Document:

CREDIT AGREEMENT

dated as of February 12, 2008

among

GLOBAL LOGISTICS ACQUISITION CORPORATION, 

THE CLARK GROUP, INC., 

CLARK DISTRIBUTION SYSTEMS, INC., 

CLARK WORLDWIDE TRANSPORTATION, INC.,

HIGHWAY DISTRIBUTION SYSTEMS, INC. AND

EVERGREEN EXPRESS LINES, INC.,

each as a Borrower, 

THE VARIOUS FINANCIAL INSTITUTIONS PARTY HERETO,

as Lenders,

and

LASALLE BANK NATIONAL ASSOCIATION,

as Administrative Agent

LASALLE BANK NATIONAL ASSOCIATION,

as Arranger

 

 

 

 

TABLE OF CONTENTS

 

	
       
 	
       
 	
       
 	
       
 	
      Page
 
	
      SECTION 1.
 	
       
 	
                        DEFINITIONS
 	
       
 	
      1
 
	
                        1.1.
 	
                         
 	
                        Definitions
 	
                         
 	
                        1
 
	
                        1.2.
 	
                         
 	
                        Other Interpretive Provisions
 	
                         
 	
                        23
 
	
      SECTION 2.
 	
                         
 	
                        COMMITMENTS OF THE LENDERS; BORROWING, CONVERSION AND LETTER OF CREDIT PROCEDURES
 	
                         
 	
                        24
 
	
                        2.1.
 	
                         
 	
                        Commitments
 	
                         
 	
                        24
 
	
                        2.2.
 	
                         
 	
                        Loan Procedures
 	
                         
 	
                        24
 
	
                        2.3.
 	
                         
 	
                        Letter of Credit Procedures
 	
                         
 	
                        26
 
	
                        2.4.
 	
                         
 	
                        Commitments Several
 	
                         
 	
                        29
 
	
                        2.5.
 	
                         
 	
                        Certain Conditions
 	
                         
 	
                        29
 
	
                        2.6.
 	
                         
 	
                        Joint and Several Liability
 	
                         
 	
                        29
 
	
                        SECTION 3.
 	
                         
 	
                        EVIDENCING OF LOANS
 	
                         
 	
                        31
 
	
                        3.1.
 	
                         
 	
                        Notes
 	
                         
 	
                        31
 
	
                        3.2.
 	
                         
 	
                        Recordkeeping
 	
                         
 	
                        31
 
	
                        SECTION 4.
 	
                         
 	
                        INTEREST
 	
                         
 	
                        31
 
	
                        4.1.
 	
                         
 	
                        Interest Rates
 	
                         
 	
                        31
 
	
                        4.2.
 	
                         
 	
                        Interest Payment Dates
 	
                         
 	
                        32
 
	
                        4.3.
 	
                         
 	
                        Setting and Notice of LIBOR Rates
 	
                         
 	
                        32
 
	
                        4.4.
 	
                         
 	
                        Computation of Interest
 	
                         
 	
                        32
 
	
                        SECTION 5.
 	
                         
 	
                        FEES
 	
                         
 	
                        32
 
	
                        5.1.
 	
                         
 	
                        Non-Use Fee
 	
                         
 	
                        32
 
	
                        5.2.
 	
                         
 	
                        Letter of Credit Fees
 	
                         
 	
                        33
 
	
                        5.3.
 	
                         
 	
                        Administrative Agent’s Fees
 	
                         
 	
                        33
 
	
                        SECTION 6.
 	
                         
 	
                        REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT; PREPAYMENTS; COLLECTIONS
 	
                         
 	
                        33
 
	
                        6.1.
 	
                         
 	
                        Reduction or Termination of the Revolving Commitment
 	
                         
 	
                        33
 
	
                        6.2.
 	
                         
 	
                        Prepayments
 	
                         
 	
                        34
 
	
                        6.3.
 	
                         
 	
                        Manner of Prepayments
 	
                         
 	
                        35
 
	
                        6.4.
 	
                         
 	
                        Repayments
 	
                         
 	
                        35
 
	
                        6.5.
 	
                         
 	
                        Collections
 	
                         
 	
                        36
 
	
                        SECTION 7.
 	
                         
 	
                        MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES
 	
                         
 	
                        37
 
	
                        7.1.
 	
                         
 	
                        Making of Payments
 	
                         
 	
                        37
 
	
                        7.2.
 	
                         
 	
                        Application of Certain Payments
 	
                         
 	
                        37
 
	
                        7.3.
 	
                         
 	
                        Due Date Extension
 	
                         
 	
                        37
 
	
                        7.4.
 	
                         
 	
                        Setoff
 	
                         
 	
                        38
 
	
                        7.5.
 	
                         
 	
                        Proration of Payments
 	
                         
 	
                        38
 
	
                        7.6.
 	
                         
 	
                        Taxes
 	
                         
 	
  38
 

 

 

-i-

 

 

	
      SECTION 8.
 	
       
 	
      INCREASED COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS
 	
       
 	
      40
 
	
                        8.1.
 	
                         
 	
                        Increased Costs
 	
                         
 	
                        40
 
	
                        8.2.
 	
                         
 	
                        Basis for Determining Interest Rate Inadequate or Unfair
 	
                         
 	
                        41
 
	
                        8.3.
 	
                         
 	
                        Changes in Law Rendering LIBOR Loans Unlawful
 	
                         
 	
                        41
 
	
                        8.4.
 	
                         
 	
                        Funding Losses
 	
                         
 	
                        42
 
	
                        8.5.
 	
                         
 	
                        Right of Lenders to Fund through Other Offices
 	
                         
 	
                        42
 
	
                        8.6.
 	
                         
 	
                        Discretion of Lenders as to Manner of Funding
 	
                         
 	
                        42
 
	
                        8.7.
 	
                         
 	
                        Mitigation of Circumstances; Replacement of Lenders
 	
                         
 	
                        43
 
	
                        8.8.
 	
                         
 	
                        Conclusiveness of Statements; Survival of Provisions
 	
                         
 	
                        43
 
	
                        SECTION 9.
 	
                         
 	
                        REPRESENTATIONS AND WARRANTIES
 	
                         
 	
                        44
 
	
                        9.1.
 	
                         
 	
                        Organization
 	
                         
 	
                        44
 
	
                        9.2.
 	
                         
 	
                        Authorization; No Conflict
 	
                         
 	
                        44
 
	
                        9.3.
 	
                         
 	
                        Validity and Binding Nature
 	
                         
 	
                        44
 
	
                        9.4.
 	
                         
 	
                        Financial Condition; Internal Controls
 	
                         
 	
                        44
 
	
                        9.5.
 	
                         
 	
                        No Material Adverse Change
 	
                         
 	
                        45
 
	
                        9.6.
 	
                         
 	
                        Litigation and Contingent Liabilities
 	
                         
 	
                        45
 
	
                        9.7.
 	
                         
 	
                        Ownership of Properties; Liens
 	
                         
 	
                        45
 
	
                        9.8.
 	
                         
 	
                        Equity Ownership; Subsidiaries
 	
                         
 	
                        45
 
	
                        9.9.
 	
                         
 	
                        Pension Plans
 	
                         
 	
                        46
 
	
                        9.10.
 	
                         
 	
                        Investment Company Act
 	
                         
 	
                        46
 
	
                        9.11.
 	
                         
 	
                        [Reserved]
 	
                         
 	
                        47
 
	
                        9.12.
 	
                         
 	
                        Regulation U
 	
                         
 	
                        47
 
	
                        9.13.
 	
                         
 	
                        Taxes
 	
                         
 	
                        47
 
	
                        9.14.
 	
                         
 	
                        Solvency, etc.
 	
                         
 	
                        47
 
	
                        9.15.
 	
                         
 	
                        Environmental Matters
 	
                         
 	
                        47
 
	
                        9.16.
 	
                         
 	
                        Insurance
 	
                         
 	
                        48
 
	
                        9.17.
 	
                         
 	
                        Real Property
 	
                         
 	
                        48
 
	
                        9.18.
 	
                         
 	
                        Information
 	
                         
 	
                        48
 
	
                        9.19.
 	
                         
 	
                        Intellectual Property
 	
                         
 	
                        49
 
	
                        9.20.
 	
                         
 	
                        Burdensome Obligations
 	
                         
 	
                        49
 
	
                        9.21.
 	
                         
 	
                        Labor Matters
 	
                         
 	
                        49
 
	
                        9.22.
 	
                         
 	
                        No Default
 	
                         
 	
                        49
 
	
                        9.23.
 	
                         
 	
                        Related Agreements, etc.
 	
                         
 	
                        49
 
	
                        9.24.
 	
                         
 	
                        Holding Companies
 	
                         
 	
                        50
 
	
                        9.25.
 	
                         
 	
                        Clark UK
 	
                         
 	
                        50
 
	
                        SECTION 10.
 	
                         
 	
                        AFFIRMATIVE COVENANTS
 	
                         
 	
                        50
 
	
                        10.1.
 	
                         
 	
                        Reports, Certificates and Other Information
 	
                         
 	
                        50
 
	
                        10.2.
 	
                         
 	
                        Books, Records and Inspections
 	
                         
 	
                        54
 
	
                        10.3.
 	
                         
 	
                        Maintenance of Property; Insurance
 	
                         
 	
                        54
 
	
                        10.4.
 	
                         
 	
                        Compliance with Laws; Payment of Taxes and Liabilities
 	
                         
 	
                        56
 
	
                        10.5.
 	
                         
 	
                        Maintenance of Existence, etc.
 	
                         
 	
                        56
 
	
                        10.6.
 	
                         
 	
                        Use of Proceeds
 	
                         
 	
                        56
 
	
                        10.7.
 	
                         
 	
                        Employee Benefit Plans
 	
                         
 	
                        57
 
	
                        10.8.
 	
                         
 	
                        Environmental Matters
 	
                         
 	
                        57
 
	
                        10.9.
 	
                         
 	
                        Further Assurances
 	
                         
 	
  57
 

 

 

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      10.10.
 	
       
 	
      Deposit Accounts
 	
       
 	
      58
 
	
                        10.11.
 	
                         
 	
                        Clark UK
 	
                         
 	
                        58
 
	
                        SECTION 11.
 	
                         
 	
                        NEGATIVE COVENANTS
 	
                         
 	
                        58
 
	
                        11.1.
 	
                         
 	
                        Debt
 	
                         
 	
                        58
 
	
                        11.2.
 	
                         
 	
                        Liens
 	
                         
 	
                        59
 
	
                        11.3.
 	
                         
 	
                        Operating Leases
 	
                         
 	
                        60
 
	
                        11.4.
 	
                         
 	
                        Restricted Payments
 	
                         
 	
                        60
 
	
                        11.5.
 	
                         
 	
                        Mergers, Consolidations, Sales
 	
                         
 	
                        61
 
	
                        11.6.
 	
                         
 	
                        Modification of Organizational Documents
 	
                         
 	
                        63
 
	
                        11.7.
 	
                         
 	
                        Transactions with Affiliates
 	
                         
 	
                        63
 
	
                        11.8.
 	
                         
 	
                        Unconditional Purchase Obligations
 	
                         
 	
                        64
 
	
                        11.9.
 	
                         
 	
                        Inconsistent Agreements
 	
                         
 	
                        64
 
	
                        11.10.
 	
                         
 	
                        Business Activities; Issuance of Equity
 	
                         
 	
                        64
 
	
                        11.11.
 	
                         
 	
                        Investments
 	
                         
 	
                        64
 
	
                        11.12.
 	
                         
 	
                        Restriction of Amendments to Certain Documents
 	
                         
 	
                        65
 
	
                        11.13.
 	
                         
 	
                        Fiscal Year
 	
                         
 	
                        65
 
	
                        11.14.
 	
                         
 	
                        Financial Covenants
 	
                         
 	
                        66
 
	
                        SECTION 12.
 	
                         
 	
                        EFFECTIVENESS; CONDITIONS OF LENDING, ETC.
 	
                         
 	
                        66
 
	
                        12.1.
 	
                         
 	
                        Initial Credit Extension
 	
                         
 	
                        66
 
	
                        12.2.
 	
                         
 	
                        Conditions
 	
                         
 	
                        70
 
	
                        SECTION 13.
 	
                         
 	
                        EVENTS OF DEFAULT AND THEIR EFFECT
 	
                         
 	
                        71
 
	
                        13.1.
 	
                         
 	
                        Events of Default
 	
                         
 	
                        71
 
	
                        13.2.
 	
                         
 	
                        Effect of Event of Default
 	
                         
 	
                        73
 
	
                        SECTION 14.
 	
                         
 	
                        THE AGENT
 	
                         
 	
                        74
 
	
                        14.1.
 	
                         
 	
                        Appointment and Authorization
 	
                         
 	
                        74
 
	
                        14.2.
 	
                         
 	
                        Issuing Lender
 	
                         
 	
                        74
 
	
                        14.3.
 	
                         
 	
                        Delegation of Duties
 	
                         
 	
                        74
 
	
                        14.4.
 	
                         
 	
                        Exculpation of Administrative Agent
 	
                         
 	
                        75
 
	
                        14.5.
 	
                         
 	
                        Reliance by Administrative Agent
 	
                         
 	
                        75
 
	
                        14.6.
 	
                         
 	
                        Notice of Default
 	
                         
 	
                        76
 
	
                        14.7.
 	
                         
 	
                        Credit Decision
 	
                         
 	
                        76
 
	
                        14.8.
 	
                         
 	
                        Indemnification
 	
                         
 	
                        76
 
	
                        14.9.
 	
                         
 	
                        Administrative Agent in Individual Capacity
 	
                         
 	
                        77
 
	
                        14.10.
 	
                         
 	
                        Successor Administrative Agent
 	
                         
 	
                        77
 
	
                        14.11.
 	
                         
 	
                        Collateral Matters
 	
                         
 	
                        78
 
	
                        14.12.
 	
                         
 	
                        Administrative Agent May File Proofs of Claim
 	
                         
 	
                        78
 
	
                        14.13.
 	
                         
 	
                        Other Agents; Arrangers and Managers
 	
                         
 	
                        79
 
	
                        SECTION 15.
 	
                         
 	
                        GENERAL
 	
                         
 	
                        79
 
	
                        15.1.
 	
                         
 	
                        Waiver; Amendments
 	
                         
 	
                        79
 
	
                        15.2.
 	
                         
 	
                        Confirmations
 	
                         
 	
                        80
 
	
                        15.3.
 	
                         
 	
                        Notices
 	
                         
 	
                        80
 
	
                        15.4.
 	
                         
 	
                        Computations
 	
                         
 	
                        81
 
	
                        15.5.
 	
                         
 	
                        Costs, Expenses and Taxes
 	
                         
 	
  81
 

 

 

-iii-

 

 

	
      15.6.
 	
       
 	
      Assignments; Participations
 	
       
 	
      81
 
	
                        15.7.
 	
                         
 	
                        Register
 	
                         
 	
                        83
 
	
                        15.8.
 	
                         
 	
                        GOVERNING LAW
 	
                         
 	
                        83
 
	
                        15.9.
 	
                         
 	
                        Confidentiality
 	
                         
 	
                        84
 
	
                        15.10.
 	
                         
 	
                        Severability
 	
                         
 	
                        84
 
	
                        15.11.
 	
                         
 	
                        Nature of Remedies
 	
                         
 	
                        85
 
	
                        15.12.
 	
                         
 	
                        Entire Agreement
 	
                         
 	
                        85
 
	
                        15.13.
 	
                         
 	
                        Counterparts
 	
                         
 	
                        85
 
	
                        15.14.
 	
                         
 	
                        Successors and Assigns
 	
                         
 	
                        85
 
	
                        15.15.
 	
                         
 	
                        Captions
 	
                         
 	
                        85
 
	
                        15.16.
 	
                         
 	
                        Customer Identification - USA Patriot Act Notice
 	
                         
 	
                        86
 
	
                        15.17.
 	
                         
 	
                        INDEMNIFICATION BY THE BORROWERS
 	
                         
 	
                        86
 
	
                        15.18.
 	
                         
 	
                        Nonliability of Lenders
 	
                         
 	
                        87
 
	
                        15.19.
 	
                         
 	
                        FORUM SELECTION AND CONSENT TO JURISDICTION
 	
                         
 	
                        88
 
	
                        15.20.
 	
                         
 	
                        WAIVER OF JURY TRIAL
 	
                         
 	
  88
 

 

 

-iv-

 

ANNEXES

 

	
      ANNEX A
 	
      Lenders and Pro Rata Shares
 
	
                        ANNEX B
 	
  Addresses for Notices
 

SCHEDULES

 

	
      SCHEDULE 9.6
 	
      Litigation and Contingent Liabilities
 
	
                        SCHEDULE 9.8 
 	
                        Subsidiaries
 
	
                        SCHEDULE 9.16
 	
                        Insurance
 
	
                        SCHEDULE 9.17
 	
                        Real Property
 
	
                        SCHEDULE 9.21
 	
                        Labor Matters
 
	
                        SCHEDULE 11.1
 	
                        Existing Debt
 
	
                        SCHEDULE 11.2
 	
                        Existing Liens
 
	
                        SCHEDULE 11.11
 	
                        Investments
 
	
                        SCHEDULE 12.1
 	
  Debt to be Repaid
 

EXHIBITS

 

	
      EXHIBIT A
 	
      Form of Note (Section 3.1)
 
	
                        EXHIBIT B
 	
                        Form of Compliance Certificate (Section 10.1.3)
 
	
                        EXHIBIT C
 	
                        Form of Borrowing Base Certificate (Section 1.1)
 
	
                        EXHIBIT D
 	
                        Form of Assignment Agreement (Section 15.6.1)
 
	
                        EXHIBIT E
 	
                        Form of Notice of Borrowing (Section 2.2.2)
 
	
                        EXHIBIT F
 	
  Form of Notice of Conversion/Continuation (Section 2.2.3)
 

 

 

-v-

 

 

 

CREDIT AGREEMENT

THIS CREDIT AGREEMENT dated as of February 12, 2008 (as amended, restated or otherwise modified from time to time, this “Agreement”) is entered into among GLOBAL LOGISTICS ACQUISITION CORPORATION, a Delaware corporation (“Holdings”), THE CLARK GROUP, INC., a Delaware corporation (“Clark Holdings”), CLARK DISTRIBUTION SYSTEMS, INC., a Delaware corporation (“CDS”), CLARK WORLDWIDE TRANSPORTATION, INC., a Pennsylvania corporation (“CWT”),
HIGHWAY DISTRIBUTION SYSTEMS, INC., a Delaware corporation (“HDS”), and EVERGREEN EXPRESS LINES, INC., a Pennsylvania corporation (“EEL”), the financial institutions that are or may from time to time become parties hereto (together with their respective successors and assigns, the “Lenders”) and LASALLE BANK NATIONAL ASSOCIATION (in its individual capacity, “LaSalle”), as Administrative Agent for the Lenders.

The Lenders have agreed to make available to the Borrowers term loans and a revolving credit facility (which includes letters of credit) upon the terms and conditions set forth herein.

In consideration of the mutual agreements herein contained, the parties hereto agree as follows:

SECTION 1. DEFINITIONS.

1.1. Definitions. 

When used herein the following terms shall have the following meanings:

Account Debtor is defined in the Guaranty and Collateral Agreement.

Account or Accounts is defined in the UCC.

Acquisition means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of all or substantially all of any business or division of a Person, (b) the acquisition of in excess of 50% of the Capital Securities of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person (other than a Person that is already a Subsidiary).

Adjusted EBITDA means, for any period, the sum of EBITDA for such period plus Pro Forma Target EBITDA for such period.

Administrative Agent means LaSalle in its capacity as administrative agent for the Lenders hereunder and any successor thereto in such capacity.

Affected Loan - see Section 8.3.

 

 

Affiliate of any Person means (a) any other Person which, directly or indirectly, controls or is controlled by or is under common control with such Person, (b) any officer or director of such Person and (c) with respect to any Lender, any entity administered or managed by such Lender or an Affiliate or investment advisor thereof and which is engaged in making, purchasing, holding or otherwise investing in commercial loans. A Person shall be deemed to be “controlled by” any other Person if such Person possesses, directly or indirectly, power to vote 5% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managers or power to direct or cause the direction of the management and policies of such Person whether by contract or otherwise. Unless expressly stated otherwise
herein, neither the Administrative Agent nor any Lender shall be deemed an Affiliate of any Loan Party.

Agent Fee Letter means the fee letter dated as of the date hereof between the Borrowers and the Administrative Agent.

Agreement - see the Preamble.

Annualized means, with respect to the determination of any accounting computation or any financial definition for any period beginning on the Closing Date and ending on or prior to the first anniversary of the Closing Date, the amount determined by multiplying the actual amount for the period from the Closing Date to the final day of such period by 366 and dividing by the number of days from (and including) the Closing Date to (and including) the final day of such period.

Applicable Margin means, for any day, the rate per annum set forth below opposite the level (the “Level”) then in effect, it being understood that the Applicable Margin for (i) LIBOR Loans shall be the percentage set forth under the column “ LIBOR Margin”, (ii) Base Rate Loans shall be the percentage set forth under the column “Base Rate Margin”, (iii) the Non-Use Fee Rate shall be the percentage set forth under the column “Non-Use Fee Rate” and (iv) the L/C Fee shall be the percentage set forth under the column “L/C Fee Rate”:

 

	
                        Level
 	
                         
 	
                        Total Debt
 to EBITDA Ratio
 	
                         
 	
                        LIBOR
 Margin
 	
                         
 	
                        Base Rate
 Margin
 	
                         
 	
                        Non-Use
  Fee Rate
 	
                         
 	
                        L/C Fee
 Rate
 
	
                        I
 	
                         
 	
                        Less than or equal to 2.0:1.0
 	
                         
 	
                        1.75%
 	
                         
 	
                        0%
 	
                         
 	
                        0.50%
 	
                         
 	
                        1.75%
 
	
      II
 	
                         
 	
                        Less than or equal to 2.5:1.0 but greater than 2.0:1.0
 	
                         
 	
                        2.0%
 	
                         
 	
                        0.50%
 	
                         
 	
                        0.50%
 	
                         
 	
                        2.0%
 
	
                        III
 	
                         
 	
                        Greater than 2.5:1.0
 	
                         
 	
                        2.25%
 	
                         
 	
                        0.75%
 	
                         
 	
                        0.50%
 	
                         
 	
                        2.25%
 

 

The LIBOR Margin, the Base Rate Margin, the Non-Use Fee Rate and the L/C Fee Rate shall be adjusted, to the extent applicable, on the fifth (5th) Business Day after the Borrowers provide the annual and quarterly financial statements and other information pursuant to Sections 10.1.1 or 10.1.2, as applicable, and the related Compliance Certificate, pursuant to Section 10.1.3. Notwithstanding anything contained in this paragraph to the contrary, (a) if the Borrowers fail to deliver the financial statements and Compliance Certificate in accordance with the provisions of Sections 10.1.1, 10.1.2 and 10.1.3, the 

 

 

-2-

 

LIBOR Margin, the Base Rate Margin, the Non-Use Fee Rate and the L/C Fee Rate shall be based upon Level III above beginning on the date such financial statements and/or Compliance Certificate were required to be delivered until the fifth (5th) Business Day after such financial statements and Compliance Certificate are actually delivered, whereupon the Applicable Margin shall be determined by the then current Level; (b) no reduction to any Applicable Margin shall become effective at any time when an Event of Default or Unmatured Event of Default has occurred and is continuing; and (c) the initial Applicable Margin on the Closing Date shall be based on Level II until the date the Term Loan is funded, at which time the Applicable Margin Level shall be reset on a pro forma basis after giving effect to such funding, and shall then remain at such Level until the date on which the financial
statements and Compliance Certificate are required to be delivered for the Fiscal Quarter ending on or about March 31, 2008.

Notwithstanding the foregoing, in the event that any financial statement or related Compliance Certificate is shown to be inaccurate (regardless of whether this Agreement or the Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “Applicable Period”) than the Applicable Margin applied for such Applicable Period, then (i) the Borrowers shall immediately deliver to the Administrative Agent a correct Compliance Certificate for such Applicable Period, (ii) the Applicable Margin shall be determined as if Level III were applicable for such Applicable Period, and (iii) the Borrowers shall immediately pay to the Administrative Agent the accrued
additional interest owing as a result of such increased Applicable Margin for such Applicable Period, which payment shall be promptly applied by the Administrative Agent in accordance with Section 7.2. This paragraph shall not limit the rights of the Administrative Agent or the Lenders with respect to Sections 4.1 and 13.2.

Asset Disposition means the sale, lease, assignment or other transfer for value (each, a “Disposition”) by any Loan Party to any Person (other than a Loan Party) of any asset or right of such Loan Party (including, the loss, destruction or damage of any thereof or any actual or threatened (in writing to any Loan Party) condemnation, confiscation, requisition, seizure or taking thereof) other than (a) the Disposition of any asset which is to be replaced, and is in fact replaced, within 60 days with another asset performing the same or a similar function, and (b) the sale or lease of inventory in the ordinary course of business and (c) other Dispositions in any Fiscal Year the Net Proceeds of which do not in the aggregate exceed $250,000.

Assignee - see Section 15.6.1.

Assignment Agreement - see Section 15.6.1.

Attorney Costs means, with respect to any Person, all reasonable fees and charges of any counsel to such Person, the reasonable allocable cost of internal legal services of such Person, all reasonable disbursements of such internal counsel and all court costs and similar legal expenses.

 

 

-3-

 

Bank Product Agreements means those certain cash management service agreements entered into from time to time between any Loan Party and a Lender or its Affiliates in connection with any of the Bank Products.

Bank Product Obligations means all obligations, liabilities, contingent reimbursement obligations, fees, and expenses owing by the Loan Parties to any Lender or its Affiliates pursuant to or evidenced by the Bank Product Agreements 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, and including all such amounts that a Loan Party is obligated to reimburse to the Administrative Agent or any Lender as a result of the Administrative Agent or such Lender purchasing participations or executing indemnities or reimbursement obligations with respect to the Bank Products provided to the Loan Parties pursuant to the Bank Product Agreements.

Bank Products means any service or facility extended to any Loan Party by any Lender or its Affiliates including:  (a) credit cards, (b) credit card processing services, (c) debit cards, (d) purchase cards, (e) ACH transactions, (f) cash management, including controlled disbursement, accounts or services, or (g) Hedging Agreements.

Base Rate means at any time the greater of (a) the Federal Funds Rate plus 0.5% per annum and (b) the Prime Rate.

Base Rate Loan means any Loan which bears interest at or by reference to the Base Rate.

Base Rate Margin - see the definition of Applicable Margin.

Borrowers means, collectively, the Holdco Borrowers and the Operating Borrowers.

Borrowing Base means an amount equal to the sum of (i) 80% of the unpaid amount of all Eligible Accounts plus (ii) 50% of the appraised fair market value of Eligible Real Estate (as set forth in an appraisal of such Eligible Real Estate in form and content, and prepared by a third-party appraiser, acceptable to Administrative Agent in its reasonable discretion), net of such reserves and allowances as the Administrative Agent deems necessary or appropriate in its reasonable discretion, including as necessary or appropriate to reflect any events, conditions, contingencies, risks or other circumstances which may arise from time to time with respect to any Loan Party.

Borrowing Base Certificate means a certificate substantially in the form of Exhibit C.

BSA - see Section 10.4.

Business Day means any day on which LaSalle is open for commercial banking business in Chicago, Illinois and, in the case of a Business Day which relates to a LIBOR Loan, on which dealings are carried on in the London interbank eurodollar market.

 

 

-4-

 

Capital Expenditures means all expenditures which, in accordance with GAAP, would be required to be capitalized and shown on the consolidated balance sheet of Holdings, including expenditures in respect of Capital Leases, but excluding expenditures made in connection with the replacement, substitution or restoration of assets to the extent financed (a) from insurance proceeds (or other similar recoveries) paid on account of the loss of or damage to the assets being replaced or restored or (b) with awards of compensation arising from the taking by eminent domain or condemnation of the assets being replaced. For purposes of Section 11.14.4, assets acquired as Permitted Acquisitions shall not constitute Capital Expenditures.

Capital Lease means, with respect to any Person, any lease of (or other agreement conveying the right to use) any real or personal property by such Person that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of such Person.

Capital Securities means, with respect to any Person, all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of such Person’s capital, whether now outstanding or issued or acquired after the Closing Date, including common shares, preferred shares, membership interests in a limited liability company, limited or general partnership interests in a partnership, interests in a trust, interests in other unincorporated organizations or any other equivalent of such ownership interest.

Cash Collateralize means to deliver cash collateral to the Administrative Agent, to be held as cash collateral for outstanding Letters of Credit, pursuant to documentation satisfactory to the Administrative Agent. Derivatives of such term have corresponding meanings.

Cash Equivalent Investment means, at any time, (a) any evidence of Debt, maturing not more than one year after such time, issued or guaranteed by the United States Government or any agency thereof, (b) commercial paper, maturing not more than one year from the date of issue, or corporate demand notes, in each case (unless issued by a Lender or its holding company) rated at least A-l by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. or P-l by Moody’s Investors Service, Inc., (c) any certificate of deposit, time deposit or banker’s acceptance, maturing not more than one year after such time, or any overnight Federal Funds transaction that is issued or sold by any Lender or its holding company (or by a commercial banking institution that is a member of the Federal Reserve System and
has a combined capital and surplus and undivided profits of not less than $500,000,000), (d) any repurchase agreement entered into with any Lender (or commercial banking institution of the nature referred to in clause (c)) which (i) is secured by a fully perfected security interest in any obligation of the type described in any of clauses (a) through (c) above and (ii) has a market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation of such Lender (or other commercial banking institution) thereunder and (e) money market accounts or mutual funds which invest exclusively in assets satisfying the foregoing requirements, and (f) other short term liquid investments approved in writing by the Administrative Agent.

 

 

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CDS – see the Preamble.

Change of Control means the occurrence of any of the following events: (a) the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act of 1934) of more than 50% of the outstanding voting Capital Securities of Holdings; (b) Holdings shall cease to own and control, directly or indirectly, 100% of each class of the outstanding Capital Securities of each other Loan Party and each Subsidiary thereof; or (c) a “Change of Control”, or words of like import, shall occur under any of the Subordinated Debt Documents. 

Clark Holdings – see the Preamble.

Clark UK means Clark Worldwide Ltd., a company organized under the laws of the United Kingdom.

Closing Date - see Section 12.1.

Code means the Internal Revenue Code of 1986.

Collateral as defined in the Guaranty and Collateral Agreement. 

Collateral Access Agreement means an agreement in form and substance reasonably satisfactory to the Administrative Agent pursuant to which a lessor of real property on which collateral is stored or otherwise located, or a warehouseman, processor or other bailee of property owned by any Loan Party, acknowledges the Liens of the Administrative Agent and waives any Liens held by such Person on such property, and, in the case of any such agreement with a lessor, permits the Administrative Agent reasonable access to and use of such real property following the occurrence and during the continuance of an Event of Default to assemble, complete and sell any Collateral stored or otherwise located thereon.

Collateral Documents means, collectively, the Guaranty and Collateral Agreement, each Mortgage, each Collateral Access Agreement, each control agreement and any other agreement or instrument pursuant to which any Loan Party or any other Person grants or purports to grant collateral to the Administrative Agent for the benefit of the Lenders or otherwise relates to such collateral.

Commitment means, as to any Lender, such Lender’s commitment to make Loans, and to issue or participate in Letters of Credit, under this Agreement. The initial amount of each Lender’s commitment to make Loans is set forth on Annex A.

Compliance Certificate means a Compliance Certificate in substantially the form of Exhibit B.

Computation Period means each period of twelve consecutive months ending on the last day of a month.

 

 

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Consolidated Net Income means, with respect to any Person for any period, the net income (or loss) of such Person and its Subsidiaries for such period, excluding any gains from Asset Dispositions, any extraordinary gains and any gains from discontinued operations.

Contingent Liability means, with respect to any Person, each obligation and liability of such Person and all such obligations and liabilities of such Person incurred pursuant to any agreement, undertaking or arrangement by which such Person:  (a) guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the indebtedness, dividend, obligation or other liability of any other Person in any manner (other than by endorsement of instruments in the course of collection), including any indebtedness, dividend or other obligation which may be issued or incurred at some future time; (b) guarantees the payment of dividends or other
distributions upon the Capital Securities of any other Person; (c) undertakes or agrees (whether contingently or otherwise):  (i) to purchase, repurchase, or otherwise acquire any indebtedness, obligation or liability of any other Person or any property or assets constituting security therefor, (ii) to advance or provide funds for the payment or discharge of any indebtedness, obligation or liability of any other Person (whether in the form of loans, advances, stock purchases, capital contributions or otherwise), or to maintain solvency, assets, level of income, working capital or other financial condition of any other Person, or (iii) to make payment to any other Person other than for value received; (d) agrees to lease property or to purchase securities, property or services from such other Person with the purpose or intent of assuring the owner of such indebtedness or obligation of the ability of such other Person to make payment of the indebtedness or obligation; (e) to induce
the issuance of, or in connection with the issuance of, any letter of credit for the benefit of such other Person; or (f) undertakes or agrees otherwise to assure a creditor against loss. The amount of any Contingent Liability shall (subject to any limitation set forth herein) be deemed to be the outstanding principal amount (or maximum permitted principal amount, if larger) of the indebtedness, obligation or other liability guaranteed or supported thereby.

Controlled Group means all members of a controlled group of corporations, all members of a controlled group of trades or businesses (whether or not incorporated) under common control and all members of an affiliated service group which, together with any Borrower or any of its Subsidiaries, are treated as a single employer under Section 414 of the Code or Section 4001 of ERISA.

CWT – see the Preamble.

Debt of any Person means, without duplication, (a) all indebtedness of such Person, (b) all borrowed money of such Person, whether or not evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person as lessee under Capital Leases which have been or should be recorded as liabilities on a balance sheet of such Person in accordance with GAAP, (d) all obligations of such Person to pay the deferred purchase price of property or services (excluding trade accounts payable in the ordinary 

 

 

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course of business), (e) all indebtedness secured by a Lien on the property of such Person, whether or not such indebtedness shall have been assumed by such Person; provided that if such Person has not assumed or otherwise become liable for such indebtedness, such indebtedness shall be measured at the fair market value of such property securing such indebtedness at the time of determination, (f) all obligations, contingent or otherwise, with respect to the face amount of all letters of credit (whether or not drawn), bankers’ acceptances and similar obligations issued for the account of such Person (including the Letters of Credit), (g) all Hedging Obligations of such Person, (h) all Contingent Liabilities of such Person, (i) all Debt of any partnership of which such Person is a general partner and (j) any Capital Securities or other equity instrument, whether or not mandatorily redeemable,
that under GAAP is characterized as debt, whether pursuant to financial accounting standards board issuance No. 150 or otherwise.

Debt to be Repaid means Debt listed on Schedule 12.1.

Dollar and the sign “$” mean lawful money of the United States of America.

EBITDA means, for any period, Consolidated Net Income for such period plus, in each case to the extent deducted in determining such Consolidated Net Income for such period, Interest Expense, income tax expense, depreciation and amortization, transaction costs and expenses and severance expense in connection with Permitted Acquisitions, in each case to the extent approved by Administrative Agent in its reasonable discretion, and costs and expenses in connection with the Related Agreements (other than the Employment Agreements), in each case to the extent approved by Administrative Agent in its reasonable discretion; provided, that, notwithstanding anything to the contrary contained herein, (i) for the Fiscal Months ending on or about February 28, 2007, March 31, 2007, April 30, 2007, May 31, 2007, June 30, 2007,
July 31, 2007, August 31, 2007, September 30, 2007, October 31, 2007, November 30, 2007 and December 31, 2007, EBITDA shall be deemed to be $629,275, $680,185, $1,046,641, $557,864, $995,531, $887,473, $922,805, $1,036,710, $1,222,029, $403,135 and ($461,991), respectively, and (ii) for the Fiscal Month ending on or about January 31, 2008, EBITDA shall be computed based on the consolidated results of Clark Holdings and its Subsidiaries pursuant to financial statements delivered pursuant to Section 10.1.2, subject to adjustments consistent with those used in determining the amounts specified in the preceding clause (i).

EEL – see the Preamble.

Eligible Account means an Account owing to any Operating Borrower which meets each of the following requirements:

(a) it arises from the rendering of services which have been fully performed by the applicable Borrower;  

(b) it (i) is subject to a perfected, first priority Lien in favor of the Administrative Agent and (ii) is not subject to any other assignment, claim or Lien;

 

 

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(c) it is a valid, legally enforceable and unconditional obligation of the Account Debtor with respect thereto, and is not subject to the fulfillment of any condition whatsoever or any counterclaim, credit, allowance, discount, rebate or adjustment by the Account Debtor with respect thereto, or to any claim by such Account Debtor denying liability thereunder in whole or in part and the Account Debtor has not refused to accept any of the services which are the subject of such Account;

(d) there is no bankruptcy, insolvency or liquidation proceeding pending by or against the Account Debtor with respect thereto;

(e) the Account Debtor with respect thereto is a resident or citizen of, and is located within, the United States or Canada, unless the services giving rise to such Account are on letter of credit, banker’s acceptance or other credit support terms reasonably satisfactory to the Administrative Agent; 

(f) it is not an Account arising from a “sale on approval,” “sale or return,” “consignment” or “bill and hold” or subject to any other repurchase or return agreement;

(g) it arises in the ordinary course of business of the applicable Borrower;

(h) if the Account Debtor is the United States or any department, agency or instrumentality thereof, the applicable Borrower has assigned its right to payment of such Account to the Administrative Agent pursuant to the Assignment of Claims Act of 1940, and evidence (satisfactory to the Administrative Agent) of such assignment has been delivered to the Administrative Agent;

(i) if the applicable Borrower maintains a credit limit for an Account Debtor, the aggregate dollar amount of Accounts due from such Account Debtor, including such Account, does not exceed such credit limit;

(j) if the Account is evidenced by chattel paper or an instrument, the originals of such chattel paper or instrument shall have been endorsed and/or assigned and delivered to the Administrative Agent or, in the case of electronic chattel paper, shall be in the control of the Administrative Agent, in each case in a manner satisfactory to the Administrative Agent;

(k) such Account is evidenced by an invoice delivered to the related Account Debtor and is not more than (i) 30 days past the due date thereof or (ii) 60 days past the original invoice date thereof, in each case according to the original terms of sale;

(l) it is not an Account with respect to an Account Debtor that is located in any jurisdiction which has adopted a statute or other requirement with respect to which any Person that obtains business from within such jurisdiction must file a notice of business activities report or make any other required filings in a timely

 

 

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manner in order to enforce its claims in such jurisdiction’s courts unless (i) such notice of business activities report has been duly and timely filed or the applicable Borrower is exempt from filing such report and has provided the Administrative Agent with satisfactory evidence of such exemption or (ii) the failure to make such filings may be cured retroactively by the applicable Borrower for a nominal fee;

(m) the Account Debtor with respect thereto is not a Borrower or an Affiliate of any Borrower;

(n) it is not owed by an Account Debtor with respect to which 25% or more of the aggregate amount of outstanding Accounts owed at such time by such Account Debtor is classified as ineligible under clause (k) of this definition; 

(o) if the aggregate amount of all Accounts owed by the Account Debtor thereon exceeds 25% of the aggregate amount of all Accounts at such time, then all Accounts owed by such Account Debtor in excess of such amount shall be deemed ineligible; and  

(p) it is otherwise not unacceptable to the Administrative Agent in its reasonable discretion for any other reason.

An Account which is at any time an Eligible Account, but which subsequently fails to meet any of the foregoing requirements, shall forthwith cease to be an Eligible Account. Further, with respect to any Account, if the Administrative Agent or the Required Lenders at any time hereafter determine in its or their discretion that the prospect of payment or performance by the Account Debtor with respect thereto is materially impaired for any reason whatsoever, such Account shall cease to be an Eligible Account after notice of such determination is given to any Borrower.

Eligible Real Estate means real property (i) owned by a Borrower, (ii) subject to a Mortgage in favor of Administrative Agent and (iii) acceptable to Administrative Agent, in its sole discretion, for designation as Eligible Real Estate. Absent further consent by Administrative Agent, the sole real property of the Loan Parties constituting Eligible Real Estate shall be the real property owned by Clark Holdings and located at 121 New York Avenue, Trenton, New Jersey 08638. Further, with respect to any real property constituting Eligible Real Estate, if the Administrative Agent or the Required Lenders at any time hereafter determine in its or their discretion that such real property has become materially impaired for any reason whatsoever (including, without limitation as a result of the existence of Hazardous Substances
located at or on such real property, whether before (to the extent not disclosed to Administrative Agent prior to the Closing Date) or following the Closing Date), such real property shall cease to be Eligible Real Estate after notice of such determination is given to any Borrower.

Employment Agreements means (i) that certain Employment Agreement dated May 18, 2007 between Timothy Teagan and Clark Holdings, (ii) that certain Employment Agreement dated May 18, 2007 between John Barry and Clark Holdings and (iii) that certain 

 

 

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Employment Agreement dated as of February 27, 2007 between Stephen Spritzer and Clark Holdings.

Environmental Claims means all claims, however asserted, by any governmental, regulatory or judicial authority or other Person alleging potential liability or responsibility for violation of any Environmental Law, or for release or injury to the environment.

Environmental Laws means all present or future federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative or judicial orders, consent agreements, directed duties, requests, licenses, authorizations and permits of, and agreements with, any governmental authority, in each case relating to any matter arising out of or relating to public health and safety, or pollution or protection of the environment or workplace, including any of the foregoing relating to the presence, use, production, generation, handling, transport, treatment, storage, disposal, distribution, discharge, emission, release, threatened release, control or cleanup of any Hazardous Substance. 

ERISA means the Employee Retirement Income Security Act of 1974. 

Event of Default means any of the events described in Section 13.1.

Excess Cash Flow means, for any period, the remainder of (a) EBITDA for such period, minus (b) the sum, without duplication, of (i) scheduled repayments of principal of Term Loans made during such period, plus (ii) voluntary prepayments of the Term Loans pursuant to Section  6.2.1 during such period, plus (iii) cash payments made in such period with respect to Capital Expenditures, plus (iv) all income taxes paid in cash by the Loan Parties
during such period, plus (v) cash Interest Expense of the Loan Parties during such period.

Excluded Taxes means taxes based upon, or measured by, the Lender’s or Administrative Agent’s (or a branch of the Lender’s or Administrative Agent’s) overall net income, overall net receipts, or overall net profits (including franchise taxes imposed in lieu of such taxes), but only to the extent such taxes are imposed by a taxing authority (a) in a jurisdiction in which such Lender or Administrative Agent is organized, (b) in a jurisdiction which the Lender’s or Administrative Agent’s principal office is located, or (c) in a jurisdiction in which such Lender’s or Administrative Agent’s lending office (or branch) in respect of which payments under this Agreement are made is located.

Federal Funds Rate means, for any day, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of

 

 

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recognized standing selected by the Administrative Agent. The Administrative Agent’s determination of such rate shall be binding and conclusive absent manifest error.

Fiscal Month means a fiscal month of a Fiscal Year, defined in accordance with past practice.

Fiscal Quarter means a fiscal quarter of a Fiscal Year, determined in accordance with past practice. 

Fiscal Year means the fiscal year of Holdings and its Subsidiaries, which period shall be the four (4) Fiscal Quarter period ending on the Saturday closest to December 31 of each year. References to a Fiscal Year with a number corresponding to any calendar year (e.g., “Fiscal Year 2003”) refer to the Fiscal Year ending on the Saturday closest to December 31 of such calendar year.

Fixed Charge Coverage Ratio means, for any Computation Period, the ratio of (a) the total for such period of EBITDA minus the sum of income taxes paid in cash by the Loan Parties and all unfinanced Capital Expenditures to (b) the sum for such period of (i) cash Interest Expense (Annualized for purposes of the March 31, 2008, June 30, 2008 and September 30, 2008 measurements of the Fixed Charge Coverage Ratio) plus (ii) required payments of principal of Funded Debt (including the Term Loans but excluding the Revolving Loans) (Annualized for purposes of the March 31, 2008, June 30, 2008 and September
30, 2008 measurements of the Fixed Chare Coverage Ratio) plus (iii) distributions made to the holders of Holdings’ Capital Securities, together with amounts paid to purchase or redeem any Capital Securities of Holdings. 

FRB means the Board of Governors of the Federal Reserve System or any successor thereto.

Funded Debt means, as to any Person, all Debt of such Person that matures more than one year from the date of its creation (or is renewable or extendible, at the option of such Person, to a date more than one year from such date).

GAAP means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession) and the Securities and Exchange Commission, which are applicable to the circumstances as of the date of determination.

Group - see Section 2.2.1.

Guaranty and Collateral Agreement means the Guaranty and Collateral Agreement dated as of the date hereof executed and delivered by the Loan Parties, together with any joinders thereto and any other guaranty and collateral agreement executed by a Loan Party, in each case in form and substance satisfactory to the Administrative Agent.

 

 

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Hazardous Substances means (a) any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, dielectric fluid containing levels of polychlorinated biphenyls, radon gas and mold; (b) any chemicals, materials, pollutant or substances defined as or included in the definition of “hazardous substances”, “hazardous waste”, “hazardous materials”, “extremely hazardous substances”, “restricted hazardous waste”, “toxic substances”, “toxic pollutants”, “contaminants”, “pollutants” or words of similar import, under any applicable Environmental Law; and (c) any other chemical, material or substance, the exposure to, or release of which is prohibited, limited
or regulated by any governmental authority or for which any duty or standard of care is imposed pursuant to, any Environmental Law.

HDS- see the Preamble.

Hedging Agreement means any interest rate, currency or commodity swap agreement, cap agreement or collar agreement, and any other agreement or arrangement designed to protect a Person against fluctuations in interest rates, currency exchange rates or commodity prices.

Hedging Obligation means, with respect to any Person, any liability of such Person under any Hedging Agreement.

Holdco Borrowers means Holdings and any additional Loan Party other than the Operating Borrowers.

Holdings - see the Preamble.

Indemnified Liabilities - see Section 15.17.

Interest Expense means for any period the consolidated interest expense of Holdings and its Subsidiaries for such period (including all imputed interest on Capital Leases).

Interest Period means, as to any LIBOR Loan, the period commencing on the date such Loan is borrowed or continued as, or converted into, a LIBOR Loan and ending on the date one, two, three or six months thereafter as selected by any Borrower pursuant to Section 2.2.2 or 2.2.3, as the case may be; provided that: 

(a) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the following Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the preceding Business Day;

(b) any Interest Period that begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest

 

 

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Period shall end on the last Business Day of the calendar month at the end of such Interest Period; 

(c) no Borrower may select any Interest Period for a Revolving Loan which would extend beyond the scheduled Termination Date; and

(d) no Borrower may select any Interest Period for a Term Loan if, after giving effect to such selection, the aggregate principal amount of all Term Loans having Interest Periods ending after any date on which an installment of the Term Loans is scheduled to be repaid would exceed the aggregate principal amount of the Term Loans scheduled to be outstanding after giving effect to such repayment.

Internal Control Event means a material weakness in, or fraud that involves management or other employees who have a role in, the Loan Parties’ internal controls over financial reporting, in each case, as described in the Securities Laws.

Inventory is defined in the Guaranty and Collateral Agreement.

Investment means, with respect to any Person, any investment in another Person, whether by acquisition of any debt or Capital Security, by making any loan or advance, by becoming obligated with respect to a Contingent Liability in respect of obligations of such other Person (other than travel and similar advances to employees in the ordinary course of business) or by making an Acquisition.

Issuing Lender means LaSalle, in its capacity as the issuer of Letters of Credit hereunder, or any Affiliate of LaSalle that may from time to time issue Letters of Credit, and their successors and assigns in such capacity.

LaSalle - see the Preamble.

L/C Application means, with respect to any request for the issuance of a Letter of Credit, a letter of credit application in the form being used by the Issuing Lender at the time of such request for the type of letter of credit requested.

L/C Fee Rate - see the definition of Applicable Margin.

Lender - see the Preamble. References to the “Lenders” shall include the Issuing Lender; for purposes of clarification only, to the extent that LaSalle (or any successor Issuing Lender) may have any rights or obligations in addition to those of the other Lenders due to its status as Issuing Lender, its status as such will be specifically referenced. In addition to the foregoing, for the purpose of identifying the Persons entitled to share in the Collateral and the proceeds thereof under, and in accordance with the provisions of, this Agreement and the Collateral Documents, the term “Lender” shall include Affiliates of a Lender providing a Bank Product.

Lender Party - see Section 15.17.

 

 

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Letter of Credit - see Section 2.1.3.

LIBOR Loan means any Loan which bears interest at a rate determined by reference to the LIBOR Rate.

LIBOR Margin - see the definition of Applicable Margin.

LIBOR Office means with respect to any Lender the office or offices of such Lender which shall be making or maintaining the LIBOR Loans of such Lender hereunder. A LIBOR Office of any Lender may be, at the option of such Lender, either a domestic or foreign office.

LIBOR Rate means a rate of interest equal to (a) the per annum rate of interest at which United States dollar deposits in an amount comparable to the amount of the relevant LIBOR Loan and for a period equal to the relevant Interest Period are offered in the London Interbank Eurodollar market at 11:00 A.M. (London time) two (2) Business Days prior to the commencement of such Interest Period (or three (3) Business Days prior to the commencement of such Interest Period if banks in London, England were not open and dealing in offshore United States dollars on such second preceding Business Day), as displayed in the Bloomberg Financial Markets system (or other authoritative source selected by the Administrative Agent in its sole discretion) or, if the
Bloomberg Financial Markets system or another authoritative source is not available, as the LIBOR Rate is otherwise determined by the Administrative Agent in its sole and absolute discretion, divided by (b) a number determined by subtracting from 1.00 the then stated maximum reserve percentage for determining reserves to be maintained by member banks of the Federal Reserve System for Eurocurrency funding or liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D), such rate to remain fixed for such Interest Period. The Administrative Agent’s determination of the LIBOR Rate shall be conclusive, absent manifest error.

Lien means, with respect to any Person, any interest granted by such Person in any real or personal property, asset or other right owned or being purchased or acquired by such Person (including an interest in respect of a Capital Lease) which secures payment or performance of any obligation and shall include any mortgage, lien, encumbrance, title retention lien, charge or other security interest of any kind, whether arising by contract, as a matter of law, by judicial process or otherwise.

Loan Documents means this Agreement, the Notes, the Letters of Credit, the Master Letter of Credit Agreement, the L/C Applications, the Agent Fee Letter, the Collateral Documents, the Subordination Agreements and all documents, instruments and agreements delivered in connection with the foregoing.

Loan Party means Holdings and each Subsidiary of Holdings, other than Clark UK.

 

 

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Loan or Loans means, as the context may require, Revolving Loans and/or Term Loans.

Lock Box- see Section 6.5(a).

Lock Box Account – see Section 6.5(a).

Margin Stock means any “margin stock” as defined in Regulation U.

Master Letter of Credit Agreement means, at any time, with respect to the issuance of Letters of Credit, a master letter of credit agreement or reimbursement agreement in the form, if any, being used by the Issuing Lender at such time, as the same may be amended, restated or otherwise modified from time to time.

Material Adverse Effect means (a) a material adverse change in, or a material adverse effect upon, the financial condition, operations, assets, business, properties or prospects of the Loan Parties taken as a whole, (b) a material impairment of the ability of any Loan Party to perform any of the Obligations under any Loan Document, or (c) a material adverse effect upon any substantial portion of the collateral under the Collateral Documents or upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document.

Mortgage means a mortgage, deed of trust, leasehold mortgage or similar instrument granting the Administrative Agent a Lien on real property of any Loan Party.

Multiemployer Pension Plan means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which any Borrower or any other member of the Controlled Group may have any liability.

Net Cash Proceeds means:

(a) with respect to any Asset Disposition, the aggregate cash proceeds (including cash proceeds received pursuant to policies of insurance or by way of deferred payment of principal pursuant to a note, installment receivable or otherwise, but only as and when received) received by any Loan Party pursuant to such Asset Disposition net of (i) the direct costs relating to such sale, transfer or other disposition (including sales commissions and legal, accounting and investment banking fees), (ii) taxes paid or reasonably estimated by the Borrowers to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements) and (iii) amounts required to be applied to the repayment of any Debt secured by a Lien on the asset subject to such Asset Disposition (other than the Loans);

(b) with respect to any issuance of Capital Securities, the aggregate cash proceeds received by any Loan Party pursuant to such issuance, net of the direct costs relating to such issuance (including sales and underwriters’ commissions); and

 

 

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(c) with respect to any issuance of Debt, the aggregate cash proceeds received by any Loan Party pursuant to such issuance, net of the direct costs of such issuance (including up-front, underwriters’ and placement fees).

Non-U.S. Participant - see Section 7.6(d).

Non-Use Fee Rate - see the definition of Applicable Margin.

Note means a promissory note substantially in the form of Exhibit A.

Notice of Borrowing - see Section 2.2.2.

Notice of Conversion/Continuation - see Section 2.2.3.

Obligations means all obligations (monetary (including post-petition interest, allowed or not) or otherwise) of any Loan Party under this Agreement and any other Loan Document including Attorney Costs and any reimbursement obligations of each Loan Party in respect of Letters of Credit and surety bonds, all Hedging Obligations permitted hereunder which are owed to any Lender or its Affiliate or Administrative Agent, and all Bank Products Obligations, all in each case howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due.

OFAC - see Section 10.4.

Operating Borrowers means, collectively, CDS, CWT, EEL, HDS, Clark Holdings and any Person acquired pursuant to a Permitted Acquisition that is engaged in business operations through the direct ownership of operating assets, as reasonably determined by Administrative Agent.

Operating Lease means any lease of (or other agreement conveying the right to use) any real or personal property by any Loan Party, as lessee, other than any Capital Lease.

Participant - see Section 15.6.2.

PBGC means The Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA.

PCAOB means the Public Company Accounting Oversight Board or any other governmental authority succeeding to any of the principal functions thereof.

Pension Plan means a “pension plan”, as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA or the minimum funding standards of ERISA (other than a Multiemployer Pension Plan), and as to which any Borrower or any member of the Controlled Group may have any liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.

 

 

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Permitted Acquisition – see Section 11.5.

Permitted Lien means a Lien expressly permitted hereunder pursuant to Section 11.2.

Person means any natural person, corporation, partnership, trust, limited liability company, association, governmental authority or unit, or any other entity, whether acting in an individual, fiduciary or other capacity.

Prime Rate means, for any day, the rate of interest in effect for such day as publicly announced from time to time by the Administrative Agent as its prime rate (whether or not such rate is actually charged by the Administrative Agent), which is not intended to be the Administrative Agent’s lowest or most favorable rate of interest at any one time. Any change in the Prime Rate announced by the Administrative Agent shall take effect at the opening of business on the day specified in the public announcement of such change; provided that the Administrative Agent shall not be obligated to give notice of any change in the Prime Rate.

Pro Forma Target EBITDA means, for any period, the aggregate amount of EBITDA attributable to each target of a Permitted Acquisition consummated during such period, but solely to the extent not reflected in EBITDA of Holdings and its Subsidiaries for such period, adjusted by identifiable and verifiable expense reductions and cost savings, if any, and other adjustments set forth in Article 11 of Regulation S-X under the Securities Act of 1933, as amended, in each case calculated by Borrowers and approved by Administrative Agent in its sole discretion.

Pro Rata Share means: 

(a) with respect to a Lender’s obligation to make Revolving Loans, participate in Letters of Credit, reimburse the Issuing Lender, and receive payments of principal, interest, fees, costs, and expenses with respect thereto, (x) prior to the Revolving Commitment being terminated or reduced to zero, the percentage obtained by dividing (i) such Lender’s Revolving Commitment, by (ii) the aggregate Revolving Commitment of all Lenders and (y) from and after the time the Revolving Commitment has been terminated or reduced to zero, the percentage obtained by dividing (i) the aggregate unpaid principal amount of such Lender’s Revolving Outstandings by (ii) the aggregate unpaid principal amount of all Revolving Outstandings;

(b) with respect to a Lender’s obligation to make a Term Loan and receive payments of interest, fees, and principal with respect thereto, (x) prior to the making of the Term Loans, the percentage obtained by dividing (i) such Lender’s Term Loan Commitment, by (ii) the aggregate amount of all Lenders’ Term Loan Commitments, and (y) from and after the making of the Term Loans, the percentage obtained by dividing (i) the principal amount of such Lender’s Term Loan by (ii) the principal amount of all Term Loans of all Lenders; and

 

 

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(c) with respect to all other matters as to a particular Lender, the percentage obtained by dividing (i) such Lender’s Revolving Commitment plus such Lender’s Term Loan Commitment (or, if the Term Loans have been funded, the outstanding principal amount of such Lender’s Term Loan) by (ii) the aggregate amount of Revolving Commitment of all Lenders plus the Term Loan Commitment of all Lenders (or, if the Term Loans have been funded, the outstanding aggregate principal amount of the Term Loans); provided that in the event the Commitments have been terminated or reduced to zero, Pro Rata Share shall be the
percentage obtained by dividing (A) the principal amount of such Lender’s Revolving Outstandings plus the unpaid principal amount of such Lender’s Term Loan by (B) the principal amount of all outstanding Revolving Outstandings plus the unpaid principal amount of all Term Loans of all Lenders.

Proxy Statement means the Definitive Proxy Statement dated January 28, 2008 filed by Holdings pursuant to Section 14(a) of the Securities Exchange Act of 1934 and relating to the special meeting in lieu of annual meeting of stockholders held on February 7, 2008.

Public Shares means the “Public Shares” as defined in the Proxy Statement.

Purchase Agreement means the Stock Purchase Agreement dated as of May 18, 2007 among Holdings, Clark Holdings and the shareholders of Clark Holdings, as amended or otherwise modified from time to time in a manner satisfactory to the Administrative Agent.

Register - see Section 15.7.

Regulation D means Regulation D of the FRB.

Regulation U means Regulation U of the FRB.

Related Agreements means (i) the Purchase Agreement, (ii) the Escrow Agreement dated as of the date hereof among Holdings, the shareholders of Clark Holdings, the Representative (as defined therein) and the Escrow Agent (as defined therein) and (iii) the Employment Agreements, in each case as amended or modified from time to time in accordance with the terms of this Agreement. 

Related Transactions means the transactions contemplated by the Related Agreements.

Replacement Lender - see Section 8.7(b).

Reportable Event means a reportable event as defined in Section 4043 of ERISA and the regulations issued thereunder as to which the PBGC has not waived the notification requirement of Section 4043(a), or the failure of a Pension Plan to meet the minimum funding standards of Section 412 of the Code (without regard to whether the

 

 

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Pension Plan is a plan described in Section 4021(a)(2) of ERISA) or under Section 302 of ERISA.

Required Lenders means (i) at any time that there are three or fewer Lenders, all such Lenders and (ii) at any other time, Lenders whose Pro Rata Shares exceed 662/3%.

Revolving Commitment means, as to any Lender as of any date of determination, the difference between (i) the amount specified for such Lender as the “Revolving Commitment Amount” on Annex A hereto minus (ii) such Lender’s Pro Rata Share of the Term Loan Exposure on such date of determination, subject to adjustment pursuant to any and all Assignment Agreements entered into by such Lender following the Closing Date, in each case as such amount may be reduced from time to time pursuant to Section 6.1. On the Closing Date, the aggregate Revolving Commitments of all Lenders is
$30,000,000 minus the Term Loan Exposure as of the Closing Date.

Revolving Loan - see Section 2.1.1.

Revolving Loan Availability means the lesser of (i) the aggregate Revolving Commitments of all Lenders and (ii) the Borrowing Base.

Revolving Outstandings means, at any time, the sum of (a) the aggregate principal amount of all outstanding Revolving Loans, plus (b) the Stated Amount of all Letters of Credit.

Sarbanes-Oxley means the Sarbanes-Oxley Act of 2002.

SEC means the Securities and Exchange Commission or any other governmental authority succeeding to any of the principal functions thereof.

Securities Laws means the Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley, and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the PCAOB.

Senior Debt means all Debt of Holdings and its Subsidiaries other than Subordinated Debt. 

Senior Debt to EBITDA Ratio means, as of the last day of any Computation Period, the ratio of (a) Senior Debt as of such day to (b) Adjusted EBITDA for the Computation Period ending on such day.

Senior Officer means, with respect to any Loan Party, any of the chief executive officer, the chief financial officer, the chief operating officer or the treasurer of such Loan Party.

Specified Systems CapEx means Capital Expenditures for a new accounting system contemplated to be acquired by the Loan Parties.

 

 

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Stated Amount means, with respect to any Letter of Credit at any date of determination, (a) the maximum aggregate amount available for drawing thereunder under any and all circumstances plus (b) the aggregate amount of all unreimbursed payments and disbursements under such Letter of Credit.

Stock Conversion means the conversion by holders of Capital Securities of Holdings of up to 2,199,283 Public Shares into the right to receive cash in the aggregate amount not to exceed $17,732,159 which conversion shall have been elected by such holders in accordance with and pursuant to the terms and conditions set forth in the Proxy Statement.

Stock Repurchase Transactions means the repurchases of Capital Securities by Holdings pursuant to and in accordance with the Stock Conversion.

Subordinated Debt means any unsecured Debt of any Loan Party which has subordination terms and other material terms reasonably acceptable to Administrative Agent.

Subordinated Debt Documents means all documents and instruments relating to the Subordinated Debt and all amendments and modifications thereof approved by the Administrative Agent.

Subordination Agreements means all subordination agreements executed by a holder of Subordinated Debt in favor of the Administrative Agent and the Lenders from time to time after the Closing Date in form and substance and on terms and conditions satisfactory to Administrative Agent.

Subsidiary means, with respect to any Person, a corporation, partnership, limited liability company or other entity of which such Person owns, directly or indirectly, such number of outstanding Capital Securities as have more than 50% of the ordinary voting power for the election of directors or other managers of such corporation, partnership, limited liability company or other entity. Unless the context otherwise requires, each reference to Subsidiaries herein shall be a reference to Subsidiaries of the Borrowers.

Taxes means any and all present and future taxes, duties, levies, imposts, deductions, assessments, charges or withholdings, and any and all liabilities (including interest and penalties and other additions to taxes) with respect to the foregoing, but excluding Excluded Taxes.

Term Loan Commitment means, as to any Lender, the amount specified for such Lender as the “Term Commitment Amount” on Annex A hereto, subject to adjustment pursuant to any and all Assignment Agreements entered into by such Lender following the Closing Date, in each case as such amount may be reduced from time to time pursuant to Section 6.2. On the Closing Date, the aggregate Term Loan Commitments of all Lenders is $20,000,000.

Term Loan Exposure means (i) prior to the funding of the Term Loan, the Term Loan Commitment and (ii) as of any date from and following the date of funding of the Term Loan, the outstanding principal amount of the Term Loan as of such date.

 

 

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Term Loans - see Section 2.1.2.

Term Loan Maturity Date means the earlier of (a) February ___, 2011 or (b) the Termination Date.

Termination Date means the earlier to occur of (a) February ___, 2011 or (b) such other date on which the Commitments terminate pursuant to Section 6 or Section 13.

Termination Event means, with respect to a Pension Plan that is subject to Title IV of ERISA, (a) a Reportable Event, (b) the withdrawal of any Borrower or any other member of the Controlled Group from such Pension Plan during a plan year in which any Borrower or any other member of the Controlled Group was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or was deemed such under Section 4068(f) of ERISA, (c) the termination of such Pension Plan, the filing of a notice of intent to terminate the Pension Plan or the treatment of an amendment of such Pension Plan as a termination under Section 4041 of ERISA, (d) the institution by the PBGC of proceedings to terminate such Pension Plan or (e) any event or condition that might constitute grounds under Section 4042 of ERISA for the termination
of, or appointment of a trustee to administer, such Pension Plan.

Total Debt means all Debt of Holdings and its Subsidiaries, determined on a consolidated basis, excluding (a) contingent obligations in respect of Contingent Liabilities (except (i) to the extent constituting Contingent Liabilities in respect of Debt of a Person other than any Loan Party and (ii) for the avoidance of doubt, contingent obligations in respect of undrawn letters of credit), and (b) Hedging Obligations.

Total Debt to EBITDA Ratio means, as of the last day of any Computation Period, the ratio of (a) Total Debt as of such day to (b) Adjusted EBITDA for the Computation Period ending on such day.

Total Plan Liability means, at any time, the present value of all vested and unvested accrued benefits under all Pension Plans, determined as of the then most recent valuation date for each Pension Plan, using PBGC actuarial assumptions for single employer plan terminations.

type - see Section 2.2.1.

UCC is defined in the Guaranty and Collateral Agreement.

Unfunded Liability means the amount (if any) by which the present value of all vested and unvested accrued benefits under all Pension Plans exceeds the fair market value of all assets allocable to those benefits, all determined as of the then most recent valuation date for each Pension Plan, using PBGC actuarial assumptions for single employer plan terminations.

Unmatured Event of Default means any event that, if it continues uncured, will, with lapse of time or notice or both, constitute an Event of Default.

 

 

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Withholding Certificate - see Section 7.6(d).

Wholly-Owned Subsidiary means, as to any Person, a Subsidiary all of the Capital Securities of which (except directors’ qualifying Capital Securities) are at the time directly or indirectly owned by such Person and/or another Wholly-Owned Subsidiary of such Person.

1.2. Other Interpretive Provisions. 

(a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

(b) Section, Annex, Schedule and Exhibit references are to this Agreement unless otherwise specified.

(c) The term “including” is not limiting and means “including without limitation.”

(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.”

(e) Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement and the other Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, supplements and other modifications thereto, but only to the extent such amendments, restatements, supplements and other modifications are not prohibited by the terms of any Loan Document, and (ii) references to any statute or regulation shall be construed as including all statutory and regulatory provisions amending, replacing, supplementing or interpreting such statute or regulation.

(f) This Agreement and the other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and each shall be performed in accordance with its terms.

(g) This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to the Administrative Agent, the Borrowers, the Lenders and the other parties thereto and are the products of all parties. Accordingly, they shall not be construed against the Administrative Agent or the Lenders merely because of the Administrative Agent’s or Lenders’ involvement in their preparation.

 

 

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      SECTION 2.
 	
      COMMITMENTS OF THE LENDERS; BORROWING, CONVERSION AND LETTER OF CREDIT PROCEDURES.
 

2.1. Commitments. 

On and subject to the terms and conditions of this Agreement, each of the Lenders, severally and for itself alone, agrees to make loans to, and to issue or participate in letters of credit for the account of, the Borrowers as follows:

2.1.1. Revolving Commitment. Each Lender with a Revolving Commitment agrees to make loans on a revolving basis (“Revolving Loans”) from time to time until the Termination Date in such Lender’s Pro Rata Share of such aggregate amounts as any Borrower may request from all Lenders; provided that (i) the Revolving Outstandings will not at any time exceed Revolving Loan Availability and (ii) the Holdco Borrowers shall have no right, following the Closing Date, to request any Revolving Loans, and no Lender shall have any obligation following the Closing Date to make any Revolving Loans to or for the
account of any Holdco Borrower, unless the proceeds thereof are directly used by such Holdco Borrower to finance the consummation of a Permitted Acquisition.

2.1.2. Term Loan Commitment. Each Lender with a Term Loan Commitment agrees to make a loan to the Borrowers (each such loan, a “Term Loan”) on the Closing Date or, subject to the immediately succeeding sentence, on any date thereafter in the aggregate amount not to exceed such Lender’s Pro Rata Share of the Term Loan Commitment. The Commitments of the Lenders to make Term Loans shall expire on the earlier of (i) the date on which all Term Loans have been made and (ii) the date that is 60 days following the Closing Date.

2.1.3. L/C Commitment. Subject to Section 2.3.1, the Issuing Lender agrees to issue letters of credit, in each case containing such terms and conditions as are permitted by this Agreement and are reasonably satisfactory to the Issuing Lender (each, a “Letter of Credit”), at the request of and for the account of any Operating Borrower from time to time before the scheduled Termination Date and, as more fully set forth in Section 2.3.2, each Lender agrees to purchase a participation in each such Letter of Credit; provided that (a) the aggregate Stated Amount of all Letters of Credit shall not at any time exceed $3,000,000 and (b) the Revolving Outstandings shall not at any time exceed Revolving Loan Availability.

2.2. Loan Procedures. 

2.2.1. Various Types of Loans. Each Loan shall be divided into tranches which are either a Base Rate Loan or a LIBOR Loan (each a “type” of Loan), as any Borrower shall specify in the related notice of borrowing or conversion pursuant to Section 2.2.2 or 2.2.3. LIBOR Loans having the same Interest Period which expire on the same day are sometimes called a “Group” or collectively “Groups”. Base Rate Loans and LIBOR Loans may be outstanding at the same time, provided that not more than five (5) different Groups of LIBOR Loans shall be outstanding at any one time. All borrowings,

 

 

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conversions and repayments of Loans shall be effected so that each Lender will have a ratable share (according to its Pro Rata Share) of all types and Groups of Loans. 

2.2.2. Borrowing Procedures. Any Borrower shall give written notice (each such written notice, a “Notice of Borrowing”) substantially in the form of Exhibit E or telephonic notice (followed immediately by a Notice of Borrowing) to the Administrative Agent of each proposed borrowing not later than (a) in the case of a Base Rate borrowing, 11:00 A.M., Chicago time, on the proposed date of such borrowing, and (b) in the case of a LIBOR borrowing, 11:00 A.M., Chicago time, at least three Business Days prior to the proposed date of such borrowing. Each such notice shall be effective upon receipt
by the Administrative Agent, shall be irrevocable, and shall specify the date, amount and type of borrowing and, in the case of a LIBOR borrowing, the initial Interest Period therefor. Promptly upon receipt of such notice, the Administrative Agent shall advise each Lender thereof. Not later than 1:00 P.M., Chicago time, on the date of a proposed borrowing, each Lender shall provide the Administrative Agent at the office specified by the Administrative Agent with immediately available funds covering such Lender’s Pro Rata Share of such borrowing and, so long as the Administrative Agent has not received written notice that the conditions precedent set forth in Section 12 with respect to such borrowing have not been satisfied, the Administrative Agent shall pay over the funds received by the Administrative Agent to the applicable Borrower on the requested borrowing date. Unless the Administrative
Agent shall have received notice from a Lender prior to the proposed date of any borrowing that such Lender will not make available to the Administrative Agent its respective share of such borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with this Section and may, in reliance upon such assumption, make available to the respective Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable borrowing available to the Administrative Agent, then the applicable Lender and the Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrowers to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrowers, the interest rate applicable to Base Rate Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such borrowing. Each borrowing shall be on a Business Day. Each LIBOR borrowing shall be in an aggregate amount of at least $500,000 and an integral multiple of at least $25,000.

2.2.3. Conversion and Continuation Procedures. 

(a) Subject to Section 2.2.1, any Borrower may, upon irrevocable written notice to the Administrative Agent in accordance with clause (b) below:

(A) elect, as of any Business Day, to convert any Loans (or any part thereof in an aggregate amount not less than $500,000 or a higher integral multiple of $25,000) into Loans of the other type; or

 

 

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(B) elect, as of the last day of the applicable Interest Period, to continue any LIBOR Loans having Interest Periods expiring on such day (or any part thereof in an aggregate amount not less than $500,000 or a higher integral multiple of $25,000) for a new Interest Period;

provided that after giving effect to any prepayment, conversion or continuation, the aggregate principal amount of each Group of LIBOR Loans shall be at least $500,000 and an integral multiple of $25,000.

(b) Any Borrower shall give written notice (each such written notice, a “Notice of Conversion/Continuation”) substantially in the form of Exhibit F or telephonic notice (followed immediately by a Notice of Conversion/Continuation) to the Administrative Agent of each proposed conversion or continuation not later than (i) in the case of conversion into Base Rate Loans, 11:00 A.M., Chicago time, on the proposed date of such conversion and (ii) in the case of conversion into or continuation of LIBOR Loans, 11:00 A.M., Chicago time, at least three (3) Business Days prior to the proposed date of such conversion or continuation, specifying in each case:

(A) the proposed date of conversion or continuation;

(B) the aggregate amount of Loans to be converted or continued;

(C) the type of Loans resulting from the proposed conversion or continuation; and

(D) in the case of conversion into, or continuation of, LIBOR Loans, the duration of the requested Interest Period therefor.

(c) If upon the expiration of any Interest Period applicable to LIBOR Loans, the Borrowers have failed to select timely a new Interest Period to be applicable to such LIBOR Loans, the Borrowers shall be deemed to have elected to convert such LIBOR Loans into Base Rate Loans effective on the last day of such Interest Period.

(d) The Administrative Agent will promptly notify each Lender of its receipt of a notice of conversion or continuation pursuant to this Section 2.2.3 or, if no timely notice is provided by the Borrowers, of the details of any automatic conversion.

(e) Any conversion of a LIBOR Loan on a day other than the last day of an Interest Period therefor shall be subject to Section 8.4.

2.3. Letter of Credit Procedures. 

2.3.1. L/C Applications. The Operating Borrowers shall execute and deliver to the Issuing Lender the Master Letter of Credit Agreement from time to time in effect. The Operating Borrowers shall give notice to the Administrative Agent and the Issuing Lender of the proposed issuance of each Letter of Credit on a Business Day which is

 

 

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at least three (3) Business Days (or such lesser number of days as the Administrative Agent and the Issuing Lender shall agree in any particular instance in their sole discretion) prior to the proposed date of issuance of such Letter of Credit. Each such notice shall be accompanied by an L/C Application, duly executed by the applicable Operating Borrower and in all respects satisfactory to the Administrative Agent and the Issuing Lender, together with such other documentation as the Administrative Agent or the Issuing Lender may request in support thereof, it being understood that each L/C Application shall specify, among other things, the date on which the proposed Letter of Credit is to be issued, the expiration date of such Letter of Credit (which shall not be later than the scheduled Termination Date (unless such Letter of Credit is Cash Collateralized)) and whether such Letter of Credit is
to be transferable in whole or in part. Any Letter of Credit outstanding after the scheduled Termination Date which is Cash Collateralized for the benefit of the Issuing Lender shall be the sole responsibility of the Issuing Lender. So long as the Issuing Lender has not received written notice that the conditions precedent set forth in Section 12 with respect to the issuance of such Letter of Credit have not been satisfied, the Issuing Lender shall issue such Letter of Credit on the requested issuance date. The Issuing Lender shall promptly advise the Administrative Agent of the issuance of each Letter of Credit and of any amendment thereto, extension thereof or event or circumstance changing the amount available for drawing thereunder. In the event of any inconsistency between the terms of the Master Letter of Credit Agreement, any L/C Application and the terms of this Agreement, the terms of this
Agreement shall control.

2.3.2. Participations in Letters of Credit. Concurrently with the issuance of each Letter of Credit, the Issuing Lender shall be deemed to have sold and transferred to each Lender with a Revolving Commitment, and each such Lender shall be deemed irrevocably and unconditionally to have purchased and received from the Issuing Lender, without recourse or warranty, an undivided interest and participation, to the extent of such Lender’s Pro Rata Share, in such Letter of Credit and the Borrowers’ reimbursement obligations with respect thereto. If the Borrowers do not pay any reimbursement obligation when due, the Borrowers shall be deemed to have immediately requested that the Lenders make a Revolving Loan which is a Base Rate Loan in a principal amount equal to such reimbursement obligations.
The Administrative Agent shall promptly notify such Lenders of such deemed request and, without the necessity of compliance with the requirements of Section 2.2.2, Section 12.2 or otherwise such Lender shall make available to the Administrative Agent its Pro Rata Share of such Loan. The proceeds of such Loan shall be paid over by the Administrative Agent to the Issuing Lender for the account of the Borrowers in satisfaction of such reimbursement obligations. For the purposes of this Agreement, the unparticipated portion of each Letter of Credit shall be deemed to be the Issuing Lender’s “participation” therein. The Issuing Lender hereby agrees, upon request of the Administrative Agent or any Lender, to deliver to the Administrative Agent or such Lender a list of all outstanding Letters of Credit issued by
the Issuing Lender, together with such information related thereto as the Administrative Agent or such Lender may reasonably request.

 

 

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2.3.3. Reimbursement Obligations.

(a) Each Borrower hereby unconditionally and irrevocably agrees to reimburse the Issuing Lender for each payment or disbursement made by the Issuing Lender under any Letter of Credit honoring any demand for payment made by the beneficiary thereunder, in each case on the date that such payment or disbursement is made. Any amount not reimbursed on the date of such payment or disbursement shall bear interest from the date of such payment or disbursement to the date that the Issuing Lender is reimbursed by the Borrowers therefor, payable on demand, at a rate per annum equal to the Base Rate from time to time in effect plus the Base Rate Margin from time to time in effect plus, beginning on the third Business Day after receipt
of notice from the Issuing Lender of such payment or disbursement, 2%. The Issuing Lender shall notify the Borrowers and the Administrative Agent whenever any demand for payment is made under any Letter of Credit by the beneficiary thereunder; provided that the failure of the Issuing Lender to so notify the Borrowers or the Administrative Agent shall not affect the rights of the Issuing Lender or the Lenders in any manner whatsoever.

(b) The Borrowers’ reimbursement obligations hereunder shall be irrevocable and unconditional under all circumstances, including (a) any lack of validity or enforceability of any Letter of Credit, this Agreement or any other Loan Document, (b) the existence of any claim, set-off, defense or other right which any Loan Party may have at any time against a beneficiary named in a Letter of Credit, any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), the Administrative Agent, the Issuing Lender, any Lender or any other Person, whether in connection with any Letter of Credit, this Agreement, any other Loan Document, the transactions contemplated herein or any unrelated transactions (including any underlying transaction between any Loan Party and the beneficiary named in any Letter of Credit), (c) the validity, sufficiency or
genuineness of any document which the Issuing Lender has determined complies on its face with the terms of the applicable Letter of Credit, even if such document should later prove to have been forged, fraudulent, invalid or insufficient in any respect or any statement therein shall have been untrue or inaccurate in any respect, or (d) the surrender or impairment of any security for the performance or observance of any of the terms hereof. Without limiting the foregoing, no action or omission whatsoever by the Administrative Agent or any Lender (excluding any Lender in its capacity as the Issuing Lender) under or in connection with any Letter of Credit or any related matters shall result in any liability of the Administrative Agent or any Lender to any Borrower, or relieve any Borrower of any of its obligations hereunder to any such Person.

2.3.4. Funding by Lenders to Issuing Lender. If the Issuing Lender makes any payment or disbursement under any Letter of Credit and (a) the Borrowers have not reimbursed the Issuing Lender in full for such payment or disbursement by 11:00 A.M., Chicago time, on the date of such payment or disbursement, (b) a Revolving Loan may not be made in accordance with Section 2.3.2 or (c) any reimbursement received by the Issuing Lender from the Borrowers is or must be returned or rescinded upon or during any bankruptcy or reorganization of any Borrower or otherwise, each other Lender with a Revolving Commitment shall be obligated to pay to the Administrative Agent for the account 

 

 

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of the Issuing Lender, in full or partial payment of the purchase price of its participation in such Letter of Credit, its Pro Rata Share of such payment or disbursement (but no such payment shall diminish the obligations of the Borrowers under Section 2.3.3), and, upon notice from the Issuing Lender, the Administrative Agent shall promptly notify each other Lender thereof. Each other Lender irrevocably and unconditionally agrees to so pay to the Administrative Agent in immediately available funds for the Issuing Lender’s account the amount of such other Lender’s Pro Rata Share of such payment or disbursement. If and to the extent any Lender shall not have made such amount available to the Administrative Agent by 2:00 P.M., Chicago time, on the Business Day on which such Lender receives notice from the
Administrative Agent of such payment or disbursement (it being understood that any such notice received after noon, Chicago time, on any Business Day shall be deemed to have been received on the next following Business Day), such Lender agrees to pay interest on such amount to the Administrative Agent for the Issuing Lender’s account forthwith on demand, for each day from the date such amount was to have been delivered to the Administrative Agent to the date such amount is paid, at a rate per annum equal to (a) for the first three days after demand, the Federal Funds Rate from time to time in effect and (b) thereafter, the Base Rate from time to time in effect. Any Lender’s failure to make available to the Administrative Agent its Pro Rata Share of any such payment or disbursement shall not relieve any other Lender of its obligation hereunder to make available to the Administrative Agent such other Lender’s Pro Rata Share of such payment, but no Lender shall be
responsible for the failure of any other Lender to make available to the Administrative Agent such other Lender’s Pro Rata Share of any such payment or disbursement.

2.4. Commitments Several.

The failure of any Lender to make a requested Loan on any date shall not relieve any other Lender of its obligation (if any) to make a Loan on such date, but no Lender shall be responsible for the failure of any other Lender to make any Loan to be made by such other Lender.

2.5. Certain Conditions. 

Except as otherwise provided in Section 2.3.2 and Section 2.3.4 of this Agreement, no Lender shall have an obligation to make any Loan, or to permit the continuation of or any conversion into any LIBOR Loan, and the Issuing Lender shall not have any obligation to issue any Letter of Credit, if an Event of Default or Unmatured Event of Default exists.

2.6. Joint and Several Liability.

(a) Each Borrower acknowledges that it is jointly and severally liable for all of the Obligations, and as a result hereby unconditionally guaranties the full and prompt payment when due, whether at maturity or earlier, by reason of acceleration or otherwise, and at all times thereafter, of all Obligations of the other Borrowers to Administrative Agent and Lenders, howsoever created, arising or evidenced, whether direct 

 

 

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or indirect, absolute or contingent, joint or several, now or hereafter existing, or due or to become due, and howsoever owned, held or acquired by Lenders. Each Borrower agrees that if this guaranty, or any Liens securing this guaranty, would, but for the application of this sentence, be unenforceable under applicable law, this guaranty and each such Lien shall be valid and enforceable to the maximum extent that would not cause this guaranty or such Lien to be unenforceable under applicable law, and this guaranty and such Lien shall automatically be deemed to have been amended accordingly at all relevant times.

(b) Each Borrower hereby agrees that its obligations under this guaranty shall be unconditional, irrespective of (a) the validity or enforceability of the Obligations or any part thereof, or of any promissory note or other document evidencing all or any part of the Obligations, (b) the absence of any attempt to collect the Obligations from a Borrower or any other guarantor or other action to enforce the same, (c) the waiver or consent by Administrative Agent or Lenders with respect to any provision of any agreement, instrument or document evidencing or securing all or any part of the Obligations, or any other agreement, instrument or document now or hereafter executed by a Borrower and delivered to Administrative Agent or Lenders, (d) the failure by Administrative Agent or Lenders to take any steps to perfect and maintain its security interest in, or to preserve its rights to,
any security or collateral for the Obligations, for its benefit, (e) Administrative Agent’s or Lenders’ election, in any proceeding instituted under the United States Bankruptcy Code, of the application of Section 1111(b)(2) of the United States Bankruptcy Code, (f) any borrowing or grant of a security interest by a  Borrower as debtor-in-possession, under Section 364 of the United States Bankruptcy Code, (g) the disallowance, under Section 502 of the United States Bankruptcy Code, of all or any portion of Administrative Agent’s or Lenders’ claim(s) for repayment of the Obligations, or (h) any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Borrower or a guarantor.

(c) Each Borrower hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of receivership or bankruptcy of a Borrower, protest or notice with respect to the Obligations and all demands whatsoever, and covenants that this guaranty will not be discharged, except by complete and irrevocable payment and performance of the Obligations. No notice to a Borrower or any other party shall be required for Administrative Agent or Lenders to make demand hereunder, except as otherwise expressly provided for herein. Such demand shall constitute a mature and liquidated claim against a Borrower. Upon the occurrence of any Event of Default, Administrative Agent may, in its sole election, proceed directly and at once, without notice, against any Borrower to collect and recover the full amount or any portion of the Obligations, without first proceeding
against any other Borrower, any other person, firm, corporation, or any security or collateral for the Obligations. Administrative Agent shall have the exclusive right to determine the application of payments and credits, if any from any Borrower, any other person, firm or corporation, or any security or collateral for the Obligations, on account of the Obligations or of any other liability of a Borrower to Administrative Agent or Lenders.

 

 

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(d) At any time after and during the continuance of an Event of Default, Administrative Agent and any Lender may, in its sole discretion, without notice to a Borrower and regardless of the acceptance of any collateral for the payment hereof, appropriate and apply toward payment of the Obligations (i) any indebtedness due or to become due from Administrative Agent or any Lender to such Borrower and (ii) any moneys, credits or other property belonging to such Borrower at any time held by or coming into the possession of Administrative Agent, any Lender or any affiliates thereof, whether for deposit or otherwise.

(e) Nothing contained in this Section 2.6 shall be deemed to amend or otherwise modify the obligations of the Borrowers set forth in the Guaranty and Collateral Agreement.

SECTION 3. EVIDENCING OF LOANS.

3.1. Notes. 

The Loans of each Lender shall be evidenced by a Note, with appropriate insertions, payable to the order of such Lender in a face principal amount equal to such Lender’s Revolving Commitment plus the principal amount of such Lender’s Term Loan Commitment.

3.2. Recordkeeping. 

The Administrative Agent, on behalf of each Lender, shall record in its records, the date and amount of each Loan made by each Lender, each repayment or conversion thereof and, in the case of each LIBOR Loan, the dates on which each Interest Period for such Loan shall begin and end. The aggregate unpaid principal amount so recorded shall be rebuttably presumptive evidence of the principal amount of the Loans owing and unpaid. The failure to so record any such amount or any error in so recording any such amount shall not, however, limit or otherwise affect the Obligations of the Borrowers hereunder or under any Note to repay the principal amount of the Loans hereunder, together with all interest accruing thereon.

SECTION 4. INTEREST.

4.1. Interest Rates. 

The Borrowers promise to pay interest on the unpaid principal amount of each Loan for the period commencing on the date of such Loan until such Loan is paid in full as follows:

(a) at all times while such Loan is a Base Rate Loan, at a rate per annum equal to the sum of the Base Rate from time to time in effect plus the Base Rate Margin from time to time in effect; and

 

 

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(b) at all times while such Loan is a LIBOR Loan, at a rate per annum equal to the sum of the LIBOR Rate applicable to each Interest Period for such Loan plus the LIBOR Margin from time to time in effect;

provided that at any time an Event of Default exists, unless the Required Lenders otherwise consent, the interest rate applicable to each Loan shall be increased by 6.00% (and, in the case of Obligations not bearing interest (such as fees and expenses), such Obligations shall bear interest at the Base Rate applicable to Revolving Loans plus 6.00%), provided further that such increase may thereafter be rescinded by the Required Lenders, notwithstanding Section 15.1. Notwithstanding the foregoing, upon the occurrence of an Event of Default under Sections 13.1.1 or 13.1.4, such increase shall occur automatically.

4.2. Interest Payment Dates. 

Accrued interest on each Base Rate Loan shall be payable in arrears on the last day of each calendar quarter and at maturity. Accrued interest on each LIBOR Loan shall be payable on the last day of each Interest Period relating to such Loan (and, in the case of a LIBOR Loan with an Interest Period in excess of three months, on the three-month anniversary of the first day of such Interest Period), upon a prepayment of such Loan, and at maturity. After maturity, and at any time an Event of Default exists, accrued interest on all Loans shall be payable on demand.

4.3. Setting and Notice of LIBOR Rates. 

The applicable LIBOR Rate for each Interest Period shall be determined by the Administrative Agent, and notice thereof shall be given by the Administrative Agent promptly to the Borrowers and each Lender. Each determination of the applicable LIBOR Rate by the Administrative Agent shall be conclusive and binding upon the parties hereto, in the absence of demonstrable error. The Administrative Agent shall, upon written request of the Borrowers or any Lender, deliver to the Borrowers or such Lender a statement showing the computations used by the Administrative Agent in determining any applicable LIBOR Rate hereunder.

4.4. Computation of Interest. 

Interest shall be computed for the actual number of days elapsed on the basis of a year of 360 days, provided that interest on Base Rate Loans shall be computed for the actual number of days elapsed on the basis of a year of 365/366 days. The applicable interest rate for each Base Rate Loan shall change simultaneously with each change in the Base Rate.

SECTION 5. FEES.

5.1. Non-Use Fee. 

The Borrowers agree to pay to the Administrative Agent for the account of each Lender a non-use fee, for the period from the Closing Date to the Termination Date, at the Non-Use Fee Rate in effect from time to time of such Lender’s Pro Rata Share (as

 

 

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adjusted from time to time) of the unused amount of the aggregate Commitments of all Lenders. For purposes of calculating usage under this Section, (i) the aggregate Revolving Commitments of all Lenders shall be deemed used to the extent of Revolving Outstandings and (ii) the aggregate Term Loan Commitments of all Lenders shall be deemed used to the extent of the funded Term Loans. Such non-use fee shall be payable in arrears on the last day of each calendar quarter and on the Termination Date for any period then ending for which such non-use fee shall not have previously been paid. The non-use fee shall be computed for the actual number of days elapsed on the basis of a year of 360 days. 

5.2. Letter of Credit Fees. 

(a) The Borrowers agree to pay to the Administrative Agent for the account of each Lender a letter of credit fee for each Letter of Credit equal to the L/C Fee Rate in effect from time to time of such Lender’s Pro Rata Share (as adjusted from time to time) of the undrawn amount of such Letter of Credit (computed for the actual number of days elapsed on the basis of a year of 360 days); provided that, unless the Required Lenders otherwise consent, the rate applicable to each Letter of Credit shall be increased by 6.00% at any time that an Event of Default exists. Such letter of credit fee shall be payable in arrears on the last day of each calendar quarter and on the Termination Date (or such later date on which such
Letter of Credit expires or is terminated) for the period from the date of the issuance of each Letter of Credit (or the last day on which the letter of credit fee was paid with respect thereto) to the date such payment is due or, if earlier, the date on which such Letter of Credit expired or was terminated. 

(b) In addition, with respect to each Letter of Credit, the Borrowers agree to pay to the Issuing Lender, for its own account, (i) such fees and expenses as the Issuing Lender customarily requires in connection with the issuance, negotiation, processing and/or administration of letters of credit in similar situations and (ii) a letter of credit fronting fee in the amount and at the times agreed to by the Borrowers and the Issuing Lender.

5.3. Administrative Agent’s Fees. 

The Borrowers agree to pay to the Administrative Agent such agent’s fees as are mutually agreed to from time to time by the Borrowers and the Administrative Agent including the fees set forth in the Agent Fee Letter.

SECTION 6. REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT; PREPAYMENTS; COLLECTIONS.

6.1. Reduction or Termination of the Revolving Commitment. 

6.1.1. Voluntary Reduction or Termination of the Revolving Commitment. The Borrowers may from time to time on at least five (5) Business Days’ prior written notice received by the Administrative Agent (which shall promptly advise each Lender thereof) permanently reduce the aggregate Revolving Commitments of all Lenders to an amount not less than the Revolving Outstandings. Any such reduction shall be in an 

 

 

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amount not less than $250,000 or a higher integral multiple of $25,000. Concurrently with any reduction of the aggregate Revolving Commitments of all Lenders to zero, the Borrowers shall pay all interest on the Revolving Loans, all non-use fees, and all letter of credit fees, and shall Cash Collateralize in full all obligations arising with respect to the Letters of Credit.

6.1.2. [Reserved]

6.1.3. All Reductions of the Revolving Commitment. All reductions of the aggregate Revolving Commitments of all Lenders shall reduce the Revolving Commitments ratably among the Lenders according to their respective Pro Rata Shares.

6.2. Prepayments. 

6.2.1. Voluntary Prepayments. The Borrowers may from time to time prepay the Loans in whole or in part; provided that the Borrowers shall give the Administrative Agent (which shall promptly advise each Lender) notice thereof not later than 11:00 A.M., Chicago time, on the day of such prepayment (which shall be a Business Day), specifying the Loans to be prepaid and the date and amount of prepayment. Any such partial prepayment shall be in an amount equal to $25,000 or a higher integral multiple of $25,000.

6.2.2. Mandatory Prepayments.

(a) The Borrowers shall make a prepayment of the Term Loans until paid in full upon the occurrence of any of the following at the following times and in the following amounts:

(i) Concurrently with the receipt by any Loan Party of any Net Cash Proceeds from any Asset Disposition, in an amount equal to 100% of such Net Cash Proceeds; provided, that such Loan Party may reinvest the amount of such Net Cash Proceeds within 180 days in assets to be employed in the business of such Loan Party; provided, further, that, if such Loan Party does not intend to so reinvest such Net Cash Proceeds or if such 180-day period expires without such Loan Party having reinvested such Net Cash Proceeds, Borrowers shall prepay the Term Loans in an amount equal to such Net Cash Proceeds (to the extent not reinvested).

(ii) Concurrently with the receipt by any Loan Party of any Net Cash Proceeds from any issuance of Capital Securities of any Loan Party (excluding (x) any issuance of Capital Securities pursuant to any employee or director option program, benefit plan or compensation program and (y) any issuance by a Subsidiary to Holdings or any other Loan Party), in an amount equal to 100% of such Net Cash Proceeds; provided, that such mandatory prepayment in respect of any such issuance shall be deemed waived by the Lenders if the Total Debt to EBITDA Ratio as of the last day of the most recently ended month prior to such issuance for which financial statements have been delivered to the Administrative Agent in accordance with Section 10.1.2(b) does not exceed 2.0 to 1.0.

 

 

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(iii) Concurrently with the receipt by any Loan Party of any Net Cash Proceeds from any issuance of any Debt of any Loan Party (excluding Debt permitted by clauses (a) through (j) of Section 11.1), in an amount equal to 100% of such Net Cash Proceeds.

(iv) Within 90 days after the end of each Fiscal Year (commencing with Fiscal Year 2008), in an amount equal to 50% of Excess Cash Flow for such Fiscal Year; provided, that such mandatory prepayment in respect of Excess Cash Flow for any Fiscal Year shall be deemed waived by the Lenders if the Total Debt to EBITDA Ratio as of the last day of such Fiscal Year does not exceed 2.0 to 1.0.

(b) If on any day the Revolving Outstandings exceeds the Borrowing Base, the Borrowers shall immediately prepay Revolving Loans or Cash Collateralize the outstanding Letters of Credit, or do a combination of the foregoing, in an amount sufficient to eliminate such excess.

6.3. Manner of Prepayments.

Any partial prepayment of a Group of LIBOR Loans shall be subject to the proviso to Section 2.2.3(a). Any prepayment of a LIBOR Loan on a day other than the last day of an Interest Period therefor shall include interest on the principal amount being repaid and shall be subject to Section 8.4. All prepayments of Term Loans shall be applied in the inverse order of maturity to the remaining installments thereof. Except as otherwise provided by this Agreement, all principal payments in respect of the Loans shall be applied first, to repay outstanding Base Rate Loans and then to repay outstanding LIBOR Rate Loans in direct order of Interest Period maturities.

6.4. Repayments.

6.4.1. Revolving Loans. The Revolving Loans of each Lender shall be paid in full and the Revolving Commitment of each Lender shall terminate on the Termination Date.

6.4.2. Term Loans. The Term Loans shall be paid in installments due on the last day of each Fiscal Quarter, commencing with the first full Fiscal Quarter following the funding date of the Term Loans, each equal to the quotient of (i) the original principal amount of the Term Loans divided by (ii) twenty (20); provided, that unless sooner paid in full, the outstanding principal balance of the Term Loans shall be paid in full on the Term Loan Maturity Date. Each Lender shall receive a portion of each installment paid pursuant to the preceding sentence in accordance with such Lender’s Pro Rata Share.

 

 

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6.5. Collections. 

Commencing no later than sixty (60) days following the date hereof, in order to facilitate the Administrative Agent’s and the Lenders’ maintenance and monitoring of their security interests in the Collateral, the Borrowers shall maintain all their deposit accounts with the Administrative Agent or an Affiliate of the Administrative Agent approved in writing by Administrative Agent. Commencing no later than September 30, 2008, the Borrowers shall direct all of their Account Debtors to make all payments on the Accounts directly to a post office box (the “Lock Box”) designated by, and under the exclusive control of, the Administrative Agent. Unless the Administrative Agent otherwise consents in writing, in order to facilitate the Administrative Agent’s and the Lenders’
maintenance and monitoring of their security interests in the Collateral, the Lock Box shall be maintained with the Administrative Agent or an Affiliate of the Administrative Agent approved in writing by the Administrative Agent. Commencing no later than September 30, 2008, the Borrowers shall establish an account (the “Lock Box Account”) in the Administrative Agent’s name with the Administrative Agent or an approved Affiliate, into which all payments received in the Lock Box shall be deposited, and into which, commencing no later than September 30, 2008, the Borrowers will immediately deposit all payments received by the Borrowers on Accounts in the identical form in which such payments were received, whether by cash or check. If, following the establishment of the Lock Box Account, any Borrower, any Affiliate or Subsidiary, any shareholder, officer, director, employee or agent of any
Borrower or any Affiliate or Subsidiary, or any other Person acting for or in concert with the Borrowers shall receive any monies, checks, notes, drafts or other payments relating to or as proceeds of Accounts or other Collateral, the Borrowers and each such Person shall receive all such items in trust for, and as the sole and exclusive property of, the Administrative Agent and, immediately upon receipt thereof, shall remit the same (or cause the same to be remitted) in kind to the Lock Box Account. The Borrowers agree that all payments made to such Lock Box Account or otherwise received by the Administrative Agent, whether in respect of the Accounts or as proceeds of other Collateral or otherwise, will be applied on account of the Obligations in accordance with the terms of this Agreement. The Borrowers agree to pay all fees, costs and expenses in connection with opening and maintaining the Lock Box and Lock Box Account. All of such fees, costs and expenses, if not paid by the
Borrowers, may be paid by the Administrative Agent, and in such event all amounts paid by the Administrative Agent shall constitute Obligations hereunder, shall be payable to the Administrative Agent by the Borrowers upon demand, and, until paid, shall bear interest at the highest rate then applicable to Loans hereunder. Following the establishment of the Lock Box Account, all checks, drafts, instruments and other items of payment or proceeds of Collateral shall be endorsed by the Borrowers to the Administrative Agent, and, if that endorsement of any such item shall not be made for any reason, the Administrative Agent is hereby irrevocably authorized to endorse the same on Borrowers’ behalf. For the purpose of this section, the Borrowers irrevocably hereby make, constitute and appoint the Administrative Agent (and all Persons designated by the Administrative Agent for that purpose) as Borrowers’ true and lawful attorney and agent-in-fact (i) to endorse Borrowers’
name upon said items of payment and/or proceeds of Collateral and upon any chattel paper, document, instrument, invoice or similar document or agreement relating to any Account of the Borrowers; (ii) to take control

 

 

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in any manner of any item of payment or proceeds thereof and (iii) to have access to any lock box or postal box into which any of Borrowers’ mail is deposited, and open and process all mail addressed to the Borrowers and deposited therein.

On a monthly basis, the Administrative Agent shall deliver to the Borrowers an account statement showing all Loans, charges and payments, which shall be deemed final, binding and conclusive upon the Borrowers (absent manifest error) unless the Borrowers notify the Administrative Agent in writing, specifying any error therein, within thirty (30) days of the date such account statement is sent to the Borrowers and any such notice shall only constitute an objection to the items specifically identified.

SECTION 7. MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.

7.1. Making of Payments. 

All payments of principal or interest on the Notes, and of all fees, shall be made by the Borrowers to the Administrative Agent in immediately available funds at the office specified by the Administrative Agent not later than noon, Chicago time, on the date due; and funds received after that hour shall be deemed to have been received by the Administrative Agent on the following Business Day. The Administrative Agent shall promptly remit to each Lender its share of all such payments received in collected funds by the Administrative Agent for the account of such Lender. All payments under Section 8.1 shall be made by the Borrowers directly to the Lender entitled thereto without setoff, counterclaim or other defense.

7.2. Application of Certain Payments. 

So long as no Event of Default has occurred and is continuing, (a) payments matching specific scheduled payments (if any) then due shall be applied to those scheduled payments and (b) voluntary and mandatory prepayments shall be applied as set forth in Sections 6.2 and 6.3. After the occurrence and during the continuance of an Event of Default, all amounts collected or received by the Administrative Agent or any Lender as proceeds from the sale of, or other realization upon, all or any part of the Collateral shall be applied as the Administrative Agent shall determine in its discretion. Concurrently with each remittance to any Lender of its share of any such payment, the Administrative Agent shall advise such Lender as to the application of such payment. 

7.3. Due Date Extension. 

If any payment of principal or interest with respect to any of the Loans, or of any fees, falls due on a day which is not a Business Day, then such due date shall be extended to the immediately following Business Day (unless, in the case of a LIBOR Loan, such immediately following Business Day is the first Business Day of a calendar month, in which case such due date shall be the immediately preceding Business Day) and, in the case of principal, additional interest shall accrue and be payable for the period of any such extension.

 

 

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7.4. Setoff. 

Each Borrower, for itself and each other Loan Party, agrees that the Administrative Agent and each Lender have all rights of set-off and bankers’ lien provided by applicable law, and in addition thereto, each Borrower, for itself and each other Loan Party, agrees that at any time any Event of Default exists, the Administrative Agent and each Lender may apply to the payment of any Obligations, whether or not then due, any and all balances, credits, deposits, accounts or moneys of each Borrower and each other Loan Party then or thereafter with the Administrative Agent or such Lender.

7.5. Proration of Payments. 

If any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, by application of offset or otherwise, on account of (a) principal of or interest on any Loan, but excluding (i) any payment pursuant to Section 8.7 or 15.6 and (ii) payments of interest on any Affected Loan) or (b) its participation in any Letter of Credit) in excess of its applicable Pro Rata Share of payments and other recoveries obtained by all Lenders on account of principal of and interest on the Loans (or such participation) then held by them, then such Lender shall purchase from the other Lenders such participations in the Loans (or sub-participations in Letters of Credit) held by them as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery ratably with each of them; provided that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Lender, the purchase shall be rescinded and the purchase price restored to the extent of such recovery.

7.6. Taxes. 

(a) All payments made by the Borrowers hereunder or under any Loan Documents shall be made without setoff, counterclaim, or other defense. To the extent permitted by applicable law, all payments hereunder or under the Loan Documents (including any payment of principal, interest, or fees) to, or for the benefit, of any person shall be made by the Borrowers free and clear of and without deduction or withholding for, or account of, any Taxes now or hereinafter imposed by any taxing authority.

(b) If any Borrower makes any payment hereunder or under any Loan Document in respect of which it is required by applicable law to deduct or withhold any Taxes, such Borrower shall increase the payment hereunder or under any such Loan Document such that after the reduction for the amount of Taxes withheld (and any taxes withheld or imposed with respect to the additional payments required under this Section 7.6(b)), the amount paid to the Lenders or the Administrative Agent equals the amount that was payable hereunder or under any such Loan Document without regard to this Section 7.6(b). To the extent any Borrower withholds any Taxes on payments hereunder or under any Loan Document, such Borrower shall pay the
full amount deducted to the relevant taxing authority within the time allowed for payment under applicable law and shall deliver to the Administrative Agent within 30 days after it has made payment to such authority a receipt issued by such authority (or other evidence satisfactory to the Administrative Agent) evidencing the payment of all amounts so required to be deducted or withheld from such payment.

 

 

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(c) If any Lender or the Administrative Agent is required by law to make any payments of any Taxes on or in relation to any amounts received or receivable hereunder or under any other Loan Document, or any Tax is assessed against a Lender or the Administrative Agent with respect to amounts received or receivable hereunder or under any other Loan Document, the Borrowers shall indemnify such person against (i) such Tax (and any reasonable counsel fees and expenses associated with such Tax) and (ii) any taxes imposed as a result of the receipt of the payment under this Section 7.6(c). A certificate prepared in good faith as to the amount of such payment by such Lender or the Administrative Agent shall, absent manifest error, be final, conclusive, and binding on all parties.

(d) (i) To the extent permitted by applicable law, each Lender that is not a United States person within the meaning of Code Section 7701(a)(30) (a “Non-U.S. Participant”) shall deliver to the Borrowers and the Administrative Agent on or prior to the Closing Date (or in the case of a Lender that is an Assignee, on the date of such assignment to such Lender) two accurate and complete original signed copies of IRS Form W-8BEN, W-8ECI, or W-8IMY (or any successor or other applicable form prescribed by the IRS) certifying to such Lender’s entitlement to a complete exemption from, or a reduced rate in, United States withholding tax on interest payments to be made hereunder or any Loan. If a Lender that is a Non-U.S. Participant is claiming a complete exemption from withholding on
interest pursuant to Code Sections 871(h) or 881(c), the Lender shall deliver (along with two accurate and complete original signed copies of IRS Form W-8BEN) a certificate in form and substance reasonably acceptable to Administrative Agent (any such certificate, a “Withholding Certificate”). In addition, each Lender that is a Non-U.S. Participant  agrees that from time to time after the Closing Date, (or in the case of a Lender that is an Assignee, after the date of the assignment to such Lender), when a lapse in time (or change in circumstances occurs) renders the prior certificates hereunder obsolete or inaccurate in any material respect, such Lender shall, to the extent permitted under applicable law, deliver to the Borrowers and the Administrative Agent two new and accurate and complete original signed copies of an IRS Form W-8BEN, W-8ECI, or W-8IMY (or any successor or other applicable forms
prescribed by the IRS), and if applicable, a new Withholding Certificate, to confirm or establish the entitlement of such Lender or the Administrative Agent to an exemption from, or reduction in, United States withholding tax on interest payments to be made hereunder or any Loan.

(ii) Each Lender that is not a Non-U.S. Participant (other than any such Lender which is taxed as a corporation for U.S. federal income tax purposes) shall provide two properly completed and duly executed copies of IRS Form W-9 (or any successor or other applicable form) to the Borrowers and the Administrative Agent certifying that such Lender is exempt from United States backup withholding tax. To the extent that a form provided pursuant to this Section 7.6(d)(ii) is rendered obsolete or inaccurate in any material respects as result of change in circumstances with respect to the status of a Lender, such Lender shall, to the extent permitted by applicable law, deliver to the Borrowers and the 

 

 

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Administrative Agent revised forms necessary to confirm or establish the entitlement to such Lender’s or Agent’s exemption from United States backup withholding tax.

(iii) The Borrowers shall not be required to pay additional amounts to a Lender, or indemnify any Lender, under this Section 7.6 to the extent that such obligations would not have arisen but for the failure of such Lender to comply with Section 7.6(d).

(iv) Each Lender agrees to indemnify the Administrative Agent and hold the Administrative Agent harmless for the full amount of any and all present or future Taxes and related liabilities (including penalties, interest, additions to tax and expenses, and any Taxes imposed by any jurisdiction on amounts payable to the Administrative Agent under this Section 7.6) which are imposed on or with respect to principal, interest or fees payable to such Lender hereunder and which are not paid by the Borrowers pursuant to this Section 7.6, whether or not such Taxes or related liabilities were correctly or legally asserted. This indemnification shall be made within 30 days from the date the Administrative Agent makes written
demand therefor.

SECTION 8. INCREASED COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS.

8.1. Increased Costs. 

(a) If, after the date hereof, the adoption of, or any change in, any applicable law, rule or regulation, or any change in the interpretation or administration of any applicable law, rule or regulation by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency:  (i) shall impose, modify or deem applicable any reserve (including any reserve imposed by the FRB, but excluding any reserve included in the determination of the LIBOR Rate pursuant to Section 4), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by any
Lender; or (ii) shall impose on any Lender any other condition affecting its LIBOR Loans, its Note or its obligation to make LIBOR Loans; and the result of anything described in clauses (i) and (ii) above is to increase the cost to (or to impose a cost on) such Lender (or any LIBOR Office of such Lender) of making or maintaining any LIBOR Loan, or to reduce the amount of any sum received or receivable by such Lender (or its LIBOR Office) under this Agreement or under its Note with respect thereto, then upon demand by such Lender (which demand shall be accompanied by a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail, a copy of which shall be furnished to the Administrative Agent), the Borrowers shall pay directly to such Lender such additional amount as will compensate such Lender for such increased cost or such reduction, so long as such amounts have accrued on or after the day which is 180 days prior to the date on which
such Lender first made demand therefor.

(b) If any Lender shall reasonably determine that any change in, or the adoption or phase-in of, any applicable law, rule or regulation regarding capital

 

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adequacy, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or the compliance by any Lender or any Person controlling such Lender 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 such Lender’s or such controlling Person’s capital as a consequence of such Lender’s obligations hereunder or under any Letter of Credit to a level below that which such Lender or such controlling Person could have achieved but for such change, adoption, phase-in or compliance (taking into consideration such Lender’s or such controlling Person’s policies with respect to capital adequacy) by an
amount deemed by such Lender or such controlling Person to be material, then from time to time, upon demand by such Lender (which demand shall be accompanied by a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail, a copy of which shall be furnished to the Administrative Agent), the Borrowers shall pay to such Lender such additional amount as will compensate such Lender or such controlling Person for such reduction so long as such amounts have accrued on or after the day which is 180 days prior to the date on which such Lender first made demand therefor. 

8.2. Basis for Determining Interest Rate Inadequate or Unfair.

If:

(a) the Administrative Agent reasonably determines (which determination shall be binding and conclusive on the Borrowers) that by reason of circumstances affecting the interbank LIBOR market adequate and reasonable means do not exist for ascertaining the applicable LIBOR Rate; or

(b) the Required Lenders advise the Administrative Agent that the LIBOR Rate as determined by the Administrative Agent will not adequately and fairly reflect the cost to such Lenders of maintaining or funding LIBOR Loans for such Interest Period (taking into account any amount to which such Lenders may be entitled under Section 8.1) or that the making or funding of LIBOR Loans has become impracticable as a result of an event occurring after the date of this Agreement which in the opinion of such Lenders materially affects such Loans;

then the Administrative Agent shall promptly notify the other parties thereof and, so long as such circumstances shall continue, (i) no Lender shall be under any obligation to make or convert any Base Rate Loans into LIBOR Loans and (ii) on the last day of the current Interest Period for each LIBOR Loan, such Loan shall, unless then repaid in full, automatically convert to a Base Rate Loan.

8.3. Changes in Law Rendering LIBOR Loans Unlawful. 

If any change in, or the adoption of any new, law or regulation, or any change in the interpretation of any applicable law or regulation by any governmental or other regulatory body charged with the administration thereof, should make it (or in the good faith

 

 

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judgment of any Lender cause a substantial question as to whether it is) unlawful for any Lender to make, maintain or fund LIBOR Loans, then such Lender shall promptly notify each of the other parties hereto and, so long as such circumstances shall continue, (a) such Lender shall have no obligation to make or convert any Base Rate Loan into a LIBOR Loan (but shall make Base Rate Loans concurrently with the making of or conversion of Base Rate Loans into LIBOR Loans by the Lenders which are not so affected, in each case in an amount equal to the amount of LIBOR Loans which would be made or converted into by such Lender at such time in the absence of such circumstances) and (b) on the last day of the current Interest Period for each LIBOR Loan of such Lender (or, in any event, on such earlier date as may be required by the relevant law, regulation or interpretation), such LIBOR Loan shall, unless
then repaid in full, automatically convert to a Base Rate Loan. Each Base Rate Loan made by a Lender which, but for the circumstances described in the foregoing sentence, would be a LIBOR Loan (an “Affected Loan”) shall remain outstanding for the period corresponding to the Group of LIBOR Loans of which such Affected Loan would be a part absent such circumstances.

8.4. Funding Losses. 

The Borrowers hereby agree that upon demand by any Lender (which demand shall be accompanied by a statement setting forth the basis for the amount being claimed, a copy of which shall be furnished to the Administrative Agent), the Borrowers shall indemnify such Lender against any net loss or expense which such Lender may sustain or incur (including any net loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund or maintain any LIBOR Loan), as reasonably determined by such Lender, as a result of (a) any payment, prepayment or conversion of any LIBOR Loan of such Lender on a date other than the last day of an Interest Period for such Loan (including any conversion pursuant to Section 8.3) or (b) any failure of any Borrower to
borrow, convert or continue any Loan on a date specified therefor in a notice of borrowing, conversion or continuation pursuant to this Agreement. For this purpose, all notices to the Administrative Agent pursuant to this Agreement shall be deemed to be irrevocable.

8.5. Right of Lenders to Fund through Other Offices. 

Each Lender may, if it so elects, fulfill its commitment as to any LIBOR Loan by causing a foreign branch or Affiliate of such Lender to make such Loan; provided that in such event for the purposes of this Agreement such Loan shall be deemed to have been made by such Lender and the obligation of the Borrowers to repay such Loan shall nevertheless be to such Lender and shall be deemed held by it, to the extent of such Loan, for the account of such branch or Affiliate.

8.6. Discretion of Lenders as to Manner of Funding. 

Notwithstanding any provision of this Agreement to the contrary, each Lender shall be entitled to fund and maintain its funding of all or any part of its Loans in any manner it sees fit, it being understood, however, that for the purposes of this Agreement all

 

 

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determinations hereunder shall be made as if such Lender had actually funded and maintained each LIBOR Loan during each Interest Period for such Loan through the purchase of deposits having a maturity corresponding to such Interest Period and bearing an interest rate equal to the LIBOR Rate for such Interest Period.

8.7. Mitigation of Circumstances; Replacement of Lenders. 

(a) Each Lender shall promptly notify the Borrowers and the Administrative Agent of any event of which it has knowledge which will result in, and will use reasonable commercial efforts available to it (and not, in such Lender’s sole judgment, otherwise disadvantageous to such Lender) to mitigate or avoid, (i) any obligation by the Borrowers to pay any amount pursuant to Sections 7.6 or 8.1 or (ii) the occurrence of any circumstances described in Sections 8.2 or 8.3 (and, if any Lender has given notice of any such event described in clause (i) or (ii) above and
thereafter such event ceases to exist, such Lender shall promptly so notify the Borrowers and the Administrative Agent). Without limiting the foregoing, each Lender will designate a different funding office if such designation will avoid (or reduce the cost to the Borrowers of) any event described in clause (i) or (ii) above and such designation will not, in such Lender’s sole judgment, be otherwise disadvantageous to such Lender.

(b) If any Borrower becomes obligated to pay additional amounts to any Lender pursuant to Sections 7.6 or 8.1, or any Lender gives notice of the occurrence of any circumstances described in Sections 8.2 or 8.3, the Borrowers may designate another bank which is acceptable to the Administrative Agent and the Issuing Lender in their reasonable discretion (such other bank being called a “Replacement Lender”) to purchase the Loans of such Lender and such Lender’s rights hereunder,
without recourse to or warranty by, or expense to, such Lender, for a purchase price equal to the outstanding principal amount of the Loans payable to such Lender plus any accrued but unpaid interest on such Loans and all accrued but unpaid fees owed to such Lender and any other amounts payable to such Lender under this Agreement, and to assume all the obligations of such Lender hereunder, and, upon such purchase and assumption (pursuant to an Assignment Agreement), such Lender shall no longer be a party hereto or have any rights hereunder (other than rights with respect to indemnities and similar rights applicable to such Lender prior to the date of such purchase and assumption) and shall be relieved from all obligations to the Borrowers hereunder, and the Replacement Lender shall succeed to the rights and obligations of such Lender hereunder.

8.8. Conclusiveness of Statements; Survival of Provisions. 

Determinations and statements of any Lender pursuant to Sections 8.1, 8.2, 8.3 or 8.4 shall be conclusive absent demonstrable error. Lenders may use reasonable averaging and attribution methods in determining compensation under Sections 8.1 and 8.4, and the provisions of such Sections shall survive repayment of the Obligations, cancellation of any Notes, expiration or termination of the Letters of Credit and
termination of this Agreement.

 

 

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SECTION 9. REPRESENTATIONS AND WARRANTIES.

To induce the Administrative Agent and the Lenders to enter into this Agreement and to induce the Lenders to make Loans and issue and participate in Letters of Credit hereunder, each Borrower represents and warrants to the Administrative Agent and the Lenders that:

9.1. Organization. 

Each Loan Party is validly existing and in good standing under the laws of its jurisdiction of organization; and each Loan Party is duly qualified to do business in each jurisdiction where, because of the nature of its activities or properties, such qualification is required, except for such jurisdictions where the failure to so qualify would not have a Material Adverse Effect.

9.2. Authorization; No Conflict. 

Each Loan Party is duly authorized to execute and deliver each Loan Document to which it is a party, the Borrowers are duly authorized to borrow monies hereunder and each Loan Party is duly authorized to perform its Obligations under each Loan Document to which it is a party. The execution, delivery and performance by each Loan Party of each Loan Document to which it is a party, and the borrowings by the Borrowers hereunder, do not and will not (a) require any consent or approval of any governmental agency or authority (other than any consent or approval which has been obtained and is in full force and effect), (b) conflict with (i) any provision of law, (ii) the charter, by-laws or other organizational documents of any Loan Party or (iii) any agreement, indenture, instrument or other document, or any judgment, order or decree, which is binding upon any Loan Party or any of
their respective properties or (c) require, or result in, the creation or imposition of any Lien on any asset of any Loan Party (other than Liens in favor of the Administrative Agent created pursuant to the Collateral Documents).

9.3. Validity and Binding Nature. 

Each of this Agreement and each other Loan Document to which any Loan Party is a party is the legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting the enforceability of creditors’ rights generally and to general principles of equity.

9.4. Financial Condition; Internal Controls. 

(a) The audited consolidated financial statements of (i) Holdings as at December 31, 2006 and (ii) Clark Holdings and its Subsidiaries as at December 31, 2004, December 31, 2005 and December 31, 2006, and the unaudited consolidated financial statements of (x) Holdings as at December 31, 2007 and (y) Clark Holdings and its Subsidiaries as at December 31, 2007, copies of each of which have been delivered to each Lender, were prepared in accordance with GAAP (subject, in the case of such unaudited statements, to the absence of footnotes and to normal year-end adjustments) and present

 

 

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fairly the consolidated financial condition of Holdings and Clark Holdings and its Subsidiaries, respectively, as at such dates and the results of their operations for the periods then ended.

(b) No Internal Control Event exists or has occurred since December 31, 2006 that has resulted in or could reasonably be expected to result in a misstatement in any material respect, in any financial information delivered or to be delivered to the Administrative Agent or the Lenders, of (i) covenant compliance calculations provided hereunder or (ii) the assets, liabilities, financial condition or results of operations of Clark Holdings and its Subsidiaries on a consolidated basis or Holdings and its Subsidiaries on a consolidated basis, as applicable.

9.5. No Material Adverse Change. 

Since December 31, 2006, there has been no material adverse change in the business, assets, liabilities, properties, condition (financial or otherwise), results of operations or prospects of the Loan Parties taken as a whole.

9.6. Litigation and Contingent Liabilities. 

No litigation (including derivative actions), arbitration proceeding or governmental investigation or proceeding is pending or, to each Borrower’s knowledge, threatened against any Loan Party which might reasonably be expected to have a Material Adverse Effect, except as set forth in Schedule 9.6. Other than any liability incident to such litigation or proceedings, no Loan Party has any material Contingent Liabilities not listed on Schedule 9.6 or permitted by Section 11.1.

9.7. Ownership of Properties; Liens. 

Each Loan Party owns good and, in the case of real property, marketable title to all of its properties and assets, real and personal, tangible and intangible, of any nature whatsoever (including patents, trademarks, trade names, service marks and copyrights), free and clear of all Liens, charges and claims (including infringement claims with respect to patents, trademarks, service marks, copyrights and the like) except as permitted by Section 11.2.

9.8. Equity Ownership; Subsidiaries.

All issued and outstanding Capital Securities of each Loan Party are duly authorized and validly issued, fully paid, non-assessable, and free and clear of all Liens other than those in favor of the Administrative Agent, and such securities were issued in compliance with all applicable state and federal laws concerning the issuance of securities. Schedule 9.8 sets forth the authorized Capital Securities of each Loan Party as of the Closing Date. All of the issued and outstanding Capital Securities of each Loan Party are owned as set forth on Schedule 9.8 as of the Closing Date. As of the Closing Date, except as set forth on Schedule 9.8, there
are no pre-emptive or other outstanding rights, options, warrants, conversion rights or other similar agreements or understandings for the purchase or acquisition of any Capital Securities of any Loan Party.

 

 

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9.9. Pension Plans. 

(a) The Unfunded Liability of all Pension Plans does not in the aggregate exceed twenty percent of the Total Plan Liability for all such Pension Plans. Each Pension Plan complies in all material respects with all applicable requirements of law and regulations. No contribution failure under Section 412 of the Code, Section 302 of ERISA or the terms of any Pension Plan has occurred with respect to any Pension Plan, sufficient to give rise to a Lien under Section 302(f) of ERISA, or otherwise to have a Material Adverse Effect. There are no pending or, to the knowledge of any Borrower, threatened, claims, actions, investigations or lawsuits against any Pension Plan, any fiduciary of any Pension Plan, or any Borrower or other any member of the Controlled Group with respect to a Pension Plan or a Multiemployer Pension Plan which could reasonably be expected to have a
Material Adverse Effect. No Borrower, nor any other member of the Controlled Group, has engaged in any prohibited transaction (as defined in Section 4975 of the Code or Section 406 of ERISA) in connection with any Pension Plan or Multiemployer Pension Plan which would subject that Person to any material liability. Within the past five years, no Borrower nor any other member of the Controlled Group has engaged in a transaction which resulted in a Pension Plan with an Unfunded Liability being transferred out of the Controlled Group, which could reasonably be expected to have a Material Adverse Effect. No Termination Event has occurred or is reasonably expected to occur with respect to any Pension Plan, which could reasonably be expected to have a Material Adverse Effect.

(b) All contributions (if any) have been made to any Multiemployer Pension Plan that are required to be made by any Borrower or any other member of the Controlled Group under the terms of the plan or of any collective bargaining agreement or by applicable law; no Borrower nor any other member of the Controlled Group has withdrawn or partially withdrawn from any Multiemployer Pension Plan, incurred any withdrawal liability with respect to any such plan or received notice of any claim or demand for withdrawal liability or partial withdrawal liability from any such plan, and no condition has occurred which, if continued, could result in a withdrawal or partial withdrawal from any such plan; and no Borrower nor any other member of the Controlled Group has received any notice that any Multiemployer Pension Plan is in reorganization, that increased contributions may be required to
avoid a reduction in plan benefits or the imposition of any excise tax, that any such plan is or has been funded at a rate less than that required under Section 412 of the Code, that any such plan is or may be terminated, or that any such plan is or may become insolvent.

9.10. Investment Company Act. 

No Loan Party is an “investment company” or a company “controlled” by an “investment company” or a “subsidiary” of an “investment company,” within the meaning of the Investment Company Act of 1940.

 

 

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9.11. [Reserved].

9.12. Regulation U. 

No Borrower 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.

9.13. Taxes. 

Each Loan Party has timely filed all tax returns and reports required by law to have been filed by it and has paid all taxes and governmental charges due and payable with respect to such return, except any such taxes or charges which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books. The Loan Parties have made adequate reserves on their books and records in accordance with GAAP for all taxes that have accrued but which are not yet due and payable. No Loan Party has participated in any transaction that relates to a year of the taxpayer (which is still open under the applicable statute of limitations) which is a “reportable transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2) (irrespective of the date when the transaction was
entered into).

9.14. Solvency, etc. 

On the Closing Date, and immediately prior to and after giving effect to the issuance of each Letter of Credit and each borrowing hereunder and the use of the proceeds thereof, with respect to the Loan Parties, taken as a whole, (a) the present fair saleable value of their assets is not less than the amount that will be required to pay the probable liability on their debts as they become absolute and matured, (b) they are able to realize upon their assets and pay their debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business, (c) they do not intend to, and do not believe that they will, incur debts or liabilities beyond their ability to pay as such debts and liabilities mature and (d) they are not engaged in business or a transaction, and are not about to engage in business or a transaction, for
which their property would constitute unreasonably small capital.

9.15. Environmental Matters. 

The on-going operations of each Loan Party comply in all respects with all Environmental Laws, except such non-compliance which could not (if enforced in accordance with applicable law) reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect. Each Loan Party has obtained, and maintained in good standing, all licenses, permits, authorizations, registrations and other approvals required under any Environmental Law and required for their respective ordinary course operations, and for their reasonably anticipated future operations, and each Loan Party is in compliance with all terms and conditions thereof, except where the failure to do so could not reasonably be expected to result in material liability to any Loan Party and could not reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect. No

 

 

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Loan Party or any of its properties or operations is subject to, or reasonably anticipates the issuance of, any written order from or agreement with any Federal, state or local governmental authority, nor subject to any judicial or docketed administrative or other proceeding, respecting any Environmental Law, Environmental Claim or Hazardous Substance. There are no Hazardous Substances or other conditions or circumstances existing with respect to any property, arising from operations prior to the Closing Date, or relating to any waste disposal, of any Loan Party that would reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect. No Loan Party has any underground storage tanks that are not properly registered or permitted under applicable Environmental Laws or that at any time have released, leaked, disposed of or otherwise discharged Hazardous Substances.

9.16. Insurance. 

Set forth on Schedule 9.16 is a complete and accurate summary of the property and casualty insurance program of the Loan Parties as of the Closing Date (including the names of all insurers, policy numbers, expiration dates, amounts and types of coverage, annual premiums, exclusions, deductibles, self-insured retention, and a description in reasonable detail of any self-insurance program, retrospective rating plan, fronting arrangement or other risk assumption arrangement involving any Loan Party). Each Loan Party and its properties are insured with financially sound and reputable insurance companies which are not Affiliates of the Loan Parties, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar
properties in localities where such Loan Parties operate. 

9.17. Real Property. 

Set forth on Schedule 9.17 is a complete and accurate list, as of the Closing Date, of the address of all real property owned or leased by any Loan Party, together with, in the case of leased property, the name and mailing address of the lessor of such property.

9.18. Information. 

All information heretofore or contemporaneously herewith furnished in writing by any Loan Party to the Administrative Agent or any Lender for purposes of or in connection with this Agreement and the transactions contemplated hereby is, and all written information hereafter furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender pursuant hereto or in connection herewith will be, true and accurate in every material respect on the date as of which such information is dated or certified, and none of such information is or will be incomplete by omitting to state any material fact necessary to make such information not misleading in light of the circumstances under which made (it being recognized by the Administrative Agent and the Lenders that any projections and forecasts provided by the Borrowers are based on good faith estimates and assumptions
believed by the Borrowers to be reasonable as of the date of the applicable projections or assumptions and that actual results during the period or periods covered by any such projections and forecasts may differ from projected or forecasted results).

 

 

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9.19. Intellectual Property. 

Each Loan Party owns and possesses or has a license or other right to use all patents, patent rights, trademarks, trademark rights, trade names, trade name rights, service marks, service mark rights and copyrights as are necessary for the conduct of the businesses of the Loan Parties, without any infringement upon rights of others which could reasonably be expected to have a Material Adverse Effect.

9.20. Burdensome Obligations. 

No Loan Party is a party to any agreement or contract or subject to any restriction contained in its organizational documents which could reasonably be expected to have a Material Adverse Effect.

9.21. Labor Matters. 

Except as set forth on Schedule 9.21, no Loan Party is subject to any labor or collective bargaining agreement. There are no existing or threatened strikes, lockouts or other labor disputes involving any Loan Party that singly or in the aggregate could reasonably be expected to have a Material Adverse Effect. Hours worked by and payment made to employees of the Loan Parties are not in violation of the Fair Labor Standards Act or any other applicable law, rule or regulation dealing with such matters.

9.22. No Default. 

No Event of Default exists or would result from the incurrence by any Loan Party of any Debt hereunder or under any other Loan Document.

9.23. Related Agreements, etc. 

(a) The Borrowers have heretofore furnished the Administrative Agent a true and correct copy of the Related Agreements.

(b) Each Loan Party and, to the Borrowers’ knowledge, each other party to the Related Agreements, has duly taken all necessary corporate, partnership or other organizational action to authorize the execution, delivery and performance of the Related Agreements and the consummation of transactions contemplated thereby.

(c) The Related Transactions comply with all applicable legal requirements, and all necessary governmental, regulatory, creditor, shareholder, partner and other material consents, approvals and exemptions required to be obtained by the Loan Parties and, to the Borrowers’ knowledge, each other party to the Related Agreements in connection with the Related Transactions duly obtained and are in full force and effect. As of the date of the Related Agreements, all applicable waiting periods with respect to the Related Transactions have expired without any action being taken by any competent governmental authority which restrains, prevents or imposes material adverse conditions upon the consummation of the Related Transactions.

 

 

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(d) The execution and delivery of the Related Agreements did not, and the consummation of the Related Transactions immediately prior to the effectiveness of this Agreement did not, violate any statute or regulation of the United States (including any securities law) or of any state or other applicable jurisdiction, or any order, judgment or decree of any court or governmental body binding on any Loan Party or, to the Borrowers’ knowledge, any other party to the Related Agreements, or result in a breach of, or constitute a default under, any material agreement, indenture, instrument or other document, or any judgment, order or decree, to which any Loan Party is a party or by which any Loan Party is bound or, to the Borrowers’ knowledge, to which any other party to the Related Agreements is a party or by which any such party is bound.

(e) No statement or representation made in the Related Agreements by any Loan Party or, to the Borrowers’ knowledge, any other Person, contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they are made, not misleading.

9.24. Holding Companies. 

As of the Closing Date, each of Holdings and Clark Holdings is a holding company not engaged in any business activities, and not holding any material assets (other than Capital Securities fully disclosed on Schedule 9.8).

9.25. Clark UK.

As of the Closing Date, (i) Clark UK has ceased all business activities, other than activities necessary in connection with the dissolution of Clark UK, (ii) the aggregate fair market value of all assets owned by Clark UK does not exceed $250,000 and (iii) no Loan Party has any commitment or other obligation to make any Investment in Clark UK, nor does any Loan Party have any Contingent Liabilities with respect to Clark UK.

SECTION 10. AFFIRMATIVE COVENANTS.

Until the expiration or termination of the Commitments and thereafter until all Obligations hereunder and under the other Loan Documents are paid in full and all Letters of Credit have been terminated, the Borrowers agree that, unless at any time the Required Lenders shall otherwise expressly consent in writing, the Borrowers will:

10.1. Reports, Certificates and Other Information. 

Furnish to the Administrative Agent and each Lender:

10.1.1. Annual Report. Promptly when available and in any event within 90 days after the close of each Fiscal Year: (a) a copy of the annual audit report of Holdings and its Subsidiaries for such Fiscal Year, including therein consolidated balance sheets and statements of earnings and cash flows of Holdings and its Subsidiaries as at the end of such Fiscal Year, certified without adverse reference to going concern value and without 

 

 

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qualification by independent auditors of recognized standing selected by Holdings and reasonably acceptable to the Administrative Agent, together with (i) an opinion of such accountants independently assessing Holdings’ internal controls over financial reporting in accordance with Item 308 of SEC Regulation S-K, PCAOB Auditing Standard No. 2 and Section 404 of Sarbanes-Oxley expressing a conclusion that contains no statement that there is a material weakness in such internal controls, except for such material weaknesses as to which the Required Lenders do not object, (ii) a written statement from such accountants to the effect that in making the examination necessary for the signing of such annual audit report by such accountants, nothing came to their attention that caused them to believe that the Borrowers were not in compliance with any provision of Sections 11.1, 11.4 or 11.14 of this Agreement insofar as such provision relates to accounting matters or, if something has come to their attention that caused them to believe that the Borrowers were not in compliance with any such provision, describing such non-compliance in reasonable detail, (iii) a comparison with the budget for such Fiscal Year and a comparison with the previous Fiscal Year and (iv) a written statement of the Borrowers’ management setting forth a discussion of the financial condition, changes in financial condition and results of operations for Holdings and its Subsidiaries; and (b) a consolidating balance sheet of Holdings and its Subsidiaries as of the end of such Fiscal Year and
consolidating statement of earnings and cash flows for Holdings and its Subsidiaries for such Fiscal Year, certified by a Senior Officer of the Borrowers.

10.1.2. Interim Reports. (a) Promptly when available and in any event within 45 days after the end of each Fiscal Quarter, (i) consolidated balance sheets of Holdings and its Subsidiaries as of the end of such Fiscal Quarter, together with consolidated statements of earnings and cash flows for such Fiscal Quarter and for the period beginning with the first day of such Fiscal Year and ending on the last day of such Fiscal Quarter, together with a comparison with the corresponding period of the previous Fiscal Year and a comparison with the budget for such period of the current Fiscal Year, certified by a Senior Officer of the Borrowers and (ii) a written statement of the Borrowers’ management setting forth a discussion of the financial condition, changes in financial condition and
results of operations for Holdings and its Subsidiaries; and (b) promptly when available and in any event within 30 days after the end of each Fiscal Month (extended to 45 days, in respect of any Fiscal Month that ends a Fiscal Quarter), consolidated balance sheets of Holdings and its Subsidiaries as of the end of such Fiscal Month, together with consolidated statements of earnings and a consolidated statement of cash flows for such Fiscal Month and for the period beginning with the first day of such Fiscal Year and ending on the last day of such Fiscal Month (in each case excluding, unless specifically identified, annual and quarterly adjustments), together with a comparison with the corresponding period of the previous Fiscal Year and a comparison with the budget for such period of the current Fiscal Year, certified by a Senior Officer of the Borrowers. 

10.1.3. Compliance Certificates. Contemporaneously with the furnishing of a copy of each annual audit report pursuant to Section 10.1.1 and each set of monthly statements pursuant to Section 10.1.2, a duly completed compliance certificate in the form of Exhibit B, with appropriate insertions, dated the date of such annual report or such monthly

 

 

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statements and signed by a Senior Officer of the Borrowers, containing a computation of each of the financial ratios and restrictions set forth in Section 11.14 and to the effect that such officer has not become aware of any Event of Default that has occurred and is continuing or, if there is any such event, describing it and the steps, if any, being taken to cure it.

10.1.4. Reports to the SEC and to Shareholders. Promptly upon the filing or sending thereof, copies of all annual, regular, periodic and special reports of any Loan Party filed with the SEC or with any national securities exchange; copies of all registration statements of any Loan Party filed with the SEC (other than on Form S-8); and copies of all annual reports, proxy statements, financial statements and other communications sent or made to security holders generally or to any national securities exchange.

10.1.5. Notice of Default, Litigation, ERISA and Other Matters. Promptly upon becoming aware of any of the following, written notice describing the same and the steps being taken by the Loan Parties affected thereby with respect thereto:

(a) the occurrence of an Event of Default or an Unmatured Event of Default;

(b) any litigation, arbitration or governmental investigation or proceeding not previously disclosed by the Borrowers to the Lenders which has been instituted or, to the knowledge of the Borrowers, is threatened against any Loan Party or to which any of the properties of any thereof is subject which might reasonably be expected to have a Material Adverse Effect;

(c) the institution of any steps by any member of the Controlled Group or any other Person to terminate any Pension Plan, or the failure of any member of the Controlled Group to make a required contribution to any Pension Plan (if such failure is sufficient to give rise to a Lien under Section 302(f) of ERISA) or to any Multiemployer Pension Plan, or the taking of any action with respect to a Pension Plan which could result in the requirement that any Borrower furnish a bond or other security to the PBGC or such Pension Plan, or the occurrence of any event with respect to any Pension Plan or Multiemployer Pension Plan which could result in the incurrence by any member of the Controlled Group of any material liability, fine or penalty (including any claim or demand for withdrawal liability or partial withdrawal from any Multiemployer Pension Plan), or any material increase
in the contingent liability of any Borrower with respect to any post-retirement welfare benefit plan or other employee benefit plan of any Borrower or another member of the Controlled Group, or any notice that any Multiemployer Pension Plan is in reorganization, that increased contributions may be required to avoid a reduction in plan benefits or the imposition of an excise tax, that any such plan is or has been funded at a rate less than that required under Section 412 of the Code, that any such plan is or may be terminated, or that any such plan is or may become insolvent;

(d) any cancellation or material change in any insurance maintained by any Loan Party; 

 

 

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(e) the determination by the accountants referred to in Section 10.1.1(a) or Holdings’ determination at any time of the occurrence or existence of any Internal Control Event; or

(f) any other event (including (i) any violation of any Environmental Law or the assertion of any Environmental Claim or (ii) the enactment or effectiveness of any law, rule or regulation) which might reasonably be expected to have a Material Adverse Effect.

10.1.6. Borrowing Base Certificates. As soon as practicable, and in any event not later than 15 days following the end of each month, a Borrowing Base Certificate dated as of the end of such month and executed by a Senior Officer of the Borrowers on behalf of the Borrowers (provided that (a) the Borrowers may deliver a Borrowing Base Certificate more frequently if they choose, (b) the Borrowers shall deliver a Borrowing Base Certificate together with the delivery of any Notice of Borrowing and (c) at any time an Event of Default exists, the Administrative Agent may require the Borrowers to deliver Borrowing Base Certificates more frequently).

10.1.7. Management Reports. Promptly upon receipt thereof, copies of all detailed financial and management reports submitted to the Loan Parties by independent auditors in connection with each annual or interim audit made by such auditors of the books of the Loan Parties. 

10.1.8. Projections. As soon as practicable, and in any event not later than 30 days prior to the commencement of each Fiscal Year, financial projections for Holdings and its Subsidiaries for such Fiscal Year and the Fiscal Year thereafter (including monthly balance sheets, income statements and operating and cash flow budgets for the first Fiscal Year, and quarterly balance sheets, income statements and operating and cash flow budgets for the second Fiscal Year) prepared in a manner consistent with the projections delivered by the Loan Parties to the Lenders prior to the Closing Date or otherwise in a manner reasonably satisfactory to the Administrative Agent, accompanied by a certificate of a Senior Officer of the Borrowers on behalf of the Borrowers to the effect that (a) such projections were
prepared by the Borrowers in good faith, (b) the Borrowers have a reasonable basis for the assumptions contained in such projections and (c) such projections have been prepared in accordance with such assumptions.

10.1.9. Certain Notices. Promptly following receipt, copies of any notices (including notices of default or acceleration) received from any holder or trustee of, under or with respect to any Subordinated Debt or in connection with the Related Transactions.

10.1.10. Accounts Aging Report. Concurrent with the delivery of each Borrowing Base Certificate, a detailed trial balance of Borrowers’ Accounts aged per invoice date, in form and substance reasonably satisfactory to the Administrative Agent, including without limitation the names and addresses of all Account Debtors of the Borrowers. 

 

 

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10.1.11. SEC Investigations. 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.

10.1.12. Other Information. Promptly from time to time, such other information concerning the Loan Parties as any Lender or the Administrative Agent may reasonably request.

10.2. Books, Records and Inspections. 

Keep, and cause each other Loan Party to keep, its books and records in accordance with sound business practices sufficient to allow the preparation of financial statements in accordance with GAAP; maintain, and cause each other Loan Party to maintain, such books and records in material conformity with all applicable requirements of any governmental agency or authority having regulatory jurisdiction over the Loan Parties; permit, and cause each other Loan Party to permit, at any reasonable time and with reasonable notice (or at any time without notice if an Event of Default exists), any Lender or the Administrative Agent or any representative thereof to inspect the properties and operations of the Loan Parties; and permit, and cause each other Loan Party to permit, at any reasonable time and with reasonable notice (or at any time without notice if an Event of Default exists),
any Lender or the Administrative Agent or any representative thereof to visit any or all of its offices, to discuss its financial matters with its officers and its independent auditors (and the Borrowers hereby authorize such independent auditors to discuss such financial matters with any Lender or the Administrative Agent or any representative thereof), and to examine (and, at the expense of the Loan Parties, photocopy extracts from) any of its books or other records; and permit, and cause each other Loan Party to permit, the Administrative Agent and its representatives to inspect the Inventory and other tangible assets of the Loan Parties, to perform appraisals of the equipment and real estate of the Loan Parties, and to inspect, audit, check and make copies of and extracts from the books, records, computer data, computer programs, journals, orders, receipts, correspondence and other data relating to Accounts and any other collateral. All such inspections or audits by the
Administrative Agent shall be at the Borrowers’ expense, provided that so long as no Event of Default or Unmatured Event of Default exists, the Borrowers shall not be required to reimburse the Administrative Agent for inspections or audits more frequently than twice each Fiscal Year.

10.3. Maintenance of Property; Insurance. 

(a) Keep, and cause each other Loan Party to keep, all property useful and necessary in the business of the Loan Parties in good working order and condition, ordinary wear and tear excepted.

 

 

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(b) Maintain, and cause each other Loan Party to maintain, with responsible insurance companies, such insurance coverage as may be required by any law or governmental regulation or court decree or order applicable to it and such other insurance, to such extent and against such hazards and liabilities, as is customarily maintained by companies similarly situated, but which shall insure against all risks and liabilities of the type identified on Schedule 9.16 and shall have insured amounts no less than, and deductibles no higher than, those set forth on such schedule; and, upon request of the Administrative Agent or any Lender, furnish to the Administrative Agent or such Lender a certificate setting forth in reasonable detail the nature and extent of all insurance maintained by the Loan Parties. The
Borrowers shall cause each issuer of an insurance policy to provide the Administrative Agent with an endorsement (i) showing the Administrative Agent as loss payee with respect to each policy of property or casualty insurance and naming the Administrative Agent as an additional insured with respect to each policy of liability insurance, (ii) providing that 30 days’ notice will be given to the Administrative Agent prior to any cancellation of, material reduction or change in coverage provided by or other material modification to such policy and (iii) reasonably acceptable in all other respects to the Administrative Agent. The Borrowers shall execute and deliver to the Administrative Agent a collateral assignment, in form and substance satisfactory to the Administrative Agent, of each business interruption insurance policy maintained by the Borrowers.

(c) UNLESS THE BORROWERS PROVIDE THE ADMINISTRATIVE AGENT WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS AGREEMENT, THE ADMINISTRATIVE AGENT MAY PURCHASE INSURANCE AT THE BORROWERS’ EXPENSE TO PROTECT THE ADMINISTRATIVE AGENT’S AND THE LENDERS’ INTERESTS IN THE COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT ANY LOAN PARTY’S INTERESTS. THE COVERAGE THAT THE ADMINISTRATIVE AGENT PURCHASES MAY NOT PAY ANY CLAIM THAT IS MADE AGAINST ANY LOAN PARTY IN CONNECTION WITH THE COLLATERAL. THE BORROWERS MAY LATER CANCEL ANY INSURANCE PURCHASED BY THE ADMINISTRATIVE AGENT, BUT ONLY AFTER PROVIDING THE ADMINISTRATIVE AGENT WITH EVIDENCE THAT THE BORROWERS HAVE OBTAINED INSURANCE AS REQUIRED BY THIS AGREEMENT. IF THE ADMINISTRATIVE AGENT PURCHASES INSURANCE FOR THE COLLATERAL, THE BORROWERS 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 PRINCIPAL AMOUNT OF THE LOANS OWING HEREUNDER. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF THE INSURANCE THE LOAN PARTIES MAY BE ABLE TO OBTAIN ON THEIR OWN.

 

 

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10.4. Compliance with Laws; Payment of Taxes and Liabilities. 

(a) Comply, and cause each other Loan Party to comply, in all material respects with all applicable laws, rules, regulations, decrees, orders, judgments, licenses and permits, except where failure to comply could not reasonably be expected to have a Material Adverse Effect; (b) without limiting clause (a) above, ensure, and cause each other Loan Party to ensure, that no person who owns a controlling interest in or otherwise controls a Loan Party is or shall be (i) listed on the Specially Designated Nationals and Blocked Person List maintained by the Office of Foreign Assets Control (“OFAC”), Department of the Treasury, and/or any other similar lists maintained by OFAC pursuant to any authorizing statute,
Executive Order or regulation or (ii) a person designated under Section 1(b), (c) or (d) of Executive Order No. 13224 (September 23, 2001), any related enabling legislation or any other similar Executive Orders, (c) without limiting clause (a) above, comply, and cause each other Loan Party to comply, with all applicable Bank Secrecy Act (“BSA”) and anti-money laundering laws and regulations and (d) pay, and cause each other Loan Party to pay, prior to delinquency, all taxes and other governmental charges against it or any collateral, as well as claims of any kind which, if unpaid, could become a Lien on any of its property; provided that the foregoing shall not require any Loan Party to pay any such tax or charge so long as it shall
contest the validity thereof in good faith by appropriate proceedings and shall set aside on its books adequate reserves with respect thereto in accordance with GAAP and, in the case of a claim which could become a Lien on any collateral, such contest proceedings shall stay the foreclosure of such Lien or the sale of any portion of the collateral to satisfy such claim.

10.5. Maintenance of Existence, etc. 

Maintain and preserve, and (subject to Section 11.5) cause each other Loan Party to maintain and preserve, (a) its existence and good standing in the jurisdiction of its organization and (b) its qualification to do business and good standing in each jurisdiction where the nature of its business makes such qualification necessary (other than such jurisdictions in which the failure to be qualified or in good standing could not reasonably be expected to have a Material Adverse Effect).

10.6. Use of Proceeds. 

Use the proceeds of the Term Loans solely to finance the Stock Repurchase Transactions, use the proceeds of the Revolving Loans and the Letters of Credit solely to finance the consummation of Permitted Acquisitions, for working capital purposes, for Capital Expenditures and for other general business purposes, and not use or permit any proceeds of any Loan to be used, either directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of “purchasing or carrying” any Margin Stock.

 

 

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10.7. Employee Benefit Plans. 

(a) Maintain, and cause each other member of the Controlled Group to maintain, each Pension Plan in substantial compliance with all applicable requirements of law and regulations.

(b) Make, and cause each other member of the Controlled Group to make, on a timely basis, all required contributions to any Multiemployer Pension Plan.

(c) Not, and not permit any other member of the Controlled Group to (i) seek a waiver of the minimum funding standards of ERISA, (ii) terminate or withdraw from any Pension Plan or Multiemployer Pension Plan or (iii) take any other action with respect to any Pension Plan that would reasonably be expected to entitle the PBGC to terminate, impose liability in respect of, or cause a trustee to be appointed to administer, any Pension Plan, unless the actions or events described in clauses (i), (ii) and (iii) individually or in the aggregate would not have a Material Adverse Effect.

10.8. Environmental Matters. 

If any release or threatened release or other disposal of Hazardous Substances shall occur or shall have occurred on any real property or any other assets of any Loan Party, the Borrowers shall, or shall cause the applicable Loan Party to, cause the prompt containment and removal of such Hazardous Substances and the remediation of such real property or other assets as necessary to comply with all Environmental Laws and to preserve the value of such real property or other assets. Without limiting the generality of the foregoing, the Borrowers shall, and shall cause each other Loan Party to, comply with any Federal or state judicial or administrative order requiring the performance at any real property of any Loan Party of activities in response to the release or threatened release of a Hazardous Substance. To the extent that the transportation of Hazardous Substances is
permitted by this Agreement, the Borrowers shall, and shall cause their Subsidiaries to, dispose of such Hazardous Substances, or of any other wastes, only at licensed disposal facilities operating in compliance with Environmental Laws. 

10.9. Further Assurances. 

Take, and cause each other Loan Party to take, such actions as are necessary or as the Administrative Agent or the Required Lenders may reasonably request from time to time to ensure that the Obligations of each Loan Party under the Loan Documents are secured by substantially all of the assets of each Loan Party (as well as all Capital Securities held by each Loan Party) and guaranteed by each Loan Party that is not a Borrower (including, upon the acquisition or creation thereof, any Subsidiary acquired or created after the Closing Date), in each case as the Administrative Agent may determine, including (a) the execution and delivery of guaranties, security agreements, pledge agreements, mortgages, deeds of trust, financing statements and other documents, and the filing or recording of any of the foregoing and (b) the delivery of certificated securities and other Collateral
with respect to which perfection is obtained by possession.

 

 

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10.10. Deposit Accounts. 

Unless the Administrative Agent otherwise consents in writing, in order to facilitate the Administrative Agent’s and the Lenders’ maintenance and monitoring of their security interests in the Collateral, maintain all of their disbursement accounts (other than accounts permitted not to be maintained with the Administrative Agent pursuant to Section 11.11(e)) with the Administrative Agent, commencing no later than sixty (60) days following the date hereof.

10.11. Clark UK.

Cause the dissolution of Clark UK no later than December 31, 2008, and deliver prompt written evidence of such dissolution to the Administrative Agent.

SECTION 11. NEGATIVE COVENANTS

Until the expiration or termination of the Commitments and thereafter until all Obligations hereunder and under the other Loan Documents are paid in full and all Letters of Credit have been terminated, each Borrower agrees that, unless at any time the Required Lenders shall otherwise expressly consent in writing, it will:

11.1. Debt. 

Not, and not permit any other Loan Party to, create, incur, assume or suffer to exist any Debt, except:

(a) Obligations under this Agreement and the other Loan Documents;

(b) Debt secured by Liens permitted by Section 11.2(d), and extensions, renewals and refinancings thereof; provided that the aggregate amount of all such Debt at any time outstanding shall not exceed $100,000;

(c) Subordinated Debt; provided, that at the time of incurrence of any such Subordinated Debt, (i) no Event of Default has occurred and is then continuing and (ii) the Total Debt to EBITDA Ratio, computed as of the most recently ended Computation Period on a pro forma basis to give effect to the incurrence of such Subordinated Debt, does not exceed 3.0 to 1.0;

(d) Hedging Obligations approved by Administrative Agent and incurred in favor of a Lender or an Affiliate thereof for bona fide hedging purposes and not for speculation;

(e) Debt described on Schedule 11.1 and any extension, renewal or refinancing thereof so long as the principal amount thereof is not increased;

 

 

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(f) the Debt to be Repaid (so long as such Debt is repaid on the Closing Date with the proceeds of the initial Loans hereunder);

(g) Contingent Liabilities arising with respect to customary indemnification obligations in favor of sellers in connection with Permitted Acquisitions and purchasers in connection with dispositions permitted under Section 11.5; 

(h) Debt to the extent arising from final judgments not constituting an Event of Default;

(i) Debt to the extent arising in respect of taxes, assessments, governmental charges or levies and claims for labor, materials and supplies for which the failure to make payments shall not constitute an Event of Default; and

(j) Debt consisting of any obligation to pay management fees permitted under Section 11.4.

11.2. Liens. 

Not, and not permit any other Loan Party to, create or permit to exist any Lien on any of its real or personal properties, assets or rights of whatsoever nature (whether now owned or hereafter acquired), except:

(a) Liens for taxes or other governmental charges not at the time delinquent or thereafter payable without penalty or being contested in good faith by appropriate proceedings and, in each case, for which it maintains adequate reserves;

(b) Liens arising in the ordinary course of business (such as (i) Liens of carriers, warehousemen, mechanics and materialmen and other similar Liens imposed by law and (ii) Liens in the form of deposits or pledges incurred in connection with worker’s compensation, unemployment compensation and other types of social security (excluding Liens arising under ERISA) or in connection with surety bonds, bids, performance bonds and similar obligations) for sums not overdue or being contested in good faith by appropriate proceedings and not involving any advances or borrowed money or the deferred purchase price of property or services and, in each case, for which it maintains adequate reserves;

(c) Liens described on Schedule 11.2 as of the Closing Date;

(d) subject to the limitation set forth in Section 11.1(b), (i) Liens arising in connection with Capital Leases (and attaching only to the property being leased), and (ii) Liens that constitute purchase money security interests on any property securing debt incurred for the purpose of financing all or any part of the cost of acquiring such property, provided that any such Lien attaches to such property within 20 days of the acquisition thereof and attaches solely to the property so acquired;

 

 

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(e) attachments, appeal bonds, judgments and other similar Liens, for sums not exceeding $100,000 arising in connection with court proceedings, provided the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are being actively contested in good faith and by appropriate proceedings;

(f) easements, rights of way, restrictions, minor defects or irregularities in title and other similar Liens not interfering in any material respect with the ordinary conduct of the business of any Loan Party;

(g) Liens arising from final judgments not constituting an Event of Default;

(h) Liens arising from precautionary UCC financing statement filings regarding operating leases, provided that only properties leased by the Loan Parties under such operating leases shall be subject to such Liens;

(i) statutory and common law landlords’ liens under leases to which any of the Loan Parties or any of their Subsidiaries is a party;

(j) normal and customary Liens, rights of setoff and recoupment rights upon deposits of cash in favor of banks or other depository institutions relating to due and unpaid bank fees, bank charges, returned checks and chargebacks, and other normal and customary obligations associated with the maintenance of deposit accounts by such banks or other depository institutions;

(k) Liens in favor of Agent or any Lender arising under any Hedging Agreement; and

(l) Liens arising under the Loan Documents.

11.3. Operating Leases. 

Not permit the aggregate amount of all rental payments under Operating Leases made (or scheduled to be made) by the Loan Parties (on a consolidated basis) to exceed $7,000,000 in any Fiscal Year.

11.4. Restricted Payments. 

Not, and not permit any other Loan Party to, (a) make any distribution to any holders of its Capital Securities, (b) purchase or redeem any of its Capital Securities, (c) pay any management fees or similar fees to any of its equityholders or any Affiliate thereof, (d) make any redemption, prepayment, defeasance, repurchase or any other payment in respect of any Subordinated Debt, or (e) set aside funds for any of the foregoing. Notwithstanding the foregoing, (i) any Subsidiary of any Operating Borrower may pay dividends or make other distributions to such Operating Borrower, (ii) the Loan Parties may make regularly scheduled payments (and may make dividends and distributions to the extent contemporaneously applied toward such payments) of interest and principal in respect of 

 

 

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Subordinated Debt solely to the extent permitted under the subordination provisions thereof, (iii) the Loan Parties may pay dividends and make other distributions to the other Loan Parties to the extent the proceeds thereof are contemporaneously applied against corporate expenses incurred by the Loan Parties in the ordinary course of business; and (iv) Holdings may consummate the Stock Repurchase Transactions.

11.5. Mergers, Consolidations, Sales. 

Not, and not permit any other Loan Party to, (a) be a party to any merger or consolidation, or purchase or otherwise acquire all or substantially all of the assets or any Capital Securities of any class of, or any partnership or joint venture interest in, any other Person, (b) sell, transfer, convey or lease all or any substantial part of (i) its assets except for sales of Inventory in the ordinary course of business or (ii) Capital Securities (including the sale of Capital Securities of any Subsidiary) that would result in a Change of Control, or (c) sell or assign with or without recourse any receivables, except for (i) any such merger, consolidation, sale, transfer, conveyance, lease or assignment of or by any Wholly-Owned Subsidiary of any Operating Borrower into such Borrower or into any other domestic Wholly-Owned Subsidiary of such Borrower; (ii) any such purchase
or other acquisition by any Operating Borrower or any domestic Wholly-Owned Subsidiary of such Borrower of the assets or Capital Securities of any Wholly-Owned Subsidiary of such Borrower; (iii) sales and dispositions of assets (excluding the Capital Securities of Subsidiaries) for at least fair market value (as determined by the Board of Directors of the Borrowers) so long as the value of all assets sold or otherwise disposed of under this clause (iii) in any Fiscal Year does not exceed $100,000 in the aggregate; and (iv) any Acquisition by any Borrower or any domestic Wholly-Owned Subsidiary of such Borrower that satisfies each of the following requirements (herein, a “Permitted Acquisition”):

(A) the business or division acquired comprises a business, or those assets of a business, of the type engaged in, or owned by, Borrowers on the Closing Date;

(B) immediately before and after giving effect to such Acquisition, no Event of Default or Unmatured Event of Default shall exist;

(C) the aggregate consideration to be paid in connection with all Permitted Acquisitions consummated in any Fiscal Year (including any Debt assumed or issued in connection therewith) does not exceed $50,000,000;

(D) immediately after giving effect to such Acquisition, the Borrowers are in pro forma compliance with the covenants contained in Section 11.14 recomputed as of the last day of the most recently ended Computation Period of the Loan Parties as if such Acquisition had occurred on the first day of such Computation Period for testing such compliance;

 

 

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(E) the Acquisition shall be consensual and shall have been approved by the board of directors or similar governing body of the Person and/or business or division being acquired;

(F) prior to such Acquisition, the Administrative Agent shall have received copies of each material document, instrument and agreement to be executed in connection with such Acquisition (with draft copies as and when reasonably available) together with all lien search reports and lien release letters and other documents as the Administrative Agent may require to evidence the termination of Liens on the assets or business being acquired; 

(G) not less than ten (10) Business Days prior to such Acquisition, the Administrative Agent shall have received (x) an acquisition summary with respect to the Person and/or business or division to be acquired, such summary to include a reasonably detailed description thereof (including financial information) and operating results (including financial statements for the most recent 12 month period for which they are available and as otherwise available), the terms and conditions, including economic terms, of the proposed Acquisition, and the Borrowers’ calculation of Adjusted EBITDA relating thereto and (y) financial projections for Holdings and its Subsidiaries for the next two Fiscal Years (including quarterly operating and cash flow budgets), prepared on a pro forma basis after giving effect to such Acquisition, together with a certificate in
the form described in Section 10.1.8, which projections shall demonstrate compliance with the provisions of Section 11.14 for the periods covered hereby;

(H) the Administrative Agent shall have approved the Borrowers’ computation of Adjusted EBITDA (including the computation of Pro Forma Target EBITDA in respect of such Acquisition);

(I) consents shall have been obtained in favor of the Administrative Agent to the collateral assignment of rights and indemnities under the related acquisition documents and opinions of counsel for the Loan Parties and (if delivered to the Loan Party) the selling party in favor of the Administrative Agent and the Lenders have been delivered;

(J) simultaneously with the closing of such Acquisition, the target company (if such Acquisition is structured as a purchase of equity) or the Loan Party (if such Acquisition is structured as a purchase of assets or a merger and a Loan Party is the surviving entity) shall have executed and delivered to Administrative Agent (a) such documents necessary to grant to Administrative Agent for the benefit of the Lenders a first priority Lien in all of the assets of such target company or surviving company and their respective Subsidiaries, each in form and substance satisfactory to Administrative Agent and (b) an unlimited Guaranty of the Obligations or, at the option of Administrative Agent in Administrative Agent’s absolute discretion, a joinder 

 

 

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agreement satisfactory to Administrative Agent in which such target company or surviving company and their respective Subsidiaries become borrowers under this Agreement and assume primary, joint and several liability for the Obligations; 

(K) if the Acquisition is structured as (i) a purchase of assets, the purchaser in such Acquisition shall be an Operating Borrower, (ii) a merger, an Operating Borrower shall be the surviving entity of such merger and (iii) a purchase of Capital Securities, no less than one hundred percent (100%) of the Capital Securities of the Person being acquired shall be purchased in connection therewith, and the Person being acquired shall be organized under the laws of the United States or any State hereof (it being understood and agreed that a Holdco Borrower may consummate a Permitted  Acquisition that is structured only as a purchase of Capital Securities);

(L) the Person and/or business or division to be acquired shall have net income greater than $0 for the trailing four fiscal quarter period immediately preceding the consummation of the Acquisition, as determined based upon such target’s financial statements for its most recent fiscal quarter completed within 30 days prior to the consummation of such Acquisition; and

(M) Revolving Loan Availability exceeds the Revolving Outstandings by not less than $3,000,000, after giving effect to the consummation of the Acquisition and the making of any Revolving Loans and the payment of all fees, expenses and costs in connection therewith.

Upon request by Administrative Agent, Borrowers shall deliver certifications to Administrative Agent, in form and content reasonable to Administrative Agent, with respect to the satisfaction of any or all of the requirements set forth above.

11.6. Modification of Organizational Documents. 

Not permit the charter, by-laws or other organizational documents of any Loan Party to be amended or modified in any way which could reasonably be expected to materially adversely affect the interests of the Lenders (provided, that Holdings shall be permitted to change its name, as expressly contemplated by the Proxy Statement, within thirty (30) days following the Closing Date so long as Holdings delivers evidence of such name change to Administrative Agent within five (5) days of the effectiveness of any such name change); not change, or allow any Loan Party to change, its state of formation or its organizational form.

11.7. Transactions with Affiliates. 

Not, and not permit any other Loan Party to, enter into, or cause, suffer or permit to exist any transaction, arrangement or contract with any of its other Affiliates (other than the Loan Parties) which is on terms which are less favorable than are obtainable from any Person which is not one of its Affiliates.

 

 

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11.8. Unconditional Purchase Obligations. 

Not, and not permit any other Loan Party to, enter into or be a party to any contract for the purchase of materials, supplies or other property or services if such contract requires that payment be made by it regardless of whether delivery is ever made of such materials, supplies or other property or services.

11.9. Inconsistent Agreements. 

Not, and not permit any other Loan Party to, enter into any agreement containing any provision which would (a) be violated or breached by any borrowing by the Borrowers hereunder or by the performance by any Loan Party of any of its Obligations hereunder or under any other Loan Document, (b) prohibit any Loan Party from granting to the Administrative Agent and the Lenders, a Lien on any of its assets or (c) create or permit to exist or become effective any encumbrance or restriction on the ability of any Subsidiary of any Borrower to (i) pay dividends or make other distributions to such Borrower or any other Subsidiary of such Borrower, or pay any Debt owed to such Borrower or any other Subsidiary, (ii) make loans or advances to any Loan Party or (iii) transfer any of its assets or properties to any Loan Party, other than (A) customary restrictions and conditions contained in
agreements relating to the sale of all or a substantial part of the assets of any Subsidiary pending such sale, provided that such restrictions and conditions apply only to the Subsidiary to be sold and such sale is permitted hereunder (B) restrictions or conditions imposed by any agreement relating to purchase money Debt, Capital Leases and other secured Debt permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Debt and (C) customary provisions in leases and other contracts restricting the assignment thereof.

11.10. Business Activities; Issuance of Equity. 

Not, and not permit any other Loan Party to, engage in any line of business other than the businesses engaged in on the date hereof and businesses reasonably related thereto. Not, and not permit any other Loan Party to, issue any Capital Securities other than (a) any issuance of shares of Holdings’ common Capital Securities pursuant to any employee or director option program, benefit plan or compensation program, which issuance does not cause a Change of Control or (b) any issuance by a Subsidiary of any Borrower to such Borrower or another Subsidiary of such Borrower in accordance with Section 11.4. Not permit Clark UK to conduct any business activities, other than activities necessary in connection with the dissolution of Clark UK.

11.11. Investments. 

Not, and not permit any other Loan Party to, make or permit to exist any Investment in any other Person, except the following:

 

 

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(a) contributions by any Borrower to the capital of any domestic Wholly-Owned Subsidiary of such Borrower, or by any Subsidiary to the capital of any other domestic Wholly-Owned Subsidiary, so long as the recipient of any such capital contribution has guaranteed the Obligations and such guaranty is secured by a pledge of all of its Capital Securities and substantially all of its real and personal property, in each case in accordance with Section 10.9;

(b) Investments constituting Debt permitted by Section 11.1;

(c) Contingent Liabilities constituting Debt permitted by Section 11.1 or Liens permitted by Section 11.2;

(d) Cash Equivalent Investments;

(e) bank deposits in the ordinary course of business, provided that all such deposits, other than deposits in an aggregate amount not to exceed $350,000 at any time, shall be maintained with the Administrative Agent;

(f) Investments in securities of Account Debtors received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such account debtors; 

(g) Investments in the form of Permitted Acquisitions; 

(h) CWT’s equity Investment in Kyle Freight & Distribution Services Limited, a company organized under the laws of the United Kingdom, as such Investment exists on the Closing Date; and 

(i) Investments listed on Schedule 11.11 as of the Closing Date;

provided that (x) any Investment which when made complies with the requirements of the definition of the term “Cash Equivalent Investment” may continue to be held notwithstanding that such Investment if made thereafter would not comply with such requirements; (y) no Investment otherwise permitted by clause (b), (c) or (g) shall be permitted to be made if, immediately before or after giving effect thereto, any Event of Default exists and (z) no Investments shall be permitted in Clark UK.

11.12. Restriction of Amendments to Certain Documents. 

Not amend or otherwise modify, or waive any rights under, any Related Agreements or Subordinated Debt Documents if, in any case, such amendment, modification or waiver could be adverse to the interests of the Lenders.

11.13. Fiscal Year.

Not change its Fiscal Year.

 

 

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11.14. Financial Covenants. 

11.14.1. Senior Debt to EBITDA Ratio. Not permit the Senior Debt to EBITDA Ratio as of the last day of any Computation Period to exceed 3.0 to 1.0.

11.14.2. Fixed Charge Coverage Ratio. Not permit the Fixed Charge Coverage Ratio for any Computation Period to be less than 1.25 to 1.00.

11.14.3. Total Debt to EBITDA Ratio. Not permit the Total Debt to EBITDA Ratio as of the last day of any Computation Period to exceed 3.5 to 1.0.

11.14.4. Capital Expenditures. Not permit the aggregate amount of all Capital Expenditures made by the Loan Parties (i) in any Fiscal Year (other than in respect of the Specified Systems CapEx) to exceed $1,000,000 and (ii) in respect of the Specified Systems CapEx to exceed $1,000,000. If the Loan Parties do not utilize the entire amount of Capital Expenditures permitted in any Fiscal Year (other than in respect of the Specified Systems CapEx), the Loan Parties may carry forward, to the immediately succeeding Fiscal Year only, 50% of such unutilized amount (with Capital Expenditures made by the Loan Parties in such succeeding Fiscal Year applied last to such unutilized amount). 

SECTION 12. EFFECTIVENESS; CONDITIONS OF LENDING, ETC.

The obligation of each Lender to make its Loans and of the Issuing Lender to issue Letters of Credit is subject to the following conditions precedent:

12.1. Initial Credit Extension. 

The obligation of the Lenders to make the initial Loans and the obligation of the Issuing Lender to issue its initial Letter of Credit (whichever first occurs) is, in addition to the conditions precedent specified in Section 12.2, subject to the conditions precedent that (a) all Debt to be Repaid has been (or concurrently with the initial borrowing will be) paid in full, and that all agreements and instruments governing the Debt to be Repaid and that all Liens securing such Debt to be Repaid have been (or concurrently with the initial borrowing will be) terminated and (b) the Administrative Agent shall have received (i) evidence, reasonably satisfactory to the Administrative Agent, that Holdings shall have financed the consummation of the Related Transactions with no less than $72,500,000 of
proceeds received from the issuance of its Capital Securities prior to the Closing Date; (ii) evidence, reasonably satisfactory to the Administrative Agent, that the Loan Parties have completed the Related Transactions in accordance with the terms of the Related Agreements (without any amendment thereto or waiver thereunder unless consented to by the Lenders); (iii) evidence, reasonably satisfactory to the Administrative Agent, that (A) the Proxy Statement shall have been approved for distribution to the holders of the Capital Securities of Holdings by the SEC and any other applicable governmental agency or authority, and the Proxy Statement shall have been so distributed, in each case without any amendment or other modification thereto without the prior written consent of the Administrative Agent (such consent not to be unreasonably withheld), (B) the aggregate fees and expenses with respect to the Related 

 

 

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Transactions and without duplication, the transactions contemplated by this Agreement do not exceed $5,200,000, (C) based on the most recent financial statements of Holdings and its Subsidiaries, and after giving effect to the making of the initial Loans and consummation of the Related Transactions and the payment of all fees, expenses and costs incurred in connection therewith, (x) the difference between Revolving Loan Availability and the Revolving Outstandings is not less than $2,000,000, (y) EBITDA for the twelve (12) calendar months most recently ended is not less than $8,200,000 and (z) the Total Debt to EBITDA Ratio for the twelve (12) calendar months most recently ended is not greater than 2.5 to 1.0; (iv) evidence, reasonably satisfactory to the Administrative Agent, that (A) holders of Capital Securities of Holdings holding more than 50% of the Public Shares have approved
the consummation of the stock acquisition contemplated by the Purchase Agreement and (B) holders of Capital Securities of Holdings holding no more than 20% of the Public Shares shall have exercised their rights to participate in the Stock Conversion; and (v) all of the following, each duly executed and dated the Closing Date (or such earlier date as shall be satisfactory to the Administrative Agent), in form and substance satisfactory to the Administrative Agent (and the date on which all such conditions precedent have been satisfied or waived in writing by the Administrative Agent and the Lenders is called the “Closing Date”):

12.1.1. Notes. A Note for each Lender.

12.1.2. Authorization Documents. For each Loan Party, such Person’s (a) charter (or similar formation document), certified by the appropriate governmental authority; (b) good standing certificates in its state of incorporation (or formation) and in each other state requested by the Administrative Agent; (c) bylaws (or similar governing document); (d) resolutions of its board of directors (or similar governing body) approving and authorizing such Person’s execution, delivery and performance of the Loan Documents to which it is party and the transactions contemplated thereby; and (e) signature and incumbency certificates of its officers executing any of the Loan Documents (it being understood that the Administrative Agent and each Lender may conclusively rely on
each such certificate until formally advised by a like certificate of any changes therein), all certified by its secretary or an assistant secretary (or similar officer) as being in full force and effect without modification.

12.1.3. Consents, etc. Certified copies of all documents evidencing any necessary corporate or partnership action, consents and governmental approvals (if any) required for the execution, delivery and performance by the Loan Parties of the documents referred to in this Section 12.

12.1.4. Letter of Direction. A letter of direction containing funds flow information with respect to the proceeds of the Loans on the Closing Date.

12.1.5. Guaranty and Collateral Agreement. A counterpart of the Guaranty and Collateral Agreement executed by each Loan Party, together with all instruments, transfer powers and other items required to be delivered in connection therewith.

 

 

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12.1.6. Real Estate Documents. With respect to each parcel of real property owned by any Loan Party, a duly executed Mortgage providing for a fully perfected Lien, in favor of the Administrative Agent, in all right, title and interest of the applicable Loan Party in such real property, together with:

(a) an ALTA Loan Title Insurance Policy, issued by an insurer acceptable to the Administrative Agent, insuring the Administrative Agent’s first priority Lien on such real property and containing such endorsements as the Administrative Agent may reasonably require (it being understood that the amount of coverage, exceptions to coverage and status of title set forth in such policy shall be acceptable to the Administrative Agent);

(b) copies of all documents of record concerning such real property as shown on the commitment for the ALTA Loan Title Insurance Policy referred to above;

(c) original or certified copies of all insurance policies required to be maintained with respect to such real property by this Agreement, the applicable Mortgage or any other Loan Document;

(d) a survey certified to the Administrative Agent meeting such standards as the Administrative Agent may reasonably establish and otherwise reasonably satisfactory to the Administrative Agent;  

(e) a flood insurance policy concerning such real property, if required by the Flood Disaster Protection Act of 1973; and

(f) an appraisal, prepared by an independent appraiser engaged directly by the Administrative Agent, of such parcel of real property or interest in real property, which appraisal shall satisfy the requirements of the Financial Institutions Reform, Recovery and Enforcement Act, if applicable, and shall evidence compliance with the supervisory loan-to-value limits set forth in the Federal Deposit Insurance Corporation Improvement Act of 1991, if applicable.

Additionally, in the case of any leased real property, a Collateral Access Agreement from the landlord of such property waiving any landlord’s Lien in respect of personal property kept at the premises subject to such lease and permitting access to the location by the Administrative Agent and its agents and continuing such other terms and provisions as may be required by the Administrative Agent.

12.1.7. Projections. Financial projections for Holdings and its Subsidiaries for the three year period commencing January 1, 2008 (including monthly income statements, balance sheets and cash flow statements for the first year, quarterly for the second year and annual thereafter) prepared by Holdings and giving effect to the Related Transactions and the transactions contemplated by this Agreement.

12.1.8. Opinions of Counsel. Opinions of counsel for each Loan Party, including local counsel reasonably requested by the Administrative Agent, and all other opinions issued pursuant to the Related Transactions, providing for reliance in favor of Administrative Agent.

 

 

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12.1.9. Insurance. Evidence of the existence of insurance required to be maintained pursuant to Section 10.3(b), together with evidence that the Administrative Agent has been named as a lender’s loss payee and an additional insured on all related insurance policies. 

12.1.10. Copies of Documents. Copies of the Related Agreements certified by the secretary or assistant secretary (or similar officer) of the Borrowers as being true, accurate and complete.

12.1.11. Payment of Fees. Evidence of payment by the Loan Parties of all accrued and unpaid fees, costs and expenses to the extent then due and payable on the Closing Date, together with all Attorney Costs of the Administrative Agent to the extent invoiced prior to the Closing Date, plus such additional amounts of Attorney Costs as shall constitute the Administrative Agent’s reasonable estimate of Attorney Costs incurred or to be incurred by the Administrative Agent through the closing proceedings (provided that such estimate shall not thereafter preclude final settling of accounts between the Loan Parties and the
Administrative Agent).

12.1.12. Solvency Certificate. A solvency certificate executed by a Senior Officer of the Borrowers.

12.1.13. Pro Forma. A consolidated pro forma balance sheet of Holdings and its Subsidiaries as at the Closing Date, adjusted to give effect to the consummation of the Related Transactions and the financings contemplated hereby (including any Term Loans to be made following the Closing Date) as if such transactions had occurred on such date, consistent in all material respects with the sources and uses of cash as previously described to the Lenders and the forecasts previously provided to the Lenders.

12.1.14. Environmental Reports. Environmental site assessment reports requested by the Administrative Agent.

12.1.15. Search Results; Lien Terminations. Certified copies of Uniform Commercial Code and other public search reports dated a date reasonably near to the Closing Date, listing all effective financing statements and other Liens which name any Loan Party (under their present names and any previous names) as debtors, together with (a) copies of such financing statements and other Liens, (b) payoff letters evidencing repayment in full of all Debt to be Repaid, the termination of all agreements relating thereto and the release of all Liens granted in connection therewith, with Uniform Commercial Code or other appropriate termination statements and documents effective to evidence the foregoing (other than Liens permitted by Section 11.2) and (c) such other Uniform Commercial Code and other Lien termination statements as the Administrative Agent may reasonably request.

 

 

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12.1.16. Filings, Registrations and Recordings. The Administrative Agent shall have received each document (including Uniform Commercial Code financing statements) required by the Collateral Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Lenders, a perfected Lien on the collateral described therein, prior to any other Liens (subject only to Liens permitted pursuant to Section 11.2), in proper form for filing, registration or recording.

12.1.17. Borrowing Base Certificate. A Borrowing Base Certificate dated as of the Closing Date.

12.1.18. Closing Certificate, Consents and Permits. A certificate executed by an officer of the Borrowers on behalf of the Borrowers certifying (a) the matters set forth in Section 12.2.1 as of the Closing Date and (b) the occurrence of the closing of the Related Transactions and that such closing has been consummated in accordance with the terms of the Related Agreements without waiver of any material condition thereof; together with evidence that (i) all necessary governmental, regulatory, creditor, shareholder, partner and other material consents, approvals and exemptions required to be obtained by the Borrowers in connection with the Related Transactions and the transactions contemplated
under this Agreement have been duly obtained on terms reasonably satisfactory to the Administrative Agent and are in full force and effect and (ii) all material permits necessary for the operation of any business(es) acquired in connection with the Related Transactions have been obtained.

12.1.19. Other. Such other documents as the Administrative Agent or any Lender may reasonably request.

12.2. Conditions. 

The obligation (a) of each Lender to make each Loan and (b) of the Issuing Lender to issue each Letter of Credit is subject to the following further conditions precedent that:

12.2.1. Compliance with Warranties, No Default, etc. Both before and after giving effect to any borrowing and the issuance of any Letter of Credit, the following statements shall be true and correct:

(a) the representations and warranties of each Loan Party set forth in this Agreement and the other Loan Documents shall be true and correct in all respects with the same effect as if then made (except to the extent stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct as of such earlier date); and 

(b) no Event of Default or Unmatured Event of Default shall have then occurred and be continuing.

12.2.2. Confirmatory Certificate. If requested by the Administrative Agent or any Lender, the Administrative Agent shall have received (in sufficient 

 

 

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counterparts to provide one to each Lender) a certificate dated the date of such requested Loan or Letter of Credit and signed by a duly authorized representative of the Borrowers as to the matters set out in Section 12.2.1 (it being understood that each request by any Borrower for the making of a Loan or the issuance of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrowers that the conditions precedent set forth in Section 12.2.1 will be satisfied at the time of the making of such Loan or the issuance of such Letter of Credit), together with such other documents as the Administrative Agent or any Lender may reasonably request in support thereof. In addition, if
requested by the Administrative Agent or any Lender, the Administrative Agent shall have received, prior to disbursing the Term Loans, evidence reasonably acceptable to Administrative Agent that the proceeds of such Loans will be concurrently applied to consummate Stock Repurchase Transactions.

SECTION 13. EVENTS OF DEFAULT AND THEIR EFFECT.

13.1. Events of Default. 

Each of the following shall constitute an Event of Default under this Agreement:

13.1.1. Non-Payment of the Loans, etc. Default in the payment when due of the principal of any Loan; or default, and continuance thereof for five days, in the payment when due of any interest, fee, reimbursement obligation with respect to any Letter of Credit or other amount payable by any Borrower hereunder or under any other Loan Document.

13.1.2. Non-Payment of Other Debt. Any default shall occur under the terms applicable to any Debt of any Loan Party in an aggregate amount (for all such Debt so affected and including undrawn committed or available amounts and amounts owing to all creditors under any combined or syndicated credit arrangement) exceeding $500,000 and such default shall (a) consist of the failure to pay such Debt when due, whether by acceleration or otherwise, and such failure shall continue unremedied for a period of ten (10) Business Days or (b) accelerate the maturity of such Debt or permit the holder or holders thereof, or any trustee or agent for such holder or holders, to cause such Debt to become due and payable (or require any Loan Party to purchase or redeem such Debt or post cash
collateral in respect thereof) prior to its expressed maturity.

13.1.3. Other Material Obligations. Default in the payment when due, or in the performance or observance of, any material obligation of, or condition agreed to by, any Loan Party with respect to any material purchase or lease of goods or services where such default, singly or in the aggregate with all other such defaults, might reasonably be expected to have a Material Adverse Effect.

13.1.4. Bankruptcy, Insolvency, etc. Any Loan Party becomes insolvent or generally fails to pay, or admits in writing its inability or refusal to pay, debts as they become due; or any Loan Party applies for, consents to, or acquiesces in the appointment of a trustee, receiver or other custodian for such Loan Party or any property thereof, or makes a 

 

 

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general assignment for the benefit of creditors; or, in the absence of such application, consent or acquiescence, a trustee, receiver or other custodian is appointed for any Loan Party or for a substantial part of the property of any thereof and is not discharged within 60 days; or any bankruptcy, reorganization, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is commenced in respect of any Loan Party, and if such case or proceeding is not commenced by such Loan Party, it is consented to or acquiesced in by such Loan Party, or remains for 60 days undismissed; or any Loan Party takes any action to authorize, or in furtherance of, any of the foregoing.

13.1.5. Non-Compliance with Loan Documents. (a) Failure by any Loan Party to comply with or to perform any covenant set forth in Sections 10.1.5, 10.3(b), 10.5, 10.10, 10.11 or Section 11; or (b) failure by any Loan Party to comply with or to perform any other provision of this Agreement or any other
Loan Document (and not constituting an Event of Default under any other provision of this Section 13) and continuance of such failure described in this clause (b) for 30 days.

13.1.6. Representations; Warranties. Any representation or warranty made by any Loan Party herein or any other Loan Document is breached or is false or misleading in any material respect, or any schedule, certificate, financial statement, report, notice or other writing furnished by any Loan Party to the Administrative Agent or any Lender in connection herewith is false or misleading in any material respect on the date as of which the facts therein set forth are stated or certified.

13.1.7. Pension Plans. (a) Any Person institutes steps to terminate a Pension Plan if as a result of such termination any Borrower or any member of the Controlled Group could be required to make a contribution to such Pension Plan, or could incur a liability or obligation to such Pension Plan, in excess of $250,000; (b) a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA; (c) the Unfunded Liability exceeds twenty percent of the Total Plan Liability, or (d) there shall occur any withdrawal or partial withdrawal from a Multiemployer Pension Plan and the withdrawal liability (without unaccrued interest) to Multiemployer Pension Plans as a result of such withdrawal (including any
outstanding withdrawal liability that any Borrower or any member of the Controlled Group have incurred on the date of such withdrawal) exceeds $250,000.

13.1.8. Judgments. Final judgments which exceed an aggregate of $250,000 shall be rendered against any Loan Party and shall not have been paid, discharged or vacated or had execution thereof stayed pending appeal within 30 days after entry or filing of such judgments.

13.1.9. Invalidity of Collateral Documents, etc. Any Collateral Document shall cease to be in full force and effect; or any Loan Party (or any Person by, through or on behalf of any Loan Party) shall contest in any manner the validity, binding nature or enforceability of any Collateral Document.

 

 

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13.1.10. Invalidity of Subordination Provisions, etc. Any subordination provision in any document or instrument governing Subordinated Debt, or any subordination provision in any guaranty by any Subsidiary of any Subordinated Debt, shall cease to be in full force and effect, or any Loan Party or any other Person (including the holder of any applicable Subordinated Debt) shall contest in any manner the validity, binding nature or enforceability of any such provision.

13.1.11. Change of Control. A Change of Control shall occur. 

13.1.12. Material Adverse Effect. The occurrence of any event having a Material Adverse Effect.

13.1.13. Holding Companies. Any Holdco Borrower shall conduct any business or any other activity, other than any Permitted Acquisition or any business activity directly related to (a) the maintenance of its existence as a holding company and (b) performance of its obligations under the Loan Documents to which such Loan Party is a party.

13.1.14. American Stock Exchange. The failure of Holdings to maintain its listing on the American Stock Exchange or any other national securities exchange acceptable to the Administrative Agent (Administrative Agent hereby acknowledging that a listing on either the NASDAQ Stock Market or the New York Stock Exchange is, in each case, acceptable to Administrative Agent for purposes of this Section 13.1.14).

13.2. Effect of Event of Default. 

If any Event of Default described in Section 13.1.4 shall occur, the Commitments shall immediately terminate and the Loans and all other Obligations hereunder shall become immediately due and payable and the Borrowers shall become immediately obligated to Cash Collateralize all Letters of Credit, all without presentment, demand, protest or notice of any kind; and, if any other Event of Default shall occur and be continuing, the Administrative Agent may (and, upon the written request of the Required Lenders shall) declare the Commitments to be terminated in whole or in part and/or declare all or any part of the Loans and all other Obligations hereunder to be due and payable and/or demand that the Borrowers immediately Cash Collateralize all or any Letters of Credit, whereupon the Commitments
shall immediately terminate (or be reduced, as applicable) and/or the Loans and other Obligations hereunder shall become immediately due and payable (in whole or in part, as applicable) and/or the Borrowers shall immediately become obligated to Cash Collateralize the Letters of Credit (all or any, as applicable), all without presentment, demand, protest or notice of any kind. The Administrative Agent shall promptly advise the Borrowers of any such declaration, but failure to do so shall not impair the effect of such declaration. Any cash collateral delivered hereunder shall be held by the Administrative Agent (without liability for interest thereon) and applied to the Obligations arising in connection with any drawing under a Letter of Credit. After the expiration or termination of all Letters of Credit, such cash collateral shall be applied by the Administrative Agent to any remaining Obligations hereunder and any excess shall be delivered to the Borrowers or as a court of competent jurisdiction may elect.

 

 

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SECTION 14. THE AGENT.

14.1. Appointment and Authorization. 

Each Lender hereby irrevocably (subject to Section 14.10) appoints, designates and authorizes the Administrative Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document, the Administrative Agent shall not have any duty or responsibility except those expressly set forth herein, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent. Without limiting the generality of the foregoing sentence, the use of the term “agent” herein and in other Loan Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

14.2. Issuing Lender. 

The Issuing Lender shall act on behalf of the Lenders (according to their Pro Rata Shares) with respect to any Letters of Credit issued by it and the documents associated therewith. The Issuing Lender shall have all of the benefits and immunities (a) provided to the Administrative Agent in this Section 14 with respect to any acts taken or omissions suffered by the Issuing Lender in connection with Letters of Credit issued by it or proposed to be issued by it and the applications and agreements for letters of credit pertaining to such Letters of Credit as fully as if the term “Administrative Agent”, as used in this Section 14, included the Issuing Lender with respect to such acts or omissions and (b) as
additionally provided in this Agreement with respect to the Issuing Lender.

14.3. Delegation of Duties. 

The Administrative Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct.

 

 

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14.4. Exculpation of Administrative Agent. 

None of the Administrative Agent nor any of its directors, officers, employees or agents shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except to the extent resulting from its own gross negligence or willful misconduct in connection with its duties expressly set forth herein as determined by a final, nonappealable judgment by a court of competent jurisdiction), or (b) be responsible in any manner to any Lender or participant for any recital, statement, representation or warranty made by any Loan Party or Affiliate of any Borrower, or any officer thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document (or the creation, perfection or priority of any Lien or security interest therein), or for any failure of any Borrower or any other party to any Loan Document to perform its Obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Borrower or any of the Subsidiaries or Affiliates of any Borrower.

14.5. Reliance by Administrative Agent. 

The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, electronic mail message, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the Borrowers), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests,
confirmation from the Lenders of their obligation to indemnify the Administrative Agent against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon each Lender. For purposes of determining compliance with the conditions specified in Section 12, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received written notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

 

 

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14.6. Notice of Default. 

The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Event of Default or Unmatured Event of Default except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Lenders, unless the Administrative Agent shall have received written notice from a Lender or the Borrowers referring to this Agreement, describing such Event of Default or Unmatured Event of Default and stating that such notice is a “notice of default”. The Administrative Agent will notify the Lenders of its receipt of any such notice. The Administrative Agent shall take such action with respect to such Event of Default or Unmatured Event of Default as may be requested by the Required Lenders in accordance with Section 13; provided that unless and until the Administrative Agent has received any such request, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Event of Default or Unmatured Event of Default as it shall deem advisable or in the best interest of the Lenders.

14.7. Credit Decision. 

Each Lender acknowledges that the Administrative Agent has not made any representation or warranty to it, and that no act by the Administrative Agent hereafter taken, including any consent and acceptance of any assignment or review of the affairs of the Loan Parties, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender as to any matter, including whether the Administrative Agent has disclosed material information in its possession. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Loan Parties, and made its own decision to
enter into this Agreement and to extend credit to the Borrowers hereunder. Each Lender also represents that it will, independently and without reliance upon the Administrative Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrowers. Except for notices, reports and other documents expressly herein required to be furnished to the Lenders by the Administrative Agent, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial or other condition or creditworthiness of the Borrowers which
may come into the possession of the Administrative Agent.

14.8. Indemnification. 

Whether or not the transactions contemplated hereby are consummated, each Lender shall indemnify upon demand the Administrative Agent and its directors, officers, employees and agents (to the extent not reimbursed by or on behalf of the Borrowers and

 

 

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without limiting the obligation of the Borrowers to do so), according to its applicable Pro Rata Share, from and against any and all Indemnified Liabilities (as hereinafter defined); provided that no Lender shall be liable for any payment to any such Person of any portion of the Indemnified Liabilities to the extent determined by a final, nonappealable judgment by a court of competent jurisdiction to have resulted from the applicable Person’s own gross negligence or willful misconduct. No action taken in accordance with the directions of the Required Lenders shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section. Without limitation of the foregoing, each Lender shall reimburse the Administrative Agent upon demand for its ratable share of any costs or out-of-pocket
expenses (including Attorney Costs and Taxes) incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Borrowers. The undertaking in this Section shall survive repayment of the Loans, cancellation of the Notes, expiration or termination of the Letters of Credit, any foreclosure under, or modification, release or discharge of, any or all of the Collateral Documents, termination of this Agreement and the resignation or replacement of the Administrative Agent.

14.9. Administrative Agent in Individual Capacity. 

LaSalle and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with the Loan Parties and Affiliates as though LaSalle were not the Administrative Agent hereunder and without notice to or consent of any Lender. Each Lender acknowledges that, pursuant to such activities, LaSalle or its Affiliates may receive information regarding the Borrowers or their Affiliates (including information that may be subject to confidentiality obligations in favor of any Borrower or such Affiliate) and acknowledge that the Administrative Agent shall be under no obligation to provide such information to them. With respect to their Loans (if any),  LaSalle and its Affiliates shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though LaSalle were not the Administrative Agent, and the terms “Lender” and “Lenders” include LaSalle and its Affiliates, to the extent applicable, in their individual capacities.

14.10. Successor Administrative Agent. 

The Administrative Agent may resign as Administrative Agent upon 30 days’ notice to the Lenders. If the Administrative Agent resigns under this Agreement, the Required Lenders shall, with (so long as no Event of Default exists) the consent of the Borrowers (which shall not be unreasonably withheld or delayed), appoint from among the Lenders a successor agent for the Lenders. If no successor agent is appointed prior to the effective date of the resignation of the Administrative Agent, the Administrative Agent may appoint, after consulting with the Lenders and the Borrowers, a successor agent from among

 

 

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the Lenders. Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent and the term “Administrative Agent” shall mean such successor agent, and the retiring Administrative Agent’s appointment, powers and duties as Administrative Agent shall be terminated. After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Section 14 and Sections 15.5 and 15.17 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement. If no successor agent has accepted appointment as Administrative Agent by the date which is 30 days following a retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.

14.11. Collateral Matters. 

The Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion, (a) to release any Lien granted to or held by the Administrative Agent under any Collateral Document (i) upon termination of the Commitments and payment in full of all Loans and all other obligations of the Borrowers hereunder and the expiration or termination of all Letters of Credit; (ii) constituting property sold or to be sold or disposed of as part of or in connection with any disposition permitted hereunder; or (iii) subject to Section 15.1, if approved, authorized or ratified in writing by the Required Lenders; or (b) to subordinate its interest in any Collateral to any holder of a Lien on such Collateral which is permitted by Section 11.2(d)(i) or (d)(ii) (it being understood that the Administrative Agent may conclusively rely on a certificate from the Borrowers in determining whether the Debt secured by any such Lien is permitted by Section 11.1(b)). Upon request by the Administrative Agent at any time, the Lenders will confirm in writing the Administrative Agent’s authority to release, or subordinate its interest in, particular types or items of Collateral pursuant to this Section 14.11. Each Lender hereby authorizes the Administrative Agent to give blockage notices in connection with any Subordinated Debt at the direction of Required Lenders and agrees that it will not act unilaterally to
deliver such notices.

14.12. Administrative Agent May File Proofs of Claim. 

In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrowers) shall be entitled and empowered, 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, and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order

 

 

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to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 5, 15.5 and 15.17) allowed in such judicial proceedings; and 

(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 to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 5, 15.5 and 15.17.

Nothing contained herein shall be deemed to authorize the Administrative Agent  to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

14.13. Other Agents; Arrangers and Managers. 

None of the Lenders or other Persons identified on the facing page or signature pages of this Agreement as a “syndication agent,” “documentation agent,” “co-agent,” “book manager,” “lead manager,” “arranger,” “lead arranger” or “co-arranger”, if any, shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than, in the case of such Lenders, those applicable to all Lenders as such. Without limiting the foregoing, none of the Lenders or other Persons so identified shall have or be deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders or other Persons so identified in deciding to enter into this Agreement or in taking or not taking action hereunder.

SECTION 15. GENERAL.

15.1. Waiver; Amendments. 

No delay on the part of the Administrative Agent or any Lender in the exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise by any of them of any right, power or remedy preclude other or further exercise thereof, or the exercise of any other right, power or remedy. No amendment, modification or waiver of, or consent with respect to, any provision of this Agreement or the other Loan Documents shall in any event be effective unless the same shall be in writing and acknowledged by Lenders having an aggregate Pro Rata Shares of not less than the aggregate

 

 

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Pro Rata Shares expressly designated herein with respect thereto or, in the absence of such designation as to any provision of this Agreement, 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. No amendment, modification, waiver or consent shall (a) extend or increase the Commitment of any Lender without the written consent of such Lender, (b) extend the date scheduled for payment of any principal (excluding mandatory prepayments) of or interest on the Loans or any fees payable hereunder without the written consent of each Lender directly affected thereby, (c) reduce the principal amount of any Loan, the rate of interest thereon or any fees payable hereunder, without the consent of each Lender directly affected thereby (except for periodic adjustments of interest
rates and fees resulting from a change in the Applicable Margin as provided for in this Agreement); or (d) release any party from its obligations under the Guaranty and Collateral Agreement or all or any substantial part of the Collateral granted under the Collateral Documents, change the definition of Required Lenders, any provision of this Section 15.1 or reduce the aggregate Pro Rata Share required to effect an amendment, modification, waiver or consent, without, in each case, the written consent of all Lenders. No provision of Sections 6.2.2 or 6.3 with respect to the timing or application of mandatory prepayments of the Loans shall be amended, modified or waived without the consent of Lenders having a majority of the aggregate Pro Rata Shares
of the Term Loans affected thereby. No provision of Section 14 or other provision of this Agreement affecting the Administrative Agent in its capacity as such shall be amended, modified or waived without the consent of the Administrative Agent. No provision of this Agreement relating to the rights or duties of the Issuing Lender in its capacity as such shall be amended, modified or waived without the consent of the Issuing Lender.

15.2. Confirmations. 

The Borrowers and each holder of a Note agree from time to time, upon written request received by it from the other, to confirm to the other in writing (with a copy of each such confirmation to the Administrative Agent) the aggregate unpaid principal amount of the Loans then outstanding under such Note.

15.3. Notices. 

Except as otherwise provided in Sections 2.2.2 and 2.2.3, all notices hereunder shall be in writing (including facsimile transmission) and shall be sent to the applicable party at its address shown on Annex B or at such other address as such party may, by written notice received by the other parties, have designated as its address for such purpose. Notices sent by facsimile transmission shall be deemed to have been given when received; notices sent by mail shall be deemed to have been given three (3) Business Days after the date when sent by registered or certified mail, postage prepaid; and notices sent by hand delivery or overnight
courier service shall be deemed to have been given when received. For purposes of Sections 2.2.2 and 2.2.3, the Administrative Agent shall be entitled to rely on telephonic instructions from any person that the Administrative Agent in good faith believes is an authorized officer or employee of the Borrowers, and the Borrowers shall hold the Administrative Agent and each other Lender harmless from any loss, cost or expense resulting from any such reliance.

 

 

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15.4. Computations. 

Where the character or amount of any asset or liability or item of income or expense is required to be determined, or any consolidation or other accounting computation is required to be made, for the purpose of this Agreement, such determination or calculation shall, to the extent applicable and except as otherwise specified in this Agreement, be made in accordance with GAAP, consistently applied; provided that if the Borrowers notify the Administrative Agent that the Borrowers wish to amend any covenant in Sections 10 or 11.14 (or any related definition) to eliminate or to take into account the effect of any change in GAAP on the operation of such covenant (or if the Administrative Agent notifies the Borrowers that the Required Lenders wish to amend Sections 10 or 11.14 (or any related definition) for such purpose), then the Borrowers’ compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant (or related definition) is amended in a manner satisfactory to the Borrowers and the Required Lenders.

15.5. Costs, Expenses and Taxes. 

The Borrowers agree to pay on demand all reasonable out-of-pocket costs and expenses of the Administrative Agent (including Attorney Costs and any Taxes) in connection with the preparation, execution, syndication, delivery and administration (including perfection and protection of any Collateral and the costs of Intralinks (or other similar service), if applicable) of this Agreement, the other Loan Documents and all other documents provided for herein or delivered or to be delivered hereunder or in connection herewith (including any amendment, supplement or waiver to any Loan Document), whether or not the transactions contemplated hereby or thereby shall be consummated, and all reasonable out-of-pocket costs and expenses (including Attorney Costs and any Taxes) incurred by the Administrative Agent and each Lender after an Event of Default in connection with the collection of
the Obligations or the enforcement of this Agreement, the other Loan Documents or any such other documents or during any workout, restructuring or negotiations in respect thereof. In addition, the Borrowers agree to pay, and to save the Administrative Agent and the Lenders harmless from all liability for, any fees of the Borrowers’ auditors in connection with any reasonable exercise by the Administrative Agent and the Lenders of their rights pursuant to Section 10.2. All Obligations provided for in this Section 15.5 shall survive repayment of the Loans, cancellation of the Notes, expiration or termination of the Letters of Credit and termination of this Agreement.

15.6. Assignments; Participations.

15.6.1. Assignments.

(a) Any Lender may at any time assign to one or more Persons (any such Person, an “Assignee”) all or any portion of such Lender’s Loans and Commitments,

 

 

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with the prior written consent of the Administrative Agent, the Issuing Lender (for an assignment of the Revolving Loans and the Revolving Commitment) and, so long as no Event of Default exists, the Borrowers (which consents shall not be unreasonably withheld or delayed and shall not be required for an assignment by a Lender to a Lender or an Affiliate of a Lender). Except as the Administrative Agent may otherwise agree, any such assignment shall be in a minimum aggregate amount equal to $5,000,000 or, if less, the remaining Commitment and Loans held by the assigning Lender. The Borrowers and the Administrative Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned to an Assignee until the Administrative Agent shall have received and accepted an effective assignment agreement in substantially the form of Exhibit D hereto (an “Assignment Agreement”) executed, delivered and fully completed by the applicable parties thereto and a processing fee of $3,500. No assignment may be made to any Person if at the time of such assignment the Borrowers would be obligated to pay any greater amount under Sections 7.6 or 8 to the Assignee than the Borrowers are then obligated to pay to the assigning Lender under such Sections (and if any assignment is made in violation of the foregoing, the Borrowers will not be required to pay such greater amounts). Any attempted assignment not made in accordance with this Section 15.6.1 shall be treated as the sale of a participation under Section 15.6.2. The Borrowers shall be deemed to have granted their consent to any assignment requiring its consent hereunder unless the Borrowers have expressly objected to such assignment within three (3) Business Days after notice thereof. 

(b) From and after the date on which the conditions described above have been met, (i) such Assignee shall be deemed automatically to have become a party hereto and, to the extent that rights and obligations hereunder have been assigned to such Assignee pursuant to such Assignment Agreement, shall have the rights and obligations of a Lender hereunder and (ii) the assigning Lender, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment Agreement, shall be released from its rights (other than its indemnification rights) and obligations hereunder. Upon the request of the Assignee (and, as applicable, the assigning Lender) pursuant to an effective Assignment Agreement, the Borrowers shall execute and deliver to the Administrative Agent for delivery to the Assignee (and, as applicable, the assigning Lender) a Note in the
principal amount of the Assignee’s Revolving Commitment plus the principal amount of the Assignee’s Term Loans (and, as applicable, a Note in the principal amount of the Revolving Commitment retained by the assigning Lender plus the principal amount of the Term Loans retained by the assigning Lender). Each such Note shall be dated the effective date of such assignment. Upon receipt by the assigning Lender of such Note, the assigning Lender shall return to the Borrowers any prior Note held by it.

(c) 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, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

 

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15.6.2. Participations. Any Lender may at any time sell to one or more Persons participating interests in its Loans, Commitments or other interests hereunder (any such Person, a “Participant”). In the event of a sale by a Lender of a participating interest to a Participant, (a) such Lender’s obligations hereunder shall remain unchanged for all purposes, (b) the Borrowers and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations hereunder and (c) all amounts payable by the Borrowers shall be determined as if such Lender had not sold such participation and shall be paid directly to such
Lender. No Participant shall have any direct or indirect voting rights hereunder except with respect to any event described in Section 15.1 expressly requiring the unanimous vote of all Lenders or, as applicable, all affected Lenders. Each Lender agrees to incorporate the requirements of the preceding sentence into each participation agreement which such Lender enters into with any Participant. The Borrowers agree that if amounts outstanding under this Agreement are due and payable (as a result of acceleration or otherwise), each Participant shall be deemed to have the right of set-off in respect of its participating interest in amounts owing under this Agreement and with respect to any Letter of Credit to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement; provided that such right of set-off shall be subject to the obligation of each Participant to share with the Lenders, and the Lenders agree to share with each Participant, as provided in Section 7.5. The Borrowers also agree that each Participant shall be entitled to the benefits of Section 7.6 or 8 as if it were a Lender (provided that on the date of the participation no Participant shall be entitled to any greater compensation pursuant to Section 7.6 or 8 than would have been paid to the
participating Lender on such date if no participation had been sold and that each Participant complies with Section 7.6(d) as if it were an Assignee).

15.7. Register. 

The Administrative Agent shall maintain a copy of each Assignment Agreement delivered and accepted by it and register (the “Register”) for the recordation of names and addresses of the Lenders and the Commitment of each Lender from time to time and whether such Lender is the original Lender or the Assignee. No assignment shall be effective unless and until the Assignment Agreement is accepted and registered in the Register. All records of transfer of a Lender’s interest in the Register shall be conclusive, absent manifest error, as to the ownership of the interests in the Loans. The Administrative Agent shall not incur any liability of any kind with respect to any Lender with respect to the maintenance of the Register. 

15.8. GOVERNING LAW. 

THIS AGREEMENT AND EACH NOTE SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

 

 

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15.9. Confidentiality. 

As required by federal law and the Administrative Agent’s policies and practices, the Administrative Agent may need to obtain, verify, and record certain customer identification information and documentation in connection with opening or maintaining accounts, or establishing or continuing to provide services. The Administrative Agent and each Lender agree to use commercially reasonable efforts (equivalent to the efforts the Administrative Agent or such Lender applies to maintain the confidentiality of its own confidential information) to maintain as confidential all information provided to them by any Loan Party and designated as confidential, except that the Administrative Agent and each Lender may disclose such information (a) to Persons employed or engaged by the Administrative
Agent or such Lender in evaluating, approving, structuring or administering the Loans and the Commitments; (b) to any assignee or participant or potential assignee or participant that has agreed to comply with the covenant contained in this Section 15.9 (and any such assignee or participant or potential assignee or participant may disclose such information to Persons employed or engaged by them as described in clause (a) above); (c) as required or requested by any federal or state regulatory authority or examiner, or any insurance industry association, or as reasonably believed by the Administrative Agent or such Lender to be compelled by any court decree, subpoena or legal or administrative order or process; (d) as, on the advice of the Administrative Agent’s or such Lender’s counsel, is required by law; (e) in connection with the exercise of any right or remedy under the Loan Documents
or in connection with any litigation to which the Administrative Agent or such Lender is a party; (f) to any nationally recognized rating agency that requires access to information about a Lender’s investment portfolio in connection with ratings issued with respect to such Lender; (g) to any Affiliate of the Administrative Agent, the Issuing Lender or any other Lender who may provide Bank Products to the Loan Parties; or (h) that ceases to be confidential through no fault of the Administrative Agent or any Lender. Notwithstanding the foregoing, the Borrowers consent to the publication by the Administrative Agent or any Lender of a tombstone or similar advertising material relating to the financing transactions contemplated by this Agreement, and the Administrative Agent reserves the right to provide to industry trade organizations information necessary and customary for inclusion in league table measurements.

15.10. Severability. 

Whenever possible each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. All obligations of the Borrowers and rights of the Administrative Agent and the Lenders expressed herein or in any other Loan Document shall be in addition to and not in limitation of those provided by applicable law.

 

 

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15.11. Nature of Remedies. 

All Obligations of the Borrowers and rights of the Administrative Agent and the Lenders expressed herein or in any other Loan Document shall be in addition to and not in limitation of those provided by applicable law. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

15.12. Entire Agreement. 

This Agreement, together with the other Loan Documents, embodies the entire agreement and understanding among the parties hereto and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof (except as relates to the fees described in Section 5.3) and any prior arrangements made with respect to the payment by the Borrowers of (or any indemnification for) any fees, costs or expenses payable to or incurred (or to be incurred) by or on behalf of the Administrative Agent or the Lenders.

15.13. Counterparts. 

This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Agreement. Receipt of an executed signature page to this Agreement by facsimile or other electronic transmission shall constitute effective delivery thereof. Electronic records of executed Loan Documents maintained by the Lenders shall deemed to be originals.

15.14. Successors and Assigns. 

This Agreement shall be binding upon the Borrowers, the Lenders and the Administrative Agent and their respective successors and assigns, and shall inure to the benefit of the Borrowers, the Lenders and the Administrative Agent and the successors and assigns of the Lenders and the Administrative Agent. No other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Loan Documents. The Borrowers may not assign or transfer any of their rights or Obligations under this Agreement without the prior written consent of the Administrative Agent and each Lender.

15.15. Captions. 

Section captions used in this Agreement are for convenience only and shall not affect the construction of this Agreement.

 

 

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15.16. Customer Identification - USA Patriot Act Notice. 

Each Lender and LaSalle (for itself and not on behalf of any other party) hereby notifies the Loan Parties that, pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001 (the “Act”), it is required to obtain, verify and record information that identifies the Loan Parties, which information includes the name and address of the Loan Parties and other information that will allow such Lender or LaSalle, as applicable, to identify the Loan Parties in accordance with the Act.

15.17. INDEMNIFICATION BY THE BORROWERS. 

IN CONSIDERATION OF THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY THE ADMINISTRATIVE AGENT AND THE LENDERS AND THE AGREEMENT TO EXTEND THE COMMITMENTS PROVIDED HEREUNDER, THE BORROWERS HEREBY AGREE TO INDEMNIFY, EXONERATE AND HOLD THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH OF THE OFFICERS, DIRECTORS, EMPLOYEES, AFFILIATES AND AGENTS OF THE ADMINISTRATIVE AGENT AND EACH LENDER (EACH A “LENDER PARTY”) FREE AND HARMLESS FROM AND AGAINST ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, LOSSES, LIABILITIES, DAMAGES AND EXPENSES, INCLUDING ATTORNEY COSTS (COLLECTIVELY, THE “INDEMNIFIED LIABILITIES”), INCURRED BY THE LENDER PARTIES OR ANY OF THEM AS A RESULT OF, OR ARISING OUT OF, OR RELATING TO (A) ANY TENDER OFFER, MERGER, PURCHASE OF CAPITAL SECURITIES, PURCHASE OF ASSETS (INCLUDING THE RELATED TRANSACTIONS) OR OTHER SIMILAR TRANSACTION FINANCED OR
PROPOSED TO BE FINANCED IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, WITH THE PROCEEDS OF ANY OF THE LOANS, (B) THE USE, HANDLING, RELEASE, EMISSION, DISCHARGE, TRANSPORTATION, STORAGE, TREATMENT OR DISPOSAL OF ANY HAZARDOUS SUBSTANCE AT ANY PROPERTY OWNED OR LEASED BY ANY LOAN PARTY, (C) ANY VIOLATION OF ANY ENVIRONMENTAL LAWS WITH RESPECT TO CONDITIONS AT ANY PROPERTY OWNED OR LEASED BY ANY LOAN PARTY OR THE OPERATIONS CONDUCTED THEREON, (D) THE INVESTIGATION, CLEANUP OR REMEDIATION OF OFFSITE LOCATIONS AT WHICH ANY LOAN PARTY OR THEIR RESPECTIVE PREDECESSORS ARE ALLEGED TO HAVE DIRECTLY OR INDIRECTLY DISPOSED OF HAZARDOUS SUBSTANCES OR (E) THE EXECUTION, DELIVERY, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BY ANY OF THE LENDER PARTIES, EXCEPT FOR ANY SUCH INDEMNIFIED LIABILITIES ARISING ON ACCOUNT OF THE APPLICABLE LENDER PARTY’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT AS DETERMINED BY A FINAL, NONAPPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION. IF AND TO THE EXTENT THAT THE FOREGOING UNDERTAKING MAY BE UNENFORCEABLE FOR ANY REASON, THE BORROWERS HEREBY AGREE TO MAKE THE MAXIMUM CONTRIBUTION 

 

 

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TO THE PAYMENT AND SATISFACTION OF EACH OF THE INDEMNIFIED LIABILITIES WHICH IS PERMISSIBLE UNDER APPLICABLE LAW. ALL OBLIGATIONS PROVIDED FOR IN THIS SECTION 15.17 SHALL SURVIVE REPAYMENT OF THE LOANS, CANCELLATION OF THE NOTES, EXPIRATION OR TERMINATION OF THE LETTERS OF CREDIT, ANY FORECLOSURE UNDER, OR ANY MODIFICATION, RELEASE OR DISCHARGE OF, ANY OR ALL OF THE COLLATERAL DOCUMENTS AND TERMINATION OF THIS AGREEMENT.

15.18. Nonliability of Lenders. 

The relationship between the Borrowers on the one hand and the Lenders and the Administrative Agent on the other hand shall be solely that of borrower and lender. Neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to any Loan Party arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Loan Parties, on the one hand, and the Administrative Agent and the Lenders, on the other hand, in connection herewith or therewith is solely that of debtor and creditor. Neither the Administrative Agent nor any Lender undertakes any responsibility to any Loan Party to review or inform any Loan Party of any matter in connection with any phase of any Loan Party’s business or operations. The Borrowers agree, on behalf of themselves and each other Loan Party, that neither the
Administrative Agent nor any Lender shall have liability to any Loan Party (whether sounding in tort, contract or otherwise) for losses suffered by any Loan Party in connection with, arising out of, or in any way related to the transactions contemplated and the relationship established by the Loan Documents, or any act, omission or event occurring in connection therewith, unless it is determined in a final non-appealable judgment by a court of competent jurisdiction that such losses resulted from the gross negligence or willful misconduct of the party from which recovery is sought. NO LENDER PARTY SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY OTHERS OF ANY INFORMATION OR OTHER MATERIALS OBTAINED THROUGH INTRALINKS OR OTHER SIMILAR INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT, NOR SHALL ANY LENDER PARTY HAVE ANY LIABILITY WITH RESPECT TO, AND THE BORROWERS ON BEHALF OF THEMSELVES AND EACH OTHER LOAN PARTY, HEREBY
WAIVE, RELEASE AND AGREE NOT TO SUE FOR ANY SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ARISING OUT OF THEIR ACTIVITIES IN CONNECTION HEREWITH OR THEREWITH (WHETHER BEFORE OR AFTER THE CLOSING DATE). The Borrowers acknowledge that they have been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which they were a party. No joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among the Loan Parties and the Lenders

 

 

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15.19. FORUM SELECTION AND CONSENT TO JURISDICTION.

ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION. THE BORROWERS HEREBY EXPRESSLY AND IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. THE BORROWERS FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. THE
BORROWERS HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

15.20. WAIVER OF JURY TRIAL.

EACH BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

 

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The parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized officers as of the date first set forth above.

 

	
                         
 	
                         
 	
                         
 	
                        GLOBAL LOGISTICS ACQUISITION
 CORPORATION, 
 as a Borrower
 

 

	
                          
 	
                         
 	
      By: 
 	
      
  /s/ Stephen Spritzer
 
	
                         
 	
                         
 	
                        Title:
 	
       Chief Financial Officer
 

 

	
                         
 	
                         
 	
                         
 	
                        THE CLARK GROUP, INC., 
 as a Borrower
 

 

	
                          
 	
                         
 	
      By: 
 	
      
  /s/ Stephen Spritzer
 
	
                         
 	
                         
 	
                        Title:
 	
       Chief Financial Officer
 

 

	
       
 	
       
 	
       
 	
      CLARK DISTRIBUTION SYSTEMS, INC., 

  as a Borrower
 

 

	
                          
 	
       
 	
      By: 
 	
      
  /s/ Stephen Spritzer
 
	
                         
 	
                         
 	
                        Title:
 	
       Chief Financial Officer
 

 

	
                         
 	
                         
 	
                         
 	
                        CLARK WORLDWIDE TRANSPORTATION, INC., 
 as a Borrower
 

 

	
                          
 	
                         
 	
      By: 
 	
      
  /s/ Stephen Spritzer
 
	
                         
 	
                         
 	
                        Title:
 	
       Chief Financial Officer
 

 

	
                         
 	
                         
 	
                         
 	
                        HIGHWAY DISTRIBUTION SYSTEMS, INC., 
 as a Borrower
 

 

	
                          
 	
                         
 	
      By: 
 	
      
  /s/ Stephen Spritzer
 
	
                         
 	
                         
 	
                        Title:
 	
        Chief Financial Officer
 

 

 

Signature Page to Credit Agreement

 

 

	
                         
 	
                         
 	
                         
 	
                        EVERGREEN EXPRESS LINES, INC., 
 as a Borrower
 

	
                          
 	
                         
 	
                        By: 
 	
      
  /s/ Stephen Spritzer
 
	
                         
 	
                         
 	
                        Title:
 	
       Chief Financial Officer
 

 

	
                         
 	
                         
 	
                         
 	
                        LASALLE BANK NATIONAL ASSOCIATION,
 as Administrative Agent, as Issuing Lender and as a Lender
 

	
                          
 	
                         
 	
                        By: 
 	
      
  /s/ Robert W. Hart
 
	
                         
 	
                         
 	
                        Title:
 	
       Senior Vice President
 

 

 

Signature Page to Credit Agreement

 

ANNEX A

LENDERS AND PRO RATA SHARES

 

	
      Lender
 	
                         
 	
                        Revolving 

                        Commitment 

                        Amount
 	
                         
 	
                        Pro Rata

                        Share
 	
                         
 	
                        Term Loan 

                        Commitment 

                        Amount
 	
                         
 	
                        Pro Rata 

                        Share
 
	
                        LaSalle Bank National Association
 	
                         
 	
                        
 $30,000,000
 	
                         
 	
                        
 100%
 	
                         
 	
                        
 $20,000,000
 	
                         
 	
                        100%
 
	
                        TOTALS
 	
                         
 	
                        $30,000,000
 	
                         
 	
                        100%
 	
                         
 	
                        $20,000,000
 	
                         
 	
                        100%
 

 

 

Annex A

 

ANNEX B

ADDRESSES FOR NOTICES

Global Logistics Acquisition Corporation

The Clark Group, Inc.

Clark Distribution Systems, Inc.

Clark Worldwide Transportation, Inc.

Highway Distribution Systems, Inc.

Evergreen Express Lines, Inc.

P.O. Box 438

Trenton, New Jersey 08638

Telephone: (609) 396-1100

Facsimile: (609) 599-1490

LASALLE BANK NATIONAL ASSOCIATION, as Administrative Agent, Issuing Lender and a Lender

Notices of Borrowing, Conversion, Continuation and Letter of Credit Issuance

135 South LaSalle Street

Chicago, Illinois 60603

Attention: Robert W. Hart

Telephone: (312) 904-7136

Facsimile: (312) 904-2903

All Other Notices

135 South LaSalle Street

Chicago, Illinois 60603

Attention: Robert W. Hart

Telephone: (312) 904-7136

Facsimile: (312) 904-2903

 

 

Annex B

 

EXHIBIT A

FORM OF

NOTE

 

	
                        $__________________
 	
                        ____________, ____
 Chicago, Illinois
 

The undersigned, for value received, jointly and severally promise to pay to the order of ______________ (the “Lender”) at the principal office of LaSalle Bank National Association (the “Administrative Agent”) in Chicago, Illinois the aggregate unpaid amount of all Loans made to the undersigned by the Lender pursuant to the Credit Agreement referred to below (as shown on the schedule attached hereto (and any continuation thereof) or in the records of the Administrative Agent), such principal amount to be payable on the dates set forth in the Credit Agreement.

The undersigned further jointly and severally promise to pay interest on the unpaid principal amount of each Loan from the date of such Loan until such Loan is paid in full, payable at the rate(s) and at the time(s) set forth in the Credit Agreement. Payments of both principal and interest are to be made in lawful money of the United States of America.

This Note evidences indebtedness incurred under, and is subject to the terms and provisions of, the Credit Agreement, dated as of February __, 2008 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; terms not otherwise defined herein are used herein as defined in the Credit Agreement), among the undersigned, certain financial institutions (including the Lender) and the Administrative Agent, to which Credit Agreement reference is hereby made for a statement of the terms and provisions under which this Note may or must be paid prior to its due date or its due date accelerated.

 

 

Exhibit A
Page 1

 

This Note is made under and governed by the laws of the State of Illinois applicable to contracts made and to be performed entirely within such State.

 

	
                         
 	
                         
 	
                         
 	
                        GLOBAL LOGISTICS ACQUISITION CORPORATION, 
 as a Borrower
 
	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 	
      By: 
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                        Title: 
 	
   
 

 

	
                         
 	
                         
 	
                         
 	
                        THE CLARK GROUP, INC., 
 as a Borrower
 
	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 	
      By: 
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                        Title: 
 	
   
 

 

	
                         
 	
                         
 	
                         
 	
                        CLARK DISTRIBUTION SYSTEMS, INC., 
 as a Borrower
 
	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 	
      By: 
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                        Title: 
 	
   
 

 

	
                         
 	
                         
 	
                         
 	
                        CLARK WORLDWIDE TRANSPORTATION, INC., 
as a Borrower
 
	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 	
      By: 
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                        Title: 
 	
   
 

 

	
                         
 	
                         
 	
                         
 	
                        HIGHWAY DISTRIBUTION SYSTEMS, INC., 
 as a Borrower
 
	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 	
      By: 
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                        Title: 
 	
   
 

 

	
                         
 	
                         
 	
                         
 	
                        EVERGREEN EXPRESS LINES, INC., 
 as a Borrower
 
	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 	
      By: 
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                        Title: 
 	
   
 

 

 

Exhibit A
Page 2

 

EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE

To: LaSalle Bank National Association, as Administrative Agent

Please refer to the Credit Agreement dated as of February __, 2008 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among Global Logistics Acquisition Corporation, The Clark Group, Inc., Clark Distribution Systems, Inc., Clark Worldwide Transportation, Inc., Highway Distribution Systems, Inc., Evergreen Express Lines, Inc., various financial institutions and LaSalle Bank National Association, as Administrative Agent. Terms used but not otherwise defined herein are used herein as defined in the Credit Agreement.

 

	
                        I.
 	
                        Reports. Enclosed herewith is a copy of the [annual audited/quarterly/monthly] report of Holdings as at _____________, ____ (the “Computation Date”), which report fairly presents in all material respects the financial condition and results of operations [(subject to the absence of footnotes and to normal year-end adjustments)] of Holdings and its Subsidiaries as of the Computation Date and has been prepared in accordance with GAAP consistently applied.
 

 
 

	
                        II.
 	
                        Financial Tests. The Borrowers hereby certify and warrant to you that the following is a true and correct computation as at the Computation Date of the following ratios and/or financial restrictions contained in the Credit Agreement:
 

 
[REVISE AS APPROPRIATE]

 

	
                        A.
 	
                         
 	
                        Section 11.14.1 – Senior Debt to EBITDA Ratio
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        1.
 	
                         
 	
                        Senior Debt
 	
                         
 	
                        $________
 
	
                         
 	
                         
 	
                        2.
 	
                         
 	
                        EBITDA
 	
                         
 	
                        $________
 
	
                         
 	
                         
 	
                        3.
 	
                         
 	
                        Pro Forma Target EBITDA
 	
                         
 	
                        $________
 
	
                         
 	
                         
 	
                        4.
 	
                         
 	
                        Sum of (2) and (3) (Adjusted EBITDA)
 	
                         
 	
                        $________
 
	
                         
 	
                         
 	
                        5.
 	
                         
 	
                        Ratio of (1) to (4)
 	
                         
 	
                        ____ to 1
 
	
                         
 	
                         
 	
                        6.
 	
                         
 	
                        Maximum allowed
 	
                         
 	
                        ____ to 1
 
	
                        B.
 	
                         
 	
                        Section 11.14.2 - Minimum Fixed Charge Coverage Ratio
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        1.
 	
                         
 	
                        EBITDA (from Item A(2) above)
 	
                         
 	
                        $________
 
	
                         
 	
                         
 	
                        2.
 	
                         
 	
                        Income taxes paid
 	
                         
 	
                        $________
 
	
                         
 	
                         
 	
                        3.
 	
                         
 	
                        Unfinanced Capital Expenditures 
 	
                         
 	
                        $________
 

 

 

Exhibit B
Page 1

 

 

	
                         
 	
                         
 	
                        4.
 	
                         
 	
                        Sum of (2) and (3)
 	
                         
 	
                        $________
 
	
                         
 	
                         
 	
                        5.
 	
                         
 	
                        Remainder of (1) minus (4) 
 	
                         
 	
                        $________
 
	
                         
 	
                         
 	
                        6.
 	
                         
 	
                        Interest Expense
 	
                         
 	
                        $________
 
	
                         
 	
                         
 	
                        7.
 	
                         
 	
                        Required payments of principal of Funded Debt (including the Term Loans but excluding Revolving Loans)
 	
                         
 	
                        $________
 
	
                         
 	
                         
 	
      8.
 	
                         
 	
                        Distributions made to holders of Holdings’ Capital Securities, and amounts paid to purchase or redeem such Capital Securities
 	
                         
 	
                        $________
 
	
                         
 	
                         
 	
                        9.
 	
                         
 	
                        Sum of (6), (7) and (8)
 	
                         
 	
                        $________
 
	
                         
 	
                         
 	
                        10.
 	
                         
 	
                        Ratio of (5) to (9)
 	
                         
 	
                        ____ to 1.00
 
	
                         
 	
                         
 	
                        11.
 	
                         
 	
                        Minimum Required
 	
                         
 	
                        1.25 to 1.00
 
	
                        C.
 	
                         
 	
                        Section 11.14.3 - Maximum Total Debt to EBITDA Ratio
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        1.
 	
                         
 	
                        Total Debt
 	
                         
 	
                        $________
 
	
                         
 	
                         
 	
                        2.
 	
                         
 	
                        Adjusted EBITDA (from Item A(3) above)
 	
                         
 	
                        $________
 
	
                         
 	
                         
 	
                        3.
 	
                         
 	
                        Ratio of (1) to (2)
 	
                         
 	
                        _____ to 1
 
	
                         
 	
                         
 	
                        4.
 	
                         
 	
                        Maximum allowed
 	
                         
 	
                        _____ to 1
 
	
                        D.
 	
                         
 	
                        Section 11.14.5 - Capital Expenditures
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                        1.
 	
                         
 	
                        Capital Expenditures for the Fiscal Year (other than in respect of Specified Systems CapEx) 
 	
                         
 	
                        $__________
 
	
                         
 	
                         
 	
                        2.
 	
                         
 	
                        Maximum Permitted Capital Expenditures (other than in respect of Specified Systems CapEx) 
 	
                         
 	
                        $__________
 
	
                         
 	
                         
 	
                        3.
 	
                         
 	
                        Aggregate Specified Systems CapEx
 	
                         
 	
                        $__________
 
	
                         
 	
                         
 	
                        4.
 	
                         
 	
                        Maximum Permitted Specified Systems CapEx
 	
                         
 	
                        $__________
 

The Borrowers further certify to you that no Event of Default has occurred and is continuing.

 

 

Exhibit B
Page 2

 

The Borrowers have caused this Certificate to be executed and delivered by their duly authorized officer on _________, ____.

 

	
                         
 	
                         
 	
                        GLOBAL LOGISTICS ACQUISITION CORPORATION, as a Borrower
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        THE CLARK GROUP, INC., as a Borrower
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        CLARK DISTRIBUTION SYSTEMS, INC., 
 as a Borrower
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        CLARK WORLDWIDE TRANSPORTATION, INC., as a Borrower
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        HIGHWAY DISTRIBUTION SYSTEMS, INC., 
 as a Borrower
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        EVERGREEN EXPRESS LINES, INC., 
 as a Borrower
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

 

Exhibit B
Page 3

 

EXHIBIT C

FORM OF BORROWING BASE CERTIFICATE

	
                        To:
 	
                        LaSalle Bank National Association, as Administrative Agent
 

Please refer to the Credit Agreement dated as of February __, 2008 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among Global Logistics Acquisition Corporation, The Clark Group, Inc., Clark Distribution Systems, Inc., Clark Worldwide Transportation, Inc., Highway Distribution Systems, Inc., Evergreen Express Lines, Inc., various financial institutions and LaSalle Bank National Association, as Administrative Agent. This certificate (this “Certificate”), together with supporting calculations attached hereto, is delivered to you pursuant to the terms of the Credit Agreement. Capitalized terms used but not otherwise defined herein shall have the same
meanings herein as in the Credit Agreement.

The Borrowers hereby certify and warrant to the Administrative Agent and the Lenders that at the close of business on ______________, ____ (the “Calculation Date”), the Borrowing Base was $_____________, computed as set forth on the schedule attached hereto.

The Borrowers have caused this Certificate to be executed and delivered by their officer thereunto duly authorized on ___________, ______.

 

	
                         
 	
                         
 	
                        GLOBAL LOGISTICS ACQUISITION CORPORATION,
 as a Borrower
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        THE CLARK GROUP, INC.,
 as a Borrower
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        CLARK DISTRIBUTION SYSTEMS, INC.,
 as a Borrower
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

 

Exhibit C
Page 1

 

 

	
                         
 	
                         
 	
                        CLARK WORLDWIDE TRANSPORTATION, INC.,
 as a Borrower
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        HIGHWAY DISTRIBUTION SYSTEMS, INC.,
 as a Borrower
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        EVERGREEN EXPRESS LINES, INC.,
 as a Borrower
 
	
                          
 	
                         
 	
                        

                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

 

Exhibit C
Page 2

 

SCHEDULE TO BORROWING BASE CERTIFICATE

Dated as of [_________________]

 

 

	
                        1.
 	
                        Gross Accounts
 	
                         
 	
                         
 	
                         
 	
                        $_________
 
	
                        2.
 	
                        Less Ineligibles
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                        -          Services not fully performed
 	
                         
 	
                        $_________
 	
                         
 	
                         
 
	
                         
 	
                        -          Subject to other Lien or Administrative Agent’s Lien not perfected
 	
                         
 	
                        $_________
 	
                         
 	
                         
 
	
                         
 	
                        -          Subject to Offset, etc.
 	
                         
 	
                        $_________
 	
                         
 	
                         
 
	
                         
 	
                        -          Account Debtor subject to bankruptcy
 	
                         
 	
                        $_________
 	
                         
 	
                         
 
	
                         
 	
                        -          Account Debtor not in U.S. or Canada
 	
                         
 	
                        $_________
 	
                         
 	
                         
 
	
                         
 	
                        -          Sale on Approval, Sale or Return, Bill and Hold or Consignment
 	
                         
 	
                        $_________
 	
                         
 	
                         
 
	
                         
 	
                        -          Not ordinary course of business
 	
                         
 	
                        $_________
 	
                         
 	
                         
 
	
                         
 	
                        -          Federal Accounts not assigned
 	
                         
 	
                        $_________
 	
                         
 	
                         
 
	
                         
 	
                        -          Exceeds credit limit
 	
                         
 	
                        $_________
 	
                         
 	
                         
 
	
                         
 	
                        -          Evidenced by non-assigned instrument etc.
 	
                         
 	
                        $_________
 	
                         
 	
                         
 
	
                         
 	
                        -          Over 30 days past due or over 60 days past invoice date
 	
                         
 	
                        $_________
 	
                         
 	
                         
 
	
                         
 	
                        -          Business Activity Report jurisdiction
 	
                         
 	
                        $_________
 	
                         
 	
                         
 
	
                         
 	
                        -          Affiliate Receivables
 	
                         
 	
                        $_________
 	
                         
 	
                         
 
	
                         
 	
                        -          Cross aged Accounts
 	
                         
 	
                        $_________
 	
                         
 	
                         
 
	
                         
 	
                        -          Concentration limit (25%)
 	
                         
 	
                        $_________
 	
                         
 	
                         
 
	
                         
 	
                        -          Other Administrative Agent exclusions
 	
                         
 	
                        $_________
 	
                         
 	
                         
 
	
                         
 	
                        -          Total
 	
                         
 	
                         
 	
                         
 	
                        $_________
 
	
                        3.
 	
                        Eligible Accounts [Item 1 minus Item 2]
 	
                         
 	
                         
 	
                         
 	
                        $_________
 
	
                        4.
 	
                        Item 3 times 80%
 	
                         
 	
                         
 	
                         
 	
                        $_________
 
	
      5.
 	
                        Appraised value of Eligible Real Estate
 	
                         
 	
                         
 	
                         
 	
                        $_________
 
	
                        6.
 	
                        Item 5 times 50%
 	
                         
 	
                         
 	
                         
 	
                        $_________
 
	
                        7.
 	
                        Sum of Item 4 plus Item 6 (Borrowing Base)
 	
                         
 	
                         
 	
                         
 	
                        $_________
 
	
                        8.
 	
                        Lesser of Item 7 and the aggregate Revolving Commitments of all Lenders
 	
                         
 	
                         
 	
                         
 	
                        $_________
 
	
                        9.
 	
                        Revolving Outstandings (includes Stated Amount of Letters of Credit)
 	
                         
 	
                         
 	
                         
 	
                        $_________
 
	
                        10.
 	
                        Revolving Loan Availability [Excess of Item 8 over Item 9]
 	
                         
 	
                         
 	
                         
 	
                        $_________
 
	
                        11.
 	
                        Required Prepayment [Excess of Item 9 over Item 8]
 	
                         
 	
                         
 	
                         
 	
                        $_________
 

 

 

EXHIBIT D

FORM OF

ASSIGNMENT AGREEMENT

Date:_________________

	
                        To:
 	
                        Global Logistics Acquisition Corporation
 

The Clark Group, Inc.

Clark Distribution Systems, Inc.

Clark Worldwide Transportation, Inc

Highway Distribution Systems, Inc. and

Evergreen Express Lines, Inc.

and

LaSalle Bank National Association, as Administrative Agent

	
                        Re:
 	
                        Assignment under the Credit Agreement referred to below
 

Gentlemen and Ladies:

Please refer to Section 15.6.1 of the Credit Agreement dated as of February __, 2008 (as amended or otherwise modified from time to time, the “Credit Agreement”) among Global Logistics Acquisition Corporation, The Clark Group, Inc., Clark Distribution Systems, Inc., Clark Worldwide Transportation, Inc., Highway Distribution Systems, Inc., and Evergreen Express Lines, Inc., various financial institutions and LaSalle Bank National Association, as administrative agent (in such capacity, the “Administrative Agent”). Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings provided in the Credit Agreement.

____________ (the “Assignor”) hereby sells and assigns, without recourse, to the “Assignee”), and the Assignee hereby purchases and assumes from the Assignor, that interest in and to the Assignor’s rights and obligations under the Credit Agreement as of the date hereof equal to _______% of all of the Loans, of the participation interests in the Letters of Credit and of the Commitments, such sale, purchase, assignment and assumption to be effective as of ___________, ___, or such later date on which the Borrowers and the Administrative Agent shall have consented hereto (the “Effective Date”). After giving effect
to such sale, purchase, assignment and assumption, the Assignee’s and the Assignor’s respective Pro Rata Shares for purposes of the Credit Agreement will be as set forth opposite their names on the signature pages hereof.

 

 

Exhibit D
Page 1

 

The Assignor hereby instructs the Administrative Agent to make all payments from and after the Effective Date in respect of the interest assigned hereby directly to the Assignee. The Assignor and the Assignee agree that all interest and fees accrued up to, but not including, the Effective Date are the property of the Assignor, and not the Assignee. The Assignee agrees that, upon receipt of any such interest or fees, the Assignee will promptly remit the same to the Assignor.

The Assignor represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim.

The Assignee represents and warrants to the Borrowers and the Administrative Agent that, as of the date hereof, the Borrowers will not be obligated to pay any greater amount under Section 7.6 or 8 of the Credit Agreement than the Borrowers are obligated to pay to the Assignor under such Section. [The Assignee has delivered, or is delivering concurrently herewith, to the Borrowers and the Administrative Agent the forms required by Section 7.6 of the Credit Agreement.]  The [Assignee/Assignor] [Borrowers] shall pay the fee payable to the Administrative Agent
pursuant to Section 15.6.1.

The Assignee hereby confirms that it has received a copy of the Credit Agreement. Except as otherwise provided in the Credit Agreement, effective as of the Effective Date:

(a) the Assignee (i) shall be deemed automatically to have become a party to the Credit Agreement and to have all the rights and obligations of a “Lender” under the Credit Agreement as if it were an original signatory thereto to the extent specified in the second paragraph hereof; and (ii) agrees to be bound by the terms and conditions set forth in the Credit Agreement as if it were an original signatory thereto; and 

(b) the Assignor shall be released from its obligations under the Credit Agreement to the extent specified in the second paragraph hereof.

The Assignee hereby advises each of you of the following administrative details with respect to the assigned Loans and Commitment:

	
                         
 	
                        (A)
 	
                        Institution Name:
 

Address:

Attention:

Telephone:

Facsimile:

 

 

Exhibit D
Page 2

 

	
                         
 	
                        (B)
 	
                        Payment Instructions:
 

This Assignment shall be governed by and construed in accordance with the laws of the State of Illinois

Please evidence your receipt hereof and your consent to the sale, assignment, purchase and assumption set forth herein by signing and returning counterparts hereof to the Assignor and the Assignee.

 

	
                        Pro Rata Share = _____%
 	
                         
 	
                        [ASSIGNEE]
 
	
                         
 	
                         
 	
                         
 
	
                          
 	
                         
 	
                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                        Adjusted Pro Rata Share = ______%
 	
                         
 	
                        [ASSIGNOR]
 
	
                         
 	
                         
 	
                         
 
	
                          
 	
                         
 	
                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                        ACKNOWLEDGED AND CONSENTED TO 
 this ____ day of ________, ____
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                        LASALLE BANK NATIONAL ASSOCIATION, 
 as Administrative Agent
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                        By: 
 	
                          
 	
                         
 	
                         
 	
                         
 
	
                        Title:
 	
                         
 	
                         
 	
                         
 	
                         
 

 

	
                        ACKNOWLEDGED AND CONSENTED TO 
 this ____ day of ________, ____
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                        GLOBAL LOGISTICS ACQUISITION CORPORATION, as a  Borrower
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                        By: 
 	
                          
 	
                         
 	
                         
 	
                         
 
	
                        Title:
 	
                         
 	
                         
 	
                         
 	
                         
 

 

 

Exhibit D
Page 3

 

 

	
                        THE CLARK GROUP, INC., as a Borrower
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                        By: 
 	
                          
 	
                         
 	
                         
 	
                         
 
	
                        Title:
 	
                         
 	
                         
 	
                         
 	
                         
 

 

	
                        CLARK DISTRIBUTION SYSTEMS, INC., as a Borrower
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                        By: 
 	
                          
 	
                         
 	
                         
 	
                         
 
	
                        Title:
 	
                         
 	
                         
 	
                         
 	
                         
 

 

	
                        CLARK WORLDWIDE TRANSPOTATION, INC., as a Borrower
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                        By: 
 	
                          
 	
                         
 	
                         
 	
                         
 
	
                        Title:
 	
                         
 	
                         
 	
                         
 	
                         
 

 

	
                        HIGHWAY DISTRIBUTION SYSTEMS, INC., as a Borrower
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                        By: 
 	
                          
 	
                         
 	
                         
 	
                         
 
	
                        Title:
 	
                         
 	
                         
 	
                         
 	
                         
 

 

	
                        EVERGREEN EXPRESS LINES, INC.,
 as a Borrower
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                        By: 
 	
                          
 	
                         
 	
                         
 	
                         
 
	
                        Title:
 	
                         
 	
                         
 	
                         
 	
                         
 

 

 

Exhibit D
Page 4

 

EXHIBIT E

FORM OF NOTICE OF BORROWING

	
                        To:
 	
                        LaSalle Bank National Association, as Administrative Agent
 

Please refer to the Credit Agreement dated as of February __, 2008 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among Global Logistics Acquisition Corporation, The Clark Group, Inc., Clark Distribution Systems, Inc., Clark Worldwide Transportation, Inc., Highway Distribution Systems, Inc. and Evergreen Express Lines, Inc. and various financial institutions and LaSalle Bank National Association, as Administrative Agent. Terms used but not otherwise defined herein are used herein as defined in the Credit Agreement.

The undersigned hereby gives irrevocable notice, pursuant to Section 2.2.2 of the Credit Agreement, of a request hereby for a borrowing as follows:

i. The requested borrowing date for the proposed borrowing (which is a Business Day) is ______________, ____.

ii. The aggregate amount of the proposed borrowing is $______________.

iii. The type of Revolving Loans comprising the proposed borrowing are [Base Rate] [LIBOR] Loans.

iv. The duration of the Interest Period for each LIBOR Loan made as part of the proposed borrowing, if applicable, is ___________ months (which shall be 1, 2, 3 or 6 months).

The undersigned hereby certifies that on the date hereof and on the date of borrowing set forth above, and immediately after giving effect to the borrowing requested hereby: (i) there exists and there shall exist no Unmatured Event of Default or Event of Default under the Credit Agreement; and (ii) each of the representations and warranties contained in the Credit Agreement and the other Loan Documents is true and correct as of the date hereof, except to the extent that such representation or warranty expressly relates to another date and except for changes therein expressly permitted or expressly contemplated by the Credit Agreement.

 

 

Exhibit E
Page 1

 

The Borrowers have caused this Notice of Borrowing to be executed and delivered by their officer thereunto duly authorized on ___________, ______.

 

	
                         
 	
                         
 	
                        GLOBAL LOGISTICS ACQUISITION CORPORATION, as a Borrower
 
	
                         
 	
                         
 	
                         
 
	
                          
 	
                         
 	
                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        THE CLARK GROUP, INC., as a Borrower
 
	
                         
 	
                         
 	
                         
 
	
                          
 	
                         
 	
                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        CLARK DISTRIBUTION SYSTEMS, INC., 
 as a Borrower
 
	
                         
 	
                         
 	
                         
 
	
                          
 	
                         
 	
                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        CLARK WORLDWIDE TRANSPORTATION, INC.,
 as a Borrower
 
	
                         
 	
                         
 	
                         
 
	
                          
 	
                         
 	
                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        HIGHWAY DISTRIBUTION SYSTEMS, INC., 
 as a Borrower
 
	
                         
 	
                         
 	
                         
 
	
                          
 	
                         
 	
                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        EVERGREEN EXPRESS LINES, INC., 
 as a Borrower
 
	
                         
 	
                         
 	
                         
 
	
                          
 	
                         
 	
                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

 

Exhibit E
Page 2

 

EXHIBIT F

FORM OF NOTICE OF CONVERSION/CONTINUATION

	
                        To:
 	
                        LaSalle Bank National Association, as Administrative Agent
 

Please refer to the Credit Agreement dated as of February __, 2008 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among Global Logistics Acquisition Corporation, The Clark Group, Inc., Clark Distribution Systems, Inc., Clark Worldwide Transportation, Inc., Highway Distribution Systems, Inc., Evergreen Express Lines, Inc. and various financial institutions and LaSalle Bank National Association, as Administrative Agent. Terms used but not otherwise defined herein are used herein as defined in the Credit Agreement.

The undersigned hereby gives irrevocable notice, pursuant to Section 2.2.3 of the Credit Agreement, of its request to:

(a) on [     date     ] convert $[________]of the aggregate outstanding principal amount of the [_______] Loan, bearing interest at the [________] Rate, into a(n) [________] Loan [and, in the case of a LIBOR Loan, having an Interest Period of [_____] month(s)];

[(b) on [     date     ] continue $[________]of the aggregate outstanding principal amount of the [_______] Loan, bearing interest at the LIBOR Rate, as a LIBOR Loan having an Interest Period of [_____] month(s)].

The undersigned hereby represent and warrant that all of the conditions contained in Section 12.2 of the Credit Agreement have been satisfied on and as of the date hereof, and will continue to be satisfied on and as of the date of the conversion/continuation requested hereby, before and after giving effect thereto.

 

 

Exhibit F
Page 1

 

The Borrowers have caused this Notice of Conversion/Continuation to be executed and delivered by their officer thereunto duly authorized on ___________, ______.

 

	
                         
 	
                         
 	
                        GLOBAL LOGISTICS ACQUISITION CORPORATION, as a Borrower
 
	
                         
 	
                         
 	
                         
 
	
                          
 	
                         
 	
                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        THE CLARK GROUP, INC., as a Borrower
 
	
                         
 	
                         
 	
                         
 
	
                          
 	
                         
 	
                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        CLARK DISTRIBUTION SYSTEMS, INC., 
 as a Borrower
 
	
                         
 	
                         
 	
                         
 
	
                          
 	
                         
 	
                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        CLARK WORLDWIDE TRANSPORTATION, INC., as a Borrower
 
	
                         
 	
                         
 	
                         
 
	
                          
 	
                         
 	
                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        HIGHWAY DISTRIBUTION SYSTEMS, INC., 
 as a Borrower
 
	
                         
 	
                         
 	
                         
 
	
                          
 	
                         
 	
                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

	
                         
 	
                         
 	
                        EVERGREEN EXPRESS LINES, INC., 
 as a Borrower
 
	
                         
 	
                         
 	
                         
 
	
                          
 	
                         
 	
                        By: 
 	
                          
 
	
                         
 	
                         
 	
                        Title:
 	
                         
 

 

 

Exhibit F
Page 2Execution Version 

 

 

WARRANT AGREEMENT

BPW ACQUISITION CORP.

and

MELLON INVESTOR SERVICES LLC, as Warrant Agent

 

WARRANT AGREEMENT

Dated as of  February 26, 2008

 

 

 

 

WARRANT AGREEMENT

TABLE OF CONTENTS

 

	
                         
 	
                         
 	
                         
 	
                         
 	
                        Page
 
	
      SECTION 1.
 	
                         
 	
                        Appointment of Warrant Agent
 	
                         
 	
                        -1-
 
	
                        SECTION 2.
 	
                         
 	
                        Warrant Certificates
 	
                         
 	
                        -1-
 
	
                        SECTION 3.
 	
                         
 	
                        Execution of Warrant Certificates
 	
                         
 	
                        -2-
 
	
                        SECTION 4.
 	
                         
 	
                        Registration and Countersignature
 	
                         
 	
                        -2-
 
	
                        SECTION 5.
 	
                         
 	
                        Registration of Transfers and Exchanges; Transfer Restrictions
 	
                         
 	
                        -2-
 
	
                        SECTION 6.
 	
                         
 	
                        Terms of Warrants
 	
                         
 	
                        -5-
 
	
                        SECTION 7.
 	
                         
 	
                        Payment of Taxes
 	
                         
 	
                        -10-
 
	
                        SECTION 8.
 	
                         
 	
                        Mutilated or Missing Warrant Certificates
 	
                         
 	
                        -10-
 
	
                        SECTION 9.
 	
                         
 	
                        Reservation of Warrant Shares
 	
                         
 	
                        -11-
 
	
                        SECTION 10.
 	
                         
 	
                        Obtaining Stock Exchange Listings
 	
                         
 	
                        -11-
 
	
                        SECTION 11.
 	
                         
 	
                        Adjustment of Number of Warrant Shares
 	
                         
 	
                        -12-
 
	
                        SECTION 12.
 	
                         
 	
                        Fractional Interests
 	
                         
 	
                        -14-
 
	
                        SECTION 13.
 	
                         
 	
                        Notices to Warrant Holders
 	
                         
 	
                        -14-
 
	
                        SECTION 14.
 	
                         
 	
                        Merger, Consolidation or Change of Name of Warrant Agent
 	
                         
 	
                        -16-
 
	
                        SECTION 15.
 	
                         
 	
                        Warrant Agent
 	
                         
 	
                        -16-
 
	
                        SECTION 16.
 	
                         
 	
                        Change of Warrant Agent
 	
                         
 	
                        -20-
 
	
                        SECTION 17.
 	
                         
 	
                        Notices to Company and Warrant Agent
 	
                         
 	
                        -21-
 
	
                        SECTION 18.
 	
                         
 	
                        Supplements and Amendments
 	
                         
 	
                        -21-
 
	
                        SECTION 19.
 	
                         
 	
                        Successors
 	
                         
 	
                        -22-
 
	
                        SECTION 20.
 	
                         
 	
                        Termination
 	
                         
 	
                        -22-
 
	
                        SECTION 21.
 	
                         
 	
                        Governing Law
 	
                         
 	
                        -22-
 
	
                        SECTION 22.
 	
                         
 	
                        Benefits of This Agreement
 	
                         
 	
                        -22-
 
	
                        SECTION 23.
 	
                         
 	
                        Counterparts
 	
                         
 	
                        -22-
 
	
                        SECTION 24.
 	
                         
 	
                        Force Majeure
 	
                         
 	
                        -22-
 
	
                         
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Exhibit A
 	
                         
 	
                        Form of Warrant Certificate
 	
                         
 	
                         
 
	
                        Exhibit B
 	
                         
 	
                        Legend – Founders’ Warrants and Sponsors’ Warrants
 	
                         
 	
   
 

 

 

THIS WARRANT AGREEMENT (this “Agreement”), dated as of February 26, 2008, is by and between BPW Acquisition Corp., a Delaware corporation (the “Company”), and Mellon Investor Services LLC, a New Jersey limited liability company, as warrant agent (the “Warrant Agent”).

WHEREAS, the Company has filed a registration statement (the “Registration Statement”) with the Securities Exchange Commission for the initial public offering (the “IPO”) of up to 40,250,000 units (the “Public Units”), each  consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), and one warrant (the “Public Warrants”) to purchase one share of Common
Stock at an exercise price of $7.50 per share (the Common Stock issuable upon exercise of the Public Warrants, “Public Warrant Shares”);

WHEREAS, the Company (i) has previously issued to Perella Weinberg Partners Acquisition LP, a Delaware limited partnership, and BNYH BPW Holdings LLC, a Delaware limited liability company (each a “Sponsor” and together the “Sponsors”) an aggregate of 7,102,941 units (the “Founders’ Units”), each consisting of one share of Common Stock (the “Founders’ Common Stock”) and one warrant to purchase one share of Common Stock at an exercise price of $10.00 per share (the
“Founders’ Warrants”) bearing the legend set forth in Exhibit B hereto; and (ii) has agreed  to issue and sell an aggregate of 8,600,000 warrants, each to purchase one share of Common Stock at an exercise price of $7.50 per share, bearing the legend set forth in Exhibit B hereto to the Sponsors in a private placement to occur simultaneously with the consummation of the IPO (the “Sponsors’ Warrants” and together with the Founders’ Warrants and the Public Warrants, the “Warrants”; and the Common Stock issuable upon exercise of
the Warrants, the “Warrant Shares”);

WHEREAS, the Sponsors (a) have previously transferred at cost an aggregate of 270,927 Founders’ Units to the independent directors of the Company and (b) have agreed to transfer at cost an aggregate of 149,571 Sponsors’ Warrants to the independent directors of the Company (such independent directors together with the Sponsors, the “Founders”);

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, transfer, exchange and exercise of Warrants and other matters as provided herein.

NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth herein, the parties hereto, intending to be legally bound, hereby agree as follows:

SECTION 1. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the express terms and conditions (and no implied terms) of this Agreement.

SECTION 2. Warrant Certificates. The certificates evidencing the Warrants (the “Warrant Certificates”) to be delivered pursuant to this Agreement shall be in registered form only and shall be substantially in the form set forth in Exhibit A attached hereto.

 

 

SECTION 3. Execution of Warrant Certificates. Warrant Certificates shall be signed on behalf of the Company by its Chairman of the Board or its President or Chief Executive Officer or a Senior Vice President, Vice President and by its Secretary or an Assistant Secretary. Each such signature upon the Warrant Certificates may be in the form of a facsimile signature of the present or any future Chairman of the Board, President, Chief Executive Officer, Senior Vice President, Vice President, Secretary or Assistant Secretary and may be imprinted or otherwise reproduced on the Warrant Certificates and for that purpose the Company may adopt and use the facsimile signature of any person who shall have been Chairman of the Board, President, Chief Executive Officer, Senior Vice President, Vice President,
Secretary or Assistant Secretary, notwithstanding the fact that at the time the Warrant Certificates shall be countersigned and delivered or disposed of he or she shall have ceased to hold such office.

In case any officer of the Company who shall have signed any of the Warrant Certificates shall cease to be such officer before the Warrant Certificates so signed shall have been countersigned by the Warrant Agent, or disposed of by the Company, such Warrant Certificates nevertheless may be countersigned and delivered or disposed of as though such person had not ceased to be such officer of the Company; and any Warrant Certificate may be signed on behalf of the Company by any person who, at the actual date of the execution of such Warrant Certificate, shall be a proper officer of the Company to sign such Warrant Certificate, although at the date of the execution of this Warrant Agreement any such person was not such officer.

Warrant Certificates shall be dated the date of countersignature by the Warrant Agent.

SECTION 4. Registration and Countersignature. Warrant Certificates shall be countersigned by the Warrant Agent and shall not be valid for any purpose unless so countersigned. The Warrant Agent shall, upon the written instructions of the Chairman of the Board, the Vice Chairman, the President or Chief Executive Officer, a Senior Vice President, Vice President, the Treasurer or the Chief Financial Officer of the Company, countersign, issue and deliver Warrants.

The Warrant Agent shall maintain books (the “Warrant Register”) for the registration of original issuance and the registration of transfers of the Warrant. The Company and the Warrant Agent may deem and treat the person in whose name such Warrants shall be registered upon the Warrant Register (“Registered Holders”) as the absolute owner(s) thereof (notwithstanding any notation of ownership or other writing on the Warrant Certificate made by anyone other than the Company or the Warrant Agent), for all purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.

SECTION 5. Registration of Transfers and Exchanges; Transfer Restrictions. The Warrant Agent shall from time to time, subject to the limitations of this Section 5, register the transfer of any outstanding Warrant Certificates upon the Warrant Register, upon surrender thereof duly endorsed with signatures properly guaranteed by a bank, trust company, broker, dealer, municipal securities dealer, government securities dealer or broker, credit union, a national securities exchange registered securities association or clearing agency, or a savings institution that is a participant in a Securities Transfer Association program or by a Medallion 

 

 

-2-

 

Signature Guarantor and accompanied by a written instrument or instruments of transfer in form satisfactory to the Warrant Agent, duly executed by the registered holder or holders thereof or by the duly appointed legal representative thereof or by a duly authorized attorney. Upon any such registration of transfer, a new Warrant Certificate shall be issued to the transferee(s) and the surrendered Warrant Certificate shall be cancelled by the Warrant Agent. Cancelled Warrant Certificates shall thereafter be delivered by the Warrant Agent to the Company from time to time upon written request. The (x) Founders’ Warrants may not be sold or transferred prior to the date that is one year after the date upon which the Company completes its initial business combination (as defined in the Registration Statement, its “Initial Business
Combination”), except (A) to partners, members or employees of Perella Weinberg Partners Group, LP and Brooklyn NY Holdings LLC or the Company, (B) to a holders’ partners or members upon its liquidation, (C) to relatives and trusts for estate planning purposes, or (D) by private sales of up to 33% of the outstanding Founders’ Units made at or prior to the consummation of the Initial Business Combination at purchase prices no greater than the price at which such Founders’ Units were originally purchased from the Company, and (y) Sponsors’ Warrants may not be sold or transferred until the date immediately following the date on which the Company completes its Initial Business Combination, except (A) to the Company’s officers or directors, any affiliates or family members of any of the Company’s officers or directors or any affiliates of either Sponsor, including the holders of their equity
securities and partners, members and employees of Perella Weinberg Partners Group, LP and Brooklyn NY Holdings LLC, (B) by gift to a member of a holder’s immediate family or to a trust, the beneficiary of which is a member of the holder’s immediate family, an affiliate of a Sponsor or to a charitable organization; (C) by virtue of the laws of descent and distribution upon death of any holder; (D) by virtue of the laws of the state of Delaware or a Sponsors’ limited partnership or limited liability company agreement upon dissolution of the Sponsor, or (E) pursuant to a qualified domestic relations order to which a holder is subject; provided, however, that the permissive transfers set forth above with respect to the Founders’ Warrants and the Sponsors’ Warrants may be implemented only upon the respective transferee’s written agreement with the Company to be
bound by the terms and conditions of such transfer restrictions and, if at the time applicable, the provisions of Section 6(g) of this Agreement (as applicable, such permitted transferees the “Permitted Transferees”). 

The Founders’ Warrants shall cease to be subject to the foregoing transfer restrictions if, subsequent to the Company’s completion of its Initial Business Combination, (i) the Last Reported Sales Price (as defined in Section 6(b) below) of the Common Stock equals or exceeds $13.25 per share for any 20 trading days within a 30-trading day period beginning 90 days after the Initial Business Combination, or (ii) the Company consummates a subsequent liquidation, merger, stock exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property. 

The holders of any Founders’ Warrants, Sponsors’ Warrants or Warrant Shares issued upon exercise of any Sponsors’ Warrants or Founders’ Warrants further agree, prior to any transfer of such securities, to give written notice to the Company expressing its desire to effect such transfer and describing briefly the proposed transfer. Upon receiving such notice, the Company shall present copies thereof to its counsel and the Warrant Agent and such holder agrees not to make any disposition of all or any portion of such securities unless and until:

 

 

-3-

 

(a) there is then in effect a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), covering such proposed disposition and such disposition is made in accordance with such registration statement, in which case the legends set forth in Exhibit B or Section 6(c) hereof, as the case may be (collectively, the “Legends”) with respect to such securities sold pursuant to such registration statement shall be removed; or

(b) if reasonably requested by the Company, (A) the holder shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such securities under the Securities Act, (B) the Company shall have received customary representations and warranties regarding the transferee that are reasonably satisfactory to the Company signed by the proposed transferee and (C) the Company shall have received an agreement by such transferee to the restrictions contained in the Legends.

Notwithstanding anything herein to the contrary, in the event a warrant surrendered for transfer bears a transfer legend, the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange therefore until the Warrant Agent has received an opinion of counsel for Company stating that such transfer may be made and indicating whether the new warrant must also bear any such Legends. 

Each Public Warrant shall initially be issued together with one share of Common Stock as a Unit. The share of Common Stock and the Public Warrant comprising a Public Unit shall not be separately transferable until the 35th day following the date of the final prospectus related to the IPO (unless Citigroup Global Markets Inc. informs the Company of its decision to allow earlier separate trading), subject to the Company having filed a Current Report on Form 8-K with the Securities and Exchange Commission containing an audited balance sheet reflecting the Company’s receipt of the gross proceeds of the offering of the Public Units and having issued a press release announcing when such separate trading of the shares of Common Stock and Public Warrants comprising the Public Units will begin (such date the “Detachment
Date”). Prior to the Detachment Date, Public Warrants may be transferred or exchanged only together with the Public Unit in which such Public Warrant is included, and only for the purpose of effecting, or in conjunction with, a transfer or exchange of such Unit. Furthermore, prior to the Detachment Date, each transfer of a Public Unit on the register relating to such Units shall operate also to transfer the Public Warrant included in such Unit. 

Subject to the terms of this Agreement, Warrant Certificates may be exchanged at the option of the holder(s) thereof, when surrendered to the Warrant Agent for another Warrant Certificate or other Warrant Certificates of like tenor and representing in the aggregate an equal number of Warrants. Any holder desiring to exchange a Warrant Certificate shall deliver a written request to the Warrant Agent, and shall surrender, duly endorsed with signatures guaranteed by a bank, trust company, broker, deal, municipal securities deal, government securities dealer or broker, credit union, a national securities exchange registered securities association or clearing agency, or a savings institutions that is a participant in a securities Transfer Association program or by a Medallion Signature Guarantor and accompanied by a written instrument or instruments of transfer in form satisfactory
to the Warrant Agent, the Warrant Certificate or Certificates to be so exchanged. Warrant Certificates surrendered for 

 

 

-4-

 

exchange shall be cancelled by the Warrant Agent. Such cancelled Warrant Certificates shall then be delivered by the Warrant Agent to the Company from time to time upon request.

The Warrant Agent is hereby authorized to countersign, in accordance with the terms of this Agreement, the new Warrant Certificates required pursuant to the provisions of this Section 5 and the Company, when required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purposes.

SECTION 6. Terms of Warrants.

(a) Exercise Price and Exercise Period

The initial exercise price per share at which Warrant Shares shall be purchasable upon the exercise of Warrants (the “Exercise Price”) shall be (i) $7.50 per share in the case of the Public Warrants and the Sponsors’ Warrants, and (ii) $10.00 per share in the case of the Founders’ Warrants, and each Warrant shall be initially exercisable to purchase one share of Common Stock.

Subject to the terms of this Agreement (including without limitation Section 6(e) below), each Warrant holder shall have the right, which may be exercised commencing at the opening of business on the first day of the applicable Warrant Exercise Period set forth below and until 5:00 p.m., New York City time, on the last day of such Warrant Exercise Period, to receive from the Company the number of fully paid and nonassessable Warrant Shares which the holder may at the time be entitled to receive upon the proper exercise of such Warrant in accordance with Section 6(c) of this Agreement. No adjustments as to dividends will be made upon exercise of the Warrants.

The “Warrant Exercise Period” shall (x) commence (subject to Section 6(e) below):

	
                         
 	
                        (A)
 	
                        With respect to the Public Warrants and the Sponsor Warrants, on the later of (1) the date that is 12 months from the date of the final prospectus relating to the IPO; and (2) the date on which the Company completes its Initial Business Combination; and
 

	
                         
 	
                        (B)
 	
                        With respect to the Founders’ Warrants, on the later of (1) the date on which the Company completes its Initial Business Combination and (2) one year from the date of the final prospectus relating to the IPO, in each case, if and only when the Last Reported Sales Price of the Common Stock (as defined below) equals or exceeds $12.25 per share for any 20 days within any 30 day trading period beginning 90 days after the Company’s completion of the Initial Business Combination
 

and shall (y) end on the earlier of:

	
                         
 	
                        (A)
 	
                        the date that is six years from the date of the final prospectus relating to the IPO; and
 

 

 

-5-

 

	
                         
 	
                        (B)
 	
                        the Business Day preceding the date on which such Warrants are redeemed pursuant to Section 6(b) below or expire pursuant to Section 6(f) below.
 

The “Last Reported Sales Price” of the Common Stock on any date of determination means:

	
                         
 	
                        (A)
 	
                        the last reported sale price for the regular trading session (without considering after hours or other trading outside regular trading session hours) of the Common Stock (regular way) on the American Stock Exchange on that date,
 

	
                         
 	
                        (B)
 	
                        if the Common Stock is not listed for trading on the American Stock Exchange on that date, the last reported sale price reported in the composite transactions for the principal United States securities exchange on which the Common Stock is so listed, 
 

	
                         
 	
                        (C)
 	
                        if the Common Stock is not so reported, the last quoted bid price for the Common Stock in the over-the-counter market as reported by the OTC Bulletin Board, the National Quotation Bureau or similar organization, or
 

	
                         
 	
                        (D)
 	
                        if the Common Stock is not so quoted, the average of the mid-point of the last bid and ask prices for the Common Stock from at least three nationally recognized investment banking firms that the Company selects for this purpose.
 

“Business Day” shall mean any day on which the American Stock Exchange is open for trading and which is not a Saturday, a Sunday or any other day on which banks in the City of New York, New York, are authorized or required by law to close.

Each Warrant not exercised or redeemed prior to 5:00 p.m., New York City time, on the last day of the Warrant Exercise Period shall become void and all rights thereunder and all rights in respect thereof under this Agreement shall cease as of such time. 

(b) Redemption of Warrants

The Company may call the Warrants for redemption, in whole and not in part, at a price of $0.01 per Warrant, upon not less than 30 days’ prior written notice of redemption to each Warrant holder and the Warrant Agent, at any time after such Warrants have become exercisable pursuant to Section 6(a) above, if, and only if, (A) the Last Reported Sales Price has equaled or exceeded $13.25 per share for any 20 trading days within a 30-trading-day period ending on the third Business Day prior to the notice of redemption to Warrant holders and (B) at all times between the date of such notice of redemption and the redemption date a registration statement filed pursuant to the Securities Act is in effect covering the Warrant Shares issuable upon exercise of the Warrants and a current prospectus relating to those Warrant Shares is available.

Upon a call for redemption of Warrants by the Company, the Company shall have the right to require all holders of Warrants subject to redemption who exercise such Warrants after the Company’s call for redemption to do so on a cashless basis in accordance with the procedures set forth in Section 6(d).

 

 

-6-

 

Notwithstanding the foregoing, none of the Founders’ Warrants or Sponsors’ Warrants shall be redeemable at the option of the Company so long as they are held by the Founders, the Sponsors or a Permitted Transferee; provided that the fact that one or more Founders’ Warrants or Sponsors’ Warrants are non-redeemable by operation of this sentence shall not affect the Company’s right to redeem, pursuant to the other provisions of this Section 6(b), the Public Warrants, the Founders’ Warrants and the Sponsors’ Warrants that are not held by the Founders, the Sponsors or a Permitted Transferee. Any Founders’ Warrants or Sponsors’ Warrants not held by the Founders, the Sponsors or a Permitted Transferee shall become Public Warrants and subject to the same terms and conditions hereunder as all other Public Warrants.

(c) Exercise Procedure.

A Warrant may be exercised upon surrender to the Company at the office of the Warrant Agent of the Warrant Certificate or Certificates to be exercised with the form of election to purchase on the reverse thereof properly filled in and duly signed and such other documentation as the Warrant Agent may reasonably request, and upon payment to the Warrant Agent for the account of the Company of the Exercise Price (adjusted as herein provided if applicable) for the number of Warrant Shares in respect of which such Warrants are then exercised. Payment of the aggregate Exercise Price (unless on a cashless basis, as set forth below) shall be made by certified or official bank check payable to the order of the Company in New York Clearing House Funds, or the equivalent thereof. In no event will any Warrants be settled on a net cash basis.

Subject to the provisions of Section 7 hereof, upon such surrender of Warrants and payment of the Exercise Price (or notice of settlement on a cashless basis, if applicable) the Company shall issue and cause to be delivered with all reasonable dispatch to and in such name or names as the Warrant holder may designate, a certificate or certificates for the number of full Warrant Shares issuable upon the exercise of such Warrants. Such certificate or certificates shall be deemed to have been issued and any person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price or on a cashless basis as set forth above, as applicable.

The Warrants shall be exercisable, at the election of the holders thereof, either in full or from time to time in part and, in the event that a certificate evidencing Warrants is exercised in respect of fewer than all of the Warrant Shares issuable on such exercise at any time prior to the date of expiration of the Warrants, a new certificate evidencing the remaining Warrant or Warrants will be issued by the Company, and the Warrant Agent is hereby irrevocably authorized to countersign and to deliver the required new Warrant Certificate or Certificates pursuant to the provisions of Section 4 hereof and of this Section 6, and the Company, whenever required by the Warrant Agent, shall supply the Warrant Agent with Warrant Certificates duly executed on behalf of the Company for such purpose. The Warrant Agent may assume that any Warrant presented for exercise is
permitted to be so exercised under applicable law and shall have no liability for acting in reliance on such assumption.

All Warrant Certificates surrendered upon exercise of Warrants shall be canceled by the Warrant Agent. Such canceled Warrant Certificates shall then be delivered by the Warrant Agent to the Company from time to time upon written request. The Warrant Agent shall account promptly to the Company with respect to Warrants exercised and concurrently account for and pay to the Company all monies received by the Warrant Agent for the purchase of the Warrant Shares through the exercise of such Warrants.

 

 

-7-

 

The Company shall supply the Warrant Agent from time to time with such numbers of copies of this Agreement as the Warrant Agent may request. The Warrant Agent shall keep copies of this Agreement and any notices given or received hereunder available for examination by any Registered Holder with reasonable prior written notice during normal business hours at its office. Prior to such examination, the Warrant Agent may require any such holder to submit his Warrant for inspection by the Warrant Agent. 

Certificates evidencing Warrant Shares issued upon exercise of a Sponsors’ Warrant or Founders’ Warrant shall contain the following legend, unless such Warrant Shares were issued pursuant to an effective registration statement under the Securities Act:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

SECURITIES EVIDENCED BY THIS CERTIFICATE WILL BE ENTITLED TO REGISTRATION RIGHTS UNDER A REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.

(d) Cashless Exercise. 

(1) The Founders’ and Sponsors’ Warrants may be exercised on a cashless basis by the Founders, the Sponsors and any Permitted Transferees, at the Founder’s, the Sponsor’s or such Permitted Transferee’s election (the “Cashless Exercise Election”). 

(2) Upon a call for redemption of Warrants on a cashless basis by the Company pursuant to Section 6(b) (the “Cashless Exercise Demand”), all holders of Warrants subject to redemption who exercise such Warrants shall do so on a cashless basis. 

(3) If the Founders, the Sponsors or any Permitted Transferee makes a Cashless Exercise Election with respect to any Founders’ or Sponsors’ Warrants or if the Company makes a Cashless Exercise Demand with respect to the Warrants subject to redemption that the holders thereof have elected to exercise after the Company’s call for redemption, then upon surrender of such Warrants in accordance with Section 6(c), the Company shall issue and cause to be delivered with all reasonable dispatch to and in such name or names as the Founders, the Sponsors or such Permitted Transferee or such Warrant holder, as the case may be, may designate, a certificate or certificates for the number of full Warrant Shares to be issued upon such cashless exercise, computed by using the following formula:

	
                        X =
 	
                        (A)(Y)
 
	
                         
 	
                           (B)
 

 

 

-8-

 

 

	
                        X =
 	
                        The Warrant Shares to be issued in connection with such cashless exercise to the holder of the Warrants being exercised.
 
	
                        Y=
 	
                        The number of Warrant Shares underlying the Warrants being exercised.
 
	
                        A=
 	
                        The value of one Warrant as of the date of the exercise, which shall be determined by using the following formula:
 
	
                         
 	
                        A = B - the Exercise Price
 
	
                        B=
 	
                        The Fair Market Value of a share of Common Stock.
 

For purposes of this Section 6(d), the “Fair Market Value” of a share of Common Stock shall mean the average of the Last Reported Sales Price for the ten trading days ending on the third trading day prior to (x) with respect to the Founders’ and Sponsors’ Warrants subject to a Cashless Exercise Election, the date on which the Warrant exercise notice is sent to the Warrant Agent, and (y) with respect to the Warrants subject to a Cashless Exercise Demand, the date on which the notice of redemption is sent to the holders of the Warrants. 

(iv) If the Company makes a Cashless Exercise Demand, the notice of redemption shall contain the information necessary to calculate the number of Warrant Shares to be received by Warrant holders upon exercise of the Warrants, including the Fair Market Value in such case.

(e) Registration Requirement. Notwithstanding anything else in this Section 6, no Warrant may be exercised unless at the time of exercise (A) a registration statement covering the Public Warrant Shares to be issued upon exercise of the Public Warrants is effective under the Securities Act and (B) a prospectus thereunder relating to the Public Warrant Shares is current; provided that such requirement shall no longer apply to the Founders’ Warrants and the Sponsors’ Warrants in the event that the Public Warrants have been redeemed by the Company. The Company shall use its best efforts to have a registration statement in effect covering Public Warrant Shares issuable upon exercise of the Public Warrants from the date the Public Warrants become exercisable and to maintain a
current prospectus relating to those Public Warrant Shares until the Warrants expire or are redeemed. In the event that, at the end of the Warrant Exercise Period, a registration statement covering the Public Warrant Shares to be issued upon exercise of the Public Warrants is not effective under the Securities Act, all the rights of holders hereunder shall terminate and all of the Warrants shall expire unexercised and worthless, and as a result, purchasers of the Public Units and the Founders’ Units will have paid the full Unit purchase price solely for the share of Common Stock included in each such Unit. In no event shall the Company be required to issue unregistered shares upon the exercise of any Public Warrant or settle Warrants on a net cash basis.

(f) Expiry Upon Liquidation of Trust Account. If the Company is dissolved because it fails to effect an Initial Business Combination within the applicable period set forth in its certificate of incorporation, all of the rights of holders hereunder shall terminate and all of the Warrants shall expire unexercised and worthless, and as a result purchasers of the Public Units and the Founders’ Units will have paid the full Unit purchase price solely for the share of Common Stock included in each such Unit.

 

 

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(g) Adjustment of Founders’ Warrants.

If the underwriters with respect to the IPO do not exercise the over-allotment option granted to them by the Company in full or at all, the number of Founders’ Units necessary to ensure that the aggregate amount of Founders’ Common Stock held by the Founders and any Permitted Transferee does not exceed 15% of the issued and outstanding Common Stock of the Company (after giving effect to the IPO and including any shares of Common Stock issued pursuant to the underwriters over-allotment option) shall be immediately forfeited to the Company by their holders. The Company will not make any cash payment to the Founders or any Permitted Transferee in respect of any such adjustment.

If the number of Units offered to the public in connection with the IPO is increased or decreased, the Founders’ Units (including the Founders’ Units subject to forfeiture) will be adjusted in the same proportion as the increase or decrease of the Units offered to the public in order to ensure that the aggregate amount of Founders’ Common Stock held by the Founders and any Permitted Transferee does not fall below or exceed 15% of the issued and outstanding Common Stock of the Company (after giving effect to the IPO and including any shares of Common Stock issued pursuant to the underwriter’s over-allotment option). The Company will not make or receive any cash payment to or from the Founders or any Permitted Transferees in respect of any such adjustment.

Any additional Units, shares of Common Stock and Warrants the Founders or any of its Permitted Transferees may hold pursuant to the preceding paragraph shall be deemed to be Founders’ Units, Founders’ Common Stock and Founders’ Warrants hereunder and any such Founders’ Warrants (A) shall be subject to the transfer restrictions and adjustment provisions set forth in this Agreement with respect thereto, and (B) shall bear the legend set forth in this Agreement with respect thereto.

SECTION 7. Payment of Taxes. The Company will pay all documentary stamp taxes attributable to the initial issuance of Warrant Shares upon the exercise of Warrants; provided, however, that the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issue of any Warrant Certificates or any certificates for Warrant Shares in a name other than that of the registered holder of a Warrant Certificate surrendered upon the exercise of a Warrant, and the Company and the Warrant Agent shall not be required to issue or deliver such Warrant Certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company and the Warrant
Agent that such tax has been paid.

SECTION 8. Mutilated or Missing Warrant Certificates. In case any of the Warrant Certificates shall be mutilated, lost, stolen or destroyed, the Company shall issue and the Warrant Agent shall countersign, in exchange and substitution for and upon cancellation of the mutilated Warrant Certificate, or in lieu of and substitution for the Warrant Certificate lost,

 

 

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stolen or destroyed, a new Warrant Certificate of like tenor and representing an equivalent number of Warrants, but only upon receipt of evidence satisfactory to the Company and the Warrant Agent of such loss, theft or destruction of such Warrant Certificate and indemnity, also satisfactory to the Company and the Warrant Agent. Applicants for such new Warrant Certificates must pay such reasonable charges as the Company and the Warrant Agent may prescribe.

SECTION 9. Reservation of Warrant Shares. The Company will at all times reserve and keep available, free from preemptive rights, out of the aggregate of its authorized but unissued Common Stock or its authorized and issued Common Stock held in its treasury, for the purpose of enabling it to satisfy any obligation to issue Warrant Shares upon exercise of Warrants, the maximum number of shares of Common Stock which may then be deliverable upon the exercise of all outstanding Warrants. The Warrant Agent shall have no duty or responsibility to verify availability of such shares set aside by the Company. The Company or, if appointed, the transfer agent for the Common Stock (the “Transfer Agent”) and every subsequent transfer agent for any shares of the Common Stock issuable upon the exercise of any of the Warrants will be irrevocably authorized and directed at all times to reserve such number of authorized shares as shall be required for such purpose. The Company will keep a copy of this Agreement on file with the Transfer Agent and with every subsequent Transfer Agent for any shares of the Common Stock issuable upon the exercise of the Warrants. The Warrant Agent is hereby irrevocably authorized to requisition from time to time from such Transfer Agent the stock certificates required to honor outstanding Warrants upon exercise thereof in accordance with the terms of this Agreement.
The Company will supply such Transfer Agent with duly executed certificates for such purposes. The Company will furnish such Transfer Agent a copy of all notices of adjustments and certificates related thereto, transmitted to each holder pursuant to Section 13 hereof. The Warrant Agent shall have no duty or obligation to investigate or confirm whether the information contained in such notices or certificates complies with the terms of this Agreement or any other documents, or is accurate or correct. 

Before taking any action which would cause an adjustment pursuant to Section 11 hereof to reduce the Exercise Price below the then par value (if any) of the Warrant Shares, the Company will take any commercially reasonable corporate action which may, in the opinion of its counsel (which may be counsel employed by the Company), be necessary in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares at the Exercise Price as so adjusted.

The Company covenants that all Warrant Shares which may be issued upon exercise of Warrants will, upon payment of the Exercise Price therefor or on a cashless basis pursuant to Section 6(d), if applicable, and issue, be fully paid, nonassessable, free of preemptive rights and free from all taxes, liens, charges and security interests with respect to the issue thereof.

SECTION 10. Obtaining Stock Exchange Listings. The Company will from time to time take all commercially reasonable actions which may be necessary so that the Warrant Shares, immediately upon their issuance upon the exercise of Warrants, will be listed on the principal securities exchanges and markets within the United States of America, if any, on which other shares of Common Stock are then listed. To the extent that the Common Stock is not listed on a national securities exchange or there is no exemption from state “blue sky” securities laws for the issuance of the Warrant Shares, the Company will take all commercially reasonable actions which may be necessary so that the Warrant Shares are registered in all states in which the holders of the Warrants reside.

 

 

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SECTION 11. Adjustment of Number of Warrant Shares. The number of Warrant Shares issuable upon the exercise of each Warrant is subject to adjustment from time to time upon the occurrence of the events enumerated in this Section 11. For purposes of this Section 11, “Common Stock” means shares now or hereafter authorized of any class of common stock of the Company and any other stock of the Company, however designated, that has the right (subject to any prior rights of any class or series of preferred stock) to participate in any distribution of the assets or earnings of the Company without limit as to per share amount.

(a) Stock Dividends – Split-Ups. If after the date hereof, and subject to the provisions of Section 12 hereof, the number of outstanding shares of Common Stock is increased by a stock dividend payable in shares of Common Stock, or by a split-up of shares of Common Stock, or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be increased in proportion to such increase in outstanding shares of Common Stock.

(b) Aggregation of Shares. If after the date hereof, and subject to the provisions of Section 12 hereof, the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock.

(c) Merger, Reorganization, Etc. In case of any reclassification or reorganization of the outstanding shares of Common Stock (other than a change covered by Section 11(a) or 11(b) hereof or that solely affects the par value of such shares of Common Stock), or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Warrant holders shall thereafter
have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the shares of Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the Warrant holder would have received if such Warrant holder had exercised his, her or its Warrant(s) immediately prior to such event; and if any reclassification also results in a change in shares of Common Stock covered by Section 11(a) or 11(b) hereof, then such adjustment shall be made pursuant to Sections 11(a), 11(b), and 11(d) hereof and this Section 11(c). The provisions of this Section 11(c) shall similarly apply to successive reclassifications,
reorganizations, mergers or consolidations, sales or other transfers.

 

 

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(d) Extraordinary Dividends. If the Company distributes to all holders of its Common Stock any of its assets (including cash) or debt securities or any rights, options or warrants to purchase debt securities, assets or other securities of the Company (other than Common Stock), the number of shares of Common Stock issuable upon exercise of each Warrant shall be adjusted in accordance with the formula:

N’ = N x M/(M-F)

	
                        where:
 	
                         
 
	
                        N’ =
 	
                        the adjusted number of shares of Common Stock issuable upon exercise of each Warrant.
 
	
                        N =
 	
                        the current number of shares of Common Stock issuable upon exercise of each Warrant.
 
	
                        M =
 	
                        the Last Reported Sales Price per share of Common Stock on the Business Day immediately preceding the ex-dividend date for such distribution.
 
	
                        F =
 	
                        the fair market value on the ex-dividend date for such distribution of the assets, securities, options, rights or warrants distributable to one share of Common Stock after taking into account, in the case of any rights, options or warrants, the consideration required to be paid upon exercise thereof. The Company’s Board of Directors (the “Board”) shall reasonably determine the fair market value in good faith.
 

The adjustment shall be made successively whenever any such distribution is made and shall become effective immediately after the record date for the determination of stockholders entitled to receive such distribution.

This subsection (d) does not apply to any dividends or distributions made in connection with, or as part of, (i) regular quarterly or other periodic dividends; (ii) any of the actions contemplated by Sections 11(a), 11(b) or 11(e); (iii) the conversion rights of the holders of Common Stock upon consummation of the Company’s Initial Business Combination; or (iv) in connection with the Company’s liquidation and the distribution of its assets upon its failure to consummate an Initial Business Combination. If any adjustment is made pursuant to this subsection (d) as a result of the issuance of rights, options or warrants and at the end of the period during which any such rights, options or warrants are exercisable, not all such rights, options or warrants shall have been exercised, the Warrant shall be immediately readjusted as if
“F” in the above formula was the fair market value on the ex-dividend date for such distribution of the indebtedness or assets actually distributed upon exercise of such rights, options or warrants divided by the number of shares of Common Stock outstanding on the ex-dividend date for such distribution. Notwithstanding anything to the contrary contained in this subsection (d), if “M-F” in the above formula is less than $1.00, the Company may elect to, and if “M-F” or is a negative number, the Company shall, in lieu of the adjustment otherwise required by this subsection (d), distribute to the holders of the Warrants, upon exercise thereof, the evidences of indebtedness, assets, rights, options or warrants (or the proceeds thereof) which would have been distributed to such holders had such Warrants been exercised immediately prior to the record date for such distribution.

 

 

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(e) Adjustments To Exercise Price. Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in Sections 11(a) and 11(b) hereof, the Exercise Price shall be adjusted (to the nearest cent) by multiplying such Exercise Price immediately prior to such adjustment by a fraction (A) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (B) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.

(f) Form of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 11, and Warrants issued after such adjustment may state the same Exercise Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Agreement. However, the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and which does not affect the rights, duties or responsibility of the Warrant Agent, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.

(g) Other Events. If any event occurs as to which the foregoing provisions of this Section 11 are not strictly applicable or, if strictly applicable, would not, in the good faith judgment of the Board, fairly and adequately protect the purchase rights of the registered holders of the Warrants in accordance with the essential intent and principles of such provisions, then the Board shall make such adjustments in the application of such provisions, in accordance with such essential intent and principles, as shall be reasonably necessary, in the good faith opinion of the Board, to protect such purchase rights as aforesaid and shall give written notice to the Warrant Agent with respect to such determinations

SECTION 12. Fractional Interests. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional shares upon exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 12, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round up or down to the nearest whole number of the shares of Common Stock to be issued to the Warrant holder.

SECTION 13. Notice to Warrant Holders. Upon any adjustment of the Exercise Price and/or the number of shares issuable upon exercise of a Warrant pursuant to Section 11, the Company shall promptly thereafter, and in any event within five days, (i) cause to be filed with the Warrant Agent a certificate executed by the principal financial officer of the Company setting forth the Exercise Price and/or the number of Warrant Shares issuable upon exercise of each Warrant after such adjustment and setting forth in reasonable detail the method of calculation and the facts upon which such calculations are based, and (ii) cause to be given to each of the registered holders of the Warrants at his address appearing on the Warrant register written notice of such adjustments by first-class mail, postage prepaid. Where appropriate, such notice may be given in advance and included as a part of
the notice required to be mailed under the other provisions of this Section 13. The Warrant Agent shall be fully protected in relying on any such 

 

 

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certificate or notice required to be given to it in accordance with the terms of this Agreement and on any adjustment therein contained and shall not be deemed to have knowledge of such adjustment unless and until it shall have received such certificate. In case:

(a) the Company shall propose to offer or authorize the issuance to all holders of shares of Common Stock of rights, options or warrants to subscribe for or purchase shares of Common Stock or of any other subscription rights or warrants; or

(b) the Company shall authorize the distribution to all holders of shares of Common Stock of evidences of its indebtedness or assets (other than regular cash dividends or dividends payable in shares of Common Stock or distributions referred to in subsection (b) of Section 11 hereof); or

(c) of any consolidation or merger to which the Company is a party and for which approval of any shareholders of the Company is required, or of the conveyance or transfer of the properties and assets of the Company substantially as an entirety, or of any reclassification or change of Common Stock issuable upon exercise of the Warrants (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or a tender offer or exchange offer for shares of Common Stock; or

(d) of the voluntary or involuntary dissolution, liquidation or winding up of the Company; or

(e) the Company proposes to take any action not specified above which would require an adjustment of the Exercise Price pursuant to Section 11 hereof;

then the Company shall cause to be filed with the Warrant Agent and shall cause to be given to each of the registered holders of the Warrants at his address appearing on the Warrant register, at least 10 days prior to the applicable record date hereinafter specified, or as promptly as practicable under the circumstances in the case of events for which there is no record date, by first-class mail, postage prepaid, a written notice stating (i) the date as of which the holders of record of shares of Common Stock to be entitled to receive any such rights, options, warrants or distribution are to be determined, or (ii) the initial expiration date set forth in any tender offer or exchange offer for shares of Common Stock, or (iii) the date on which any such consolidation, merger, conveyance, transfer, dissolution, liquidation or winding up is expected to become effective or consummated, and the date
as of which it is expected that holders of record of shares of Common Stock shall be entitled to exchange such shares for securities or other property, if any, deliverable upon such reclassification, consolidation, merger, conveyance, transfer, dissolution, liquidation or winding up. The failure to give the notice required by this Section 13 or any defect therein shall not affect the legality or validity of any distribution, right, option, warrant, consolidation, merger, conveyance, transfer, dissolution, liquidation or winding up, or the vote upon any action.

Nothing contained in this Agreement or in any of the Warrant Certificates shall be construed as conferring upon the holders thereof the right to vote or to consent or to receive notice as shareholders in respect of the meetings of shareholders or the election of directors of the Company or any other matter, or any rights whatsoever as shareholders of the Company.

 

 

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SECTION 14. Merger, Consolidation or Change of Name of Warrant Agent. Any Person into which the Warrant Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Warrant Agent shall be a party, or any Person succeeding to all or substantially all the agency business of the Warrant Agent, shall be the successor to the Warrant Agent hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such Person would be eligible for appointment as a successor warrant agent under the provisions of Section 16 hereof. In case at the time such successor to the Warrant Agent shall succeed to the agency created by this Agreement, and in case at
that time any of the Warrant Certificates shall have been countersigned but not delivered, any such successor to the Warrant Agent may adopt the countersignature of the original Warrant Agent; and in case at that time any of the Warrant Certificates shall not have been countersigned, any successor to the Warrant Agent may countersign such Warrant Certificates either in the name of the predecessor Warrant Agent or in the name of the successor to the Warrant Agent; and in all such cases such Warrant Certificates shall have the full force and effect provided in the Warrant Certificates and in this Agreement.

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

SECTION 15. Warrant Agent. The Warrant Agent undertakes only the duties and obligations expressly imposed by this Agreement (and no implied duties or obligations shall be read into this Agreement against the Warrant Agent) upon the following terms and conditions, by all of which the Company and the holders of Warrants, by their acceptance thereof, shall be bound:

(a) The Warrant Agent may rely conclusively and shall be protected in acting upon any order, judgment, instruction, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by or who may be an employee of the Warrant Agent or one of its affiliates), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability and of information therein contained) which is believed by the Warrant Agent, in good faith, to be genuine and to be signed or presented by the proper person or persons as set forth in Section 15(n).

(b) The Warrant Agent shall have no duties, responsibilities or obligations as the Warrant Agent except those which are expressly set forth herein, and in any modification or amendment hereof to which the Warrant Agent has consented in writing, and no duties, responsibilities or obligations shall be implied or inferred. Without limiting the foregoing, unless otherwise expressly provided in this Agreement, the Warrant Agent shall not be subject to, nor be required to comply with, or determine if any person or entity has complied with, the Registration Statement or any other agreement between or among the parties hereto, even though references thereto may be made in this Agreement, or to comply with any notice, instruction, direction, request or other communication, paper or document other than as expressly set forth in this Agreement.

 

 

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(c) The statements contained herein and in the Warrant Certificates shall be deemed to be statements of the Company only and the Warrant Agent assumes no responsibility for the correctness of any of the same or be required to verify the same. 

(d) The Warrant Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Warrant Agent. The Warrant Agent shall incur no liability or responsibility for any action taken in reliance on any Warrant Certificate, certificate of shares, notice, resolution, waiver, consent, order, certificate, or other paper, document or instrument (whether in its original or facsimile form) believed by it to be genuine and to have been signed, sent or presented by the proper party or parties.

(e) The Company hereby agrees to (A) pay to the Warrant Agent such compensation for all services rendered by the Warrant Agent in the preparation, delivery, administration and execution of this Agreement and the exercise and performance of its duties hereunder as the Company and the Warrant Agent shall agree to in writing, (B) reimburse the Warrant Agent for all expenses, taxes and governmental charges and other charges of any kind and nature incurred by the Warrant Agent in the preparation, delivery, administration, execution and amendment of this Agreement and the exercise and performance of its duties hereunder (including fees and expenses of its counsel) and (C) indemnify the Warrant Agent (and any predecessor Warrant Agent) and hold it harmless against any and all claims (whether asserted by the Company, a holder or any other person), damages, losses, suits,
actions, proceedings, settlements, expenses (including taxes other than taxes based on the income of the Warrant Agent) and liabilities (including judgments, costs and counsel fees and expenses), suffered or incurred without gross negligence, willful misconduct or bad faith (each as determined by a final, non-appealable order of a court of competent jurisdiction) on the part of the Warrant Agent or any person acting on behalf of the Warrant Agent, for any action taken, suffered or omitted by the Warrant Agent in connection with the acceptance and administration of this Agreement, including the costs and expenses of defending against any claim of liability arising therefrom, directly or indirectly. The provisions of this Section 15(e) shall survive the expiration of the Warrants and the termination of this Agreement.

(f) The Warrant Agent shall be under no obligation to institute any action, suit or legal proceeding or to take any other action likely to involve expense unless the Company or one or more registered holders of Warrant Certificates shall furnish the Warrant Agent with security and indemnity satisfactory to it for any costs and expenses which may be incurred, but this provision shall not affect the power of the Warrant Agent to take such action as it may consider proper, whether with or without any such security or indemnity. All rights of action under this Agreement or under any of the Warrants may be enforced by the Warrant Agent without the possession of any of the Warrant Certificates or the production thereof at any trial or other proceeding relative thereto, and any such action, suit or proceeding instituted by the Warrant Agent shall be brought in its name as Warrant
Agent and any recovery of judgment shall be for the ratable benefit of the registered holders of the Warrants, as their respective rights or interests may appear.

 

 

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

(h) The Warrant Agent will not be under any duty or responsibility to ensure compliance with any applicable federal or state securities laws in connection with the issuance, transfer or exchange of the Warrant Certificates. 

(i) The Warrant Agent shall act hereunder solely as agent for the Company, and its duties shall be determined solely by the provisions hereof. The Warrant Agent shall not be liable for anything which it may do or refrain from doing in connection with this Agreement except for its own gross negligence, willful misconduct or bad faith (each as determined by a final, non-appealable order of a court of competent jurisdiction). Notwithstanding anything in this Agreement to the contrary, in no event shall the Warrant Agent be liable for any special, indirect, incidental, punitive or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Warrant Agent has been advised of the likelihood of the loss or damage and regardless of the form of the action. 

(j) The Warrant Agent shall not at any time be under any duty or responsibility to any holder of any Warrant Certificate to make or cause to be made any adjustment of the Exercise Price or number of the Warrant Shares or other securities or property deliverable as provided in this Agreement, or to determine whether any facts exist which may require any such adjustments, or with respect to the nature or extent of any such adjustments, when made, or with respect to the method employed in making the same. The Warrant Agent shall not be accountable with respect to the validity or value or the kind or amount of any Warrant Shares or of any securities or property which may at any time be issued or delivered upon the exercise of any Warrant or with respect to whether any such Warrant Shares or other securities will when issued be validly issued and fully paid and nonassessable, and
makes no representation with respect thereto.

(k) Notwithstanding anything in this Agreement to the contrary, neither the Company nor the Warrant Agent shall have any liability to any holder of a Warrant Certificate or other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority prohibiting or otherwise restraining performance of such obligation; provided, however that (A) the Company must use its reasonable best efforts to have any such order, decree or ruling lifted or otherwise overturned as soon as
possible and (B) nothing in this Section 15(j) shall affect the Company’s obligation under Section 6(e) hereof to use its best efforts to have a registration statement in effect covering the Warrant Shares issuable upon exercise of the Warrants and to maintain a current prospectus relating to those Warrant Shares.

 

 

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(l) In the event the Warrant Agent believes any ambiguity or uncertainty exists hereunder or in any notice, instruction, direction, request of other communication, paper or document received by the Warrant Agent hereunder, the Warrant Agent may, in its sole discretion, refrain from taking any action, and shall be fully protected and shall not be liable in any way to the Company or any holder or other person or entity for refraining from taking such action, provided that the Warrant Agent provides prior written notice to the Company of such ambiguity or uncertainty and its intention to refrain from taking such action, unless the Warrant Agent receives written instructions signed by the Company which eliminates such ambiguity or uncertainty to the reasonable satisfaction of the Warrant Agent. 

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

(n) Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the Chief Executive Officer, the Vice Chairman, the President, any Vice President or the Chief Financial Officer of the Company and delivered to the Warrant Agent. The Warrant Agent may rely on such statements for any action taken, suffered or omitted by it in good faith under the provisions of this Agreement.

(o) The Warrant Agent shall have no responsibility or liability with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant; nor shall it be responsible to make or liable for any adjustments required under any provision hereof, including but not limited to Sections 11 hereof, or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would required any such adjustment; nor shall it by act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any shares of
Common Stock will, when issued, be valid and fully paid and nonassessable. 

(p) The Warrant Agent shall have no duty or obligation to investigate or confirm whether any determination under Section 6 is correct or accurate. In addition, notwithstanding anything to the contrary contained herein, the Warrant Agent shall have no duty or obligation to investigate or confirm whether the Company determination regarding the number of Warrant Shares to be issued in the event of a cashless exercise is accurate or correct. Notwithstanding anything to the contrary contained herein, the Warrant Agent shall also have no duty or obligation to investigate or confirm whether any determination of the Warrant Price under Section 6(d) is correct or accurate. 

 

 

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(q) The Warrant Agent hereby waives any and all right, title, interest or claim of any kind (“Claim”) in or to any distribution of the Trust Account (as defined in that certain Trust Account Agreement, dated as of the date hereof, by and between the Company and Mellon Bank, N.A., as account agent thereunder), and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever. Without limiting the foregoing, nothing in this provision 15(q) shall be deemed to prohibit payment by the Company of amounts owed to the Warrant Agent pursuant to the terms of this Agreement from interest income of the Trust Account permitted to be withdrawn by the Company under the terms of the Trust Agreement.

(r) The Company shall inform the Warrant Agent (i) of the Detachment Date pursuant to Section 5, (ii) of the consummation of an Initial Business Consummation under Section 5, (iii) of the Company’s liquidation under Section 6(f), (iv) upon the Founders’ Warrants becoming exercisable under Section 5, (v) of its lowering the Warrant Price under Section 6 and (vi) of the periods during which a Warrant can be exercised under Section 6(a).

(s) No provision of this Agreement shall require the Warrant Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights.

(t) The rights and obligations contained in this Section shall survive the termination of this Warrant Agreement and the resignation, removal or replacement of the Warrant Agent. 

SECTION 16. Change of Warrant Agent. The Warrant Agent may at any time resign as Warrant Agent upon written notice to the Company. If the Warrant Agent shall become incapable of acting as Warrant Agent, the Company shall appoint a successor to such Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation or of such incapacity by the Warrant Agent or by the registered holder of a Warrant Certificate, then the registered holder of any Warrant Certificate or the Warrant Agent may apply, at the expense of the Company, to any court of competent jurisdiction for the appointment of a successor to the Warrant Agent. Pending appointment of a successor to such Warrant Agent, either by the
Company or by such a court, the duties of the Warrant Agent shall be carried out by the Company. The holders of a majority of the unexercised Warrants shall be entitled at any time to remove the Warrant Agent and appoint a successor to such Warrant Agent. If a Successor Warrant Agent shall not have been appointed within 30 days of such removal, the Warrant Agent may apply, at the expense of the Company, to any court of competent jurisdiction for the appointment of a successor to the Warrant Agent. Such successor to the Warrant Agent need not be approved by the Company or the former Warrant Agent. After appointment the successor to the Warrant Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Warrant Agent without further act or deed; but the former Warrant Agent upon payment of all fees and expenses due it and its agents and counsel shall deliver and transfer to the successor to the Warrant Agent any property at the
time held by it hereunder and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Failure to give any notice provided for in this Section 16, however, or any defect therein, shall not affect the legality or validity of the appointment of a successor to the Warrant Agent.

 

 

-20-

 

SECTION 17. Notices to Company and Warrant Agent. Any notice or demand authorized by this Agreement to be given or made by the Warrant Agent or by the registered holder of any Warrant Certificate to or on the Company shall be sufficiently given or made when and if deposited in the mail, first class or registered, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:

BPW Acquisition Corp.

750 Washington Boulevard

Stamford, CT 06901

Attn: Chief Financial Officer

In case the Company shall fail to maintain such office or agency or shall fail to give such notice of the location or of any change in the location thereof, presentations may be made and notices and demands may be served at the office of the Warrant Agent.

Any notice pursuant to this Agreement to be given by the Company or by the registered holder(s) of any Warrant Certificate to the Warrant Agent shall be sufficiently given when and if deposited in the mail, first-class or registered, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company) to the Warrant Agent as follows:

Mellon Investor Services LLC

Newport Office Center VII

480 Washington Boulevard

Jersey City, NJ 07310

Attn: Relationship Manager

SECTION 18. Supplements and Amendments. The Company and the Warrant Agent may from time to time supplement or amend this Agreement without the approval of any holders of Warrant Certificates in order to cure any ambiguity or to correct or supplement any provision contained herein which may be defective or inconsistent with any other provision herein, or to make any other provisions in regard to matters or questions arising hereunder which the Company may deem necessary or desirable and which shall not in any way adversely affect the interests of the holders of Warrant Certificates theretofore issued. Upon the delivery of a certificate from an appropriate officer of the Company which states that the proposed supplement or amendment is in compliance with the terms of this
Section 18, the Warrant Agent shall execute such supplement or amendment. Notwithstanding anything in this Agreement to the contrary, the prior written consent of the Warrant Agent must be obtained in connection with any supplement or amendment which alters the rights, duties, obligations or immunities of the Warrant Agent and the Warrant Agent shall have no duty or obligation to execute any such amendment or supplement and shall not be bound by any amendment or supplement not executed by it. The Company may amend any provision herein with the consent of the holders of Warrants exercisable for a majority of the Warrant Shares issuable on exercise of all outstanding Warrants that would be affected by such amendment; provided that any supplement or amendment affecting the Public Warrants must be approved by the holders of a majority of Public Warrants; provided,
further that without the prior written consent of each holder of Warrants affected, an amendment or supplement may not: (a) increase the Exercise Price except

 

 

-21-

 

as contemplated herein or reduce the Warrant Exercise Period; (b) modify the Company’s right to call the Warrants for redemption, in whole, as contemplated by Section 6(b), including the provisions related to cashless exercise; (c) modify the Company’s obligation to use its best efforts to have a registration statement in effect covering Public Warrant Shares issuable upon exercise of the Public Warrants from the date the Public Warrants become exercisable and to maintain a current prospectus relating to those Public Warrant Shares until the Warrants expire or are redeemed; (d) reduce the number of Warrant Shares issuable upon the exercise of a Warrant except as contemplated by Section 11; (e) change the currency of the Exercise Price in respect of any Warrant; or (f) make any change in the supplement and amendment provisions of this Section 18 which require each holder’s
consent. Without limiting the generality of the foregoing, prior to the issuance of any Public Warrants, this Agreement (including Exhibit A hereto) may be amended by the Company and the Warrant Agent, without the consent of any holder of the Founders’ Warrants or the Sponsors’ Warrants, to modify in any way or provide for the terms of the Public Warrants.

SECTION 19. Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.

SECTION 20. Termination. This Agreement will terminate on any earlier date if all Warrants have been exercised or expired without exercise. The provisions of Section 15 hereof shall survive such termination.

SECTION 21. Governing Law. This Agreement and each Warrant Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed in accordance with the internal laws of the State of New York. The Company agrees that all actions and proceedings arising out of this Agreement or any of the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or in a New York State Court in the County of New York and that, in connection with any such action or proceeding, the parties will submit to the jurisdiction of, and venue in, such court. The Company hereto also irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim arising out of this Agreement or the transactions contemplated hereby.

SECTION 22. Benefits of This Agreement. Nothing in this Agreement shall be construed to give to any person or corporation other than the Company, the Warrant Agent and the registered holders of the Warrant Certificates any legal or equitable right, remedy or claim under this Agreement, and this Agreement shall be for the sole and exclusive benefit of the Company, the Warrant Agent and the registered holders of the Warrant Certificates.

SECTION 23. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

SECTION 24. Force Majeure. In no event shall the Warrant Agent be responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out of or caused by, directly or indirectly, forces beyond its reasonable control, including without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services.

[SIGNATURE PAGE FOLLOWS]

 

 

-22-

 

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

 

	
                         
 	
                         
 	
                        BPW ACQUISITION CORP.
 
	
                          
 	
                         
 	
                         
 By: 
 	
                        
 /s/ Michael E. Martin
 
	
                         
 	
                         
 	
                        Name: 
 	
                        Michael E. Martin
 
	
                         
 	
                         
 	
                        Title:
 	
                        Chief Executive Officer
 

 

	
                         
 	
                         
 	
                        MELLON INVESTOR SERVICES LLC, as Warrant Agent
 
	
        
 	
       
 	
                         
 By: 
 	
      

      /s/ Kevin Brennan
 
	
                         
 	
                         
 	
                        Name: 
 	
                        Kevin Brennan
 
	
                         
 	
                         
 	
                        Title:
 	
  Managing Director
 

Signature page to Warrant Agreement

 

 

EXHIBIT A

[Form of Warrant Certificate]

[FACE]

 

	
      Number
 	
                         
 	
                         
 	
      Warrants
 
	
                         
 	
                         
 	
                         
 	
   
 

THIS WARRANT WILL BE VOID IF NOT EXERCISED PRIOR TO

5:00 P.M. NEW YORK CITY TIME, _________, 2014

BPW ACQUISITION CORP.

Incorporated Under the Laws of the State of Delaware

CUSIP ________

Warrant Certificate

This Warrant Certificate certifies that ________________________, or registered assigns, is the registered holder of __________ warrants (the “Warrants”) to purchase shares of Common Stock, $.0001 par value (the “Common Stock”), of BPW Acquisition Corp., a Delaware corporation (the “Company”). Each Warrant entitles the holder, upon exercise during the period set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully paid and nonassessable shares of Common Stock (each,
a “Warrant Share”) as set forth below, at the exercise price (the “Exercise Price”) as determined pursuant to the Warrant Agreement, payable as provided in the Warrant Agreement upon surrender of this Warrant Certificate and payment of the Exercise Price (or on a cashless basis if permitted by the terms of the Warrant Agreement) at the office or agency of the Warrant Agent referred to below, subject to the conditions set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.

Each Warrant is initially exercisable for one fully paid and non-assessable share of Common Stock. The number of Warrant Shares issuable upon exercise of the Warrants is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.

The initial Exercise Price per share of Common Stock for any Warrant is equal to $[7.50]* [10.00]** per share. The Exercise Price is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.

Warrants may be exercised only during the Warrant Exercise Period subject to the conditions set forth in the Warrant Agreement and to the extent not exercised by the end of such Warrant Exercise Period such Warrants shall become void.

	
                        *
 	
                        Only applies to Public Warrants and Sponsors’ Warrants.
 

	
                        **
 	
                        Only applies to Founders’ Warrants.
 

 

 

Reference is hereby made to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though fully set forth at this place.

This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.

This Warrant Certificate shall be governed and construed in accordance with the internal laws of the State of New York, without regard to conflicts of laws principles thereof.

 

	
                         
 	
                         
 	
                        BPW ACQUISITION CORP.
 
	
                          
 	
                         
 	
                         
 By: 
 	
                          
 
	
                         
 	
                         
 	
                        Name: 
 	
                        Michael E. Martin
 
	
                         
 	
                         
 	
                        Title:
 	
                        Chief Executive Officer
 

Countersigned:

Dated:  ________, 20__

MELLON INVESTOR SERVICES LLC,

as Warrant Agent

 

	
                        By 
 	
                          
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                        Authorized Signatory
 	
                         
 	
                         
 	
                         
 

 

 

[Form of Warrant Certificate]

[Reverse]

The Warrants evidenced by this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive shares of Common Stock and are issued or to be issued pursuant to a Warrant Agreement dated as of February 26, 2008 (the “Warrant Agreement”), duly executed and delivered by the Company to Mellon Investor Services LLC, a New Jersey limited liability company, as warrant agent (the “Warrant Agent”), which Warrant Agreement is hereby incorporated by reference in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Warrant Agent, the
Company and the holders (the words “holders” or “holder” meaning the registered holders or registered holder) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.

Warrants may be exercised at any time during the Warrant Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate may exercise them by surrendering this Warrant Certificate, with the form of election to purchase set forth hereon properly completed and executed, together with payment of the Exercise Price as specified in the Warrant Agreement (or through “cashless exercise” if permitted by the Warrant Agreement) at the office of the Warrant Agent. In the event that upon any exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced hereby, there shall be issued to the holder hereof or his assignee a new Warrant Certificate evidencing the number of Warrants not
exercised. No adjustment shall be made for any dividends on any Common Stock issuable upon exercise of this Warrant.

Notwithstanding anything else in this Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration statement covering the Public Warrant Shares to be issued upon exercise of the Warrants is effective under the Act and (ii) a prospectus thereunder relating to the Public Warrant Shares is current. In no event shall the Company be required to issue unregistered shares upon the exercise of any Warrant or to net cash settle any Warrant.

The Warrant Agreement provides that upon the occurrence of certain events the number of Warrant Shares set forth on the face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be entitled to receive a fractional interest in a share of Common Stock, the Company will, upon exercise, round up or down to the nearest whole number of shares of Common Stock to be issued to the Warrant holder.

Warrant Certificates, when surrendered at the principal corporate trust office of the Warrant Agent by the registered holder thereof in person or by legal representative or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing in the aggregate a like number of Warrants.

 

 

Upon due presentation for registration of transfer of this Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental charge imposed in connection therewith.

The Company and the Warrant Agent may deem and treat the person in whose name such Warrants shall be registered upon the Warrant Register as the absolute owner(s) thereof (notwithstanding any notation of ownership or other writing on the Warrant Certificate made by anyone other than the Company or the Warrant Agent), for all purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a stockholder of the Company.

 

Election to Purchase

(To Be Executed Upon Exercise Of Warrant)

The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Certificate, to receive __________ shares of Common Stock and herewith tenders payment for such shares to the order of BPW Acquisition Corp. in the amount of $______ in accordance with the terms hereof. The undersigned requests that a certificate for such shares be registered in the name of ________________, whose address is _______________________________ and that such shares be delivered to ________________ whose address is ___________ ______________________. If said number of shares is less than all of the shares of Common Stock purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares be registered in the name of ______________, whose address is _________________________, and that such Warrant Certificate be
delivered to _________________, whose address is __________________.

 

	
                        
 Date:  __________, 20__
 	
                         
 	
                         
 	
                          
 
	
                         
 	
                         
 	
                         
 	
                        (Signature)  
 
	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                        (Address)
 
	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                        (Tax Identification Number)
 
	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Signature Guaranteed:
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 	
                         
 

THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).

 

 

EXHIBIT B

LEGEND

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN TRANSFER RESTRICTIONS SET FORTH IN THAT CERTAIN  WARRANT AGREEMENT REFERRED TO HEREIN [AND ARE SUBJECT TO FORFEITURE IN CERTAIN CIRCUMSTANCES AS SET FORTH IN THAT CERTAIN WARRANT AGREEMENT REFERRED TO HEREIN]*.

SECURITIES EVIDENCED BY THIS CERTIFICATE AND SHARES OF COMMON STOCK OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES WILL BE ENTITLED TO REGISTRATION RIGHTS UNDER A REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.

 

	
                        No. 
 	
                         
 	
                         
 	
                         
 	
                        Warrants
 

______________

	
                        *
 	
                        Only applies to Founders’ Warrants.

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