters incident to the transactions contemplated by this Agreement, the other Loan Documents, and related agreements as Agent may reasonably require and each Credit Party hereby authorizes and directs such counsel to deliver such opinions to Agent and Lenders;
(j)No Litigation.  (i) No litigation, investigation or proceeding before or by any arbitrator or Governmental Body shall be continuing or threatened in writing against any Borrower or any Guarantor or against the 

officers or directors of any Borrower or any Guarantor (A) in connection with this Agreement, the other Loan Documents or any of the transactions contemplated thereby and that, in the reasonable opinion of Agent, is deemed material or (B) that could, in the reasonable opinion of Agent, have a Material Adverse Effect; and (ii) no injunction, writ, restraining order or other order of any nature materially adverse to any Borrower or any Guarantor or the conduct of its business or inconsistent with the due consummation of the Transactions shall have been issued by any Governmental Body;
(k)Financial Condition Certificates.  Agent shall have received an executed Financial Condition Certificate in the form of Exhibit 8.1(k) (the “Financial Condition Certificate”).
(l)Collateral Examination.  Agent shall have completed Collateral examinations and received appraisals, the results of which shall be in form and substance satisfactory to Agent in its Permitted Discretion, of the Receivables, Inventory, General Intangibles, Real Property, Leasehold Interest and Equipment of each Borrower and all books and records in connection therewith;
(m)Fees.  Agent shall have received all fees payable to Agent and Lenders on or prior to the Closing Date hereunder, including pursuant to Article III hereof; 
(n)Pro Forma Financial Statements.  Agent shall have received a copy of the Projections and Pro Forma Financial Statements, which shall demonstrate the ability of Borrowers to service their Indebtedness and perform all their Obligations hereunder and otherwise which must be satisfactory in all respects to Agent;
(o)Insurance.  Agent shall have received in form and substance satisfactory to Agent, certified copies of Borrowers’ casualty insurance policies, together with loss payable endorsements on Agent’s standard form of loss payee endorsement naming Agent as loss payee, and certified copies of Borrowers’ liability insurance policies, together with endorsements naming Agent as a co-insured and lender loss payee, as may be required by Agent, and if any Real Property is located in an area designated as a flood hazard area by any Governmental Body, the Borrowers will provide the Agent, at the Borrowers’ expense, a policy of flood insurance in an amount equal to the lesser of (i) the value of the applicable Real Property to be insured and (ii) the maximum amount available under the federal flood insurance program;
(p)Title Insurance.  Agent shall have received fully paid mortgagee title insurance policies (or binding commitments to issue title insurance policies, marked to Agent’s satisfaction to evidence the form of such policies to be delivered with respect to the Mortgage delivered on the Closing Date), in standard ALTA form, issued by a title insurance company reasonably satisfactory to Agent, each in an amount equal to not less than the fair market value of the Real Property subject to a Mortgage on the Closing Date, insuring such Mortgage to create a valid Lien on the applicable Real Property with no exceptions that Agent shall not have approved in writing and no survey exceptions;
(q)Environmental Reports.  Agent shall have received all environmental studies and reports prepared by independent environmental engineering firms with respect to all Real Property owned or leased by any Credit Party, including, Phase I environmental assessments and satisfactory flood certifications;
(r)Payment Instructions.  Agent shall have received written instructions from Borrowing Agent directing the application of proceeds of the initial Advances made pursuant to this Agreement; 
(s)Blocked Accounts.  Agent shall have received duly executed agreements establishing the Blocked Accounts or Depository Accounts with financial institutions acceptable to Agent for the collection or servicing of the Receivables and proceeds of the Collateral;
(t)Consents.  Agent shall have received any and all Consents necessary to permit the effectuation of the transactions contemplated by this Agreement and the other Loan Documents; and, Agent shall have received such Consents and waivers of such third parties as might assert claims with respect to the Collateral, as Agent and its counsel shall deem necessary;
(u)No Adverse Material Change.  (i) since January 31, 2011, there shall not have occurred any event, condition or state of facts that could reasonably be expected to have a Material Adverse Effect and (ii) no representations made or information supplied to Agent or Lenders shall have been proven to be inaccurate or misleading in any material respect;
(v)Leasehold Agreements.  Agent shall have received landlord, mortgagee or warehouseman agreements satisfactory to Agent with respect to all premises leased by the Credit Parties at which Inventory and books and records are located;
(w)Mortgages.  Agent shall have received in form and substance satisfactory to Lenders (i) an executed Mortgage in respect of the Credit Parties’ Real Property located at 1701 Sturgis Road, Conway, Arkansas and (ii) title policies and (ii) surveys, for such Real Property;

(x)Contract Review.  Agent shall have reviewed (i) all material contracts of the Credit Parties including leases, union contracts, labor contracts, vendor supply contracts, license agreements and distributorship agreements and (ii) all agreements with trade vendors including terms of sales provided to the Credit Parties and any remaining past due amounts owed to vendors, and such contracts and agreements, shall be satisfactory in all respects to Agent;
(y)Closing Certificate.  Agent shall have received a closing certificate signed by the Vice President Finance of each Credit Party dated as of the date hereof, stating that (i) all representations and warranties set forth in this Agreement and the other Loan Documents are true and correct in all respects on the Closing Date (ii) the Credit Parties are on such date in compliance with all the terms and provisions set forth in this Agreement and the other Loan Documents and (iii) on such date (after giving effect to the repayment and termination of VMC’s Wells Fargo Credit Facility) no Default or Event of Default has occurred or is continuing;
(z)Borrowing Base.  Agent shall have received a Borrowing Base Certificate from Borrowers that the aggregate amount of Eligible Receivables and Eligible Inventory is sufficient in value and amount to support Advances in the amount requested by Borrowers on the Closing Date;
(aa)Undrawn Availability.  After giving effect to the initial Advances hereunder, Borrowers shall have Undrawn Availability (after payment of all fees and transaction expenses in connection with the Loan Documents, and subtraction of all trade payables aged beyond 60 days past due) of at least $5,500,000; and
(ab)Compliance with Laws.  Agent shall be reasonably satisfied that each Credit Party is in compliance with all pertinent federal, state, local or territorial regulations, including those with respect to the Federal Occupational Safety and Health Act, the Environmental Protection Act, ERISA and the Trading with the Enemy Act. 
(ac)Repayment of Indebtedness.  Agent shall have received a copy of a payoff letter and lien releases in respect of the Indebtedness of Borrowers outstanding under the Second Amended and Restated Credit Agreement, dated as of March 12, 2008, between VMC and Wells Fargo, National Association (as in effect on the date hereof, “VMC’s Wells Fargo Credit Facility”), and all Indebtedness and commitments to lend thereunder shall be paid in full and terminated, as applicable, on the Closing Date substantially contemporaneously with the initial Advances made hereunder.
(ad)Corporate.  Agent shall be reasonably satisfied with the legal and capital structure of the Credit Parties and their respective Subsidiaries.
(ae)Other.  All (i) corporate and other proceedings, and all documents, instruments and other legal matters in connection with the Transactions shall be satisfactory in form and substance to Agent and its counsel, and (ii) documents, instruments and agreements required to be delivered by or on behalf of Borrowers and Guarantors pursuant to the “closing checklist” provided by Agent in connection with this Agreement shall be delivered in form and substance satisfactory to Agent and its counsel.
2.Conditions to Each Advance
.  The agreement of Lenders to make any Advance requested to be made on any date (including the initial Advance), and of Agent to issue or cause to be issued any Letter of Credit requested to be issued on any date (including the Closing Date), is subject to the satisfaction of the following conditions precedent as of the date such Advance is made:
(a)Representations and Warranties.  Each of the representations and warranties made by any Credit Party in or pursuant to this Agreement, the other Loan Documents and any related agreements to which it is a party, and each of the representations and warranties contained in any certificate, document or financial or other statement furnished at any time under or in connection with this Agreement, the other Loan Documents or any related agreement shall be true and correct in all material respects (except that any such representation or warranty that is already qualified or modified by materiality shall be true and correct in all respects) on and as of such date as if made on and as of such date, except for those representations and warranties that relate solely to an earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such date;
(b)No Default.  No Event of Default or Default shall have occurred and be continuing on such date, or would exist after giving effect to the Advances requested to be made, on such date; 
(c)No Material Adverse Effect.  No Material Adverse Effect shall have occurred on or prior to such date, or would result after giving effect to the Advances requested to be made on such date;
Provided, however, that, notwithstanding Sections 8.2(a), (b) and (c), Agent, in its sole discretion, may continue to make Advances notwithstanding the existence of an Event of Default or Default and that any Advances so made shall 

not be deemed a waiver of any such Event of Default or Default and shall not obligate any Secured Party to make any future Advances; and
(d)Maximum Advances.  In the case of any type of Advance requested to be made, after giving effect thereto, the aggregate amount of such type of Advance shall not exceed the maximum amount of such type of Advance permitted under this Agreement.
Each request for an Advance by any Borrower hereunder shall constitute a representation and warranty by each Borrower as of the date of such Advance that the conditions contained in this subsection shall have been satisfied.
3.Conditions to Each Equipment Loan
.  The agreement of Lenders to make any Equipment Loan is subject to satisfaction of the following conditions precedent:  (a) receipt by Agent of (i) a copy of the invoice relating to the equipment being purchased, (ii) evidence that such equipment has been shipped to the applicable Borrower, (iii) evidence that the requested Equipment Loan does not exceed (x) eighty-five percent (85%) of the Net Invoice Cost of such new equipment purchased by such Borrower or (y) eighty percent (80%) of the Net Invoice Cost of such used equipment purchased by such Borrower, and (iv) such other documentation and evidence that Agent may request; and (b) after giving effect thereto, the aggregate outstanding principal amount of Equipment Loans shall not exceed the Maximum Equipment Loan Amount.
		
	ARTICLE XXV
	

ARTICLE XXVI

ARTICLE XXVIIINFORMATION AS TO CREDIT PARTIES
Until indefeasible payment in full in cash (or other immediately available funds) of the Obligations (other than Inchoate Obligations) and termination of this Agreement, each Credit Party shall, or (except with respect to Section 9.11) shall cause Borrowing Agent on its behalf to:
1.Disclosure of Material Matters
.  Immediately upon learning thereof, report to Agent all matters materially adversely affecting the value, enforceability or collectibilitycollectability of any portion of the Collateral in excess of $100,000 in the aggregate (other than Inventory held by employees of the Credit Parties for marketing and sales purposes not in excess of $10,000 in the aggregate), including any Credit Party’s reclamation or repossession of, or the return to any Credit Party of, a material amount of goods or claims or disputes asserted by any Customer or other obligor.
2.Schedules
.  During the Peak Season, deliver to Agent on or before the fifteenth (15th) day of each month (or as frequently as Agent shall require during the existence of a Default) a Borrowing Base Certificate in form and substance satisfactory to Agent (which shall be calculated as of the last day of the prior month and which shall not be binding upon Agent or restrictive of Agent’s rights under this Agreement) and on or before the  Wednesday of each week (or as frequently as Agent shall require during the existence of a Default) as and for the prior week (a) accounts receivable roll forwards and ageings inclusive of reconciliations to the general ledger, (b) accounts payable schedules inclusive of reconciliations to the general ledger, and (c) Inventory reports.  At all times other than during the Peak Season, deliver to Agent on or before the fifteenth (15th) day of each month (or as frequently as Agent shall require during the existence of a Default) as and for the prior month (a) accounts receivable ageings inclusive of reconciliations to the general ledger, (b) accounts payable schedules inclusive of reconciliations to the general ledger, (c) Inventory reports, (d) current ‘do not mail’ planscape accounts receivable detail and (e) a Borrowing Base Certificate in form and substance satisfactory to Agent (which shall be calculated as of the last day of the prior month and which shall not be binding upon Agent or restrictive of Agent’s rights under this Agreement).  Borrowers shall also deliver to Agent on or before Wednesday of each week (or as frequently as Agent shall require during the existence of a Default) as and for the prior week, a report of the sales and collections activity for such week. In addition, each Borrower will deliver to Agent at such intervals as Agent may require:  (i) confirmatory assignment schedules, (ii) copies of Customer’s invoices, (iii) evidence of shipment or delivery, and (iv) such further schedules, documents and/or information regarding the Collateral as Agent may require including trial balances and test verifications.  Agent shall have the right to confirm and verify all Receivables by any manner and through any medium it considers advisable and may do whatever it deems reasonably necessary to protect its interests hereunder.  The items to be provided under this Section 9.2 are to be in form satisfactory 

to Agent and executed by Borrowing Agent and delivered to Agent from time to time solely for Agent’s convenience in maintaining records of the Collateral, and any Borrower’s failure to deliver any of such items to Agent shall not affect, terminate, modify or otherwise limit Agent’s Lien with respect to the Collateral.
3.Environmental Reports
.  Furnish Agent, concurrently with the delivery of the financial statements referred to in Sections 9.7 and 9.8, with a Compliance Certificate stating (to the best of his knowledge) that each Credit Party is in compliance in all material respects with all federal, state and local Environmental Laws.  To the extent any Credit Party is not in compliance with the foregoing laws, the certificate shall set forth with specificity all areas of non-compliance and the proposed action such Credit Party will implement in order to achieve full compliance.
4.Litigation
.  Promptly notify Agent in writing of any claim, litigation, suit or administrative proceeding affecting any Credit Party, whether or not the claim is covered by insurance, and of any litigation, suit or administrative proceeding, which in any such case adversely affects the Collateral or that could reasonably be expected to have a Material Adverse Effect.
5.Material Occurrences
.  Promptly notify Agent in writing upon the occurrence of (a) any Event of Default or Default; (b) any event, development or circumstance whereby any financial statements or other reports furnished to Agent fail in any material respect to present fairly, in accordance with GAAP consistently applied (after giving effect to any reconciliation required to accompany such financial statements pursuant to Section 1.1), the financial condition or operating results of any Borrower as of the date of such statements; (c) any accumulated retirement plan funding deficiency which, if such deficiency continued for two plan years and was not corrected as provided in Section 4971 of the Code, could subject any Credit Party to a tax imposed by Section 4971 of the Code; (d) each and every default by any Credit Party that might result in the acceleration of the maturity of any Funded Debt, including the names and addresses of the holders of such Funded Debt with respect to which there is a default existing or with respect to which the maturity has been or could be accelerated, and the amount of such Funded Debt; and (e) any other development in the business or affairs of any Credit Party that could reasonably be expected to have a Material Adverse Effect; in each case describing the nature thereof and the action the Credit Parties propose to take with respect thereto.
6.Government Receivables
.  Upon request of Agent, provide Agent with a listing of all Receivables that arise out of contracts between any Credit Party and the United States, any state, or any department, agency or instrumentality of any of them, in such reasonable detail as Agent may require.
7.Annual Financial Statements
.  Furnish Agent and Lenders within ninety (90) days after the end of each fiscal year of VMC, financial statements of Borrowers and their Subsidiaries on a consolidating (if applicable) and consolidated basis including statements of income and stockholders’ equity and cash flow from the beginning of the current fiscal year to the end of such fiscal year and the balance sheet as at the end of such fiscal year, all prepared in accordance with GAAP consistently applied, and in reasonable detail and reported upon without a “going concern” or like qualification by an independent certified public accounting firm selected by Borrowers and satisfactory to Agent (the “Accountants”).  The report of the Accountants shall be prepared in accordance with generally accepted accounting standards.  In addition, the reports shall be accompanied by a Compliance Certificate.
8.Quarterly Financial Statements
.  Furnish Agent and Lenders within forty five (45) days after the end of (i) each fiscal quarter (other than the fourth fiscal quarter), an unaudited balance sheet of Borrowers and their Subsidiaries on a consolidating (if applicable) and consolidated basis and unaudited statements of income and stockholders’ equity and cash flow of Borrowers and their Subsidiaries on a consolidating (if applicable) and consolidated basis reflecting results of operations from the beginning of the fiscal year to the end of such quarter and for such quarter, prepared on a basis consistent with prior practices and fairly representing the financial condition of the Borrowers in all material respects, subject to normal and recurring year end adjustments and to the absence of footnotes and (ii) the fourth fiscal quarter a summary of the last three month’s profits and losses, and cash flow.  The reports shall be accompanied by a Compliance Certificate.

9.Monthly Financial Statements
.  Furnish Agent and Lenders within thirty (30) days after the end of each month, an unaudited balance sheet of Borrowers and their Subsidiaries on a consolidating (if applicable) and consolidated basis and unaudited statements of income and stockholders’ equity and cash flow of Borrowers and their Subsidiaries on a consolidating (if applicable) and consolidated basis reflecting results of operations from the beginning of the fiscal year to the end of such month and for such month, prepared on a basis consistent with prior practices and fairly representing the financial condition of the Borrowers in all material respects, subject to normal and recurring year end adjustments and to the absence of footnotes.  The reports shall be accompanied by a Compliance Certificate.
10.Other Reports
.  Furnish Agent as soon as available, but in any event within ten (10) days after the issuance thereof, (a) with copies of such financial statements, reports and returns as each Borrower shall send to its stockholders, (b) with copies of each annual report, proxy or financial statement or other report or communication sent to the shareholders of Borrowers, and copies of all annual, regular, periodic and special reports and registration statements which Borrowers may file or be required to file with the SEC under Section 13 or 15(d) of the Exchange Act, and not otherwise required to be delivered to Lenders pursuant to other provisions of this Section, and (c) with copies of any other report or other document that was filed by Borrower or any of its Subsidiaries with any Governmental Authority;
11.Additional Information
.  Furnish Agent with such additional information as Agent shall reasonably request in order to enable Agent to determine whether the terms, covenants, provisions and conditions of this Agreement and the Revolving Credit Notes have been complied with by the Credit Parties including, without the necessity of any request by Agent, (a) copies of all environmental audits and reviews, (b) at least thirty (30) days prior thereto, notice of any Credit Party’s opening of any new office or place of business or any Credit Party’s closing of any existing office or place of business (other than home offices of individual marketing and sales employees and regional sales managers of the Credit Parties), and (c) promptly upon any Credit Party’s learning thereof, notice of any labor dispute to which any Credit Party may become a party, any strikes or walkouts relating to any of its plants or other facilities, and the expiration of any labor contract to which any Credit Party is a party or by which any Credit Party is bound.
12.Projected Operating Budget
.  Commencing with fiscal year 2012, furnish Agent and Lenders, (a) no later than thirty (30) days prior to the beginning of each Borrower’s fiscal years a draft of, and (b) no later than thirty (30) days after the beginning of each such fiscal years a final board of directors approved, month by month projected operating budget and cash flow of Borrowers and their Subsidiaries on a consolidating (if applicable) and consolidated basis for such fiscal year (including an income statement for each month and a balance sheet as at the end of the last month in each fiscal quarter), such projections, in the case of the foregoing clause (b), to be accompanied by a certificate signed by the President or Vice President Finance of each Borrower to the effect that such projections have been prepared on the basis of sound financial planning practice consistent with past budgets and financial statements and that such officer has no reason to question the reasonableness of any material assumptions on which such projections were prepared.
13.Variances From Operating Budget
.  Furnish Agent, concurrently with the delivery of the financial statements referred to in Section 9.7 and each quarterly report, a written report summarizing all material variances from budgets submitted by Borrowers pursuant to Section 9.12 and a discussion and analysis by management with respect to such variances.
14.Notice of Suits, Adverse Events
.  Furnish Agent with prompt written notice of:  (a) any lapse or other termination of any Consent issued to any Credit Party by any Governmental Body or any other Person that is material to the operation of any Credit Party’s business; (b) any refusal by any Governmental Body or any other Person to renew or extend any such Consent; and (c) copies of any periodic or special reports filed by any Credit Party with any Governmental Body or Person, if such reports indicate any material change in the business, operations, affairs or condition of any Credit Party, or if copies thereof are requested by Lender; and (d) copies of any material notices and other communications from any Governmental Body or Person that specifically relate to any Credit Party.

15.ERISA Notices and Requests
.  Furnish Agent with prompt written notice in the event that (a) any Credit Party or any member of the Controlled Group knows or has reason to know that a Termination Event has occurred, together with a written statement describing such Termination Event and the action, if any, which any Credit Party or any member of the Controlled Group has taken, is taking, or proposes to take with respect thereto and, when known, any action taken or threatened by the Internal Revenue Service, Department of Labor or PBGC with respect thereto, (b) any Credit Party or any member of the Controlled Group knows or has reason to know that a prohibited transaction (as defined in Sections 406 of ERISA and 4975 of the Code) that could reasonably be expected to have a Material Adverse Effect has occurred together with a written statement describing such transaction and the action which such Credit Party or such member of the Controlled Group (as applicable) has taken, is taking or proposes to take with respect thereto, (c) a funding waiver request has been filed with respect to any Pension Benefit Plan together with all communications received by any Credit Party or any member of the Controlled Group with respect to such request, (d) any increase in the benefits of any frozen Pension Benefit Plan as set forth in Schedule 5.8(d), (e) any Credit Party or any member of the Controlled Group shall receive from the PBGC a notice of intention to terminate a Pension Benefit Plan or to have a trustee appointed to administer a Pension Benefit Plan, together with copies of each such notice, (f) any Credit Party or any member of the Controlled Group shall receive any unfavorable determination letter from the Internal Revenue Service regarding the qualification of a Pension Benefit Plan under Section 401(a) of the Code, together with copies of each such letter; (g) any Credit Party or any member of the Controlled Group shall receive a notice regarding the imposition of withdrawal liability with respect to a Multiemployer Plan, together with copies of each such notice; (h) any Credit Party or any member of the Controlled Group shall fail to make a required installment or any other required payment under the Pension Funding Rules on or before the due date for such installment or payment; (i) any Credit Party or any member of the Controlled Group knows that (i) a Multiemployer Plan has been terminated, (ii) the administrator or plan sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan, or (iii) the PBGC has instituted or will institute proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan.  The Credit Parties shall promptly deliver to Agent all information required to be reported to the PBGC under Section 4010 of ERISA and such other documents or governmental reports or filings related to any Pension Benefit Plan as Agent shall reasonably request.  Promptly following an request therefor, the Credit Parties shall deliver to the Agent copies of any documents or notices described in Sections 101(j), (k) or (l) of ERISA that any Credit Party or any member of the Controlled Group may request with respect to any Pension Benefit Plan or Multiemployer Plan, as applicable; provided, that, if any Credit Party or any member of the Controlled Group has not requested such documents or notices from the administrator or sponsor of the applicable Pension Benefit Plan or Multiemployer Plan, then the applicable Credit Party or the applicable member of the Controlled Group shall, upon request by Agent, promptly make a request for such documents or notices from such administrator or sponsor and shall provide copies of such documents and notices to Agent promptly after receipt thereof.
16.Additional Documents
.  Execute and deliver to Agent, upon request, such documents and agreements as Agent may, from time to time, reasonably request to carry out the purposes, terms or conditions of this Agreement.
		
	ARTICLE XXVIII
	

ARTICLE XXIX

ARTICLE XXXEVENTS OF DEFAULT
The occurrence of any one or more of the following events shall constitute an “Event of Default”:
1.Nonpayment
.  Failure by any Borrower to pay any principal or interest on the Obligations when due, whether due at maturity or by reason of acceleration pursuant to the terms of this Agreement or by notice of intention to prepay, or by required prepayment or failure to pay any other liabilities or make any other payment, fee or charge provided for herein or in any other Loan Document when due;
2.Breach of Representation
.  Any representation or warranty made or deemed made by any Credit Party in this Agreement, any other Loan Document or in any related agreement, certificate, document or financial or other statement furnished at any time in connection herewith or therewith shall prove to have been incorrect in any material respect or when taken together 

with all such other information delivered under the Loan Documents, misleading in any material respect (except, in each case, that any such representation or warranty that is already qualified or modified by materiality shall be true and correct in all respects) on the date when made or deemed to have been made; 
3.Noncompliance
.  Except as otherwise provided in Section 10.1, failure or neglect of any Credit Party to perform, keep or observe any term, provision, condition or covenant:
(a)contained in Sections 4.3, 4.5, 4.6, 4.7, 4.11, 4.21, 6.5, 6.6, 6.7, Sections 7.1 through 7.22 or Sections 9.7, 9.8, 9.9, 9.12 and 9.13;
(b)contained in Sections 9.1 through 9.15 (other than Sections 9.7, 9.8, 9.9, 9.12 and 9.13), which remains unremedied for a period of five (5) Business Days;
(c)contained in any other provisions of this Agreement or any of the other Loan Documents, which remains unremedied for a period of thirty (30) days after the earlier of (x) knowledge of such failure by any Credit Party, or (y) written notice of such failure to Borrowing Agent by Agent or any Lender;
4.Judicial Actions
.  Issuance of a notice of Lien, levy, assessment, injunction or attachment against any Credit Party’s Inventory, Receivables or other property having an aggregate value in excess of $250,000 that is not stayed or lifted within thirty (30) days;
5.Judgments
.  Any judgment or judgments are rendered against any Credit Party for an aggregate amount in excess of $250,000 and (a) enforcement proceedings shall have been commenced by a creditor upon such judgment, (b) there shall be any period of thirty (30) consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, shall not be in effect, or (c) any such judgment results in the creation of a Lien upon any of the Collateral (other than a Permitted Encumbrance); 
6.Bankruptcy
.  Any Credit Party shall:  (a) apply for, consent to or suffer the appointment of, or the taking of possession by, a receiver, custodian, trustee, liquidator or similar fiduciary of itself or of all or a substantial part of its property; (b) make a general assignment for the benefit of creditors; (c) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect); (d) be adjudicated a bankrupt or insolvent; (e) file a petition seeking to take advantage of any other law providing for the relief of debtors; (f) acquiesce to, or fail to have dismissed, within thirty (30) days, any petition filed against it in any involuntary case under such bankruptcy laws; or (g) take any action for the purpose of effecting any of the foregoing;
7.Inability to Pay
. Any Credit Party shall admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business;
8.Affiliate Actions
.  Any Affiliate of any Credit Party (a) violates any Anti-Terrorism Law or engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law, (b) shall, or its respective agents acting or benefiting in any capacity in connection with the Advances or other transactions hereunder, shall be a Blocked Person, (c) (i) conducts any business or engages in any transaction or dealing with any Blocked Person, including the making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, (ii) deals in, or otherwise engages in, any transaction relating to, any property or interests in property blocked pursuant to the Executive Order No. 13224, or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in the Executive Order No. 13224, the USA PATRIOT Act or any other Anti-Terrorism Law.  
9.Lien Priority

.  Any Lien created hereunder or provided for hereby or under any related agreement for any reason ceases to be or is not a valid and perfected Lien having a first priority interest;
10.Cross Default
.  A default of the obligations of any Credit Party shall occur under (i) any agreement to which it is a party in respect of Funded Debt in excess of $200,000 in the aggregate for all such Persons, or (ii) any other agreement to which it is a party that materially adversely affects its condition, affairs or prospects (financial or otherwise), in each case which default is not cured within any applicable grace period;
11.Breach of Guaranty
.  Termination or breach of any Guaranty or Guarantor Security Agreement or similar agreement executed and delivered to Agent in connection with the Obligations of any Borrower, or if any Guarantor attempts to terminate, challenges (in writing) the validity of, or its liability under, any such Guaranty or Guaranty Security Agreement or similar agreement;
12.Change of Control
.  Any Change of Control shall occur;
13.Invalidity
.  Any material provision of this Agreement or any other Loan Document shall, for any reason, cease to be valid and binding on any Credit Party, or any Credit Party shall so claim in writing to Agent or any Lender;
14.Licenses
.  (a) Any Governmental Body shall (i) revoke, terminate, suspend or adversely modify any license, permit, patent trademark or trade name of any Credit Party, or (ii) commence proceedings to suspend, revoke, terminate or adversely modify any such license, permit, trademark, trade name or patent and such proceedings shall not be dismissed or discharged within sixty (60) days, or (iii) schedule or conduct a hearing on the renewal of any license, permit, trademark, trade name or patent necessary for the continuation of any Credit Party’s business and the staff of such Governmental Body issues a report recommending the termination, revocation, suspension or material, adverse modification of such license, permit, trademark, trade name or patent; or (b) any agreement that is necessary or material to the operation of any Credit Party’s business shall be revoked or terminated and not replaced by a substitute acceptable to Agent within thirty (30) days after the date of such revocation or termination, and such revocation or termination and non-replacement could, in each case of this Section 10.15, reasonably be expected to have a Material Adverse Effect;
15.Seizures
.  Any portion of the Collateral shall be seized or taken by a Governmental Body, or Credit Party or the title and rights of any Credit Party that is the owner of any material portion of the Collateral shall have become the subject matter of claim, litigation, suit or other proceeding that might, in the opinion of Agent, upon final determination, result in impairment or loss of the security provided by this Agreement or the other Loan Documents;
16.Operations
.  The operations of any Credit Party’s manufacturing facility are interrupted at any time for more than (a) five (5) consecutive days during the Peak Season or (b) fifteen (15) consecutive days at any other time, in each case unless such Credit Party shall (i) be entitled to receive for such period of interruption, proceeds of business interruption insurance sufficient to assure that its per diem cash needs during such period is at least equal to its average per diem cash needs for the consecutive six month period immediately preceding the initial date of interruption and (ii) receive such proceeds in the amount described in clause (a) preceding not later than thirty (30) days following the initial date of any such interruption; provided, however, that notwithstanding the provisions of clauses (i) and (ii) of this section, an Event of Default shall be deemed to have occurred if such Credit Party shall be receiving the proceeds of business interruption insurance for a period of thirty (30) consecutive days; or
17.Pension Plans
.  Any failure by any Credit Party to comply with the requirements of Sections 7.16 or 9.15 hereof, determined without regard to any materiality limitation or threshold set forth therein, shall occur or exist with respect to any Pension Benefit 

Plan and, as a result of such event or condition, together with all other such events or conditions, any Credit Party or any member of the Controlled Group shall incur, or in the opinion of Agent be reasonably likely to incur, a liability to a Pension Benefit Plan or the PBGC (or both) which, in the reasonable judgment of Agent, would be reasonably likely to result in aggregate liability to the Credit Parties (or any of them) of $250,000 or more; or 
18.Section 6.5 Covenants
.  Any covenant in Section 6.5 becomes inapplicable due to the failure of such covenant to apply by its terms in a future period, and the Borrowers and Agent fail to come to an agreement acceptable to Agent in its sole discretion to amend the covenant to apply to future periods.
		
	ARTICLE XXXI
	

ARTICLE XXXII

ARTICLE XXXIIILENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT
1.Rights and Remedies
.
(a)Upon the occurrence of (i) an Event of Default pursuant to Section 10.6 all Obligations shall be immediately due and payable and this Agreement and the obligation of Lenders to make Advances shall be deemed terminated; and, (ii) any of the other Events of Default and at any time thereafter (such Event of Default not having previously been waived), at the option of Required Lenders all Obligations shall be immediately due and payable and Lenders shall have the right to terminate this Agreement and to terminate the obligation of Lenders to make Advances and (iii) a filing of a petition against any Credit Party in any involuntary case under any state or federal bankruptcy laws, all Obligations shall be immediately due and payable and the obligation of Lenders to make Advances hereunder and the obligation of Agent to issue or cause the issuance of any Letter of Credit will be terminated other than as may be agreed to by Agent and Lenders and approved by an appropriate order of the bankruptcy court or other governmental Body having jurisdiction over such Credit Party in connection therewith in form and substance satisfactory to Agent and Lenders in their sole discretion.  Upon the occurrence of any Event of Default, Agent shall have the right to exercise any and all rights and remedies provided for herein, under the other Loan Documents, under the Uniform Commercial Code and at law or equity generally, including the right to foreclose the security interests granted herein and to realize upon any Collateral by any available judicial procedure and/or to take possession of and sell any or all of the Collateral with or without judicial process.  Agent may enter any of any Credit Party’s premises or other premises without legal process and without incurring liability to any Credit Party therefor, and Agent may thereupon, or at any time thereafter, in its discretion without notice or demand, take the Collateral and remove the same to such place as Agent may deem advisable and Agent may require the Credit Parties to make the Collateral available to Agent at a convenient place.  With or without having the Collateral at the time or place of sale, Agent may sell the Collateral, or any part thereof, at public or private sale, at any time or place, in one or more sales, at such price or prices, and upon such terms, either for cash, credit or future delivery, as Agent may elect.  Except as to that part of the Collateral that is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, Agent shall give the Credit Parties reasonable notification of such sale or sales, it being agreed that in all events written notice mailed to Borrowing Agent at least ten (10) days prior to such sale or sales is reasonable notification.  At any public sale Agent or any Secured Party may bid for and become the purchaser, and Agent, any Secured Party or any other purchaser at any such sale thereafter shall hold the Collateral sold absolutely free from any claim or right of whatsoever kind, including any equity of redemption and all such claims, rights and equities are hereby expressly waived and released by each Credit Party.  In connection with the exercise of the foregoing remedies, including the sale of Inventory, Agent is granted a perpetual non-revocable, royalty free, nonexclusive license and Agent is granted permission to use all of each Credit Party’s (a) trademarks, trade styles, trade names, patents, patent applications, copyrights, service marks, licenses, franchises and other proprietary rights that are used or useful in connection with Inventory for the purpose of marketing, advertising for sale and selling or otherwise disposing of such Inventory and (b) Equipment for the purpose of completing the manufacture of unfinished goods.  The cash proceeds realized from the sale of any Collateral shall be applied to the Obligations in the order set forth in Section 11.5.  Non-cash proceeds will only be applied to the 

Obligations as they are converted into cash.  If any deficiency shall arise, the Credit Parties shall remain liable to Secured Party therefor.
(b)To the extent that Applicable Law imposes duties on Agent to exercise remedies in a commercially reasonable manner, each Credit Party acknowledges and agrees that it is not commercially unreasonable for Agent (i) to fail to incur expenses reasonably deemed significant by Agent to prepare Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against Customers or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies against Customers and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as any Credit Party, for expressions of interest in acquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure Agent against risks of loss, collection or disposition of Collateral or to provide to Agent a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist Agent in the collection or disposition of any of the Collateral.  Each Credit Party acknowledges that the purpose of this Section 11.1(b) is to provide non-exhaustive indications of what actions or omissions by Agent would not be commercially unreasonable in Agent’s exercise of remedies against the Collateral and that other actions or omissions by Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 11.1(b).  Without limitation upon the foregoing, nothing contained in this Section 11.1(b) shall be construed to grant any rights to any Credit Party or to impose any duties on Agent that would not have been granted or imposed by this Agreement or by Applicable Law in the absence of this Section 11.1(b).  
2.Agent’s Discretion
.  Agent shall have the right in its sole discretion to determine which rights, Liens, security interests or remedies Agent may at any time pursue, relinquish, subordinate, or modify or to take any other action with respect thereto and such determination will not in any way modify or affect any of Secured Party rights hereunder.
3.Setoff
.  Subject to Section 14.12, in addition to any other rights that Agent or any other Secured Party may have under Applicable Law, upon the occurrence of an Event of Default hereunder, Agent and such Secured Party shall have a right, immediately and without notice of any kind, to apply any Credit Party’s property held by Agent and such Secured Party to reduce the Obligations.
4.Rights and Remedies not Exclusive
.  The enumeration of the foregoing rights and remedies is not intended to be exhaustive and the exercise of any rights or remedy shall not preclude the exercise of any other right or remedies provided for herein or otherwise provided by law, all of which shall be cumulative and not alternative.
5.Allocation of Payments After Event of Default
.  Notwithstanding any other provisions of this Agreement to the contrary, after the occurrence and during the continuance of an Event of Default, all amounts collected or received by Agent on account of the Obligations or any other amounts outstanding under any of the Loan Documents or in respect of the Collateral may, at Agent’s discretion, be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of Agent in connection with enforcing its rights and the rights of Secured Parties under this Agreement and the other Loan Documents and any protective advances made by Agent with respect to the Collateral under or pursuant to the terms of this Agreement;

SECOND, to payment of any fees owed to Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of each of Lenders to the extent owing to such Lender pursuant to the terms of this Agreement;
FOURTH, to the payment of all of the Obligations consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of the Obligations (including the payment or cash collateralization of any outstanding Letters of Credit);
SIXTH, to all other Obligations and other obligations that have become due and payable under the Loan Documents or otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH” above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next succeeding category; (ii) each of Lenders shall receive (so long as it is not a Defaulting Lender) an amount equal to its pro rata share (based on the proportion that the then outstanding Advances held by such Lender bears to the aggregate then outstanding Advances) of amounts available to be applied pursuant to clauses “FOURTH”, “FIFTH” and “SIXTH” above; and (iii) to the extent that any amounts available for distribution pursuant to clause “FIFTH” above are attributable to the issued but undrawn amount of outstanding Letters of Credit, such amounts shall be held by Agent in a cash collateral account and applied (A) first, to reimburse the Issuer from time to time for any drawings under such Letters of Credit and (B) then, following the expiration of all Letters of Credit, to all other obligations of the types described in clauses “FIFTH” and “SIXTH” above in the manner provided in this Section 11.5.
		
	ARTICLE XXXIV
	

ARTICLE XXXV

ARTICLE XXXVIWAIVERS AND JUDICIAL PROCEEDINGS
1.Waiver of Notice
.  Each Credit Party hereby waives notice of non-payment of any of the Receivables, demand, notice of acceleration, notice of intent to accelerate, presentment, protest and notice thereof with respect to any and all instruments, notice of acceptance hereof, notice of loans or advances made, credit extended, Collateral received or delivered, or any other action taken in reliance hereon, and all other demands and notices of any description, except such as are expressly provided for herein.
2.Delay
.  No delay or omission on Agent’s or any Secured Party’s part in exercising any right, remedy or option shall operate as a waiver of such or any other right, remedy or option or of any Default or Event of Default.
3.Jury Waiver; California Judicial Reference
.  
(a)EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES TO THE MAXIMUM EXTENT NOT PROHIBITED BY APPLICABLE LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR THERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE 

AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT OR SUCH OTHER LOAN DOCUMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(b)IN THE EVENT THAT ANY SUCH ACTION IS COMMENCED OR MAINTAINED IN ANY COURT IN THE STATE OF CALIFORNIA, AND THE WAIVER OF JURY TRIAL SET FORTH IN SECTION ABOVE IS NOT ENFORCEABLE, AND EACH PARTY TO SUCH ACTION DOES NOT SUBSEQUENTLY WAIVE IN AN EFFECTIVE MANNER UNDER CALIFORNIA LAW ITS RIGHT TO A TRIAL BY JURY, THE PARTIES HERETO HEREBY ELECT TO PROCEED AS FOLLOWS:
(i)WITH THE EXCEPTION OF THE ITEMS SPECIFIED IN CLAUSE (II) BELOW, ANY CONTROVERSY, DISPUTE OR CLAIM (EACH, A “CONTROVERSY”) BETWEEN THE PARTIES ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT WILL BE RESOLVED BY A REFERENCE PROCEEDING IN ACCORDANCE WITH THE PROVISIONS OF SECTIONS 638, ET SEQ. OF THE CALIFORNIA CODE OF CIVIL PROCEDURE (“CCP”), OR THEIR SUCCESSOR SECTIONS, WHICH SHALL CONSTITUTE THE EXCLUSIVE REMEDY FOR THE RESOLUTION OF ANY CONTROVERSY, INCLUDING WHETHER THE CONTROVERSY IS SUBJECT TO THE REFERENCE PROCEEDING.  EXCEPT AS OTHERWISE PROVIDED ABOVE, VENUE FOR THE REFERENCE PROCEEDING WILL BE IN ANY COURT IN WHICH VENUE IS APPROPRIATE UNDER APPLICABLE LAW (THE “COURT”).
(ii)THE MATTERS THAT SHALL NOT BE SUBJECT TO A REFERENCE ARE THE FOLLOWING: (A) NON-JUDICIAL FORECLOSURE OF ANY SECURITY INTERESTS IN REAL OR PERSONAL PROPERTY; (B) EXERCISE OF SELF HELP REMEDIES (INCLUDING SET-OFF); (C) APPOINTMENT OF A RECEIVER; AND (D) TEMPORARY, PROVISIONAL OR ANCILLARY REMEDIES (INCLUDING WRITS OF ATTACHMENT, WRITS OF POSSESSION, TEMPORARY RESTRAINING ORDERS OR PRELIMINARY INJUNCTIONS).  THIS AGREEMENT DOES NOT LIMIT THE RIGHT OF ANY PARTY TO EXERCISE OR OPPOSE ANY OF THE RIGHTS AND REMEDIES DESCRIBED IN CLAUSES (A) AND (B) OR TO SEEK OR OPPOSE FROM A COURT OF COMPETENT JURISDICTION ANY OF THE ITEMS DESCRIBED IN CLAUSES (C) AND (D).  THE EXERCISE OF, OR OPPOSITION TO, ANY OF THOSE ITEMS DOES NOT WAIVE THE RIGHT OF ANY PARTY TO A REFERENCE PURSUANT TO THIS AGREEMENT.
(iii)THE REFEREE SHALL BE A RETIRED JUDGE OR JUSTICE SELECTED BY MUTUAL WRITTEN AGREEMENT OF THE PARTIES.  IF THE PARTIES DO NOT AGREE WITHIN TEN (10) DAYS OF A WRITTEN REQUEST TO DO SO BY ANY PARTY, THEN, UPON REQUEST OF ANY PARTY, THE REFEREE SHALL BE SELECTED BY THE PRESIDING JUDGE OF THE COURT (OR HIS OR HER REPRESENTATIVE).  A REQUEST FOR APPOINTMENT OF A REFEREE MAY BE HEARD ON AN EX PARTE OR EXPEDITED BASIS, AND THE PARTIES AGREE THAT IRREPARABLE HARM WOULD RESULT IF EX PARTE RELIEF IS NOT GRANTED.
(iv)EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE REFEREE SHALL DETERMINE THE MANNER IN WHICH THE REFERENCE PROCEEDING IS CONDUCTED INCLUDING THE TIME AND PLACE OF HEARINGS, THE ORDER OF PRESENTATION OF EVIDENCE, AND ALL OTHER QUESTIONS THAT ARISE WITH RESPECT TO THE COURSE OF THE REFERENCE PROCEEDING.  ALL PROCEEDINGS AND HEARINGS CONDUCTED BEFORE THE REFEREE, EXCEPT FOR TRIAL, SHALL BE CONDUCTED WITHOUT A COURT REPORTER, EXCEPT THAT WHEN ANY PARTY SO REQUESTS, A COURT REPORTER WILL BE USED AT ANY HEARING CONDUCTED BEFORE THE REFEREE, AND THE REFEREE WILL BE PROVIDED A COURTESY COPY OF THE TRANSCRIPT.  THE PARTY MAKING SUCH A REQUEST SHALL HAVE THE OBLIGATION TO ARRANGE FOR THE COURT REPORTER.  SUBJECT TO THE REFEREE’S POWER TO 

AWARD COSTS TO THE PREVAILING PARTY, THE CREDIT PARTIES WILL PAY THE COST OF THE REFEREE AND ALL COURT REPORTERS.
(v)THE REFEREE SHALL BE REQUIRED TO DETERMINE ALL ISSUES IN ACCORDANCE WITH EXISTING APPLICABLE CASE LAW AND STATUTORY LAW.  THE RULES OF EVIDENCE APPLICABLE TO PROCEEDINGS AT LAW IN THE COURT WILL BE APPLICABLE TO THE REFERENCE PROCEEDING.  THE REFEREE SHALL BE EMPOWERED TO ENTER EQUITABLE AS WELL AS LEGAL RELIEF, ENTER EQUITABLE ORDERS THAT WILL BE BINDING ON THE PARTIES AND RULE ON ANY MOTION THAT WOULD BE AUTHORIZED IN A COURT PROCEEDING.  THE REFEREE SHALL ISSUE A DECISION AT THE CLOSE OF THE REFERENCE PROCEEDING WHICH DISPOSES OF ALL CLAIMS OF THE PARTIES THAT ARE THE SUBJECT OF THE REFERENCE.   PURSUANT TO CCP SECTION 644, SUCH DECISION SHALL BE ENTERED BY THE COURT AS A JUDGMENT OR AN ORDER IN THE SAME MANNER AS IF THE ACTION HAD BEEN TRIED BY THE COURT AND ANY SUCH DECISION WILL BE FINAL, BINDING AND CONCLUSIVE.  THE PARTIES RESERVE THE RIGHT TO APPEAL FROM THE FINAL JUDGMENT OR ORDER OR FROM ANY APPEALABLE DECISION OR ORDER ENTERED BY THE REFEREE.  THE PARTIES RESERVE THE RIGHT TO FINDINGS OF FACT, CONCLUSIONS OF LAWS, A WRITTEN STATEMENT OF DECISION, AND THE RIGHT TO MOVE FOR A NEW TRIAL OR A DIFFERENT JUDGMENT, WHICH NEW TRIAL, IF GRANTED, IS ALSO TO BE A REFERENCE PROCEEDING UNDER THIS PROVISION.
(vi)NEITHER THE INCLUSION OF THIS SECTION 12.3, NOR ANY REFERENCE TO CALIFORNIA LAW CONTAINED HEREIN SHALL BE DEEMED TO AFFECT OR LIMIT IN ANY WAY THE PARTIES’ CHOICE OF NEW YORK LAW.
ARTICLE XXXVII

ARTICLE XXXVIII

ARTICLE XXXIXEFFECTIVE DATE AND TERMINATION
1.Term
.  This Agreement, which shall inure to the benefit of and shall be binding upon the respective successors and permitted assigns of each Credit Party, Agent and each Secured Party, shall become effective on the date hereof and shall continue in full force and effect until December 22, 2019 (the “Term”) unless sooner terminated as herein provided.  Borrowers may terminate this Agreement at any time upon not less than sixty (60) days’ nor more than ninety (90) days’ prior written notice upon payment in full of the Obligations (other than Inchoate Obligations). In the event this Agreement is terminated prior to the last day of the Term (the date of such prepayment hereinafter referred to as the “Early Termination Date”), Borrowers shall pay to Agent for the benefit of Lenders an early termination fee as set forth in the Fee Letter.
2.Termination
.  The termination of the Agreement shall not affect any Borrower’s, Agent’s or any other Secured Party’s rights, or any of the Obligations having their inception prior to the effective date of such termination, and the provisions hereof shall continue to be fully operative until all transactions entered into, rights or interests created or Obligations (other than Inchoate Obligations) have been fully and indefeasibly paid, disposed of, concluded or liquidated.  The security interests, Liens and rights granted to Agent and Secured Party hereunder and the financing statements filed hereunder shall continue in full force and effect, notwithstanding the termination of this Agreement or the fact that Borrowers’ Account may from time to time be temporarily in a zero or credit position, until all of the Obligations (other than Inchoate Obligations) of each Borrower have been indefeasibly paid and performed in full after the termination of this Agreement or each Borrower has furnished Agent and Lenders with an indemnification satisfactory to Agent and Lenders with respect thereto.  Accordingly, each Borrower waives any rights that it may have under the Uniform Commercial Code to demand the filing of termination statements with respect to the Collateral, and Agent shall not be required to send such termination statements to each Borrower, or to file them with any filing office, unless and until this Agreement has been terminated in accordance with its terms and all Obligations (other than Inchoate Obligations) have been indefeasibly paid in full in immediately available funds.  All representations, warranties, covenants, waivers and agreements contained herein shall survive termination hereof until all Obligations (other than Inchoate Obligations) are indefeasibly paid and performed in full. In the event of the payoff or refinancing of all outstanding Obligations contemporaneously with the termination of all Commitments hereunder, Agent shall confirm 

the payoff of the Obligations on the date so paid and the termination of the Commitments on the date so terminated in a customary payoff letter satisfactory to Agent in its reasonable discretion 
		
	ARTICLE XL
	

ARTICLE XLI

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

Agent may resign on sixty (60) days’ written notice to each of Lenders and Borrowing Agent and upon such resignation, the Required Lenders will promptly designate a successor Agent reasonably satisfactory to Borrowers: provided that no consent or approval of Borrowers will be required hereunder if a Default or Event of Default has occurred and is continuing at the time of such designation.
Any such successor Agent shall succeed to the rights, powers and duties of Agent, and the term “Agent” means such successor agent effective upon its appointment, and the former Agent’s rights, powers and duties as Agent shall be terminated, without any other or further act or deed on the part of such former Agent.  After any Agent’s resignation as Agent, the provisions of this Article XIV shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.
4.Certain Rights of Agent
.  If Agent shall request instructions from Lenders with respect to any act or action (including failure to act) in connection with this Agreement or any other Loan Document, Agent shall be entitled to refrain from such act or taking such action unless and until Agent has received instructions from the Required Lenders; and Agent shall not incur liability to any Person by reason of so refraining.  Without limiting the foregoing, Secured Parties shall not have any right of action whatsoever against Agent as a result of its acting or refraining from acting hereunder in accordance with the instructions of the Required Lenders.
5.Reliance
.  Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype or telecopier message, cablegram, order or other document or telephone message believed by it to be genuine and correct and to have been signed, sent or made by the proper person or entity, and, with respect to all legal matters pertaining to this Agreement and the other Loan Documents and its duties hereunder, upon advice of counsel selected by it.  Agent may employ agents and attorneys-in-fact and shall not be liable for the default or misconduct of any such agents or attorneys-in-fact selected by Agent with reasonable care.
6.Notice of Default
.  Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder or under the other Loan Documents, unless Agent has received notice from a Lender or Borrowing Agent referring to this Agreement or the other Loan Documents, describing such Default or Event of Default and stating that such notice is a “notice of default”.  In the event that Agent receives such a notice, Agent shall give notice thereof to Secured Parties.  Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders; provided, that, unless and until Agent has received such directions, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of Secured Parties.
7.Indemnification
.  To the extent Agent is not reimbursed and indemnified by Borrowers, each Lender will reimburse and indemnify Agent in proportion to its respective portion of the Advances (or, if no Advances are outstanding, according to its Commitment Percentage), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by or asserted against Agent in performing its duties hereunder, or in any way relating to or arising out of this Agreement or any other Loan Document; provided that, Lenders shall not be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from Agent’s gross (not mere) negligence or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment).
8.Agent in its Individual Capacity
.  With respect to the obligation of Agent to lend under this Agreement, the Advances made by it shall have the same rights and powers hereunder as any other Lender and as if it were not performing the duties as Agent specified herein; and the term “Lender” or any similar term shall, unless the context clearly otherwise indicates, include Agent in its individual capacity as a Lender.  Agent may engage in business with any Credit Party as if it were not performing the 

duties specified herein, and may accept fees and other consideration from any Credit Party for services in connection with this Agreement or otherwise without having to account for the same to Secured Parties.
9.Delivery of Documents
.  To the extent Agent receives financial statements required under Sections 9.7, 9.8, 9.9, 9.12 and 9.13 or Borrowing Base Certificates from any Borrower pursuant to the terms of this Agreement that any Borrower is not obligated to deliver to each Lender, Agent will promptly furnish such documents and information to Secured Parties.
10.Borrowers’ Undertaking to Agent
.  Without prejudice to their respective obligations to Secured Parties under the other provisions of this Agreement, each Borrower hereby undertakes with Agent to pay to Agent from time to time on demand all amounts from time to time due and payable by it for the account of Secured Parties or any of them pursuant to this Agreement to the extent not already paid.  Any payment made pursuant to any such demand shall pro tanto satisfy the relevant Borrower’s obligations to make payments for the account of Secured Parties or the relevant one or more of them pursuant to this Agreement.
11.No Reliance on Agent’s Customer Identification Program
.  Each Lender acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants or assignees, may rely on Agent to carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer identification program, or other obligations required or imposed under or pursuant to the USA PATRIOT Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other Anti-Terrorism Law, including any programs involving any of the following items relating to or in connection with any Credit Party, its Affiliates or its agents, this Agreement, the other Loan Documents or the transactions hereunder or contemplated hereby: (a) any identity verification procedures; (b) any record-keeping; (c) comparisons with government lists; (d) customer notices; or (e) other procedures required under the CIP Regulations or such other laws. 
12.Other Agreements
.  Each of the Lenders agrees that it shall not, without the express consent of Agent, and that it shall, to the extent it is lawfully entitled to do so, upon the request of Agent, set off against the Obligations, any amounts owing by such Lender to any Credit Party or any deposit accounts of any Credit Party now or hereafter maintained with such Lender.  Anything in this Agreement to the contrary notwithstanding, each of Lenders further agrees that it shall not, unless specifically requested to do so by Agent, take any action to protect or enforce its rights arising out of this Agreement or the other Loan Documents, it being the intent of Lenders that any such action to protect or enforce rights under this Agreement and the other Loan Documents shall be taken in concert and at the direction or with the consent of Agent or Required Lenders.  
		
	ARTICLE XLIII
	

ARTICLE XLIV

ARTICLE XLVBORROWING AGENCY; GUARANTY 
1.Borrowing Agency Provisions
.
(a)Each Borrower hereby irrevocably designates Borrowing Agent to be its attorney and agent and in such capacity to borrow, sign and endorse notes, and execute and deliver all instruments, documents, writings and further assurances now or hereafter required hereunder, on behalf of such Borrower or Borrowers, and hereby authorizes Agent to pay over or credit all loan proceeds hereunder in accordance with the request of Borrowing Agent.
(b)The handling of this credit facility as a co-borrowing facility with a borrowing agent in the manner set forth in this Agreement is solely as an accommodation to Borrowers and at their request.  Neither Agent nor any Lender shall incur liability to Borrowers as a result thereof.  To induce Agent and Lenders to do so and in consideration thereof, each Borrower hereby indemnifies Agent and each Lender and holds Agent and each Lender harmless from and against any and all liabilities, expenses, losses, damages and claims of damage or injury asserted against Agent or any Lender by any Person arising from or incurred by reason of the handling of the financing 

arrangements of Borrowers as provided herein, reliance by Agent or any Lender on any request or instruction from Borrowing Agent or any other action taken by Agent or any Lender with respect to this Section 15.1 except due to willful misconduct or gross (not mere) negligence by the indemnified party (as determined by a court of competent jurisdiction in a final and non-appealable judgment).
(c)All Obligations shall be joint and several, and each Borrower shall make payment upon the maturity of the Obligations by acceleration or otherwise, and such obligation and liability on the part of each Borrower shall in no way be affected by any extensions, renewals and forbearance granted to Agent or any Lender to any Borrower, failure of Agent or any Lender to give any Borrower notice of borrowing or any other notice, any failure of Agent or any Lender to pursue or preserve its rights against any Borrower, the release by Agent or any Lender of any Collateral now or thereafter acquired from any Borrower, and such agreement by each Borrower to pay upon any notice issued pursuant thereto is unconditional and unaffected by prior recourse by Agent or any Lender to the other Borrowers or any Collateral for such Borrower’s Obligations or the lack thereof.  Each Borrower waives all suretyship defenses.
2.Joint and Several Liability of Borrowers
.  Each Borrower hereby agrees as follows.
(a)Each Borrower is accepting joint and several liability hereunder and under the other Loan Documents in consideration of the financial accommodations to be provided by Agent and the Lenders under this Agreement, for the mutual benefit, directly and indirectly, of each Borrower and in consideration of the undertakings of the other Borrowers to accept joint and several liability for the Obligations.
(b)Each Borrower, jointly and severally, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers, with respect to the payment and performance of all of the Obligations (including any Obligations arising under this Section 15.2), it being the intention of each Borrower and the parties hereto that all the Obligations shall be the joint and several obligations of each Borrower without preferences or distinction among them.
(c)If and to the extent that any Borrower shall fail to make any payment with respect to any of the Obligations as and when due or to perform any of the Obligations in accordance with the terms thereof, then in each such event the other Borrowers will make such payment with respect to, or perform, such Obligation.
(d)The Obligations of each Borrower under the provisions of this Section 15.2 constitute the absolute and unconditional, full recourse Obligations of each Borrower enforceable against each Borrower to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of this Agreement or any other circumstances whatsoever.
3.Guaranty
.  
(a)Guaranty.  Each Guarantor hereby absolutely and unconditionally guarantees, as a guaranty of payment and performance and not merely as a guaranty of collection, prompt payment when due, whether at stated maturity, by required prepayment, upon acceleration, demand or otherwise, and at all times thereafter, of any and all of the Obligations, whether for principal, interest, premiums, fees, indemnities, damages, costs, expenses or otherwise, of Borrowers and the other Credit Parties to the Secured Parties, arising hereunder or under any other Loan Document (including all renewals, extensions, amendments, refinancings and other modifications thereof and all costs, attorneys’ fees and expenses incurred by the Secured Parties in connection with the collection or enforcement thereof).  Agent’s books and records showing the amount of the Obligations shall be admissible in evidence in any action or proceeding, and shall be binding upon each Guarantor, and conclusive for the purpose of establishing the amount of the Obligations.  This Guaranty shall not be affected by the genuineness, validity, regularity or enforceability of the Obligations or any instrument or agreement evidencing any Obligations, or by the existence, validity, enforceability, perfection, non-perfection or extent of any collateral therefor, or by any fact or circumstance relating to the Obligations which might otherwise constitute a defense to the obligations of any Guarantor under this Guaranty, and each Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to any or all of the foregoing.
(b)Limitation of Guaranty.  Any term or provision of this Section 15.3 or any other provision in this Agreement or any other Loan Document to the contrary notwithstanding, the maximum aggregate amount for which any Guarantor shall be liable hereunder shall not exceed the maximum amount for which such Guarantor shall 

be liable without rendering this Guaranty or any other Loan Document, as it relates to such Guarantor, subject to avoidance under Applicable Law relating to fraudulent conveyance or fraudulent transfer (including the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and Section 548 of the Bankruptcy Code or any comparable provisions of Applicable Law (collectively, “Fraudulent Transfer Laws”).  Any analysis of the provisions of this Guaranty for purposes of Fraudulent Transfer Laws shall take into account the right of contribution established in clause (c) of Section 15.3 and, for purposes of such analysis, give effect to any discharge of intercompany debt as a result of any payment made under any Guaranty made pursuant to this Section.
(c)Right of Contribution.  To the extent that any Guarantor shall be required hereunder to pay any portion of any guaranteed Obligation exceeding the greater of (i) the amount of the value actually received by such Guarantor and its Subsidiaries from the Advances and the other Obligations and (ii) the amount such Guarantor would otherwise have paid if such Guarantor had paid the aggregate amount of the guaranteed Obligations (excluding the amount the amount paid by Borrowers) in the same proportion as such Guarantor’s net worth on the date enforcement is sought hereunder bears to the aggregate net worth of all the Guarantors on such date, then such Guarantor shall be reimbursed by such other Guarantors for the amount of such excess, pro rata, based on the respective net worth of such Guarantors on such date.
(d)Rights of Secured Parties.  Each Guarantor consents and agrees that the Secured Parties may, at any time and from time to time, without notice or demand, and without affecting the enforceability or continuing effectiveness hereof:  (i) amend, extend, renew, compromise, discharge, accelerate or otherwise change the time for payment or the terms of the Obligations or any part thereof; (ii) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any security for the payment of this Guaranty or any Obligations; (iii) apply such security and direct the order or manner of sale thereof as Agent and the Lenders in their sole discretion may determine; and (iv) release or substitute one or more of any endorsers or other guarantors of any of the Obligations.  Without limiting the generality of the foregoing, each Guarantor consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of any Guarantor under this Guaranty or which, but for this provision, might operate as a discharge of such Guarantor.
(e)Obligations Independent.  The obligations of each Guarantor hereunder are those of primary obligor, and not merely as surety, and are independent of the Obligations and the obligations of any other guarantor, and a separate action may be brought against any Guarantor to enforce this Guaranty whether or not Borrowers or any other Credit Party or any other person or entity is joined as a party.
(f)Subrogation.  No Guarantor shall exercise any right of subrogation, contribution, indemnity, reimbursement or similar rights with respect to any payments it makes under this Guaranty until all of the Obligations and any amounts payable under this Guaranty have been indefeasibly paid and performed in full and all of the commitments of the Lenders hereunder have been terminated.  If any amounts are paid to any Guarantor in violation of the foregoing limitation, then such amounts shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Secured Parties to reduce the amount of the Obligations, whether matured or unmatured.
(g)Termination; Reinstatement.  This Guaranty is a continuing and irrevocable guaranty of all Obligations now or hereafter existing and shall remain in full force and effect until all Obligations and any other amounts payable under this Guaranty are indefeasibly paid in full in cash and all of the commitments of the Lenders hereunder have been terminated.  Notwithstanding the foregoing, this Guaranty shall continue in full force and effect or be revived, as the case may be, if any payment by or on behalf of Borrowers or any Guarantor or any other Credit Party is made, or any of the Secured Parties exercises its right of setoff, in respect of the Obligations and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by any of the Secured Parties in their discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any insolvency proceeding or otherwise, all as if such payment had not been made or such setoff had not occurred and whether or not the Secured Parties are in possession of or have released this Guaranty and regardless of any prior revocation, rescission, termination or reduction.  The obligations of each Guarantor under this paragraph shall survive termination of this Guaranty.
(h)Stay of Acceleration.  If acceleration of the time for payment of any of the Obligations is stayed, in connection with any case commenced by or against any Credit Party under any insolvency proceeding, or otherwise, all such amounts shall nonetheless be payable by such Credit Party immediately upon demand by the Secured Parties.
(i)Condition of Borrowers.  Each Guarantor acknowledges and agrees that it has the sole responsibility for, and has adequate means of, obtaining from Borrowers and the other Credit Parties and any other 

guarantor such information concerning the financial condition, business and operations of Borrowers and any such other guarantor as such Guarantor requires, and that none of the Secured Parties has any duty, and such Guarantor is not relying on the Secured Parties at any time, to disclose to such Guarantor any information relating to the business, operations or financial condition of Borrowers or any other Credit Party or any other guarantor (each Guarantor waiving any duty on the part of the Secured Parties to disclose such information and any defense relating to the failure to provide the same).
4.Waivers and Agreements
.  
(a)Except as otherwise expressly provided in this Agreement, each Credit Party hereby waives notice of acceptance of its joint and several liability, notice of any Advances or Letters of Credit issued under or pursuant to this Agreement, notice of the occurrence of any Default, Event of Default, or of any demand for any payment under this Agreement, notice of any action at any time taken or omitted by Agent or Lenders under or in respect of any of the Obligations, any requirement of diligence or to mitigate damages and, generally, to the extent permitted by applicable law, all demands, notices and other formalities of every kind in connection with this Agreement (except as otherwise provided in this Agreement).  Each Credit Party hereby waives all rights that it may have now or in the future under any statute, at common law, in equity or otherwise, to compel Agent or Lenders to marshal assets or to proceed against any other Credit Party, other Person or security for the payment or performance of any Obligations before, or as a condition to, proceeding against such Credit Party.  Each Credit Party waives all defenses available to a surety, guarantor or accommodation co-obligor other than payment in full of all Obligations.  Each Credit Party hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Obligations, the acceptance of any payment of any of the Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by Agent or Lenders at any time or times in respect of any default by any Credit Party in the performance or satisfaction of any term, covenant, condition or provision of this Agreement, any and all other indulgences whatsoever by Agent or Lenders in respect of any of the Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Obligations or the addition, substitution or release, in whole or in part, of any Credit Party.  Without limiting the generality of the foregoing, each Credit Party assents to any other action or delay in acting or failure to act on the part of Agent or any Lender with respect to the failure by any Credit Party to comply with any of its respective Obligations, including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with applicable laws or regulations thereunder, which might, but for the provisions of this Section 15.4 afford grounds for terminating, discharging or relieving any Credit Party, in whole or in part, from any of its Obligations under this Section 15.4, it being the intention of each Credit Party that, so long as any of the Obligations hereunder remain unsatisfied, the Obligations of each Credit Party under this Section 15.4 shall not be discharged except by performance and then only to the extent of such performance.  The Obligations of each Credit Party under this Section 15.4 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any Credit Party or Agent or any Lender.
(b)Each Credit Party represents and warrants to Agent and Lenders that such Credit Party is currently informed of the financial condition of the other Credit Parties and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations.  Each Credit Party further represents and warrants to Agent and Lenders that such Credit Party has read and understands the terms and conditions of this Agreement and the other Loan Documents.  Each Credit Party hereby covenants that such Credit Party will continue to keep informed of the other Borrowers’ financial condition, the financial condition of other guarantors, if any, and of all other circumstances which bear upon the risk of nonpayment or nonperformance of the Obligations.
(c)Each Credit Party waives, to the maximum extent permitted by law, all rights and defenses that such Credit Party may have because the Obligations are or become secured by Real Property.  This means, among other things: (i) Agent and Lenders may collect from such Credit Party without first foreclosing on any Real Property or personal property Collateral pledged by any other Credit Party and (ii) if Agent or any Lender forecloses on any Real Property pledged by any Credit Party: (A) the amount of the Obligations may be reduced only by the price for which such Collateral is sold at the foreclosure sale, even if such Collateral is worth more than the sale price; and (B) Agent and Lenders may collect from such Credit Party even if Agent or Lenders, by foreclosing on any such Real 

Property, has destroyed any right such Credit Party may have to collect from the other Credit Parties.  This is an unconditional and irrevocable waiver of any rights and defenses such Credit Party may have because the Obligations are secured by Real Property.  These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d or 726 of the California Code of Civil Procedure or any comparable statutes.  
(d)Each Credit Party understands and acknowledges that if the Secured Parties foreclose judicially or nonjudicially against any Real Property security for the Obligations, that foreclosure could impair or destroy any ability that such Credit Party may have to seek reimbursement, contribution, or indemnification from any other Credit Party or others based on any right such Credit Party may have of subrogation, reimbursement, contribution, or indemnification for any amounts paid by such Credit Party under this Agreement.  Each Credit Party further understands and acknowledges that in the absence of this paragraph, such potential impairment or destruction of such Credit Party’s rights, if any, may entitle such Credit Party to assert a defense to this Agreement based on Section 580d of the California Code of Civil Procedure as interpreted in Union Bank v. Gradsky, 265 Cal. App. 2d 40 (1968).  By executing this Agreement, each Credit Party freely, irrevocably, and unconditionally:  (i) waives and relinquishes that defense and agrees that such Credit Party will be fully liable under this Agreement even though the Secured Parties may foreclose, either by judicial foreclosure or by exercise of power of sale, any deed of trust securing the Obligations; (ii) agrees that such Credit Party will not assert that defense in any action or proceeding which the Secured Parties may commence to enforce this Agreement; (iii) acknowledges and agrees that the rights and defenses waived by such Credit Party in this Agreement include any right or defense that such Credit Party may have or be entitled to assert based upon or arising out of any one or more of Sections 580a, 580b, 580d, or 726 of the California Code of Civil Procedure or Section 2848 of the California Civil Code; and (iv) acknowledges and agrees that the Secured Parties are relying on this waiver in creating the Obligations, and that this waiver is a material part of the consideration which the Secured Parties are receiving for creating the Obligations.
(e)Each Credit Party waives any right or defense it may have at law or equity, including California Code of Civil Procedure Section 580a, to a fair market value hearing or action to determine a deficiency judgment after a foreclosure.  As provided in Section 16.1 hereof, this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.  The foregoing provisions are included solely out of an abundance of caution and shall not be construed to mean that any of the above referenced provisions of California law are in any way applicable to this Agreement or the Obligations.
(f)Agent and Lenders may, in their discretion, pursue such rights and remedies as they deem appropriate, including realization upon Collateral by judicial foreclosure or non‐judicial sale or enforcement, without affecting any rights and remedies under this Agreement.  If, in taking any action in connection with the exercise of any rights or remedies, Agent or any Lender shall forfeit any other rights or remedies, including the right to enter a deficiency judgment against any Credit Party or other Person, whether because of any Applicable Laws pertaining to “election of remedies” or otherwise, each Credit Party consents to such action and waives any claim based upon it, even if the action may result in loss of any rights of subrogation that any Credit Party might otherwise have had, whether under Section 580(d) of the California Code of Civil Procedure, any comparable statute, or otherwise.  Any election of remedies that results in denial or impairment of the right of Agent or any Lender to seek a deficiency judgment against any Credit Party shall not impair any other Credit Party’s obligation to pay the full amount of the Obligations.  Each Credit Party waives all rights and defenses arising out of an election of remedies, such as non-judicial foreclosure with respect to any security for the Obligations, even though that election of remedies destroys such Credit Party’s rights of subrogation against any other Person.  Agent may bid all or a portion of the Obligations at any foreclosure or trustee’s sale or at any private sale, and the amount of such bid need not be paid by Agent but shall be credited against the Obligations.  The amount of the successful bid at any such sale, whether Agent or any other Person is the successful bidder, shall be conclusively deemed to be the fair market value of the Collateral, and the difference between such bid amount and the remaining balance of the Obligations shall be conclusively deemed to be the amount of the Obligations, notwithstanding that any present or future law or court decision may have the effect of reducing the amount of any deficiency claim to which Agent or any Lender might otherwise be entitled but for such bidding at any such sale.
(g)The provisions of this Section 15.4 are made for the benefit of Agent, Lenders and their respective successors and assigns, and may be enforced by it or them from time to time against any Credit Party as often as occasion therefor may arise and without requirement on the part of Agent, any Lender, any of their respective successors or assigns first to marshal any of its or their claims or to exercise any of its or their rights against any Credit Party or to exhaust any remedies available to it or them against any Credit Party or to resort to any other source or 

means of obtaining payment of any of the Obligations hereunder or to elect any other remedy.  The provisions of this Section 15.4 shall remain in effect until all of the Obligations shall have been paid in full in accordance with the terms of this Agreement.  If at any time, any payment, or any part thereof, made in respect of any of the Obligations, is rescinded or must otherwise be restored or returned by Agent or any Lender upon the insolvency, bankruptcy or reorganization of any Credit Party, or otherwise, the provisions of this Section 15.4 will forthwith be reinstated in effect, as though such payment had not been made.
(h)Until the Obligations (other than Inchoate Obligations) have been paid in full in cash or cash collateralized in accordance with the terms hereof and all of the commitments of the Lenders hereunder have been terminated, each Credit Party hereby agrees that it will not enforce any of its rights of contribution or subrogation against any other Credit Party with respect to any liability incurred by it hereunder or under any of the other Loan Documents, any payments made by it to Agent or any Lender with respect to any of the Obligations or any collateral security therefor until such time as all of the Obligations (other than Inchoate Obligations) have been paid in full in cash.  Any claim which any Credit Party may have against any other Credit Party with respect to any payments to Agent or any Lender hereunder or under any other Loan Documents are hereby expressly made subordinate and junior in right of payment, without limitation as to any increases in the Obligations arising hereunder or thereunder, to the prior payment in full in cash of the Obligations (other than Inchoate Obligations) and, in the event of any insolvency, bankruptcy, receivership, liquidation, reorganization or other similar proceeding under the laws of any jurisdiction relating to any Credit Party, its debts or its assets, whether voluntary or involuntary, all such Obligations shall be paid in full in cash before any payment or distribution of any character, whether in cash, securities or other property, shall be made to any other Credit Party therefor.
(i)Each Credit Party hereby agrees that, after the occurrence and during the continuance of any Default or Event of Default, the payment of any amounts due with respect to the indebtedness or other obligations owing by any Credit Party to any other Credit Party is hereby subordinated to the prior payment in full in cash of the Obligations (other than Inchoate Obligations) in accordance with the terms of this Agreement.  Each Credit Party hereby agrees that after the occurrence and during the continuance of any Default or Event of Default, such Credit Party will not demand, sue for or otherwise attempt to collect any indebtedness of any other Credit Party owing to such Credit Party until the Obligations (other than Inchoate Obligations) shall have been paid in full in cash.  If, notwithstanding the foregoing sentence, any Credit Party shall collect, enforce or receive any amounts in respect of such indebtedness, such amounts shall be collected, enforced and received by such Credit Party as trustee for Agent, and such Credit Party shall deliver any such amounts to Agent for application to the Obligations in accordance with the terms of this Agreement.
(j)Each Credit Party expressly waives any and all rights of subrogation, reimbursement, indemnity, exoneration, contribution of any other claim that such Credit Party may now or hereafter have against the other Credit Parties or other Person directly or contingently liable for the Obligations hereunder, or against or with respect to the other Credit Parties’ property (including any property that is Collateral for the Obligations), arising from the existence or performance of this Agreement, until termination of this Agreement and repayment in full of the Obligations.
ARTICLE XLVI

ARTICLE XLVII

ARTICLE XLVIIIMISCELLANEOUS
1.Governing Law
.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York applied to contracts to be performed wholly within the State of New York.  Any judicial proceeding brought against any Credit Party with respect to any of the Obligations, this Agreement, the other Loan Documents or any related agreement may be brought in any court of competent jurisdiction in the City of New York, Borough of Manhattan, State of New York, United States of America, and, by execution and delivery of this Agreement, each Credit Party accepts for itself and in connection with its properties, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement.  Each Credit Party hereby waives personal service of any and all process upon it and consents that all such service of process may be made by registered mail (return receipt requested) directed to the Borrowing Agent at its address set forth in Schedule A and service so made shall be deemed completed five (5) days after the same has been so deposited in the mails of the United States of America, or, at Agent’s option, by service upon Borrowing Agent, which each Credit Party irrevocably appoints as such Credit Party’s agent for the purpose of accepting service within the State of New York.  

Nothing herein shall affect the right to serve process in any manner permitted by law or shall limit the right of Agent or any Secured Party to bring proceedings against any Credit Party in the courts of any other jurisdiction.  Each Credit Party waives any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens.  Each Credit Party waives the right to remove any judicial proceeding brought against such Credit Party in any state court to any federal court.  Any judicial proceeding by any Credit Party against any Secured Party or any other Indemnitee involving, directly or indirectly, any matter or claim in any way arising out of, related to or connected with this Agreement or any related agreement, shall be brought only in a federal or state court located in the City of New York, Borough of Manhattan, State of New York, United States of America; provided, that the Credit Parties may bring counterclaims in any other court in which the original claim was brought by Agent or any Secured Party.
2.Entire Understanding
.
(a)This Agreement and the documents executed concurrently herewith contain the entire understanding between the Credit Parties, Agent and each Secured Party and supersede all prior agreements and understandings, if any, relating to the subject matter hereof.  Any promises, representations, warranties or guarantees not herein contained and hereinafter made shall have no force and effect unless in writing, signed by each Credit Party’s, Agent’s and each Lender’s respective officers.  Neither this Agreement nor any portion or provisions hereof may be changed, modified, amended, waived, supplemented, discharged, cancelled or terminated orally or by any course of dealing, or in any manner other than by an agreement in writing, signed by the party to be charged.  Each Credit Party acknowledges that it has been advised by counsel in connection with the execution of this Agreement and other Loan Documents and is not relying upon oral representations or statements inconsistent with the terms and provisions of this Agreement.
(b)The Required Lenders, Agent with the consent in writing of the Required Lenders, and the Credit Parties may, subject to the provisions of this Section 16.2(b), from time to time enter into written supplemental agreements to this Agreement or the other Loan Documents executed by the Credit Parties, for the purpose of adding or deleting any provisions or otherwise changing, varying or waiving in any manner the rights of Lenders, Agent or the Credit Parties thereunder or the conditions, provisions or terms thereof or waiving any Event of Default thereunder, but only to the extent specified in such written agreements; provided, however, that no such supplemental agreement shall, without the consent of all Lenders:
(i)increase the Commitment Percentage, the maximum dollar commitment of any Lender or the Maximum Revolving Advance Amount or the Maximum Equipment Loan Amount (or any component thereof).
(ii)extend the maturity of any Revolving Credit NotesNote or the due date for any amount payable hereunder, or decrease the rate of interest or reduce any fee payable by Borrowers to Lenders pursuant to this Agreement.
(iii)alter the definition of the term Required Lenders or alter, amend or modify this Section 16.2(b).
(iv)release any Collateral during any calendar year (other than in accordance with the provisions of this Agreement) having an aggregate value in excess of $250,000.
(v)change the rights and duties of Agent.
(vi)permit any Revolving Advance to be made if after giving effect thereto the total of Revolving Advances outstanding hereunder would exceed the Formula Amount for more than sixty (30) consecutive Business Days or exceed one hundred and ten percent (110%) of the Formula Amount.
(vii)increase the Advance Rates above the Advance Rates in effect on the Closing Date.
(viii)release any Guarantor.
Any such supplemental agreement shall apply equally to each Secured Party and shall be binding upon the Credit Parties, Secured Parties and all future holders of the Obligations.  In the case of any waiver, the Credit Parties and Secured Parties shall be restored to their former positions and rights, and any Event of Default waived shall be deemed to be cured and not continuing, but no waiver of a specific Event of Default shall extend to any subsequent Event of Default (whether or not the subsequent Event of Default is the same as the Event of Default that was waived), or impair any right consequent thereon.

In the event that Agent requests the consent of a Lender pursuant to this Section 16.2 and such Lender shall not respond or reply to Agent in writing within five (5) days of delivery of such request, such Lender shall be deemed to have consented to the matter that was the subject of the request.  In the event that Agent requests the consent of a Lender pursuant to this Section 16.2 and such consent is denied, then PNC may, at its option, require such Lender to assign its interest in the Advances to PNC or to another Lender or to any other Person designated by Agent (the “Designated Lender”), for a price equal to (i) the then outstanding principal amount thereof plus (ii) accrued and unpaid interest and fees due such Lender, which interest and fees shall be paid when collected from Borrowers.  In the event PNC elects to require any Lender to assign its interest to PNC or to the Designated Lender, PNC will so notify such Lender in writing within forty five (45) days following such Lender’s denial, and such Lender will assign its interest to PNC or the Designated Lender no later than five (5) days following receipt of such notice pursuant to a Commitment Transfer Supplement executed by such Lender, PNC or the Designated Lender, as appropriate, and Agent.
Notwithstanding (a) the existence of a Default or Event of Default, (b) that any of the other applicable conditions precedent set forth in Section 8.2 have not been satisfied or (c) any other provision of this Agreement, Agent may at its discretion and without the consent of Required Lenders, voluntarily permit the sum of the outstanding Revolving Advances and the Maximum Undrawn Amount at any time to exceed ten percent (10%) of the Formula Amount for up to sixty (60) consecutive Business Days (the “Out-of-Formula Loans”); provided, that, such outstanding Advances do not exceed the Maximum Revolving Advance Amount.  If Agent is willing in its sole and absolute discretion to make such Out-of-Formula Loans, such Out-of-Formula Loans shall be payable on demand and shall bear interest at the Default Rate for Revolving Advances ; provided that, if Lenders do make Out-of-Formula Loans, neither Agent nor Lenders shall be deemed thereby to have changed the limits of Section 2.1(a).  For purposes of this paragraph, the discretion granted to Agent hereunder shall not preclude involuntary overadvances that may result from time to time due to the fact that the Formula Amount was unintentionally exceeded for any reason, including Collateral previously deemed to be either “Eligible Receivables” or “Eligible Inventory”, as applicable, becomes ineligible, collections of Receivables applied to reduce outstanding Revolving Advances are thereafter returned for insufficient funds or overadvances are made to protect or preserve the Collateral.  In the event Agent involuntarily permits the outstanding Revolving Advances to exceed the Formula Amount by more than ten percent (10%), Agent shall use its efforts to have Borrowers decrease such excess in as expeditious a manner as is practicable under the circumstances and not inconsistent with the reason for such excess.  Revolving Advances made after Agent has determined the existence of involuntary overadvances shall be deemed to be involuntary overadvances and shall be decreased in accordance with the preceding sentence.
In addition to (and not in substitution of) the discretionary Revolving Advances permitted above in this Section 16.2, Agent is hereby authorized by Borrowers and Lenders, from time to time in Agent’s sole discretion, (A) after the occurrence and during the continuation of a Default or Event of Default, or (B) at any time that any of the other applicable conditions precedent set forth in Section 8.2 have not been satisfied, to make Revolving Advances to Borrowers on behalf of Lenders that Agent, in its reasonable business judgment, deems necessary or desirable (a) to preserve or protect the Collateral, or any portion thereof, (b) to enhance the likelihood of, or maximize the amount of, repayment of the Advances and other Obligations, or (c) to pay any other amount chargeable to Borrowers pursuant to the terms of this Agreement; provided, that at any time after giving effect to any such Revolving Advances the outstanding Revolving Advances do not exceed one hundred and ten percent (110%) of the Formula Amount.
3.Successors and Assigns; Participations; New Lenders
.
(a)This Agreement shall be binding upon and inure to the benefit of the Credit Parties, Agent, each Secured Party, all future holders of the Obligations and their respective successors and assigns, except that no Credit Party may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of Agent and each Lender.
(b)Each Credit Party acknowledges that in the regular course of commercial banking business one or more Lenders may at any time and from time to time sell participating interests in the Advances to other financial institutions (each such transferee or purchaser of a participating interest, a “Participant”).  Each Participant may exercise all rights of payment (including rights of set-off) with respect to the portion of such Advances held by it or other Obligations payable hereunder as fully as if such Participant were the direct holder thereof; provided that 

Borrowers shall not be required to pay to any Participant more than the amount that it would have been required to pay to Lender that granted an interest in its Advances or other Obligations payable hereunder to such Participant had such Lender retained such interest in the Advances hereunder or other Obligations payable hereunder; and provided, further, that in no event shall Borrowers be required to pay any such amount arising from the same circumstances and with respect to the same Advances or other Obligations payable hereunder to both such Lender and such Participant.  Each Borrower hereby grants to any Participant a continuing security interest in any deposits, moneys or other property actually or constructively held by such Participant as security for the Participant’s interest in the Advances.
(c)Any Lender, with the consent of Agent (which shall not be unreasonably withheld or delayed), may sell, assign or transfer all or any part of its rights and obligations under or relating to Revolving Advances under this Agreement and the other Loan Documents to one or more Eligible Assignees and one or more Eligible Assignees may commit to make Advances hereunder (each a “Purchasing Lender”), in minimum amounts of not less than $5,000,000 (or its entire interest, if less), pursuant to a Commitment Transfer Supplement, executed by a Purchasing Lender, the transferor Lender, and Agent and delivered to Agent for recording.  Upon such execution, delivery, acceptance and recording, from and after the transfer effective date determined pursuant to such Commitment Transfer Supplement, (i) Purchasing Lender thereunder shall be a party hereto and, to the extent provided in such Commitment Transfer Supplement, have the rights and obligations of a Lender thereunder with a Commitment Percentage as set forth therein, and (ii) the transferor Lender thereunder shall, to the extent provided in such Commitment Transfer Supplement, be released from its obligations under this Agreement, the Commitment Transfer Supplement creating a novation for that purpose.  Such Commitment Transfer Supplement shall be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Lender and the resulting adjustment of the Commitment Percentages arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations of such transferor Lender under this Agreement and the other Loan Documents.  Each Borrower hereby consents to the addition of such Purchasing Lender and the resulting adjustment of the Commitment Percentages arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations of such transferor Lender under this Agreement and the other Loan Documents.  Borrowers shall execute and deliver such further documents and do such further acts and things in order to effectuate the foregoing.
(d)Any Lender, with the consent of Agent (which shall not be unreasonably withheld or delayed), may directly or indirectly sell, assign or transfer all or any portion of its rights and obligations under or relating to Revolving Advances under this Agreement and the other Loan Documents to an entity, whether a corporation, partnership, trust, limited liability company or other entity that (i) is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and (ii) is administered, serviced or managed by the assigning Lender or an Affiliate of such Lender (a “Purchasing CLO” and together with each Participant and Purchasing Lender, each a “Transferee” and collectively the “Transferees”), pursuant to a Commitment Transfer Supplement modified as appropriate to reflect the interest being assigned (“Modified Commitment Transfer Supplement”), executed by any intermediate purchaser, the Purchasing CLO, the transferor Lender, and Agent as appropriate and delivered to Agent for recording.  Upon such execution and delivery, from and after the transfer effective date determined pursuant to such Modified Commitment Transfer Supplement, (i) Purchasing CLO thereunder shall be a party hereto and, to the extent provided in such Modified Commitment Transfer Supplement, have the rights and obligations of a Lender thereunder and (ii) the transferor Lender thereunder shall, to the extent provided in such Modified Commitment Transfer Supplement, be released from its obligations under this Agreement, the Modified Commitment Transfer Supplement creating a novation for that purpose.  Such Modified Commitment Transfer Supplement shall be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing CLO.  Each Borrower hereby consents to the addition of such Purchasing CLO.  Borrowers shall execute and deliver such further documents and do such further acts and things in order to effectuate the foregoing.
(e)Agent shall maintain at its address a copy of each Commitment Transfer Supplement and Modified Commitment Transfer Supplement delivered to it and a register (the “Register”) for the recordation of the names and addresses of each Lender and the outstanding principal, accrued and unpaid interest and other fees due hereunder.  The entries in the Register shall be conclusive, in the absence of manifest error, and each Borrower, Agent and Lenders may treat each Person whose name is recorded in the Register as the owner of the Advance recorded therein for the purposes of this Agreement.  The Register shall be available for inspection by Borrowing Agent or any Lender at any reasonable time and from time to time upon reasonable prior notice.  Agent shall receive a fee in the 

amount of $3,500 payable by the applicable Purchasing Lender and/or Purchasing CLO upon the effective date of each transfer or assignment (other than to an intermediate purchaser) to such Purchasing Lender and/or Purchasing CLO.
(f)Each Credit Party authorizes each Lender to disclose to any Transferee and any prospective Transferee any and all financial information in such Lender’s possession concerning such Credit Party that has been delivered to such Lender by or on behalf of such Credit Party pursuant to this Agreement or in connection with such Lender’s credit evaluation of such Credit Party.
4.Application of Payments
.  Agent shall have the continuing and exclusive right to apply or reverse and re-apply any payment and any and all proceeds of Collateral to any portion of the Obligations.  To the extent that any Credit Party makes a payment or Agent or any Secured Party receives any payment or proceeds of the Collateral for any Credit Party’s benefit, which are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, debtor in possession, receiver, custodian or any other party under any bankruptcy law, common law or equitable cause, then, to such extent, the Obligations or part thereof intended to be satisfied shall be revived and continue as if such payment or proceeds had not been received by Agent or such Secured Party.
5.Indemnity
.  Each Credit Party shall indemnify each Indemnitee from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever (including fees and disbursements of counsel) that may be imposed on, incurred by, or asserted against any Indemnitee in any claim, litigation, proceeding or investigation instituted or conducted by any Governmental Body or instrumentality or any other Person with respect to any aspect of, or any transaction contemplated by, or referred to in, or any matter related to, this Agreement or the other Loan Documents, whether or not  any Indemnitee is a party thereto, except to the extent that any of the foregoing arises out of the gross (not mere) negligence or willful misconduct of the party being indemnified (as determined by a court of competent jurisdiction in a final and non-appealable judgment).  Without limiting the generality of the foregoing, this indemnity shall extend to any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever (including fees and disbursements of counsel) asserted against or incurred by any Indemnitees by any Person under any Environmental Laws or similar laws by reason of any Credit Party’s or any other Person’s failure to comply with laws applicable to solid or hazardous waste materials, including Hazardous Substances and Hazardous Waste, or other Toxic Substances.  Additionally, if any taxes (excluding taxes imposed upon or measured solely by the net income of Agent and Lenders, but including any intangibles taxes, stamp tax, recording tax or franchise tax) shall be payable by any Secured Party or the Credit Parties on account of the execution or delivery of this Agreement, or the execution, delivery, issuance or recording of any of the Loan Documents, or the creation or repayment of any of the Obligations hereunder, by reason of any Applicable Law now or hereafter in effect, the Credit Parties will pay (or will promptly reimburse Secured Parties for payment of) all such taxes, including interest and penalties thereon, and will indemnify and hold the indemnitees described above in this Section 16.5 harmless from and against all liability in connection therewith.
6.Notice
.  Any notice or request hereunder may be given to Borrowing Agent or any Credit Party or to Agent or any Lender at their respective addresses set forth in Schedule A or at such other address as may hereafter be specified in a notice designated as a notice of change of address under this Section 16.6.  Any notice, request, demand, direction or other communication (for purposes of this Section 16.6 only, a “Notice”) to be given to or made upon any party hereto under any provision of this Loan Agreement shall be given or made by telephone or in writing (which includes by means of electronic transmission (i.e., “e-mail” or.pdf) or facsimile transmission or by setting forth such Notice on a site on the World Wide Web (a “Website Posting”) if Notice of such Website Posting (including the information necessary to access such site) has previously been delivered to the applicable parties hereto by another means set forth in this Section 16.6) in accordance with this Section 16.6.  Any such Notice must be delivered to the applicable parties hereto at the addresses and numbers set forth under their respective names on Schedule A or in accordance with any subsequent unrevoked Notice from any such party that is given in accordance with this Section 16.6.  Any Notice shall be effective:
(a)In the case of hand-delivery, when delivered;
(b)If given by mail, four days after such Notice is deposited with the United States Postal Service, with first-class postage prepaid, return receipt requested; 

(c)In the case of a telephonic Notice, when a party is contacted by telephone, if delivery of such telephonic Notice is confirmed no later than the next Business Day by hand delivery, a facsimile or electronic transmission, a Website Posting or an overnight courier delivery of a confirmatory Notice (received at or before noon on such next Business Day);
(d)In the case of a facsimile transmission, when sent to the applicable party’s facsimile machine’s telephone number, if the party sending such Notice receives confirmation of the delivery thereof from its own facsimile machine;
(e)In the case of electronic transmission, when actually received;
(f)In the case of a Website Posting, upon delivery of a Notice of such posting (including the information necessary to access such site) by another means set forth in this Section 16.6; and
(g)If given by any other means (including by overnight courier), when actually received.
Any Lender giving a Notice to Borrowing Agent or any Credit Party shall concurrently send a copy thereof to Agent, and Agent shall promptly notify the other Lenders of its receipt of such Notice.
7.Survival
.  The obligations of the Credit Parties under Sections 2.2(f), 3.7, 3.8, 3.9, 4.19(h), and 16.5 and the obligations of Lenders under Section 14.7, shall survive termination of this Agreement and the other Loan Documents and payment in full of the Obligations.
8.Severability
.  If any part of this Agreement is contrary to, prohibited by, or deemed invalid under Applicable Laws or regulations, such provision shall be inapplicable and deemed omitted to the extent so contrary, prohibited or invalid, but the remainder hereof shall not be invalidated thereby and shall be given effect so far as possible.
9.Expenses
.  All reasonable and documented out-of-pocket costs and expenses, including reasonable attorneys’ fees (including the allocated costs of in-house counsel, one primary counsel to Agent and, if necessary, one local counsel in any relevant jurisdiction) and disbursements incurred by Agent on its behalf or on behalf of Secured Parties, including all costs and expenses incurred (and including in or in connection with or anticipation of an insolvency proceeding, reorganization, or any similar proceeding):  (a) in all efforts made to enforce payment of any Obligation or effect collection of any Collateral, or (b) in connection with the entering into, modification, amendment, administration and enforcement of this Agreement and the other Loan Documents or any consents or waivers hereunder or thereunder and all related agreements, documents and instruments, or (c) in instituting, maintaining, preserving, enforcing and foreclosing on Agent’s security interest in or Lien on any of the Collateral, or maintaining, preserving or enforcing any of Agent’s or any Lender’s rights hereunder and under the other Loan Documents and under all related agreements, documents and instruments, whether through judicial proceedings or otherwise, or (d) in defending or prosecuting any actions or proceedings arising out of or relating to Agent’s or any Lender’s transactions with any Credit Party, or (e) in connection with any advice given to Agent or any Lender with respect to its rights and obligations under this Agreement and under the other Loan Documents and all related agreements, documents and instruments, may be charged to Borrowers’ Account and shall be part of the Obligations, or (f) in connection with any inspections or appraisal conducted pursuant to Section 4.10, provided that absent the occurrence and continuation of an Event of Default, only four collateral appraisals (other than desk top appraisals) during any 12 month period following the Closing Date shall be at the expense of the Borrowers. 
10.Injunctive Relief
.  Each Credit Party recognizes that, in the event such Credit Party fails to perform, observe or discharge any of its obligations or liabilities under this Agreement, or threatens to fail to perform, observe or discharge such obligations or liabilities, any remedy at law may prove to be inadequate relief to Secured Parties; therefore, Agent, if Agent so requests, shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving that actual damages are not an adequate remedy.
11.Consequential Damages
.  Neither Agent nor any Lender, nor any agent or attorney for any of them, shall be liable to any Credit Party (or any Affiliate of any such Person) for indirect, punitive, exemplary or consequential damages arising from any breach of 

contract, tort or other wrong relating to the establishment, administration or collection of the Obligations or as a result of any transaction contemplated under this Agreement or any other Loan Document.
12.Captions
.  The captions at various places in this Agreement are intended for convenience only and do not constitute and shall not be interpreted as part of this Agreement.
13.Counterparts; Facsimile Signatures
.  This Agreement may be executed in any number of and by different parties hereto on separate counterparts, all of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement.  Any signature delivered by a party by facsimile or other similar form of electronic transmission shall be deemed to be an original signature hereto.
14.Construction
.  The parties acknowledge that each party and its counsel have reviewed this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments, schedules or exhibits thereto.
15.Confidentiality; Sharing Information
. 
Agent, each Lender and each Transferee shall hold all non-public information obtained by Agent, such Lender or such Transferee pursuant to the requirements of this Agreement in accordance with Agent’s, such Lender’s and such Transferee’s customary procedures for handling confidential information of this nature; provided, however, that Agent, each Lender and each Transferee may disclose such confidential information (a) to its examiners, Affiliates, outside auditors, counsel and other professional advisors, (b) to Agent, any Lender or to any prospective Transferees, (c) as required or requested by any Governmental Body or representative thereof or pursuant to legal process, and (d) in connection with the enforcement of its rights under this Agreement and the other Loan Documents; provided, further that (i) unless specifically prohibited by Applicable Law or court order, Agent, each Lender and each Transferee shall use its reasonable best efforts prior to disclosure thereof, to notify the applicable Credit Party of the applicable request for disclosure of such non-public information (A) by a Governmental Body or representative thereof (other than any such request in connection with an examination of the financial condition of a Lender or a Transferee by such Governmental Body) or (B) pursuant to legal process and (ii) in no event shall Agent, any Lender or any Transferee be obligated to return any materials furnished by any Credit Party other than those documents and instruments in possession of Agent or any Lender in order to perfect its Lien on the Collateral once the Obligations have been paid in full and this Agreement has been terminated.  
Each Credit Party acknowledges that from time to time financial advisory, investment banking and other services may be offered or provided to such Credit Party or one or more of its Affiliates (in connection with this Agreement or otherwise) by any Lender or by one or more Subsidiaries or Affiliates of such Lender and each Credit Party hereby authorizes each Lender to share any information delivered to such Lender by such Credit Party and its Subsidiaries pursuant to this Agreement, or in connection with the decision of such Lender to enter into this Agreement, to any such Subsidiary or Affiliate of such Lender, it being understood that any such Subsidiary or Affiliate of any Lender receiving such information shall be bound by the provisions of this Section 16.15 as if it were a Lender hereunder.  Such authorization shall survive the repayment of the other Obligations and the termination of this Agreement.
16.Publicity
.  Each Credit Party and each Lender hereby authorizes Agent to make appropriate announcements of the financial arrangement entered into among the Credit Parties, Agent and Lenders, including announcements that are commonly known as tombstones, in such publications and to such selected parties as Agent shall in its sole and absolute discretion deem appropriate.  No Lender may make any such announcement without the prior written consent of Agent, such consent to be given or withheld in Agent’s sole and absolute discretion.
17.Certifications From Banks and Participants; USA PATRIOT Act

.  Each Lender or assignee or participant of a Lender that is not incorporated under the Laws of the United States of America or a state thereof (and is not excepted from the certification requirement contained in Section 313 of the USA PATRIOT Act and the applicable regulations because it is both (a) an affiliate of a depository institution or foreign bank that maintains a physical presence in the United States or foreign country, and (b) subject to supervision by a banking authority regulating such affiliated depository institution or foreign bank) shall deliver to Agent the certification, or, if applicable, recertification, certifying that such Lender is not a “shell” and certifying to other matters as required by Section 313 of the USA PATRIOT Act and the applicable regulations: (i) within 10 days after the Closing Date, and (ii) as such other times as are required under the USA PATRIOT Act.
[Signature Pages Follow; Remainder of Page Intentionally Left Blank] 
53708450_1415
53708450_16
Each of the parties has signed this Agreement as of the day and year first above written.
BORROWERS:
VIRCO MFG. CORPORATION,
a Delaware corporation

By:_____/s/Robert E. Dose_______
Name:     Robert E. Dose
		
	Title:
	Vice President Finance, 

Treasurer and Secretary

VIRCO INC.,
a Delaware corporation

By:_____/s/Robert E. Dose_______
Name:     Robert E. Dose
Title:    Vice President Finance, 
Treasurer and Secretary

PNC BANK, NATIONAL ASSOCIATION, 
as Lender and as Agent

By:_____/s/Jeanette Vandenbergh___
Name:    Jeanette Vandenbergh
Title:    Vice President

Commitment Percentage (Revolving Advances):  100%
Commitment Percentage (Equipment Loans):  100%

53708450_1416

Schedule A
Notice Address

Notice Address for Agent:

PNC Bank, National Association
Two North Lake Avenue, Suite 440
Pasadena, California  91101
Attention:    Relationship Manager (Virco Mfg. Corporation)
Telephone:    (626) 432-7546
Facsimile:    (626) 432-4589

with a copy (which shall not constitute notice) to:

PNC Bank, National Association
PNC Agency Services
PNC Firstside Center
500 First Avenue, 4th Floor
Pittsburgh, Pennsylvania 15219
		
	Attention:
	Lisa Pierce

		
	Telephone:
	(412) 762-6442

		
	Facsimile:
	(412) 762-8672

with an additional copy to:

McGuireWoods LLP
1800 Century Park East, 8th Floor
Los Angeles, California 90067
Attention:    Gary Samson, Esq.
Telephone:    (310) 315-8248        
Facsimile:    (310) 956-3148
Email:        gsamson@mcguirewoods.com

Notice Address for Credit Parties:

Virco Mfg. Corporation
2027 Harpers Way
Torrance, California  90501
Attention:    Robert E. Dose
VP Finance
Facsimile:    (310)533-1906
Attention:    Robert E. Dose

Virco Inc.
2027 Harpers Way
Torrance, California  90501
Attention:    Robert E. Dose
VP Finance
Facsimile:    (310)533-1906
Attention:    Robert E. Dose 
Document comparison by Workshare 9 on Friday, June 02, 2017 10:17:02 AM

	
		
	Input:

	Document 1 ID
	interwovenSite://DMSPROXY/Active/53708450/14 

	Description
	#53708450v14<Active> - VIRCO:  Conformed Copy of Credit Agreement 

	Document 2 ID
	interwovenSite://DMSPROXY/Active/53708450/16 

	Description
	#53708450v16<Active> - VIRCO:  Conformed Copy of Credit Agreement 

	Rendering set
	MW Standard

	
		
	Legend:

	Insertion 

	Deletion 

	Moved from 

	Moved to 

	Style change 

	Format change 

	Moved deletion 

	Inserted cell
	 

	Deleted cell
	 

	Moved cell
	 

	Split/Merged cell
	 

	Padding cell
	 

	
		
	Statistics:

	 
	Count

	Insertions
	301

	Deletions
	276

	Moved from
	3

	Moved to
	3

	Style change
	0

	Format changed
	0

	Total changes
	583

Exhibit B

84785966

EQUIPMENT NOTE

$2,500,000                                            March 13, 2017

This EQUIPMENT NOTE (this “Note”) is executed and delivered under and pursuant to the terms of that certain Revolving Credit and Security Agreement, dated as of December 22, 2011 (as such agreement may be amended, restated, or otherwise modified from time to time, the “Credit Agreement”), among VIRCO MFG. CORPORATION, a corporation organized under the laws of the State of Delaware (“VMC”), VIRCO INC., a corporation organized under the laws of the State of Delaware (“Virco” and, together with VMC and each Person that becomes a party hereto pursuant to Section 7.12 as a borrower, each a “Borrower”, and collectively “Borrowers”), the Persons from time to time party hereto pursuant to Section 7.12 as a guarantor, the financial institutions that are now or that hereafter become a party hereto (collectively, “Lenders” and individually a “Lender”) and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as administrative agent for Lenders (PNC, in such capacity, “Agent”).  Initially capitalized terms used but not defined herein have the respective meanings set forth in the Credit Agreement.
FOR VALUE RECEIVED, Borrowers hereby promise to pay to the order of PNC Bank, national association, at the office of Agent specified in the Credit Agreement or at such other place as Agent may from time to time designate, in accordance with the Credit Agreement, to Borrowing Agent in writing:
(i)    the principal sum of $2,500,000, or such other amount thereof as may be from time to time advanced under the Equipment Loans and pursuant to the terms of the Credit Agreement (the “Principal Amount”), subject to acceleration upon the occurrence of an Event of Default or earlier termination of the Credit Agreement pursuant to the terms thereof; and

(ii)    interest on the Principal Amount of this Note from time to time outstanding until such Principal Amount is paid in full at the applicable Equipment Loan Rate in accordance with the provisions of the Credit Agreement.  In no event, however, shall interest exceed the maximum interest rate permitted by Applicable Law.  During the existence of an Event of Default, at the option of Agent or the Required Lenders, interest shall be payable at the Default Rate. 

This Note is an Equipment Note under and as defined in the Credit Agreement and is secured by the Liens granted pursuant to the Credit Agreement and the other Loan Documents, is entitled to the benefits of the Credit Agreement and the other Loan Documents, and is subject to all of the agreements, terms, and conditions therein contained.
This Note is subject to mandatory prepayment and may be voluntarily prepaid, in whole or in part, on the terms and conditions set forth in the Credit Agreement.
If an Event of Default under Section 10.6 of the Credit Agreement occurs, this Note shall immediately become due and payable, without notice on demand, together with reasonable attorneys’ fees if the collection hereof is placed in the hands of an attorney to obtain or enforce payment hereof and if any other Event of Default occurs, this Note may, as provided in the Credit Agreement, be declared to be immediately due and payable, without notice on demand, in each case together with expenses and costs as provided in the Credit Agreement.  
This Note shall be governed by and construed in accordance with the laws of the State of New York applied to contracts to be performed wholly within the State of New York.  This governing law election has been made in reliance of the Applicable Law.  Borrowers hereby irrevocably consent to the non-exclusive jurisdiction of any state or federal court located in the County of New York, State of New York in any and 

all actions and proceedings whether arising hereunder, under the Credit Agreement, any Other Document or undertaking.  Borrowers waive any objection to improper venue and forum non-conveniens to proceedings in any such court and all rights to transfer for any reason.  Without limiting the applicability of any other provision of this Note, the terms of Section 12.3 of the Credit Agreement shall apply to this Note, mutatis mutandis.
Borrowers expressly waive any presentment, demand, protest, notice of protest, notice of intent to accelerate, notice of acceleration, or any other notice of any kind except as expressly provided in the Credit Agreement.
IN WITNESS WHEREOF, each Borrower has duly executed this Note as of the date first written above.

[Signature pages follow]

BORROWERS:
VIRCO MFG. CORPORATION,
a Delaware corporation

By:_____/s/Robert E. Dose_______
Name:     Robert E. Dose
		
	Title:
	Vice President Finance, 

Treasurer and Secretary

VIRCO INC.,
a Delaware corporation

By:_____/s/Robert E. Dose_______
Name:     Robert E. Dose
Title:    Vice President Finance, 
Treasurer and Secretary

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00272-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00272-of-00352.parquet"}]]