Document:

EX-10.1

 Exhibit 10.1 

Additional Term Sheets to Restructuring Support and Forbearance Agreement 

December 28, 2014 

 LEASE TERM SHEET 

Note: It is currently anticipated that the real estate assets of the subsidiaries of a newly-formed Delaware limited partnership (“Propco”) will be
leased to subsidiaries of “Opco” (defined below) pursuant to two separate leases. One lease (the “Lease”)1 will include all “Facilities” (defined below) other than
Caesars Palace Las Vegas (“CPLV”). The other lease (the “CPLV Lease”) will only include CPLV. To the extent that a term below does not differentiate between the Lease and the CPLV Lease, such term shall be included in both
leases. 
  

	 Landlord 
	With respect to the Lease, all of the subsidiaries of Propco that own the fee or ground leasehold (as applicable) interests in the real property comprising the “Non-CPLV Facilities” (as defined below). 

 

	 	With respect to the CPLV Lease, a subsidiary of Propco that owns the fee interest in the real property comprising the CPLV Facility. 

 

	 Tenant 
	With respect to the Lease, the subsidiaries of Caesars Entertainment Operating Company (“CEOC” or “Opco”) necessary for the operation of all of the Non-CPLV Facilities, including all license holders with respect thereto, as
reasonably demonstrated to Propco. 

  

	 	With respect to the CPLV Lease, subsidiaries of CEOC necessary for the operation of the CPLV Facility, including all license holders with respect thereto, as reasonably demonstrated to Propco. 

 

	 Guaranty / MLSA 
	Caesars Entertainment Corporation (“CEC”), a wholly-owned subsidiary of CEC (“Manager”), Opco and Propco will enter into a Management and Lease Support Agreement with respect to each of the Lease and the CPLV Lease (each, an
“MLSA”), pursuant to which (i) Manager will manage the Facilities (as defined below) on behalf of Opco and (ii) CEC will provide a full guarantee of all payments and performance of Opco’s monetary obligations under each of the CPLV
Lease and the Lease.2 The terms of the MLSA are more particularly set forth in that certain Summary of Terms with respect to the MLSA. 

 

	 Leased Property 
	With respect to the Lease, all of the real property interest in the facilities (the “Non-CPLV Facilities”) described on Exhibit A attached hereto, including all buildings and structures located thereon, and all rights
appurtenant thereto. The Non-CPLV Facilities also may include any material non-U.S. real estate assets (if any) directly or indirectly wholly-owned by Opco, subject to compliance with all legal, regulatory, tax/REIT 

 

	1 	Lease may be structured as two individual cross-defaulted leases, to accommodate the JV interest for the Joliet asset. 

	2 	 NTD: Management Agreement and Guaranty will be integrated as one document, subject to terms of MLSA Term Sheet.

  
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	 	and contractual restrictions and requirements applicable to such assets; provided, however, that no such non-U.S. real estate asset shall be included in the Non-CPLV Facilities if, despite the reasonable best efforts of
Opco and/or CEOC, it would be unduly onerous or costly, in consideration of the value of such real estate asset, to include such real estate asset in the Non-CPLV Facilities. If any such non-U.S. assets are included in the Non-CPLV Facilities
as described above, the parties will reasonably agree on an ownership and operational structure with respect to such non-U.S. assets, which structure may include separate leases. 

 

	 	With respect to the CPLV Lease, all of the real property interest in CPLV (the “CPLV Facility”, together with the Non-CPLV Facilities, the “Facilities”), as described on Exhibit B attached
hereto, including all buildings and structures located thereon, and all rights appurtenant thereto. 

  

	 Term 
	15 year initial term (the “Initial Term”). 

  

	 	Four 5-year renewal terms (each, a “Renewal Term”) to be exercised at Tenant’s option by notifying Landlord (i) no earlier than 18 months prior to the then-current expiration and (ii) no later than 12
months prior to the then-current expiration. 

  

	 	The Term with respect to any Leased Property shall not exceed 80% of the useful life of such Leased Property. Any Leased Property not meeting such requirement shall be subject to a shorter Term than the other Leased
Property that satisfies such requirements.3 

  

	 	The “Rent Reduction Adjustment” with respect to a Facility shall mean (i) with respect to the Base Rent, a proportionate reduction of the Base Rent based on the EBITDAR of such Facility versus the EBITDAR of
all the Facilities and (ii) with respect to Percentage Rent, a reduction of the then current dollar amount based on excluding the Net Revenue of the applicable Facility from the Percentage Rent formula on a pro forma basis. 

 

	 Rent 
	“Rent” means the sum of Base Rent and Percentage Rent. Rent shall be paid monthly in advance. 

  

	 	Rent under the Lease and the CPLV Lease shall be as follows for the Initial Term and each Renewal Term:4 

 

	 	Lease: 

  

	 	(a) For the first 3 Lease years, Base Rent of $475,000,000 per Lease year. 

  

	 	(b) For the 4th Lease year through the 10th Lease year, (i) Base Rent equal to $332,500,000, subject to the annual Escalator (as hereinafter defined) 

 

	3 	The parties understand that none of the Facilities will run afoul of the 80% test during the Initial Term, and that the provision will apply (if at all) only in respect of Renewal Terms. 

	4 	 For tax purposes, portions of each Non-CPLV Facility (e.g., barges and boats) may be subject to a specific Rent allocation to be set forth in the
definitive documents. 

  
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	 	commencing in the 7th Lease year as described below, plus (ii) Percentage Rent equal to the Non-CPLV Initial Percentage Rent (as hereinafter defined), as adjusted at the commencement of the 6th Lease year as described
below. 

  

	 	(c) From and after the commencement of the 11th Lease year, (i) Base Rent equal to 80% of the Rent for the 10th Lease year, subject to the annual Escalator as described below, plus (ii) Percentage Rent equal
to Non-CPLV Secondary Percentage Rent (as hereinafter defined). 

  

	 	For the 4th and 5th Lease year, Percentage Rent, in each such Lease year, shall be equal to a fixed annual amount
equal to $142,500,000, adjusted as follows: (i) in the event that the Net Revenue with respect to the Non-CPLV Facilities for the 3rd Lease year has increased versus the Net Revenue for the 12 month period immediately preceding the 1st Lease
year (such increase, the “Year 4 Non-CPLV Increase”), such $142,500,000 shall increase by the product of (a) the Non-CPLV Factor (as defined below) and (b) the Year 4 Non-CPLV Increase; and (ii) in the event that the
Net Revenue with respect to the Non-CPLV Facilities for the 3rd Lease year has decreased versus the Net Revenue for the 12 month period immediately preceding the 1st Lease year (such decrease, the “Year 4 Non-CPLV Decrease”), such
$142,500,000 shall decrease by the product of (a) the Non-CPLV Factor and (b) the Year 4 Non-CPLV Decrease (such resulting amount being referred to herein as the “Non-CPLV Initial Percentage Rent”). 

 

	 	For the 6th Lease year through the 10th Lease year, Percentage Rent, in each such Lease year, shall be equal to a fixed annual amount equal to the Non-CPLV Initial Percentage Rent, adjusted as follows: (i) in the
event that the Net Revenue with respect to the Non-CPLV Facilities for the 5th Lease year has increased versus the Net Revenue for the 3rd Lease year (such increase, the “Year 6 Non-CPLV Increase”), Percentage Rent shall increase by
the product of (a) the Non-CPLV Factor and (b) the Year 6 Non-CPLV Increase; and (ii) in the event that the Net Revenue with respect to the Non-CPLV Facilities for the 5th Lease year has decreased versus the Net Revenue for the 3rd
Lease year (such decrease, the “Year 6 Non-CPLV Decrease”), Percentage Rent shall decrease by the product of (a) the Non-CPLV Factor and (b) the Year 6 Non-CPLV Decrease. 

 

	 	For the 11th Lease year through the 15th Lease year, Percentage Rent shall be equal to a fixed annual amount equal to 20% of the Rent for the 10th Lease year, adjusted as follows: (i) in the event that the Net
Revenue with respect to the Non-CPLV Facilities for the 10th Lease year has increased versus the Net Revenue for the 5th Lease year (such increase, the “Year 11 Non-CPLV Increase”), Percentage Rent shall increase by the product of
(a) the Non-CPLV Factor and (b) the Year 11 Non-CPLV Increase; and (ii) in the event that the Net Revenue with respect to the Non-CPLV Facilities for the 10th Lease year has decreased versus the Net Revenue for the 5th Lease year
(such decrease, the “Year 11 Non-CPLV Decrease”), Percentage Rent shall decrease by the product of (a) the Non-CPLV Factor and (b) the Year 11 Non-CPLV Decrease (such resulting amount being referred to herein as
“Non-CPLV Secondary Percentage Rent”). 

  
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	 	At the commencement of each Renewal Term, (i) the Base Rent under the Lease for the first year of such Renewal Term shall be adjusted to fair market value rent (provided that (A) in no event will the Base Rent be
decreased and (B) no such adjustment shall cause Base Rent to be increased by more than 10% of the prior year’s Base Rent), subject thereafter to the annual Escalator, and (ii) the Percentage Rent for such Renewal Term will be equal to the
Percentage Rent in effect for the Lease year immediately preceding the first year of such Renewal Term, adjusted as follows: (1) in the event that the Net Revenue with respect to the Non-CPLV Facilities for the Lease year immediately preceding the
applicable Renewal Term has increased versus the Net Revenue for (x) in respect of the first Renewal Term, the 10th Lease year and (y) for each subsequent Renewal Term, the Lease year prior to the first Lease year of the immediately preceding
Renewal Term (such increase, the “Renewal Term Non-CPLV Increase”), Percentage Rent shall increase by the product of (a) the Non-CPLV Factor and (b) the Renewal Term Non-CPLV Increase; and (ii) in the event that the Net Revenue with
respect to the Non-CPLV Facilities for the Lease year immediately preceding the applicable Renewal Term has decreased versus the Net Revenue for (x) in respect of the first Renewal Term, the 10th Lease year and (y) in respect of each subsequent
Renewal Term, the Lease year prior to the first Lease year of the immediately preceding Renewal Term (such decrease, the “Renewal Term Non-CPLV Decrease”), Percentage Rent shall decrease by the product of (a) the Non-CPLV Factor and (b)
the Renewal Term Non-CPLV Decrease. The Lease shall contain a customary mechanism by which Landlord and Tenant shall determine the fair market value adjustment to Base Rent at least 12 months prior to the commencement of the applicable Renewal Term.
The fair market valuation shall be as of the date of commencement of the applicable Renewal Term. 

  

	 	The “Non-CPLV Factor” shall be equal to: (i) for the 4th Lease year through the 10th Lease year, 19.5%; and (ii) from and after the 11th Lease year, 13%. 

 

	 	From and after the commencement of the 7th Lease year, Base Rent for the Lease will be subject to an annual escalator (the “Escalator”) equal to the higher of 2% and the Consumer Price Index (“CPI”)
increase with respect to such year, above the previous lease year’s Base Rent. 

  

	 	CPLV Lease: 

  

	 	(a) For the first 5 Lease years, Base Rent of $160,000,000 per Lease year, subject to the annual Escalator. 

  

	 	(b) From and after the commencement of the 6th Lease year, (i) Base Rent equal to 80% of the Rent for the 5th Lease year, subject to the annual Escalator, plus (ii) Percentage Rent equal to the CPLV Initial Percentage
Rent (as hereinafter defined), as adjusted in the 11th Lease year as described below. 

  
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	 	For the 6th Lease year through the 10th Lease year, Percentage Rent shall be equal to a fixed annual amount equal to 20% of the Rent for the 5th Lease year, adjusted as follows: (i) in the event that the Net Revenue
with respect to the CPLV Facility for the 5th Lease year has increased versus the Net Revenue for the 12 month period immediately preceding the 1st Lease year (such increase, the “Year 6 CPLV Increase”), Percentage Rent shall increase by
the product of (a) 13% (the “CPLV Factor”) and (b) the Year 6 CPLV Increase; and (ii) in the event that the Net Revenue with respect to the CPLV Facility for the 5th Lease year has decreased versus the Net Revenue for the 12
month period immediately preceding the 1st Lease year (such decrease, the “Year 6 CPLV Decrease”), Percentage Rent shall decrease by the product of (a) the CPLV Factor and (b) the Year 6 CPLV Decrease (such resulting amount being
referred to herein as “CPLV Initial Percentage Rent”). 

  

	 	From and after the commencement of the 11th Lease year, Percentage Rent shall be equal to a fixed annual amount equal to the CPLV Initial Percentage Rent, adjusted as follows: (i) in the event that the Net Revenue with
respect to the CPLV Facility for the 10th Lease year has increased versus the Net Revenue for the 5th Lease year (such increase, the “Year 11 CPLV Increase”), Percentage Rent shall increase by the product of (a) the CPLV Factor and
(b) the Year 11 CPLV Increase and (ii) in the event that the Net Revenue with respect to the CPLV Facility for the 10th Lease year has decreased versus the Net Revenue for the 5th Lease year (such decrease, the “Year 11 CPLV
Decrease”), Percentage Rent shall decrease by the product of (a) the CPLV Factor and (b) the Year 11 CPLV Decrease. 

  

	 	At the commencement of each Renewal Term, (i) the Base Rent under the CPLV Lease for the first year of such Renewal Term shall be adjusted to fair market value rent (provided that (A) in no event will the Base Rent be
decreased and (B) no such adjustment shall cause Base Rent to be increased by more than 10% of the prior year’s Base Rent), subject thereafter to the annual Escalator, and (ii) the Percentage Rent for such Renewal Term will be equal to the
Percentage Rent in effect for the Lease year immediately preceding the first year of such Renewal Term, adjusted as follows: (1) in the event that the Net Revenue with respect to the CPLV Facility for the Lease year immediately preceding the
applicable Renewal Term has increased versus the Net Revenue for (x) in respect of the first Renewal Term, the 10th Lease year and (y) for each subsequent Renewal Term, the Lease year prior to the first Lease year of the immediately preceding
Renewal Term (such increase, the “Renewal Term CPLV Increase”), Percentage Rent shall increase by the product of (a) the CPLV Factor and (b) the Renewal Term CPLV Increase; and (ii) in the event that the Net Revenue with respect to the
CPLV Facility for the Lease year immediately preceding the applicable Renewal Term has decreased versus the Net Revenue for (x) in respect of the first Renewal Term, the 10th Lease year and (y) in respect of each subsequent Renewal Term, the Lease

  
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year prior to the first Lease year of the immediately preceding Renewal Term (such decrease, the “Renewal Term CPLV Decrease”), Percentage Rent shall decrease by the product of (a) the
CPLV Factor and (b) the Renewal Term CPLV Decrease. The CPLV Lease shall contain a customary mechanism by which Landlord and Tenant shall determine the fair market value adjustment to Base Rent at least 12 months prior to the commencement of the
applicable Renewal Term. The fair market valuation shall be as of the date of commencement of the applicable Renewal Term. 

  

	 	“Net Revenue” shall be defined in the definitive documents. 

  

	 Rent Allocation 
	Rent will be allocated under section 467 of the Code and regulations thereunder on a declining basis within the 115/85 safe harbor, adjusted as necessary such that the REIT’s pro rata share of Landlord’s anticipated free cash flow from
operations, after payment by Landlord (and its subsidiaries) of all required debt service and operating expenses, is no less than 100% of the REIT’s anticipated taxable income (assuming annual Cap Ex Reimbursements of $78.0 million).

  

	 Triple Net Lease 
	Subject to the provision below regarding Landlord’s reimbursement to Tenant of capital expenditures (the “Capex Reimbursement”), the Leases will be absolute, traditional triple net leases. Tenant shall pay all Rent absolutely net
to Landlord, without abatement, and unaffected by any circumstance (except as expressly provided below in the cases of casualty and condemnation and the Capex Reimbursement). Subject to the Capex Reimbursement, Tenant will assume complete
responsibility for the condition, operation, repair, alteration and improvement of the Facilities, for compliance with all legal requirements (whether now or hereafter in effect) including, without limitation, all environmental requirements (whether
arising before or after the effective date of the Lease), and for payment of all costs and liabilities of any nature associated with the Facilities, including, without limitation, all impositions, taxes, insurance and utilities, and all costs and
expenses relating to the use, operation, maintenance, repair, alteration and management thereof. Opco and Tenant will, jointly and severally, provide a customary environmental indemnity to Landlord. 

 

	 Expenses, Maintenance, Repairs and Maintenance Capital Expenditures, Minor Alterations 
	Tenant shall be responsible for the maintenance and repair of the Leased Properties (including capital expenditures with respect thereto); provided, however, that, under the Leases, Landlord shall reimburse to Tenant an annual amount in respect
of capital expenditures incurred by Tenant with respect to the Leased Properties under the Lease and CPLV Lease in the amount equal to the lesser of (1) $78.0 million per Lease year in the aggregate (decreasing proportionately upon any Facility
ceasing to be Leased Properties pursuant to the terms of the Lease or CPLV Lease in proportion with the Rent Reduction Adjustment), and (2) 37.5% of all capital expenditures incurred by Opco in such year (such lesser amount, the “CapEx
Reimbursement Amount”). The CapEx Reimbursement Amount shall be applied 75% to the Lease and 25% to the CPLV Lease, 

  
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	 	subject to adjustment as agreed upon by Propco to the extent required by (or to improve the terms of) any CPLV financing. Such CapEx Reimbursement Amount shall be decreased each Lease year, for such Lease year only, by
an amount equal to 50% of excess cash flow (to be defined in a manner consistent with Tenant’s financing documentation) in excess of $10 million generated by Tenant from the Facilities during the prior year. Such decrease will be structured in
a manner to comply with REIT requirements. 

  

	 	Within 30 days after the end of each month, Tenant shall provide to Landlord a report setting forth all revenues and capital expenditures for the preceding month for the Non-CPLV Facilities (in the aggregate), on the
one hand, and the CPLV Facility, on the other hand, and include Tenant’s request identifying the portion of the CapEx Reimbursement Amount it is requesting to be paid. Within 15 days after Landlord’s receipt of such report, Landlord shall
pay Tenant an amount equal to the lesser of (i) an estimated one-twelfth portion of the applicable CapEx Reimbursement Amount payable (as reasonably estimated in accordance with the applicable budget preparation process) in respect of each Lease
year, or (ii) the actual amount of capital expenditures incurred by Tenant during such month, multiplied by a fraction, the numerator of which is the estimated CapEx Reimbursement Amount for that year, and the denominator of which is the Minimum
CapEx Amount. Payment of the CapEx Reimbursement Amount shall be reconciled on a quarterly and year-end cumulative basis such that, (i) within the later of (x) 15 days after Tenant’s delivery of the required quarterly reporting or (y) 45 days
after the end of each quarter and (ii) within 30 days after the delivery of audited year-end financial statements (as applicable), quarterly and at year end Landlord will have paid to Tenant an amount equal to the ratio of the CapEx Reimbursement
Amount to the Minimum CapEx Amount (in each case, as the same may be adjusted as provided herein), multiplied by the actual amount of capital expenditures paid by Tenant for such period, provided, in no event will Landlord pay to Tenant more than
its applicable CapEx Reimbursement Amount for such year. In the event that Landlord does not reimburse Tenant for such costs within the time periods set forth above and after Tenant’s 15-day (or 30-day, as applicable) written request therefor,
Tenant shall have the right to deduct such sums from subsequent installments of Rent payable under the Lease or CPLV Lease, as applicable. In the event that Tenant fails to pay Rent as and when due under the Lease or CPLV Lease beyond all applicable
notice and cure periods, Landlord shall have the right to deduct such unpaid Rent amounts from subsequent installments of the CapEx Reimbursement Amount payable under the Lease or CPLV Lease, as applicable. 

 

	 	Tenant must expend sums for capital expenditures relating to the Facilities in an annual amount at least equal to $175,000,000 (such amount being a gross amount toward which the CapEx Reimbursement Amount may be
applied), which amount shall be increased or decreased with the inclusion or removal of Leased Properties from the Leases, in proportion with the EBITDAR of any new or sold Leased Property versus the EBITDAR of all the Leased Properties (such
amount, as adjusted, the “Minimum CapEx 

  
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 Amount”). If Tenant does not spend the full amount of the Minimum CapEx Amount as required
under the Leases, Landlord shall have the right to seek the remedy of specific performance to require Tenant to spend any such unspent amount. 

Propco shall have the right to designate an observer on the Opco Board in accordance with the Summary Term Sheet for Proposed Restructuring,
which observer shall have the opportunity to participate in all discussions and meetings of the Board and applicable committee regarding capital expenditures, budgeting, planning and construction of capital improvements for the (existing and new)
Facilities and to receive all materials given to committee members in connection with such matters. 
 Tenant shall be permitted to make
any alterations and improvements (including Material Alterations (defined below)) to the Facilities in its reasonable discretion; provided, however, that (i) all alterations must be of equal or better quality than the applicable existing Facility,
as applicable, (ii) any such alterations do not have an adverse effect on the structural integrity of any portion of the Leased Properties, and (iii) any such alterations would not otherwise result in a diminution of value to any Leased Properties.
If any alteration does not meet the standards of (i), (ii) and (iii) above, then such alteration shall be subject to Landlord’s approval. “Material Alteration” shall mean Tenant elects to (i) materially alter a Facility, (ii) expand a
Facility, or (iii) develop the undeveloped land leased pursuant to the Lease, and, in each case, the cost of such activity exceeds $50,000,000. The Minimum CapEx Amount shall not include the cost of Material Alterations. 

 

	 Material Alterations; Growth Capex; Development of Undeveloped Land 
	In the event Tenant is going to perform any Material Alteration, Tenant shall notify Landlord of such Material Alteration. Within 30 days of receipt of a notification of a Material Alteration, Landlord shall notify Tenant as to whether it will
fund all or a portion of such proposed Material Alteration and, if so, the terms and conditions upon which it would do so. Tenant shall have 10 days to accept or reject Landlord’s funding proposal. If Landlord declines to fund a proposed
Material Alteration, Tenant shall be permitted to secure outside financing or utilize then existing available financing for a 9-month period, after which 9-month period, if Tenant has not secured outside or then-existing available financing, Tenant
shall again be required to first seek funding from Landlord. 

 If Landlord agrees to fund the Material Alteration and Tenant
rejects the terms thereof, Tenant shall be permitted to either use then existing available financing or seek outside financing for a 9-month period for such Material Alteration, in each case on terms that are economically more advantageous to Tenant
than offered under Landlord’s funding proposal, and if Tenant elects to utilize economically more advantageous financing it shall provide Landlord with reasonable evidence of the terms of such financing. Prior to any advance of funds (if
applicable), Tenant and Landlord shall enter into the agreements necessary to effectuate the applicable terms of Landlord financing (including, without limitation, an amendment to the Lease if financing is structured as a Rent increase). 

  
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	 	If Tenant constructs a Material Alteration with its then existing available financing or outside financing, (i) during the Term, such Material Alteration shall be deemed part of the Leased Property solely for the
purpose of calculating Percentage Rent and shall for all other purposes be Tenant’s property and (ii) following expiration or termination of the Term, such Material Alteration shall be Tenant’s property but Landlord shall have the
option to purchase such property for fair market value. If Landlord does not elect to purchase such Material Alteration, Tenant shall, at its option, either remove the Material Alteration from the Leased Property and restore the Leased Property to
the condition existing prior to such Material Alteration being constructed, at its sole cost and expense and prior to expiration or earlier termination of the Term, or leave the Material Alteration at the Leased Property at the expiration or earlier
termination of the Term, at no cost to Landlord. If Landlord elects to purchase the Material Alteration, any amount due to Tenant for the purchase shall be credited against any amounts owed by Tenant to Landlord under the applicable Lease (including
damages, if any, in connection with the termination of such Lease). If Landlord agrees to fund a proposed Material Alteration and Tenant accepts the terms thereof, such Material Alteration shall be deemed part of the Leased Property for all
purposes. 

  

	 Right of First Refusal 
	Tenant’s Right of First Refusal: 

  

	 	Prior to consummating a transaction whereby Landlord or any of its affiliates (provided, however, that this provision will not apply if the MLSA has been terminated by Landlord or CEC (or an affiliate thereof) is
otherwise no longer responsible for management of the Facilities with the written consent of Landlord ) will own, operate or develop a domestic (U.S.) gaming facility outside of Las Vegas, Nevada (either existing prior to such date or to be
developed) that is not then subject to a pre-existing lease or management agreement in favor a third-party operator that was not entered into in contemplation of such acquisition or development, Landlord shall notify Tenant and CEC of the subject
opportunity. CEC (or its designee) shall have the right to lease (and Manager manage) such facility, and if such right is exercised Landlord and CEC (or its designee) will structure such transaction in a manner that allows the subject property to be
owned by Landlord and leased to CEC (or its designee). In such event, CEC (or its designee) shall enter into a lease with respect to the additional property whereby (i) rent thereunder shall be established based on formulas consistent with the
EBITDAR coverage ratio with respect to the Lease then in effect (the “Allocated Rent Amount”) and (ii) such other terms that CEC (or its designee) and Landlord agree upon shall be incorporated. In the event that the foregoing right is not
exercised by CEC (or its designee), Landlord (or an affiliate thereof) shall have the right to consummate the subject transaction without Tenant’s and/or CEC’s involvement, provided the same is on terms no more favorable to the
counterparty than those presented to Tenant for consummating such transaction. 

  
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	 	The mechanics and timing of applicable notices in respect of, and the exercise of, Tenant’s ROFR will be more particularly set forth in the Lease. 

 

	 	Landlord’s Right of First Refusal: 

  

	 	Prior to consummating a transaction whereby Tenant or any of its affiliates (including CEC or any of its affiliates) (provided, however, that this provision will not apply if the MLSA has been terminated by Propco or, with Propco’s consent,
CEC (or an affiliate thereof) is otherwise no longer managing the Facilities) will own, operate or develop a domestic (U.S.) gaming facility outside of Las Vegas, Nevada (either existing prior to such date or to be developed) that is not subject to
a lease or management agreement in favor a third-party operator that was not entered into in contemplation of such acquisition or development, Tenant shall notify Landlord of the subject opportunity. Landlord shall have the right to own such
facility and lease it to Tenant, and if Landlord exercises such right then Tenant and Landlord will structure such transaction in a manner that allows the subject property to be owned by Landlord and leased to Tenant (and be managed by Manager). In
such event, Tenant and Landlord shall amend the Lease by (i) adding the additional property as Leased Property, (ii) increasing Rent by the Allocated Rent Amount with respect to such property and (iii) incorporating such other terms that Tenant and
Landlord have agreed to. In the event that Landlord declines its right to own the facility, Tenant (or an affiliate thereof) shall have the right to consummate the subject transaction without Landlord’s involvement, provided the same is on
terms no more favorable to the counterparty than those presented to Landlord for consummating such transaction. Further, in the event Landlord declines its right to own such facility, the Lease shall provide for similar terms as those provided in
the Penn Gaming lease with respect to any such facilities which are located outside of Las Vegas, Nevada and within the restricted area (as defined in the Penn Gaming lease but reduced to 30 miles) of any existing Non-CPLV Facilities.

  

	 	The mechanics and timing of applicable notices in respect of, and the exercise of, Landlord’s ROFR will be more particularly set forth in the Lease. 

 

	 Permitted Use 
	Tenant shall use the Leased Property for hotel, gaming, entertainment, conference, retail and other uses consistent with its current use, or with prevailing industry use. 

 

	 Landlord Sale of Properties 
	Landlord may sell, without Tenant consent in each instance, any or all of the Facilities, upon the following terms: (i) the purchaser shall enter into a severance lease with Tenant for the sold Facility(ies) on substantially the same terms as
contained in the applicable Lease, with an appropriate rent 

  
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	 	adjustment; (ii) the applicable Lease shall be modified as necessary to reflect the removal of the applicable Facility(ies), including, without limitation, an adjustment to the Rent thereunder so as to preserve the same
economics following the entry into such severance lease; and (iii) CEC and Manager shall enter into a new MLSA with respect to the severance lease on terms substantially similar to CEC’s obligations with respect to the MLSA with respect to the
Leases. The Leases shall not be cross-defaulted with any such severance lease. 

  

	 	Each Lease shall survive any such assignment or transfer by Landlord and the successor Landlord shall become a party thereto. 

  

	 	If the partnership (as opposed to the spin-off) structure is used, Landlord’s right to sell the Facilities as described above shall be subject to compliance with a customary Tax Protection Agreement protecting CEOC
from adverse tax consequences resulting from asset sales or repayment of debt below certain thresholds. 

  

	 Assignment by Tenant 
	Tenant will not have the right to directly assign portions of the Lease, however, the following assignments will be permitted, as well as others of a similar nature: 

 

	 	1) An assignment to a permitted lender (described in further detail below) for collateral purposes, any assignment to such permitted lender or any other purchaser upon a foreclosure or transaction in lieu of
foreclosure, and any assignment to any subsequent purchaser thereafter each shall be permitted; provided, however, that in all such transfers, the foreclosing lender or any purchaser or successor purchaser must keep the MLSA in place unless Landlord
has consented (in its sole discretion) to the termination of the MLSA, as more particularly provided in the MLSA term sheet, and if Landlord has so consented to an MLSA termination, the foreclosing lender or any purchaser or successor purchaser
shall engage an “acceptable operator” (satisfying parameters to be set forth in the Leases with respect to, among other things, gaming and other appropriate operational experience and qualification) to operate the Facilities.

  

	 	2) An assignment to an affiliate of Tenant, to CEC or an affiliate of CEC. 

  

	 	3) Any sublease of any portion of the premises, pursuant to a bona-fide third party transaction, so long as Tenant is not released from its obligations under the Lease, and (x) provided all covenants with respect to CEC
management continue to be satisfied, and (y) subject to restrictions against transactions designed to avoid payment of Percentage Rent or otherwise to negate requirements or provisions in the CPLV Lease or the Lease; provided, however, the following
shall be permitted: (A) any subleases existing as of the effective date of the Lease or CPLV Lease, as applicable, consistent with currently existing arrangements and (B) any affiliate subleases necessary or appropriate for the operation of the
Facilities in connection with licensing requirements (e.g., gaming, liquor, etc.). 

  
 11 

	 	Additionally, the following transfers of direct and indirect interests in Tenant will be permitted: 

  

	 	1) Transfers of stock in Tenant or its parent(s) on a nationally-recognized exchange; provided, however, in order to be a permitted transfer, in the event of a change of control of CEC, the quality of management must be
generally consistent or superior to that which existed immediately prior to the transfer. 

  

	 	2) Reconfiguration of the Board of Directors of Tenant’s parent(s) that does not result from a change of control. 

  

	 	3) Transfers of interests in Tenant that do not cause a change in control of Tenant. 

  

	 	In all events, except as expressly provided in the MLSA term sheet, neither Tenant nor the Guarantor under the Guaranty will be released in connection with any such transfer, assignment, sublet or other disposition,
whether permitted or restricted. 

  

	 	Notwithstanding anything to the contrary, there shall be no restrictions on direct or indirect transfers in CEC; provided, however, in order to be a permitted transfer, in the event of a change of control of CEC, the
quality of management must be generally consistent or superior to that which existed immediately prior to the transfer. 

  

	 	For purposes hereof, the term “change of control” shall be defined in a manner consistent with Opco debt financing documents. 

 

	 Landlord Financing 
	Landlord may finance or refinance its interest in any of the Non-CPLV Facilities and CPLV Facility, as applicable (“Landlord Financing”), in its discretion. Tenant will reasonably cooperate in all Landlord Financings. Tenant will
operate (or cause to be operated) the Facilities in compliance with the customary terms of the Landlord Financing documents (including all covenants pertaining to the maintenance of the Facilities, as applicable, funding and maintaining lender
required reserves, complying with all cash management requirements of the lender, procuring insurance and providing reporting), pertaining to the Facilities, as applicable, as existing as of the effective date of the Leases and any new or additional
terms of any new or modified Landlord Financing made following the effective date of the Leases, in each case provided that such terms are customary and do not (x) materially increase Tenant’s obligations under the Leases, or (y) materially
diminish Tenant’s rights under the Leases (it being acknowledged that Tenant’s obligation to fund and maintain customary and reasonable reserves as required by Landlord’s lender does not materially increase Tenant’s obligations
or materially diminish Tenant’s rights under the Leases). The Leases shall be subordinate to all Landlord Financing, provided Landlord shall obtain non-disturbance agreements from its lenders in a form to be reasonably agreed to by the parties.

  
 12 

	 Tenant Financing 
	Tenant shall be permitted to obtain the financing contemplated by the Restructuring Support Agreement, and any refinancing/replacements thereof, subject to parameters on any financing/refinancing (such as lender qualifications for entitlement to
leasehold mortgagee protections) to be set forth in the Leases. The lender (with appropriate qualifications) under such Tenant financing (i) shall be given notice of a default under the Lease, (ii) shall be afforded a right to cure any applicable
Tenant default, (iii) shall, upon an early termination or rejection of the Lease, be given the opportunity to enter into a replacement lease (on terms consistent with the Lease) and (iv) shall be afforded other customary leasehold mortgagee
protections. 

  

	 	Such mortgagee protections shall provide that the leases shall survive any debt default by Tenant under such financing and any foreclosure by such lender on Tenant’s leasehold interest (provided all curable
defaults have been, or upon foreclosure will be, cured), and neither Landlord nor Tenant nor its lenders or assignees shall have termination rights under the Leases in respect thereof (absent an Event of Default under the applicable Lease).

  

	 	Upon foreclosure, the foreclosing lender must keep the MLSA in place unless Landlord has consented (in its sole discretion) to the termination of the MLSA, as more particularly provided in the MLSA term sheet, and if
Landlord has so consented to an MLSA termination, the foreclosing lender shall engage an “acceptable operator” (satisfying parameters to be set forth in the Leases with respect to, among other things, gaming and other appropriate
operational experience and qualification) to operate the Facilities. 

  

	 Financial Statements of Tenant 
	Tenant shall provide to Landlord quarterly and audited annual financial statements (prepared in accordance with applicable securities law requirements, including as to format and timing, and shall consent to the inclusion of such financial
statements in all public or private disclosure and offering documents of Propco and the REIT required by applicable law). In addition, the Tenant under the CPLV Lease shall provide to Landlord such additional customary and reasonable financial
information related to CPLV as may be required for the Landlord Financing pertaining to CPLV. 

  

	 	In addition, Tenant shall provide revenue and capital expenditure reports to Landlord to the extent set forth in the section above titled “Expenses, Maintenance, Repairs and Maintenance Capital Expenditures, Minor
Alterations”. 

  

	 Casualty 
	In the event of any casualty with respect to a Facility, Tenant is obligated to rebuild/restore, and has no right to terminate the Lease, except that, (i) for the CPLV Lease, during the final two years of the Term, in connection with a casualty
which costs in excess of 25% of total property fair market value as determined by mutually acceptable architect or contractor, either Landlord or Tenant may terminate the Lease, (ii) for the Lease, during final two years of the Term, in connection
with a casualty for any individual Facility which costs in excess of 25% of total fair market value 

  
 13 

	 	for such individual Facility as determined by mutually acceptable architect or contractor, either Landlord or Tenant may terminate the Lease as to such individual Facility (in which event the Rent obligations under the
Lease in respect of the remaining Facilities shall be proportionately adjusted, based on a mechanic to be set forth in the Leases), and (iii) Tenant shall not have an obligation to rebuild/restore solely to the extent the casualty was uninsured
under the insurance policies Tenant is required to keep in place under the Lease or CPLV lease, as applicable. 

  

	 Condemnation 
	If substantially all of the CPLV Facility is taken, then the CPLV Lease will terminate. If substantially all of any individual Non-CPLV Facility under the Lease is taken, then the Lease will terminate as to such individual Non-CPLV Facility, and
the Rent shall be reduced by the Rent Reduction Amount with respect to the applicable Non-CPLV Facility. In any such case (when the Lease or CPLV Lease (as applicable) is terminated in whole or in part), the applicable award will be distributed,
first to Landlord in payment of the fair market value of Landlord’s interest in the applicable Facilities, then to Tenant in payment of the fair market value of the Tenant’s property which was so taken, and the balance of the award if any,
to Landlord. In the case of a partial condemnation, the applicable Lease will continue unabated except that Base Rent shall be adjusted in proportion to the portion of the Facility which was taken (based on a mechanic to be set forth in the Leases).

  

	 Events of Default 
	Standard events of default including failure to pay monetary sums and failure to comply with the covenants set forth in the Lease. With respect to monetary defaults, Tenant shall be entitled to notice and a 10 day cure period. With respect to
non-monetary defaults, Tenant shall be entitled to notice and, so long as Tenant (i) commences to cure within 30 days after receipt of notice and (ii) continues to diligently cure the applicable default, the applicable non-monetary default shall not
become an Event of Default. Landlord will refrain from exercising remedies under the Lease in respect of an Event of Default for the duration of the cure periods furnished to CEC as specifically provided in the MLSA term sheet. 

 

	 	A default under the Lease shall not be a default under the CPLV Lease. With respect to the Lease, (a) during the term of the initial Landlord financing with respect to the Non-CPLV Facilities, a default under the CPLV
Lease shall be a default under the Lease, and (b) from and after the replacement of the initial Landlord financing with respect to the Non-CPLV Facilities with replacement financing, a default under the CPLV Lease shall not be a default under the
Lease. 

  

	 	Any default by Tenant with respect to a Tenant Financing or Landlord with respect to a Landlord Financing shall not be considered a default under the leases. 

 

	 Remedies upon Event of Default 
	If Landlord elects to terminate the Lease or CPLV Lease upon an Event of Default by Tenant during the Term (including any Renewal Terms for which Tenant has exercised its renewal option), then Landlord shall be 

  
 14 

	 	 
entitled to seek damages with respect to an acceleration of future rents in accordance with applicable law, but in no event shall such damages exceed the difference between (i) the net present
value of the Rent for the applicable Leased Properties for the balance of the Initial Term and/or such Renewal Term if exercised (as applicable), minus (ii) the net present value of the fair market rental for the applicable Leased Properties for the
balance of the Initial Term and/or such Renewal Term if exercised (as applicable). 

  

	 Alternative Dispute Resolution 
	The parties will reasonably consider an alternative dispute resolution process as part of the negotiation of the definitive documentation. 

  

	 Effect of Lease Termination: 
	If the Lease or CPLV Lease is terminated for any reason, at Landlord’s option (1) Tenant will cooperate (and shall cause Manager to cooperate) to transfer to a designated successor at fair market value all tangible personal property located
at each Facility (as applicable) and used exclusively at such Facility (as applicable); and/or (2) Tenant shall stay in possession and continue to operate the business in the same manner as prior practice (for a period not to exceed 2-years) while
the identity of a successor tenant is determined. Any amount due to Tenant hereunder for the purchase of the personal property shall be credited by Landlord against any amounts owed by Tenant to Landlord under the applicable Lease (including
damages, if any, in connection with the termination of such Lease). 

  

	 	The foregoing is subject to the express terms of the MLSA in the event of a Non-Consented Lease Termination (as defined in the MLSA term sheet) of the Lease or CPLV Lease. 

 

	 REIT Provisions 
	Each lease shall contain certain provisions required to satisfy REIT-related requirements applicable to Landlord, including: 

  

	 	•	 	Tenant shall not sublet, assign or enter into any management arrangements pursuant to which subtenant rent would be based on net income or profits of the subtenant. 

 

	 	•	 	Landlord shall have the right to assign the leases to another person (e.g., a taxable REIT subsidiary) in order to maintain landlord’s REIT status. 

 

	 	•	 	Tenant shall be obligated to provide information to Landlord necessary to verify REIT compliance. 

  

	 Regulatory 
	Landlord and Tenant shall comply with all applicable regulatory requirements. The Non-CPLV Facilities intended to be demised under the Lease shall be severable into separate leases with respect to any Facility in the event necessary to comply
with any applicable licensing or regulatory requirements, pursuant to a mechanism to be set forth in the Lease as agreed between Landlord and Tenant. The resulting severed leases shall be cross-defaulted. If a Facility is so severed, Rent under the
initial Lease shall be reduced by the Rent Reduction Adjustment with respect to such Facility, and the Rent under a lease for any such severed Facility shall be equal to such deducted amount. 

  
 15 

	 Governing Law 
	New York, except that the provisions relating to the creation of the leasehold estate and remedies concerning recovery of possession of the leased property shall be governed by the law of the state where the Facility is located.

  
 16 

 EXHIBIT A 

Non-CPLV Facilities 
  

					
			
	1. Horseshoe Council Bluffs	  	Council Bluffs	  	IA
			
	2. Harrah’s Council Bluffs	  	Council Bluffs	  	IA
			
	3. Harrah’s Metropolis	  	Metropolis	  	IL
			
	4. Horseshoe Southern Indiana - Vessel	  	New Albany and Elizabeth	  	IN
			
	5. Horseshoe Hammond	  	Hammond	  	IN
			
	6. Horseshoe Bossier City	  	Bossier City	  	LA
			
	7. Harrah’s Bossier City (Louisiana Downs)	  	Bossier City	  	LA
			
	8. Harrah’s North Kansas City	  	North Kansas City and Randolph	  	MO

  
 17 

					
			
	9. Grand Biloxi Casino Hotel (f/k/a Harrah’s Gulf Coast) and Biloxi Land Assemblage	  	Biloxi	  	MS
			
	10. Horseshoe Tunica	  	Robinsonville	  	MS
			
	11. Tunica Roadhouse	  	Robinsonville	  	MS
			
	12. Caesars Atlantic City	  	Atlantic City and Pleasantville	  	NJ
			
	13. Bally’s Atlantic City and Schiff Parcel	  	Atlantic City	  	NJ
			
	14. Harrah’s Lake Tahoe	  	Stateline	  	NV
			
	15. Harvey’s Lake Tahoe	  	Stateline	  	NV
			
	16. Harrah’s Reno	  	Reno	  	NV
			
	17. Harrah’s Joliet (subject to the rights of Des Plaines Development Corporation/ John Q. Hammons)	  	Joliet	  	IL

  
 18 

					
			
	Golf Courses	  		  	
			
	18. Rio Secco Golf Course	  	Henderson	  	NV
			
	19. Cascata Golf Course	  	Boulder City	  	NV
			
	20. Grand Bear Golf Course	  	Saucier	  	MS
			
	Racetracks	  		  	
			
	21. Bluegrass Downs	  	Paducah	  	KY
			
	Miscellaneous	  		  	
			
	22. Las Vegas Land Assemblage	  	Las Vegas	  	NV
			
	23. Harrah’s Airplane Hangar	  	Las Vegas	  	NV

  
 19 

 EXHIBIT B 

CPLV Facilities 
  

					
	1. Caesars Palace	  	Las Vegas	  	NV

  
 20 

 SUMMARY OF TERMS 

Management and Lease Support Agreement (“MLSA”)1 

between CEC, Manager, Landlord and Tenant 

in connection with the Leases 

(all as hereinafter defined) 
  

	 CEC: 
	Caesars Entertainment Corporation, a Delaware corporation 

  

	 Manager: 
	A wholly-owned subsidiary of CEC, as manager of the Facilities under the MLSA2 

  

	 Landlord: 
	[Propco] collectively together with its subsidiaries that own the Facilities (as defined in the Leases), as landlord under the Leases, as more particularly described in the “Lease Term Sheet” 

 

	 Tenant: 
	[Opco/CEOC] collectively together with certain of its subsidiaries, as tenant under the Leases, as more particularly described in the “Lease Term Sheet” 

 

	 Leases: 
	(1) A certain lease of various facilities (other than Caesars Palace Las Vegas) between Landlord and Tenant and (2) a certain lease of Caesars Palace Las Vegas between Landlord and Tenant, as more particularly described in the “Lease Term
Sheet” 

  

	1 	MLSA to consist of the two separate agreements on same terms to correspond to the two separate leases. Agreements to have same terms other than as specified herein. In connection with the incorporation of the CEC
guaranty into the MLSA rather than its being a stand-alone instrument, the definitive deal documentation will provide that a termination of the MLSA by Tenant or Manager (including in the case of a rejection in bankruptcy) will not, subject to the 3rd and 4th Bullet Points of “CEC Guaranty” and subject to footnote 5 below, result in termination of CEC’s guaranty obligations under
the MLSA. 

	2 	Notwithstanding anything set forth in this MLSA Term Sheet or in the RSA Term Sheet, the Lease Term Sheet or the Debt Term Sheets, it is understood and agreed that all assets (other than the real property transferred to
Propco upon the formation of the REIT structure) required to operate the properties consistent with current practice (the “Facility Management Assets”), shall be transferred to an entity (the “Facility Management Assets Owner”)
so as to be made continuously available to Manager through a mutually agreeable bankruptcy remote structure that shall remove the risk of lack of access in all events (it being understood that the structures to be considered include the Facility
Management Assets Owner being owned by Manager and/or Landlord). 

	 Term: 
	The MLSA commences on the date the Leases commence. The MLSA automatically terminates, but may be replaced in accordance with the provisions described below, with respect to any Facility if such Facility is no longer demised under a Lease. The
Term of the MLSA expires with respect to each Lease upon the earlier to occur of (1) the date that none of the Facilities are demised under such Lease, (2) Tenant and Landlord terminate the MLSA with respect to such Lease,
(3) termination in connection with a Tenant Foreclosure (pursuant to option 1 in the following section) and (4) the termination of such Lease (pursuant to the third Bullet Point in “CEC Guaranty” below). 

 

	 	Notwithstanding any such termination of the MLSA, in the event of a Non-Consented Lease Termination (as defined below), the following shall occur (unless expressly elected not to occur by Landlord in accordance with the
4th Bullet Point of “CEC Guaranty”): (i) the Lease and the MLSA shall be replaced on the same terms as previously existed and (ii) the management rights and obligations of Manager shall
continue thereunder subject to and on the terms contemplated below in the fourth Bullet Point of “CEC Guaranty” and the guaranty obligations of CEC shall continue thereunder subject to and on the terms contemplated below in the fourth
Bullet Point of “CEC Guaranty.”3 

  

	 Tenant Foreclosure: 
	If Tenant’s lender (or any lender, if more than one) has a valid lien on the leasehold estate under the Leases or on the direct or indirect equity in the Tenant, whether by mortgage, equity pledge or otherwise, and duly forecloses on such
lien following an Event of Default under Tenant’s financing (and/or in connection with any pursuit of remedies in a bankruptcy proceeding), such lender (the “OpCo Lenders”) shall, in connection with and as a condition to
effectuating such Tenant Foreclosure (and/or pursuit of remedies in any proceeding), 

  

	3 	Notwithstanding anything contained in the section titled “Term” or otherwise in this MLSA Term Sheet, unless the Landlord shall have terminated the Lease or the MLSA expressly in writing (or expressly
consented in writing to such termination), the CEC guaranty obligations shall, subject to the 3rd and 4th Bullet Points of “CEC
Guaranty” and subject to footnote 5 below, continue in effect. Each of the Lease and the MLSA shall contain a provision stating that each document is being entered into as part of an overall integrated transaction and that the parties would not
be entering into one document without the other. Further, the parties will acknowledge that in a chapter 11 case, they would not reject one agreement without rejecting the other as if they were one agreement and not separable. 

  
 2 

	 	 
irrevocably elect one of the following: (1) with the consent of Landlord (in its sole and absolute discretion) and Manager, to terminate the MLSA and, in connection with such termination,
directly operate the Facilities pursuant to the terms of the Leases, or obtain a replacement operator to operate the Facilities or (2) to retain Manager as operator of the Facilities pursuant to the terms of the MLSA and keep the MLSA in full force
and effect in accordance with its terms. The Opco Lenders will enter into an agreement (the “Consent Agreement”) with Landlord, CEC and Manager to effect the consent rights hereunder (with it being understood that any
rejection of a Lease in bankruptcy will be treated as a Non-Consented Lease Termination unless in connection therewith (x) Landlord terminates the Manager under the MLSA or (y) Landlord consents to the termination of the MLSA (in its sole and
absolute discretion)). 

  

	 	In the event of a Non-Consented Lease Termination, the following shall occur (unless expressly elected not to occur by Landlord in accordance with the 4th Bullet
Point of “CEC Guaranty”): (i) the Lease and the MLSA shall be replaced on the same terms as previously existed and (ii) the management rights and obligations of Manager shall continue thereunder subject to and on the terms contemplated
below in the fourth Bullet Point of “CEC Guaranty” and the guaranty obligations of CEC shall continue thereunder subject to and on the terms contemplated below in the fourth Bullet Point of “CEC Guaranty”. 

 

	 REIT Management: 
	The terms of the MLSA shall be reasonably acceptable to the parties thereto and shall include, inter alia, the following terms: 

  

	 	•	 	Operations management provisions pursuant to which Manager will manage the Facilities in its business judgment on reasonable and customary terms to be more fully set forth in the MLSA and, in any event, on terms no less
favorable to Tenant than current practice. 

  

	 	•	 	All direct expenses for operating the Facilities will be reimbursed by Tenant (including, without limitation, fees and expenses allocated to Manager and/or Tenant for the Facilities under arrangements with Caesars
Enterprise Services, LLC (“CES”)). Manager will enter into separate shared services arrangements with CES (and, if necessary, any other applicable affiliates) for access to all of its services (including without limitation use of
the Total Rewards® program) for the benefit of the Facilities so that the Facilities can be run consistent with past practice and in the future consistent with all other CEC (or CEC
affiliates’) directly or indirectly owned or managed facilities, without discrimination against the Facilities.4 

 

	4 	In connection with the implementation of definitive transaction documentation, Landlord must understand and approve any fee and expense structure to the extent it impacts Landlord or any of the Facilities.

  
 3 

	 	•	 	All expenses associated with owning and maintaining the Facility Management Assets will be reimbursed by Tenant. 

  

	 	•	 	Manager may delegate duties under the MLSA to one or more affiliates on customary terms so long as neither Landlord nor Tenant is prejudiced thereby. 

 

	 CEC Guaranty: 
	Pursuant to the MLSA, CEC will guaranty the payment and performance of all monetary obligations of Tenant under the Leases, subject to the following terms: 

  

	 	•	 	CEC will have no liability with respect to the Leases unless an “Event of Default” is continuing under the Leases. 

  

	 	•	 	If an “Event of Default” under either of the Leases occurs, CEC shall have no liability with respect to the Leases, unless CEC was given notice of the applicable default of Tenant under the Lease or CPLV
Lease, as applicable, and (A) with respect to a monetary default. CEC failed to cure such default on or prior to five (5) business days after Tenant’s deadline under the applicable Lease (or, if later, after CEC’s receipt of such
notice from Landlord) and (B) with respect to a non-monetary default, CEC failed to cure such default on or prior to Tenant’s deadline to cure such default under the applicable Lease (or, if later, after CEC’s receipt of such notice from
Landlord). 

  

	 	•	 	CEC’s and Manager’s obligations with respect to each MLSA (including, without limitation, CEC’s guaranty obligations with respect to the Lease and the CPLV Lease, as applicable) shall terminate in the
event the Lease or CPLV Lease (as applicable) is terminated by Landlord expressly in writing (or with Landlord’s express written consent), except to the extent of any accrued and unpaid guaranty obligations through the date of such termination
(which shall be immediately due and payable upon demand) and such damages to which Landlord is entitled due to such termination pursuant to the Lease or CPLV Lease, as applicable. In addition, CEC’s obligations with respect to each MLSA

  
 4 

	 	(including, without limitation, CEC’s guaranty obligations with respect to the Lease and the CPLV Lease, as applicable) shall terminate in the event that Manager is terminated by Landlord expressly in writing (or by
Tenant’s lender with Landlord’s express written consent, in its sole and absolute discretion) as manager of the Facilities or the CPLV Facility (as applicable)5; provided, however, (i)
CEC’s guaranty obligation shall continue to the extent of any accrued and unpaid guaranty obligations through the date of such termination (which shall be immediately due and payable upon demand) and such damages to which Landlord is entitled
due to such termination pursuant to the Lease or the CPLV Lease, as applicable, and (ii) CEC’s guaranty obligations shall continue to cover any post-termination management transition period during which Manager continues to act as manager.
Except as provided in this Bullet Point, CEC’s guaranty obligations under the MLSA shall not terminate for any reason. 

  

	 	•	 	In the event a Lease is terminated without the express written consent of Landlord including, without limitation, 

 

	5 	Each Lease shall provide that Manager may only be terminated as manager of the Facilities or the CPLV Facility by Landlord (or by Tenant’s lender with Landlord’s express written consent in its sole and
absolute discretion) and, in the event of any such termination or otherwise (including in the case of a rejection in bankruptcy), Landlord shall have the sole right to elect to appoint a replacement Manager (and if so elected by Landlord, Tenant
(and its successor and assigns, including under the Consent Agreement) shall be deemed to have accepted such appointment and no other right or approval shall be necessary for such appointment to be effective). If Landlord does not elect to appoint
Manager (or another CEC affiliate, to be made available by CEC, under the same terms as the MLSA as provided herein) as replacement Manager (unless prevented from making such election by order of a court or other governmental entity, automatic stay
or other legal prohibition), Landlord shall be deemed to have terminated Manager with its express written consent. If Landlord is prevented from making such election by order of a court or other governmental entity, automatic stay or other legal
prohibition, then Landlord and Tenant (and its successor and assigns, including under the Consent Agreement) shall be deemed to have consented to Manager’s continued management of the Facilities notwithstanding the termination of the MLSA until
Landlord is no longer prevented from making such election. Each Lease shall further provide that if Manager is terminated as manager of the Facilities or the CPLV Facility other than by Landlord (or by Tenant’s lender with Landlord’s
express written consent in its sole and absolute discretion), then such Lease shall automatically terminate (and such termination shall constitute a Non-Consented Lease Termination). 

  
 5 

	 	 
by a rejection in bankruptcy (a “Non-Consented Lease Termination”), then the following shall occur (unless Landlord expressly elects in writing that the
following shall not occur and expressly consents in writing to the Lease termination) without expense or loss of economic benefit to Landlord: (i) Tenant (or its successors and assigns, including under the Consent Agreement) shall transfer all of
its assets (including, without limitation, rights under licenses and with respect to intellectual property) to a replacement entity directly or indirectly owned by CEC or Tenant (or its successors and assigns, including under the Consent Agreement)
that will assume the rights and obligations of Tenant under the Lease (the “Replacement Tenant”), (ii) a new lease (the “Replacement Lease”) on terms identical to the Lease so terminated shall be
entered into by Landlord with the Replacement Tenant and (iii) to the extent not transferred pursuant to clause (i) above or otherwise provided by Manager, CEC and CES shall replicate all prior arrangements with respect to management,
sub-management, licensing, intellectual property and otherwise as necessary to provide for the continued management and operation of the Facilities as existed prior to such termination, and, upon such occurrence (x) CEC, Manager, Replacement Tenant
and Landlord shall enter into a new management and lease support agreement on terms identical to the MLSA (and CEC, Manager and its applicable affiliates shall enter into any necessary associated sub-management, licensing and other applicable
arrangements) and (y) the management rights and obligations of Manager and guaranty obligations of CEC shall continue with respect to such Replacement Lease as set forth in the MLSA. The Consent Agreement will provide that Tenant and the OpCo
Lenders will act in support of this right. If (1) Landlord has not elected in writing that the foregoing shall not occur and (2) clauses (i), (ii) and (iii) do not occur other than as a direct and proximate result of Landlord’s acts or failure
to act in accordance with this Bullet Point, then CEC’s guaranty shall not terminate. If Landlord elects in writing that the foregoing shall not occur and/or clauses (i), (ii) or (iii) do not occur as a direct and proximate result of
Landlord’s acts or failure to act in accordance with this Bullet Point, then Landlord shall have been deemed to expressly consent to the termination of the Lease in writing (and CEC’s guaranty 

  
 6 

	 	shall terminate). Landlord shall have the right of specific performance to compel CEC and/or its affiliates to comply with the foregoing. In addition, CEC, Manager and Landlord shall have the right of specific performance to compel
Tenant (or its successors and assigns, including under the Consent Agreement (which shall contain such remedy)) to comply with the foregoing. If Tenant (or its successors and assigns, including under the Consent Agreement) do not cooperate with the
foregoing, CEC and Manager shall have the right to replicate the structure, including determining the ownership and identity of the Replacement Tenant, without regard to the interests of Tenant or its successors (including the OpCo Lenders).

  

	 CEC Covenants: 
	The MLSA shall contain customary terms and waivers of all suretyship and other defenses by CEC and will include a covenant by CEC requiring that (a) the sale of assets by CEC be for fair market value consideration, on arm’s-length terms
and, in the event of sales to affiliates, be subject to (i) confirmation of fair market value by the approval of an independent group of CEC’s board of directors and by a fairness opinion from an investment bank reasonably acceptable to
Landlord (with an approved list of investment banks to be agreed in the MLSA) and (ii) a right of first refusal in favor of Landlord or its designee and (b) non-cash dividends by CEC be permitted only to the extent such dividends would not
reasonably be expected to result in CEC’s inability to perform its guaranty obligations under the MLSA. 

  

	 Integrated Agreement: 
	For the avoidance of doubt, each of the provisions constituting the MLSA, including the management obligations of Manager and the guaranty obligations of CEC, are and are intended to be part of a single integrated agreement and shall not be
deemed to be separate or severable agreements. 

  
 7 

 New First Lien OpCo Debt 

$[            ] Term Facility 

Summary of Principal Terms1 

 

	 Borrower: 
	[Caesars Entertainment Operating Company, Inc.]2 (the “Borrower”). 

  

	 Agent/Collateral Agent: 
	[            ] will act as sole administrative agent for the Senior Facilities (in such capacity and together with its permitted successors and assigns, the
“Agent”), and will perform the duties customarily associated with such role. 

  

	 	[            ] will act as collateral agent for the Senior Facilities (in such capacity, the “Collateral Agent”) and will perform the
duties customarily associated with such role. 

  

	 	The Agent and Collateral Agent shall each be acceptable to the First Lien Bank Lenders and the First Lien Noteholders. 

  

	 Facilities: 
	(A)	 a senior secured term loan facility in an aggregate principal amount set forth in the Restructuring Term Sheet (the “First Lien
Term Facility” and loans thereunder, the “Term Loans”), which will be issued to each First Lien Bank Lender, in accordance with the Restructuring Term Sheet (in such capacity, collectively the
“Lenders”). 

  

	 	(B)	at the Borrower’s option, a senior secured revolving credit facility in an aggregate principal amount not to exceed $200 million (the “Revolving Facility” and, together with the First Lien
Term Facility, the “Senior Facilities”), to be provided by the First Lien Bank Lenders or such other financial institutions to become Lenders under the Senior Facilities, a portion of which will be available through a
subfacility in the form of letters of credit. 

  

	 	In accordance with the Restructuring Term Sheet, the Borrower shall use its commercially reasonable efforts to syndicate the First Lien Term Facility to the market at or below the interest rates set forth herein and, to
the extent so syndicated, the cash proceeds will be used to increase the cash payments to the First Lien Bank Lenders pursuant to the terms of the Restructuring Term Sheet. 

 

	1	All capitalized terms used but not defined herein shall have the meaning assigned thereto in the Restructuring Term Sheet to which this Term Sheet is attached (the “Restructuring Term Sheet”).

	2	[NTD: Assumes CEOC is the operating company in the new REIT structure. 

  

	 Definitive Documentation: 
	The definitive documentation for the Senior Facilities (the “Senior Facilities Documentation”) shall, except as otherwise set forth herein, be based on financing and security documentation typical and customary for exit
financings, taking into consideration (i) the First Lien Credit Agreement, dated as of October 11, 2013, among Caesars Entertainment Resort Properties, LLC, Caesars Entertainment Resort Properties Finance, Inc., Harrah’s Las Vegas,
LLC, Harrah’s Atlantic City Holding, Inc., Rio Properties, LLC, Flamingo Las Vegas Holding, LLC, Harrah’s Laughlin, LLC and Paris Las Vegas Holding, LLC, as borrowers, the lenders party thereto and Citicorp North America, Inc., as
administrative agent (the “CERP Credit Agreement”) and (ii) the operating lease structure of the Borrower and its subsidiaries, and otherwise be reasonably satisfactory to the Borrower and the Requisite Consenting Creditors
(the “Documentation Precedent”); provided that, in the case of provisions setting forth the debt and lien capacity, such Senior Facilities Documentation shall be based on and consistent with the CERP Credit Agreement, as
modified to reflect the terms set forth herein. 

  

	 Incremental Facilities: 
	The Borrower will be permitted after the Closing Date to add additional revolving or term loan credit facilities (the “Incremental Facilities”) in an aggregate principal amount not to exceed the greater of (x) $150
million and (y) an aggregate principal amount of indebtedness that would not cause (1) in the case of debt incurred under the Incremental Facilities that is secured by pari passu liens on the Collateral, the pro forma First Lien Net
Leverage Ratio (to be defined as the ratio of total funded debt outstanding that consists of the Term Loans and other funded debt that is secured by first-priority liens on the Collateral that are pari passu with the Term Loans (net of unrestricted
cash and cash equivalents not to exceed in the aggregate $100 million) to adjusted EBITDA) (“First Lien Net Leverage Ratio”) to exceed a ratio to be set on the Closing Date that is equal to a ratio that is 0.25x greater than
the pro forma First Lien Net Leverage Ratio in effect on the Closing Date3 and (2) in the case of debt incurred under the Incremental Facilities that is secured by junior liens on the
Collateral, the pro forma Total Secured Net Leverage Ratio (to be defined as the ratio of total funded debt 

  

	3	 For the avoidance of doubt, (i) the calculation of the ratios in the OpCo debt documents shall exclude Chester Downs (from both debt and EBITDA)
and (ii) any Revolving Facility loans outstanding at the time of incurrence of any debt shall be included in the calculation of any Leverage Ratio at the time of such incurrence.

  
 2 

	 	 
outstanding that is secured by liens on the Collateral (net of unrestricted cash and cash equivalents not to exceed in the aggregate $100 million) to adjusted EBITDA) (“Total Secured
Net Leverage Ratio”) to exceed a ratio to be set on the Closing Date that is equal to a ratio that is 0.25x greater than the pro forma Total Secured Net Leverage Ratio in effect on the Closing Date; provided, that:

  

	 	(i)	the loans under such additional credit facilities shall be secured senior obligations and shall rank pari passu or junior in right of security with, and shall have the same guarantees as, the Senior Facilities;
provided, that, if such additional credit facilities rank junior in right of security to the Senior Facilities, (x) such additional credit facilities will be established as a separate facility from the Senior Facilities and pursuant to
separate documentation, (y) such Incremental Facilities shall be subject to the Intercreditor Agreements (as defined below) or other intercreditor agreements that are not materially less favorable to the Lenders and the First Lien Noteholders
than the Intercreditor Agreements and (z) for the avoidance of doubt, will not be subject to clause (iv) below; 

  

	 	(ii)	the loans under the additional term loan facilities will mature no earlier than, and will have a weighted average life to maturity no shorter than, that of the First Lien Term Facility and all other terms of any such
additional term loan facility (other than pricing, amortization or maturity) shall be substantially identical to the First Lien Term Facility or otherwise reasonably acceptable to the Agent; 

 

	 	(iii)	all fees and expenses owing in respect of such increase to the Agent, Collateral Agent and the Lenders shall have been paid; and 

  

	 	(iv)	each incremental term facility shall be subject to a “most favored nation” pricing provision that ensures that the initial “yield” on the incremental facility does not exceed the “yield” at
such time on the First Lien Term Facility by more than 50 basis points (with “yield” being determined by the Agent taking into account the applicable margin, upfront fees, any original issue discount and any LIBOR or ABR floors, but
excluding any structuring, commitment and arranger or similar fees). 

  
 3 

	 Purpose: 
	On the Closing Date, the Term Loan will be issued to each First Lien Bank Lender in accordance with the Restructuring Term Sheet. 

  

	 Availability: 
	The full amount of the First Lien Term Facility will be issued on the Closing Date. Amounts under the First Lien Term Facility that are repaid or prepaid may not be reborrowed. 

 

	 Interest Rates: 
	LIBOR + 4.0% per annum, with a 1.0% LIBOR floor. 

  

	 Default Rate: 
	With respect to overdue principal (whether at stated maturity, upon acceleration or otherwise), the applicable interest rate plus 2.00% per annum, and with respect to any other overdue amount (including overdue interest), the interest rate
applicable to ABR loans plus 2.00% per annum and in each case, shall be payable on demand. 

  

	 Final Maturity and Amortization: 
	The First Lien Term Facility will mature on the date that is six (6) years after the Closing Date, and, commencing with the second full fiscal quarter ended after the Closing Date, will amortize in equal quarterly installments in an aggregate
annual amount equal to 1% of the original principal amount of the First Lien Term Facility with the balance payable on the maturity date of the First Lien Term Facility. 

 

	 Guarantees: 
	All obligations of the Borrower under the Senior Facilities and, at the option of the Borrower, under any interest rate protection or other hedging arrangements entered into with the Agent, an entity that is a Lender or agent at the time of such
transaction (or on the Closing Date, if applicable), or any affiliate of any of the foregoing (“Hedging Arrangements”), or any cash management arrangements with any such person (“Cash Management
Arrangements”), will be unconditionally guaranteed (the “Guarantees”) by each existing and subsequently acquired or organized wholly owned domestic subsidiary of the Borrower (the “Subsidiary
Guarantors”), subject to exceptions consistent with the Documentation Precedent and others, if any, to be agreed upon. The Guarantees will be guarantees of payment and performance and not of collection. 

 

	 Security: 
	Subject to exceptions described below and other exceptions to be agreed upon, the Senior Facilities, the Guarantees, any Hedging Arrangements and any Cash Management Arrangements will be secured on a first-priority basis by 

  
 4 

	 	

	  substantially all the owned material assets of the Borrower and each Subsidiary
Guarantor, in each case whether owned on the Closing Date or thereafter acquired (collectively, the “Collateral”), including but not limited to: (a) a perfected first-priority pledge of all the equity interests directly
held by the Borrower or any Subsidiary Guarantor (which pledge, in the case of any foreign subsidiary, shall be limited to 100% of the non-voting equity interests (if any) and 65% of the voting equity interests of such foreign subsidiary),
(b) a lien on cash, deposit accounts and securities accounts, and (c) perfected first-priority security interests in, and mortgages on, substantially all owned tangible and intangible assets of the Borrower and each Subsidiary Guarantor
(including, but not limited to, accounts receivable, inventory, equipment, general intangibles, investment property, intellectual property and real property) except for (v) real property with a fair market value less than $15.0 million and
leaseholds, (w) vehicles, (x) those assets as to which the Borrower, Agent and Collateral Agent shall reasonably determine that the costs or other consequences of obtaining such a security interest are excessive in relation to the value of the
security to be afforded thereby, (y) assets to which the granting or perfecting such security interest would violate any applicable law (including gaming laws and regulations) or contract (and with regard to which contract the counterparty
thereto requires such prohibition as a condition to entering into such contract, such contract has been entered into in the ordinary course of business, such restriction is consistent with industry custom and consent has been requested and not
received), and (z) other exceptions consistent with the Documentation Precedent. There shall be neither lockbox arrangements nor any control agreements relating to the Borrower’s and its subsidiaries’ bank accounts or securities
accounts. 

  

	 	All the above-described pledges, security interests and mortgages shall be created on terms, and pursuant to documentation consistent with the Documentation Precedent. 

 

	 	The Senior Facilities Documentation will provide that none of the Collateral Agent, Lenders or Administrative Agent will be permitted to terminate Caesars Entertainment Corporation or any of its subsidiaries or
affiliates as manager of any of the PropCo facilities without the prior written consent of PropCo. 

  

	 	 The relative rights and priorities in the Collateral for each of the Credit Agreement and the First Lien Notes will be set forth in a customary intercreditor
agreement between the 

  
 5 

	 	 
administrative agent for the Credit Agreement, on the one hand, and the trustee for the First Lien Notes, on the other hand, except that such intercreditor agreement shall provide that the
indebtedness outstanding under the Credit Agreement and the First Lien Notes vote together as one class and are pari passu in all respects, including in respect of directing the collateral agent thereunder (the “First Lien Intercreditor
Agreement”). 

  

	 	The relative rights and priorities in the Collateral for each of the Credit Agreement, the First Lien Notes and the Second Lien Notes will be set forth in a customary intercreditor agreement, consistent with the
Documentation Precedent, as between the collateral agent for the Credit Agreement and the First Lien Notes, on the one hand, and the collateral agent for the Second Lien Notes, on the other hand (the “First Lien/Second Lien Intercreditor
Agreement” and, together with the First Lien Intercreditor Agreement, the “Intercreditor Agreements”). 

  

	 Mandatory Prepayments: 
	Unless (in the case of clause (a)) the net cash proceeds are reinvested (or committed to be reinvested) in the business within 12 months after (and, if so committed to be reinvested, are actually reinvested within three months after the end of
such initial 12-month period), a non-ordinary course asset sale or other non-ordinary disposition of property (other than sale of receivables in connection with a permitted receivable financing) of the Borrower or any of the subsidiaries (including
insurance and condemnation proceeds), (a) the Lenders’ pro rata share (to be defined as the ratio of funded debt outstanding that consists of the Term Loans to the sum of the total funded debt outstanding that consists of the Term Loans and the
First Lien Notes) of 100% of the net cash proceeds in excess of an amount to be agreed upon from such non-ordinary course asset sales or other non-ordinary dispositions of property, and (b) the Lenders’ pro rata share (to be defined as the
ratio of funded debt outstanding that consists of the Term Loans to the sum of the total funded debt outstanding that consists of the Term Loans and the First Lien Notes) of 100% of the net cash proceeds of issuances, offerings or placements of debt
obligations of the Borrower and its subsidiaries (other than debt permitted to be incurred under the Senior Facilities Documentation unless otherwise provided as a condition to the incurrence thereof), shall be applied to prepay the Term Loans under
the First Lien Term Facility, in each case subject to customary and other exceptions to be agreed upon, including those consistent with the Documentation Precedent. 

  
 6 

	 	In addition, beginning with the first full fiscal year of the Borrower after the Closing Date, 50% of Excess Cash Flow (to be defined in a manner consistent with the Documentation Precedent and to take into account
application of Excess Cash Flow under the Lease and otherwise in a manner satisfactory to the Requisite Consenting Creditors and subject to a minimum threshold to be agreed) of the Borrower and its restricted subsidiaries (stepping down to 25% if
the First Lien Net Leverage Ratio is less than or equal to 2.75 to 1.00 and stepping down to 0% if the First Lien Net Leverage Ratio is less than or equal to 2.25 to 1.00) shall be used to prepay the Term Loans under the First Lien Term Facility and
the First Lien Notes, on a ratable basis; provided that any voluntary prepayment of Term Loans made during any fiscal year (including Loans under the Revolving Facility to the extent commitments thereunder are permanently reduced by the
amount of such prepayments at the time of such prepayment) and voluntary repayment of the First Lien Notes shall be credited against excess cash flow prepayment obligations for such fiscal year (or, at the Borrower’s option, any future year) on
a Dollar-for-Dollar basis. 

  

	 	All mandatory prepayments shall be made pro rata among the Lenders. 

  

	 	Notwithstanding the foregoing, each Lender under the First Lien Term Facility shall have the right to reject its pro rata share of any mandatory prepayments described above, in which case the amounts so rejected may be
retained by the Borrower on terms consistent with the Documentation Precedent. 

  

	 	The above-described mandatory prepayments shall be applied to the First Lien Term Facility in direct order of maturity. 

  

	 	Prepayments from subsidiaries’ Excess Cash Flow and asset sale proceeds will be limited under the Senior Facilities Documentation to the extent (x) the repatriation of funds to fund such prepayments is prohibited,
restricted or delayed by applicable local laws, (y) applied to repay indebtedness of a foreign subsidiary of the Borrower or (z) the repatriation of funds to fund such prepayments would result in material adverse tax consequences. 

  
 7 

	 Voluntary Prepayments and Reductions in Commitments: 
	Voluntary reductions of the unutilized portion of the commitments under the Senior Facilities and prepayments of borrowings thereunder will be permitted at any time in minimum principal amounts to be agreed upon, without premium or penalty,
subject to the following paragraph and subject to reimbursement of the Lenders’ redeployment costs in the case of a prepayment of Adjusted LIBOR borrowings other than on the last day of the relevant interest period. All voluntary prepayments of
the First Lien Term Facility will be applied pro rata to the Term Loan (and pro rata among the Lenders) and to the remaining amortization payments under the First Lien Term Facility in such order as the Borrower may direct. 

 

	 	Voluntary Prepayments of the Term Loans made prior to the four year anniversary of the Closing Date will be subject to a prepayment premium, as follows: 

 

	 	•	 	First year following Closing Date: customary “make-whole” premium (T+50) 

  

	 	•	 	Second year following Closing Date: 3% 

  

	 	•	 	Third year following Closing Date: 2% 

  

	 	•	 	Fourth year following Closing Date: 1% 

  

	 	•	 	Fourth year anniversary and thereafter: par 

  

	 Representations and Warranties: 
	The following representations and warranties, among others, if any, to be negotiated in the Senior Facilities Documentation, will apply (to be applicable to the Borrower and its restricted subsidiaries, subject to customary and other exceptions
and qualifications to be agreed upon, consistent with the Documentation Precedent): organization, existence, and power; qualification; authorization and enforceability; no conflict; governmental consents; subsidiaries; accuracy of financial
statements and other information in all material respects; projections; no material adverse change since the Closing Date; absence of litigation; compliance with laws (including PATRIOT Act, OFAC, FCPA, ERISA, margin regulations, environmental laws
and laws with respect to sanctioned persons); payment of taxes; ownership of properties; governmental regulation; inapplicability of the Investment Company Act; Closing Date solvency on a consolidated basis; labor matters; validity, priority and
perfection of security interests in the Collateral; intellectual property; treatment as designated senior debt under subordinated debt documents (if any); use of proceeds; and insurance. 

  
 8 

	 Affirmative Covenants: 
	The following affirmative covenants, among others, if any, to be negotiated in the Senior Facilities Documentation, will apply (to be applicable to the Borrower and its restricted subsidiaries), subject to customary (consistent with the
Documentation Precedent) and other baskets, exceptions and qualifications to be agreed upon: maintenance of corporate existence and rights; performance and payment of obligations; delivery of annual and quarterly consolidated financial statements
(accompanied by customary management discussion and analysis and (annually) by an audit opinion from nationally recognized auditors that is not subject to any qualification as to scope of such audit or going concern) (with extended time periods to
be agreed for delivery of the first annual and certain quarterly financial statements to be delivered after the Closing Date) and an annual budget; delivery of notices of default and material adverse litigation, ERISA events and material adverse
change; maintenance of properties in good working order; maintenance of books and records; maintenance of customary insurance; commercially reasonable efforts to maintain ratings (but not a specific rating); compliance with laws; inspection of books
and properties; environmental; additional guarantors and additional collateral (subject to limitations set forth under the captions “Guarantees” and “Security”); further assurances in respect of
collateral matters; use of proceeds; and payment of taxes. 

 The Senior Facilities Documentation will provide that any
management or similar fees paid to Caesars Entertainment Corporation or any of its subsidiaries or affiliates will be made on an arm’s-length basis and on “market” terms (including caps on amounts and consent rights relating to
modifications of applicable agreements relating thereto). 
  

	 Negative Covenants: 
	The following negative covenants, among others, if any, to be negotiated in the Senior Facilities Documentation, will apply (to be applicable to the Borrower and its restricted subsidiaries), subject to customary exceptions and qualifications
(consistent with the Documentation Precedent) and others to be agreed upon: 

  

	 	1.	Limitation on dispositions of assets. 

  

	 	2.	Limitation on mergers and acquisitions. 

  

	 	3.	Limitation on dividends and stock repurchases and optional redemptions (and optional prepayments) of subordinated debt, it being understood that such limitations will be more restrictive until the Total Net Leverage
Ratio is less than 3.00 to 1.00. 

  
 9 

	 	4.	Limitation on indebtedness (including guarantees and other contingent obligations) and preferred stock, it being understood that additional unsecured indebtedness may be incurred in an aggregate principal amount that
would not cause the pro forma Total Net Leverage Ratio (to be defined as the ratio of total funded debt outstanding (net of unrestricted cash and cash equivalents not to exceed in the aggregate $100 million) to adjusted EBITDA) (“Total
Net Leverage Ratio”) to exceed a ratio to be set on the Closing Date that is equal to a ratio that is 0.25x greater than the pro forma Total Net Leverage Ratio in effect on the Closing Date. 

 

	 	5.	Limitation on loans and investments. 

  

	 	6.	Limitation on liens and further negative pledges. 

  

	 	7.	Limitation on transactions with affiliates. 

  

	 	8.	Limitation on sale/leaseback transactions. 

  

	 	9.	Limitation on changes in the business of the Borrower and its subsidiaries. 

  

	 	10.	Limitation on restrictions on ability of subsidiaries to pay dividends or make distributions. 

  

	 	11.	Limitation on changes to fiscal year. 

  

	 	12.	Limitation on modifications to subordinated debt documents. 

  

	 	13.	Limitation on material modifications to the MLSA, lease and other arrangements entered into in connection with the lease structure. 

 

	 	EBITDA shall be defined in a manner consistent with the Documentation Precedent. 

  

	 	All ratios and calculations shall be measured on a Pro Forma Basis (to be defined in a manner consistent with the Documentation Precedent, and including the annualized effect of addbacks in the definition of EBITDA).

  
 10 

	 	With respect to basket amounts, covenant thresholds and similar levels in the Senior Facilities Documentation provisions with respect to debt and lien capacity that are tied to dollar amounts, such amounts, thresholds
and levels will be based on the corresponding dollar amounts that are set forth in the CERP Credit Agreement, in each case as adjusted pursuant to the agreement of the parties, including to reflect the pro forma capital structure of the Borrower and
the relative size and EBITDA of the Borrower (such amounts as adjusted, the “Basket Adjustments”). 

  

	 Financial Covenant: 
	First Lien Term Facility: None. 

  

	 Events of Default: 
	The following (subject to customary and other thresholds and grace periods to be agreed upon, consistent with the Documentation Precedent, and applicable to the Borrower and its restricted subsidiaries), among others, if any, to be negotiated in
the Senior Facilities Documentation: nonpayment of principal, interest or other amounts; violation of covenants; incorrectness of representations and warranties in any material respect; cross event of default and cross acceleration to material
indebtedness; bankruptcy and similar events; material judgments; ERISA events; invalidity of the Guarantees or any security document, in each case, representing a material portion of the Guarantees or the Collateral; and Change of Control (to be
defined in a manner consistent with the Documentation Precedent). 

  

	 Unrestricted Subsidiaries: 
	The Senior Facilities Documentation will contain provisions pursuant to which, subject to limitations consistent with the Documentation Precedent, the Borrower will be permitted to designate any existing or subsequently acquired or organized
subsidiary as an “unrestricted subsidiary” and subsequently re-designate any such unrestricted subsidiary as a restricted subsidiary. Unrestricted subsidiaries will not be subject to the affirmative or negative covenant or event of default
provisions of the Senior Facilities Documentation, and the results of operations and indebtedness of unrestricted subsidiaries will not be taken into account for purposes of calculating the financial ratios contained in the Senior Facilities
Documentation on terms consistent with the Documentation Precedent. 

  

	 Voting: 
	Usual for facilities and transactions of this type and consistent with the Documentation Precedent; provided that the Borrower and its affiliates, including the Sponsors, shall not have voting rights with respect to loans and commitments held by
them. 

  
 11 

	 Cost and Yield Protection: 
	Usual for facilities and transactions of this type, consistent with the Documentation Precedent. 

  

	 Assignments and Participations: 
	The Lenders will be permitted to assign loans and commitments under the Senior Facilities with the consent of the Borrower (not to be unreasonably withheld or delayed, but which consent under the First Lien Term Facility shall be deemed granted
if the Borrower fails to respond to a request for consent by a Lender within ten business days of such request being made); provided, that such consent of the Borrower shall not be required (i) if such assignment is made, in the case of
the First Lien Term Facility, to another Lender under the First Lien Term Facility or an affiliate or approved fund of a Lender under the First Lien Term Facility or (ii) after the occurrence and during the continuance of an event of default
relating to payment default or bankruptcy. All assignments will also require the consent of the Agent (subject to exceptions consistent with the Documentation Precedent) not to be unreasonably withheld or delayed. Each assignment, in the case of the
First Lien Term Facility, will be in an amount of an integral multiple of $1,000,000. The Agent will receive a processing and recordation fee of $3,500, payable by the assignor and/or the assignee, with each assignment. Assignments will be by
novation and will not be required to be pro rata between the Senior Facilities. 

  

	 	The Lenders will be permitted to sell participations in loans subject to the restrictions set forth herein and consistent with the Documentation Precedent. Voting rights of participants shall (i) be limited to
matters in respect of (a) increases in commitments of such participant, (b) reductions of principal, interest or fees payable to such participant, (c) extensions of final maturity or scheduled amortization of the loans or commitments
in which such participant participates and (d) releases of all or substantially all of the value of the Guarantees, or all or substantially all of the Collateral and (ii) for clarification purposes, not include the right to vote on waivers
of defaults or events of default. 

  

	 	Notwithstanding the foregoing, assignments (and, to the extent such list is made available to all Lenders, participations) shall not be permitted to ineligible institutions identified to the Agent on or prior to the
Closing Date and, 

  
 12 

	 	with the consent of the Agent, thereafter; provided that the Agent shall not be held liable or responsible for any monitoring or enforcing of the foregoing. 

 

	 	Assignments shall not be deemed non-pro rata payments. Non-pro rata prepayments will be permitted to the extent required to permit “extension” transactions and “replacement” facility transactions
(with existing and/or new Lenders), subject to customary restrictions consistent with the Documentation Precedent. 

  

	 	Assignments to the Sponsors and their respective affiliates (other than the Borrower and its subsidiaries) (each, an “Affiliated Lender”) shall be permitted subject to customary restrictions
consistent with the Documentation Precedent. 

  

	 Non-Pro Rata Repurchases: 
	The Borrower and its subsidiaries may purchase from any Lender (other than the Borrower or any of its affiliates, including the Sponsors), at individually negotiated prices, outstanding principal amounts or commitments under the First Lien Term
Facility in a non-pro rata manner; provided that (i) the purchaser shall make a representation to the seller at the time of assignment that it does not possess material non-public information with respect to the Borrower and its subsidiaries
that has not been disclosed to the seller or Lenders generally (other than the Lenders that have elected not to receive material non-public information), (ii) any commitments or loans so repurchased shall be immediately cancelled and (iii) no
default or event of default exists or would result therefrom. 

  

	 Expenses and Indemnification: 
	Consistent with the Documentation Precedent. 

  

	 Regulatory Matters: 
	Customary for facilities of this type and consistent with the Documentation Precedent. 

  

	 Governing Law and Forum: 
	New York. 

  

	 Counsel to Agent/Collateral Agent: 
	[                    ]. 

  
 13 

 New First Lien OpCo Debt 

$[            ] First Lien Notes 

Summary of Principal Terms1 

 

	 Issuer: 
	[Caesars Entertainment Operating Company, Inc.]2, in its capacity as the issuer of the First Lien Notes (the “Issuer”). 

 

	 Issue: 
	The First Lien Notes in an amount set forth in the Restructuring Term Sheet will be issued under and have the benefit of an indenture and security documentation typical and customary in the case of first lien senior secured notes issued pursuant
to an exit financing, taking into consideration (i) the indenture for the first-priority senior secured notes issued on October 11, 2013 by Caesars Entertainment Resort Properties, LLC, Caesars Entertainment Resort Properties Finance, Inc.,
Harrah’s Atlantic City Holding, Inc., Harrah’s Las Vegas, LLC, Harrah’s Laughlin, LLC, Flamingo Las Vegas Holding, LLC, Paris Las Vegas Holding, LLC, Rio Properties, LLC (the “CERP First Lien Indenture”) and
(ii) the operating lease structure of the Issuer and its subsidiaries, and otherwise be reasonably satisfactory to the Issuer and the Requisite Consenting Creditors (the “Documentation Precedent”); provided that, in the case
of provisions setting forth the debt and lien capacity, the indenture shall be based on and consistent with the CERP First Lien Indenture, as modified to reflect the terms set forth herein. 

 

	 	In accordance with the Restructuring Term Sheet, the Issuer shall use its commercially reasonable efforts to syndicate the First Lien Notes to the market at or below the interest rates set forth herein and, to the
extent so syndicated, the cash proceeds will be used to increase the cash payments to the First Lien Noteholders pursuant to the terms of the Restructuring Term Sheet. 

 

	 Purpose: 
	On the Closing Date, the First Lien Notes will be issued to each First Lien Noteholder in accordance with the Restructuring Term Sheet. 

  

	 Maturity: 
	The First Lien Notes will mature on the date that is six (6) years after the Closing Date. 

  

	 Interest Rate: 
	LIBOR + 4.0% per annum, with a 1.0% LIBOR floor. 

  

	1	All capitalized terms used but not defined herein shall have the meanings assigned thereto in the Restructuring Term Sheet to which this Term Sheet is attached (the “Restructuring Term Sheet”),
or in the New First Lien OpCo Debt Term Sheet attached thereto. 

	2	NTD: Assumes CEOC is the operating company in the new REIT structure. 

	 Default Rate: 
	With respect to overdue principal (whether at stated maturity, upon acceleration or otherwise), the applicable interest rate plus 2.00% per annum, and with respect to any other overdue amount (including overdue interest), the interest rate
applicable to ABR loans plus 2.00% per annum and in each case, shall be payable on demand. 

  

	 Ranking: 
	The First Lien Notes will constitute senior first-priority secured indebtedness of the Issuer, and will rank pari passu in all respects, including in right of payment with all obligations under the Senior Facilities (the “Credit
Agreement”) and all other first lien senior indebtedness of the Issuer. 

  

	 Guarantees: 
	The First Lien Notes and all obligations under the indenture related thereto will be unconditionally guaranteed by each existing and subsequently acquired or organized wholly owned domestic subsidiary of the Issuer (the “Note
Guarantors”), subject to exceptions consistent with the Documentation Precedent and others, if any, to be agreed upon, on a senior first-priority secured basis (the “Note Guarantees”). The Note Guarantees will
rank pari passu in all respects, including in right of payment, with all obligations under the Credit Agreement and all other senior indebtedness of the Note Guarantors. The Note Guarantees will be guarantees of payment and performance and not of
collection. 

  

	 Security: 
	Subject to the limitations set forth below and limitations consistent with the Documentation Precedent, the First Lien Notes and the Note Guarantees will be secured by a first-priority security interest in substantially all the owned material
assets of the Issuer and each Note Guarantor, in each case whether owned on the Closing Date or thereafter acquired (collectively, the “Collateral”), including but not limited to: (a) a perfected first-priority pledge of all
the equity interests directly held by the Issuer or any Note Guarantor (which pledge, in the case of any foreign subsidiary, shall be limited to 100% of the non-voting equity interests (if any) and 65% of the voting equity interests of such foreign
subsidiary) (b) a lien on cash, deposit accounts and securities accounts, and (c) perfected first-priority security interests in, and mortgages on, substantially all owned tangible and intangible assets of the Issuer and each Note
Guarantor (including, but not limited to, accounts receivable, inventory, equipment, general intangibles, investment property, intellectual property and real property) except for (v) real property with a fair market value less than $15.0 million and
leaseholds, (w) vehicles, (x) those assets as to which the Issuer and Collateral Agent shall reasonably determine that the costs or other 

	 	

  
 2 

	 	consequences of obtaining such a security interest are excessive in relation to the value of the security to be afforded thereby, (y) assets to which the granting or perfecting such security interest would violate any
applicable law (including gaming laws and regulations) or contract (and with regard to which contract the counterparty thereto requires such prohibition as a condition to entering into such contract, such contract has been entered into in the
ordinary course of business, such restriction is consistent with industry custom and consent has been requested and not received), and (z) other exceptions consistent with the Documentation Precedent; and provided that the pledge of equity interests
and other securities will be subject to customary Rule 3-16 cut-back provisions. There shall be neither lockbox arrangements nor any control agreements relating to the Issuer’s and its subsidiaries’ bank accounts or securities accounts.

  

	 	All of the above-described pledges, security interests and mortgages shall be created on terms, and pursuant to documentation, consistent with the Documentation Precedent. 

 

	 	The indenture for the First Lien Notes will provide that none of the Collateral Agent, First Lien Noteholders or Trustee will be permitted to terminate Caesars Entertainment Corporation or any of its subsidiaries or
affiliates as manager of any of the PropCo facilities without the prior written consent of PropCo. 

  

	 	The relative rights and priorities in the Collateral for each of the Credit Agreement and the First Lien Notes will be set forth in the First Lien Intercreditor Agreement, as between the administrative agent for the
Credit Agreement, on the one hand, and the trustee for the First Lien Notes, on the other hand, which intercreditor agreement shall provide that the indebtedness outstanding under the Credit Agreement and the First Lien Notes vote together as one
class and are pari passu in all respects, including in respect of directing the collateral agent thereunder. 

  

	 	The relative rights and priorities in the Collateral for each of the Credit Agreement, the First Lien Notes and the Second Lien Notes will be set forth in the First Lien/Second Lien Intercreditor Agreement, as between
the collateral agent for the Credit Agreement and the First Lien Notes, on the one hand, and the collateral agent for the Second Lien Notes, on the other hand. 

  

	 Mandatory Redemption: 
	None. 

  
 3 

	 Optional Redemption: 
	Prior to the first anniversary of the Closing Date, the Issuer may redeem the Notes at a make-whole price based on U.S. Treasury notes with a maturity closest to the first anniversary of the Closing Date plus 50 basis points. 

 

	 	Prior to the first anniversary of the Closing Date, the Issuer may redeem up to 35% of the Notes in an amount equal to the amount of proceeds from an equity offering at a price equal to par plus the coupon on such
Notes. 

  

	 	After the first anniversary of the Closing Date, the Notes will be callable at par plus accrued interest plus a premium equal to 3.00%, which premium shall decline to 2.00% on the second anniversary of the Closing Date,
to 1.00% on the first anniversary of the Closing Date and to zero on the fourth anniversary of the Closing Date. 

  

	 	All redemptions shall be made on a pro rata basis among the First Lien Notes. 

  

	 Offer to Repurchase with Proceeds of Debt Issuance: 
	The Issuer will be required to make an offer to repurchase the First Lien Notes at par in an amount equal to the First Lien Noteholders’ pro rata share (to be defined as the ratio of funded debt outstanding that consists of the First Loan
Notes to the sum of the total funded debt outstanding that consists of the First Lien Notes and the First Lien Term Facility) of 100% of the net cash proceeds of issuances, offerings or placements of debt obligations of the Issuer and its
subsidiaries (other than debt permitted to be incurred under the indenture governing the First Lien Notes unless otherwise provided as a condition to the incurrence thereof). 

 

	 Offer to Purchase from Asset Sale Proceeds: 
	The Issuer will be required to make an offer to repurchase the First Lien Notes at par in an amount equal to the First Lien Noteholders’ pro rata share (to be defined as the ratio of funded debt outstanding that consists of the First Loan
Notes to the sum of the total funded debt outstanding that consists of the First Lien Notes and the First Lien Term Facility) of 100% of the net cash proceeds from any non-ordinary course asset sales or dispositions by the Issuer or any Note
Guarantor in accordance with the Documentation Precedent to the extent any such proceeds are not otherwise applied in a manner consistent with the Documentation Precedent. 

 

	 Offer to Repurchase Upon a Change of Control: 
	The Issuer will be required to make an offer to repurchase the First Lien Notes following the occurrence of a “change of control” (to be defined in a manner consistent with the Documentation Precedent) at a price in cash
equal to 101.0% of the outstanding principal amount thereof, plus accrued and unpaid interest to the date of repurchase. 

  
 4 

	 Offer to Repurchase from Excess Cash Flow: 
	Beginning with the first full fiscal year of the Issuer after the Closing Date, the Issuer will be required to make an offer to repurchase the First Lien Notes at par in an amount equal to the First Lien Noteholders’ pro rata share (to be
defined as the ratio of funded debt outstanding that consists of the First Loan Notes to the sum of the total funded debt that consists of the First Lien Notes and First Lien Term Facility) of 50% of Excess Cash Flow (to be defined in a manner
consistent with the definition in the Credit Agreement and subject to the same minimum threshold therein) of the Issuer and its restricted subsidiaries (stepping down to 25% if the First Lien Net Leverage Ratio is less than or equal to 2.75 to 1.00
and stepping down to 0% if the First Lien Net Leverage Ratio is less than or equal to 2.25 to 1.00); provided that any voluntary prepayment of Term Loans made during any fiscal year (including Loans under the Revolving Facility to the extent
commitments thereunder are permanently reduced by the amount of such prepayments at the time of such prepayment) and voluntary repayment of the First Lien Notes shall be credited against excess cash flow prepayment obligations for such fiscal year
(or, at the Borrower’s option, any future year) on a Dollar-for-Dollar basis. 

 Prepayments from subsidiaries’
Excess Cash Flow and asset sale proceeds will be limited under the First Lien Notes Documentation to the extent (x) the repatriation of funds to fund such prepayments is prohibited, restricted or delayed by applicable local laws, (y) applied to
repay indebtedness of a foreign subsidiary of the Borrower or (z) the repatriation of funds to fund such prepayments would result in material adverse tax consequences. 
  

	 Defeasance and Discharge Provisions: 
	Customary for high yield debt securities consistent with the Documentation Precedent. 

  

	 Modification: 
	Customary for high yield debt securities consistent with the Documentation Precedent. Notes held by the Issuer and its affiliates, including the Sponsors, shall not have voting rights. 

 

	 Registration Rights: 
	Customary registration rights. 

  

	 Covenants: 
	Substantially the same as those in the Documentation Precedent (including in respect of baskets and carveouts to such covenants; provided that such baskets and carveouts shall conform to the corresponding amounts in the Credit Agreement).
For the avoidance of doubt, there shall be no financial maintenance covenants. 

  
 5 

	 	1. The provisions limiting indebtedness shall, in addition to carve-outs consistent with the Documentation Precedent, provide that the amount of indebtedness incurred under the “bank basket” will not exceed an
amount equal to the sum of (i) the aggregate principal amount of the Credit Agreement (including the accordion provisions thereunder), plus (ii) such additional amount of indebtedness that may be incurred that would not cause the ratio of
funded debt (including the debt referred to in clause (i) of this sentence) outstanding that is (A) secured by a first priority lien on the Collateral (net of unrestricted cash and cash equivalents not to exceed in the aggregate $100
million) to adjusted EBITDA (the “Net First Lien Leverage Ratio”) to exceed a ratio to be set on the Closing Date that is equal to a ratio that is 0.25x greater than the pro forma First Lien Net Leverage Ratio in effect on
the Closing Date, (B) secured by junior liens on the Collateral (net of unrestricted cash and cash equivalents not to exceed in the aggregate $100 million) to adjusted EBITDA (the “Net Total Secured Leverage Ratio”) to
exceed a ratio to be set on the Closing Date that is equal to a ratio that is 0.25x greater than the pro forma Net Total Secured Leverage Ratio in effect on the Closing Date and (C) unsecured (net of unrestricted cash and cash equivalents not
to exceed in the aggregate $100 million) to adjusted EBITDA (the “Net Total Leverage Ratio”) to exceed a ratio to be set on the Closing Date that is equal to 0.25x greater than the pro forma Net Total Leverage Ratio in effect
on the Closing Date;3 

  

	 	2. The provisions limiting liens shall provide for customary permitted liens consistent with the Documentation Precedent and include (i) the ability to incur first-priority liens on indebtedness to the extent that
the pro forma Net First Lien Leverage Ratio is not greater than a ratio to be set on the Closing Date that is equal to a ratio that is 0.25x greater than the pro forma First Lien Net Leverage Ratio in effect on the Closing Date; (ii) the
ability to incur liens junior to the liens securing the First Lien Notes, provided that the indebtedness secured by such junior liens is permitted under the indenture, and (iii) the ability to incur liens on assets of non-Note Guarantor
subsidiaries so long as such liens secure obligations of non-Note Guarantor subsidiaries that are otherwise permitted. 

 

	3	For the avoidance of doubt, (i) the calculation of the ratios in the OpCo debt document shall exclude Chester Downs (from both debt and EBITDA) and (ii) any Revolving Facility loans outstanding at the time of
incurrence of any debt shall be included in the calculation of any Leverage Ratio at the time of such incurrence. 

  
 6 

 3. With respect to basket amounts, covenant thresholds and similar levels in the indenture
governing the First Lien Notes provisions with respect to debt and lien capacity that are tied to dollar amounts, such amounts, thresholds and levels will be based on the corresponding dollar amounts that are set forth in the CERP First Lien
Indenture, in each case as adjusted pursuant to the agreement of the parties, including to reflect the pro forma capital structure of the Issuer and the relative size and EBITDA of the Issuer (such amounts as adjusted, the “Basket
Adjustments”). 
  

	 	4. The provisions limiting dividends and stock repurchases and optional redemptions (and optional prepayments) of subordinated debt will be more restrictive until the Net Total Leverage Ratio is less than 3.00 to 1.00.

  

	 	5. The indenture for the First Lien Notes will provide that any management or similar fees paid to Caesars Entertainment Corporation or any of its subsidiaries or affiliates will be made on an arm’s-length basis and on “market”
terms (including caps on amounts and consent rights relating to modifications of applicable agreements relating thereto). 

  

	 Events of Default: 
	Customary for high yield debt securities and consistent with the Documentation Precedent. 

  

	 Governing Law: 
	New York. 

  

	 Regulatory Matters: 
	Consistent with the Documentation Precedent. 

  

	 Counsel to the Notes Lead Arranger: 
	[                    ]. 

  
 7 

 New Second Lien OpCo Debt 

$[            ] Second Lien Notes 

Summary of Principal Terms1 

 

	 Issuer: 
	[Caesars Entertainment Operating Company, Inc.]2, in its capacity as the issuer of the Second Lien Notes (the “Issuer”). 

 

	 Issue: 
	The Second Lien Notes in an a amount set forth in the Restructuring Term Sheet will be issued under and have the benefit of an indenture and security documentation typical and customary in the case of second lien senior secured notes issued
pursuant to an exit financing, taking into consideration (i) the indenture for the second-priority senior secured notes issued on October 11, 2013 by Caesars Entertainment Resort Properties, LLC, Caesars Entertainment Resort Properties Finance,
Inc., Harrah’s Atlantic City Holding, Inc., Harrah’s Las Vegas, LLC, Harrah’s Laughlin, LLC, Flamingo Las Vegas Holding, LLC, Paris Las Vegas Holding, LLC, Rio Properties, LLC (the “CERP Second Lien Indenture”)
and (ii) the operating lease structure of the Issuer and its subsidiaries, and otherwise be reasonably satisfactory to the Issuer and the Requisite Consenting Creditors (the “Documentation Precedent”); provided that, in the
case of provisions setting forth the debt and lien capacity, the indenture shall be based on and consistent with the CERP Second Lien Indenture, as modified to reflect the terms set forth herein. 

 

	 Purpose: 
	On the Closing Date, the Second Lien Notes will be issued to each First Lien Bank Lender and First Lien Noteholder in accordance with the Restructuring Term Sheet. 

 

	 Maturity: 
	The Second Lien Notes will mature on the date that is seven (7) years after the Closing Date. 

  

	 Interest Rate: 
	A fixed rate equal to 8.5%. 

  

	 Ranking: 
	The Second Lien Notes will constitute senior second-priority secured indebtedness of the Issuer, and will rank pari passu in right of payment with all obligations under the Senior Facilities (the “Credit Agreement”) and
all other senior indebtedness (including the First Lien Notes) of the Issuer. 

  

	1	All capitalized terms used but not defined herein shall have the meanings assigned thereto in the Restructuring Term Sheet to which this Term Sheet is attached (the “Restructuring Term Sheet”),
or in the New First Lien OpCo Debt Term Sheet attached thereto. 

	2	NTD: Assumes CEOC is the operating company in the new REIT structure. 

	 Guarantees: 
	The Second Lien Notes and all obligations under the indenture related thereto will be unconditionally guaranteed by each existing and subsequently acquired or organized wholly owned domestic subsidiary of the Issuer that guarantees the Credit
Agreement or the First Lien Notes (the “Note Guarantors”), subject to exceptions consistent with the Documentation Precedent and others, if any, to be agreed upon, on a senior second-priority secured basis (the
“Note Guarantees”). The Note Guarantees will rank pari passu in right of payment with all obligations under the Credit Agreement and all other senior indebtedness of the Note Guarantors. The Note Guarantees will be
automatically released upon release of the corresponding guarantees of the Credit Agreement and the First Lien Notes; provided that such released guarantees shall be reinstated if such released guarantors thereof are required to subsequently
guarantee the Credit Agreement or the First Lien Notes. The Note Guarantees will be guarantees of payment and performance and not of collection. 

  

	 Security: 
	Subject to the limitations set forth below and limitations consistent with the Documentation Precedent, the Second Lien Notes and the Note Guarantees will be secured by a second-priority security interest in those assets of the Issuer and the
Note Guarantors that secure the First Lien Notes (the “Collateral”), provided that (i) assets securing the Second Lien Notes shall not include property excluded from the Collateral securing the First Lien Notes
and (ii) the pledge of equity interests and other securities will be subject to customary Rule 3-16 cut-back provisions. 

  

	 	The relative rights and priorities in the Collateral for each of the Credit Agreement, the First Lien Notes and the Second Lien Notes will be set forth in the First Lien/Second Lien Intercreditor Agreement as between
the collateral agent for the Credit Agreement and the First Lien Notes, on the one hand, and the collateral agent for the Second Lien Notes, on the other hand. 

  

	 	The indenture for the Second Lien Notes will provide that none of the Collateral Agent, note holders or Trustee will be permitted to terminate Caesars Entertainment Corporation or any of its subsidiaries or affiliates
as manager of any of the PropCo facilities without the prior written consent of PropCo. 

  
 2 

	 Mandatory Redemption: 
	None. 

  

	 Optional Redemption: 
	Prior to the first anniversary of the Closing Date, the Issuer may redeem the Notes at a make-whole price based on U.S. Treasury notes with a maturity closest to the first anniversary of the Closing Date plus 50 basis points. 

 

	 	Prior to the first anniversary of the Closing Date, the Issuer may redeem up to 35% of the Notes in an amount equal to the amount of proceeds from an equity offering at a price equal to par plus the coupon on such
Notes. 

  

	 	After the first anniversary of the Closing Date, the Notes will be callable at par plus accrued interest plus a premium equal to 3.00%, which premium shall decline to 2.00% on the second anniversary of the Closing Date,
to 1.00% on the first anniversary of the Closing Date and to zero on the fourth anniversary of the Closing Date. 

  

	 	All redemptions shall be made on a pro rata basis among the Notes. 

  

	 Offer to Purchase from Asset Sale Proceeds: 
	The Issuer will be required to make an offer to repurchase the Second Lien Notes at par with the net cash proceeds from any non-ordinary course asset sales or dispositions by the Issuer or any Note Guarantor in accordance with the Documentation
Precedent to the extent any such proceeds are not otherwise applied in a manner consistent with the Documentation Precedent. 

  

	 Offer to Repurchase Upon a Change of Control: 
	The Issuer will be required to make an offer to repurchase the Second Lien Notes following the occurrence of a “change of control” (to be defined in a manner consistent with the Documentation Precedent) at a price in cash
equal to 101.0% of the outstanding principal amount thereof, plus accrued and unpaid interest to the date of repurchase. 

  

	 Defeasance and Discharge Provisions: 
	Customary for high yield debt securities consistent with the Documentation Precedent. 

  

	 Modification: 
	Customary for high yield debt securities consistent with the Documentation Precedent. Notes held by the Issuer and its affiliates, including the Sponsors, shall not have voting rights. 

 

	 Registration Rights: 
	Customary registration rights. 

  

	 Covenants: 
	Substantially the same as those in the Documentation Precedent (including in respect of baskets and carveouts to such 

  

 

  
 3 

	 	 
covenants); provided, that such covenants shall in no event be more restrictive than the corresponding covenant in the First Lien Notes. For the avoidance of doubt, there shall be no
financial maintenance covenants. 

  

	 	1. The provisions limiting indebtedness shall, in addition to carve-outs consistent with the Documentation Precedent, provide that the amount of indebtedness incurred under the “bank basket” will not exceed an
amount equal to the sum of (i) the aggregate principal amount of the Credit Agreement (including the accordion provisions thereunder), plus (ii) such additional amount of indebtedness that may be incurred that would not cause the ratio of
funded debt outstanding that is (A) secured by a first priority lien on the Collateral (net of unrestricted cash and cash equivalents not to exceed in the aggregate $100 million) to adjusted EBITDA (the “Net First Lien Leverage
Ratio”) to exceed a ratio to be set on the Closing Date that is equal to a ratio that is 0.25x greater than the pro forma First Lien Net Leverage Ratio in effect on the Closing Date, (B) secured by junior liens on the Collateral
(net of unrestricted cash and cash equivalents not to exceed in the aggregate $100 million) to adjusted EBITDA (the “Net Total Secured Leverage Ratio”) to exceed a ratio to be set on the Closing Date that is equal to a ratio
that is 0.25x greater than the pro forma Net Total Secured Leverage Ratio in effect on the Closing Date and (C) unsecured (net of unrestricted cash and cash equivalents not to exceed in the aggregate $100 million) to adjusted EBITDA (the
“Net Total Leverage Ratio”) to exceed a ratio to be set on the Closing Date that is equal to 0.25x greater than the pro forma Net Total Leverage Ratio in effect on the Closing
Date.3 

  

	 	2. The provisions limiting liens shall provide for customary permitted liens consistent with the Documentation Precedent and include (i) the ability to incur (x) first-priority liens on indebtedness to the
extent that the pro forma Net First Lien Leverage Ratio is not greater than a ratio to be set on the Closing Date that is equal to a ratio that is 0.25x greater than the pro forma Net First Lien Leverage Ratio in effect on the Closing Date and
(y) pari passu liens on indebtedness so long as such liens are subject to the First Lien/Second Intercreditor Agreement or another intercreditor agreement that is not materially less favorable to the holders than the First 

 

	3	 For the avoidance of doubt, (i) the calculation of the ratios in the OpCo debt document shall exclude Chester Downs (from both debt and EBITDA)
and (ii) any Revolving Facility loans outstanding at the time of incurrence of any debt shall be included in the calculation of any Leverage Ratio at the time of such incurrence.

  
 4 

	 	 
Lien/Second Lien Intercreditor Agreement and such indebtedness is permitted under the indenture; (ii) the ability to incur liens junior to the liens securing the Second Lien Notes, provided that
the indebtedness secured by such junior liens is permitted under the indenture and (iii) the ability to incur liens on assets of non-Note Guarantor subsidiaries so long as such liens secure obligations of non-Note Guarantor subsidiaries that are
otherwise permitted. 

  

	 	3. With respect to basket amounts, covenant thresholds and similar levels in the indenture governing the Second Lien Notes provisions with respect to debt and lien capacity that are tied to dollar amounts, such amounts,
thresholds and levels will be based on the corresponding dollar amounts that are set forth in the CERP Second Lien Indenture, in each case as adjusted pursuant to the agreement of the parties, including to reflect the pro forma capital structure of
the Issuer and the relative size and EBITDA of the Issuer (such amounts as adjusted, the “Basket Adjustments”) 

  

	 	4. The provisions limiting dividends and stock repurchases and optional redemptions (and optional prepayments) of subordinated debt will be more restrictive until the Net Total Leverage Ratio is less than 3.00 to 1.00.

  

	 	5. The indenture for the Second Lien Notes will provide that any management or similar fees paid to Caesars Entertainment Corporation or any of its subsidiaries or affiliates will be made on an arm’s-length basis
and on “market” terms (including caps on amounts and consent rights relating to modifications of applicable agreements relating thereto). 

  

	 Events of Default: 
	Customary for high yield debt securities and consistent with the Documentation Precedent. 

  

	 Governing Law: 
	New York. 

  

	 Regulatory Matters: 
	Consistent with the Documentation Precedent. 

  

	 Counsel to the Notes Lead Arranger: 
	[                ]. 

  
 5 

 New First Lien PropCo Debt 

$[            ] Term Facility 

Summary of Principal Terms1 

 

	 Borrower: 
	[REIT PropCo] (the “Borrower”). 

  

	 Agent/Collateral Agent: 
	[            ] will act as sole administrative agent for the Senior Facilities (in such capacity and together with its permitted successors and assigns, the
“Agent”), and will perform the duties customarily associated with such role. 

  

	 	[            ] will act as collateral agent for the Senior Facilities (in such capacity, the “Collateral Agent”) and will perform the
duties customarily associated with such role. 

  

	 	The Agent and Collateral Agent shall each be acceptable to the First Lien Bank Lenders and First Lien Noteholders. 

  

	 Facilities: 
	(A)	 a senior secured term loan facility in an aggregate principal amount set forth in the Restructuring Term Sheet (the “First Lien
Term Facility” and loans thereunder, the “Term Loans”), which will be issued to each First Lien Bank Lender in accordance with the Restructuring Term Sheet (in such capacity, the
“Lenders”). 

  

	 	(B)	at the Borrower’s option, a senior secured revolving credit facility in an aggregate principal amount not to exceed an amount to be agreed (and acceptable to the Requisite Consenting Creditors) (the
“Revolving Facility” and, together with the First Lien Term Facility, the “Senior Facilities”), to be provided by the First Lien Bank Lenders or such other financial institutions to become Lenders
under the Senior Facilities, a portion of which will be available through a subfacility in the form of letters of credit. 

  

	 Definitive Documentation: 
	The definitive documentation for the Senior Facilities (the “Senior Facilities Documentation”) shall, except as otherwise set forth herein, be based on financing and security documentation typical and customary for exit
financings, taking into consideration (i) the First Lien Credit Agreement, dated as of October 11, 2013, among Caesars Entertainment Resort Properties, LLC, Caesars Entertainment Resort 

 

	1	All capitalized terms used but not defined herein shall have the meaning assigned thereto in the Restructuring Term Sheet to which this Term Sheet is attached (the “Restructuring Term Sheet”).

	 	 
Properties Finance, Inc., Harrah’s Las Vegas, LLC, Harrah’s Atlantic City Holding, Inc., Rio Properties, LLC, Flamingo Las Vegas Holding, LLC, Harrah’s Laughlin, LLC and Paris Las
Vegas Holding, LLC, as borrowers, the lenders party thereto and Citicorp North America, Inc., as administrative agent, and (ii) the operating lease structure and the REIT structure of the Borrower and its subsidiaries, and otherwise be
reasonably satisfactory to the Borrower and the Requisite Consenting Creditors (the “Documentation Precedent”). 

  

	 Incremental Facilities: 
	The Borrower will be permitted after the Closing Date to add additional revolving or term loan credit facilities (the “Incremental Facilities”) on terms consistent with Documentation Precedent. 

 

	 Purpose: 
	On the Closing Date, the Term Loan will be issued to each First Lien Bank Lender in accordance with the Restructuring Term Sheet. 

  

	 Availability: 
	The full amount of the First Lien Term Facility will be issued on the Closing Date. Amounts under the First Lien Term Facility that are repaid or prepaid may not be reborrowed. 

 

	 Interest Rates: 
	LIBOR + 3.5% per annum, with a 1.0% LIBOR floor. 

  

	 Default Rate: 
	With respect to principal (whether at stated maturity, upon acceleration or otherwise), the applicable interest rate plus 2.00% per annum, and with respect to any other overdue amount (including overdue interest), the interest rate applicable to
ABR loans plus 2.00% per annum and in each case, shall be payable on demand. 

  

	 Final Maturity and Amortization: 
	The First Lien Term Facility will mature on the date that is five (5) years after the Closing Date, and, commencing with the second full fiscal quarter ended after the Closing Date, will amortize in equal quarterly installments in an aggregate
annual amount equal to 1% of the original principal amount of the First Lien Term Facility with the balance payable on the maturity date of the First Lien Term Facility. 

 

	 Guarantees: 
	All obligations of the Borrower under the Senior Facilities and, at the option of the Borrower, under any interest rate protection or other hedging arrangements entered into with the Agent, an entity that is a Lender or agent at the time of such
transaction (or on the Closing Date, if applicable), or any affiliate of any of the foregoing (“Hedging Arrangements”), or any cash management arrangements with any such person 

  
 2 

	  (“Cash Management Arrangements”), will be unconditionally
guaranteed (the “Guarantees”) by each existing and subsequently acquired or organized wholly owned domestic subsidiary of the Borrower (the “Subsidiary Guarantors”), subject to exceptions consistent
with the Documentation Precedent and others, if any, to be agreed upon. The Guarantees will be guarantees of payment and performance and not of collection. 

  

	 Security: 
	Subject to exceptions described below and other exceptions to be agreed upon, the Senior Facilities, the Guarantees, any Hedging Arrangements and any Cash Management Arrangements will be secured on a first-priority basis by substantially all the
owned material assets of the Borrower and each Subsidiary Guarantor, in each case whether owned on the Closing Date or thereafter acquired (collectively, the “Collateral”), including but not limited to: (a) a perfected
first-priority pledge of all the equity interests directly held by the Borrower or any Subsidiary Guarantor (which pledge, in the case of any foreign subsidiary, shall be limited to 100% of the non-voting equity interests (if any) and 65% of the
voting equity interests of such foreign subsidiary), (b) a perfected first priority lien on cash, deposit accounts and securities accounts, and (c) perfected first-priority security interests in, and mortgages on, substantially all owned
tangible and intangible assets of the Borrower and each Subsidiary Guarantor (including, but not limited to, accounts receivable, inventory, equipment, general intangibles, investment property, intellectual property and real property (including
assignment of rents)) except for (v) real property with a fair market value less than $15.0 million and leaseholds, (w) vehicles, (x) those assets as to which the Borrower, Agent and Collateral Agent shall reasonably determine that the
costs or other consequences of obtaining such a security interest are excessive in relation to the value of the security to be afforded thereby, (y) assets to which the granting or perfecting such security interest would violate any applicable
law (including gaming laws and regulations) or contract (and with regard to which contract such counterparty thereto requires such prohibition as a condition to entering into such contract, such contract has been entered into in the ordinary course
of business, such restriction is consistent with industry custom and consent has been requested and not received) and (z) other exceptions consistent with the Documentation Precedent. For the avoidance of doubt, lockbox arrangements and control
agreements relating to the Borrower’s and its subsidiaries’ bank accounts and securities accounts will be 

  
 3 

	 	 
required to be delivered at closing. The operating lease with [Caesars Entertainment Operating Company, Inc.] shall be subject to a customary subordination and non-disturbance agreement as
provided in the Lease Term Sheet attached to the Restructuring Support Agreement. 

  

	 	All the above-described pledges, security interests and mortgages shall be created on terms, and pursuant to documentation consistent with the Documentation Precedent. 

 

	 	The relative rights and priorities in the Collateral for each of the Credit Agreement and the First Lien Notes will be set forth in a customary intercreditor agreement between the administrative agent for the Credit
Agreement, on the one hand, and the trustee for the First Lien Notes, on the other hand, except that such intercreditor agreement shall provide that the indebtedness outstanding under the Credit Agreement and the First Lien Notes vote together as
one class and are pari passu in all respects, including in respect of directing the collateral agent thereunder (the “First Lien Intercreditor Agreement”). 

 

	 	The relative rights and priorities in the Collateral for each of the Credit Agreement, the First Lien Notes and the Second Lien Notes will be set forth in a customary intercreditor agreement between the collateral agent
for the Credit Agreement and the First Lien Notes, on the one hand, and the collateral agent for the Second Lien Notes, on the other hand (the “First Lien/Second Lien Intercreditor Agreement”). 

 

	 Mandatory Prepayments: 
	Customary asset sale mandatory prepayments and Excess Cash Flow mandatory prepayments (commencing with the first full fiscal year of the Borrower after the Closing Date, and subject to a minimum threshold to be agreed), on terms and definitions
consistent with Documentation Precedent, with Excess Cash Flow to be calculated for these purposes after any Mandatory REIT Distributions. Excess Cash Flow payments will be made ratably between the Term Loans and the First Lien Notes (and ratably
among the Lenders and holders of the First Lien Notes). 

  

	 Voluntary Prepayments and Reductions in Commitments: 
	 Voluntary reductions of the unutilized portion of the commitments under the Senior Facilities and prepayments of borrowings thereunder will be permitted at any time, in minimum principal
amounts to be agreed upon, without premium or penalty, subject to the following paragraph and subject to reimbursement of the Lenders’ redeployment costs 

  
 4 

	  in the case of a prepayment of Adjusted LIBOR borrowings other than on the last day
of the relevant interest period. All voluntary prepayments of the First Lien Term Facility will be applied pro rata to the Term Loan (and pro rata among the Lenders) and to the remaining amortization payments under the First Lien Term Facility in
such order as the Borrower may direct. 

  

	 	Voluntary Prepayments of the Term Loans made prior to the four year anniversary of the Closing Date will be subject to a prepayment premium, as follows: 

 

	 	•	 	First year following Closing Date: customary “make-whole” premium (T+50) 

  

	 	•	 	Second year following Closing Date: 3% 

  

	 	•	 	Third year following Closing Date: 2% 

  

	 	•	 	Fourth year following Closing Date: 1% 

  

	 	•	 	Fourth year anniversary and thereafter: par 

  

	 Representations and Warranties: 
	The following representations and warranties, among others, if any, to be negotiated in the Senior Facilities Documentation, will apply (to be applicable to the Borrower and its restricted subsidiaries, subject to customary and other exceptions
and qualifications to be agreed upon, consistent with the Documentation Precedent): organization, existence, and power; qualification; authorization and enforceability; no conflict; governmental consents; subsidiaries; accuracy of financial
statements and other information in all material respects; projections; no material adverse change since the Closing Date; absence of litigation; compliance with laws (including PATRIOT Act, OFAC, FCPA, ERISA, margin regulations, environmental laws
and laws with respect to sanctioned persons); payment of taxes; ownership of properties; governmental regulation; inapplicability of the Investment Company Act; Closing Date solvency on a consolidated basis; labor matters; validity, priority and
perfection of security interests in the Collateral; intellectual property; treatment as designated senior debt under subordinated debt documents (if any); use of proceeds; and insurance. 

 

	 Affirmative Covenants: 
	 The following affirmative covenants, among others, if any, to be negotiated in the Senior Facilities Documentation, will apply (to be applicable to the Borrower and its restricted
subsidiaries), subject to customary (consistent with the Documentation Precedent) and other baskets, exceptions and qualifications to be agreed upon: maintenance of corporate 

  
 5 

	 	 
existence and rights; performance and payment of obligations; delivery of annual and quarterly consolidated financial statements (accompanied by customary management discussion and analysis and
(annually) by an audit opinion from nationally recognized auditors that is not subject to any qualification as to scope of such audit or going concern) (other than solely with respect to, or resulting solely from an upcoming maturity date under any
series of indebtedness occurring within one year from the time such opinion is delivered) (with extended time periods to be agreed for delivery of the first annual and certain quarterly financial statements to be delivered after the Closing Date)
and an annual budget (it being understood that the public REIT reporting that includes the Borrower shall satisfy the Borrower’s reporting obligations so long as it includes a consolidating income statement and balance sheet for the Borrower);
delivery of notices of default and material adverse litigation, ERISA events and material adverse change; maintenance of properties in good working order; maintenance of books and records; maintenance of customary insurance; commercially reasonable
efforts to maintain ratings (but not a specific rating); compliance with laws; inspection of books and properties; environmental; additional guarantors and additional collateral (subject to limitations set forth under the captions
“Guarantees” and “Security”); further assurances in respect of collateral matters; use of proceeds; and payment of taxes. 

 

	 Negative Covenants: 
	The following negative covenants, among others, if any, to be negotiated in the Senior Facilities Documentation, will apply (to be applicable to the Borrower and its restricted subsidiaries), subject to customary exceptions and qualifications
(consistent with the Documentation Precedent) and others to be agreed upon: 

  

	 	1.	Limitation on dispositions of assets. 

  

	 	2.	Limitation on mergers and acquisitions. 

  

	 	3.	Limitations on dividends and stock repurchases and optional redemptions (and optional prepayments) of subordinated debt; provided, that, any distributions required to be made to distribute 100% of REIT taxable income or
satisfy any REIT-related requirements shall be permitted (such distributions, the “Mandatory REIT Distributions”). 

  
 6 

	 	4.	Limitation on indebtedness (including guarantees and other contingent obligations) and preferred stock. 

  

	 	5.	Limitation on loans and investments. 

  

	 	6.	Limitation on liens and further negative pledges. 

  

	 	7.	Limitation on transactions with affiliates. 

  

	 	8.	Limitation on sale/leaseback transactions. 

  

	 	9.	Limitation on changes in the business of the Borrower and its subsidiaries. 

  

	 	10.	Limitation on restrictions on ability of subsidiaries to pay dividends or make distributions. 

  

	 	11.	Limitation on changes to fiscal year. 

  

	 	12.	Limitation on modifications to subordinated debt documents. 

  

	 	13.	Limitation on material modifications to the MLSA, lease and other arrangements entered into in connection with the lease structure. 

 

	 	EBITDA shall be defined in a manner consistent with the Documentation Precedent. 

  

	 	All ratios and calculations shall be measured on a Pro Forma Basis (to be defined in a manner consistent with the Documentation Precedent, and including the annualized effect of addbacks in the definition of EBITDA). 

 

	 	The Senior Facilities Documentation will provide that any management or similar fees paid to Caesars Entertainment Corporation or any of its subsidiaries or affiliates will be made on an arm’s-length basis and on
“market” terms (including caps on amounts and consent rights relating to modifications of applicable agreements relating thereto). 

  

	 Financial Covenant: 
	First Lien Term Facility: None. 

  

	 Events of Default: 
	 The following (subject to customary and other thresholds and grace periods to be agreed upon, consistent with the Documentation Precedent, and applicable to the Borrower and its restricted
subsidiaries), among others, if any, to be negotiated in the Senior Facilities Documentation: 

  
 7 

	 	 
nonpayment of principal, interest or other amounts; violation of covenants; incorrectness of representations and warranties in any material respect; cross event of default and cross acceleration
to material indebtedness; bankruptcy and similar events; material judgments; ERISA events; invalidity of the Guarantees or any security document, in each case, representing a material portion of the Guarantees or the Collateral; and Change of
Control (to be defined in a manner consistent with the Documentation Precedent). 

  

	 Unrestricted Subsidiaries: 
	The Senior Facilities Documentation will contain provisions pursuant to which, subject to limitations consistent with the Documentation Precedent, the Borrower will be permitted to designate any existing or subsequently acquired or organized
subsidiary as an “unrestricted subsidiary” and subsequently re-designate any such unrestricted subsidiary as a restricted subsidiary. Unrestricted subsidiaries will not be subject to the affirmative or negative covenant or event of default
provisions of the Senior Facilities Documentation, and the results of operations and indebtedness of unrestricted subsidiaries will not be taken into account for purposes of calculating the financial ratios contained in the Senior Facilities
Documentation on terms consistent with the Documentation Precedent. In addition, [CPLV Sub] shall constitute an unrestricted subsidiary of the Borrower on the Closing Date. 

 

	 Voting: 
	Usual for facilities and transactions of this type and consistent with the Documentation Precedent; provided that the Borrower and its affiliates, including the Sponsors, shall not have voting rights with respect to loans and commitments held by
them. 

  

	 Cost and Yield Protection: 
	Usual for facilities and transactions of this type, consistent with the Documentation Precedent. 

  

	 Assignments and Participations: 
	Customary assignment provisions consistent with the Documentation Precedent. 

  

	 Non-Pro Rata Repurchases: 
	 The Borrower and its subsidiaries may purchase from any Lender (other than the Borrower or any of its affiliates, including the Sponsors), at individually negotiated prices, outstanding
principal amounts or commitments under the First Lien Term Facility in a non-pro rata manner; provided that (i) the purchaser shall make a representation to the seller at the time of assignment that it does not possess material non-public
information with respect to the Borrower and its 

  
 8 

	 	 
subsidiaries that has not been disclosed to the seller or Lenders generally (other than the Lenders that have elected not to receive material non-public information), (ii) any commitments or
loans so repurchased shall be immediately cancelled and (iii) no default or event of default exists or would result therefrom. 

  

	 Expenses and Indemnification: 
	Consistent with the Documentation Precedent. 

  

	 Regulatory Matters: 
	Customary for facilities of this type and consistent with the Documentation Precedent. 

  

	 Governing Law and Forum: 
	New York. 

  

	 Counsel to Agent/Collateral Agent: 
	[                    ]. 

  
 9 

 New First Lien PropCo Debt 

$[            ] First Lien Notes 

Summary of Principal Terms1 

 

	 Issuer: 
	[REIT PropCo], in its capacity as the issuer of the First Lien Notes (the “Issuer”). 

  

	 Issue: 
	The First Lien Notes in an amount set forth in the Restructuring Term Sheet will be issued under and have the benefit of an indenture and security documentation typical and customary in the case of first lien senior secured notes issued pursuant
to an exit financing, taking into consideration (i) the indenture for the first-priority senior secured notes issued on October 11, 2013 by Caesars Entertainment Resort Properties, LLC, Caesars Entertainment Resort Properties Finance, Inc.,
Harrah’s Atlantic City Holding, Inc., Harrah’s Las Vegas, LLC, Harrah’s Laughlin, LLC, Flamingo Las Vegas Holding, LLC, Paris Las Vegas Holding, LLC, Rio Properties, LLC and (ii) the operating lease structure and the REIT
structure of the Issuer and its subsidiaries, and otherwise be reasonably satisfactory to the Issuer and the Requisite Consenting Creditors (the “Documentation Precedent”). 

 

	 Purpose: 
	On the Closing Date, the First Lien Notes will be issued to each First Lien Noteholder in accordance with the Restructuring Term Sheet. 

  

	 Maturity: 
	The First Lien Notes will mature on the date that is five (5) years after the Closing Date. 

  

	 Interest Rate: 
	LIBOR + 3.5% per annum, with a 1.0% LIBOR floor. 

  

	 Default Rate: 
	With respect to principal (whether at stated maturity, upon acceleration or otherwise), the applicable interest rate plus 2.00% per annum, and with respect to any other overdue amount (including overdue interest), the interest rate applicable to
ABR loans plus 2.00% per annum and in each case, shall be payable on demand. 

  

	 Ranking: 
	The First Lien Notes will constitute senior first-priority secured indebtedness of the Issuer, and will rank pari passu in all respects, including in right of payment, with all obligations under the Senior Facilities (the “Credit
Agreement”) and all other first lien senior indebtedness of the Issuer. 

  

	1	 All capitalized terms used but not defined herein shall have the meanings assigned thereto in the Restructuring Term Sheet to which this Term Sheet is
attached (the “Restructuring Term Sheet”), or in the New First Lien PropCo Debt Term Sheet attached thereto. 

	 Guarantees: 
	The First Lien Notes and all obligations under the indenture related thereto will be unconditionally guaranteed by each existing and subsequently acquired or organized wholly owned domestic subsidiary of the Issuer (the “Note
Guarantors”), subject to exceptions consistent with the Documentation Precedent and others, if any, to be agreed upon, on a senior first-priority secured basis (the “Note Guarantees”). The Note Guarantees will
rank pari passu in all respects, including in right of payment, with all obligations under the Credit Agreement and all other senior indebtedness of the Note Guarantors. The Note Guarantees will be guarantees of payment and performance and not of
collection. 

  

	 Security: 
	Subject to the limitations set forth below and limitations consistent with the Documentation Precedent, the First Lien Notes and the Note Guarantees will be secured by a first-priority security interest in substantially all the owned material
assets of the Issuer and each Note Guarantor, in each case whether owned on the Closing Date or thereafter acquired (collectively, the “Collateral”), including but not limited to: (a) a perfected first-priority pledge of all
the equity interests directly held by the Issuer or any Note Guarantor (which pledge, in the case of any foreign subsidiary, shall be limited to 100% of the non-voting equity interests (if any) and 65% of the voting equity interests of such foreign
subsidiary) (b) a perfected first priority lien on cash, deposit accounts and securities accounts, and (c) perfected first-priority security interests in, and mortgages on, substantially all owned tangible and intangible assets of the Issuer
and each Note Guarantor (including, but not limited to, accounts receivable, inventory, equipment, general intangibles, investment property, intellectual property and real property (including an assignment of rents)) except for (v) real property
with a fair market value less than $15.0 million and leaseholds, (w) vehicles, (x) those assets as to which the Issuer and Collateral Agent shall reasonably determine that the costs or other consequences of obtaining such a security interest are
excessive in relation to the value of the security to be afforded thereby, (y) assets to which the granting or perfecting such security interest would violate any applicable law (including gaming laws and regulations) or contract (and with regard to
which contract the counterparty thereto requires such prohibition as a condition to entering into such contract, such contract has been entered into in the ordinary course of business, such restriction is consistent with industry custom and consent
has been requested and not received), and (z) other exceptions 

  
 2 

	 	 
consistent with the Documentation Precedent; and provided that the pledge of equity interests and other securities will be subject to customary Rule 3-16 cut-back provisions. For avoidance of
doubt, lockbox arrangements and control agreements relating to the Issuer’s and its subsidiaries’ bank accounts and securities accounts will be required to be delivered at closing. The operating lease with [Caesars Entertainment Operating
Company, Inc.] shall be subject to a customary subordination and non-disturbance agreement as provided in the Lease Term Sheet attached to the Restructuring Support Agreement. 

 

	 	All the above-described pledges, security interests and mortgages shall be created on terms, and pursuant to documentation, consistent with the Documentation Precedent. 

 

	 	The relative rights and priorities in the Collateral for each of the Credit Agreement and the First Lien Notes will be set forth in the First Lien Intercreditor Agreement, as between the administrative agent for the
Credit Agreement, on the one hand, and the trustee for the First Lien Notes, on the other hand, which intercreditor agreement shall provide that the indebtedness outstanding under the Credit Agreement and the First Lien Notes vote together as one
class and are pari passu in all respects, including in respect of directing the collateral agent thereunder. 

  

	 	The relative rights and priorities in the Collateral for each of the Credit Agreement, the First Lien Notes and the Second Lien Notes will be set forth in the First Lien/Second Lien Intercreditor Agreement, as between
the collateral agent for the Credit Agreement and the First Lien Notes, on the one hand, and the collateral agent for the Second Lien Notes, on the other hand. 

  

	 Mandatory Redemption: 
	None. 

  

	 Optional Redemption: 
	Prior to the first anniversary of the Closing Date, the Issuer may redeem the Notes at a make-whole price based on U.S. Treasury notes with a maturity closest to the first anniversary of the Closing Date plus 50 basis points. 

Prior to the first anniversary of the Closing Date, the Issuer may redeem up to 35% of the Notes in an amount equal to the amount of proceeds
from an equity offering at a price equal to par plus the coupon on such Notes. 
 After the first anniversary of the Closing Date, the
Notes will be callable at par plus accrued interest plus a premium equal to 

  
 3 

	 	 
3.0%, which premium shall decline to 2.0% on the second anniversary of the Closing Date, to 1.0% on the third anniversary of the Closing Date and to zero on the fourth anniversary of the Closing
Date. 

  

	 	All redemptions shall be made on a pro rata basis among the Notes. 

  

	 Offer to Purchase from Asset Sale Proceeds: 
	The Issuer will be required to make an offer to repurchase the First Lien Notes at par with the net cash proceeds from any non-ordinary course asset sales or dispositions by the Issuer or any Note Guarantor in accordance with the Documentation
Precedent to the extent any such proceeds are not otherwise applied in a manner consistent with the Documentation Precedent. 

  

	 Offer to Repurchase with Proceeds of Debt Issuance: 
	The Issuer will be required to make an offer to repurchase the First Lien Notes at par in an amount equal to the First Lien Noteholders’ pro rata share (to be defined as the ratio of funded debt outstanding that consists of the First Loan
Notes to the sum of the total funded debt that consists of the First Lien Notes and First Lien Term Facility) of 100% of the net cash proceeds of issuances, offerings or placements of debt obligations of the Issuer and its subsidiaries (other than
debt permitted to be incurred under the indenture governing the First Lien Notes unless otherwise provided as a condition to the incurrence thereof). 

  

	 Offer to Repurchase Upon a Change of Control: 
	The Issuer will be required to make an offer to repurchase the First Lien Notes following the occurrence of a “change of control” (to be defined in a manner consistent with the Documentation Precedent) at a price in cash
equal to 101.0% of the outstanding principal amount thereof, plus accrued and unpaid interest to the date of repurchase. 

  

	 Offer to Purchase from Excess Cash Flow: 
	Beginning with the first full fiscal year of the Issuer after the Closing Date, the Issuer will be required to make an offer to repurchase the First Lien Notes at par in an amount equal to the First Lien Noteholders’ pro rata share (to be
defined as the ratio of funded debt outstanding that consists of the First Loan Notes to the sum of the total funded debt that consists of the First Lien Notes and First Lien Term Facility) of Excess Cash Flow (to be defined in a manner consistent
with the Credit Agreement and subject to the same minimum threshold therein) of the Issuer and its restricted subsidiaries. 

  

	 Defeasance and Discharge Provisions: 
	Customary for high yield debt securities consistent with the Documentation Precedent. 

  
 4 

	 Modification: 
	Customary for high yield debt securities consistent with the Documentation Precedent. Notes held by the Issuer and its affiliates, including the Sponsors, shall not have voting rights. 

 

	 Registration Rights: 
	Customary registration rights. 

  

	 Covenants: 
	Substantially the same as those in the Documentation Precedent (including in respect of baskets and carveouts to such covenants; provided, that such baskets and covenants shall conform to the corresponding amounts in the Credit Agreement
(including with respect to the Mandatory REIT Distributions)). For the avoidance of doubt, there shall be no financial maintenance covenants. 

  

	 	[CPLV Sub] shall constitute an unrestricted subsidiary of the Issuer on the Closing Date. 

  

	 	The provisions limiting dividends and stock repurchases and optional redemptions (and optional prepayments) of subordinated debt shall be subject to only those very limited carveouts that shall be agreed to by the
Issuer and the Requisite Consenting Creditors, but shall in any event permit the Mandatory REIT Distributions. 

  

	 	The indenture for the First Lien Notes will provide that any management or similar fees paid to Caesars Entertainment Corporation or any of its subsidiaries or affiliates will be made on an arm’s-length basis and
on “market” terms (including caps on amounts and consent rights relating to modifications of applicable agreements relating thereto). 

  

	 Events of Default: 
	Customary for high yield debt securities and consistent with the Documentation Precedent. 

  

	 Governing Law: 
	New York. 

  

	 Regulatory Matters: 
	Consistent with the Documentation Precedent. 

  

	 Counsel to the Notes Lead Arranger: 
	[                    ]. 

  
 5 

 New Second Lien PropCo Debt 

$[            ] Second Lien Notes 

Summary of Principal Terms1 

 

	 Issuer: 
	[REIT PropCo], in its capacity as the issuer of the Second Lien Notes (the “Issuer”). 

  

	 Issue: 
	The Second Lien Notes in an amount set forth in the Restructuring Term Sheet will be issued under and have the benefit of an indenture and security documentation typical and customary in the case of second lien senior secured notes issued
pursuant to an exit financing, taking into consideration (i) the indenture for the second-priority senior secured notes issued on October 11, 2013 by Caesars Entertainment Resort Properties, LLC, Caesars Entertainment Resort Properties Finance,
Inc., Harrah’s Atlantic City Holding, Inc., Harrah’s Las Vegas, LLC, Harrah’s Laughlin, LLC, Flamingo Las Vegas Holding, LLC, Paris Las Vegas Holding, LLC, Rio Properties, LLC and (ii) the operating lease structure and the REIT
structure of the Issuer and its subsidiaries, and otherwise be reasonably satisfactory to the Issuer and the Requisite Consenting Creditors (the “Documentation Precedent”). 

 

	 Purpose: 
	On the Closing Date, the Second Lien Notes will be issued to each First Lien Noteholder in accordance with the Restructuring Term Sheet. 

  

	 Maturity: 
	The Second Lien Notes will mature on the date that is six (6) years after the Closing Date. 

  

	 Interest Rate: 
	A fixed rate equal to 8.0%. 

  

	 Ranking: 
	The Second Lien Notes will constitute senior second-priority secured indebtedness of the Issuer, and will rank pari passu in right of payment with all obligations under the Senior Facilities (the “Credit Agreement”) and
all other senior indebtedness of the Issuer. 

  

	 Guarantees: 
	The Second Lien Notes and all obligations under the indenture related thereto will be unconditionally guaranteed by each existing and subsequently acquired or organized wholly owned domestic subsidiary of the Issuer that guarantees the Credit
Agreement or the First Lien Notes (the “Note Guarantors”), subject to exceptions consistent with the Documentation 

 

	1	 All capitalized terms used but not defined herein shall have the meanings assigned thereto in the Restructuring Term Sheet to which this Term Sheet is
attached (the “Restructuring Term Sheet”), or in the New First Lien PropCo Debt Term Sheet attached thereto. 

	 	 Precedent and others, if any, to be agreed upon, on a senior second-priority secured basis (the “Note
Guarantees”). The Note Guarantees will rank pari passu in right of payment with all obligations under the Credit Agreement and all other senior indebtedness of the Note Guarantors. The Note Guarantees will be automatically released upon
release of the corresponding guarantees of the Credit Agreement and First Lien Notes; provided that such released guarantees shall be reinstated if such released guarantors thereof are required to subsequently guarantee the Credit Agreement
or First Lien Notes. The Note Guarantees will be guarantees of payment and performance and not of collection. 

  

	 Security: 
	Subject to the limitations set forth below and limitations consistent with the Documentation Precedent, the Second Lien Notes and the Note Guarantees will be secured by a second-priority security interest in those assets of the Issuer and the
Note Guarantors that secure the First Lien Notes (the “Collateral”), provided that (i) assets securing the Second Lien Notes shall not include property excluded from the Collateral securing the First Lien Notes
and (ii) the pledge of equity interests and other securities will be subject to customary Rule 3-16 cut-back provisions. 

  

	 	The relative rights and priorities in the Collateral for each of the Credit Agreement, the First Lien Notes and the Second Lien Notes will be set forth in the First Lien/Second Lien Intercreditor Agreement as between
the collateral agent for the Credit Agreement and the First Lien Notes, on the one hand, and the collateral agent for the Second Lien Notes, on the other hand. 

  

	 Mandatory Redemption: 
	None. 

  

	 Optional Redemption: 
	Prior to the third anniversary of the Closing Date, the Issuer may redeem the Notes at a make-whole price based on U.S. Treasury notes with a maturity closest to the third anniversary of the Closing Date plus 50 basis points. 

 

	 	Prior to the third anniversary of the Closing Date, the Issuer may redeem up to 35% of the Notes in an amount equal to the amount of proceeds from an equity offering at a price equal to par plus the coupon on such
Notes. 

  

	 	After the third anniversary of the Closing Date, the Notes will be callable at par plus accrued interest plus a premium equal to one-half of the coupon on such Notes, which premium shall decline ratably on each
anniversary of the Closing Date thereafter to zero on the date that is two years prior to the maturity date. 

  
 2 

  

	 	All redemptions shall be made on a pro rata basis among the Notes. 

  

	 Offer to Purchase from Asset Sale Proceeds: 
	The Issuer will be required to make an offer to repurchase the Second Lien Notes at par with the net cash proceeds from any non-ordinary course asset sales or dispositions by the Issuer or any Note Guarantor in accordance with the Documentation
Precedent to the extent any such proceeds are not otherwise applied in a manner consistent with the Documentation Precedent. 

  

	 Offer to Repurchase Upon a Change of Control: 
	The Issuer will be required to make an offer to repurchase the Second Lien Notes following the occurrence of a “change of control” (to be defined in a manner consistent with the Documentation Precedent) at a price in cash
equal to 101.0% of the outstanding principal amount thereof, plus accrued and unpaid interest to the date of repurchase. 

  

	 Defeasance and Discharge Provisions: 
	Customary for high yield debt securities consistent with the Documentation Precedent. 

  

	 Modification: 
	Customary for high yield debt securities consistent with the Documentation Precedent. Notes held by the Issuer or its affiliates, including the Sponsors, shall not have voting rights. 

 

	 Registration Rights: 
	Customary registration rights. 

  

	 Covenants: 
	Substantially the same as those in the Documentation Precedent (including in respect of baskets and carveouts to such covenants); provided, that such covenants shall in no event be more restrictive than the corresponding covenant in the
First Lien Notes (including, without limitation, with respect to the Mandatory REIT Distributions). For the avoidance of doubt, there shall be no financial maintenance covenants. 

 

	 	[CPLV Sub] shall constitute an unrestricted subsidiary of the Issuer on the Closing Date. 

  

	 	The indenture for the Second Lien Notes will provide that any management or similar fees paid to Caesars Entertainment Corporation or any of its subsidiaries or affiliates will be made on an arm’s-length basis and
on “market” terms (including caps on amounts and consent rights relating to modifications of applicable agreements relating thereto). 

  
 3 

	 Events of Default: 
	Customary for high yield debt securities and consistent with the Documentation Precedent. 

  

	 Governing Law: 
	New York. 

  

	 Regulatory Matters: 
	Consistent with the Documentation Precedent. 

  

	 Counsel to the Notes Lead Arranger: 
	[                    ]. 

  
 4 

 CPLV Mezz Debt 

$[            ] Term Facility 

Summary of Principal Terms1 

 

	 Borrower: 
	[CPLV Holdings] (the “Borrower”), a newly-formed holding company that owns 100% of the outstanding stock of the subsidiary (or subsidiaries) of PropCo that own CPLV and have issued the CPLV Market Debt (as defined below)
(collectively, the “CPLV Sub”). 

  

	 Agent: 
	[            ] will act as sole administrative agent and collateral agent for the Term Facility (in such capacity and together with its permitted successors and assigns, the
“Agent”), and will perform the duties customarily associated with such roles. 

  

	 Facilities: 
	A secured non-guaranteed term loan facility in an aggregate principal amount equal to the difference in the amount of CPLV Market Debt (as defined below) issued in accordance with the Restructuring Term Sheet and $2,600 million (the
“CPLV Mezz Facility” and loans thereunder, the “CPLV Mezz Loans”), which will be issued to each First Lien Bank Lender and First Lien Noteholder in accordance with the Restructuring Term Sheet (in such
capacity, the “Lenders”).2 In accordance with the Restructuring Term Sheet, at least $2,000 million of real estate financing shall be issued to third party investors for
cash proceeds on or before consummation of the Restructuring, which shall be senior to the CPLV Mezz Debt (with 100% of the net proceeds being used to repay the holders of the CPLV Term Loans) (the “CPLV Market Debt”).

  

	 Definitive Documentation: 
	The definitive documentation for the CPLV Mezz Facility (the “Mezz Facility Documentation”) shall be based on customary documentation for commercial real estate mezzanine financings, as modified to reflect
(i) agency and operational matters acceptable to the Borrower and Agent and (ii) the operating lease structure and the REIT structure of the Borrower (the “Documentation Precedent”). 

 

	 Purpose: 
	On the Closing Date, the CPLV Mezz Loans will be issued to each First Lien Bank Lender and First Lien Noteholder in accordance with the Restructuring Term Sheet. 

 

	1	All capitalized terms used but not defined herein shall have the meaning assigned thereto in the Restructuring Term Sheet to which this Term Sheet is attached (the “Restructuring Term Sheet”).

	2	For the avoidance of doubt, the Lenders will be issued notes backed by the CPLV Mezz Loans through a customary securitization structure. 

	 Availability: 
	The full amount of the CPLV Mezz Facility will be issued on the Closing Date. Amounts under the CPLV Mezz Facility that are repaid or prepaid may not be reborrowed. 

 

	 Interest Rates: 
	A rate equal to 8.00% if the principal amount of the CPLV Mezz Facility is equal to $600 million, increasing by 0.25% for every $25 million reduction in the principal amount of the CPLV Mezz Facility below $600 million on the Closing Date (up to
a maximum interest rate of 13.0%). 

  

	 Default Rate: 
	With respect to principal, the applicable interest rate plus 2.00% per annum, and with respect to any other overdue amount (including overdue interest), the interest rate applicable to ABR loans plus 2.00% per annum and in each case, shall be
payable on demand. 

  

	 Final Maturity and Amortization: 
	The CPLV Mezz Facility will mature on the date that is six (6) years after the Closing Date. 

  

	 Guarantees: 
	None. 

  

	 Security: 
	Subject to customary exceptions, the CPLV Mezz Facility will be secured on a first-priority basis by a pledge of the equity interests in CPLV Sub. There shall be neither lockbox arrangements nor any control agreements relating to the
Borrower’s and its subsidiaries’ bank accounts or securities accounts. The operating lease with [Caesars Entertainment Operating Company, Inc.] shall be subject to a customary subordination and non-disturbance agreement as provided in the
Lease Term Sheet attached to the Restructuring Support Agreement. 

  

	 	The relative rights and priorities in the Collateral for the CPLV Mezz Facility and the CPLV Market Debt will be set forth in a customary intercreditor agreement, as between the collateral agent for the CPLV Mezz
Facility, on the one hand, and the collateral agent for the CPLV Market Debt, on the other hand. 

  

	 Mandatory Prepayments: 
	Customary for commercial real estate mezzanine financings. 

  

	 Voluntary Prepayments and Reductions in Commitments: 
	 Voluntary reductions of the unutilized portion of the commitments under the CPLV Mezz Facility and prepayments of borrowings thereunder will be permitted at any time, in minimum principal
amounts to be agreed upon, without premium or penalty, pro rata among the Lenders 

  
 2 

	 	 
subject to reimbursement of the Lenders’ redeployment costs in the case of a prepayment of Adjusted LIBOR borrowings other than on the last day of the relevant interest period. All voluntary
prepayments of the Term Facility will be applied to the remaining amortization payments under the CPLV Mezz Facility in such order as the Borrower may direct. 

 

	 Representations and Warranties: 
	The following representations and warranties will apply (to be applicable to the Borrower and its restricted subsidiaries, subject to customary and other exceptions and qualifications to be agreed upon, consistent with the Documentation
Precedent): organization, existence, and power; qualification; authorization and enforceability; no conflict; governmental consents; subsidiaries; accuracy of financial statements and other information in all material respects; projections; no
material adverse change since the Closing Date; absence of litigation; compliance with laws (including PATRIOT Act, OFAC, FCPA, ERISA, margin regulations, environmental laws and laws with respect to sanctioned persons); payment of taxes; ownership
of properties; governmental regulation; inapplicability of the Investment Company Act; Closing Date solvency on a consolidated basis; labor matters; validity, priority and perfection of security interests in the Collateral; intellectual property;
treatment as designated senior debt under subordinated debt documents (if any); use of proceeds; and insurance. 

  

	 Affirmative Covenants: 
	 The following affirmative covenants will apply (to be applicable to the Borrower and its restricted subsidiaries), subject to customary (consistent with the Documentation Precedent) and
other baskets, exceptions and qualifications to be agreed upon: maintenance of corporate existence and rights; performance and payment of obligations; delivery of annual and quarterly consolidated financial statements (accompanied by customary
management discussion and analysis and (annually) by an audit opinion from nationally recognized auditors that is not subject to any qualification as to scope of such audit or going concern) (other than solely with respect to, or resulting solely
from an upcoming maturity date under any series of indebtedness occurring within one year from the time such opinion is delivered) (with extended time periods for delivery of the first annual and certain quarterly financial statements to be
delivered after the Closing Date) and an annual budget (it being understood that the public REIT reporting that includes the Borrower shall satisfy the Borrower’s reporting obligations so long as it includes a consolidating income statement and
balance sheet for the 

  
 3 

	 	 
Borrower); delivery of notices of default and material adverse litigation, ERISA events and material adverse change; maintenance of properties in good working order; maintenance of books and
records; maintenance of customary insurance; commercially reasonable efforts to maintain ratings (but not a specific rating); compliance with laws; inspection of books and properties; environmental; additional guarantors and additional collateral
(subject to limitations set forth under the captions “Guarantees” and “Security”); further assurances in respect of collateral matters; use of proceeds; and payment of taxes. 

 

	 Negative Covenants: 
	The following negative covenants, among others, if any, to be negotiated in the Mezz Facility Documentation, will apply (to be applicable to the Borrower and its restricted subsidiaries), subject to customary exceptions and qualifications
(consistent with the Documentation Precedent) and others to be agreed upon: 

  

	 	1.	Limitation on dispositions of assets. 

  

	 	2.	Limitation on mergers and acquisitions. 

  

	 	3.	Limitation on dividends and stock repurchases and optional redemptions (and optional prepayments) of subordinated debt; provided that, any distributions required to be made to distribute 100% of REIT taxable income or
satisfy any REIT-related requirements shall be permitted (such distributions, the “Mandatory REIT Distributions”). 

  

	 	4.	Limitation on indebtedness (including guarantees and other contingent obligations) and preferred stock. 

  

	 	5.	Limitation on loans and investments. 

  

	 	6.	Limitation on liens and further negative pledges. 

  

	 	7.	Limitation on transactions with affiliates. 

  

	 	8.	Limitation on sale/leaseback transactions. 

  

	 	9.	Limitation on changes in the business of the Borrower and its subsidiaries. 

  

	 	10.	Limitation on restrictions on ability of subsidiaries to pay dividends or make distributions. 

  
 4 

	 	11.	Limitation on changes to fiscal year. 

  

	 	12.	Limitation on modifications to subordinated debt documents. 

  

	 	13.	Limitation on material modifications to the MLSA, lease and other arrangements entered into in connection with the lease structure. 

 

	 	EBITDA shall be defined in a manner consistent with the Documentation Precedent. 

  

	 	All ratios and calculations shall be measured on a Pro Forma Basis (to be defined in a manner consistent with the Documentation Precedent, and including the annualized effect of addbacks in the definition of EBITDA).

  

	 	The Mezz Facility Documentation will provide that any management or similar fees paid to Caesars Entertainment Corporation or any of its subsidiaries or affiliates will be made on an arm’s-length basis and on
“market” terms (including caps on amounts and consent rights relating to modifications of applicable agreements relating thereto). 

  

	 Financial Covenant: 
	CPLV Mezz Facility: None. 

  

	 Events of Default: 
	The following (subject to customary and other thresholds and grace periods to be agreed upon, consistent with the Documentation Precedent, and applicable to the Borrower and its restricted subsidiaries): nonpayment of principal, interest or
other amounts; violation of covenants; incorrectness of representations and warranties in any material respect; cross event of default and cross acceleration to material indebtedness (including CLV Market Debt); bankruptcy and similar events;
material judgments; ERISA events; invalidity of the Guarantees or any security document, in each case, representing a material portion of the Guarantees or the Collateral; and Change of Control (to be defined in a manner consistent with the
Documentation Precedent). 

  

	 Voting: 
	Usual for facilities and transactions of this type and consistent with the Documentation Precedent; provided that the Borrower and its affiliates, including the Sponsors, shall not have voting rights with respect to loans and commitments held by
them. . 

  

	 Cost and Yield Protection: 
	Usual for facilities and transactions of this type, consistent with the Documentation Precedent. 

  
 5 

	 Assignments and Participations: 
	The Lenders will be permitted to assign loans and commitments under the CPLV Mezz Facility with the consent of the Borrower (not to be unreasonably withheld or delayed, but which consent under the CPLV Mezz Facility shall be deemed granted if
the Borrower fails to respond to a request for consent by a Lender within ten business days of such request being made); provided, that such consent of the Borrower shall not be required (i) if such assignment is made, in the case of the
CPLV Mezz Facility, to another Lender under the CPLV Mezz Facility or an affiliate or approved fund of a Lender under the Term Facility or (ii) after the occurrence and during the continuance of an event of default relating to payment default
or bankruptcy. All assignments will also require the consent of the Agent (subject to exceptions consistent with the Documentation Precedent) not to be unreasonably withheld or delayed. Each assignment, in the case of the CPLV Mezz Facility, will be
in an amount of an integral multiple of $1,000,000. The Agent will receive a processing and recordation fee of $3,500, payable by the assignor and/or the assignee, with each assignment. Assignments will be by novation. 

 

	 	The Lenders will be permitted to sell participations in loans subject to the restrictions set forth herein and consistent with the Documentation Precedent. Voting rights of participants shall (i) be limited to
matters in respect of (a) increases in commitments of such participant, (b) reductions of principal, interest or fees payable to such participant, (c) extensions of final maturity or scheduled amortization of the loans or commitments
in which such participant participates and (d) releases of all or substantially all of the value of the Guarantees, or all or substantially all of the Collateral and (ii) for clarification purposes, not include the right to vote on waivers
of defaults or events of default. 

  

	 	Notwithstanding the foregoing, assignments (and, to the extent such list is made available to all Lenders, participations) shall not be permitted to ineligible institutions identified to the Agent on or prior to the
Closing Date and, with the consent of the Agent, thereafter; provided that the Agent shall not be held liable or responsible for any monitoring or enforcing of the foregoing. 

 

	 	 Assignments shall not be deemed non-pro rata payments. Non-pro rata prepayments will be permitted to the extent

  
 6 

	 	 
required to permit “extension” transactions and “replacement” facility transactions (with existing and/or new Lenders), subject to customary restrictions consistent with the
Documentation Precedent. 

  

	 	Assignments to the Sponsors and their respective affiliates (other than the Borrower and its subsidiaries) (each, an “Affiliated Lender”) shall be permitted subject to customary restrictions
consistent with the Documentation Precedent. 

  

	 Non-Pro Rata Repurchases: 
	The Borrower and its subsidiaries may purchase from any Lender (other than the Borrower and its affiliates, including the Sponsors), at individually negotiated prices, outstanding principal amounts or commitments under the CPLV Mezz Facility in
a non-pro rata manner; provided that (i) the purchaser shall make a representation to the seller at the time of assignment that it does not possess material non-public information with respect to the Borrower and its subsidiaries that has not
been disclosed to the seller or Lenders generally (other than the Lenders that have elected not to receive material non-public information), (ii) any commitments or loans so repurchased shall be immediately cancelled and (iii) no default or
event of default exists or would result therefrom. 

  

	 Expenses and Indemnification: 
	Consistent with the Documentation Precedent. 

  

	 Regulatory Matters: 
	Customary for facilities of this type and consistent with the Documentation Precedent. 

  

	 Governing Law and Forum: 
	New York. 

  

	 Counsel to Agent: 
	[                    ]. 

  
 7 

 BACKSTOP COMMITMENT AGREEMENT 

BACKSTOP COMMITMENT AGREEMENT (this “Agreement”), dated as of
[                    ], is by and among Caesars Entertainment Operating Company, Inc., a Delaware corporation (“CEOC”), and
the investors identified on Schedule I hereto to the extent such parties are not Terminating Preferred Backstop Investors (each, a “Preferred Backstop Investor” and, collectively, the “Preferred Backstop
Investors”). 
 RECITALS 

WHEREAS, on [                    ]
(the “Petition Date”), CEOC and certain debtor affiliates (collectively, the “Debtor”) anticipate commencing jointly administered proceedings (the “Chapter 11 Proceedings”) for relief under
chapter 11 of title 11 of the United States Code (as amended, the “Bankruptcy Code”) in the Bankruptcy Court (as defined in the Restructuring Support Agreement) (and such case, the “Bankruptcy Case”); 

WHEREAS, in connection with the Chapter 11 Proceedings, the Debtor has engaged in good faith negotiations with certain parties in interest
regarding the terms of the Bankruptcy Plan of Reorganization of the Debtor (the “Plan”), which Plan shall be consistent in all material respects with the Restructuring Term Sheet setting forth the principal terms to be included in
the Plan and attached as Exhibit A to the Restructuring Support Agreement; 
 WHEREAS, pursuant to the Plan, CEOC has agreed to cause the
formation of Propco (the “Company”), and the Company has agreed to, in each case on the terms and conditions set forth therein, commence a rights offering (the “Rights Offering”) whereby holders1 (each a “Holder” and collectively, the “Holders”) of the Senior Secured Notes (as defined below) shall be granted non-transferable rights
(“Rights”) to purchase up to [            ] shares of Preferred Stock (as defined below) issued by the Company in the aggregate at a purchase price of
$[            ] per share (“Per Share Purchase Price”) payable in cash for aggregate proceeds to the Company of $250.0 million pursuant to the Offering Conditions;

 WHEREAS, in order to facilitate the Rights Offering, pursuant to this Agreement, and subject to the terms, conditions and limitations set
forth herein and in consideration of the payment of the Commitment Payment (as defined below), the Company is willing to sell, and the Preferred Backstop Investors are willing to purchase, on the Effective Date, the total number of Preferred
Stock not purchased by Holders in the Rights Offering (the “Unsubscribed Shares”). 
  

	1	NTD. To extent Preferred Stock is not 1145 eligible, holders who purchase in the Rights Offering will be required to rep to being one of a QIB, IAI, or a non-U.S. person under Regulation S as the Rights Offering will be
a private placement. Subscription forms should include such an investor qualification. Rights to be distributed pro rata among eligible holders. 

 NOW, THEREFORE, in consideration of the premises and of the mutual agreements contained
herein, and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows: 

Section 1. DEFINITIONS. 

(a) As used in this Agreement, the following terms shall have the following meanings: 

“8.5% Notes” means the 8- 1⁄2%
Senior Secured Notes due 2020 in the aggregate principal amount of $1,250,000,000 issued pursuant to that certain Indenture dated as of February 14, 2012 (as modified, supplemented and/or amended and in effect on the date hereof) among Caesars
Operating Escrow LLC, Caesars Escrow Corporation, Caesars Entertainment Corporation, and U.S. Bank National Association, as trustee. 

“11.25% Notes” means the 11- 1⁄4%
Senior Secured Notes due 2017 in the aggregate principal amount of $2,095,000,000 issued pursuant to that certain Indenture dated as of June 10, 2009 (as modified, supplemented and/or amended and in effect on the date hereof, among
Harrah’s Operating Escrow LLC, Harrah’s Escrow Corporation, Harrah’s Entertainment, Inc. n/k/a Caesars Entertainment Corporation, and U.S. Bank National Association, as trustee. 

“Addendum” has the meaning assigned to it in Section 10.9. 

“Additional 9% Notes” means the 9% Senior Secured Notes due 2020 in the aggregate principal amount of $1,500,000,000 issued
pursuant to that certain Indenture dated as of February 15, 2013 (as modified, supplemented and/or amended and in effect on the date hereof) among Caesars Operating Escrow LLC, Caesars Escrow Corporation, Caesars Entertainment Corporation, and
U.S. Bank National Association, as trustee. 
 “Affiliate” means, with respect to any specified Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person. 

“Agreement” has the meaning assigned to it in the preamble hereto. 

“Approval Motion” has the meaning assigned to it in Section 5.1. 

“Approval Order” has the meaning assigned to it in Section 5.1. 

“Assumption Agreement” has the meaning assigned to it in Section 10.9. 

“Backstop Commitment” means the commitment of each Preferred Backstop Investor to acquire the number of Preferred Stock equal
to the product of (i) each such Preferred Backstop Investor’s Backstop Percentage and (ii) the Unsubscribed Shares. 

  
 2 

 “Backstop Percentage” means the percentage set forth opposite the name of such
Preferred Backstop Investor under the heading “Backstop Percentage” on Schedule I hereto (as such Schedule I may be updated pursuant to Section 10.9 hereof and/or to reflect the increase or deduction of Backstop
Commitments or Default Shares acquired or disposed of pursuant to the last paragraph of Section 8(a) and Section 8(b)(i) and/or to reflect the removal of a potential Preferred Backstop Investor pursuant to the definition of Preferred
Backstop Investor). 
 “Backstop Purchase Price” means, with respect to any Preferred Backstop Investor, such Preferred
Backstop Investor’s Backstop Percentage of the product of the (i) Per Share Purchase Price and (ii) the Unsubscribed Shares. 

“Backstop Shares” has the meaning assigned to it in Section 2.2(a). 

“Bankruptcy Case” has the meaning assigned to it in the recitals hereto. 

“Bankruptcy Code” means title 11 of the United States Code, as amended from time to time. 

“Bankruptcy Court” has the meaning assigned to it in the recitals hereto. 

“Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law
to be closed in the City of New York. 
 “Closing” has the meaning assigned to it in Section 2.2(b). 

“Commitment Payment” means for each Preferred Backstop Investor a fee equal to the Commitment Percentage of the product of
(i) such Preferred Backstop Investor’s Backstop Percentage and (ii) $300 million. 
 “Commitment Percentage”
means 5%, provided such percentage shall increase by an additional 4% for each 240 day period after the Petition Date until the Subscription Commencement Date begins. 

“Company” has the meaning assigned to it in the preamble hereto. 

“Confirmation Hearing” shall mean the hearing held by the Bankruptcy Court to consider the confirmation of the Plan pursuant
to section 1129 of the Bankruptcy Code. 
 “Confirmation Order” means the Order of the Bankruptcy Court confirming the
Plan. 
 “Contracts” means any contract, arrangement, note, bond, commitment, purchase order, sales order, franchise,
guarantee, indemnity, indenture, instrument, lease, license or other agreement, understanding, instrument or obligation, whether written or oral, all amendments, supplements and modifications of or for any of the foregoing and all rights and
interests arising thereunder or in connection therewith. 

  
 3 

 “control” (including the terms “controlled by” and
“under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly or as trustee, personal representative or executor, of the power to direct or cause
the direction of the affairs, policies or management of a Person, whether through the ownership of voting securities, as trustee, personal representative or executor, by Contract, credit arrangement or otherwise. 

“Debtor” has the meaning assigned to it in the recitals hereto. 

“Defaulting Preferred Backstop Investor” has the meaning assigned to it in Section 8(b)(i). 

“Default Purchase Right” has the meaning assigned to it in Section 8(b)(i). 

“Default Shares” has the meaning assigned to it in Section 8(b)(i). 

“Effective Date” has the meaning assigned to it in the Plan. 

“Encumbrance” means any security interest, pledge, mortgage, lien, claim, option, charge or encumbrance. 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations
promulgated thereunder, or any successor statute. 
 “Exculpated Claims” has the meaning assigned to it in
Section 9(b). 
 “Exculpated Parties” has the meaning assigned to it in Section 9(b). 

“Governmental Authority” means any federal, national, supranational, foreign, state, provincial, local, county, municipal or
other government, any governmental, regulatory or administrative authority, agency, department, bureau, board, commission or official or any quasi-governmental or private body exercising any regulatory, taxing, importing or other governmental or
quasi-governmental authority, or any court, tribunal, judicial or arbitral body, or any Self-Regulatory Organization. 

“Holder” has the meaning assigned to it in the recitals hereto. 

“Indemnitees” has the meaning assigned to it in Section 9(a). 

“Initial 9% Notes” means the 9% Senior Secured Notes due 2020 in the initial aggregate principal amount of $1,500,000,000
issued pursuant to that certain Indenture dated as of August 22, 2012 (as modified, supplemented and/or amended and in effect on the date hereof) among Caesars Operating Escrow LLC, Caesars Escrow Corporation, Caesars Entertainment Corporation,
and U.S. Bank National Association, as trustee. 
 “KKWC” has the meaning assigned to it in Section 10.9. 

  
 4 

 “Law” means any federal, national, supranational, foreign, state, provincial,
local, county, municipal or similar statute, law, common law, writ, injunction, decree, guideline, policy, ordinance, regulation, rule, code, Order, constitution, treaty, requirement, judgment or judicial or administrative doctrines enacted,
promulgated, issued, enforced or entered by any Governmental Authority. 
 “Losses” has the meaning assigned to it in
Section 9(a) hereof. 
 “Milestone” has the meaning assigned to it in Section 5.6. 

“Milestone Dates” has the meaning assigned to it in Section 5.6. 

“Material Adverse Effect” means any event, circumstance, development, change or effect that, individually or in the aggregate
with all other events, circumstances, developments, changes or effects, (a) has had or would reasonably be expected to have or result in a material adverse effect or change in the results of operations, properties, assets, liabilities or
condition (financial or otherwise) of the applicable Company Party taken as a whole or (b) has or would reasonably be expected to prevent, materially delay or materially impair the ability of the applicable Company Party to consummate the
Rights Offering or the applicable Company Party to consummate any of the transactions contemplated hereby. 
 “Non-Defaulting
Preferred Backstop Investors” has the meaning assigned to it in Section 8(b)(i). 
 “Non-Terminating Preferred
Backstop Investors” means any Preferred Backstop Investor that is not a Terminating Preferred Backstop Investor. 

“Order” means any order, writ, judgment, injunction, decree, rule, ruling, directive, stipulation, determination or award
made, issued or entered by or with any Governmental Authority, whether preliminary, interlocutory or final. 
 “Offering
Conditions” means those terms and conditions set forth on Exhibit C. 
 “Payment Date” has the meaning assigned to
it in Section 2.3(a). 
 “Per Share Purchase Price” has the meaning assigned to it in the recitals hereto. 

“Person” means any individual, partnership, firm, corporation, limited liability company, association, joint venture, trust,
Governmental Authority, first nation, aboriginal or native group or band, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Exchange Act. 

“Plan” has the meaning assigned to it in the recitals hereto. 

“Plan Solicitation Order” means an Order entered by the Bankruptcy Court, in form and substance materially consistent with
this Agreement and the Restructuring Support Agreement 

  
 5 

 
and otherwise reasonably satisfactory to the Preferred Backstop Investors and CEOC, which shall, among other things, approve the disclosure statement relating to the Plan, including the Rights
Offering Documents, and set procedures for the solicitation of votes to accept or reject the Plan. 
 “Preferred Backstop Investor
Default” has the meaning assigned to it in Section 8(b)(i). 
 “Preferred Backstop Investor Material Adverse
Effect” means any event, circumstance, development, change or effect that, individually or in the aggregate with all other events, circumstances, developments, changes or effects, has or would reasonably be expected to prevent, materially
delay or materially impair the ability of the applicable Preferred Backstop Investor to consummate the transactions contemplated hereby. 

“Preferred Backstop Investors” means (i) the parties listed on Schedule I hereto who have executed the Restructuring
Support Agreement on or prior to December 29, 2014 or their managed funds and accounts2 and (ii) the parties who have executed the Restructuring Support Agreement on or prior to
December 29, 2014, or their managed funds and accounts, who have submitted written notice indicating that they elect to be Preferred Backstop Investors before January 5, 2015, to CEOC with a simultaneous copy to the Preferred Backstop
Investors who are currently listed on Schedule I hereto (such parties electing pursuant to clause (ii), the “New Preferred Backstop Investors”). In the case of New Preferred Backstop Investors, the Schedule I of the Backstop
Agreement shall be updated to reflect such parties on January 5, 2015. Notwithstanding the foregoing, Schedule I shall be updated pursuant to Section 10.9 hereof, and shall exclude any Terminating Preferred Backstop Investor.
For the avoidance of doubt, to the extent that a party no longer has a Backstop Percentage, such party shall no longer be a “Preferred Backstop Investor.” 

“Preferred Stock” means the Series A Convertible Preferred Stock of the Company, par value
$[            ] per share, on terms and conditions set forth on the term sheet attached as Exhibit D hereto, as may be supplemented as appropriate, and subject to definitive
documentation acceptable to the Required Preferred Backstop Investors, as determined by such Required Preferred Backstop Investors in their reasonable discretion, to be agreed to on or before the Petition Date; provided, however, that any terms
affecting the economics of the Preferred Stock, directly or indirectly, as determined by the Required Preferred Backstop Investors, shall be subject to the Required Preferred Backstop Investors’ sole discretion. 

“Required Preferred Backstop Investors” means, as of any date of determination, the
Non-Defaulting Preferred Backstop Investors and Non-Terminating Preferred Backstop Investors holding more than 66-2/3% of the total Backstop Commitment, calculated without regard to the Backstop Commitments
held by Defaulting Preferred Backstop Investors and Terminating Preferred Backstop Investors. 
  

	2 	NTD: parties have the ability to elect on December 29, 2014 to be Preferred Backstop Parties, but are not required to do so. 

  
 6 

 “Restructuring Support Agreement” means that certain Restructuring Plan Support
Agreement, made and entered into as of December 19, 2014, by and among the Debtor, Caesars Entertainment Corporation, LeverageSource III (H Holdings), L.P., LeverageSource V, L.P., and the Consenting Creditors (as defined therein). 

“Rights” has the meaning assigned to it in the recitals hereto. 

“Rights Offering” has the meaning assigned to it in the recitals hereto. 

“[Rights Offering Documents]” has the meaning assigned to it in the Plan and shall be approved by the Bankruptcy Court
pursuant to the Plan Solicitation Order in form and substance materially consistent with this Agreement and the Restructuring Support Agreement and otherwise reasonably satisfactory to the Preferred Backstop Investors and CEOC. 

“Senior Secured Notes” means the (i) 11.25% Notes, (ii) 8.5% Notes, (iii) Initial 9% Notes and
(iv) Additional 9% Notes. 
 “Securities Act” means the Securities Act of 1933, as amended from time to time, and the
rules and regulations promulgated thereunder, or any successor statute. 
 “Self-Regulatory Organization” means any
securities exchange, futures exchange, contract market, any other exchange or corporation or similar self-regulatory body or organization applicable to a party to this Agreement. 

“Subscription Commencement Date” means the date the Plan Solicitation Package is mailed or distribution is otherwise
commenced in accordance with the Plan Solicitation Order. 
 “Subscription Expiration Date” means
                     [Insert date that is ten days prior to the Voting Deadline and not less than 20 days after the Subscription Commencement
Date] or such later date as the Required Preferred Backstop Investors shall agree. 
 “Subsidiaries” of any Person means
any corporation, partnership, joint venture, limited liability company, trust, estate or other Person of which (or in which), directly or indirectly, more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency),
(b) the interest in the capital or profits of such partnership, joint venture or limited liability company or other Person or (c) the beneficial interest in such trust or estate is at the time owned by such first Person, or by such first
Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries. 
 “Terminating
Preferred Backstop Investors” has the meaning assigned in Section 8(a). 
 “Unsubscribed Shares” has
the meaning assigned to it in the recitals hereto. 

  
 7 

 “Voting Deadline” means the date set by the Bankruptcy Court as the deadline for
voting to accept or reject the Plan. 
 Section 2. RIGHTS OFFERING; BACKSTOP; COMMITMENT PAYMENT.  

2.1 Rights Offering. 

(a) The Company shall make the Rights Offering pursuant to the Plan, which shall be subject to the Offering Conditions and
such other terms and conditions set forth in the Rights Offering Documents. 
 (b) Ten Business Days prior to the date of the
Confirmation Hearing, the Company shall notify the Preferred Backstop Investors of the Rights Offering and the Preferred Backstop Investors shall have the right, but not obligation, upon written notice to the Company to elect to purchase up to 50%
of the Preferred Stock issued in the Rights Offering (in addition to each of their rights as a Holder pursuant to the Rights Offering Documents) on the same terms and conditions as the other Holders under the Rights Offering Documents; provided,
however, that the Preferred Backstop Investors shall not be required to post funds until the Effective Date. Each Preferred Backstop Investor shall have the right to purchase its pro rata share of such amount, based on its Backstop Percentage and to
the extent any Preferred Backstop Investor elects to not purchase its pro rata share, such share(s) shall be made available to the Preferred Backstop Investors that are purchasing their pro rata share. 

(c) The Company hereby agrees and undertakes to give, or to cause to be given, to the Preferred Backstop Investors as soon as
reasonably practicable, but in no event later than two (2) Business Days, after the entry of the Confirmation Order, by overnight mail, e-mail or by electronic facsimile transmission, (i) written notification setting forth (A) the
total number of shares of Preferred Stock purchased by Holders (inclusive of any shares of Preferred Stock purchased pursuant to Section 2.1(b)) in the Rights Offering pursuant to the exercise of Rights and the aggregate cash proceeds received
by the Company therefor, (B) the number of Unsubscribed Shares, (C) the Backstop Purchase Price for each Preferred Backstop Investor and (D) the targeted Effective Date and (ii) a subscription form to be completed by each
Preferred Backstop Investor to facilitate such Preferred Backstop Investor’s subscription for the Preferred Stock purchased pursuant to this Agreement. In addition, on the first Business Day of each calendar week during the period beginning on
the Subscription Commencement Date and ending on the Subscription Expiration Date, the Company shall give, or cause to be given, to the Preferred Backstop Investors by overnight mail, e-mail or by electronic facsimile transmission a written
notification setting forth the then most current information as to the total amount of Preferred Stock then subscribed for in the Rights Offering, the number of then unsubscribed Preferred Stock, the Backstop Purchase Price for each Preferred
Backstop Investor (as if the Rights Offering were to be concluded with the then current amount of subscribed for Preferred Stock) and the targeted Effective Date. 

  
 8 

 2.2 Backstop. 

(a) On the terms and subject to the conditions contained herein, and in reliance on the representations and warranties set
forth in this Agreement, each of the Preferred Backstop Investors hereby agrees, severally and not jointly, to purchase on the Effective Date, and the Company hereby agrees to sell and issue to each such Preferred Backstop Investor, at the Backstop
Purchase Price therefor, its Backstop Percentage of the Unsubscribed Shares, subject to the Offering Conditions. The Preferred Stock which each of the Preferred Backstop Investors purchases pursuant to this Agreement are referred to herein as such
Preferred Backstop Investor’s “Backstop Shares.” For the avoidance of doubt, any shares of Preferred Stock acquired in the Rights Offering pursuant to Section 2.1(b) shall not be deemed Backstop Shares. 

(b) The closing of the purchase and sale of the Backstop Shares hereunder (the “Closing”) will occur on the
Effective Date contemporaneously with substantial consummation of the Plan. At the Closing, payment for the Backstop Shares that each Preferred Backstop Investor has agreed to purchase shall be effected by each such Preferred Backstop Investor
delivering to the Company in immediately available funds its respective Backstop Purchase Price (ii) against delivery by the Company of the Backstop Shares to which such Preferred Backstop Investor is entitled to and delivery to each Preferred
Backstop Investor such certificates, documents or instruments required to be delivered by it to such Preferred Backstop Investor pursuant to this Agreement. The agreements, instruments, certificates and other documents to be delivered on the
Effective Date by or on behalf of the Company shall be delivered to each applicable Preferred Backstop Investor in accordance with Section 10.3 hereof. 

2.3 Commitment Payment. 

(a) The Commitment Payment shall be earned upon the entry of the Approval Order and shall be payable, with respect to a
Preferred Backstop Investor, upon the earlier of (x) the Effective Date of the Plan and (y) two Business Days after the termination of this Agreement by or with respect to such Preferred Backstop Investor, provided that the Commitment
Payment, with respect to a Preferred Backstop Investor, shall not be required to be paid to a particular Preferred Backstop Investor to the extent that such termination of this Agreement with respect to such Preferred Backstop Investor has occurred
due to a breach of this Agreement by such Preferred Backstop Investor, to the extent such breach has been determined as solely caused by the Preferred Backstop Investor by a final, non-appealable order entered
by a court of competent jurisdiction (such date, the “Payment Date”). 
 (b) On the Payment Date, CEOC shall
pay to each Preferred Backstop Investor, by wire transfer in immediately available funds to an account specified by such Preferred Backstop Investor to CEOC not less than one (1) day prior to the Payment Date, such Preferred Backstop
Investor’s pro rata portion of the Commitment Payment based on such Preferred Backstop Investor’s Backstop Percentage (which percentage, for the avoidance of doubt, shall be adjusted pursuant to the definition of Backstop Percentage). 

  
 9 

 (c) The provisions for the payment of the Commitment Payment and the other
provisions provided herein, are an integral part of the transactions contemplated by this Agreement and without these provisions the Preferred Backstop Investors would not have entered into this Agreement, and the Commitment Payment shall, pursuant
to the Approval Order, constitute allowed administrative expenses of the Debtors’ estate under sections 503(b) and 507 of the Bankruptcy Code. 

Section 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY and CEOC. Each of the Company and CEOC (the “Company
Parties”) hereby represents and warrants, severally and not jointly, to each of the Preferred Backstop Investors as of the date hereof and as of the Effective Date (except for representations and warranties that are made as of a specific date,
which are made only as of such date), on behalf of itself and not any other party, as follows: 
 3.1 Organization and
Qualification; Subsidiaries. Each Company Party and its Subsidiaries has been duly organized and is validly existing and is in good standing under the laws of their respective jurisdictions of organization, with the requisite power and authority
to own its properties and conduct its business as currently conducted. 
 3.2 Authorization; Enforcement; Validity. Subject only to
Bankruptcy Court approval, each Company Party has all necessary corporate power and authority to enter into this Agreement and to carry out its obligations hereunder (including, without limitation (a) the issuance of the Backstop Shares and
(b) the payment of the Commitment Payment) in accordance with the terms hereof. The execution and delivery by each Company Party of this Agreement, the performance by each of the Company and CEOC of its obligations hereunder (including, without
limitation, (x) the issuance of the Backstop Shares and (y) the payment of the Commitment Payment), have been duly authorized by all requisite action on the part of such Company Party, and no other action on the part of the Company Party
is necessary to authorize the execution and delivery by the Company Party of this Agreement or the consummation of the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by the Company Party, and
assuming due authorization, execution and delivery by the other parties hereto and subject to Bankruptcy Court approval, this Agreement constitutes the legal, valid and binding obligation of the Company Party, enforceable against the Company Party
in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or similar Laws now or hereafter in effect relating to creditors’ rights generally and subject to general principles of equity. 

3.3 No Conflicts. Assuming that all consents, approvals, authorizations and other actions described in Section 3.4 have
been obtained, and except as may result from any facts or circumstances relating solely to any of the Preferred Backstop Investors, the execution, delivery and performance by the Company Party of this Agreement and the consummation of the
transactions contemplated hereby (including, without limitation, (x) the issuance of the Backstop 

  
 10 

 
Shares and (y) the payment of the Commitment Payment) do not and will not: (a) violate, conflict with or result in the breach of the certificate of incorporation, articles of
incorporation, bylaws, certificate of formation, operating agreement, limited liability company agreement or similar formation or organizational documents of the Company Party or any of its Subsidiaries; (b) conflict with or violate any Law or
Order applicable to the Company or any of its respective assets or properties; (c) violate, conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a
default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, any note, bond, mortgage or indenture, Contract, agreement, lease, sublease, license, permit,
franchise or other instrument or arrangement to which the Company Party or its Subsidiaries is a party or to which any of their respective assets or properties are subject, or result in the creation of any Encumbrance on any of their respective
assets or properties, except, in the case of clauses (b) and (c), for any such conflict, violation, breach or default that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 

3.4 Consents and Approvals. The execution, delivery and performance by the Company Party of this Agreement do not require any consent,
approval, authorization or other Order of, action by, filing with or notification to, any Governmental Authority or any other Person under any of the terms, conditions or provisions of any Law or Order applicable to the Company Party or any of its
Subsidiaries or by which any of their respective assets or properties may be bound, any Contract to which the Company Party or any of its Subsidiaries is a party or by which the Company Party or any of its Subsidiaries may be bound, except the entry
of the Approval Order and the Confirmation Order and the expiration, or waiver by the Bankruptcy Court, of the fourteen (14) day period set forth in Bankruptcy Rules 6004(h) and 3020(e), as applicable. 

Section 4. REPRESENTATIONS AND WARRANTIES OF THE BACKSTOP INVESTORS. Each Preferred Backstop Investor represents and
warrants, severally and not jointly, to the Company Parties as of the date hereof and as of the Effective Date (except for representations and warranties that are made as of a specific date, which are made only as of such date), as follows: 

 4.1 Authorization; Enforcement; Validity. Such Preferred Backstop Investor has all necessary corporate, limited liability
company or equivalent power and authority to enter into this Agreement and to carry out, or cause to be carried out, its obligations hereunder in accordance with the terms hereof. The execution and delivery by such Preferred Backstop Investor of
this Agreement and the performance by such Preferred Backstop Investor of its obligations hereunder have been duly authorized by all requisite action on the part of such Preferred Backstop Investor, and no other action on the part of such Preferred
Backstop Investor is necessary to authorize the execution and delivery by such Preferred Backstop Investor of this Agreement or the consummation of the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered
by such Preferred Backstop Investor, and assuming due authorization, execution and delivery by the other parties hereto, this Agreement 

  
 11 

 
constitutes the legal, valid and binding obligation of such Preferred Backstop Investor, enforceable against such Preferred Backstop Investor in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium or similar Laws now or hereafter in effect relating to creditors’ rights generally and subject to general principles of equity. 

4.2 No Conflicts. The execution, delivery, and performance by such Preferred Backstop Investor of this Agreement do not and will not
(a) violate any provision of the organizational documents of such Preferred Backstop Investor; (b) conflict with or violate any Law or Order applicable to such Preferred Backstop Investor or any of its respective assets or properties;
(c) violate, conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of
termination, amendment, acceleration, suspension, revocation or cancellation of, any note, bond, mortgage or indenture, Contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which such Preferred
Backstop Investor is a party or to which any of its assets or properties are subject, or result in the creation of any Encumbrance on any of its assets or properties, except, in the case of clauses (b) and (c), for any such conflict, violation,
breach or default that would not reasonably be expected to have, individually or in the aggregate, a Preferred Backstop Investor Material Adverse Effect on such Preferred Backstop Investor. 

4.3 Consents and Approvals. No consent, approval, order, authorization, registration or qualification of or with any court or
Governmental Authority or body having jurisdiction over such Preferred Backstop Investor is required in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby, except for any consent,
approval, order or authorization required under the Bankruptcy Code. 
 4.4 Investor Representation. (i) It is either (A) a
qualified institutional buyer as defined in Rule 144A of the Securities Act, (B) an institutional accredited investor as defined in Rule 501(a)(1), (2), (3), or (7) under the Securities Act, (C) a
non-U.S. person under Regulation S under the Securities Act, or (D) the foreign equivalent of (A) or (B) above, and (ii) any securities of the Company acquired by the applicable
Preferred Backstop Investor in connection with this Agreement will have been acquired for investment and not with a view to distribution or resale in violation of the Securities Act. 

Section 5. ADDITIONAL COVENANTS.  

5.1 Approval Motion and Approval Order. CEOC agrees to file a motion and supporting papers (the “Approval Motion”)
(including an order in form and substance materially consistent with this Agreement and otherwise reasonably satisfactory to CEOC and the Required Preferred Backstop Investors) seeking an order of the Bankruptcy Court (the “Approval
Order”) approving this Agreement. 
 5.2 Commercially Reasonable Efforts. CEOC agrees to use its commercially reasonable
efforts to timely satisfy (if applicable) each of the conditions under Sections 6 and 7 of this Agreement. 

  
 12 

 5.3 Further Assurances. Each party hereto, without expanding such party’s obligations
under the Restructuring Support Agreement other than as specifically contemplated hereby, shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as any other party hereto may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby, in each case at
the cost of CEOC. 
 5.4 Use of Proceeds. The Company shall use the net proceeds from the sale of Preferred Stock issued pursuant to
the Rights Offering solely as provided in the Plan. 
 5.5 Milestones. CEOC shall use its reasonable best efforts to cause the
following actions (each, individually a “Milestone” and collectively, the “Milestones”) to occur on or before the dates specified below (such corresponding date, the “Milestone Date”); 

(a) The motion for the Approval Order shall have been filed no later than 45 days from the Petition Date and the Approval Order
shall have been entered by the Bankruptcy Court by no later than 150 days from the date of the filing of such motion; 
 (b)
the Plan Solicitation Order shall have been entered by the Bankruptcy Court by no later than 150 days from the Petition Date; 

(c) the Confirmation Order shall have been entered by the Bankruptcy Court by no later than 120 days from the date of entry of
the Plan Solicitation Order; 
 (d) the Company shall file a registration statement under the Securities Exchange Act of
1933, as amended, (the “Registration Statement”) registering the Preferred Stock as soon as practicable following the effective date of the Plan and in any event within 75 days thereafter, and shall cause the Registration Statement to be
effective as soon as practicable thereafter; 
 (e) the Subscription Expiration Date shall have occurred by no later than
[240 days after the Petition Date]; and 
 (f) the Effective Date shall have occurred by no later than [180 days from the
date the Confirmation Order becomes a final order]. 
 Section 6. CONDITIONS TO THE BACKSTOP INVESTORS’ OBLIGATIONS.
The obligations of each of the Preferred Backstop Investors to purchase the Backstop Shares pursuant to this Agreement on the Effective Date shall be subject to the satisfaction at or prior to the Effective Date of each of the following conditions,
any one or more of which may be waived in writing by the Required Preferred Backstop Investors: 
 6.1 Representations and
Warranties. (a) All of the representations and warranties made by the Company Parties in this Agreement shall be true and correct in all material respects 

  
 13 

 
as of the Effective Date as though made at and as of the Effective Date (except to the extent such representations and warranties expressly speak as of an earlier date, which shall be true and
correct as of such date); (b) the Company Parties shall have performed and complied in all material respects with all agreements and covenants required by this Agreement to be performed by the Company Parties on or prior to the Effective Date
or such earlier date as may be applicable; and (c) with respect to clauses (a) and (b), at the Closing there shall be delivered to the Preferred Backstop Investors a certificate signed by a duly authorized representative of the Company to
the foregoing effect. 
 6.2 Approval Order. The Approval Order shall have been entered by the Bankruptcy Court. 

6.3 Confirmation Order. The Confirmation Order shall have been entered by the Bankruptcy Court, shall not have been stayed pending
appeal, and there shall not have been entered by any court of competent jurisdiction any reversal, modification or vacatur, in whole or in part, of the Confirmation Order. 

6.4 Plan and Rights Offering Documents. (i) Each of the Plan (and the exhibits thereto) and the Confirmation Order, with respect
to provisions that could affect the economic interests of the Preferred Backstop Investors or that could be adverse to any of the Preferred Backstop Investors, shall not be inconsistent with this Agreement and the Restructuring Support Agreement,
and shall be in form and substance reasonably acceptable to the Required Preferred Backstop Investors, and (ii) the Rights Offering Documents, which shall include the Offering Conditions, shall be in form and substance materially consistent
with this Agreement and the Restructuring Support Agreement and otherwise reasonably acceptable to the Required Preferred Backstop Investors and CEOC. 

6.5 Conditions to Confirmation. Each of the conditions precedent to the effectiveness of the Plan and the occurrence of the Effective
Date shall have been satisfied or waived in accordance with the Plan. 
 6.6 Rights Offering. The Subscription Expiration Date shall
have occurred. 
 6.7 Payment of Amounts. The Company shall have paid each Preferred Backstop Investor such Preferred Backstop
Investor’s pro rata portion of the Commitment Payment in accordance with the terms of this Agreement. 
 Section 7.
CONDITIONS TO THE COMPANY’S OBLIGATIONS. The obligations of the Company to issue and sell the Backstop Shares to each of the Preferred Backstop Investors pursuant to this Agreement shall be subject to the satisfaction at or prior
to the Effective Date of each of the following conditions, any one or more of which may be waived in writing by CEOC or the Company:  

7.1 Representations and Warranties. (a) All of the representations and warranties made by each Preferred Backstop Investor in this
Agreement shall be true and correct in all 

  
 14 

 
material respects as of the date hereof and as of the Effective Date as though made at and as of the Effective Date (except to the extent such representations and warranties expressly speak as of
an earlier date, which shall be true and correct as of such date), except to the extent that the breach of any such representation or warranty would not reasonably be expected to have a Preferred Backstop Investor Material Adverse Effect on such
Preferred Backstop Investor and (b) each Preferred Backstop Investor shall have performed and complied in all material respects with all agreements and covenants required by this Agreement to be performed by such Preferred Backstop Investor on
or prior to the Effective Date. 
 7.2 Approval Order. The Approval Order shall have been entered by the Bankruptcy Court. 

7.3 Confirmation Order. The Confirmation Order shall have been entered by the Bankruptcy Court, shall not have been stayed pending
appeal, and there shall not have been entered by any court of competent jurisdiction any reversal, modification or vacatur, in whole or in part, of the Confirmation Order. 

7.4 Conditions to Confirmation. Each of the conditions precedent to the effectiveness of the Plan and the occurrence of the Effective
Date shall have been satisfied in accordance with the Plan. 
 7.5 Rights Offering. The Subscription Expiration Date shall have
occurred 
 7.6 Backstop Subscription Forms. CEOC and the Company shall have received a duly executed subscription form from each
Preferred Backstop Investor in accordance with Section 2.1(b). 
 Section 8. TERMINATION. 

(a) Termination by the Preferred Backstop Investors. This Agreement may be terminated at any time by any Preferred
Backstop Investor with respect to itself (and not with respect to any other Preferred Backstop Investor): 
 (i) upon the failure of any of
the conditions set forth in Section 6 hereof to be satisfied, which failure cannot be cured or is not cured within [10] days of written notice to the Company and CEOC by such Preferred Backstop Investor; 

(ii) if any of the Company Parties alters, amends or modifies any term of this Agreement without the consent of the Required Preferred
Backstop Investor, or if any alteration, amendment or modification is adverse to any Preferred Backstop Investor, without the consent of each Preferred Backstop Investor; 

(iii) if any of the Company Parties breaches any representation or warranty or breaches any covenant applicable to it in any material respect
under this Agreement and if such breach is curable, it is not cured within [10] days of written notice to the applicable Company Party by such Preferred Backstop Investor; 

  
 15 

 (iv) if any of the Milestones shall not have occurred on or prior to the applicable Milestone
Date; or 
 (v) upon the occurrence of any matters set forth in any of [clauses (a) through (k) of Section 8] of the
Restructuring Support Agreement and/or a Company Termination Event (as defined in the Restructuring Support Agreement) and/or a termination of the Restructuring Support Agreement; 

provided that, in the event any Preferred Backstop Investor elects to terminate this Agreement (each, a “Terminating Preferred
Backstop Investor”), the Backstop Commitments allocated to such Terminating Preferred Backstop Investor shall be allocated to all Non-Defaulting Preferred Backstop Investors who elect to acquire such Backstop Commitments on a pro rata basis
(based on the Backstop Percentages of such electing Non-Defaulting Preferred Backstop Investors), and provided further that in the event no Non-Defaulting Preferred Backstop Investor elects to acquire the Backstop Commitments of the Terminating
Preferred Backstop Investors, this Agreement shall terminate. 
 (b) Termination by the Company.  

(i) (A) upon termination of the Restructuring Support Agreement, the Company may terminate this Agreement by written notice to the Preferred
Backstop Investors or (B) if any Preferred Backstop Investor breaches this Agreement in a manner that causes a Preferred Backstop Investor Material Adverse Effect with respect to such Preferred Backstop Investor, and if such breach is curable,
is not cured within five (5) Business Days after receipt of written notice from the Company to such Preferred Backstop Investor (each, a “Preferred Backstop Investor Default” and any such defaulting Preferred Backstop
Investor, a “Defaulting Preferred Backstop Investor”), then following the expiration of the five (5) Business Day notice period, the Company shall follow the procedures set forth in clause (ii) below and each of the
other Preferred Backstop Investors (the “Non-Defaulting Preferred Backstop Investors”) shall have the right (the “Default Purchase Right”) but not the obligation, to purchase on the Effective Date all or a portion
of the Backstop Shares that were to be purchased by the Defaulting Preferred Backstop Investor (the “Default Shares”) at a price per share equal to the Per Share Purchase Price. To the extent that the Non-Defaulting Preferred
Backstop Investors (in the aggregate) desire to purchase more than the total number of Default Shares, such Default Shares shall be allocated between the Non-Defaulting Preferred Backstop Investors pro rata, based on their respective Backstop
Percentages. 
 (ii) As soon as practicable after a Preferred Backstop Investor Default, but in no event later than three (3) Business
Days following the Company or CEOC becoming aware of such Preferred Backstop Investor Default, the Company or CEOC shall send a written notice (in accordance with the notice provisions set forth in Section 10.3) to each Non-Defaulting Preferred Backstop Investor, specifying the number of Default Shares. The 

  
 16 

 
Non-Defaulting Preferred Backstop Investors shall have five (5) Business Days from receipt of such notice to elect to exercise the Default Purchase Right by notifying the Company and CEOC in
writing of its or their election to purchase all or a portion of the Default Shares then available as a result of the Preferred Backstop Investor Default or find a third-party reasonably satisfactory to the Non-Defaulting Preferred Backstop
Investors to replace the commitment of the Defaulting Preferred Backstop Investor. If at the conclusion of such five (5) Business Day period, the Non-Defaulting Preferred Backstop Investors have not elected to exercise the Default Purchase
Right in its entirety or have not found a third-party to replace the commitment of the Defaulting Backstop Purchaser, then the Company or CEOC may terminate this Agreement. 

(iii) Notwithstanding anything to the contrary in this Section 8(b), in addition to any liability to the Company or CEOC, the parties
agree that any Defaulting Preferred Backstop Investor will be liable to the Non-Defaulting Preferred Backstop Investors for the consequences to the Non-Defaulting Preferred Backstop Investors of its breach and that the
Non-Defaulting Backstop Purchasers can enforce rights of damages and/or specific performance pursuant to Section 10.18 immediately upon the expiration of the original five (5) Business Day
notice period set forth Section 8(b)(i). 
 (c) Mutual Termination. This Agreement may be terminated by
the mutual written consent of CEOC and the Preferred Backstop Investors representing more than 75% of the aggregate Backstop Percentage. 

(d) Effect of Termination. If this Agreement is terminated pursuant to this Section 8, subject to the last
paragraph of Section 8(a), the obligations of such parties contained in Sections 2.3, 9, 10.2 through 10.19 and this Section 8 shall survive any such termination. 

Section 9. PROTECTION OF COMMITMENT PAYMENT. 

Both of the Company and CEOC shall jointly and severally indemnify, save and hold harmless each Preferred Backstop Investor, and each of their
respective directors, officers, stockholders, employees, partners, members, managers, representatives, attorneys, other professional advisors and agents and all of their respective heirs, successors, legal administrators, permitted assigns and
designees, and each Person who (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) controls any of the Preferred Backstop Investors and the officers, directors, agents and employees of any such
controlling Person (collectively, the “Covered Persons”) from and against all losses, claims, damages, liabilities, costs (including, without limitation, the costs of investigation and reasonable attorneys’ fees) and expenses,
as incurred by any or all of the Covered Persons in connection with any direct claim or claim against them by a third party for avoidance of or otherwise in connection with or arising from the payment of the Commitment Payment; provided that neither
the Company nor CEOC shall have any obligation to indemnify or save and hold harmless any Covered Person (i) for any claim or expense that is judicially determined (the determination having become final and no longer subject to appeal) to have
arisen solely and directly from such Covered Persons’ gross negligence, willful misconduct, or breach of this Agreement that has caused a Preferred 

  
 17 

 
Backstop Investor Material Adverse Effect and that would result in the loss of such Preferred Backstop Investor’s entitlement under the terms of this Agreement to payment of the Commitment
Payment or (ii) for any claim or expense that is settled prior to a judicial determination as to the exclusion set forth in clause (i) above, but determined by the Bankruptcy Court, after notice and a hearing, to be a claim or expense for
which such Covered Person should not receive indemnity under the terms of this Section 9; provided that, without otherwise limiting CEOC’s or the Company’s obligation under this Section 9, CEOC and the Company shall have no
obligation to indemnify any Covered Person pending such judicial determination where CEOC or the Company has in good faith and in a reasonable manner, asserted an uncured breach of this Agreement that has caused a Preferred Backstop Investor
Material Adverse Effect that would result in the loss of such Preferred Backstop Investor’s entitlement under the terms of this Agreement to payment of the Commitment Payment. This provision will be in addition to the rights of each and all of
the Covered Persons to bring an action against the Company for breach of any term of this Agreement. The Company acknowledges and agrees that each and all of the Covered Persons shall be treated as third-party beneficiaries with rights to bring an
action against the Company under this Section 9. 
 Section 10. MISCELLANEOUS. 

10.1 Payments. All payments made by or on behalf of CEOC and/or the Company or any of their affiliates to a Preferred Backstop Investor
or its assigns, successors or designees pursuant to this Agreement shall be without withholding, set-off, counterclaim or deduction of any kind. 

10.2 Survival. The representations and warranties made in this Agreement will survive the execution and delivery of this Agreement and
the Closing for the length of the applicable statute of limitations with respect thereto. 
 10.3 No Waiver of Rights. All waivers
hereunder must be made in writing, and the failure of any party at any time to require another party’s performance of any obligation under this Agreement shall not affect the right subsequently to require performance of that obligation. Any
waiver of any breach of any provision of this Agreement shall not be construed as a waiver of any continuing or succeeding breach of such provision or a waiver or modification of any other provision. 

10.4 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery in person, by an internationally recognized overnight courier service, by facsimile or registered or certified mail (postage prepaid, return receipt requested) to the
respective parties hereto at the following addresses (or at such other address for any party as shall be specified by such party in a notice given in accordance with this Section 10.3) 

 

	 	(a)	If to the Company, to: 

  
 18 

 [PROPCO] 

[    ] 

[    ] 

Attention: [    ] 

Facsimile: [    ] 

with a copy (which shall not constitute notice to the Company) to 

[    ] 

[    ] 

[    ] 

Facsimile: [    ] 

Attention: [    ] 
  

	 	(b)	If to CEOC, to: 

 Caesars Entertainment Operating Company, Inc. 

One Caesars Palace Drive 

Las Vegas, NV 89109 

Attn: General Counsel 

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

Kirkland & Ellis LLP 

601 Lexington Ave 

New York, NY 10022 

			
	Attn: 	 	Paul M. Basta, P.C.
		 	Nicole L. Greenblatt

 Facsimile: (212) 446 4900 

			
	E-mail Address: 	 	paul.basta@kirkland.com
		 	ngreenblatt@kirkland.com

 -and- 

Kirkland & Ellis LLP 

300 North LaSalle 

Chicago, IL 60654 
  

			
	Attn: 	 	David R. Seligman, P.C.
		 	Ryan Preston Dahl

			
	E-mail Address: 	 	dseligman@kirkland.com
		 	rdahl@kirkland.com

 Facsimile: (312) 862-2200 

  
 19 

	 	(c)	If to a Preferred Backstop Investor, to the mailing address or facsimile number set forth on Schedule I hereto. 

with a copy (which shall not constitute notice to such Preferred Backstop Investor) to: 

Kleinberg, Kaplan, Wolff & Cohen, P.C. 

551 Fifth Avenue, 18th Floor 

New York, NY 10176 

Telephone: (212) 986-6000 Facsimile: (212) 986-8866 

Attention: Mary Kuan, Esq. 
 Any
of the foregoing addresses or facsimile numbers may be changed by giving notice of such change in the foregoing manner, except that notices for changes of address or facsimile number shall be effective only upon receipt. 

10.5 Headings. The section and subsection headings in this Agreement are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement. 
 10.6 Construction. The parties hereto and their respective legal counsel
participated in the preparation of this Agreement, and therefore, this Agreement shall be construed neither against nor in favor of any of the parties hereto, but rather in accordance with the fair meaning thereof. 

10.7 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect for so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially
adverse to any party hereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent
of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. 

10.8 Entire Agreement. This Agreement (including the Schedules and Exhibits hereto) and the agreements and documents referenced herein
constitute the entire agreement of the parties hereto with respect to the subject matter hereof and supersede all prior agreements and undertakings, both written and oral, among the parties hereto with respect to the subject matter hereof. 

10.9 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Except as set forth below, neither this Agreement nor any of the rights, interests or obligations under this 

  
 20 

 
Agreement will be assigned by any party (whether by operation of law or otherwise) without the prior written consent of the other parties. Notwithstanding the foregoing, (i) a Preferred
Backstop Investor may enter into arrangements with other parties regarding its rights and/or obligations under this Agreement, provided that it shall remain liable for its obligations with respect to the Backstop Commitment, and (ii) the
rights, obligations and interests hereunder may be assigned, delegated or transferred, in whole or in part, by any Preferred Backstop Investors (A) either alone or in connection with a corresponding Transfer (as such term is defined in the
Restructuring Support Agreement) of Claims (as such term is defined in the Restructuring Support Agreement) to a transferee with the consent of CEOC, such consent not to be unreasonably withheld, delayed or denied and (B) to affiliates and to
other Preferred Backstop Investors; provided, however, that such transferee, as a condition precedent to such Transfer, becomes a party to this Agreement and assumes the obligations of the transferring Preferred Backstop Investor under
this Agreement by executing an addendum substantially in the form set forth in Exhibit A (the “Addendum”) and an assumption in substantially the form set forth in Exhibit B hereto (the “Assumption
Agreement”) and deliver the same to Kleinberg, Kaplan, Wolff & Cohen, P.C. (“KKWC”) and a copy to CEOC. Any Transfer that is made in violation of the immediately preceding sentence shall be null and void ab initio,
and CEOC and each Preferred Backstop Investor, as applicable, shall have the right to enforce the voiding of such transfer. Following any assignment of a Preferred Backstop Investor’s rights and obligations in this Agreement described in
Section 10.9(ii) above, Schedule I hereto shall be updated by KKWC (in consultation with the assigning Preferred Backstop Investor and the Transferee) and delivered to CEOC solely to reflect the name and address of the applicable
transferee and the Backstop Percentage that shall apply to such transferee, and any changes to the Backstop Percentage applicable to the assigning Preferred Backstop Investor. Any update to Schedule I hereto described in the immediately preceding
sentence shall not be deemed an amendment or modification of this Agreement. In performing this Agreement, CEOC may rely solely on the most current Schedule I delivered by KKWC. 

10.10 No Third Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and
their respective successors and permitted assigns and, except as expressly set forth in Section 9, nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy
of any nature whatsoever. 
 10.11 Amendment. This Agreement may not be altered, amended, or modified except by a written instrument
executed by or on behalf of CEOC and the Required Preferred Backstop Investors, provided that if any alteration, amendment or modification could be adverse to any of the Preferred Backstop Investors, such Preferred Backstop Investors’ written
consent shall be required. This Agreement shall become binding only after the same is signed and delivered by or on behalf of each of the parties hereto. 

10.12 Governing Law. This Agreement shall be interpreted, construed and enforced in accordance with the laws of the State of New York,
without regard to the conflicts of law principles thereof. 

  
 21 

 10.13 Consent to Jurisdiction. Each of the parties hereto (a) irrevocably and
unconditionally agrees that any actions, suits or proceedings, at Law or equity, arising out of or relating to this Agreement or any agreements or transactions contemplated hereby shall be heard and determined in the Bankruptcy Court;
(b) irrevocably submits to the jurisdiction of such court in any such action, suit or proceeding; (c) consents that any such action, suit or proceeding may be brought in such courts and waives any objection that such party may now or
hereafter have to the venue or jurisdiction or that such action or proceeding was brought in an inconvenient court; and (d) agrees that service of process in any such action, suit or proceeding may be effected by providing a copy thereof by any
of the methods of delivery permitted by Section 10.3 to such party at its address as provided in Section 10.3 (provided that nothing herein shall affect the right to effect service of process in any other manner permitted by
Law). 
 10.14 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS. EACH OF THE PARTIES HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE TRANSACTIONS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.13. 
 10.15
Currency. Unless otherwise specified in this Agreement, all references to currency, monetary values and dollars set forth herein shall mean United States (U.S.) dollars and all payments hereunder shall be made in United States dollars. 

10.16 Approvals. Notwithstanding anything to the contrary herein, unless notified in writing to the contrary, for purposes of seeking
approvals of the Preferred Backstop Investors hereunder, such as in accordance with Section 6.4, the Company Parties may rely on the written approval (including email) of KKWC. 

10.17 Counterparts. This Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. 

10.18 Specific Performance. Each party hereto acknowledges that, in view of the uniqueness of the securities referenced herein and the
transactions contemplated by this Agreement, the other parties hereto would not have an adequate remedy at law for money damages in the event that this Agreement has not been performed in accordance with its terms, and therefore agrees that such
other parties shall be entitled to specific enforcement of the terms hereof in addition to any other remedy to which it may be entitled, at law or in equity, without otherwise limiting the parties’ remedies hereunder. 

  
 22 

 10.19 Rules of Construction. Unless the context of this Agreement clearly requires
otherwise, references to the plural include the singular, references to the singular include the plural, the term “including” is not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning
represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of
this Agreement. Section, subsection, clause, schedule, annex and exhibit references are to this Agreement unless otherwise specified. Any reference to this Agreement shall include all alterations, amendments, changes, extensions, modifications,
renewals, replacements, substitutions, and supplements thereto and thereof, as applicable. Whenever the context may require, any pronoun includes the corresponding masculine, feminine and neuter forms. 

10.20 Covenants and Representations. Notwithstanding anything to the contrary in this Agreement or otherwise, (i) CEOC, on behalf
of itself and the Debtors, shall cause the Company to perform each obligations, covenant, undertaking and agreement in this Agreement, and to cause the Company’s representations and warranties in this Agreement to be true, complete and correct
as of the times given and shall be liable for all obligations not satisfied or performed by the Company, (ii) all obligations, covenants, undertakings and agreements of the Preferred Backstop Investors to the Company shall apply only after the
Company has been properly incorporated and formed in accordance with the Plan and (iii) the Company shall be deemed to give the representations and warranties with respect to itself and contained in Section 3 only on the Effective Date and
on the date that it has been properly incorporated and formed in accordance with the Plan. 
 [No further text appears; signature pages
follow] 

  
 23 

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

			
	CAESARS ENTERTAINMENT OPERATING COMPANY, INC.
		
	 By:
	 	  

	 Name:

	 Title:

	
	 [BACKSTOP INVESTOR]

		
	 By:
	 	  

	 Name:

	 Title:

  
 24 

 Schedule I 

SCHEDULE OF BACKSTOP INVESTORS 
  

					
	 Name and Address of Preferred Backstop Investors and Wire Instructions
	  	Backstop
Percentage3	 
	 Certain funds or entities or accounts managed by Brigade Capital Management
	  	 	 	% 
	 Certain funds or accounts managed by DDJ Capital Management, LLC
	  			
	 Certain funds or entities or accounts managed by Elliott Management Corporation
	  			
	 PIMCO and/or certain funds or entities or accounts managed by PIMCO
	  			
	 Certain funds or entities or accounts managed by JPMorgan Asset Management
	  			
		  	  
	  
	 
	 Total:
	  	 	100	% 

 [Need email/contact info for notices, subscription status reports etc.] 

 

	3	NTD: The initial percentage for each Preferred Backstop Investor will be equal to the product of (i) the quotient resulting from (x) the amount designated by such Preferred Backstop Investor, provided such
amount shall not exceed the principal amount of the first lien bonds held by such Preferred Backstop Investor divided by (y) the aggregate amount designated by all Preferred Backstop Investors pursuant to clause (x) and (ii) 100.

  
 25 

 Exhibit A 

ADDENDUM 
 Reference is
made to that certain Backstop Commitment Agreement (as amended, modified or supplemented from time to time, the “Agreement”) by and among Caesars Entertainment Operating Company, Inc., a Delaware corporation (
“CEOC”), and each of the Preferred Backstop Investors party thereto from time to time. Each capitalized term used but not defined herein shall have the meaning given to it in the Agreement. 

Upon execution and delivery of this Addendum by the undersigned, as provided in Section 10.9 of the Agreement, the undersigned hereby
becomes a Preferred Backstop Investor, as applicable thereunder and bound thereby effective as of the date of the Agreement. 
 By executing
and delivering this Addendum, the undersigned represents and warrants, for itself and for the benefit of each party to the Agreement, that: 
  

	 	(a)	as of the date of this Addendum, the undersigned has executed and delivered an Assumption and Joinder Agreement therefor (a copy of which is attached to this Addendum); 

 

	 	(b)	as of the date of this Addendum, with respect to each transferee that (i) is an individual, such Transferee has all requisite authority to enter into this Addendum and to carry out the transactions contemplated by,
and perform its respective obligation under, the Agreement and (ii) is not an individual, such transferee is duly organized, validly existing, and in good standing under the laws of the state of its organization, and has all requisite
corporate, partnership, or limited liability company power and authority to enter into this Addendum and to carry out the transactions contemplated by, and perform its respective obligations under, the Agreement; 

 

	 	(c)	assuming the due execution and delivery of the Agreement by the Company the Addendum and the Agreement are legally valid and binding obligations of it, enforceable against it in accordance with its terms, except as may
be limited by bankruptcy, insolvency or similar laws, or by equitable principles relating to or limiting creditors’ rights generally; and 

  

	 	(d)	as of the date of this Addendum, it is not aware of any event that, due to any fiduciary or other duty to any other person, would prevent it from taking any action required of it under the Agreement and this Addendum.

 By executing and delivering this Addendum to CEOC, the undersigned agrees to be bound by all the terms of the Agreement.

  
 26 

 The undersigned acknowledges and agrees that once delivered to CEOC, it may not revoke, withdraw,
amend, change or modify this Addendum unless the Agreement has been terminated. 
 THIS ADDENDUM SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. 

This Addendum may be executed in one or more counterparts, each of which, when so executed, shall constitute the same instrument and the
counterparts may be delivered by facsimile transmission or by electronic mail in portable document format (.pdf). 
 [Signature on Following
Page] 

  
 27 

 IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be duly executed and
delivered by their proper and duly authorized officers as of this [    ] day of [            ]. 

 

	
	TRANSFEREE WHO BECOMES A BACKSTOP INVESTOR
	
	[NAME]
	  

	as a Preferred Backstop Investor
	Name:

  
 28 

 Exhibit B 

ASSUMPTION AND JOINDER AGREEMENT 

Reference is made to (i) that certain Backstop Commitment Agreement (as amended, modified or supplemented from time to time, the
“Agreement”), dated as of [    ], 2014, by and among Caesars Entertainment Operating Company, Inc., a Delaware corporation (“CEOC”) and each of the Preferred Backstop Investors party
thereto from time to time, and (ii) that certain Addendum, dated as of [    ], [    ] (the “Transferor Addendum”) submitted by
                    , as transferor (the “Transferor”). Each capitalized term used but not defined herein shall have the
meaning given to it in the Agreement. 
 As a condition precedent to becoming a Preferred Backstop Investor, the undersigned (the
“Transferee”) hereby agrees to become bound by all the terms, conditions and obligations set forth in the Agreement and the Transferor Addendum copies of which are attached hereto as Annex I. This Assumption and Joinder Agreement
shall take effect and shall become an integral part of the Agreement and the Transferor Addendum immediately upon its execution, and the Transferee shall be deemed to be bound by all of the terms, conditions and obligations of the Agreement and the
Transferor Addendum as of the date thereof. The Transferee shall hereafter be deemed to be a “Preferred Backstop Investor” and a “party” for all purposes under the Agreement. 

[Signatures on Following Page] 

 IN WITNESS WHEREOF, this Assumption and Joinder Agreement has been duly executed by each of the
undersigned as of the date specified below. 
 Date:
[                    ]  
  

			
	  
 Name of Transferor
	  	  
 Name of Transferee

		
	  
 Authorized Signatory of
Transferor
	  	  
 Authorized Signatory of
Transferee

		
	  
 (Type or Print Name and Title of
Authorized Signatory)
	  	  
 (Type or Print Name and Title of
Authorized Signatory)

		
		  	Address of Transferee:
		
		  	  

		
		  	  

		
		  	  

		  	Attn:
		
		  	  

		  	Tel:
		
		  	  

		  	Fax:
		
		  	  

		  	E-mail:
		
		  	  

  
 30 

 Exhibit C 

OFFERING CONDITIONS 
  

	1.	Holders shall receive an Election Form and ballot in the Solicitation Package, which shall be approved by the Bankruptcy Court. 

  

	2.	The Election Form must be submitted by the Subscription Expiration Date. 

  

	3.	Returned Election Form for Holders other than the Preferred Backstop Investors must provide evidence of financial wherewithal to purchase the shares of Preferred Stock pursuant to the Rights Offering. CEOC shall
determine in its discretion whether such Holders are satisfactory to CEOC (such approved Holders, the “Satisfactory Holders”). 

  

	4.	CEOC shall notify the Preferred Backstop Investors of the Satisfactory Holders and the Preferred Stock such Satisfactory Holders have elected to purchase pursuant to the Rights Offering no later than three days before
the deadline set by the Bankruptcy Court for the filing of objections to confirmation of the Plan (the “Objection Deadline”). 

  

	5.	On or before the Objection Deadline, all Holders designated as Satisfactory Holders (which, for the avoidance of doubt, shall exclude the Preferred Backstop Investors) shall post cash in the amount of the maximum
aggregate Per Share Purchase Price for all Preferred Stock such Holder elected to purchase (the “Purchase Amount Obligation”) with a third party escrow agent designated by CEOC and reasonably satisfactory to the Required Preferred
Backstop Investors. 

  

	6.	To the extent that the cash timely posted by the Satisfactory Holders is less than the Purchase Amount Obligation, the Preferred Backstop Investors shall have the right, but not the obligation, to satisfy their
respective Backstop Commitments with respect to any shortfall in the Purchase Amount Obligation, provided that any Backstop Commitment declined by any Preferred Backstop Investor shall be allocated pro rata (based on the Backstop Commitment of the
Preferred Backstop Investors electing to participate) to the Preferred Backstop Investors electing to participate. 

  
 31ex10-1.htm

 

 

Exhibit 10.1

 

 

REVERE HIGH YIELD FUND, LP

WITH

RANOR, INC.

 

 

 

 

TERM LOAN AND SECURITY AGREEMENT

 

 

Dated as of December 22, 2014

 

 

 

 

  

  

  

 

 

THIS TERM LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of December 22, 2014 between REVERE HIGH YIELD FUND, LP, a  Delaware  limited partnership having an office and place of business located at 105 Rowayton Avenue, Suite 100, Rowayton, CT 06853 (the “Lender”) and RANOR, INC., a Delaware corporation having an address of 1 Bella Vista Drive, Westminster, MA 01473 (the “Borrower”).

 

W I T N E S S E T H:

WHEREAS, at the request of the Borrower, Lender is making a term loan to Borrower on the date hereof, in the maximum principal amount of ONE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($1,500,000.00) (the “Note A Loan”) and a term loan to Borrower on the date hereof, in the maximum principal amount of SEVEN HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($750,000.00) (the “Note B Loan”) to provide funds for the repayment of a loan held by Santander Bank, N.A. which Loan shall mature on the Maturity Date. Borrower acknowledges receipt of all of proceeds of the Note A Loan and the Note B Loan and that no amount repaid in respect of the Note A Loan and/or the Note B Loan may be reborrowed; and

 

WHEREAS, Lender is willing to provide Borrower with such credit facility pursuant to the terms, conditions and limitations set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing the parties hereto agree to the following:

	
I.  

	
DEFINITIONS

 

SECTION 1.01. Definitions. As used herein, the terms defined in the preamble shall have the same meaning when used in this Agreement and the following words and terms shall have the following meanings:

 

“Account” means an account (as that term is defined in the Code).

 

“Account Debtor” means any Person who is obligated under, with respect to, or on account of, an Account, chattel paper, or a General Intangible.

 

“Additional Documents” shall have the meaning set forth in Section 7.04 hereof.

 

“Affiliate” shall mean as to any Person, any other Person (i) which directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such Person; or (ii) which, directly or indirectly, beneficially owns or holds ten percent (10%) or more of any class of stock or any other ownership interest in such Person; or (iii) ten percent (10%) or more of the direct or indirect ownership of which is beneficially owned or held by such Person; or (iv) which is a member of the family (as defined in Section 267(c)(4) of the Code) of such Person or which is a trust or estate the beneficial owners of which are members of the family (as defined in Section 267(c)(4) of the Code) of such Person; or (v) which directly or indirectly  is  a  general  partner,  controlling  shareholder,  managing  member,  officer,  director, trustee or employee of such Person.

 

 

 

 

  

2

  

 

 

“Assignment of Leases and Rents” shall mean that certain Assignment of Leases and Rents, dated as of the date hereof, from Borrower in favor of Lender which shall be recorded on or about the date hereof in the Worcester District Registry of Deeds with respect to the  Property

 

“Bankruptcy Code” means title 11 of the United States Code, as in effect from time to  time.

 

“Bankruptcy Proceeding” has the meaning set forth in Section 3.05 hereof.

“Books” means all of Borrower’s now owned or hereafter acquired books and records (including (i) all of their Records indicating, summarizing, or evidencing their assets (including the Borrower Collateral) or liabilities, (ii) all of Borrower’s Records relating to their business operations or financial condition, and (iii) all of their goods or General Intangibles related to such information).

“Borrower Collateral” means collectively all of the Borrower Note A Collateral and all of the Borrower Note B Collateral, or any portion thereof, as applicable.

“Borrower Note A Collateral” means all of Borrower’s now owned or hereafter acquired right, title, and interest in the Property and each of the following of Borrower:

	
  

	
(a)

	
all of its Equipment, and

 

	
  

	
(b)

	
the proceeds and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance covering any or all of the foregoing.

 

“Borrower Note B Collateral” means all of Borrower’s now owned or hereafter acquired right, title, and interest in each of the following of Borrower:

 

	
  

	
(a)

	
all of its Accounts,

	
  

	
(b)

	
all of its Inventory,

	
  

	
(c)

	
all of its Equipment, and

	
  

	
(d)

	
the proceeds and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance covering any or all of the foregoing.

 

“Borrower’s Counsel” shall mean William A. Scari, Jr., Pepper Hamilton, LLP, 400 Berwyn Park, 899 Cassatt Road, Berwyn, Pennsylvania 19312-1183 or such other counsel as shall be mutually acceptable to the Lender and the Borrower.

 

“Business Day” shall mean any day not a Saturday, Sunday or legal holiday, on which the Lender is open for business.

 

 

 

 

  

3

  

 

 

“Capital Lease” means a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

 

“Capitalized Lease Obligation” means that portion of the obligations under a Capital Lease that is required to be capitalized in accordance with GAAP.

 

“Cash Equivalents” means (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within 1 year from the date of acquisition thereof, (b) marketable direct obligations issued by any State of the United States or any political subdivision of any such State or any public instrumentality thereof maturing within 1 year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”), (c) commercial paper maturing no more than 270 days from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit or bankers’ acceptances maturing within 1 year from the date of acquisition thereof issued by any bank organized under the laws of the United States or any State thereof having at the date of acquisition thereof combined capital and surplus of not less than $250,000,000, (e) demand Deposit Accounts maintained with (i) any bank that satisfies the criteria described in clause (d) above, or (ii) any other bank organized under the laws of the United States or any State thereof so long as the amount maintained with any such other bank is less than or equal to $100,000 and is insured by the Federal Deposit Insurance Corporation, and (f) Investments in money market funds substantially all of whose assets are invested in one or more of the types of assets described in clauses (a) through (e) above.

“Charges” shall have the meaning set forth in Section 5.11 hereof. "Closing Date" shall mean December 2014.

 

“Code” means the Massachusetts Uniform Commercial Code, as in effect from time to time; provided, however, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, priority, or remedies with respect to Lender’s Lien on any Borrower Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than Commonwealth of Massachusetts, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies.

 

“Collateral” means all of the property, rights and interests of the Borrower that are or are intended to be subject to the security interests and security title created by the Loan Documents.

 

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

 

 

 

 

  

4

  

 

“Collections” means all cash, checks, notes, instruments, and other items of payment (including insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds).

“Control” shall mean with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management  and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. “Controlled by,” “Controlling” and “under common Control with” shall have the respective correlative meaning thereto.

“Default Rate” shall mean the lesser of twenty-four percent (24%) per annum, or (ii) the highest rate of interest permitted under the laws of the Commonwealth of Massachusetts.

 

“Deposit Account” means any deposit account (as that term is defined in the Code).

 

“Environmental Indemnity” shall mean that certain Environmental Indemnity Agreement dated as of the date hereof, in favor of Lender, from Borrower and each Guarantor.

“Equipment” means equipment (as that term is defined in the Code) and includes machinery, chattels, machine tools, dies, jigs, molds, parts, small tools, perishable tools, motors, furniture, furnishings, fixtures, vehicles (including motor vehicles), computer hardware, tools, parts, and goods (other than consumer goods, farm products, or Inventory), wherever located, including all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing and all parts and equipment which may be attached to or which are necessary to the operation and use of any or all of the foregoing..

“Event of Default” has the meaning set forth in Section 8.01 hereof.

“Executive Officer” means with respect to a Person (other than an individual), the Executive Chairman, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer or the Secretary of such Person, or any other officer having substantially the same authority and responsibility.

“GAAP” shall mean generally accepted accounting principles.

“General Intangibles” means general intangibles (as that term is defined in the Code), including payment intangibles, contract rights, rights to payment, rights arising under common law, statutes, or regulations, choses or things in action, goodwill, patents, trade names, trade secrets, trademarks, servicemarks, copyrights, blueprints, drawings, purchase orders, customer lists, monies due or recoverable from pension funds, route lists, rights to payment and other rights under any royalty or licensing agreements, infringement claims, computer programs, information contained on computer disks or tapes, software, literature, reports, catalogs, insurance premium rebates, tax refunds, and tax refund claims, and any other personal property other than Accounts, commercial tort claims, Deposit Accounts, goods, Investment Property, and Negotiable Collateral.

 

 

 

 

  

5

  

 

 

“Governmental Authority” shall mean any court, board, agency, commission, office or authority of any nature whatsoever or any governmental unit (federal, State, county, district, municipal, city or otherwise) now or hereafter in existence.

 

“Guarantor” shall mean Techprecision Corporation, a Delaware corporation. “Guaranty” shall mean the guaranty of payment referred to in Section 4.04 executed and

delivered by each Guarantor.

“Hedge Agreement” means any and all agreements or documents now existing or hereafter entered into by Borrower that provide for an interest rate, credit, commodity or equity swap, cap, floor, collar, forward foreign exchange transaction, currency swap, cross currency rate swap, currency option, or any combination of, or option with respect to, these or similar transactions, for the purpose of hedging Borrower’s exposure to fluctuations in interest or exchange rates, loan, credit exchange, security, or currency valuations or commodity prices.

“Impositions” shall mean all taxes, installments of assessments, water charges, sewer charges, and other fees, taxes, charges and assessments of every kind and nature whatsoever assessed or charged against or constituting a lien on the Property or any interest therein or the Term Loan.

“Indebtedness” means (a) all obligations for borrowed money, (b) all obligations evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, interest rate swaps, or other financial products, (c) all obligations as a lessee under Capital Leases, (d) all obligations or liabilities of others secured by a Lien on any asset of a Person or its Subsidiaries, irrespective of whether such obligation or liability is assumed, (e) all obligations to pay the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business  and repayable in accordance with customary trade practices), (f) all obligations owing under Hedge Agreements, and (g) any obligation guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that constitutes Indebtedness under any of clauses (a) through (f) above.

“Interest Rate” shall mean a rate equal to twelve percent (12%) per annum computed on the basis of the actual days elapsed on the assumption that each month contains thirty (30) days and each year contains three hundred sixty (360) days.

“Inventory” means inventory (as that term is defined in the Code).

“Investment” means, with respect to any Person, any investment by such Person in any other Person (including Affiliates) in the form of loans, guaranties, advances, or capital contributions (excluding (a) commission, travel, and similar advances to officers and employees of such Person made in the ordinary course of business, and (b) bona fide Accounts arising in the ordinary course of business consistent with past practice), purchases or other acquisitions of Indebtedness, Stock, or all or substantially all of the assets of such other Person (or of any division  or  business  line  of  such  other  Person),  and  any  other  items  that  are  or  would  be classified as investments on a balance sheet prepared in accordance with GAAP.

 

 

 

 

  

6

  

 

“Investment Property” means investment property (as that term is defined in the Code).

“Leases” shall mean any and all leases and subleases, now or hereafter approved by the Lender in its sole discretion, relating to the use or occupancy of the Collateral and in effect between the Borrower, as lessor or sublessor, and the tenants or subtenants named therein, as the same may be amended or modified with the Lender’s prior approval.

“Legal Requirements” shall mean statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities affecting the Borrower, any member or general partner of Borrower, any Loan Document, all or part of the Borrower Collateral, all or part of the Property or the construction, ownership, use, alteration or operation thereof, whether now or hereafter enacted and in force, and all permits, licenses and authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instrument, either of record or known to Borrower, at any time in force affecting all or part of the Property.

“Lender’s Counsel” shall mean Mayo Crowe LLC, CityPlace II, 185 Asylum Street, Hartford, CT 06103.

“Lender Expenses”  means all (a)  costs or  expenses (including taxes,  and insurance premiums) required to be paid by Borrower under any of the Loan Documents that are paid, advanced, or incurred by Lender, (b) fees or charges paid or incurred by Lender in connection with Lender’s transactions with Borrower, including, fees or charges for photocopying, notarization, couriers and messengers, telecommunication, public record searches (including tax lien, litigation, and UCC searches and including searches with the patent and trademark office, the copyright office, or the department of motor vehicles), filing, recording, or publication, (c) fees and charges paid or incurred by Lender in connection with appraisals and collateral valuations (including initial and subsequent periodic collateral appraisals or valuations or business valuations to the extent of the fees and charges therefor (and up to the amount of any limitation contained in this Agreement)), real estate surveys, real estate title policies and endorsements, and environmental audits, (d) costs and expenses incurred by Lender in the disbursement of funds to Borrower (by wire transfer or otherwise), (e) charges paid or incurred by Lender resulting from the dishonor of checks, (f) costs and expenses paid or incurred by Lender to correct any default or enforce any provision of the Loan Documents, or in gaining possession of, maintaining, handling, preserving, storing, shipping, selling, preparing for sale, or advertising to sell the Borrower Collateral, or any portion thereof, irrespective of whether a sale is consummated, (g) audit fees and expenses of Lender related to audit examinations of the Books to the extent of the fees and charges (and up to the amount of any limitation) contained in this Agreement, (h) costs and expenses of third-party claims or any other suit paid or incurred by Lender in enforcing or defending the Loan Documents or in connection with the transactions contemplated by the Loan Documents or Lender’s relationship with Borrower or any Guarantor (excluding any costs and expenses related to such claims or suits that are attributable to Lender’s gross  negligence  or  willful  misconduct),  (i)  Lender’s  third-party  out-of-pocket  costs  and expenses (including attorneys’ fees) incurred in advising, structuring, drafting, reviewing, administering, or amending the Loan Documents, and (j) Lender’s costs and expenses (including attorneys, accountants, consultants, and  other advisors’ fees and expenses) incurred  in terminating, enforcing (including attorneys, accountants, consultants, and other advisors’ fees and expenses incurred in connection with a “workout,” a “restructuring,” or a Bankruptcy Proceeding concerning Borrower or any Guarantor or in exercising rights or remedies under the Loan Documents), or defending the Loan Documents, irrespective of whether suit is brought, or in taking any remedial action concerning the Borrower Collateral.

“Lender’s Liens” means the Liens granted by Borrower to Lender under this Agreement or the other Loan Documents.

“Lien” means any interest in an asset securing an obligation owed to, or a claim by, any Person other than the owner of the asset, irrespective of whether (a) such interest is based on the common law, statute, or contract, (b) such interest is recorded or perfected, and (c) such interest is contingent upon the occurrence of some future event or events or the existence of some future circumstance or circumstances. Without limiting the generality of the foregoing, the term “Lien” includes the lien or security interest arising from a mortgage, deed of trust, deed to secure debt, encumbrance, pledge, hypothecation, assignment, deposit arrangement, security agreement, conditional sale or trust receipt, or from a lease, consignment, or bailment for security purposes and also includes reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases, and other title exceptions and encumbrances affecting Real Property.

“Loan Documents” shall mean, collectively, this Agreement, the Note, the Guaranty, the Mortgage, the Assignment of Leases and Rents,  the  Environmental Indemnity and all other documents, certificates and instruments executed in connection therewith.

“Loan Policy” shall have the meaning set forth in Section 4.06 hereof.

“Material Adverse Effect” shall mean a material adverse effect on (a) the business, operations, property, condition (financial or otherwise) taken as a whole, (b) the ability of the Borrower to perform its obligations under this Agreement or the other Loan Documents, or (c) the validity or enforceability of the rights or remedies of the Lender hereunder or under the other Loan Documents.

“Maturity Date” shall have the meaning set forth in Section 2.03 hereof.

“Massachusetts Property” means that certain real property more particularly described in the  Mortgage and commonly known as 48 Farm Town Road, Westminster, Massachusetts.

“Minimum Guaranteed Interest” shall mean an amount equal to the greater of (i) six (6) months interest at the Interest Rate on the amount outstanding on the Loan, or (ii) interest due on any amount Advanced under this agreement at the Interest Rate.

“Mortgage” shall mean that certain Mortgage Deed, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated of the date hereof, in favor of Lender, by Borrower which mortgage shall be recorded on or about the date hereof in the Worcester District Registry of Deeds with respect to the Property.

 

 

 

 

  

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“Negotiable Collateral” means letters of credit, letter of credit rights, instruments, promissory notes, drafts, documents, and chattel paper (including electronic chattel paper and tangible chattel paper).

“Net Income” means for any period net income of Borrower for such period determined in accordance with GAAP.

“Note” shall mean collectively Note A and Note B.

“Note  A”  shall  mean  that  certain  term  note  in  the  original  principal  amount  of $1,500,000.00 dated as of the date hereof from Borrower in favor of Lender.

“Note  B”  shall  mean  that  certain  term  note  in  the  original  principal  amount  of $750,000.00 dated as of the date hereof from Borrower in favor of Lender.

“Note A Exit Fee” means $45,000.00.

“Note B Exit Fee” means $22,500.00.

“Obligations” means (a) all loans including, without limitation, the Loan, debts, principal, interest, premiums, liabilities, obligations (including indemnification obligations), fees, charges, costs, Lender Expenses (including any fees or expenses that, but for the commencement of an Insolvency Proceeding, would have accrued), lease payments, guaranties, covenants, and duties of any kind and description owing by Borrower to Lender pursuant to or evidenced by the Loan Documents 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 interest not paid when due and all Lender Expenses that Borrower is required to pay or reimburse by the Loan Documents, by law, or otherwise. Any reference in this Agreement or in the Loan Documents to the Obligations shall include all extensions, modifications, renewals, supplements, restatements or alterations thereof.

“Payment Date” shall have the meaning set forth in Section 2.02 hereof.

“Permitted Indebtedness” means the Indebtedness described in  Section 6.01 hereof.

“Permitted Dispositions” means (a) sales or other dispositions of Equipment that is substantially worn, damaged, or obsolete in the ordinary course of business, (b) sales of Inventory to buyers in the ordinary course of business, (c) the use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents, and (d) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business.

 

 

 

 

  

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“Permitted Liens” means (a) Liens held by Lender, (b) Liens for unpaid taxes that either (i) are not yet delinquent, or (ii) do not constitute an Event of Default hereunder and are the subject of Permitted Protests, (c) Liens set forth on Schedule P, (d) the interests of lessors under operating leases, (e) Liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course of business and not in connection with the borrowing of money, and which Liens either (i) are for sums not yet delinquent, or (ii) are the subject of Permitted Protests, (f) Liens on amounts deposited in connection with obtaining worker’s  compensation  or  other  unemployment insurance, (g) Liens on amounts deposited in connection with the making or entering into of bids, tenders, or leases in the ordinary course of business and not in connection with the borrowing of money, (h) Liens on amounts deposited as security for surety or appeal bonds in connection with obtaining such bonds in the ordinary course of business, (i) Liens resulting from any judgment or award that is not an Event of Default hereunder, and (j) rights of setoff or bankers’ liens upon deposits of cash in favor of banks of banks or other depository institutions; and (k) with respect to any Real Property, easements, rights of way, and zoning restrictions that do not materially interfere with or impair the use or operation thereof as reasonably determined by  Lender, including those matters described in Schedule B of that certain Lender’s title insurance policy from Fidelity National Title Insurance  Company provided to Lender  in connection with the recording of the Mortgage.

“Permitted Protest” shall mean the right of Borrower to protest any Lien (other than any Lien that secures the Obligations), taxes (other than payroll taxes or taxes that are the subject of a United States federal tax lien), or rental payment, provided that (a) a reserve with respect to such obligation is established on the Books in such amount as is required under GAAP, (b) any such protest is instituted promptly and prosecuted diligently by Borrower, as applicable, in good faith, and (c) Lender is satisfied that, while any such protest is pending, there will be no impairment of the enforceability, validity, or priority of any of the Lender’s Liens.

“Person” shall mean any natural person, limited liability company, corporation, business trust, joint venture, association, company, partnership or government, or any agency or political subdivision thereof.

 

“Property” shall mean the Massachusetts Property and all improvements thereon. “Purchase  Money  Indebtedness”  means  Indebtedness  (other  than  the  Obligations),

incurred at the time of, or within 20 days after, the acquisition of any fixed assets for the purpose of financing all or any part of the acquisition cost thereof. 

“Record” shall mean information that is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable in perceivable form.

“Restricted Payments” means (a) any dividend or other distribution, in cash or other property, direct or indirect, on account of any class of membership interests or other ownership interests in Borrower, now or hereafter outstanding, (b) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any class of membership interests or other ownership interests in Borrower, now or hereafter outstanding, (c) any payment made to retire, or obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of membership interests or other ownership interests in Borrower, now or hereafter outstanding, (d) any payment or prepayment of principal, or redemption, purchase, retirement, defeasance, sinking fund or similar payment with respect to, any Indebtedness owing to a member or general partner in Borrower or Guarantor or an Affiliate of a member or general partner in Borrower, or (e) any payment to a member or a general partner in Borrower or Guarantor or an Affiliate of Borrower or Guarantor or any member or general partner in Borrower or Guarantor not expressly authorized herein.

 

 

 

 

  

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“Securities Account” means a securities account (as that term is defined in the Code). “Solvent”  shall  mean,  with  respect  to  any Person  on  a  particular  date,  that,  at  fair

valuations, the sum of such Person’s assets is greater than all of such Person’s debts.

 

“Stock” shall mean all shares, options, warrants, membership interests, units of membership interests, partnership interests, other interests, participations, or other equivalents (regardless of how designated) of or in a Person, whether voting or nonvoting,  including common stock, preferred stock, or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).

 

“Subsidiary”  of  a  Person  shall  mean  a  corporation,  partnership,  limited  liability company, or other entity in which that Person directly or indirectly owns or controls the shares of Stock having ordinary voting power to elect a majority of the board of directors (or appoint other comparable managers) of such corporation, partnership, limited liability company, or other entity.

“Supporting Obligation” means a letter-of-credit right or secondary  obligation that supports the payment or performance of an Account, chattel paper, document, General Intangible, instrument, or Investment Property.

"Term Loan" shall mean the term loan pursuant to Section 2.01 hereof. “Title Company” shall mean Fidelity National Title Insurance Company. “Utica” shall mean Utica Leaseco., LLC, a Florida limited liability company.

 

“Utica Loan” shall mean a commercial loan by Utica to Borrower in the  original principal amount of $4,150,000.00.

“Utica Senior Debt Documents” shall mean a certain Loan and Security Agreement and other loan documents executed by Borrower to and for the benefit of Utica with respect to the Utica Loan.

	
  

	
II.

	
THE TERM LOAN

SECTION 2.01. Term Loan. The Lender agrees, upon the terms and subject to the conditions hereof, to make to Borrower the Note A Loan and the Note B Loan, each of which shall have a twelve (12) month term. The Note A Loan and the Note B Loan shall be collectively referred to herein as the “Term Loan” or the “Loan”. The Term Loan shall be fully advanced to Borrower on the date hereof.

SECTION 2.02. The Note. The Term Loan shall be evidenced by Note A and Note B, in the forms attached hereto as Exhibit A-1 and Exhibit A-2, respectively, appropriately completed, payable to the order of the Lender, duly executed and delivered on behalf of the Borrower, and dated as of the Closing Date. The Note shall be with interest accruing at the Interest Rate and payable on the first day of each month (a “Payment Date”), commencing on February 1, 2015 until and including the Maturity Date with a final payment of the principal balance plus accrued and unpaid interest due and payable on the Maturity Date. Note A shall be secured by the Mortgage on the Property and a perfected security interest in Borrower’s Equipment, subject only to the Permitted Liens. Note B shall be secured by a perfected first priority UCC-1 security interest in Borrower’s Accounts and Inventory and by  a  perfected security interest in Borrower’s Equipment, subject only to the Permitted Liens.

SECTION 2.03. Maturity Date. The maturity date of the Term Loan is December 31, 2015 (the “Maturity Date”). If the Borrower requests an extension in writing at least sixty 60 days but no more than 90 days prior to the Maturity Date then if the following conditions are determined by the Lender in its reasonable discretion to have been satisfied, then Lender  will  extend  the Maturity Date as it relates to Note A and/or Note B for one (1) period of six (6) months (the “Extension”): (a) such request is accompanied by an explanation of the need for the extension and documentation supporting such explanation, (b) the Borrower has submitted the balance sheet and income and expense statement for the fiscal quarter most recently ended with respect to Borrower and the Property in such detail as Lender may reasonably require if they have not been previously delivered to the Lender; (c) Borrower is not in default under any Loan Document; (d) there has not been a material adverse change in the financial condition of the Borrower or any Guarantor; (e) the Borrower, each Guarantor, and the Lender have executed an acknowledgement of the extension which includes a reaffirmation by the Guarantor of its obligations;  (f) the Borrower has paid the Lender an extension fee in the amount of $15,000.00 in the event that the Maturity Date as it relates to Note A is extended and $7,500.00 in the event that the Maturity Date as it relates to Note B is extended; (g) the Borrower has provided the Lender with such additional documentation as the Lender may reasonably request including, without limitation, evidence of the priority of the lien of the Deed of Trust; (h) the Borrower has represented to the Lender in writing the accuracy of all submissions supporting the extension request, that Borrower is not in default under any Loan Document, that the representations made by the Borrower and any Guarantor in the Loan Documents are true on the date of the extension and that there have been no material adverse changes to the financial condition of the Borrower or any Guarantor; (i) the Borrower has complied with such other conditions for the granting of the extension as may be reasonably required by the Lender which conditions may include payment of accrued interest and a portion of the principal balance of the Loan; and (j) such other conditions as may be reasonably required by the Lender.

SECTION 2.04. Interest and Principal Payments on the Term Loan. On each Payment Date, commencing on February 1, 2015 until and including the Maturity Date, Borrower shall pay interest in arrears on the principal balance of the Loan from time to time outstanding at a per annum rate equal to the Interest Rate of 12% per annum. The principal balance plus accrued and unpaid interest shall be due and payable on the Maturity Date. In addition to such monthly payments of interest and principal, on the earlier to occur of (i) prepayment of the Loan in accordance with Section 2.05 below or otherwise, and (ii) the Maturity Date, Borrower shall pay to Lender the Minimum Guaranteed Interest.

 

 

 

 

  

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SECTION 2.05. Prepayment of the Term Loan. Borrower may prepay the Term Loan in whole but not in part, at any time, but only after advance written notice to Lender of at least forty-five (45) days provided that no Default or Event of Default shall have occurred and be continuing. If the Loan is prepaid anytime during the term of the Loan, Borrower shall pay to Lender the Minimum Guaranteed Interest. Lender’s acceptance of any prepayment under this Section 2.05 shall not waive any of Lender’s rights and remedies under the Loan Documents arising pursuant to an Event of Default.

SECTION 2.06. Late Charge. If any sum payable under the Note or hereunder is not paid within five (5) days after the date on which it is due, the Borrower shall pay, upon demand, an amount equal to ten percent (10%) of such unpaid sum as a late payment charge.

SECTION 2.07. Funds; Manner of Payment. Each payment of principal and interest on the Note shall be made in immediately available federal funds without set-off or counterclaim to the Lender. Whenever any payment to be made hereunder or under the Note shall be Stated to be due, or whenever any Payment Date would otherwise occur on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest.

SECTION 2.08.  Default Rate. In addition to the late payment charge set forth at Section 2.6 hereof, if any monthly installments of the Note, or the entire principal balance of the Note, as the case may be, is not paid within five (5) days following the applicable due date, the Borrower shall thereafter pay interest on the principal balance at a rate per annum equal to the Default Rate.

SECTION 2.09. Use of the Term Loan Proceeds. The proceeds of the Term Loan shall be used by the Borrower for the repayment of a loan in the amount of $1,447,261.11 plus breakage fees on the related interest rate swap of approximately $220,000 from Santander Bank, N.A.and the residual proceeds of the Term Loan shall be used for general corporate purposes.

SECTION 2.10. Exit Fee.

 

(a)           On the earlier of (i) the Maturity Date of Note A and (ii) such earlier time that the Note A is paid in full or accelerated, Borrower shall pay to Lender an amount equal to the Note A Exit Fee.

(b)           On the earlier of (i) the Maturity Date of Note B and (ii) such earlier time that the Note B is paid in full or accelerated, Borrower shall pay to Lender an amount equal to the Note B Exit Fee.

 

 

 

 

  

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III.

	
REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lender, that:

SECTION 3.01. Organization. Each of Borrower and Guarantor has been  duly organized, is validly existing and in good standing under the laws of the State of its formation, with requisite power and authority, and all rights, licenses, permits and authorizations, governmental or otherwise, necessary to own its properties and to transact the business in which it is now engaged. Each of Borrower and Guarantor is duly qualified to do business and is in good standing in each jurisdiction where it is required to be so qualified in connection with its properties, business and operations.

SECTION 3.02.  Authorization; No Contravention.

 

(a)      The execution, delivery and performance of this Agreement and the other Loan Documents by the Borrower and the borrowings by such Borrower hereunder (a) have been duly authorized, (b) will not violate (i) any provision of law or any governmental rule or regulation applicable to such Borrower or, (ii) any order of any court or other agency of government binding on Borrower or any indenture, agreement or other instrument to which Borrower is a party, or by which Borrower or any of its properties are bound, and (c) will not be in conflict with, result in a breach of or constitute (with due notice and/or lapse of time) a default under, any such indenture, agreement or other instrument, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of its properties or assets other than as contemplated by the Loan Documents. Each person executing the Loan Documents on behalf of Borrower has full authority to execute and deliver the same.

(b)        The execution, delivery and performance of the Guaranty and the other Loan Documents by Guarantor, as applicable (i) have been duly authorized, (ii) will not violate (1) any provision of law or any governmental rule or regulation applicable to such Guarantor or, (2) any order of any court or other agency of government binding on such the Guarantor or  any indenture, agreement or other instrument to which such each Guarantor is a party, or by which such Guarantor or any of its properties are bound, and (iii) will not be in conflict with, result in a breach of or constitute (with due notice and/or lapse of time) a default under, any such indenture, agreement or other instrument, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of its properties or assets other than as contemplated by the Loan Documents. Each person executing the Loan Document on behalf of the Borrower and each Guarantor has full authority to execute and deliver the same.

SECTION 3.03. Litigation. (a) There are no actions, suits or proceedings pending or, to the knowledge of the Borrower and each Guarantor, threatened in writing against or affecting the Borrower or Guarantor, at law or in equity or before or by any Federal, State, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which are undisclosed and involve any of the transactions contemplated herein or which, if adversely determined against the Borrower or Guarantor would have a  Material  Adverse Effect; and (b) neither the Borrower nor Guarantor is in default with respect to any judgment, writ, injunction, decree, rule or regulation of any court or Federal, State, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which would have a Material Adverse Effect.

 

 

 

 

  

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SECTION 3.04. Agreements. Neither the Borrower nor any Guarantor is a party to any agreement or instrument or subject to any judgment, order, writ, injunction, decree or regulation materially and adversely affecting its business, properties or assets, operations or condition (financial or otherwise). Neither the Borrower nor any Guarantor is in default in any manner which would have a Material Adverse Effect or materially and adversely affect the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any other agreement or instrument to which it is a party.

SECTION 3.05. No Bankruptcy Filing. Neither the Borrower nor any Guarantors or any shareholder, members or general partner of the Borrower, are contemplating either the filing of a petition by it under any State or federal bankruptcy or insolvency law or the liquidation of all or a major portion of its property (a “Bankruptcy Proceeding”), and the Borrower and any Guarantor have no knowledge of any Person contemplating the filing of any such petition against either the Borrower, the Guarantors, any member or partner of Borrower. In addition, neither the Borrower, any Guarantor, any shareholder, member or partner of Borrower, nor any principal nor Affiliate of the Borrower have been a party to, or the subject of a Bankruptcy Proceeding for the past ten years.

 

SECTION 3.06. Intentionally omitted.

SECTION 3.07. Fraudulent Transfer. Each of the Borrower, any Guarantor, and each of its respective Subsidiaries is Solvent. No transfer of property is being made by the Borrower, any Guarantor or each of its respective Subsidiaries and no obligation is being incurred by the Borrower, the Guarantor or each of its respective Subsidiaries in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of the Borrower; no transfer of property is being made by Guarantor and no obligation is being incurred by any Guarantor in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of any Guarantor.

SECTION 3.08. No Plan Assets. As of the date hereof and throughout the term of the Term Loan (i) neither the Borrower nor any Guarantor is or will be an “employee benefit plan,” as defined in Section 3(3) of ERISA, (ii) none of the assets of the Borrower or any Guarantor will constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101, (iii) neither the Borrower nor any Guarantor is or will be a “governmental plan” within the meaning of Section 3(32) of ERISA, and (iv) transactions by or with the Borrower or the Guarantor are not and will not be subject to State statutes regulating investment of, and fiduciary obligations with respect to, governmental plans. As of the date hereof, neither the Borrower nor any Guarantor nor any member of a “controlled group of corporations” (within the meaning of Section 414 of the Code) maintains, sponsors or contributes to a “defined benefit plan” (within the meaning of Section 3(35) of ERISA) or a “multiemployer pension plan” (within the meaning of Section 3(37)(A) of ERISA).

SECTION 3.09. Federal Reserve Regulations; Investment Company Act. No part of the proceeds of the Term Loan will be used for the purpose of purchasing or acquiring any “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or for any other purpose that would be inconsistent with such Regulation U or any other regulation of such Board of Governors, or for any purpose prohibited by Legal Requirements or any Loan Document. Borrower is not (i) an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended; or (ii) subject to any other federal or State law or regulation which purports to restrict or regulate its ability to borrow money.

 

 

 

 

  

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SECTION 3.10. Proceeds of the Term Loan. The proceeds of the Term Loan shall be applied by the Borrower for the purposes described in Section 2.09.

 

SECTION 3.11. Purchase Options. Neither the Property nor any part thereof is subject to any purchase options or other similar rights in favor of third parties.

SECTION 3.12. Hazardous Substances Except as set forth in that certain Phase I Environmental Site Assessment Report prepared by GZA dated November 3, 2010 and that certain Phase 1 Environmental Site Assessment prepared by Triumvirate Environmental, Inc. dated June 18, 2014 (collectively, the “Environmental Report”), (i) the Property is not  in violation of any Legal Requirement pertaining to or imposing liability or standards of conduct concerning environmental regulation, contamination or clean-up, including the Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act, the Emergency Planning and Community Right-to-Know Act of 1986, the Hazardous Substances Transportation Act, the Solid Waste Disposal Act, the Clean Water Act, the Clean Air Act, the Toxic Substance Control Act, the Safe Drinking Water Act, the Occupational Safety and Health Act, any State super-lien and environmental clean-up statutes (including with respect to Toxic Mold), any local law requiring related permits and licenses and all amendments to and regulations in respect of the foregoing laws (collectively, “Environmental Laws”); (ii) the Property is not subject to any private or governmental Lien or judicial or administrative notice or action or inquiry, investigation or claim relating to hazardous, toxic and/or dangerous substances, toxic mold or fungus of a type that may pose a risk to human health or the environment or would negatively impact the value of the Property (“Toxic Mold”) or any other substances or materials which are included under or regulated by Environmental Laws (collectively, “Hazardous Substances”); (iii) no Hazardous Substances are or have been (including to the best of Borrower’s knowledge, the period prior to Borrower’s acquisition of the Property), discharged, generated, treated, disposed of or stored on, incorporated in, or removed or transported from the Property other than in compliance with all Environmental Laws; (iv) to the best of Borrower’s knowledge, no Hazardous Substances are present in, on or under any nearby real property which could migrate to or otherwise affect the Property; (v) no Toxic Mold is on or about the Property which requires remediation; (vi) no underground storage tanks exist on the Property and the Property has never been used as a landfill; and (vii) there have been no environmental investigations, studies, audits, reviews or other analyses conducted by or on behalf of Borrower or any Guarantor and within Borrower’s or any Guarantor’s possession which have not been provided to Lender.

SECTION 3.13. Governmental Approval. No registration with or consent or approval of, or other action by, any Federal, State or other governmental authority or regulatory body is required in connection with the execution, delivery and performance of the Loan Documents or the borrowings hereunder, except any such registrations, consents or approvals obtain on or prior to the date hereof or necessary to perfect Lender’s security interest granted under any of the Loan Documents.

 

 

 

 

  

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SECTION 3.14. Indebtedness.   No Indebtedness of Borrower or Guarantor shall remain outstanding after the Closing Date, except as set forth on Schedule 6.01 attached hereto.

 

SECTION 3.15. Full Disclosure. All written information heretofore furnished by the Borrower and any Guarantor to the Lender for purposes of or in connection with this Agreement is, and all such information hereafter to be furnished by the Borrower and any Guarantor to the Lender will, to the best of Borrower’s and Guarantor’s knowledge, be true and accurate in all material respects on the date as of which such information is Stated or certified. The Borrower and each Guarantor have disclosed to the Lender in writing any and all facts which, in the reasonable judgment of the Borrower and Guarantor, has or would be reasonably likely to cause a Material Adverse Effect.

SECTION 3.16. Borrower Collateral. Except for the Permitted Liens, Borrower has, or will have, when acquired by it, good and marketable title to the Borrower Collateral free from any adverse liens, security interests or encumbrances, and no financing statements covering all or any part of the Borrower Collateral are on file in the office of the Secretary of the State of the State of Delaware.

SECTION 3.17. Binding Effect. This Agreement and each other Loan Document to which the Borrower is a party constitutes the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability.

SECTION 3.18.  Equipment/Inventory.  The list of Equipment attached hereto as Exhibit B is hereby certified as a true and correct as of the date hereof. The book value of the Equipment and the Inventory listed on the balance sheet as of March 31, 2014 is accurate and complete as of such date in all material respects, is current and saleable in the ordinary course of Borrower’s business and has not been subject to any material change since the date thereof other than for ordinary and customary changes consistent with Borrower’s ordinary business.

	
  

	
IV.

	
CONDITIONS OF THE TERM LOAN

 

The willingness of the Lender to make the Term Loan hereunder is subject to  the following conditions precedent:

SECTION 4.01. Representations and Warranties; No Default. As of the Closing Date, the representations and warranties set forth in Article III hereof shall be true and correct in all material respects.

 

SECTION 4.02. Organizational Documents. As applicable, on or prior to the Closing Date, the Lender shall have received a certified copy of the filing receipt, articles of incorporation and bylaws of the Borrower and each Guarantor, together with evidence of the consent of the board of directors of the Borrower and each Guarantor to execute this Agreement and the other Loan Documents

SECTION 4.03. Opinion of Counsel. On or prior to the Closing Date, the Lender shall have received a legal opinion of Borrower’s Counsel reasonably acceptable to Lender and Lender’s Counsel.

SECTION 4.04. Guaranty of Payment. On or prior to the Closing Date, the Lender shall have received from each Guarantor a guaranty of payment substantially in the form of Exhibit C, attached hereto.

SECTION 4.05. Mortgage On or prior to the Closing Date, the Lender shall have received the Mortgage in the form attached hereto as Exhibit D with respect to the Property.

 

SECTION 4.06. Security Interest in the Borrower Collateral. On or prior to the Closing Date, the Lender shall have received a perfected first priority security interest under the Uniform Commercial Code in the Borrower Collateral (subject to Permitted Liens).

SECTION 4.07. Origination Fee. On or prior to the Closing Date, the Lender shall have received the amount of three (3%) of the Loan (Sixty-Seven Thousand Five Hundred and 00/100 Dollars ($67,500.00)) from the Borrower, which amount shall represent an origination fee due to Lender with respect to the Loan.

SECTION 4.08.                           Utica Agreements.  On or prior to the Closing Date, the Lender shall have received the Intercreditor and Subordination Agreement and the Mortgagee’s Disclaimer and Consent, each in the form attached hereto as Exhibit E.

 

 

 

 

  

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V.

	
AFFIRMATIVE COVENANTS

The Borrower covenants and agrees with the Lender that, so long as this Agreement shall remain in effect or any of the principal of or interest on the Note shall remain unpaid, it will comply with the following:

SECTION 5.01  Insurance.  Borrower shall maintain, at all times:

 

(a)           Insurance on its properties against loss by fire and all available extended coverage risks in such amounts and with such insurers as may be reasonably satisfactory to Lender, which insurance shall by the terms of the policy provide that (x) in the event of loss or damage, if any, the proceeds thereof shall be payable to Lender, as the holder of a security interest, mortgage or other lien or interest in the personal or real property of Borrower insured under the policy as Lender’s interest may appear; (y) the insurance, as to the interest of Lender, shall not be invalidated by any act or neglect of Borrower, its directors, officers, agents or employees, by any foreclosures,  or  other  proceeding,  or notice of sale relating to said property or any of it; by any change in the title or ownership of the property, or any of it; or by the occupation of the premises where the property, or any of it, is located for purposes more hazardous than are permitted by the policy; and (z) if the policy is cancelled, for whatever reason, the insurance shall continue in full force and effect for the benefit of Lender for not less than thirty (30) days after written notice of cancellation to Lender from the insurer which notice the insurer shall agree to give to Lender. Borrower shall cause the insurer to supply the Lender certificates, or other evidence of the insurance reasonably satisfactory to Lender, indicating compliance with the foregoing, including evidence of continuation thereof not later than thirty (30) days prior to the expiration of any policy of insurance. Lender shall have the right to apply the proceeds of any such insurance in reduction of the Obligations, whether or not then due and payable, in such manner as Lender in its sole discretion may determine or to pay over, at such times and in such amounts, such proceeds or part thereof, as Lender in its sole discretion may determine, to Borrower for the purpose of replacing the Borrower Collateral affected by any loss relating thereto. Notwithstanding the above, the Lender shall allow Borrower to use the insurance proceeds for the restoration or replacement of the Borrower Collateral provided that (i) the proceeds total less than $50,000.00 for any single event of loss, or (ii) Lender shall reasonably determine that (a) the restoration or replacement of the Borrower Collateral can be completed prior to the Maturity Date, (b) that the insurance proceeds will be sufficient to complete the restoration or, if the amount of the insurance proceeds will be insufficient to restore or replace the Borrower Collateral, Borrower deposits with Lender an amount equal to the difference between Lender’s estimated costs of such restoration or replacement and the amount of the insurance proceeds, and (c) the Borrower Collateral will be restored or replaced such that the fair market value (as reasonably determined by Lender) of the Borrower Collateral shall be at least equal to the pre-casualty value. Such insurance maintained by Borrower shall include, without limitation, insurance coverage on Borrower Collateral in the possession of Lender or its agent or contractor. Borrower and any other obligor by becoming bound by the Obligations, hereby indemnifies Lender against any loss  or damage to Borrower Collateral not insured by Borrower and for any deficiency in any effective insurance coverage required to be maintained by Borrower pursuant to this section, which indemnification obligation shall constitute part of the Obligations; and

(b)           General public liability insurance against claims for personal injury, death or property damage in such amounts as are reasonably satisfactory to Lender and, in the case of Borrower, Worker’s Compensation insurance in statutory  amounts  with companies licensed to do business in the states in which the Borrower operates.

(c)           In the event the Borrower shall fail to maintain insurance coverage satisfactory to the Lender, the Lender may obtain such insurance at the  Borrower’s expense and such expense shall be added to the unpaid principal balance of the Term Loan. The Borrower shall also furnish to the Lender, promptly following the Borrower’s receipt thereof (i) copies of all insurance policies, including title insurance, affecting the Property and (ii) the original or copy of all recorded documents affecting the Property.

SECTION 5.02. Preservation of Borrower Collateral. Borrower shall  maintain  and preserve the Borrower Collateral in good repair, working order and condition, reasonable wear and tear excepted, and make all needed and commercially reasonable repairs, renewals, replacements, additions or improvements thereto and immediately notify Lender of any event causing loss or depreciation in the value of the Borrower Collateral and the amount of such loss or depreciation to the extent any such loss or depreciation could reasonably be expected to cause a Material Adverse Effect;

SECTION 5.03. Defense of Borrower Collateral. Borrower shall use commercially reasonable efforts to defend the Borrower Collateral against all claims and  demands  of  all persons at any time claiming the same or any interest therein and, in the event Lender’s security interest in the Borrower Collateral, or any part thereof, would be impaired by  an  adverse decision, allow Lender to contest or defend any such claim or demand in Borrower’s name and pay, upon demand, Lender’s reasonable costs, charges and expenses, including, but not limited to, attorneys’ fees, incurred by Lender in connection therewith.

SECTION 5.04. Books and Records. The Borrower shall maintain adequate books, accounts and records in accordance with good accounting standards and practice. The Lender shall have the right, upon reasonable prior written notice, to examine such books and records (provided that such right shall not be exercised by Lender more than twice each calendar year absent the occurrence of a Material Adverse Effect or an Event of Default.

SECTION 5.05. Cash Covenant. Borrower shall on the dates set forth in Schedule 5.05 hereto, have cash on hand not less than the amounts set forth in such Schedule 5.05.

 

SECTION 5.06. Financial Statements, Reports. As applicable, the Borrower shall furnish or cause to be furnished to Lender the following: (i) on or before July 30th of each year for the fiscal year most recently ended, the annual financial statements with respect to Borrower and Guarantor and the Property showing Borrower’s and Guarantor’s balance sheet and income and expense statement and the annual rent roll, other income, and the detailed operating expenses of the Property, prepared by Guarantor’s chief financial officer or its designee in accordance with generally accepted accounting principles consistently applied; (ii) within forty-five (45) days after the end of each fiscal quarter of Borrower, the balance sheet and income and expense statement for the fiscal quarter most recently ended with respect to Borrower and Guarantor and the Property in such detail as Lender may reasonably require; (iii) for 2013 and all subsequent years, as soon as available and not later than thirty (30) days after the due date thereof, copies of all federal and State returns of: (1) Borrower if Borrower files its own tax returns or (2) the entity in whose tax returns Borrower is included for tax reporting purposes,  in  either  case together with all supporting schedules; (iv) for 2014 and all subsequent years, as  soon  as available and not later than 30 days after the due date thereof, copies of all federal and State tax returns filed by Guarantor, together with all supporting schedules; (v) such other information as to Borrower, the Guarantor and the Property as Lender may reasonably require from time to time, all in such form and detail as Lender may require; and (vi) such financial and other information with respect to tenants and prospective tenants of any part of the Property as Lender may reasonably require from time to time as available to Borrower and Guarantor. Borrower shall be deemed to have satisfied the financial delivery requirements of subsections (i) and (ii) herein above if Guarantor’s annual report on Form 10-K or quarterly reports on Form 10-Q, as applicable, prepared in accordance with the rules of the Securities and Exchange Commission, have been posted to EDGAR within the foregoing time frames, and Borrower has notified Lender that such report is available through EDGAR.

 

 

 

 

  

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SECTION 5.07. Taxes. Cause all assessments and taxes, whether real, personal, or otherwise, due or payable by, or imposed, levied, or assessed against Borrower or Guarantor or any of their assets to be paid in full, before delinquency or before the expiration of  any extension period, except to the extent that the validity of such assessment or tax shall be the subject of a Permitted Protest. Subject to Permitted Protests, Borrower will  make timely payment or deposit of all  tax payments and withholding taxes required of it and them by applicable laws, including those laws concerning F.I.C.A., F.U.T.A., State disability, and local, State, and federal income taxes, and will, upon request, furnish Lender with proof satisfactory to Lender indicating that Borrower has made such payments or deposits.

SECTION 5.08. Location of Borrower Collateral. Keep the Borrower Collateral only at the Property, the locations identified on Schedule 5.08(a), or at the Lender, and maintain the chief executive offices of Borrower only at the locations identified on Schedule 5.08(b); provided, however, that Borrower may amend Schedule 5.08(a) and Schedule 5.08(b) so long as such amendment occurs by written notice to Lender not less than 30 days prior to the date on which such Borrower Collateral is moved to such new location or such chief executive office is relocated, so long as such new location is within the continental United States, and so long as, at the time of such written notification, Borrower provides to Lender a Collateral Access Agreement with respect thereto.

SECTION 5.09. Compliance with Laws. Comply with the requirements of all applicable laws, rules, regulations, and orders of any Governmental Authority, other than laws, rules, regulations, and orders the non-compliance with which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.10. Leases. Pay when due all rents and other amounts payable under any leases to which Borrower or Guarantor is a party or by which Borrower’s  or Guarantor’s properties and assets are bound, unless such payments are the subject of a Permitted Protest.

SECTION 5.11. Tax and Insurance Deposits. To the extent required by the Mortgage, Borrower shall make or shall cause Guarantor to make deposits to pay the Impositions and insurance premiums, and such amounts shall be held and applied by Lender, in accordance with the terms of the Mortgage.

SECTION 5.12.  Intentionally Omitted.

SECTION 5.13. Laborers, Subcontractors and Materialmen. The Borrower will furnish to the Lender, upon request of the Lender at any time, and from time to time, affidavits listing all laborers, subcontractors, materialmen, and any other Persons who might or could claim statutory or common law liens and are furnishing or have furnished labor or material to the Property or any part thereof on behalf of Borrower or Guarantor, together with affidavits, or other evidence satisfactory to the Lender, showing that such parties have been paid all amounts then due for labor and materials furnished to the Property. Following payment in full to each applicable party, the Borrower will also use reasonable efforts to furnish to the Lender, at any time and from time to time upon demand by the Lender, lien waivers bearing a then current date and prepared on a form satisfactory to the Lender from the contractors, subcontractors or materialmen as the Lender may reasonably require.

 

 

 

 

  

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SECTION 5.14. Further Assurances. The Borrower will cooperate with, and will do such further acts and execute such further instruments and documents as the Lender shall reasonably request, to preserve and protect the Collateral and to carry out to its satisfaction the transactions contemplated by this Agreement and the other Loan Documents.

 

SECTION 5.15.  Loss of Priority. If this Agreement or any other Loan Document that purports to create a Lien, shall, for any reason, fail or cease to create a valid and perfected and, except to the extent permitted by the terms hereof or thereof, first priority Lien on or security interest in the Borrower Collateral covered hereby or thereby, except as a result of a disposition of the applicable Borrower Collateral in a transaction permitted under this Agreement, then Borrower shall promptly repay all of the Obligations in full.

	
  

	
VI.

	
NEGATIVE COVENANTS

Borrower covenants and agrees that, so long as any credit hereunder shall be available and until termination of this Agreement and payment in full of the Obligations, Borrower will not and will not permit Guarantor to do any of the following without the prior written consent of Lender:

SECTION 6.01. Indebtedness. Create, incur, assume, suffer to exist, guarantee, or otherwise become or remain, directly or indirectly, liable with respect to any Indebtedness, except:

(a)           Indebtedness evidenced by this Agreement and the other Loan Documents, and

(b)           Indebtedness  existing  on  the  Closing  Date  as  set  forth  on  Schedule  6.01(b) (including any extensions or renewals thereof).

 

(c)   Endorsement of instruments or other payment items for deposit.

SECTION 6.02. Loss of Priority Subject to the Permitted Liens, fail or cease to create a valid and perfected Lien (subject to Permitted Liens) on or security interest in the Borrower Collateral covered hereby or thereby, except as a result of a disposition of the applicable Borrower Collateral in a transaction permitted under this Agreement.

 

SECTION 6.03. Liens.  Create, incur, assume, or suffer to exist, directly or indirectly, any Lien on or with respect to any of its assets, of any kind, whether now owned or hereafter acquired, or any income or profits therefrom, except for Permitted Liens.

 

SECTION 6.04.  Restrictions on Fundamental Changes.

 

(a)         Enter into any merger, consolidation, reorganization, or recapitalization, or reclassify its Stock.

 

(b)         Liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution).

 

(c)         Convey, pledge, hypothecate, sell, lease, license, assign, transfer, or otherwise dispose of, in one transaction or a series of transactions, all or any substantial part of the Borrower Collateral, other than Permitted Dispositions.

 

 

  

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SECTION 6.05. Disposal of Assets. Other than Permitted Dispositions, convey, sell, lease, license, assign, transfer, or otherwise dispose of any of Borrower Collateral.

SECTION 6.06. Change Name. Change Borrower’s or Guarantor’s name, federal employer identification number, organizational identification number, State of organization or organizational identity; provided, however,  that Borrower and/or Guarantor may change its name upon at least thirty (30) days’ prior written notice to Lender of such change and so long as, at the time of such written notification, Borrower and/or Guarantor provides any financing statements necessary to perfect and continue perfected the Lender’s Liens.

SECTION 6.07. Nature of Business. Make any change in the principal nature of its or their business.

 

SECTION 6.08. Prepayments and Amendments. Except in connection  with  the Permitted Payments provided in Section 6.10, optionally prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness of Borrower, other than the Obligations in accordance with this Agreement.

SECTION 6.09. Change of Control. Cause, permit, or suffer, directly or indirectly, any change of Control of Borrower.

SECTION 6.10. Restricted Payments. Make any Restricted  Payment;  provided, however, that, so long as no default or Event of Default shall have occurred and be continuing or would occur as a result thereof and Lender shall have received the financial statements required by Section 5.06, then Borrower may pay quarterly dividends to Guarantor in an amount not to exceed $750,000 provided Guarantor uses such dividends solely to fund Guarantor’s  operating budget.

SECTION 6.11. Accounting Methods. Modify or change its fiscal year or its method of accounting (other than as may be required to conform to GAAP) or enter into, modify, or terminate any agreement currently existing, or at any time hereafter entered into with any third party accounting firm or service bureau for the preparation or storage of Borrower’s or Guarantor’s accounting records  without said accounting firm or service bureau agreeing to provide Lender information regarding Borrower’s or Guarantor’s financial condition.

 

SECTION 6.12.  Investments.  Directly or indirectly, make or acquire any Investment or incur any liabilities (including contingent obligations) for or in connection with any Investment.

SECTION 6.13. Transactions with Affiliates. (a) Sell, lease, assign, transfer, convey, license or otherwise dispose of any of Borrower’s property to any Affiliate or (b) directly or indirectly enter into or permit to exist any other transaction with any Affiliate of Borrower except for transactions that (i) are in the ordinary course of Borrower’s business, (ii) are upon fair and reasonable terms, (iii) are fully disclosed to Lender, and (iv) are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-Affiliate.

 

 

 

 

  

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SECTION 6.14. Change of Business. Suspend or change a substantial portion of its or their business.

SECTION 6.15. Use of Proceeds. Use the proceeds of the Term Loan for any purpose other than on the Closing Date, to pay transactional fees, costs and expenses incurred in connection with this Agreement and, the other Loan Documents for the purposes set forth in Section 2.09, and the transactions contemplated hereby and thereby.

SECTION 6.16. Borrower Collateral with Bailees. Store any Borrower Collateral at any time now or hereafter with a bailee, warehouseman, or similar party, other than a custodian for the benefit of Lender.

SECTION 6.17. Borrower’s Actions with Guarantor; Correction Statements. Neither Borrower nor Guarantor shall file a correction statement relating to the Borrower Collateral or to any financing statement or fixture filing filed by Lender without Lender’s prior written consent. Borrower and the Borrower Subsidiaries acknowledge and agree that any pledge, mortgage or any security interest, lien or other encumbrance in any of the Borrower Collateral in favor of any person, other than Lender or as otherwise permitted under this Agreement, without Lender’s express permission, will  violate the rights of Lender and Lender may note this fact on any financings statement, fixture filing or other record filed by Lender.

	
  

	
VII.

	
CREATION OF SECURITY INTEREST.

SECTION 7.01. Grant of Security Interest. Subject to the Permitted Liens, Borrower hereby grants  to Lender, for the benefit of Lender, a continuing security interest  in all of Borrower’s right, title, and interest in all currently existing and hereafter acquired or arising: (i) Borrower Note A Collateral in order to secure prompt repayment of any and all of the Obligations under Note A; and (ii) Borrower Note B Collateral in order to secure prompt repayment of any and all Obligations under Note B, in accordance with the terms and conditions of the Loan Documents and in order to secure prompt performance by Borrower of each of its covenants and duties under the Loan Documents. The Lender’s Liens in and to the Borrower Note A Collateral shall attach to all Borrower Note A Collateral without further act on the part of Lender or Borrower. The Lender’s Lien in and to the Borrower Note B Collateral shall attach to all Borrower Note B Collateral without further act on the part of Lender or Borrower. Except as permitted by this Agreement or any other Loan Document,  neither Borrower nor the Guarantor has authority, express or implied, to dispose of any item or portion of the Borrower Note A Collateral or the Borrower Note B Collateral other than Permitted Dispositions

SECTION 7.02. Negotiable Collateral. In the event that any Borrower Note A Collateral and/or any Borrower Note B Collateral, including proceeds, is evidenced by or consists of Negotiable Collateral, and if and to the extent that Lender determines that perfection or priority of Lender’s security interest is dependent on or enhanced by possession, Borrower, promptly upon the request of Lender, shall endorse and deliver physical possession of such Negotiable Collateral and all agreements and documents related thereto to Lender, provided such Negotiable Collateral is not being held by another secured party as otherwise permitted under this Agreement.

 

 

 

 

  

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SECTION 7.03. Collection of Accounts, General Intangibles, and Negotiable Collateral. At any time after the occurrence and during the continuation of an Event of Default, Lender or Lender’s designee may (a) notify Account Debtors of Borrower that Borrower’s Accounts, chattel paper, or General Intangibles have been assigned to Lender or that Lender has a security interest therein, (b) cause a servicer to take possession of, and collect, Borrower’s Accounts, or (c) collect Borrower’s Accounts, chattel paper, or General Intangibles directly and charge the collection costs and expenses to the balance of the Term Loan. At any time after the occurrence and during the continuation of an Event of Default, Borrower agrees that it will hold in trust for Lender, as Lender’s trustee, any of its Collections that it receives and immediately will deliver such Collections to Lender in their original form as received by Borrower.

SECTION 7.04. Filing of Financing Statements; Commercial Tort Claims; Delivery of Additional Documentation Required. Borrower authorizes Lender to file any financing statement necessary or desirable to effectuate the transactions contemplated by the Loan Documents, and any continuation statement or amendment with respect thereto, in any appropriate filing office without the signature of Borrower where permitted by applicable law. Borrower hereby ratifies the filing of any financing statement filed without the signature of Borrower prior to the date hereof. At any time upon the request of Lender, Borrower shall execute or deliver to Lender any and all fixture filings, security agreements, pledges, assignments, endorsements of certificates of title, and all other documents (collectively, the “Additional Documents”) that Lender may request in its reasonable discretion, in form and substance satisfactory to Lender, to create, perfect, and continue perfected or to better perfect the Lender’s Liens in the Borrower Collateral (whether now owned or hereafter arising or acquired, tangible or intangible, real or personal), to create and perfect Liens in favor of Lender in any Borrower Collateral acquired after the Closing Date, and in order to fully consummate all of the transactions contemplated hereby and under the other Loan Documents. To the maximum extent permitted by applicable law, Borrower authorizes Lender to file such executed Additional Documents in any appropriate filing office.

SECTION 7.05. Power of Attorney.  Borrower hereby irrevocably makes, constitutes, and appoints Lender (and any of Lender’s officers, employees, or agents designated by Lender) as Borrower’s true and lawful attorney, with power to (a) if Borrower refuses to, or fails timely to execute and deliver any of the documents described in Section 7.04, sign the name of Borrower on any of the documents described in Section 7.04, (b) at any time that an Event of Default has occurred and is continuing, sign Borrower’s name on any invoice or bill of lading relating to the  Borrower  Collateral,  drafts against Account Debtors,  or  notices to Account Debtors, (c) at any time that a Material Adverse Effect or an Event of Default has occurred and is continuing, send requests (or make telephone inquiry) for verification of Borrower’s Accounts, (d) at any time that an Event of Default has occurred and is continuing, endorse Borrower’s name on any of its payment items (including all of its Collections) that may come into Lender’s possession, (e) at any time that an Event of Default has occurred and is continuing, make, settle, and adjust all claims under Borrower’s policies of insurance and make all determinations and decisions with respect to such policies of insurance, and (f) at any time that an Event of Default has occurred and is continuing, settle and adjust disputes and claims respecting Borrower’s Accounts, chattel paper, or General Intangibles directly with Account Debtors, for amounts and upon terms that Lender determines to be reasonable, in Lender’s discretion, and Lender may cause to be executed and delivered any documents and releases that Lender determines to be necessary. The appointment of Lender as Borrower’s attorney, and each and every one of its rights and powers, being coupled with an interest, is irrevocable until all of the Obligations have been fully and finally repaid and performed and Lender’s obligations to extend credit hereunder are terminated.

 

 

 

 

  

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SECTION 7.06. Right to Inspect and Verify. Lender (through any of its officers, employees, or agents) shall have the right, from time to time hereafter (i) to inspect the Books and make copies or abstracts thereof, during normal business hours, (ii) upon reasonable prior written notice to Borrower not more than once each calendar year absent the occurrence of a Material Adverse Effect or an Event of Default, (iii) at any time that a Material Adverse Effect or an Event of Default has occurred and is continuing, to communicate directly with any and all Account Debtors to verify the existence and terms thereof, (iv) at any time that a Material Adverse Effect or Event of Default has occurred and is continuing, to check, test, and appraise the Borrower Collateral, or any portion thereof, in order to verify Borrower’s financial condition or the amount, quality, value, condition of, or any other matter relating to, the Borrower Collateral; and (v) at any time that a Material Adverse Effect or an Event of Default has occurred and is continuing, Borrower shall permit any designated representative of Lender to visit and inspect any of the properties of the Borrower to inspect and to discuss its finances and properties and Borrower Collateral, upon reasonable notice and at such reasonable times during normal business hours and as often as may be reasonably requested.

 

	
  

	
VIII.

	
EVENTS OF DEFAULT.

SECTION  8.01. Events of Default. Any one or more of the following events shall constitute an event of default (each, an “Event of Default”) under this Agreement:

 

(a)           If Borrower fails to pay when due and payable, or when declared due and payable, all or any portion of the Obligations (whether of principal, interest (including any interest which, but for the provisions of the Bankruptcy Code, would have accrued on such amounts), fees and charges due Lender, reimbursement of Lender Expenses, or other amounts constituting Obligations);

(b)           If Borrower fails to (a) perform, keep, or observe any covenant or other provision contained in Sections 5.04, 5.06, 5.07, 5.08 or 5.09 hereof and such failure continues for fifteen (15) days after written notice from Lender, (b) perform, keep, or observe any covenant or other provision contained in any Section of this Agreement (other than a Section that is expressly dealt with elsewhere in this Section 8.01), or the other Loan Documents, and such failure continues for fifteen (15) days after written notice from Lender, or (c) perform, keep, or observe any covenant or other provision contained in Section 5 (other than a subsection of Section 5 that is expressly dealt with elsewhere in this Section 8.01), or Section 6 of this Agreement or any comparable provision contained in any of the other Loan Documents;

(c)           If any material portion of Borrower’s assets or the Guarantor’s assets is attached, seized, subjected to a writ or distress warrant, levied upon, or comes into the possession of any third Person and such failure continues for fifteen (15) days after written notice from Lender;

 

(d)           If a Bankruptcy Proceeding is commenced by Borrower or any Guarantor;

(e)           If a Bankruptcy Proceeding is commenced against the Borrower or Guarantor, and any of the following events occur: (a) the Borrower, or any Guarantor consents to the institution of such Bankruptcy Proceeding against it, (b) the petition commencing the Bankruptcy Proceeding is not timely controverted; provided, however, that, during the pendency of such period, Lender shall be relieved of its obligations to extend credit hereunder, (c) the petition commencing the Bankruptcy Proceeding is not dismissed within 45 calendar days of the date of the filing thereof; provided, however, that, during the pendency of such period, Lender shall be relieved of its obligation to extend credit hereunder, (d) an interim trustee is appointed to take possession of all or any substantial portion of the properties or assets of, or to operate all or any substantial portion of the business of the Borrower or any Guarantor, or (e) an order for relief shall have been entered therein;

(f)           If Borrower or any Guarantor is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs and such event continues for twenty (20) days after written notice from Lender;

(g)           If a notice of Lien, levy, or assessment is filed of record with respect to any of Borrower’s or any Guarantor’s assets by the United States, or any department, agency, or instrumentality thereof, or by any State, county, municipal, or governmental agency, or if any taxes or debts owing at any time hereafter to any one or more of such entities becomes a Lien, whether choate or otherwise, upon any of Borrower’s or any Guarantor’s assets and the same is not paid before such payment is delinquent, and such event continues for twenty (20) days after written notice from Lender without being discharged, satisfied, vacated or bonded;

 

 

 

 

  

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(h)            Judgment or other claim in an amount in excess of $5,000.00 becomes a Lien or encumbrance upon any material portion of Borrower’s or any Guarantor’s assets or any Borrower Collateral, except for judgments and claims disclosed to Lender, in writing, prior to the date hereof, and such event continues for twenty (20) days after written notice from Lender without being discharged, satisfied, vacated or bonded;

(i)           If there is a default with respect to any agreement relative to Borrower’s Indebtedness, the termination of which is reasonably likely to result in a Material Adverse Effect, and such default (a) occurs at the final maturity of the obligations thereunder, or (b) results in a right by the other party thereto, irrespective of whether exercised, to accelerate the maturity of Borrower’s or such Guarantor’s obligations thereunder, to terminate such agreement or to refuse to renew such agreement in accordance with an automatic renewal right therein, and such event described in clause (a) or (b) continues for twenty (20) days after written notice from Lender;

 

(j)           If Borrower makes any payment on account of Indebtedness, except for payments under the Loan Documents and payments otherwise expressly permitted under this Agreement, and such default is not cured within twenty (20) days after written notice from Lender;

(k)           If any material misstatement or misrepresentation exists as of the date when made or deemed made, in any warranty, representation, statement, or Record made to Lender by Borrower any Guarantor or any officer, employee, agent, or director of Borrower or any Guarantor;

(l)           If this Agreement or any other Loan Document that purports to create a Lien, shall, for any reason, fail or cease to create a valid and perfected and, except to the extent permitted by the terms hereof or thereof including with regard to the Permitted Liens, first priority Lien on or security interest in the Borrower Collateral covered hereby or thereby, except as a result of a disposition of the applicable Borrower Collateral in a transaction permitted under this Agreement, and such event continues for fifteen (15) days after written notice from Lender;

 

(m)           Any provision of any Loan Document shall at any time for any reason be declared to be null and void, or the validity or enforceability thereof shall be contested by Borrower or any Guarantor, or a proceeding shall be commenced by Borrower or any Guarantor, or by any Governmental Authority having jurisdiction over Borrower seeking to establish the invalidity or unenforceability thereof, or Borrower or Guarantor, shall deny that Borrower or any Guarantor has any liability or obligation purported to be created under any Loan Document;

(n)           If any Executive Officer of Borrower shall become unable to perform, or cease to be employed in his current position with Borrower and shall not be replaced within 90 days by an individual with comparable education,  experience  and other  qualifications or  otherwise acceptable to Lender in its sole discretion;

(o)           If Borrower is in default of the Utica Loan including under any of the Utica Senior Debt Documents; or

(q)           If any default or event of default as defined or described in any of the other Loan Documents occurs and is not cured within the applicable cure period, if any.

 

 

 

 

  

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IX.

	
LENDER’S RIGHTS AND REMEDIES.

SECTION 9.01. Rights and Remedies. Upon the occurrence, and during the continuation, of an Event of Default, the Lender (at its election but without notice of its election and without demand) may do any one or more of the following, all of which are authorized by the Borrower:

(a)           Declare all or any portion of the Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable without presentment, demand, protest, or notice of any kind, all of which are expressly waived by Borrower;

 

(b)           Terminate this Agreement and any of the other Loan Documents as to any future liability or obligation of Lender, but without affecting any of the Lender’s Liens in the Borrower Collateral and without affecting the Obligations;

(c)           Without notice to or demand upon Borrower or any Guarantor, make such payments and do such acts as Lender considers necessary or reasonable to protect its security interests in the Borrower Collateral. Borrower agrees to assemble the Borrower Collateral if Lender so requires, and to make the Borrower Collateral available to Lender at a place that Lender may designate which is reasonably convenient to both parties. Borrower authorizes Lender to enter the premises where the Borrower Collateral is located, to take and maintain possession of the Borrower Collateral, or any part of it, and to pay, purchase, contest, or compromise any Lien that in Lender’s reasonable determination, appears to conflict with the priority of Lender’s Liens in and to the Borrower Collateral and to pay all reasonable expenses incurred in connection therewith and to charge to the balance of the Term Loan. With respect to any of Borrower’s owned or leased premises, Borrower hereby grants to Lender a license to enter into possession of such premises and to occupy the same, without charge, in order to exercise any of Lender’s rights or remedies provided herein, at law, in equity, or otherwise;

(d)           Without notice to Borrower (such notice being expressly waived), and without constituting an acceptance of any collateral in full or partial satisfaction of an obligation (within the meaning of the Code), set off and apply to the Obligations any and all (i) balances and deposits of Borrower held by Lender, or (ii) Indebtedness at any time owing to or for the credit or the account of Borrower held by Lender;

 

(e)   Terminate any commitment to lend hereunder; and 

 

(f)              Lender shall have all other rights and remedies available at law or in equity or pursuant to any other Loan Document.

The rights and remedies of Lender under this Agreement, the other Loan Documents, and all other agreements shall be cumulative. Lender shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by Lender of one right or remedy shall be deemed an election, and no waiver by Lender of any Event of Default shall be deemed a continuing waiver. No delay by Lender shall constitute a waiver, election, or acquiescence by it. In the event of an Event of Default which is not cured within any applicable cure period, Borrower  agrees to cooperate with Lender  to assemble and to liquidate the Borrower Collateral.

 

	
  

	
X.

	
MISCELLANEOUS

SECTION 10.01. Notices. All notices, requests and other communications provided for hereunder shall  be in writing and shall  be deemed to have been duly given or made when delivered by hand at the address set forth below, or if sent by certified mail, three days after the day on which mailed, or, in the case of an overnight courier service, one business day after delivery to such courier service, addressed as set  forth below, or to such other address the respective parties hereto may hereafter designate in writing:

 

 

 

  

24

  

 

 

	
(a)

	
if to Lender, at

	  	  
	  	
c/o Revere High Yield Fund, LP 

105 Rowayton Avenue, Suite 100

	  	
Rowayton, CT 06853 

Attention:  Clark Briner

	  	  
	  	
with a copy to:

	  	  
	  	
Mayo Crowe LLC 

CityPlace II

	  	
185 Asylum Street

	  	
Hartford, Connecticut 06103 

Attention:  Katherine F. Troy

	 	 
	
(b)

	
if to the Borrower, in the name of Borrower at: 

	  	  
	 	Ranor, Inc.
	  	
1 Bella Drive

	  	
Westminster, MA 01473

	  	  
	  	
with a copy to:

	 	 
	  	
William A. Scari, Jr.

	 	PepperHamilton LLP
	 	400 Berwyn Park
	  	
899 Cassatt /Road

	  	
Berwyn, PA 19312-1183

	  	  
	
(c)

	
as to each such party at such other address as such party  shall have designated to the other in a written notice complying as to delivery with the provisions of this Section 10.01.

SECTION 10.02. Survival of Agreement; Successors and Assigns. (a) All covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the making by Lender of the Loan and the execution and delivery to Lender of the Note, and shall continue in full force and effect so long as any of the Note is outstanding and unpaid or such longer period if expressly set forth in this Agreement.

(b) Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party. All covenants, promises and agreements by or on behalf of the Borrower which is contained in this Agreement shall bind and inure to the benefit of the respective successors and assigns of the Lender. 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 Lender shall not have any obligation to any Person not a party to this Agreement or the other Loan Documents including without limitation, legal fees of Lender’s counsel, UCC insurance costs, UCC Search fees, filing fees and the origination fee set forth in Section 4.09.

 

 

 

 

  

25

  

 

SECTION 10.03.  Expenses of the Lender; Indemnification.

 

(a)     The Borrower will pay all reasonable out-of-pocket costs and expenses incurred by the Lender in connection with the preparation, development and execution of this Agreement and the other Loan Documents.

(b)      The Borrower agrees to indemnify the Lender and its respective directors, officers, employees and agents against, and to hold the Lender and each such person harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable counsel fees and expenses, actually incurred by or asserted against the Lender or any such person arising out of, in any way connected  with, or  as a result of  (i) this Agreement or  the other Loan Documents, (ii) the breach of any representation or warranty or (iii) any claim, litigation, investigation or proceedings relating to any of the foregoing, whether or not the Lender or any such person is a party thereto; provided, however, that such indemnity shall not, as to the Lender, apply to any such losses, claims, damages, liabilities or related expenses to the extent that they result solely from the negligence or misconduct of the Lender.

(c)     The provisions of this Section 10.03 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of the Loan, the invalidity or unenforceability of any term or provision of this Agreement or any of the Loan Documents, or any investigation made by or on behalf of the Lender. All amounts due under this Section 10.03 shall be payable on written demand therefor.

SECTION 10.04. Applicable Law. This Agreement, the Note and the other Loan Documents shall be governed and construed by and interpreted in accordance with the laws of the  Commonwealth of Massachusetts, without regard to conflict of law provisions thereof.

SECTION 10.05.  Waiver of Rights by the Lender; Waiver of Jury Trial, etc.

 

(a)           Neither any failure nor any delay on the part of the Lender in exercising any right, power or privilege hereunder or under the Loan Documents shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any other right, power or privilege. Except as prohibited by law, each party hereto hereby waives any right it may have to claim or recover in any litigation referred to in this Section any special, exemplary, punitive or consequential damages or any damages other than, or in addition to, actual damages. Each party hereto (i) certifies that neither any representative, agent or attorney of the Lender has represented, expressly or otherwise, that the Lender would not, in the event of litigation, seek to enforce the foregoing waivers and (ii) acknowledges that it has been induced to enter into this Agreement or the Loan Documents, as applicable, by, among other things, the mutual waivers and certifications herein.

 

(b)           THE BORROWER AND THE LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM OR ACTION IN ANY WAY, INVOLVING OR ARISING, DIRECTLY OR INDIRECTLY, OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

 

 

 

 

  

26

  

SECTION 10.06.  Acknowledgments. The Borrower acknowledges that:

 

(a)           it has been advised by counsel in the negotiation, execution and delivery of this Agreement, the Note and the other Loan Documents;

(b)           the Lender does not have any fiduciary relationship with the Borrower and the relationship between the Lender, on one hand, and the Borrower, on the other hand, is solely that of debtor and creditor; and

 

(c)           no joint venture exists between the Borrower and the Lender.

SECTION 10.07.  Consent to Jurisdiction. (a)  The Borrower hereby irrevocably submits to the non-exclusive jurisdiction of any United States federal or Massachusetts State court in any action or proceedings arising out of or relating to any Loan Documents and the Borrower hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in any such court and irrevocably waives any objection it may now or hereafter have as to the venue of any such action or proceeding brought in such a court or the fact that such court is an inconvenient forum.

(b)      The Borrower irrevocably and unconditionally consents to the service or process in any such action or proceeding in any of the aforesaid courts by the mailing of copies of such process to them by certified or registered mail at its address specified in Subsection 10.01.

SECTION 10.08. Extension of Maturity. Except as otherwise expressly provided herein, whenever a payment to be made hereunder shall fall due and payable on any day other than a Business Day, such payment may be made on the next succeeding Business Day and such extension of time shall be included in computing interest.

SECTION 10.09. Modification of Agreement. No modification, amendment or waiver of any provision of this Agreement or the Note shall in any event be effective unless the same shall be in writing and signed by the Lender and the Borrower and then such waiver, amendment or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in the same, similar or other circumstance.

SECTION 10.10. Participations and Assignments. The  Borrower may not assign or transfer any of its interests under this Agreement, the Note or the Loan Documents without the prior written consent of the Lender.

 

 

 

 

  

27

  

 

SECTION 10.11. Reinstatement; Certain Payments. If a claim is ever made upon the Lender for repayment or recovery of any amount or amounts received by the Lender in payment or on account of any of the obligations under this Agreement, the Lender shall give prompt notice of such claim to the Borrower, and if the Lender repays all or part of said amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over the Lender or any of its property, or (ii) any settlement or compromise of any such claim effected by the Lender with any such claimant, entered into after consultation with Borrower, then and in such event the Borrower agrees that any such judgment, decree, order, settlement or compromise shall be binding upon such Borrower notwithstanding the cancellation of the Note or other instrument evidencing the obligations under this Agreement or the termination of this Agreement, and the Borrower shall be and remain liable to the Lender hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by the Lender.

SECTION 10.12. Right of Setoff. In addition to any rights and remedies of the Lender provided by law, the Lender is hereby authorized, following and during the continuance of an Event of Default, to the fullest extent permitted by law, to set off and apply any monies held by the Lender to or for the credit or the account of the Borrower against any and all of  the obligations of the Borrower now and hereafter existing under this Agreement, the Note or the other Loan Documents held by the Lender, irrespective of whether or not the Lender shall have made any demand under this Agreement, the Note or the other Loan Documents and although such obligations may be in any currency, direct or indirect, absolute or contingent, matured or unmatured. The Lender agrees to promptly notify the Borrower after any such setoff and application made by the Lender, but the failure to give such notice shall not affect the validity of such setoff and application. The rights of the Lender under this Section are in addition to other rights and remedies which the Lender may have.

 

SECTION 10.13. Severability. In case any one or more of the provisions contained in this Agreement or in the Note should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby.

SECTION 10.14. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument.

SECTION 10.15.  Entire Agreement; Cumulative Remedies.

 

(a)           This Agreement, the Note and the other Loan Documents constitute the entire agreement among the parties hereto and thereto as to the subject matter hereof and thereof and supersede any previous agreement, oral or written, as to such subject matter.

(b)           The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law.

 

SECTION 10.16. Headings. Section headings used herein are for convenience  of reference only and are not to affect the construction of or be taken into consideration in interpreting this Agreement.

SECTION 10.17. Exhibits and Schedules.  Exhibits A-1, A-2, B, C and D and Schedules P, 5.05, 5.08(a), and 5.08(b) shall constitute an integral part of this Agreement.

SECTION 10.18.  Intentionally Omitted.

 

SECTION 10.19. Cross Default and Cross Collateral. In furtherance of prior provisions hereof, Borrower, each Guarantor and the mortgagor under the Mortgage, agree and acknowledge that the occurrence of an Event of Default under the terms of this Agreement shall constitute an Event of Default under the Note, the Mortgage, and the other Loan Documents and under the documents evidencing any other loan now existing or hereafter made by Lender to Borrower which is secured by all or any portion of the Borrower Collateral, including without limitation, the Property.  The security interests, liens and other rights and interests in and relative to any of the Borrower Collateral now or hereafter granted to Lender by Borrower by or in any instrument or agreement, including but not limited to this Agreement and the other Loan Documents shall serve as security for any and all liabilities of Borrower to Lender, including but not limited to the liabilities described in this Agreement, the Note, the Mortgage, and the other Loan Documents and, for the repayment thereof, Lender may resort to any security held by it in such order and manner as it may elect

 

 

 

[Remainder of Page Intentionally Left Blank; Signature Page to Follow]

 

 

  

28

  

 

 

IN WITNESS WHEREOF, the Borrower and the Lender have caused this Agreement to be duly executed by their duly authorized officers, all of the day and year first above written.

 

	  	 	 	
LENDER:

	  	 	 	  
	  	 	 	
REVERE HIGH YIELD FUND, LP,

	  	 	 	
a Delaware limited partnership

	 	 	 	 
	  	 	 	
By:  Revere GP, LLC, its General Partner

	 	 	 	 
	  	 	 	
By:  /s/ Clark Briner

	  	 	 	
    Name:  Clark Briner

	  	 	 	
    Title:  Manager

	  	 	 	  
	  	 	 	  
	  	 	 	  
	
STATE OF CONNECTICUT     

	 )	 	
 

	 	 )	
ss: Westport

	 
	
COUNTY OF FAIRFIELD      

	 )	 	
 

 

On this the 19th day of December, 2014, before me, the undersigned officer, personally appeared Clark Briner who acknowledged himself to be the Manager of Revere GP, LLC, the General Partner of REVERE HIGH YIELD FUND, LP, and that he, in such capacity, being authorized so to do, executed the foregoing instrument for the purposes therein contained on behalf of such entity, as his and its free act and deed.

 

IN WITNESS WHEREOF, I hereunto set my hand.

 

	 	/s/ Richard L. Morin Sr.
	 	
Notary Public

	 	
My Commission Expires:

 

 

[Signature Page to Term Loan and Security Agreement]

 

 

 

  

  

  

 

 

	 	 	 	
BORROWER:

	 	 	 	 
	 	 	 	
RANOR, INC.,

	 	 	 	
a Delaware corporation

	 	 	 	 
	 	 	
By: 

	/s/ Alexander Shen
	 	 	 	
Name: Alexander Shen

	 	 	 	
Title: President

	 	 	 	 
	
THE COMMONWEALTH OF MASSACHUSETTS

	
§

	 	
  

	 	
§ss.

	 	 
	
COUNTY OF WORCESTER

	
§

	 	
  

	 	 	 	 

 

 

On  this 19th day of December, 2014, personally appeared Alexander Shen, President of RANOR, INC., signer and sealer of the foregoing instrument, and acknowledged the same to be his free act and deed in his capacity as President, and the free act and deed of RANOR, INC., before me.

	 	/s/ Richard L. Morin Sr.
	  	
Name: Richard L. Morin Sr.

	 	
Notary Public,

	  	
My Commission Expires:

	  	  

 

 

[Signature Page to Term Loan and Security Agreement - continued]

 

 

 

 

  

  

  

 

EXHIBIT A-1 & A-2

 

TERM NOTES

 

 

 

 

  

  

  

 

 

Exhibit A-1 to Term Loan and Security Agreement

 

 

TERM NOTE

 

 

	$1,500,000.00	December          , 2014
	 	 
	 	 

 

FOR VALUE RECEIVED, the undersigned, RANOR, INC., a Delaware corporation with an address of Bella Drive, Westminster, Massachusetts 01473 (the "Borrower"), DOES HEREBY PROMISE to pay to the order of REVERE HIGH YIELD FUND, LP, a Delaware limited partnership (the "Lender"), at the office of the Lender at 105 Rowayton Avenue, Suite 100, Rowayton, Connecticut 06853, in lawful money of the United States of America, in immediately available funds, the maximum principal amount of ONE MILLION FIVE HUNDRED THOUSAND 00/100 DOLLARS ($1,500,000.00) or so much thereof as may be advanced to Borrower pursuant to this Term Note and the Agreement (as hereinafter  defined)  payable  as follows: (i) payments of interest only on advanced principal on the first day of each month (a “Payment Date”), commencing on February 1, 2015 until and including the Payment Date immediately prior to the Maturity Date; and (ii) a balloon payment of the advanced principal balance plus any accrued and unpaid interest on the Maturity Date of December 31, 2015, provided, however, that Borrower may elect to extend the Maturity Date for a period of six (6) months to June 30, 2016 conditioned upon  Borrower providing to Lender, on or before the date which is sixty (60) days prior to the initial Maturity Date but no more than ninety (90) days prior to the initial Maturity Date: (a) written notice to Lender of its election to so extend, and (b) payment to Lender of an extension fee in the amount of Fifteen Thousand and No/100  Dollars  ($15,000.00). Interest hereunder shall accrue from the date hereof on the unpaid principal amount hereof at a rate equal to twelve percent (12%) per annum on the basis of the actual days elapsed on the assumption that each month contains thirty (30) days and each  year contains three hundred sixty (360) days, multiplied by the actual number of days elapsed, in like money, at said office, as more specifically set forth in Article II of that certain Term Loan and Security Agreement dated as of the date hereof (the “Agreement”) and, upon a default, at a rate of the lesser of: (A) twenty-four percent (24%) per annum, or (B) the highest rate of interest permitted under the laws of the Commonwealth of Massachusetts.

This Term Note is given to evidence an actual loan (the “Loan”) in the maximum principal amount of $1,500,000.00, and is the Term Note referred to as “Note A” in Section 2.02 of the Agreement, and is subject to prepayment and acceleration of maturity as set forth in the Agreement. This Term Note is secured by, among other things, that certain Mortgage Deed, Assignment of Leases and Rents, Security Agreement  and Fixture Filing from Borrower in favor of Lender, Guaranty of Guarantor and Financing Statement from Borrower in favor of Lender (the “Security Instrument”). All terms defined in the Agreement are used herein with their defined meanings unless otherwise provided.

This Term Note shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts and any applicable laws of the United States of America.

 

 

 

 

  

  

  

 

 

Exhibit A-1 to Term Loan and Security Agreement

The Lender shall have the absolute right to sell and/or assign this Term Note and the Security Instrument, in whole or in part, and/or to enter into one or more participation agreements concerning this Term Note and the Security Instrument. If Lender gives written notice of any such sale(s), assignment(s) and/or participation(s) to Borrower, Borrower shall make, or cause to be made, payments to such subsequent holder(s) or participant(s), as the case may be.

If any term of this Term Note, or the applications hereof to any person or set of circumstances, shall to any extent be invalid, illegal, or unenforceable, the remainder of this Term Note, or the application of such provision or part thereof to persons or circumstances other than those as to which it is invalid, illegal, or unenforceable, shall not be affected thereby, and each term of this Term Note shall be valid and enforceable to the fullest extent consistent with applicable law and this Term Note shall be interpreted and construed as though such invalid, illegal, or unenforceable term or provision (or any portion thereof) were not contained in this Term Note.

Borrower and all other parties liable hereunder, whether as principal, endorser or otherwise, hereby severally waive presentment, demand for payment, protest and notice of dishonor and waive recourse to defenses generally, including extensions  of  time, release of security or other indulgences that may be granted by Lender to Borrower or any other party liable hereon, and also agree to pay all costs of collection, including reasonable attorneys’ fees incurred by Lender in connection with enforcement of any of Lender’s rights hereunder or under any other document in connection with, securing or evidencing this Term Note.

BORROWER AND ANY SUBSEQUENT ENDORSER, GUARANTOR OR OTHER ACCOMMODATION BORROWER WAIVE PRESENTMENT, DEMAND FOR PAYMENT AND NOTICE OF DISHONOR, TOGETHER WITH ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS TERM NOTE OR UNDER ANY AGREEMENT, INSTRUMENT OR OTHER DOCUMENT CONTEMPLATED HEREBY OR RELATED HERETO AND IN ANY ACTION DIRECTLY OR INDIRECTLY RELATED TO OR CONNECTED WITH THE OBLIGATIONS PROVIDED FOR HEREIN, OR ANY CONDUCT  RELATING TO THE ADMINISTRATION OR ENFORCEMENT OF SUCH OBLIGATIONS OR ARISING FROM THE DEBTOR/CREDITOR RELATIONSHIP OF THE PARTIES HERETO. BORROWER ACKNOWLEDGES THAT THIS WAIVER MAY DEPRIVE IT OF AN IMPORTANT RIGHT AND THAT SUCH WAIVER HAS WILLINGLY,  KNOWINGLY AND VOLUNTARILY BEEN AGREED TO BY BORROWER.

BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COMMONWEALTH OF MASSACHUSETTS AND WAIVES PERSONAL SERVICE OF  ANY  AND ALL PROCESS UPON BORROWER, AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO BORROWER AT THE ADDRESS AS SET FORTH IN THIS TERM NOTE AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. BORROWER WAIVES ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND WILLINGLY, KNOWINGLY AND VOLUNTARILY CONSENTS TO THE GRANTING OF ANY SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.

 

 

 

 

  

2

  

 

 

Exhibit A-1 to Term Loan and Security Agreement

 

BORROWER ACKNOWLEDGES AND REPRESENTS THAT THE LOAN EVIDENCED BY THIS TERM NOTE IS A COMMERCIAL  TRANSACTION AND THAT THE PROCEEDS OF THE LOAN SHALL NOT BE USED FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES. BORROWER AND ANY SUBSEQUENT ENDORSER, GUARANTOR OR OTHER ACCOMMODATION BORROWER HEREBY WILLINGLY, KNOWINGLY AND VOLUNTARILY WAIVE (TO THE MAXIMUM EXTENT PERMITTED BY LAW) ANY RIGHTS TO NOTICE OR HEARING OR AS OTHERWISE REQUIRED BY ANY LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE HOLDER MAY ELECT TO USE OR WHICH IT MAY AVAIL ITSELF. BORROWER FURTHER WAIVES, TO THE GREATEST EXTENT PERMITTED BY LAW, THE BENEFITS OF ALL PRESENT AND FUTURE VALUATION, APPRAISEMENT, EXEMPTION, STAY, REDEMPTION AND MORATORIUM LAWS. BORROWER FURTHER WAIVES ANY REQUIREMENTS THAT HOLDER OBTAIN  A BOND OR ANY SIMILAR DEVICE IN CONNECTION WITH THE EXERCISE OF ANY REMEDY OR THE ENFORCEMENT OF ANY RIGHT HEREUNDER OR PERTAINING TO THE LOAN.

BORROWER HEREBY EXPRESSLY AND UNCONDITIONALLY, WILLINGLY, KNOWINGLY AND VOLUNTARILY WAIVES, IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT BY OR ON BEHALF OF LENDER ON THIS TERM NOTE, ANY AND EVERY RIGHT BORROWER MAY HAVE TO (I) INJUNCTIVE RELIEF, (II) INTERPOSE ANY COUNTERCLAIM THEREIN (OTHER THAN COMPULSORY COUNTERCLAIMS), AND (III) HAVE THE SAME CONSOLIDATED WITH ANY OTHER OR SEPARATE SUIT, ACTION OR PROCEEDING. NOTHING HEREIN CONTAINED SHALL PREVENT OR PROHIBIT BORROWER FROM INSTITUTING OR MAINTAINING A SEPARATE ACTION AGAINST LENDER WITH RESPECT  TO  ANY ASSERTED CLAIM.

EXCEPT AS PROHIBITED BY LAW, BORROWER HEREBY WILLINGLY, KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES  OTHER  THAN,  OR  IN  ADDITION  TO,  ACTUAL  DAMAGES.

 

BORROWER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF PAYEE HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT PAYEE WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR PAYEE TO ACCEPT THIS TERM  NOTE AND MAKE THE LOAN.

 

 

 

 

  

3

  

 

 

Exhibit A-1 to Term Loan and Security Agreement

It is the intention of Borrower and Lender to conform strictly to the usury laws now or hereafter in force in the Commonwealth of Massachusetts, and  any  interest payable under this Term Note or any other documents evidencing or securing the Loan (the “Loan Documents”) shall be subject to reduction to an amount not to exceed the maximum non-usurious amount for commercial loans allowed under the usury laws of the state or commonwealth in which the Property is located as now or hereafter construed by the courts having jurisdiction over such matters. In the event such interest (whether designated as interest, service charges, points, or otherwise) does exceed the maximum legal rate, it shall be (i) cancelled automatically to the extent that such interest exceeds the maximum legal rate; (ii) if already paid, at the option of the Lender, either be rebated to Borrower or credited on the principal amount of the Term Note; or (iii) if the Term Note has been prepaid in full, then such excess shall be rebated to Borrower.

It is further agreed, without limitation of the foregoing, that all calculations of the rate of interest (whether designed as interest, service charges, points, or otherwise) contracted for, charged, or received under this Term Note, or under any instrument evidencing or securing the loan evidenced hereby, that  are made for the purpose of determining whether such rate exceeds the maximum legal rate, shall be made, to the extent permitted by applicable law, by amortizing, prorating, allocating, and spreading throughout the full stated term of this Term Note (and any extensions of the term hereof that may be hereafter granted) all such interest at any time contracted for, charged, or received from the Borrower or otherwise by the Lender so that the rate of interest on account of the indebtedness evidenced by this Term Note, as so calculated, is uniform throughout the term hereof. If the Borrower is exempt or hereafter becomes exempt from applicable usury statutes or for any other reason the rate of interest to be charged on this Term Note is not limited by law, none of the provisions  of this paragraph shall be construed so as to limit or reduce the interest or other consideration payable under this Term Note or any other Loan Documents. The terms and provisions of this paragraph shall control and supersede every other provision of all agreements between the parties hereto.

 

[Remainder of Page Intentionally Left Blank; Signature Page to Follow]

 

 

 

 

 

  

4

  

 

 

Exhibit A-1 to Term Loan and Security Agreement

 

 

IN WITNESS WHEREOF, the Borrower has executed this Note as of the day and year first above written at, Worcester County, Massachusetts.

 

	 	 	 	
BORROWER:

	 	 	 	 
	 	 	 	
RANOR, INC.,

	 	 	 	
a Delaware corporation

	 	 	 	 
	 	 	
By: 

	 
	 	 	 	
Name: Alexander Shen

	 	 	 	
Title: President

	 	 	 	 
	
THE COMMONWEALTH OF MASSACHUSETTS

	
§

	 	
  

	 	
§ss.

	 	 
	
COUNTY OF 

	
§

	 	
  

	 	 	 	 

 

On this                        day of December, 2014, personally appeared Alexander Shen, President, of RANOR, INC., signer and sealer of the foregoing instrument, and acknowledged the same to be his free act and deed in his capacity as such President, and the free act and deed of RANOR, INC., before me.

 

	 	 
	 	
Name:

	 	
Commissioner of the Superior Court/

	 	
Notary Public,

	 	
My Commission Expires:

	 	 

 

 

[Signature Page to Term Note A]

 

 

 

 

  

  

  

 

 

Exhibit A-2 to Term Loan and Security Agreement

 

TERM NOTE

 

	$750,000.00	 December           , 2014

                                                                                        

FOR VALUE RECEIVED, the undersigned, RANOR, INC., a Delaware corporation with an address of Bella Drive, Westminster, Massachusetts 01473 (the "Borrower"), DOES HEREBY PROMISE to pay to the order of REVERE HIGH YIELD FUND, LP, a Delaware limited partnership (the "Lender"), at the office of the Lender at 105 Rowayton Avenue, Suite 100, Rowayton, Connecticut 06853, in lawful money of the United States of America, in immediately available funds, the maximum principal amount of SEVEN HUNDRED FIFTY THOUSAND 00/100 DOLLARS ($750,000.00) or so much thereof as may be advanced to Borrower pursuant to this Term Note and the Agreement (as hereinafter defined) payable as follows: (i) payments of interest only on advanced principal on the first day of each month (a “Payment Date”), commencing on February 1, 2015 until and including the Payment Date immediately prior to the Maturity Date; and (ii) a balloon payment of the advanced principal balance plus any accrued and unpaid interest on the Maturity Date of December 31, 2015, provided, however, that Borrower may elect to extend the Maturity Date for a period of six (6) months to June 30, 2016 conditioned upon Borrower providing to Lender, on or before the date which is sixty (60) days prior to the initial Maturity Date but no more than ninety (90) days prior to the initial Maturity Date: (a) written notice to Lender of its election to so extend, and (b) payment to Lender of an extension fee in the amount of Seven Thousand Five Hundred and No/100 Dollars ($7,500.00). Interest hereunder shall accrue from the date hereof on the unpaid principal amount hereof at a rate equal to twelve percent (12%) per annum on the basis of the actual days elapsed on the assumption that each month contains thirty (30) days and each year contains  three hundred sixty (360) days, multiplied by the actual number of days elapsed, in like money, at said office, as more specifically set forth in Article II of that certain Term Loan and Security Agreement dated as of the date hereof (the “Agreement”) and, upon a default, at a rate of the lesser of: (A) twenty-four percent (24%) per annum, or (B) the highest rate of interest permitted under the laws of the Commonwealth of Massachusetts.

This Term Note is given to evidence an actual loan (the “Loan”) in the maximum principal amount of $750,000.00, and is the Term Note referred to  as  “Note  B”  in Section 2.02 of the Agreement, and is subject to prepayment and acceleration of maturity as set forth in the Agreement. This Term Note is secured by, among other things, that certain Guaranty of Guarantor and Financing Statement from Borrower in  favor  of Lender (the “Security Instrument”). All terms defined in the Agreement are used herein with their defined meanings unless otherwise provided.

This Term Note shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts and any applicable laws of the United States of America.

 

 

 

 

 

  

  

  

 

 

Exhibit A-2 to Term Loan and Security Agreement

 

The Lender shall have the absolute right to sell and/or assign this Term Note and the Security Instrument, in whole or in part, and/or to enter into one or more participation agreements concerning this Term Note and the Security Instrument. If Lender gives written notice of any such sale(s), assignment(s) and/or participation(s) to Borrower, Borrower shall make, or cause to be made, payments to such subsequent holder(s) or participant(s), as the case may be.

If any term of this Term Note, or the applications hereof to any person or set of circumstances, shall to any extent be invalid, illegal, or unenforceable, the remainder of this Term Note, or the application of such provision or part thereof to persons or circumstances other than those as to which it is invalid, illegal, or unenforceable, shall not be affected thereby, and each term of this Term Note shall be valid and enforceable to the fullest extent consistent with applicable law and this Term Note shall be interpreted and construed as though such invalid, illegal, or unenforceable term or provision (or any portion thereof) were not contained in this Term Note.

Borrower and all other parties liable hereunder, whether as principal, endorser or otherwise, hereby severally waive presentment, demand for payment, protest and notice of dishonor and waive recourse to defenses generally, including extensions  of  time, release of security or other indulgences that may be granted by Lender to Borrower or any other party liable hereon, and also agree to pay all costs of collection, including reasonable attorneys’ fees incurred by Lender in connection with enforcement of any of Lender’s rights hereunder or under any other document in connection with, securing or evidencing this Term Note.

BORROWER AND ANY SUBSEQUENT ENDORSER, GUARANTOR OR OTHER ACCOMMODATION BORROWER WAIVE PRESENTMENT, DEMAND FOR PAYMENT AND NOTICE OF DISHONOR, TOGETHER WITH ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS TERM NOTE OR UNDER ANY AGREEMENT, INSTRUMENT OR OTHER DOCUMENT CONTEMPLATED HEREBY OR RELATED HERETO AND IN ANY ACTION DIRECTLY OR INDIRECTLY RELATED TO OR CONNECTED WITH THE OBLIGATIONS PROVIDED FOR HEREIN, OR ANY CONDUCT  RELATING TO THE ADMINISTRATION OR ENFORCEMENT OF SUCH OBLIGATIONS OR ARISING FROM THE DEBTOR/CREDITOR RELATIONSHIP OF THE PARTIES HERETO. BORROWER ACKNOWLEDGES THAT THIS WAIVER MAY DEPRIVE IT OF AN IMPORTANT RIGHT AND THAT SUCH WAIVER HAS WILLINGLY,  KNOWINGLY AND VOLUNTARILY BEEN AGREED TO BY BORROWER.

BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COMMONWEALTH OF MASSACHUSETTS AND WAIVES PERSONAL SERVICE OF  ANY  AND ALL PROCESS UPON BORROWER, AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO BORROWER AT THE ADDRESS AS SET FORTH IN THIS TERM NOTE AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. BORROWER WAIVES ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND WILLINGLY, KNOWINGLY AND VOLUNTARILY CONSENTS TO THE GRANTING OF ANY SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.

 

BORROWER ACKNOWLEDGES AND REPRESENTS THAT THE LOAN EVIDENCED BY THIS TERM NOTE IS A COMMERCIAL  TRANSACTION AND THAT THE PROCEEDS OF THE LOAN SHALL NOT BE USED FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES. BORROWER AND ANY SUBSEQUENT ENDORSER, GUARANTOR OR OTHER ACCOMMODATION BORROWER HEREBY WILLINGLY, KNOWINGLY AND VOLUNTARILY WAIVE (TO THE MAXIMUM EXTENT PERMITTED BY LAW) ANY RIGHTS TO NOTICE OR HEARING OR AS OTHERWISE REQUIRED BY ANY LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE HOLDER MAY ELECT TO USE OR WHICH IT MAY AVAIL ITSELF. BORROWER FURTHER WAIVES, TO THE GREATEST EXTENT PERMITTED BY LAW, THE BENEFITS OF ALL PRESENT AND FUTURE VALUATION, APPRAISEMENT, EXEMPTION, STAY, REDEMPTION AND MORATORIUM LAWS. BORROWER FURTHER WAIVES ANY REQUIREMENTS THAT HOLDER OBTAIN  A BOND OR ANY SIMILAR DEVICE IN CONNECTION WITH THE EXERCISE OF ANY REMEDY OR THE ENFORCEMENT OF ANY RIGHT HEREUNDER OR PERTAINING TO THE LOAN.

 

BORROWER HEREBY EXPRESSLY AND UNCONDITIONALLY, WILLINGLY, KNOWINGLY AND VOLUNTARILY WAIVES, IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT BY OR ON BEHALF OF LENDER ON THIS TERM NOTE, ANY AND EVERY RIGHT BORROWER MAY HAVE TO (I) INJUNCTIVE RELIEF, (II) INTERPOSE ANY COUNTERCLAIM THEREIN (OTHER THAN COMPULSORY COUNTERCLAIMS), AND (III) HAVE THE SAME CONSOLIDATED WITH ANY OTHER OR SEPARATE SUIT, ACTION OR PROCEEDING. NOTHING HEREIN CONTAINED SHALL PREVENT OR PROHIBIT BORROWER FROM INSTITUTING OR MAINTAINING A SEPARATE ACTION AGAINST LENDER WITH RESPECT  TO  ANY ASSERTED CLAIM.

 

 

 

  

2

  

 

 

Exhibit A-2 to Term Loan and Security Agreement

EXCEPT AS PROHIBITED BY LAW, BORROWER HEREBY WILLINGLY, KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. BORROWER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF PAYEE HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT  PAYEE  WOULD  NOT,  IN  THE  EVENT  OF  LITIGATION,  SEEK  TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR PAYEE TO ACCEPT THIS TERM  NOTE AND MAKE THE LOAN.

It is the intention of Borrower and Lender to conform strictly to the usury laws now or hereafter in force in the Commonwealth of Massachusetts, and  any  interest payable under this Term Note or any other documents evidencing or securing the Loan (the “Loan Documents”) shall be subject to reduction to an amount not to exceed the maximum non-usurious amount for commercial loans allowed under the usury laws of the state or commonwealth in which the Property is located as now or hereafter construed by the courts having jurisdiction over such matters. In the event such interest (whether designated as interest, service charges, points, or otherwise) does exceed the maximum legal rate, it shall be (i) cancelled automatically to the extent that such interest exceeds the maximum legal rate; (ii) if already paid, at the option of the Lender, either be rebated to Borrower or credited on the principal amount of the Term Note; or (iii) if the Term Note has been prepaid in full, then such excess shall be rebated to Borrower.

It is further agreed, without limitation of the foregoing, that all calculations of the rate of interest (whether designed as interest, service charges, points, or otherwise) contracted for, charged, or received under this Term Note, or under any instrument evidencing or securing the loan evidenced hereby, that  are made for the purpose of determining whether such rate exceeds the maximum legal rate, shall be made, to the extent permitted by applicable law, by amortizing, prorating, allocating, and spreading throughout the full stated term of this Term Note (and any extensions of the term hereof that may be hereafter granted) all such interest at any time contracted for, charged, or received from the Borrower or otherwise by the Lender so that the rate of interest on account of the indebtedness evidenced by this Term Note, as so calculated, is uniform throughout the term hereof. If the Borrower is exempt or hereafter becomes exempt from applicable usury statutes or for any other reason the rate of interest to be charged on this Term Note is not limited by law, none of the provisions  of this paragraph shall be construed so as to limit or reduce the interest or other consideration payable under this Term Note or any other Loan Documents. The terms and provisions of this paragraph shall control and supersede every other provision of all agreements between the parties hereto.

 

[Remainder of Page Intentionally Left Blank; Signature Page to Follow]

  

3

  

 

 

Exhibit A-2 to Term Loan and Security Agreement

 

IN WITNESS WHEREOF, the Borrower has executed this Note as of the day and year first above written at, Worcester County, Massachusetts.

 

 

	 	 	 	
BORROWER:

	 	 	 	 
	 	 	 	 
	 	 	 	
RANOR, INC.,

	 	 	 	
a Delaware corporation

	 	 	 	 
	 	 	 	 
	 	 	
By: 

	
                                                

	 	 	 	
Name: Alexander Shen

	 	 	 	
Title: President

	 	 	 	 
	
THE COMMONWEALTH OF MASSACHUSETTS

	
§

	 	
  

	 	
§ss.

	 	 
	
COUNTY OF 

	
§

	 	
  

	 	 	 	 

 

On this                  day of December, 2014, personally appeared Alexander Shen, President, of RANOR, INC., signer and sealer of the foregoing instrument, and acknowledged the same to be his free act and deed in his capacity as such President, and the free act and deed of RANOR, INC., before me.

 

 

 

	 	                                                             
	 	
Name:

	 	
Commissioner of the Superior Court/

	 	
Notary Public,

	 	
My Commission Expires:

	 	 

 

 

 

[Signature Page to Term Note B]

 

 

 

 

  

  

  

 

EXHIBIT B

 

TERM LOAN AND SECURITY AGREEMENT EQUIPMENT

 

 

	
Ph#

	
Item

	
Description

	 	
1

	
TOS HOSTIVAR TYPE BN102B TOOL & CUTIER GRINDER, S/N: 049304

	 	 	 
	
188

	
2

	
RUSH MDL. 250 DRILL SHARPENER, S/N: N A

	 	 	 
	
188

	
3

	
6" BALDOR MDL. 2N GRINDER

	 	 	 
	
189

	
4

	
ST 14" OPTICAL COMPARATOR

	 	 	 
	
175

	
5

	
FARO LASER TRACKER (NEW 2007)

	 	 	 
	
176

	
6

	
[HC-5] TOS MDL. WHN13C HORIZONTAL BORING MILL, 5.12" SPINDLE

	 	 	 
	  	  	
DIAMETER, #50 TAPER, SPINDLE TRAVEL 48.8", X-137.85", Y-78.7", W-48.8", B

	 	 	 
	  	  	
ROTARY TABLE SIZE 70.8" X 63", FANUC 11 CONTROL, SIN: 03-14 (1988)

	
 

195

	
 

7

	
 

[HC-6] TOSHIBA SHIBAURA MDL. BF13AQ FLOOR TYPE HORIZONTAL BORING

	  	  	
MILL, 5. 12" SPINDLE DIAMETER, #50 TAPER NMTB, SPINDLE TRAVEL 35.4",

	  	  	
SLEEVE TRAVEL 13.8", 178" X 116" TABLE, [5) 76" X 144" FLOOR PLATES,

	  	  	
FANUC OM CONTROL, S/N: 133791 (1978; RETROFIT 1995)

	 	 	 
	
187

	
8

	
[HC-7] KURAKI MDL. KBT13DKA HORIZONTAL BORING MILL, 5.12" SPINDLE

	  	  	
DIAMETER, #50 TAPER, SPINDLE TRAVEL 27.5", X-118", Y-80.7", Z-51.2", B

	  	  	
ROTARY TABLE SIZE 70.9" X 63", FANUC 15 CONTROL, 40-POSITION

	  	  	
AUTOMATIC TOOL CHANGER, SIN: 1601 (1995)

	 	 	 
	
199-200

	
9

	
[HC-8] MITSUBISHI MDL. MAFRS150 HORIZONTAL BORING MILL, 5.905"

	  	  	
SPINDLE DIAMETER, #50 TAPER, SPINDLE TRAVEL 35.4", X-277.7", Y-145.7", Z-

	  	  	
27.5", TABLE TRAVEL 59", B ROTARY TABLE 118" X 98.4", [3] RIGHT ANGLE

	  	  	
HEADS, [1] SPINDLE SUPPORT, FANUC 15 CONTROL, (2} 144" X 72-1/2" FLOOR

	  	  	
PLATES, S/N: H5202 (1980)

	 	 	 
	
174

	
10

	
[HC-9] TITAN MDL. AFC130 CNC HORIZONTAL BORING MILL, 5" SPINDLE

	  	  	
DIAMETER, #50 TAPER, SPINDLE TRAVEL 35.5", X-98", Y-98", W-56.3", B

	  	  	
ROTARY TABLE SIZE 63" X 71", BUi T-IN ROTARY TABLE, 40-POSITION

	  	  	
AUTOMATIC TOOL CHANGER, FANUC 16 CONTROL, S/N; 101 (1996)

	  	  	
[CURRENTLY BEING REPAIRED; APPRAISED AS IF FIXED]

	 	 	 
	
178

	
11

	
[VC-1] MAZAK MDL. MEGATURN A16 VERTICAL BORING MILL, 65" DIAMETER

	  	  	
TABLE, CHIP CONVEYOR, FANUC OT CONTROL, S N: 55443 (1984)

	 	 	 
	
190

	
12

	
[VC-2] TITAN MDL. SC-30-43 CNC VERTICAL BORING MILL, 118" DIAMETER

	
TABLE, [2) HEADS, [1] LIVE SPINDLE, FANUC 16TT CONTROL (1996)

 

Koster Industries Inc.

 

 

 

  

Page 1 of 11

  

 

 

EXHIBIT B

 

TERM LOAN AND SECURITY AGREEMENT EQUIPMENT

 

 

 

	
Ph#

	
Item

	
Description

	 	 	 
	
191-192

	
13

	
[VC4] BLANSKO MDL SKJ32-636 CNC VERTICAL BORING MILL, SLIDING

	  	  	
TABLE, 250" MAX PORT SIZE, LIVE SPINDLE, FANUC OTT CONTROL, 126"

	  	  	
DIAMETER TABLE, S N: 43063-92 (1989)

	  	  	
SEE PHOT0 #1

	 	 	 
	
196-197

	
14

	
[VC·5] TITAN MDL. SC22-2HG VERTICAL TURRET LATHE, 16-POSITION

	  	  	
AUTOMATIC TOOL CHANGER, [1) HEAD, LIVE SPINDLE, 78-1/2" DIAMETER

	  	  	
TABLE, FANUC 16T CONTROL, S/N: CNC-MSF-01 (1993)

	 	 	 
	
239

	
16

	
[VC-6] PHOENIX MDL. 144/236 VERTICAL MACHINING CENTER, 144" TABLE, [1]

	  	  	
HEAD, LIVE SPINDLE, FANUC 161 CONTROL, S/N: M1031 (1999)

	  	  	
SEE PHOT0 #2

	 	 	 
	
237-238

	
16

	
[VC-7] PHOENIX MOL 144/236 VERTICAL MACHINING CENTER, 144" TABLE, [1]

	  	  	
HEAD, LIVE SPINDLE, 20-POSITION AUTOMATIC TOOL CHANGER, FANUC 16i

	  	  	
CONTROL, S/N: M1032 (2000)

	  	  	
SEE PHOTQ #3

	 	 	 
	
212

	
17

	
[VMC-1] MATSUURA MOL. MC-1500 V4 VERTICAL MACHINING CENTER, FANUC

	  	  	
6M CONTROL, S/N: 82052738

	 	 	 
	  	
18

	
YAM MDL 850HG LATHE, XlY DIGITAL READOUT, SIN: 857123

	 	 	 
	  	
19

	
BRIDGEPORT SERIES I 2HP VERTICAL MILLING MACHINE, XIY DIGITAL

	  	  	
READOUT, POWER FEED TABLE, SIN: 2J130021

	 	 	 
	  	
20

	
OOYA MDL. RE3-2000 RADIAL DRILL, S/N: 7512462

	 	 	 
	
193-194

	
21

	
[VC-8] TCI CNC VERTICAL BORING MILL, [2] HEADS, 116" DIAMETER TABLE, [2]

	  	  	
12-POSITION AUTOMATIC TOOL CHANGERS, CHIP CONVEYOR, S/N: 315 (NEW

	  	  	
2008)

	  	  	
SEE PHOT0 #4

	 	 	 
	
184

	
22

	
[H-1] TOSHIBA SHIBAURA MDL. BT10BR1 HORIZONTAL BORING MILL, SPINDLE

	  	  	
DIAMETER 3.94", #50 SPINDLE TAPER NMTB, SPINDLE TRAVEL 28", Y-49", X-

	  	  	
55", Z-44.5", SONY DIGITAL READOUTS, 44" X 49" ROTARY TABLE, S/N: 6831

	  	  	
(1979)

	 	 	 
	
177

	
23

	
[HC-1) NOMURA MDL. BN130SWRATC HORIZONTAL BORING MILL, SPINDLE

	
DIAMETER 5.12", #50 SPINDLE TAPER NMTB'S OR CAT'S, X-95", Y-83", Z-59", W-

	
34", FANUC 6M CONTROL, 71" X 79" ROTARY TABLE, 60-POSITION AUTOMATIC

	
TOOL CHANGER, S/N: 4000 (1982)

 

Koster Industries Inc.

 

 

 

  

Page 2 of 11

  

 

 

EXHIBIT B

 

TERM LOAN AND SECURITY AGREEMENT EQUIPMENT

 

	
 

Ph#

	
 

Item

	
 

Description                                                                                                                           

[HC-2] TOSHIBA SHIBAURA MDL BP13BP5 HORIZONTAL BORING MILL, SPINDLE DIAMETER 5.12", #50 TAPER SPINDLE, 27.5" SPINDLE TRAVEL, X-118", Y-99". Z-43", GE FANUC 181-T CONTROL, 118" X 59" TABLE, S/N: 130085 (1984)

SEE PHOTO #S

 

[HC-3] TOSHIBA SHIBAURA MDL BPN13R4 HORIZONTAL BORING MILL, SPINDLE DIAMETER 5.12", #50 TAPER SPINDLE, SPINDLE TRAVELS IN 4" STEPS, X-78", Y-90", Z-70.8", 78.8" X 63" BUILT-IN ROTARY TABLE, FANUC 6M CONTROL, S/N: 230017 (1982)

 

[HC-4) TOSHIBA SHIBAURA MDL. BF16A HORIZONTAL BORING MILL, SPINDLE DIAMETER 6.3", #50 TAPER SPINDLE NMTB, X-354", Y-134", Z-34", FANUC 6M CONTROL, 79" X 98" ROTARY TABLE, SHIBAURA BR20/25B CONTROL, 6' IN I OUT TRAVEL, S/N: 51317 (1980)

 

MDL. QGV-75 75HP AIR COMPRESSOR, WITH QUINCY AIR DRYER, (2] AIR RECEIVING TANKS

 

RANOR 5 TON FREE STANDING OVERHEAD BRIDGE CRANE, 60' SPAN, 15 TON ROBBINS & MEYERS, APPROXIMATELY  160' RUNWAY

 

M&M CNC PRECISION ROTARY TABLE, 72" DIAMETER GIDDINGS & LEWIS 72" X 72" ROTARY TABLE

25 TON PHILADELPHIA & ROBBINS & MEYERS 15 TON FREE STANDING OVERHEAD BRIDGE CRANE, 60' SPAN, 160' RUNWAY, WITH PENDANT CONTROLS

 

DeWALT MDL. ME1 CUTOFF SAW, S N: 536

 

TURN-PRO MDL. 01712058 7" HORIZONTAL BANDSAW, SIN: 03117009

 

OKAMOTO MDL. 6-18 6" X 18" SURFACE GRINDER, WITH 6" X 18" PERMANENT MAGNETIC CHUCK, DIGITAL READOUT, S/N: N/A

 

MICCO TYPE NSGGHH 16'' X 24" SURFACE GRINDER, WITH 16" X 24" MAGNETIC CHUCK & RECTIFIER, SIN: H3506

 

METOSA MDL. TAURUS 310 CNC LATHE, S N: 40839 RIDGID PIPE THREADER

POWERMATIC MDL 1200 20" FLOOR TYPE DRILL PRESS, SIN : 66-2225

	
186

	
24

	
 

 

186

	
 

 

25

	
 

 

234-236

	
 

 

26

	
 

 

179-180

	
 

 

27

	
 

181-182

	
 

28

	
 

183

	
 

29

	
198

	
30

	
201-202

	
31

	  	
 

32

	
203

	
33

	
204

	
34

	  	
 

35

	
 

205

	
 

36

	
206

	
37

	
207

	
38

 

 

Koster Industries Inc.

 

 

 

 

  

Page 3 of 11

  

 

 

EXHIBIT B

 

TERM LOAN AND SECURITY AGREEMENT EQUIPMENT

	
Ph#

	
Item

	 Description 
	
208

	
39

	
BRIDGEPORT SERIES I2HP VERTICAL MILLING MACHINE, 9" X 42" WORKING

	  	  	
SURFACE OF TABLE, POWER FEED TO TABLE, DIGITAL READOUT, SIN:

	  	  	
12BR248938

	 	 	 
	
209

	
40

	
[2) SHARP VERTICAL MILLING MACHINES, DIGITAL READOUT, POWER FEED

	  	  	
TO TABLE, 9" X 50" WORKING SURFACE OF TABLE, SIN'S: N A

	 	 	 
	  	
41

	
RODGERS MDL. 5150-13-3 150 TON CAPACITY GARAGE TYPE HYDRAULIC

	  	  	
ARBOR PRESS, S N: 8150-1163

	 	 	 
	  	
42

	
GIDOlNGS & LEWIS 60" X 60" ROTARY TABLE

	 	 	 
	
210-211

	
43

	
VIEW OF ROTARY TABLES, V-BLOCKS, JAW RISERS, ANGLE IRONS, OFFSET

	  	  	
HEADS, SET-UP BLOCKS

	 	 	 
	
213

	
44

	
HYUNDAI MDL WIAL400LMC CNC LATHE, 12-POSITION AUTOMATI C TOOL

	  	  	
CHANGER, [2) LIVE SPINDLES, FANUC 321 MDL. A CNC CONTROLS, SIN: G3199-

	  	  	
086 (2012)

	 	 	 
	
214

	
45

	
YAM MDL. 850HG 24" / 34" X 36" GEARED HEAD ENGINE LATHE, 3-JAW CHUCK,

	  	  	
ALORIS TOOL POST, S/N: 857123

	 	 	 
	
215

	
46

	
OOYA 18" X 72" RADIAL ARM DRILL, WITH BOX TABLE

	 	 	 
	
218

	
47

	
JET PORTABLE HORIZONTAL BANDSAW

	 	 	 
	
217

	
48

	
MILLER DELTAWELD 650 DC ARC WELDER, WITH WIRE FEED, PORTABLE

	 	 	 
	
218

	
49

	
STOKES MDL. JRS VACUUM PRESS, WITH VARIAN CONTROL, MOUNTED ON

	  	  	
BERNARD PORTABLE LEAK TESTER

	 	 	 
	
219

	
50

	
STOKES PUMP LEAK TESTER, WITH VARIAN 959 TURBO LEAK DETECTOR

	  	  	
CONTROL

	 	 	 
	
220-222

	
51

	
PHOENIX MDL. 15/480 GANTRY MILL, 16'8" BETWEEN GANTRIES, 12' X 25'

	  	  	
WORKING SURFACE OF TABLE, [2] 36-POSITION AUTOMATIC TOOL

	  	  	
CHANGERS, FANUC 30i CNC CONTROL, SIN: M1747 (2011)

	  	  	
SEE PHOT0 #6

	 	 	 
	
223

	
52

	
STOKES MDL. 615-7 VACUUM PUMP, S/N: 885700C81 198

	 	 	 
	
224-225

	
53

	
[3] 50 TON COPCO FREE STANDING OVERHEAD BRIDGE CRANE SYSTEMS, 75'

	
SPAN, PENDANT CONTROLS, REMOTE CONTROL, 500' LONG, ALL DUAL

	
HOOKS

 

 

Koster Industries Inc.

 

 

  

Page 4 of 11

  

 

 

EXHIBIT B

 

TERM LOAN AND SECURITY AGREEMENT EQUIPMENT

 

	
226

	
54

	
PRESTON-EASTON MOL. PA100HD13 10,000# WELDING POSITIONER, S/N: PBIOOHD-14 (1980)

	
227

	
55

	
ROUNDO TYPE LH-35000 WELDING POSITIONER, S/N: 976098 (1997)

	
228

	
56

	
MILLER SYNCROWAVE 350LX WELDER, WITH BERNARD WIRE FEED

	
228

	
57

	
(2) LINCOLN ARC WELDERS, WITH COOL ARC 40

	
229

	
58

	
(2) MILLER MDL. 458 CC YY WELDERS, WITH MILLER WIRE FEED, BERNARD BOOM WELDER

	
230

	
59

	
LINCOLN POWER MIG 300 WELDER

	
231

	
60

	
MILLER SYNCROWAVE 351 AC/DC WELDING POWER SUPPLY

	
232

	
61

	
KOIKE ARONSON MD. HD25VF 2500# CAPACITY WELDING POSITIONER, S/N: 45933

	
233

	
62

	
MILLER DELTAWELD 452 POWER SOURCE

	
240

	
63

	
MG INDUSTRIES S TORCH BURNING MACHINE, WITH [1] PLASMA TORCH, 17'

	  	  	
WIDE X 55' LONG TABLE, BURNY 10 LCD PLUS CONTROL (1990)

	  	  	
SEE PHOT0 #7

	
241

	
64

	
FLOW MACH 3 MDL. 40208 WATER JET, 100" X 175" (2013)

SEE PHOT0 #8

	
242

	
65

	
FREE STANDING OVERHEAD BRIDGE CRANE SYSTEM, 60' SPAN, 500' LONG,

	  	  	
PENDANT CONTROLS

	  	  	
- 15 TON ROBBINS & MEYERS

	  	  	
- 20 TON ACECO

	  	  	
- 20 TON ACECO

	  	  	
- 40 TON PHILADELPHIA TRAMRAIL

	
243

	
66

	
HOMEMADE STRAIGHTENING TABLE, 24' X 8' WORKING SURFACE OF TABLE,

	  	  	
ENERPAC UNIT

	
244

	
67

	
MILLER MILLERMATIC POWER SOURCE

	
245-246

	
68

	
[5] MILLER DELTAWELO 452 DC POWER SOURCES, WITH BERNARD BOOM,

	
254-255

	  	
WIRE FEED, [1] W/O BOOM ·HANGING FROM HOIST, (1] W/ WIRE FEED

	
247-250

	
69

	
[3] MILLER DELTAWELD 450 DC POWER SOURCES, WITH BERNARD BOOM,

	
258

	  	
WIRE FEED

 

 

Koster Industries Inc.

 

 

  

Page 5 of 11

  

 

 

EXHIBIT B

TERM LOAN AND SECURITY AGREEMENT EQUIPMENT

 

	
Ph#

	
Item

	
Description

	  
	  	  	  	  
	
251-252

	
70

	
[2] MILLER XMT304 CC/CV, WITH WIRE FEED

	  
	  	  	  	  
	
253

	
71

	
MILLER SYNCROWAVE 351 WELDER

	  
	  	  	  	  
	
256-258

	
72

	
[6] MILLER A/C D/C 250 WELDERS, [2] W/ COOL-ARC 40, [1] WITH BERNARD

	  
	  	  	
WIRE FEED

	  
	  	  	  	  
	
257

	
73

	
TELEDYNE 2500# CAPACITY WELDING POSITIONER, S/N: 103570

	  
	  	  	  	  
	
259

	
74

	
MILLER DELTAWELD 650 DC ARC WELDER

	  
	  	  	  	  
	
260, 268

	
75

	
[2] MILLER SYNCROWAVE 250 DX DC WELDERS, WITH TIGS

	  
	  	  	  	  
	
261

	
76

	
ARONSON MDL 2G12VRA12VLS-MKVT-26 BOOM WELDING MANIPULATOR,

	  
	  	  	
WITH LINCOLN 600 IDEALARC WELDER, S/N: 8461

	  
	  	  	  	  
	
262-263

	
77

	
CYCLOMATIC SEAM TRACKER SYSTEM, WITH MILLER SYNCROWAVE 350 DC

	  
	  	  	
WELDER, JETLINE MDL. ALC101 ARC LENGTH CONTROLLER, 9600 JETLINE

	  
	  	  	
CONTROL

	  
	  	  	  	  
	
264, 311

	
78

	
[2] MILLER DELTAWELD 451 DC ARC WELDERS, WITH BERNARD BOOM &

	  
	  	  	
MILLER 60 SERIES WIRE FEEDER

	  
	  	  	  	  
	  	  	
ASSORTED CANNABALIZED AREA

	  
	
265-266

	
79

	
ASSORTED WELDERS, PLASMAS, WIRE FEEDS

	  
	  	  	  	  
	  	
80

	
EMPIRE REACH-IN TYPE SAND BLAST CABINET

	  
	  	  	  	  
	  	  	
AIR COMPRESSOR ROOM

	  
	
269-270

	
81

	
[3] QST-245 50HP AIR COMPRESSORS, PYRAMID MDL. 2000 AIR DRYER, AIR

	  
	  	  	
RECEIVING TANK

	  
	  	  	  	  
	
271-272

	
82

	
VACU BLAST CORP. SAND BLASTING UNIT, 18' WIDE X 24' DEEP X 16' HIGH

	  
	  	  	  	  
	  	
83

	
LARGE CAR BOTTOM FURNACE, 10' X 24', HONEYWELL CONTROL ROOM

	  
	  	  	  	  
	
273

	
84

	
PAINT SPRAY BOOTH

	  
	  	  	  	  
	
275

	
85

	
16" WILTON DRILL

	  
	  	  	  	  
	
276

	
86

	
[2] ARONSON MDL. HD700 70,000# CAPACITY WELDING POSITIONERS, S/N'S:

	  
	  	  	
8523; 7715

	  
	  	  	  	  
	
277

	
87

	
12' ARONSON WELDING MANIPULATOR, WITH LINCOLN WELDER

	  

 

 

Koster Industries Inc.

 

 

 

 

  

Page 6 of 11

  

 

 

 

EXHIBIT B

 

TERM LOAN AND SECURITY AGREEMENT EQUIPMENT

	
Ph#

	
Item

	
Description

	  
	  	  	  	  
	
278

	
88

	
SKYJACK 500# CAPACITY MAN LIFT

	  
	  	  	  	  
	
279

	
89

	
LINCOLN POWERMATE 350, WITH COOL-ARC 40

	  
	  	  	  	  
	
280

	
90

	
LINCOLN IDEALARC 600 DC WELDER

	  
	  	  	  	  
	
281

	
91

	
LINCOLN IDEALARC 1500 DC WELDER

	  
	  	  	  	  
	
283

	
92

	
ARONSON MDL. S14VRA14CL-DKDT-32 WELDING MANIPULATOR, WITH [2] MILLER MDL. 451 WELDERS, S/N: 80253

	  
	  	  	  	  
	
284

	
93

	
ARONSON MDL HD100VF 10,000# CAPACITY WELDING POSITIONER, S/N: 43686 (NEW 2008)

	  
	  	  	  	  
	  	
94

	
MILLER DIMENSION 652 DC WELDER, WITH BOOM WELDER

	  
	  	  	  	  
	
286

	
95

	
PRESTON-EASTON 20,000# CAPACITY TANK TURNING ROLLS

	  
	  	  	  	  
	
287

	
96

	
ARONSON MDL. PC120A 120,000# CAPACITY WELDING TURN TABLE, S/N: 718

	  
	  	  	  	  
	
288

	
97

	
[6] LINCOLN 350 POWER MIG WELDERS

	  
	  	  	  	  
	
289

	
98

	
MILLER 652 DC WELDER, WITH BERNARD BOOM WELDER

	  
	  	  	  	  
	
291

	
99

	
MILLER DIMENSION 400 WELDER, WITH WIRE FEED

	  
	  	  	  	  
	
290

	
100

	
14" WILTON VERTICAL BANDSAW, S/N: 06062782

	  
	  	  	  	  
	
292

	
101

	
6" BM BELT SANDER

	  
	  	  	  	  
	
293

	
102

	
GEKA HYDRACROP MDL. 80/SD IRONWORKER, S/N: 6437 (1995)

	  
	  	  	  	  
	
294

	
103

	
MARVEL MDL. F2150PC3 VERTICAL BANDSAW, TOUCH SCREEN, COMPUTER CONTROLLED, S/N: F2150-20237PC-3

	  
	  	  	  	  
	
295

	
104

	
MDL. HST-29 PLATE BEVELING MACHINE

	  
	  	  	  	  
	
308

	
105

	
PANDJIRIS BOOM MANIPULATOR, WITH 12' WIRE FEED, MILLER DIMENSION 452 WELDER

	  
	  	  	  	  
	  	  	
MAIN FABRICATION SHOP

	  
	
301

	
106

	
IKEDA TYPE RM1375 RADIAL ARM DRILL, S/N: 80105

	  

 

Koster Industries Inc.

 

 

  

Page 7 of 11

  

 

 

EXHIBIT B

 

TERM LOAN AND SECURITY AGREEMENT EQUIPMENT

 

 

	
Ph#

	
Item

	
Description

	  
	
302

	
107

	
CINCINNATI MDL. 1500 1500 TON CAPACITY HYDRAULIC POWER PRESS BRAKE, 20'6" BETWEEN HOUSINGS, 30' LONG, S/N: 39561 (1975)

 

	  
	
303

	
106

	
LARGE QUANTITY OF BRAKE DIES

 

	  
	
304

	
109

	
ROUNDO TYPE R6S HORIZONTAL ANGLE ROLLS, 6 X 6 X 5/8, S/N: 986709

(1998)

 

	  
	
 

305

	
 

110

	
CINCINNATI MDL. 750 750 TON CAPACITY HYDRAULIC POWER PRESS BRAKE, 20' LONG, 20'6" BETWEEN HOUSINGS, S/N: 41188

 

	  
	
 

306

	
 

111

	
FREE STANDING OVERHEAD CRANE SYSTEM, 60' SPAN, 500' LONG, PENDANT CONTROLS

~ 5 TON CLEVELAND TRAMRAIL

~ [3] 15 TON ROBBINS & MEYERS

~ 10 TON ACECO

 

	  
	
309

	
112

	
KOIKE ARONSON MDL. HD240VF 24,000# CAPACITY WELDING POSITIONER, S/N: 46425

 

	  
	
310

	
113

	
ARONSON MDL. G8VRA80L-PK 8' BOOM WELDER, S/N: 80435

 

	  
	  	
114

	
[3] MILLER DELTAWELD 452 WELDERS

 

	  
	  	
115

	
KOIKE ARONSON MDL. TDRA-20HD 20 TON CAPACITY TANK TURNING ROLL, S/N: N/A

 

	  
	  	
116

	
KOIKE ARONSON 30,000# CAPACITY TANK TURNING ROLL, S/N: 97531

 

	  
	
314

	
117

	
[9] MILLER SYNCROWAVE 250 WELDERS

 

	  
	  	
118

	
MILLER DIMENSION 400 WELDER

 

	  
	  	
119

	
[2] BERNARD BOOMS

 

	  
	
314

	
120

	
[2] MILLER DELTAWELD 451 WELDERS, WITH WIRE FEED

 

	  
	
312

	
121

	
ARONSON MDL HD160A 16,000# CAPACITY WELDING POSITIONER, S/N: 75108

 

	  
	
313

	
122

	
RANSOME MDL. 250P 25,000# CAPACITY WELDING POSITIONER, S/N: 6525507

 

	  
	  	
123

	
[2] CULLEN-FIRESTEDT MDL. 140-347 10,000# CAPACITY WELDING POSITIONERS, S/N'S: 347; N A

 

	  
	
315

	
124

	
MILLER SYNCROWAVE 351 WELDER

	  

Koster Industries Inc.

 

 

 

  

Page 8 of 11

  

 

 

EXHIBIT B

TERM LOAN AND SECURITY AGREEMENT EQUIPMENT

 

	
Ph#

	
Item

	
Description

	  
	  	  	  	  
	
318

	
125

	
ARONSON MDL. SS14VRA14CL-PK 14' LONG X 14' HIGH MANIPULATOR, WITH

	  
	  	  	
LINCOLN HEAD, S/N: 7613

 

	  
	
317

	
126

	
MILLER MDL. XMT304 WIRE FEED & INVERTER

 

	  
	
318

	
127

	
MILLER DELTAWELD 650 DC WELDER

 

	  
	
319

	
128

	
ARONSON MDL. HD30A 5000# CAPACITY WELDING POSITIONER, S/N: 70300

 

	  
	
320

	
129

	
ARONSON MDL. 2G12VRA12CL-RK 14" X 14" WELDING MANIPULATOR, WITH

	  
	  	  	
MILLER 451 WELDER, S/N: 8020

 

	  
	  	
130

	
MILLER SYNCROWAVE 350LX WELDER, WITH TIG

 

	  
	  	
131

	
ARONSON MDL. HD45 5000# CAPACITY WELDING POSITIONER, S/N: 79388

 

	  
	
321

	
132

	
KOIKE ARONSON MDL. HD25VF 2500# CAPACITY TANK TURNING ROLL, S/N:

	  
	  	  	
45575

 

	  
	
322, 325

	
133

	
LINCOLN SYSTEM 55 ELECTRIC AUTOMATION ROBOT STATION, WITH FANUC SYSTEM R-30iA, FANUC M-710iC ROBOT

	  
	  	  	  	  
	
323-324

	
134

	
HYPERFORMANCE MDL. HPR260 PLASMA SYSTEM, WITH 260-AMP PLASMA

	  
	  	  	
TORCH

 

	  
	  	
135

	
LINCOLN POWERWAVE 455 ELECTRIC WELDER

 

	  
	
326

	
136

	
SERTUM 2" X 12' PYRAMID TYPE BENDING ROLLS, WITH DROP END HOUSING

	  
	  	  	
(1977)

	  
	  	  	
SEE PHOTO #9

 

	  
	
327

	
137

	
CINCINNATI MDL. 400 400 TON X 18' POWER PRESS BRAKE, 12'6" BETWEEN

	  
	  	  	
HOUSINGS, 12" STROKE, S/N: 37225

 

	  
	
328

	
138

	
CINCINNATI MDL. 2512 3/8" X 12' POWER SQUARING SHEAR, S/N: 36574

 

	  
	
329

	
139

	
JETLINE MDL. IWS96Z SEAM WELDER, WITH CONTROLS, ARC LENGTH

	  
	  	  	
CONTROL 101, S N: 85276

 

	  
	
330

	
140

	
WEBB MDL. 15L-1510 3/4'' X 10' INITIAL TYPE BENDING ROLL, WITH DROP END,

	  
	  	  	
S/N: 7190

 

	  
	  	  	
GARAGE

	  
	
296

	
141

	
QUINCY MDL. QSl-245 50HP AIR COMPRESSOR

	  

 

 

 

Koster Industries Inc.

 

 

 

  

Page 9 of 11

  

 

 

 

EXHIBIT B

 

TERM LOAN AND SECURITY AGREEMENT EQUIPMENT

 

 

	
Ph#

	
Item

	
Description

	  
	  	  	  	  
	  	
142

	
BM 6" SANDER

 

	  
	
297

	
143

	
RANSOME MDL. 100P 10,000# CAPACITY WELDING POSITIONER, S/N: 655752

 

	  
	
298

	
144

	
[2] RANSOME MDL. CPRR 90 TON CAPACITY TANK TURNING ROLLS, S/N'S: 3733015; N/A

	  
	  	  	  	  
	  	  	
DUE TO THE PLANT BEING IN FULL OPERATION, THE FORKLIFT TRUCKS WERE APPRAISED ON A SAMPLE BASIS. THIS LIST WAS PROVIDED TO US BY MANAGEMENT.

	  
	  	
145

	
TOYOTA MDL. 023FGC30 6000# CAPACITY PROPANE FORKLIFT TRUCK, S/N: 11442

	  
	  	  	  	  
	  	
146

	
TOYOTA MDL. 12712 5000# CAPACITY PROPANE FORKLIFT TRUCK, S/N: 423F625

	  
	  	  	  	  
	  	
147

	
CLARK MDL. GCX30E 5500# CAPACITY PROPANE FORKLIFT TRUCK, S/N: GX230-125-9245KF

	  
	  	  	  	  
	  	
148

	
CAT MDL. DPL40 9000# CAPACITY DIESEL FORKLIFT TRUCK, S/N: 3CM00437

 

	  
	  	
149

	
NISSAN MDL. A115PV 3000# CAPACITY PROPANE FORKLIFT TRUCK, S/N: CPJ01-9N296V

	  
	  	  	  	  
	  	
150

	
TOYOTA MDL. 02-3FD40 8800# CAPACITY DIESEL FORKLIFT TRUCK, S/N: FD45-1471

	  
	  	  	  	  
	  	
151

	
DATSUN MDL. CPF02 5000# CAPACITY PROPANE FORKLIFT TRUCK, S/N: 002808

	  
	  	  	  	  
	  	
152

	
CLARK MDL. C500-Y550 5500# CAPACITY DIESEL FORKLIFT TRUCK, S/N: 440654-4796

	  
	  	  	  	  
	  	
153

	
NISSAN MDL. CPJ02 5000# CAPACITY PROPANE FORKLIFT TRUCK, S/N: 9P0168

	  
	  	  	  	  
	  	
154

	
NISSAN MDL. UGJ02A30PV 6000# CAPACITY PROPANE FORKLIFT TRUCK, S/N: 9L0118

	  
	  	  	  	  
	  	
155

	
JOHN DEERE MDL. 544A LOADER, S/N: 000783CD

 

	  
	  	
156

	
TENNANT SERIES II MDL. 27SII FLOOR SWEEPER, S/N: 275-5124

 

	  
	  	
157

	
2010 DODGE CARAVAN, VIN: 2D4RNGDX4AR426237

	  

 

 

 

 

 

Koster Industries Inc.

 

 

 

 

  

Page 10 of 11

  

 

 

EXHIBIT B

TERM LOAN AND SECURITY AGREEMENT EQUIPMENT

	 
	
 

Ph#

	
 

Item

	
 

Description

	  	
 

158

	
 

2003 FORD MDL F-350 PICKUP TRUCK, VIN: 1FTSF31F63EA52607

	 	 
	
159

	
1995 GMC 3500 DUMP TRUCK, VIN: 1GDJK34KOSE533852

	 	 
	
160

	
1987 INTERNATIONAL MDL F-2575 TRACTOR, VIN: 1HSZJG2R5HH462325

	 	 
	
161

	
GENIE MDL S-60 MANLIFT, S/N: 735

	 	 
	
162

	
FARO LASER TRACKER (NEW 2007)

	 	 
	
163

	
MISCELLANEOUS INSPECTION ITEMS, INCLUDING BUT NOT LIMITED TO:

	 	 
	  	
GRANITE SURFACE PLATES, HEIGHT GAGES, MICROMETERS, JO-BLOCK

	 	 
	  	
SETS, CHAMFER GAGE, PIN SETS, CALIPERS, THICKNESS GAGES, ETC.

	 	 
	
164

	
MISCELLANEOUS OFFICE ITEMS, INCLUDING BUT NOT LIMITED TO: QUANTITY

	  	
OF DESKS, CUBICLES WITH MODULAR DESKS, CHAIRS, CREDENZAS,

	  	
QUANTITY OF FILE CABINETS, PC'S, PRINTERS, SHELVING, COPY MACHINE,

	  	
FAX MACHINE, PAPER CUTTER, POSTAGE METER, BOOKSHELVES, STORAGE

	  	
CABINETS, ETC.

	 	 
	165	
MISCELLANEOUS SHOP & CRIB ITEMS THROUGHOUT FACILITY, INCLUDING  BUT NOT LIMITED TO: PERISHABLE TOOLING, LARGE QUANTITY OF ANGLE PLATES, HOLDDOWNS, C-CLAMPS, PORTABLE MATERIAL HANDLING CARTS, ASSORTED ELECTRICAL & MAINTENANCE SUPPLIES, LARGE QUANTITY OF CNC TOOLING, BROOMS, SHOVELS, TOTE BINS, BENCHES, VISES, VIDMAR CABINETS, HOISTS, ROTARY BINS, #3-1/2R FAMCO ARBOR PRESS, FACTORY OFFICE FURNITURE & EQUIPMENT, FLOOR PLATES, LARGE QUANTITY OF TOOLING FOR VTL'S & HBM'S, CHOP SAW, SLINGS, CHAINS, PORTABLE VACUUM PUMPS, 15HP AIR COMPRESSOR, PORTABLE SCAFFOLDING, ASSORTED WELDING EQUIPMENT, STEEL BINS, SCRAP HOPPERS, FANS, LARGE QUANTITY OF HOISTS WITH RAIL, ASSORTED HARDWARE, 165" DIAMETER TABLE, OUST COLLECTORS, DOUBLE ENO GRINDERS, TOOL BOXES, CABINETS, WELDING WIRE, 2-WHEEL HAND TRUCKS, PALLET TRUCKS, BANDING MACHINES, DRY ROD STABILIZING OVENS, ASSORTED AIR TOOLS, PNEUMATIC GRINDERS, PAINT PRESSURE TANKS, HOOKS, STRAPS, AIR HOSE, WASH DOWN TABLE, NOTCHER, BENDING ROLLS, PORTABLE CRANE, SNOW BLOWER, LADDERS, RACKING, [2J 10HP SPEEDAIRE AIR COMPRESSORS, HYDRAULIC JACKS, DAYTON BATTERY CHARGER, FLAME RETARDENT CABINETS, WELDERS (OUT OF SERVICE}, BENCHES & VISES, LAWN MOWER, PARTS CLEANER, ASSORTED TANK TURNING ROLLS, 5' WIDE X 50 HIGH ANGLE PLATES, PAINT PRESSURE TANK, ETC.

 

	
  

	
*In addition to the Assets listed above, the Assets shall include any and all patent or licensing agreements to utilize the foregoing Assets for their·intended purpose and upon a sale' of any of the Assets, the right to utilize the patent and license agreement shall run with the applicable Asset and pass to the transferee of title to the Assets.

 

Koster Industries Inc.

 

 

 

 

 

  

Page 11 of 11

  

 

 

EXHIBIT C

 

 

GUARANTY

 

 

 

 

  

  

  

 

 

Exhibit C to Term Loan and Security Agreement

 

 

GUARANTY AGREEMENT

THIS GUARANTY AGREEMENT dated as of December      , 2014 (herein referred to as the “Guaranty Agreement”) is from TECHPRECISION CORPORATION, a Delaware corporation having an  address of 3477 Corporate Parkway, Suite 140, Center Valley, Pennsylvania 18034 (herein, together with heirs, administrators, representatives, executors, successors and assigns, referred to as “Guarantor”) to REVERE HIGH YIELD FUND, LP, a Delaware limited partnership (herein, together with its successors and assigns, referred to as “Lender”).

 

PRELIMINARY STATEMENT

 

	
  

	
A.

	
Ranor, Inc., a Delaware corporation (the “Borrower”) entered into that certain Term Loan and Security Agreement dated the date hereof with the Lender (as amended from time to time, the “Loan Agreement”), pursuant to which the Lender has agreed to make a loan in the maximum principal amount of $1,500,000.00 affecting certain real estate and improvements held by Borrower located in Westminster, Massachusetts (the “Premises”), and a loan in the maximum principal amount of $750,000.00 (collectively, the “Loan”), which Loan is evidenced by a Term Note of even date herewith from Borrower to Lender, in the face amount of $1,500,000.00 and a Term Note of even date herewith  from Borrower to Lender in the face amount of $750,000.00 (as may from time to time be amended, extended, renewed and supplemented, collectively, the “Note”).

 

	
  

	
B.

	
The indebtedness evidenced by the Note is secured by, inter alia, the Loan Agreement and a Mortgage Deed, Assignment of Leases  and Rents, Security Agreement and Fixture Filing of even date herewith from Borrower to Lender (as may be amended and supplemented, the “Mortgage”).

	
  

	
C.

	
As further security for the payment of the indebtedness evidenced by the Note and in order to induce Lender to make the Loan, Guarantor is willing to enter into and deliver this Guaranty Agreement. Guarantor acknowledges that Lender has refused to make the Loan without this Guaranty Agreement.

 

	
  

	
D.

	
This Guaranty Agreement, the Note, the Mortgage, and any other documents or instruments evidencing or securing the Note shall be herein referred to as the “Loan Documents.”

 

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is  hereby acknowledged, Guarantor does hereby, jointly and severally, covenant and agree with Lender as follows:

 

 

 

 

  

1

  

 

Exhibit C to Term Loan and Security Agreement

 

 

ARTICLE I

 

REPRESENTATIONS AND WARRANTIES OF GUARANTOR

 

SECTION 1.1. REPRESENTATIONS AND WARRANTIES.

 

Guarantor does hereby represent and warrant as follows:

	
  

	
(a)

	
This Guaranty Agreement has been duly authorized, executed and delivered by Guarantor;

	
  

	
(b)

	
There are no undisclosed actions, suits, or proceedings pending or, to the best of Guarantor’s knowledge, threatened against Guarantor in any court or before any Federal, state, municipal or other governmental department or commission, board, bureau, agency or instrumentality which if adversely determined will affect the transactions contemplated by this Guaranty Agreement or materially adversely affect Guarantor’s ability to perform Guarantor’s obligations hereunder;

 

	
  

	
(c)

	
The Loan will result in a direct financial benefit to Borrower and to Guarantor;

 

	
  

	
(d)

	
With regard to any and all balance sheets, net worth statements and other financial statements and data which have heretofore been given to Lender with respect to Guarantor, Guarantor affirms that such statement fairly and accurately represents the financial condition of Guarantor as of the date of such statements, and, since such date, there has been no material adverse change in the financial condition of Guarantor; and

 

	
  

	
(e)

	
(i) there are no undisclosed material claims or demands pending against, or to the knowledge of Guarantor threatened against Guarantor or any of Guarantor’s assets which, if adversely decided, would affect the Guarantor’s ability to perform the obligations hereunder, (ii) Guarantor is not in breach or default of any obligation to pay money that would affect the Guarantor's ability to perform the obligations hereunder, and (iii) no event (including specifically Guarantor’s execution and delivery of this Guaranty Agreement) has occurred that would affect the Guarantor's ability to perform the obligations hereunder, and which, with or without the lapse of time or action by a third party, constitutes or could constitute a material breach or material default under any document evidencing or securing any obligation to pay money or under any other contract or agreement to which Guarantor is a party.

 

ARTICLE II

 

PAYMENT AND PERFORMANCE GUARANTY

 

 

SECTION 2.1.GUARANTY.

 

 

Guarantor hereby irrevocably, unconditionally and absolutely guarantees to Lender, and Lender’s successors and assigns, the due and prompt payment, and not just the collectability, of the principal of, and interest and late charges, escrow payments and all other indebtedness and indemnification, if any, under any of the Loan Documents when due, whether at  maturity, pursuant to mandatory or optional prepayments, by acceleration, indemnification or otherwise all at the times and places and at the rates described in, and otherwise according to the terms of, the Note and the other Loan Documents.

 

 

 

 

  

2

  

 

 

Exhibit C to Term Loan and Security Agreement

Guarantor further hereby irrevocably, unconditionally and absolutely guarantees to Lender the due and prompt performance by Borrower of all duties, agreements and obligations of Borrower contained in the Note and the other Loan Documents, and the due and prompt payment of all costs incurred, including reasonable attorneys’ and paralegals’ fees and costs (including, without limitation, fees and costs incurred in litigation, mediation, arbitration, administrative and bankruptcy proceedings, and appeals therefrom), in enforcing the payment and performance of the Note and the other Loan Documents and this Guaranty Agreement.

 

The payment and performance of the items set forth in this Section 2.1 are hereinafter collectively referred to as the “Indebtedness Guaranteed”.

 

The liability of Guarantor under this Section 2.1 shall survive any release, termination, satisfaction or foreclosure of the Mortgage or the Borrower Collateral (as defined in the Loan Agreement) or the acceptance of title to the Premises or the Borrower Collateral by a deed in lieu of foreclosure.

In case any covenant and agreement made by Borrower under any Loan Documents has not been performed or any obligation under the Note or other Loan Document shall not have been paid by Borrower when due, Guarantor will, not later than fifteen (15) days after written notice by Lender, perform the same and pay the same, to the amount and to the extent required hereunder. Overdue amounts hereunder shall bear interest at the Default Rate as defined in the Note.

 

SECTION 2.2.ABSOLUTE OBLIGATIONS.

 

The obligations of Guarantor under this Guaranty Agreement shall be binding upon Guarantor and Guarantor’s heirs, administrators, representatives, executors, successors and assigns, and shall remain in full force and effect irrespective of any obligations of Borrower on the Note or under the Mortgage or other Loan Documents. The obligations of Guarantor shall not be discharged or impaired by acts, failures or omissions on the part of any holder or holders of the Note whether or not Guarantor has notice, or has agreed to such acts, failures or omissions which might otherwise have the effect of releasing Guarantor, including but not limited to the following acts, failures or omissions:

 

	
  

	
(a)

	
any failure to present the Note for payment or to demand payment thereof, or to give Borrower notice of dishonor for nonpayment of the Note or the interest thereon, when and as the same may become due and payable, or notice of any failure on the part of Borrower and/or Guarantor to do any act or thing or to perform or keep any covenant or agreement by it to be done, kept and performed under the terms of the Note or the Mortgage or the other Loan Documents;

 

	
  

	
(b)

	
the voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all the assets, marshaling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition with creditors or readjustments of, or other similar proceedings affecting Borrower and/or Guarantor or any of their respective assets, or any contest of the validity of this Guaranty Agreement in any such proceeding;

 

	
  

	
(c)

	
any release, limitation, discharge, or cessation of the liability of Borrower or any other person for all or any portion of the obligations under any of the Loan Documents or of Guarantor under this Guaranty Agreement due to any statute, regulation or rule of law, or any invalidity or unenforceability in whole or in part of this Guaranty Agreement or of any provision of any Loan Document or any term or provision hereof or thereof;

 

	
  

	
(d)

	
any defense, setoff, counterclaim, or claim of recoupment, reduction, diminution, discharge, or exoneration, or any other defense of any kind or nature, other than that of prior performance, that Borrower or Guarantor may have or assert, including, but not limited to, any defense of incapacity or lack of authority to enter into  this Guaranty Agreement or any of the other Loan Documents or to perform or pay the liabilities and obligations contained herein or therein, or any defense based on any omission, statute of limitations, failure of consideration, accord and satisfaction, delay or inadequacy, whether entire or partial, respectively, under this Guaranty Agreement or any of the other Loan Documents or the existence of any defense to the enforcement of the Loan Documents;

 

	
  

	
(e)

	
any failure or delay in exercising Lender’s rights and/or remedies against Borrower or Guarantor, hereunder or under any of the other Loan Documents. Lender’s release of or refusal to enforce any provision of the Loan Documents, or agreement not to sue Borrower, any suspension of the right to enforce against Borrower its obligations under the Loan Documents or any security interest in or lien upon any collateral granted to Lender under the Loan Documents or any transfer, waiver, subordination, exchange, substitute, recovery, abandonment, compromise, settlement, modification, surrender or release of any security granted to Lender, or any agreement or undertaking of Borrower, Guarantor or any other person; any compromise, extension, renewal of, or settlement of duration or time for payment, discharge, or performance of all or any part of the liabilities or the obligations hereunder, whether made with or without the knowledge or consent of Borrower or Guarantor; any amendment to or modification of, alteration, increase, reduction, compromise of, renewal, extension, refinance of, any of the Loan Documents, any amendment or modification of any documents or agreement relating thereto or any release, surrender, exchange, realization, or compromise of Lender’s rights and remedies with respect to any lien upon or security interest in the collateral granted to Lender under any of the Loan Documents, whether or not any promise by Lender is for any cause void or voidable by Lender at its option;

 

 

 

 

  

3

  

 

 

Exhibit C to Term Loan and Security Agreement

 

	
  

	
(f)

	
the addition of, or release of, any and all other endorsers, guarantors, obligors and other persons liable under the Loan Documents and/or release of the security or any portion thereof or acceptance of additional security for the performance of the obligations under the Loan Documents;

 

	
  

	
(g)

	
any agreement by Lender with Borrower or any other person to supplement, modify, amend, extend, renew, accelerate or otherwise change the time for payment of Borrower’s obligations under the Loan Documents or any part thereof, including any increase or decrease of the rate(s) of interest thereon;

 

	
  

	
(h)

	
any agreement by Lender with Borrower or any other person to supplement, modify, amend or waive, or enter into or give any agreement, approval or consent with respect to the Loan Documents or any of Borrower’s other obligations under the Loan Documents or any part thereof, or any of the Loan Documents, or any additional security or guaranties, or any condition, covenant, default, remedy, right, representation or term thereof or thereunder;

 

	
  

	
(i)

	
acceptance of new or additional instruments, documents or agreements in exchange for or relative to any of the Loan Documents or any of Borrower’s other obligations under the Loan Documents or any part thereof;

 

	
  

	
(j)

	
acceptance of partial payments on Borrower’s obligations under the Loan Documents;

	
  

	
(k)

	
any agreement to settle, release on terms satisfactory to Lender or by operation of applicable laws or otherwise to liquidate or enforce any obligations of Borrower under the Loan Documents, or any security in any manner, or any consent to the transfer of any security and bid and purchase at any sale;

 

	
  

	
(l)

	
to the extent permitted by law, any failure of Lender to give notice of sale or other disposition of any collateral to Borrower or Guarantor or any other person or any defect in any notice that may be given in connection with any sale or disposition of collateral; and/or

	
  

	
(m)

	
to the extent permitted by law, any failure of Lender to comply with applicable laws in connection with the sale or other disposition of any collateral or other security granted to Lender under the Loan Documents, including, without  limitation,  any failure of Lender to conduct a commercially reasonable sale or other disposition of any collateral or other security.

 

Provided that the specific enumeration of the above-mentioned acts, failures or omissions shall not be deemed to exclude any other acts, failures or omissions, though not specifically mentioned above, it being the purpose and intent of this paragraph that the obligations of Guarantor shall be absolute and unconditional to the extent herein specified and shall not be discharged, impaired or varied except by the payment of the principal of, prepayment fee (as defined in the Note), if any, and interest on the Note and any other payments due under the Note, the Mortgage and the Loan Documents in accordance with the terms thereof, and then only to the extent of such payment. Without limiting any of the other terms or provisions hereof, it is understood and agreed that in order to hold Guarantor liable hereunder, there shall be no obligation on the part of Lender or any other holder of the Note to resort in any manner or form for payment to Borrower, to any other person, firm or corporation, their properties or estates. All rights of Lender or any other holder of the Note hereunder may be transferred or assigned at any time or from time to time and shall be considered to be transferred or assigned at any time or from time to time upon the transfer of the Note, whether with or without the consent of or notice to Guarantor or to Borrower.

 

 

 

 

  

4

  

 

 

Exhibit C to Term Loan and Security Agreement

 

Guarantor also agrees that to the extent Borrower makes any payment on the Note or any of the other Loan Documents, which payment or any part thereof is subsequently invalidated, voided, declared to be fraudulent or preferential, set aside, or is required to be repaid to a trustee, receiver, or any other person under any bankruptcy code, common law, or equitable cause, then and to the extent of such payment, Borrower’s obligation or the part thereof intended to be satisfied shall be revived and continued in full force and effect with respect to Guarantor’s obligations hereunder, as if said payment had not been made. The liability of  Guarantor hereunder shall not be reduced or discharged, in whole or in part, by any payment to Lender from any source, that Lender thereafter pays, returns or refunds in whole or in part by reason of the assertion of a claim of any kind relating thereto, including, but not limited to, any claim for breach of contract, breach of warranty, preference, illegality, invalidity, or fraud asserted by any account debtor or by any other person.

 

To the extent permitted by law,  Lender may, at its election, exercise any right or remedy it may have against Borrower, Guarantor or any other person or any security held by Lender, including, without limitation, the right to foreclose upon any such security by one or more foreclosure sales, whether or not every aspect of any such sale is commercially reasonable, without affecting or impairing in any way the liability of Guarantor hereunder, except to the extent the indebtedness has been paid, and Guarantor hereby waives any defense arising out of the absence, impairment or loss of any right of reimbursement, contribution or subrogation or any other right or remedy of Guarantor against Borrower or any other person or any such security whether resulting from such election by Lender or otherwise. Guarantor hereby waives any defense arising by reason of any disability or other defense of Borrower or any other person or by reason of the cessation from any cause whatsoever (including without limitation any intervention or omission by Lender) of any obligation or liability, either in whole or in part, of Borrower to Lender. Guarantor understands and agrees that if all or any part of any obligation or liability of Borrower to Lender is secured by real property, Guarantor shall be obligated and liable for the full amount of Guarantor’s obligations hereunder notwithstanding foreclosure of such real property by trustee sale, judicial sale or any other reason impairing the right of Guarantor to proceed against Borrower.

 

SECTION 2.3                     ADDITIONAL WAIVERS OF GUARANTOR.

 

	
  

	
(a)

	
Financial Condition of Borrower.   Guarantor acknowledges that this is a continuing Guaranty Agreement and that Guarantor expressly promises to pay and perform each and every one of Guarantor’s obligations hereunder. Guarantor is fully aware of the operating history of the Premises and the status of the Borrower Collateral. Guarantor delivers this Guaranty Agreement based solely upon Guarantor’s independent investigation of Borrower’s financial condition, and Guarantor assumes full responsibility for obtaining any further information concerning Borrower’s financial condition. Guarantor agrees that Guarantor is now and, during the term of this Guaranty Agreement, will be responsible for being fully aware of the financial condition of Borrower, the Borrower Collateral and the Premises. Guarantor knowingly accepts the full range of risk encompassed in a contract of continuing guaranty, which risk includes, but is not limited to, the possibility that Borrower’s financial condition or its ability to pay its debts as they mature has deteriorated.

 

	
  

	
(b)

	
Waiver of Notice. Guarantor hereby waives: (i) presentment and protest, and waives notice of presentment, protest, dishonor, non-payment, non-performance and any similar notice, and waives any delay thereto, with respect to the Loan Documents or any instruments or documents at any time held by Lender in connection with this Guaranty Agreement or the other Loan Documents; (ii) notice of extension, modification, refunding, amendment, addition or supplement to, deletion or departure from, or breach of any of the terms of the Loan Documents (other than this Guaranty Agreement) or the other Loan Documents or any other agreement that may be made relating hereto or thereto; (iii) notice of the occurrence of any default hereunder or the occurrence of any default or Event of Default under any of the Loan Documents, any compromise, release, consent, or other action or inaction with respect to the collateral granted to Lender under any of the Loan Documents or any of the terms and provisions of the Loan Documents; (iv) notice with respect to any exercise or non- exercise by Lender, or any right, power, or remedy under or in respect of the Loan Documents or any security, lien, deposit, pledge, or guaranty held in connection with the liabilities of Borrower under the Loan Documents; (v) notice of acceptance of this Guaranty Agreement and notice that credit has been extended by Lender  in reliance on Guarantor’s guaranty of the obligations of Borrower; (vi) any defense based upon an election of remedies by Lender whether or not the right of Guarantor to proceed against Borrower for reimbursement is affected; (vii) to the extent Guarantor may lawfully do so, any defense based upon any statute or rule which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; and (viii) all defenses which Borrower may now or hereafter have to the payment of the obligations under the Loan Documents which could otherwise be asserted by Guarantor in any defense (other than payment) of any kind which  Guarantor may now or hereafter have with respect to any of the Loan Documents, any other guaranty, or any other collateral securing the obligations under the Loan Documents.

 

	
  

	
(c)

	
Waiver of Rights of Subrogation. Notwithstanding anything to the contrary elsewhere contained herein or in any other Loan Document, Guarantor until one year and one day from the payment and full satisfaction of all amounts due Lender under the Loan Documents and the performance and payment of the Indebtedness Guaranteed, hereby 

expressly waives with respect to Borrower and any other person, any and all rights at law or in equity to subrogation, to reimbursement, to exoneration, to contribution, to indemnification, to setoff or to any other rights that could accrue to a surety against a principal, to a guarantor against a maker or obligor, to an accommodation party against the party accommodated, or to a holder or transferee against a maker, and which Guarantor may have or hereafter acquire against Borrower or any other person in connection with or as a result of Guarantor’s execution, delivery and/or performance of this Guaranty Agreement or any other Loan Document. Guarantor agrees that Guarantor shall not have or assert any such rights against Borrower or its successors and assigns or any other person (including any surety), either directly or as an attempted setoff to any action commenced against Guarantor by Borrower (as borrower or in any other capacity) or by Lender or by any other person.

  

Guarantor agrees that to the extent that such claims are not subordinated, by operation of law or otherwise, such claims of Guarantor are hereby subordinated as a claim against Borrower or any of its assets, whether such claim be in the ordinary course of business or in the event of voluntary or involuntary liquidation, dissolution, insolvency or bankruptcy, so that no payment with respect to any such indebtedness, claim or liability will be made or received while any portion of the obligations under the Loan Documents remains due and unpaid, and if any such payment is received by Guarantor, it shall be held in trust for the benefit of Lender and then promptly paid over to Lender for application to the payment of the obligations under the Loan Documents.

 

 

 

 

  

5

  

 

 

Exhibit C to Term Loan and Security Agreement

 

 

 

	
  

	
(d)

	
Independent Obligations, and Waivers. The obligations of Guarantor hereunder are independent of and are not co-extensive with the obligations of Borrower under the Loan Documents. A separate action or actions may be brought and prosecuted by Lender against Guarantor whether or not an action is brought against Borrower or Borrower is joined in any such action or actions and Guarantor’s liability hereunder may be enforced regardless of the existence, validity, enforcement  or  non- enforcement of any such other guaranties or other obligations. Any cause of action that Lender may have against Guarantor shall accrue upon the date Lender makes demand on Guarantor for payment of Guarantor’s obligations hereunder. Without limiting the generality of the foregoing, Guarantor expressly waives the benefit of any statute of limitations, any moratorium, reinstatement, marshaling, forbearance, valuation, stay, extension, redemption, appraisement, exemption and homestead now provided, or which may hereafter be provided, by the Constitution or laws of the United States of America or the Commonwealth of Massachusetts, both as to itself and to all of its property, real and personal, affecting the liabilities under the Loan Documents or otherwise and expressly agrees that the running of a period of limitation on, or any delay or omission in, Lender’s action against Borrower or in Lender’s enforcement of remedies against Borrower, the collateral granted to Lender under any of the Loan Documents, or any security interest or lien held for  the liabilities under the Loan Documents shall not exonerate or affect Guarantor’s absolute obligation to pay and perform in full Guarantor’s obligations hereunder.

	
  

	
(e)

	
Bankruptcy and Related Waivers. Guarantor hereby waives to the fullest extent permitted by law, (i) any defense arising as a result of Lender’s 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, (ii) any defense based on any borrowing or grant or a security interest under Section 364 of the United States Bankruptcy Code, (iii) any use of cash collateral under Section 363 of the United States Bankruptcy Code, (iv) any agreement or stipulation with respect to the provision of adequate protection in any bankruptcy proceeding of any person, (v) the avoidance of any lien in favor of Lender for any reason, and (vi) any objection to or defense arising as a result of bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, liquidation or dissolution proceeding commenced by or against Borrower or any other person, including any discharge of, or bar or stay against collecting, all or any of the liabilities hereunder or under any of the Loan Documents.

 

	
  

	
(f)

	
Understandings With Respect to Waivers and Consents. Guarantor warrants and agrees that each of the waivers and consents of Guarantor set forth in this Guaranty Agreement are made after consultation with legal counsel and with full knowledge of their significance and consequences, with the understanding that events giving rise to any defense or right waived may diminish, destroy or otherwise adversely affect rights which Guarantor otherwise may have against Borrower, Lender or any other person or against the Premises or the Borrower Collateral, and that, under the circumstances, the waivers and consents herein given are reasonable and not contrary to public policy or law. If any of the waivers or consents herein is determined to be contrary to any applicable law or public policy, such waivers and consents shall be effective to the maximum extent permitted by law.

 

 

 

 

  

6

  

 

 

Exhibit C to Term Loan and Security Agreement

 

 

ARTICLE III 

TERM OF GUARANTY

 

SECTION 3.1.                                GUARANTY TERM.

 

The obligations and liabilities of Guarantor under this Guaranty Agreement shall remain in full force and effect, notwithstanding the release of the Note, the Mortgage or the other Loan Documents, until such time as the Note has been paid in full and the principal, prepayment fee (as defined in the Note), if any, and interest on the Note and all other amounts due and owing Lender under the Loan Documents have been paid in full  and all  obligations of Borrower have been performed in full.

 

ARTICLE IV 

MISCELLANEOUS

 

 

SECTION 4.1.                                NO TRANSFER.

 

Guarantor covenants that Guarantor will not transfer any of its assets for the purpose of preventing Lender from satisfying any judgment rendered under this Guaranty Agreement therefrom, either before or after the entry of any such judgment.

 

SECTION 4.2.                                FINANCIAL STATEMENTS.

 

Guarantor shall submit such financial and other information as provided in Section 5.06 of the Loan Agreement.

 

SECTION 4.3.                                UNCONDITIONAL OBLIGATIONS.

 

The obligations of Guarantor hereunder shall arise absolutely and unconditionally when the Note shall have been delivered to Lender.

 

SECTION 4.4.                                AMENDMENTS.

 

This Guaranty Agreement may be amended and the observance of any term of this Guaranty Agreement may be waived with (and only with) the written consent of Guarantor and Lender (or the holder or holders of the Note).

SECTION 4.5.                                ENTIRE AGREEMENT.

 

This Guaranty Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.

SECTION 4.6.                                SEVERABILITY.

 

In case any one or more of the provisions contained in this Guaranty Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected or impaired thereby.

SECTION 4.7.                                SUCCESSORS AND ASSIGNS.

 

This Guaranty Agreement shall be binding upon Guarantor and Guarantor’s heirs, administrators, representatives, executors, successors and assigns and shall inure to the benefit of Lender and its successors and assigns as holder of the Note.

 

SECTION 4.8.                                GOVERNING LAW.

 

This Guaranty Agreement shall be governed by and construed and interpreted in accordance with the laws of the Commonwealth of Massachusetts, without regard to principles of conflicts of laws.

 

SECTION 4.9.                                JURISDICTION AND NOTICES.

 

 

 

 

  

7

  

 

 

Exhibit C to Term Loan and Security Agreement

 

 

The Guarantors submit and consent to personal jurisdiction in the Commonwealth of Massachusetts for the enforcement of this Guaranty Agreement and waive any and all personal rights under the laws of any state or the United States of America to object to jurisdiction in the Commonwealth of Massachusetts for the purposes of litigation to enforce this Guaranty Agreement. Litigation may be commenced either in the court of general jurisdiction of such state or the United States District Court for the district in that state, at the election of the Lender. In the event that such litigation is commenced in lieu of personal service, service of process may be made, and personal jurisdiction over the Guarantors obtained, by the mailing of a copy of any summons and complaint, U.S. Mail, Certified Mail, Return Receipt Requested, or any other method provided under the laws of the jurisdiction for service of process in a civil action, to the Guarantors at the addresses shown below, or the last address of which Lender has received notice. Nothing contained herein shall prevent Lender from bringing any action or exercising any rights against any security given to Lender by the Guarantors, or against the Guarantors personally, or against any property of the Guarantors, within any other state. Commencement of any such action or proceeding in any other state shall not constitute a waiver of the agreement as to the laws of the state which shall govern the rights and obligations of the Guarantors and Lender hereunder or of the submission made by the Guarantors to personal jurisdiction with the Commonwealth of Massachusetts. The aforesaid means of obtaining personal jurisdiction and perfecting service of process are not intended to be exclusive but are cumulative and in addition to all other means of  obtaining personal jurisdiction and perfecting service of process  now or hereafter provided by the laws  of the state where an action on this Guaranty Agreement is commenced.

 

 

 

	Address:	TechPrecision Corporation
	 	
Saucon Valley Plaza

	 	3477 Corporate Parkway, Suite 140
	 	Center Valley, Pennsylvania 18034 
	 	Attention: Richard F. Fitzgerald, CFO
	Telephone: 	484.693.1702
	Fax: 	267.373.1640
	Email: 	fitzgeraldr@techprecision.com
	 	 

             

SECTION 4.10.                                          ENFORCEMENT COSTS.

 

 

If (i) this Guaranty Agreement is delivered to an attorney for the purpose of enforcing the obligations hereunder or any of them through any legal proceeding; (ii) an attorney is retained to represent Lender in any bankruptcy, reorganization, receivership, or other proceedings affecting creditors’ rights and involving a claim under this Guaranty Agreement; or (iii) an attorney is retained to represent Lender in any other proceedings whatsoever in connection with this Guaranty Agreement, then Guarantor shall pay to Lender all reasonable attorneys’ and paralegals’ fees and costs,  including without limitation fees and costs incurred in litigation, mediation, arbitration, administrative, and bankruptcy proceedings and appeals therefrom, court costs, filing fees, recording costs, expenses for telephone calls and facsimile transmissions, travel expenses, photocopies, expenses of sale of foreclosure, title insurance premiums, accountant’s fees, appraisal fees, environmental investigation costs, out of court settlement fees and expenses and all other costs and expenses incurred in connection therewith, in addition  to  all  other amounts due hereunder. Such costs shall be paid Lender whether or not an action is actually commenced against Guarantor by reason of any breach of Guaranty Agreement.

 

 

 

 

  

8

  

 

 

Exhibit C to Term Loan and Security Agreement

 

SECTION 4.11.  PREJUDGMENT REMEDY WAIVER .

 

GUARANTOR HEREBY REPRESENTS, COVENANTS AND AGREES THAT THE TRANSACTION TO WHICH THE LOAN DOCUMENTS RELATE IS A "COMMERCIAL TRANSACTION" AS DEFINED BY THE GENERAL LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. GUARANTOR HEREBY WAIVES ALL RIGHTS TO NOTICE AND PRIOR COURT HEARING OR COURT ORDER UNDER THE GENERAL LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, AS AMENDED, OR UNDER ANY OTHER STATE OR FEDERAL LAW WITH RESPECT TO ANY AND ALL PREJUDGMENT REMEDIES BORROWER OR LENDER MAY EMPLOY TO ENFORCE ITS  RIGHTS  AND  REMEDIES  HEREUNDER. GUARANTOR ACKNOWLEDGES AND RESERVES ITS RIGHT TO NOTICE AND A HEARING SUBSEQUENT TO THE ISSUANCE OF A WRIT FOR PREJUDGMENT REMEDY BY BORROWER’S OR LENDER’S ATTORNEY, AND BORROWER AND LENDER ACKNOWLEDGE GUARANTOR’S RIGHT TO SAID HEARING SUBSEQUENT TO THE ISSUANCE OF SAID WRIT. GUARANTOR FURTHER HEREBY WAIVES ANY REQUIREMENT OR OBLIGATION OF BORROWER OR LENDER TO POST A BOND OR OTHER SECURITY IN CONNECTION WITH ANY PREJUDGMENT REMEDY OBTAINED BY BORROWER OR LENDER AND WAIVES ANY OBJECTIONS TO ANY PREJUDGMENT REMEDY OBTAINED BY BORROWER OR LENDER BASED ON ANY OFFSETS, CLAIMS, DEFENSES OR COUNTERCLAIMS OF GUARANTOR OR ANY OTHER OBLIGATED PARTY  TO ANY ACTION BROUGHT BY BORROWER OR LENDER.

 

SECTION 4.12.                                          JURY TRIAL.

 

NEITHER BORROWER, LENDER, GUARANTOR OR ANY OTHER PERSON OR ENTITY LIABLE FOR THE INDEBTEDNESS EVIDENCED BY THE NOTE, OR ANY ASSIGNEE, SUCCESSOR, HEIR OR PERSONAL REPRESENTATIVE OF LENDER, BORROWER, GUARANTOR OR ANY OTHER PERSON OR ENTITY SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER LITIGATION PROCEDURE BASED UPON OR ARISING OUT OF THIS GUARANTY AGREEMENT, THE MORTGAGE, THE NOTE OR ANY INSTRUMENT SECURING THE NOTE, ANY COLLATERAL FOR THE PAYMENT HEREOF OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG SUCH PERSONS OR ENTITIES, OR ANY OF THEM. NEITHER LENDER, BORROWER, GUARANTOR OR ANY OTHER PERSON OR ENTITY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND THE PROVISIONS HEREOF SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES. GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY LENDER THAT THE PROVISIONS OF THIS PARAGRAPH CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH LENDER HAS RELIED,  IS  RELYING AND WILL RELY IN MAKING THE LOAN. BORROWER ACKNOWLEDGES THAT IT HAS CONSULTED WITH AN ATTORNEY AND FULLY UNDERSTANDS THE LEGAL EFFECT OF THE PROVISIONS OF THIS PARAGRAPH.

 

	
  

	
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

 

 

 

 

  

9

  

 

 

Exhibit C to Term Loan and Security Agreement

 

IN  WITNESS  WHEREOF,  Guarantor  has  caused  this  Guaranty  Agreement  to  be executed as of the day and year first above written.

 

	 	 	 	
TECHPRECISION CORPORATION

	 	 	 	
a Delaware corporation

	 	 	 	 
	 	 	
By: 

	
                                                

	 	 	 	
Name: Richard F. Fitzgerald

	 	 	 	
Title: Chief Financial Officer

	 	 	 	 
	
THE COMMONWEALTH OF PENNSYLVANIA

	
§

	 	
  

	 	
§ss.

	 	 
	
COUNTY OF                                       

	
§

	 	
  

	 	 	 	 

On this                       day of December, 2014, personally appeared Richard F. Fitzgerald, Chief Financial Officer of TECHPRECISION CORPORATION, signer and sealer of the foregoing instrument, and acknowledged the same to be his free act and deed in his capacity as such Chief Financial Officer, and the free act and deed of TECHPRECISION CORPORATION before me.

 

	 	                                             
	 	
Name:

	 	
Commissioner of the Superior Court/

	 	
Notary Public,

	 	
My Commission Expires:

	 	 

[Signature Page to Guaranty Agreement]

 

 

  

  

  

 

 

 

EXHIBIT D

 

 

MORTGAGE

(see attached)

 

 

 

 

  

  

  

 

 

Exhibit D to Term Loan and Security Agreement

 

After recording return to:

 

MAYO CROWE LLC 

CITY PLACE II

185 ASYLUM STREET

HARTFORD, CONNECTICUT 06103 

ATTENTION: KATHERINE F. TROY, ESQ.

 

 

RANOR, INC., AS BORROWER TO

 

REVERE HIGH YIELD FUND, LP, AS LENDER

 

 

 

  MORTGAGE DEED, ASSIGNMENT OF LEASES AND RENT, SECURITY AGREEMENT AND FIXTURE FILING

 

  

 

 

	
Date:

	
As of December, 2014

	  	  
	
Location:

	
48 Town Farm Road

	
Westminster, Massachusetts

	  
	  	  
	
County:

	
Worcester

 

 

 

  

  

  

 

 

Exhibit D to Term Loan and Security Agreement

 

  MORTGAGE DEED, ASSIGNMENT OF LEASES AND RENT, SECURITY AGREEMENT AND FIXTURE FILING

 

THIS MORTGAGE DEED, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this “Security Instrument”), made this day of December, 2014 by and between RANOR, INC., a Delaware corporation having an office and place of business located at Bella Drive, Westminster, Massachusetts 01473, as party of the first part (the “Borrower”), for the benefit of REVERE HIGH YIELD FUND, LP, a Delaware limited partnership, with an address of 105 Rowayton Avenue, Suite 100, Rowayton, Connecticut 06853, together with its successors and assigns, as party of the second part (“Lender”).

 

RECITALS:

WHEREAS, Borrower and Lender are parties to that certain Term Loan and Security Agreement dated the date hereof (as such agreement is amended and in effect from time to time, the “Loan Agreement”);

WHEREAS, the Loan Agreement provides for Lender to make a loan to Borrower in the principal amount of ONE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($1,500,000.00) (the “Loan”);

WHEREAS, the Loan is evidenced by a Term Note dated as of the date hereof (the “Note”) in the maximum principal sum of ONE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($1,500,000.00), with interest payable from the date thereof at the rates set forth in the Note, which by this reference is incorporated herein. The Note matures on December 31, 2015; provided, however, that Borrower may elect to extend the maturity date thereof for a period of six (6) months to June 30, 2016 subject to and in accordance with the terms and conditions of the Note and the Loan Agreement; and

WHEREAS, Borrower desires to secure the payment and performance of all of its obligations under the Note and certain additional Obligations (as defined in Section 1.1).

IN CONSIDERATION of the principal sum of the Note as advanced as described above, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to secure the Obligations, Borrower hereby:

(A)           Irrevocably, unconditionally, and absolutely grants, bargains, sells, assigns, transfers, pledges, mortgages, warrants, and conveys to Lender (WITH POWER OF SALE) for the purposes herein set forth and grants Lender (WITH POWER OF SALE) a security interest in, all of Borrower’s right, title, and interest in the following property (collectively, the “Collateral”), upon the terms and conditions hereof:

 

 

 

 

 

 

  

-1-

  

 

 

Exhibit D to Term Loan and Security Agreement

 

(i)           That certain tract or parcel of land of which Borrower is now seized and in possession, situate in Worcester County, Massachusetts, having a street address at 48 Town Farm Road, Westminster, Massachusetts 01473, and more fully described in Exhibit A attached hereto and by this reference incorporated herein (“Premises”);

(ii)           Any and all buildings, constructions, and improvements now or hereafter erected or located in or on the Premises, including, but not limited to, all fixtures, attachments, appliances, equipment, machinery, and other articles now owned by Borrower or hereafter acquired by Borrower and attached or affixed thereto or located thereon (except the personalty owned by lessees) (collectively, the “Improvements”), together with all appurtenances and additions thereto and betterments, renewals, substitutions, and replacements thereof, all of which shall be deemed and construed to be part of the realty;

(iii)           All right, title, and interest of Borrower in and to all items incorporated as part of or attributed or affixed to any of the Premises, Improvements, or other real property included in the Collateral or any other interest of Borrower, whether now owned or hereafter acquired, in, to or relating to the Premises, Improvements, or such other real property, in such manner that such items are no longer personal property under the laws of the Commonwealth of Massachusetts;

(iv)           All easements, rights-of-way, and rights now owned or hereafter acquired by Borrower and used or usable in connection with the Premises and the Improvements, or as a means of access thereto, including, without limiting the generality of the foregoing, all rights pursuant to any trackage agreement, all rights to the non-exclusive use of common drive entries, all water and water rights, and all mineral, mining, oil, and gas rights and rights to produce or share in the production of anything related thereto, together with all tenements, hereditaments, and appurtenances thereof and thereto;

(v)           All right, title, and interest now owned or hereafter acquired by Borrower in and to any land lying within the right-of-way of any street, open or proposed, adjoining the Premises, and any and all sidewalks, alleys, and strips and gores of land adjacent to or used in connection with the Premises or the Improvements;

(vi)           All of the fixtures described in Exhibit B attached hereto and by this reference incorporated herein, now owned or hereafter acquired by Borrower, and all appurtenances and additions thereto and betterments, renewals, substitutions and replacements thereof; and, all right, title, and interest of Borrower, now or hereafter arising, in and to any and all said property is hereby assigned to Lender, together with the benefits of all deposits and payments now or hereafter made thereon by or on behalf of Borrower;

(vii)           All interests, estates, or other claims or demands in law and in equity which Borrower now has or may hereafter acquire in the Collateral;

 

 

 

 

  

-2-

  

 

 

Exhibit D to Term Loan and Security Agreement

 

(viii)           All proceeds, products, substitutions and accessions of the foregoing, of every type; and

	
  

	
(B)

	
Assigns, sets over, and transfers to Lender (WITH POWER OF SALE):

 

(i)           All right, title, and interest of Borrower in and to all leases, whether written or oral, covering the Premises, the Improvements, or any portion thereof, now or hereafter existing or entered into (collectively, “Leases”), and all right, title, and interest of Borrower thereunder, including, without limitation, all guaranties thereof, all cash or security deposits, advance rentals, and all deposits or payments of similar nature; and

(ii)           All rents, issues, profits, royalties, income, and other benefits derived from the Premises or the Improvements or any other portion of the Collateral (collectively, the “Rents”).

TO HAVE AND TO HOLD the said bargained property with all and singular the rights, members, and appurtenances thereto appertaining, to the only proper use, benefit, and behoof of Lender and its successors and assigns, in fee simple, and Borrower hereby covenants that Borrower is lawfully seized and possessed of said property, and has a good right to convey it, and it is unencumbered, subject to (a) Liens (as defined in the Loan Agreement) held by Lender,

(b) Liens for unpaid taxes that either (i) are not yet delinquent, or (ii) do not constitute an Event of Default hereunder and are the subject of Permitted Protests (as defined in the Loan Agreement), (c) Liens set forth on Schedule P to the Loan Agreement, (d) warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in the  ordinary course of business and not in connection with the borrowing of money, and which Liens either

(i)     are for sums not yet delinquent, or (ii) are the subject of Permitted Protests, (f) Liens on amounts deposited in connection with obtaining worker’s compensation or other unemployment insurance, (g) Liens on amounts deposited in connection with the making or entering into bids, tenders, or leases in the ordinary course of business and not in connection with the borrowing of money, (h) Liens on amounts deposited as security for surety or appeal bonds in connection with obtaining such bonds in the ordinary course of business, (i) Liens resulting from any judgment or award that is not an Event of Default hereunder, (j) rights of setoff or bankers’ liens upon deposits of cash in favor of banks or other depository institutions; and (k) with respect to any Real Property (as defined in the Loan Agreement), easements, rights of way, and zoning restrictions that do not materially interfere with or impair the use or operation thereof as reasonably determined by Lender, including those matters described in Schedule B of that certain lender’s title insurance policy from Fidelity National Title Insurance Company provided to Lender in connection with the recording of the Security Instrument (collectively, the “Permitted Liens”); and Borrower does by these presents bind Borrower and Borrower’s heirs, executors, administrators, successors and assigns, forever, to warrant and defend the said bargained property, unto Lender and its successors and assigns, against Borrower, and against all and every other person or persons shall and will WARRANT AND FOREVER DEFEND.

  

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Exhibit D to Term Loan and Security Agreement

 

PROVIDED, that if Borrower shall pay or cause to be paid to Lender the Obligations in full at the time and in the manner stated in the Note and in this Security Instrument and other Loan Documents at any time before the sale hereinafter provided for, and shall well and truly perform, comply with and observe each and every covenant, agreement, term and condition of this Security Instrument and of the other Loan Documents, then these presents and the estate granted hereby shall cease, determine and become void, and Lender shall (at the expense of Borrower), release and discharge the lien and terminate the security interest of this Security Instrument.

 

IN FURTHERANCE OF THE FOREGOING, Borrower hereby warrants, represents, covenants, and agrees as follows:

 

  ARTICLE I. OBLIGATIONS

 

Section 1.1     Obligations.   This Security Instrument is executed, acknowledged, and

delivered  by  Borrower  to  secure  and  enforce  the  following  obligations  (collectively,  the “Obligations”):

(a)           Payment and performance of all obligations of Borrower under the Note;

(b)           Performance of every obligation, covenant, and agreement of Borrower arising under or in connection with this Security Instrument, the Loan Agreement and all other Loan Documents (as defined in Section 1.2 hereof);

(c)           Payment of all sums advanced pursuant to the terms of this Security Instrument to protect and preserve the Collateral and the lien and security interest hereby created therein;

(d)           Payment of all sums advanced and costs and expenses incurred by Lender in connection with the Obligations, or any part thereof, any renewal, extension or change of or substitution for the Obligations or any part thereof, or the acquisition or perfection of the security therefor, whether made or incurred at the request of Borrower or Lender;

(e)           Payment of all indebtedness and liabilities and performance of all other obligations of Borrower to Lender arising pursuant to or in connection with any interest rate swap agreement, interest rate cap agreement, hedging agreement or other interest rate protection arrangements now or hereafter made between Borrower and Lender to hedge the floating interest rate expenses of the Note;

(f)           Payment of all other indebtedness and liabilities and performance of all other obligations of Borrower to Lender arising pursuant to or in connection with this Security Instrument, the Loan Agreement or any other Loan Document; and

 

(g)           All renewals, extensions, amendments, modifications, consolidations, and changes of, or substitutions or replacements for, all or any part of the items described under clauses (a) through (f) above.

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

 

 

Section 1.2 Loan Documents. This Security Instrument, the Loan Agreement, the Note, the Assignment of Leases and Rents dated as of the date hereof from Borrower in favor of Lender, the Guaranty Agreement dated as of the date hereof from TechPrecision Corporation (the “Guarantor”) in favor of Lender (the “Guaranty”), the Environmental Indemnity Agreement dated as of the date hereof from Borrower and Guarantor in favor of Lender, the Assignment of Contracts, Licenses, Permits, Agreements, Warranties and Approvals dated as of the date hereof from Borrower in favor of Lender, the UCC-1 Financing Statements, the Compliance Agreement dated as of the date hereof from Borrower in favor of Lender, the Guarantor’s Certificate of No Adverse Change dated as of the date hereof from Guarantor in favor of Lender, the Fee Representation Letter dated as of the date hereof from Borrower and Guarantor, and any other mortgage, security agreement, assignment of leases and rents, environmental indemnity agreement, cash collateral agreement, guaranty, ISDA master agreement or other interest rate hedging or protection agreement, or other agreement or mortgage now or hereafter made to evidence or further secure the payment and performance of any of the Obligations or otherwise made in connection with the Obligations, are herein referred to collectively as the “Loan Documents.”

ARTICLE II. 

 

REPRESENTATIONS AND WARRANTIES

 

Borrower hereby represents and warrants to Lender as follows:

 

Section 2.1 Title. Borrower owns the Premises and Improvements in  fee  simple absolute, and has good and marketable title to the Collateral, free and clear of all liens, charges, encumbrances, and security interests whatsoever, except the Permitted Liens. Borrower will forever warrant and defend its title to the Collateral, and the validity, enforceability, and priority of the lien and security interest created hereby, against the claims of all persons except the Permitted Liens.

 

Section 2.2 Legal Status and Authority. Borrower is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has all necessary approvals, governmental and otherwise, and full power and authority to own its properties (including the Collateral) and carry on its business as now conducted and proposed to be conducted.

Section 2.3 Validity of Loan Documents. The execution and delivery, and the performance by Borrower of the terms of the Loan Documents (i) are within the company power of Borrower; (ii) have been authorized by all requisite company action; (iii) will not violate, conflict with, result in a breach of, or constitute (with notice or lapse of time, or both) a default under any provision of law, any order or judgment of any court or governmental authority, the articles of organization, operating agreement, or other governing instrument of Borrower, or any indenture, agreement, or other instrument to which Borrower is a party or by which it or any of its property is or may be bound or affected, and Borrower has received all necessary approvals and consents, company, governmental, or otherwise; (iv) will not result in the creation or imposition of any lien, charge, or encumbrance whatsoever upon any of its properties or assets, except the lien and security interest created hereby; and (v) will not require any authorization or license from, or any filing with, any governmental or other body (except for the filing or recording of this Security Instrument and the other applicable loan documents). The Loan Documents constitute legal, valid, and binding obligations of Borrower.

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

Section 2.4 Litigation. There is no action, suit, or  proceeding,  judicial, administrative, or otherwise (including any condemnation or similar proceeding), pending or, to the best knowledge of Borrower, threatened or contemplated against, or affecting, Borrower or the Collateral.

 

Section 2.5Status of Collateral.

 

(a)           The Premises and Improvements are not located in an area identified by the Secretary of Housing and Urban Development, or any successor thereto, as an area having special flood, mudslide, and/or flood-related erosion hazards pursuant to the National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended, or any successor law.

 

(b)           Borrower has all necessary certificates, permits, licenses, and other approvals, governmental and otherwise (including all zoning, building code, land use, environmental and similar approvals), necessary for the operation of the Premises and Improvements, all of which are in full force and effect as of the date hereof and all operations conducted thereon are in substantial compliance with such approvals.

(c)           The Premises and Improvements, and the present and contemplated use and occupancy thereof, are in full compliance with all applicable zoning ordinances, building codes, land use, and other similar laws.

(d)           The Premises and Improvements are served by all utilities required for the contemplated use thereof.

(e)           All public roads and streets necessary to serve the Premises and Improvements for the contemplated use thereof have been completed, are serviceable in all weather, and, where required by the appropriate governmental entities, have been dedicated to and formally accepted by such governmental entities.

(f)           All costs and expenses of any and all labor, materials, supplies, and equipment used in the construction of the Improvements have been paid in full.

 

(g)           Borrower has paid in full for, and is the owner of, all furnishings, fixtures, and equipment (other than lessees’ property) used in connection with the operation of the Premises, free and clear of any and all security interests, liens, or encumbrances, except for the Permitted Liens.

 

(h)         There is no proceeding pending for the total or partial condemnation of the Collateral.

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

 

(i)           All taxes and governmental assessments, water, sewer and municipal charges, if any, that are due and owing as of the date hereof and which, if not paid, would create a lien on or affect the ownership interest of Borrower with respect to the Collateral, have been paid.

(j)           Borrower has not entered into any management agreement concerning the Collateral, and Borrower does not have any obligation to pay any management fees in connection with management of the Collateral.

(k)           Borrower has not accepted rent under the Leases or under any rental or occupancy agreement more than thirty (30) days in advance of its due date.

 

ARTICLE III. 

 

COVENANTS AND AGREEMENTS

 

Borrower covenants and agrees with Lender as follows:

Section 3.1 Payment of Obligations.  Borrower shall pay when due and shall perform the Obligations.

Section 3.2 Continuation of Existence. Borrower shall maintain in good standing its existence under the laws of the Commonwealth of Massachusetts and shall not (i) dissolve, terminate, or otherwise dispose of, directly or indirectly or by operation of law, all or substantially all of its assets; (ii) reorganize, convert or change its legal structure without the prior written consent of Lender; or (iii) change its name, the address of its principal offices, or the name under which Borrower conducts its business without promptly notifying Lender of such change.

Section 3.3Taxes, Liens, and Other Charges.

 

(a)           Subject to Permitted Protests, Borrower shall provide for payments when due of all taxes, liens, assessments, dues, fines, impositions and public charges, general and special, ordinary and extraordinary, of every character (including penalties and interest), now or hereafter levied or assessed upon or against the Collateral (collectively, the “Assessments”). Borrower shall also pay (i) all income, franchise, and other taxes and governmental charges levied, assessed, or imposed by the United States of America, or any state, any political subdivision thereof, or any other taxing authority upon Borrower or in respect of any of the Collateral which, if unpaid, would become a lien or charge upon the Collateral, or any part thereof; and (ii) all charges made by utility companies, public or private, for services furnished or used in connection with the Collateral (together with the Assessments, collectively, “Impositions”).

(b)           Borrower shall pay all taxes (excluding income, franchise, and doing business taxes), assessments, charges, expenses, costs, and fees (including registration and recording fees) levied on, or assessed against Lender, to the extent same are incurred in connection with any of the Loan Documents or the Loan. Borrower shall also pay all stamp and other similar taxes required to be paid in connection with the Obligations.

Section 3.4 Defense of Title and Litigation.  Subject to the Permitted Liens, if the lien or security interest created by this Security Instrument, or the validity, enforceability, or priority thereof or of this Security Instrument, or if title or any of the rights of Borrower or Lender in or to the Collateral, shall be endangered or questioned, or shall be attacked directly or indirectly, or if any action or proceeding is instituted against Borrower or Lender with respect thereto, Borrower will promptly notify Lender thereof and will diligently endeavor to cure any defect which may be claimed, and will take all necessary and proper steps for the defense of such action or proceeding, including the employment of counsel, the prosecution or defense of litigation, and, subject to Lender’s approval, the compromise, release, or discharge of any and all adverse claims. Lender (whether or not named as a party to such actions or proceedings) is hereby authorized and empowered (but shall not be obligated) to take such additional steps as it may deem necessary or proper for the defense of any such action or proceeding or the protection of the lien, security interest, validity, enforceability, or priority of this Security Instrument, or of such title or rights, including the employment of counsel, the prosecution or defense of litigation, the compromise, release, or discharge of such adverse claims, the purchase of any tax title, and the removal of such prior liens and security interests. Borrower shall, on demand, reimburse Lender for all expenses (including reasonable attorneys’ fees and disbursements) incurred by it in connection with the foregoing matters. All such costs and expenses of Lender, until reimbursed by Borrower, shall be part of the Obligations and shall be deemed to be secured by this Security Instrument.

Section 3.5Operation and Maintenance of Collateral.

 

(a)           Repair and Maintenance. Borrower will operate and maintain the Premises, the Improvements, and the other Collateral in good order, repair, and operating condition; will promptly make all necessary repairs, renewals, replacements, additions, and improvements thereto, interior and exterior, structural and nonstructural, foreseen  and unforeseen, or otherwise necessary to ensure that the same as part of the security under this Security Instrument shall not in any material way be diminished or impaired; and will not cause or allow any of the Premises, the Improvements, or any other Collateral to be misused or wasted or to materially deteriorate.   No part of the Improvements shall be removed, demolished, or structurally  or  materially  altered,  nor  shall  any  new  building,  structure,  facility,  or  other improvement be constructed on the Premises without Lender’s prior written consent.

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

(b)           Replacement of Collateral. Except for Permitted Dispositions (as defined in the Loan Agreement), Borrower will keep the Premises and the Improvements fully equipped, and will replace all worn out or obsolete Collateral with fixtures or personal property comparable thereto when new, and will not, without Lender’s prior written consent, remove from the Premises or the Improvements any fixtures or personalty covered by this Security Instrument unless the same is replaced by Borrower with an article of equal suitability and value when new, owned by Borrower free and clear of any lien or security interest (other than Permitted Liens).

(c)           Compliance with Laws. Borrower will perform and comply promptly with, and cause the Collateral to be maintained, used, and operated in accordance with, any and all (i) present and future laws, ordinances, rules, regulations, and requirements of every duly- constituted governmental or quasi-governmental authority or agency applicable to Borrower or the Collateral; (ii) similarly applicable orders, rules, and regulations of any regulatory, licensing, accrediting, insurance underwriting or rating organization, or other body exercising similar functions; (iii) similarly applicable duties or obligations of any kind imposed under any Permitted Encumbrance or otherwise by law, covenant, condition, agreement, or  easement, public or private; and (iv) policies of insurance at any time in force with respect to the Collateral. If Borrower receives any notice that Borrower or the Collateral is in default under or is not in compliance with any of the foregoing, or notice of any proceeding initiated under or with respect to any of the foregoing, Borrower will promptly furnish a copy of such notice to Lender.

(d)           Zoning; Title Matters. Borrower will not, without the prior written consent of Lender, (i) initiate or support any zoning reclassification of the Premises or the Improvements, seek any variance under existing zoning ordinances applicable to the Premises or the Improvements, or use or permit the use of the Premises and Improvements in a manner which would require any variance or special use permit under applicable zoning ordinances;  (ii) modify, amend, or supplement any of the permitted title encumbrances; (iii) impose any restrictive covenants or encumbrances upon the Collateral, execute or file any subdivision plat affecting the Premises or the Improvements, or consent to the annexation of the Premises or the Improvements to any municipality; or (iv) permit or suffer the Premises and the Improvements to be used by the public or any person in such manner as might make possible a claim of adverse usage or possession, or of any implied dedication or easement.

(e)           No Cooperative or Condominium. Borrower shall not operate or permit the Premises or the Improvements to be operated as a cooperative, condominium, or other form of ownership in which the lessees or other occupants thereof participate in the ownership, control, or management of the Premises, Improvements, or any part thereof, as lessees, stockholders, or otherwise.

Section 3.6                      Insurance.

 

(a)           Type of Insurance Coverage. Borrower shall keep the Premises, the Improvements, and the other Collateral insured for the benefit of Borrower and Lender by procuring and maintaining the following types of insurance:

(i)           comprehensive, “All Risks” property insurance providing “special” form coverage in form and content as the Lender may from time to time reasonably require and against hazards as the Lender may from time to time reasonably require on the Improvements and personal property contained therein and in each case (A) in an amount equal to 100% of the “Full Replacement Cost,” which for the purposes of this Security Instrument shall mean actual replacement value (exclusive of costs of excavation, foundations, underground utilities and footings) with a waiver of depreciation; (B) containing an agreed amount endorsement and replacement cost endorsement with respect to the Improvements and personal property contained therein waiving all co-insurance provisions; (C) providing that the deductible not exceed Twenty-Five Thousand Dollars ($25,000.00); and (D) containing Demolition Costs, Increased Cost of Construction and “Ordinance or Law Coverage” or “Enforcement” endorsements in amounts satisfactory to Lender if any of the Improvements or the use of the Collateral shall at any time constitute legal non-conforming structures or uses or the ability to rebuild the Improvements is restricted or prohibited. The Full Replacement Cost may be redetermined from time to time by an appraiser or contractor designated and paid by Lender or by an engineer or appraiser in the regular employ of the insurer. No omission on the part of Lender to request any such appraisals shall relieve Borrower of any obligations under this subsection;

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

(ii)           if Borrower leases the Premises and upon Lender’s request, rent or business interruption or use and occupancy insurance, on such basis and in such amounts as shall be satisfactory to Lender, and in any event not less than an amount equal to one (1) year’s total income from the Premises and the Improvements, including, but not limited to, all rent and all other income such as lessee reimbursement of operating expenses, with the amount to be determined each year based on Borrower’s reasonable estimate of such income for the succeeding twelve (12) month period;

 

(iii)           flood insurance if any portion of the Improvements is currently or at any time in the future located in an area identified by the Secretary of Housing and Urban Development, or any successor, as an area having special flood, mudslide and flood-related erosion hazards and in which flood insurance has been made available under the National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended, modified, supplemented, or replaced from time to time;

 

(iv)           commercial general liability insurance on an [occurrence]1 basis covering Borrower and Lender against claims for bodily injury, death, property damage and personal injury occurring in, upon, or about or resulting from the Premises, the Improvements, or any other Collateral, or any street, drive, sidewalk, curb, or passageway adjacent thereto, in standard form and with such coverages and in such minimum amounts and with such minimum limits as may be reasonably acceptable to Lender;

 

 

1 Note: Borrower confirming that such policy is on an occurrence basis and not a claims basis.

 

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

 

(v)           worker’s compensation, subject to the statutory limits of the state in which the Premises is located, and employer’s liability insurance with a limit of at least $1,000,000 per accident and per disease per employee, and $1,000,000 per disease policy limit in respect of any work or operations on or about the Premises, or in connection with the Improvements or any other Collateral or its operation (if applicable); and

(vi)           such other insurance in such form and in such amounts as may from time to time be required by Lender against other insurable hazards and casualties which at the time are commonly insured against in the case of properties of similar character and location to the Premises and the Improvements.

(b)           Form of Policy. All insurance required under this Section shall be continuously maintained in full force and effect, and be nonassessable, and the policies therefor shall contain such clauses and endorsements as Lender shall from time to time request, in its reasonable discretion, including but not limited to clauses or endorsements to the effect that such policies shall not be canceled, terminated or coverage thereunder reduced without the insurer thereunder giving at least thirty (30) days prior written notice to Lender, and shall be in such form and amounts and be issued by such insurance companies doing business in the jurisdiction in which the Premises are located as shall be approved by Lender. All such policies shall have a minimum term of not less than one year. All such policies shall be issued by insurance companies qualified under the laws of the Commonwealth of Massachusetts and duly authorized and licensed to transact business in such State and reflecting a claims paying ability rating of “A” or better and a financial class of “IX” or better as determined by A.M. Best Company, Inc. Without limiting the foregoing, the insurance policies provided for in Sections 3.6(a)(i), (ii), and (iii) above shall be first payable in case of loss to Lender, and shall contain standard mortgagee clauses and lender’s loss payable endorsements in form and substance acceptable to Lender, and shall also contain a waiver of subrogation clause. The insurance policies provided for in Section 3.6(a) above shall name Lender as an additional insured.

(c)           Original Policies. Borrower shall deliver to Lender original or certified copies of policies evidencing the insurance required under Sections 3.6(a)(i), (ii), (iii), (iv) and (v) above. Borrower shall also deliver to Lender originals or certified copies of any and all renewal policies at least thirty (30) days prior to the expiration of each such policy. If original policies and renewal policies are unavailable or if such coverage is under a blanket policy, Borrower shall deliver to Lender duplicate originals of such policies or, if unavailable, original certificates from the issuing insurance companies evidencing that such policies are in full force and effect, together with certified copies of the original policies.

(d)           Transfer of Title. In the event of foreclosure of this Security Instrument or other transfer of title or assignment of the Premises and the other Collateral in extinguishment, in whole or in part, of the Obligations, all right, title, and interest of Borrower in and to all policies of insurance required under this Section or otherwise then in force with respect thereto, and all proceeds payable thereunder and unearned premiums thereon, shall immediately vest in the purchaser or other transferee of the Premises and the other Collateral.

 

(e)           Approval Not Warranty. No approval by Lender of any insurer shall be construed to be a representation, certification, or warranty of its solvency, and no approval by Lender as to the amount, type, and/or form of any insurance shall be construed to be a representation, certification, or warranty of its sufficiency.

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

Section 3.7                      Damage and Destruction of Collateral.

 

(a)            Borro wer ’s Obligations . In the event of any damage to or loss or destruction of the Collateral, (i) Borrower shall promptly notify Lender of such event and take such steps as shall be necessary to preserve any undamaged portion of the Collateral and (ii) if, pursuant to Section 3.7(b), the insurance proceeds are applied to the restoration, replacement, or rebuilding of such Collateral (but regardless whether such insurance proceeds, if any, shall be sufficient for the purpose), Borrower shall promptly (and, in any event, prior to the date on which any lessee under any Lease shall be entitled to cancel or terminate said Lease because of any such damage, loss or destruction) commence and diligently pursue to completion the restoration, replacement, and rebuilding of the Collateral as nearly as possible to its value, condition, and character immediately prior to such damage, loss, or destruction and in accordance with plans and specifications approved, and with other provisions for the preservation of the security hereunder established, by Lender.

(b)            Lend er’s Rights; Application of Proceeds . In the event that any portion of the Collateral is so damaged, destroyed, or lost, and such damage, destruction, or loss is covered, in whole or in part, by insurance described in Section 3.6, then (i) Lender may, but shall not be obligated to, make proof of loss if not made promptly by Borrower and is hereby authorized and empowered by Borrower to settle, adjust, or compromise any claims for damage, destruction, or loss thereunder; (ii) each insurance company concerned is hereby authorized and directed to make payment therefor directly to Lender; and (iii) Lender shall have the right to apply the insurance proceeds, first, to reimburse Lender for all costs and expenses, including adjustors’ and attorneys’ fees and disbursements, incurred in connection with the collection of such proceeds and, second, the remainder of such proceeds shall be applied, at Lender’s option, either (A) in payment of all or any part of the Obligations, whether or not then due and payable, in the order and manner determined by Lender (provided that to the extent that any Obligation shall remain outstanding after such application, such unpaid Obligation shall continue in full force and effect and Borrower shall not be excused in the payment thereof), or to the cure of any then current default hereunder; or (B) to the restoration, replacement, or rebuilding, in whole or in part, of the portion of the Collateral so damaged, destroyed, or lost, provided that any insurance proceeds held by Lender to be applied to the restoration, replacement, or rebuilding of the Premises shall be so held without payment or allowance of interest thereon and shall be paid out from time to time upon compliance by Borrower with such provisions and requirements as may be imposed by  Lender.    Notwithstanding  the  above,  after  reimbursement  of  Lender  for  all  costs  and expenses, including adjustors’ and reasonable attorneys’ fees and disbursements, incurred in connection with the collection of such proceeds, the Lender shall allow Borrower to use the insurance proceeds for the restoration or replacement of the Collateral provided that (i) the proceeds total less than $50,000 for any single event of loss, or (ii) Lender shall reasonably determine that (a) the restoration or replacement of the Collateral can be completed prior to the Maturity Date (as defined in the Loan Agreement), (b) that the insurance proceeds will be sufficient to complete the restoration or, if the amount of the insurance proceeds is not sufficient to restore or replace the Collateral, Borrower deposits with Lender an amount equal to the difference between Lender’s estimated costs of such restoration or replacement and the amount of the insurance proceeds, and (c) the Collateral will be restored or replaced such that the fair market value (as reasonably determined by Lender) of the Collateral shall be at least equal to the pre-casualty value. In the event that Borrower shall have received all or any portion of such insurance proceeds, or any other proceeds in respect of such damage or destruction, Borrower, upon demand from Lender, shall pay to Lender an amount equal to the amount so received by Borrower, to be applied pursuant to this section. Notwithstanding anything herein or at law or in equity to the contrary, none of the insurance proceeds or payments in lieu thereof paid to Lender as herein provided shall be deemed trust funds, and Lender shall be entitled to dispose of such proceeds as provided in this Section. Borrower expressly assumes all risk of loss, including a decrease in the use, enjoyment, or value of the Collateral, from any casualty whatsoever, whether or not insurable or insured against.

Section 3.8                      Condemnation.

 

(a)            Borro wer ’s Obligations ; Proceedings . Promptly upon obtaining knowledge of any pending or threatened institution of any proceedings for the condemnation of the Collateral, or any part or interest therein, or of any right of eminent domain, or of any other proceedings arising out of injury or damage to or decrease in the value of the Collateral (including any change in any street, whether as to grade, access, or otherwise), or any part thereof or interest therein, Borrower will notify Lender of the threat or pendency thereof. Lender may participate in any such proceedings (but shall not be obligated to do so), and Borrower from time to time will execute and deliver to Lender all instruments requested by Lender or as may be required to permit such participation. Borrower shall, at its expense, diligently prosecute any such proceedings, shall deliver to Lender copies of all papers served in connection therewith, and shall consult and cooperate with Lender, its attorneys and agents, in the carrying on and defense of any such proceedings; provided that no settlement of any such proceeding shall be made by Borrower without Lender’s prior written consent.

(b)            Lend er’s Ri ghts to Proceeds . All proceeds of condemnation awards or proceeds of sale in lieu of condemnation, and all judgments, decrees, and awards for injury or damage to the Collateral are hereby assigned and shall be paid to Lender. Borrower agrees to execute and deliver such further assignments thereof as Lender may request, and authorizes Lender to collect and receive the same, to give receipts and releases therefor, and to appeal from any such judgment, decree, or award. Lender shall in no event be liable or responsible for failure to collect, or exercise diligence in the collection of, any of the same.

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

(c)           Application of Proceeds. Lender shall have the right to apply any proceeds, judgments, decrees, or awards referred to in subsection (b) of this Section, first, to reimburse Lender for all costs and expenses, including attorneys’ fees and disbursements, incurred in connection with the proceeding in question, and any appeal therefrom, or in the collection of such amounts and, second, the remainder of such proceeds, judgments, decrees, or awards shall be applied or paid, at Lender’s option but subject to Section 3.8(d), either (A) in payment of all or any part of the Obligations, whether or not then due and payable, in the order and manner determined by Lender, or to the cure of any then current default hereunder; or (B) first, to the repair and restoration of the Collateral, if any is deemed necessary by Lender as a result of the condemnation and, second, to Borrower for its own use. In the event that Borrower shall have received all or any portion of such proceeds, judgments, decrees, or awards, Borrower, upon demand from Lender, shall pay to Lender an amount equal to the amount so received by Borrower, to be applied as Lender shall have the right pursuant to this subsection. Notwithstanding the above, after reimbursement of Lender for all costs and expenses, including attorneys’ fees and disbursements, incurred in connection with the proceeding in question, and any appeal therefrom, or in the collection of such amounts, the Lender shall allow Borrower to use any proceeds, judgments, decrees, or awards referred to in subsection (b) of this Section for the restoration or replacement of the Collateral provided that (i) the proceeds total less than $50,000 for any single condemnation action, or (ii) Lender shall reasonably determine that (a) the restoration or replacement of the Collateral can be completed prior to the Maturity Date (as defined in the Loan Agreement), (b) that the proceeds will be sufficient to complete the restoration or, if the amount of the proceeds is not sufficient to restore or replace the Collateral, Borrower deposits with Lender an amount equal to the difference between Lender’s estimated costs of such restoration or replacement and the amount of the proceeds, and (c) the Collateral will be restored or replaced such that the fair market value (as reasonably determined by Lender) of the Collateral shall be at least equal to the pre-condemnation value.

 

(d)           Effect on the Obligations. Notwithstanding any condemnation, taking, or other proceeding referred to in this Section causing injury to or decrease in value of the Collateral (including a change in any street, whether as to grade, access, or otherwise), or any interest therein, Borrower shall continue to pay and perform the Obligations as provided herein. Any reduction in the Obligations resulting from such application shall be deemed to take effect only on the date of receipt by Lender of such proceeds, judgments, decrees or awards and application against the Obligations, provided that if prior to the receipt by Lender of such proceeds, judgments, decrees, or awards, the Collateral shall have been sold on foreclosure of this Security Instrument, or shall have been transferred by deed-in-lieu of foreclosure, Lender shall have the right to receive the same to the extent of any deficiency found to be due upon such sale, with legal fees and disbursements incurred by Lender in connection with the collection thereof.

 

Section 3.9                      Liens and Liabilities.

 

(a)           Discharge of Liens. Borrower shall pay, bond, or otherwise discharge, from time to time when the same shall become due, all claims and demands of mechanics, materialmen, laborers, and others which, if unpaid, might result in, or permit the creation of, a lien or encumbrance on the Collateral, or on the revenues, rents, issues, income, or profits arising therefrom and, in general, Borrower shall do, or cause to be done, at Borrower’s sole cost and expense, everything necessary to fully preserve the lien and security interest created by this Security Instrument and the priority thereof.

(b)           Creation of Liens. Borrower shall not, without Lender’s prior written consent, create, place, or permit to be created or placed, or through any act or failure to act, acquiesce in the placing of, or allow to remain, any deed of trust, mortgage, deed to secure debt, voluntary or involuntary lien, whether statutory, constitutional, or contractual (except for Impositions which are not yet due and payable), security interest, encumbrance or charge, or conditional sale or other title retention document, against or covering the Collateral, prior to, on a parity with, or subordinate to the lien of this Security Instrument, other than Permitted Lien.

Section 3.10 Transfer of Collateral/Due on Sale. Borrower acknowledges that Lender has relied upon the principals of Borrower and their experience in owning, constructing, developing and operating the Collateral and properties similar to the Collateral in connection with the closing of the loan evidenced by the Note. Accordingly, in the event that the Collateral or any part thereof or direct or indirect therein or any membership interests, partnership interests other interest in Borrower shall be sold, conveyed, disposed of, alienated, hypothecated, leased (except to tenants of space in the Improvements under Leases permitted by this Security Instrument), assigned, pledged, mortgaged, further encumbered or otherwise transferred or Borrower shall be divested of its title to the Collateral or any interest therein, in any manner or way, whether voluntarily or involuntarily, without the prior written consent of Lender being first obtained, which consent may be withheld in Lender’s sole discretion, then the same shall constitute an Event of Default and Lender shall have the right, at its option, to declare any or all of the Obligations, irrespective of any maturity date specified in the Note, immediately due and payable and to otherwise exercise any of its other rights and remedies contained in Article VI hereof. For the purposes of this Section, each of the following shall be deemed to be a transfer of an interest in the Collateral: (i) in the event Borrower or any partner or member of Borrower is an individual or an entity other than a corporation or trust or limited liability company, a direct or indirect change in the ownership interests in Borrower or any partner, any joint venturer or any member, either voluntarily, involuntarily or otherwise, or the direct or indirect sale, conveyance, transfer, disposition, alienation, hypothecation or encumbering of all or any portion of the interests of Borrower or of any such partner, joint venturer or member in Borrower or of such partner or member (whether in the form of a beneficial or partnership interest or in the form of a power of direction, control or management, or otherwise); (ii) in the event Borrower is a corporation or trust or limited liability company, the direct or indirect sale, conveyance, transfer, disposition, alienation, hypothecation or encumbering of the issued and outstanding capital stock of Borrower (or the issuance of new shares of capital stock of Borrower (in one or a series of transactions) such that, after giving effect to such issuance and any prior issuance, more than forty-nine percent (49%) in the aggregate of the outstanding capital stock of Borrower is owned by any person or entity and their affiliates unless such person or entity and their affiliates owned more than forty-nine percent (49%) of the outstanding capital stock of Borrower as of the date hereof); and (iii) any change in the management or decision making control over Borrower or the Collateral.

 

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

Section 3.11                      Tax and Insurance Deposits.

 

(a)           Monthly Deposits. Upon Lender’s request after and during the continuance of a Material Adverse Effect or an Event of Default, Borrower shall deposit with Lender in a non-interest bearing account, or at Lender’s request, with its servicing agent, on the first day of each and every month, commencing with the date the next payment of interest and/or principal and interest shall become due under the Note, a deposit to pay the Assessments (as defined in Section 3.3 hereof) and insurance premiums which will next become due on the insurance policies required by this Security Instrument (hereinafter collectively referred to as the “Charges”) in an amount equal to:

 

(i)           One-twelfth (1/12th) of the annual Assessments next to become due upon the Collateral; provided that, with the first such deposit, there shall be deposited in addition an amount as estimated by Lender which, when added to monthly deposits to be made thereafter as provided for herein, shall assure to Lender’s satisfaction that there will be sufficient funds on deposit to pay the Impositions as they come due; plus

(ii)           One-twelfth (1/12th) of the annual premiums on each policy of insurance required to be maintained by this Security Instrument; provided that with the first such deposit there shall be deposited, in addition, an amount equal to one-twelfth (1/12th) of such annual insurance premiums multiplied by the number of months elapsed between the date premiums on each policy were last paid to and including the date of deposit, provided that the amount of such deposits shall be based upon Lender’s estimate as to the amount of Assessments and insurance premiums next to be payable and may require that the full amount of such payment will be available to Lender at least one month in advance of the due date. Prior to the payment due dates, Borrower shall obtain the original Assessments and insurance premiums bills and forward them immediately to Lender upon Borrower’s receipt thereof.  Lender will, upon timely presentation to Lender by the Borrower of the bills therefor, pay the Charges from such deposits directly to the taxing authority or the insurance carrier as the case may be, or return such amount to the Borrower so it can make such payments. In the event the deposits on hand shall not be sufficient to pay all of the estimated Charges when the same shall become due from time to time, or the prior deposits shall be less than the currently estimated monthly amounts, then the Borrower shall immediately pay to Lender on demand any amount necessary to make up the deficiency. The excess of any such deposits shall be credited towards subsequent Charges.

 

(b)           Use of Deposits. Except to the extent required by applicable law, all funds so deposited shall, until so applied, constitute additional security for the Obligations, shall be held by Lender in a separate escrow account, shall not be commingled with other funds of Lender, and, provided that no Event of Default (as defined in Section 6.1) shall have occurred and be continuing hereunder, shall be applied in payment of the aforesaid amounts prior to their becoming delinquent, but only to the extent that Lender shall have such funds on hand, provided that Lender shall not have any obligation to use said funds to pay (i) any installment of Assessments prior to the last day on which payment thereof may be made without penalty or interest, or to pay any insurance premium prior to the due date thereof; or (ii) any of the aforesaid amounts unless Lender shall have been furnished with the bills or invoices therefor in sufficient time to pay the same before any penalty or interest attaches and before said policies of insurance lapse, as the case may be. If an Event of Default shall have occurred  and  be continuing hereunder, or if the Obligations shall be accelerated as herein provided, all funds so deposited may, at Lender’s option, be applied to the Obligations in the order determined by Lender or to cure said Event of Default or as provided in this Section. In no event shall Borrower claim any credit against the principal and interest due hereunder for any payment or deposit for taxes or insurance. Neither Lender nor its servicing agent shall be liable for any act or omission made or taken in good faith. In making any payments, Lender or its servicing agent may rely on any statement, bill or estimate procured from or issued by the payee without inquiry into the validity or accuracy of the same. If the taxes shown in the tax statement shall be levied on property more extensive than the Collateral, Lender shall be under no duty to seek a tax division or apportionment of the tax bill, and any payment of taxes based on a larger parcel shall be paid by the Borrower, the deposits to be made hereunder shall be based on the larger tax parcel and the Borrower shall expeditiously cause a tax subdivision to be made.

(c)           Transfer of Security Instrument. Upon an assignment or other transfer of this Security Instrument, Lender shall have the right to pay over the balance of such deposits in its possession to the assignee or other successor, and Lender shall thereupon be completely released from all liability with respect to such deposits, and Borrower or the owner of the Collateral shall look solely to the assignee or transferee with respect thereto.

Section 3.12 Inspection. Borrower shall allow Lender and its authorized representatives, or agents, including third-party property appraisers, environmental engineers, architects, engineers, and Lender’s employees, to enter upon the Collateral and conduct tests and to enter upon and inspect the Collateral, or any part thereof, at all reasonable times and upon reasonable prior notice, except in the event of an emergency when no notice shall be required and subject to the rights of tenants, and shall assist Lender and such representatives or agents in effecting said inspection.

Section 3.13                      Records, Reports, and Audits.

 

(a)           Maintenance of Records. Borrower shall keep and maintain at all times complete and accurate books of accounts and records in sufficient detail to correctly reflect the results of the operation of the Premises and copies of all written contracts, Leases and other instrument which affect the Premises (including but not limited to all bills, invoices and contracts for electrical service, gas service, water and sewer service, waste management service, telephone service and management services). Borrower shall allow Lender or its authorized representatives at all reasonable times upon prior notice, at Borrower’s expense, to examine and make copies of all such books and records and all supporting data therefor at Borrower’s principal place of business, at the Premises or at such other place where such books, records, and data may be located. Borrower shall assist Lender or such representative in effecting such examination. Absent the occurrence and continuance of a Material Adverse Effect or an Event of Default, Lender shall not conduct any such examination more than twice during any twelve (12) month period.

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

(b)           Financial Reports.      Borrower shall furnish or cause to be furnished to Lender the financial statements and reports required by Section 5.6 of the Loan Agreement.

Section 3.14                      Intentionally Omitted.

 

Section 3.15                      Intentionally Omitted.

 

Section 3.16                      Intentionally Omitted.

 

Section 3.17 Subordination of Fees. The terms and conditions of all arrangements whereby Borrower, any guarantor, or any person, partnership, corporation, limited liability company or other entity related to or controlled by or under common control with Borrower or any guarantor or in which Borrower, any guarantor, or any member or manager of Borrower has a substantial interest, is or may be entitled to fees or commissions with respect to the Collateral or sales or leases of the Collateral shall be disclosed to Lender, and no payment of any fees or compensation may be made by or on behalf of Borrower to any of such persons or entities without Lender’s prior written consent, until the Loan is fully satisfied.

Section 3.18 Leases of Space. Borrower will, at its own cost and expense, perform, comply with and discharge all of the obligations of Borrower under any leases and use its best efforts to enforce or secure the performance of each obligation and undertaking of the respective tenants under any such leases and will appear in and defend, at its own cost and expense, any action or proceeding arising out of or in any manner connected with the Borrower’s interest in any leases of the Premises. The Borrower will not borrow against, pledge or assign any of Borrower’s rights under the leases or any rentals due thereunder or consent to a subordination or assignment of the interest of the tenants thereunder to any party other than Lender, nor anticipate the rents thereunder for more than one (1) month in advance or reduce the amount of rents and other payments thereunder, nor waive, excuse, condone or in any manner release or discharge the tenants of or from their obligations, covenants, conditions and agreements to be performed, nor to incur any indebtedness to the tenants, nor enter into any additional leases of all or any part of the Premises without the prior written consent of Lender.

 

Section 3.19 Alterations and Renovations. Borrower agrees that, without the prior written consent of Lender, Borrower will not remove or expand any improvements on the Premises, erect any new improvements or make any material alterations in any improvements which will alter the basic structure, adversely affect the market value or change the existing architectural character of the Premises. Borrower agrees that buildings, structures and improvements now or hereafter constructed on or in the Premises or repairs made to the Premises shall be completed in a good and workmanlike manner, in accordance with all applicable governmental laws, regulations, requirements and permits. Borrower agrees not to acquiesce in any rezoning classification, modification or restriction affecting the Premises without the written consent of Lender.

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

Section 3.20                      Property Management.

 

(a)           Without the prior written consent of the Lender, Borrower shall not (i) enter into a management agreement, (ii) surrender any management agreement, (ii) consent to the assignment by any property manager of its rights, duties or obligations under any management agreement, (iii) terminate or cancel any management agreement, or (iv) modify, change, supplement, alter or amend any management agreement, in any material respect, either orally or in writing.

(b)           Upon the occurrence and during the continuance of an Event of Default, the Lender may require, upon ten (10) Business Days prior written notice to Borrower, that Borrower retain a property manager, or select a new property manager if a property manager then exists, not affiliated with Borrower to manage the Collateral. If such a property manager is so required by the Lender, Borrower shall immediately seek to appoint a property manager acceptable to the Lender. Such newly appointed property manager shall enter into a property management agreement with Borrower satisfactory to the Lender. Borrower shall execute and deliver an Assignment of Management Agreement in form and substance reasonably satisfactory to the Lender, which shall be consented to and acknowledged by such newly appointed property manager.

Section 3.21 Further Acts. Borrower shall do and perform all acts necessary to keep valid and effective the charges and lien hereof, to carry into effect its objective and purposes, and to protect the lawful owner of the Note and the other Obligations. Promptly upon request by Lender, and at Borrower’s expense, Borrower shall execute, acknowledge, and deliver to Lender such other and further instruments and do such other acts as in the reasonable opinion of Lender may be necessary or desirable to (a) grant to Lender the highest available perfected lien on all of the Collateral; (b) correct any defect, error, or omission which may be discovered in the contents of this Security Instrument or any other Loan Document; (c) identify more fully and subject to the liens, encumbrances, and security interests and assignments created hereby any property intended by the terms hereof to be covered hereby (including, without limitation, any renewals, additions, substitutions, replacements, or appurtenances to the Collateral); (d) assure the first priority hereof and thereof subject to the Permitted Liens; and (e) otherwise effect the intent of this Security Instrument.

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

 

ARTICLE IV.

ADDITIONAL ADVANCES; EXPENSES; INDEMNITY

 

Section 4.1 Additional Advances and Disbursements. Borrower agrees that, if Borrower shall default in any of its Obligations to pay any amount or to perform any action, including its obligation under Section 3.3 to pay Impositions and under Section 3.6 to procure, maintain, and pay premiums on the insurance policies referred to therein, then Lender shall have the right, but not the obligation, in Borrower’s name or in its own name, and without notice to Borrower, to advance all or any part of such amounts or to perform any or all such actions, and, for such purpose and to the extent permitted by applicable law, Borrower expressly grants to Lender, in addition and without prejudice to any other rights and remedies hereunder, the right to enter upon and take possession of the Collateral to such extent and as often as it may deem necessary or desirable to prevent or remedy any such default. No such advance or performance shall be deemed to have cured such default by Borrower or any Event of Default with respect thereto. All sums advanced, all Collection Expenses (as hereinafter defined), and all expenses incurred by Lender in connection with such advances or actions, and all other sums advanced or expenses incurred by Lender hereunder or under applicable law (whether required or optional and whether indemnified hereunder or not) shall be part of the Obligations, shall bear interest at the rate stated in the Note for payments from and after maturity (the “Default Rate”), and shall be secured by this Security Instrument. Lender, upon making any such advance, shall be subrogated to all of the rights of the person receiving such advance.

Section 4.2 Other Expenses.

 

(a)           Borrower shall pay or, on demand, reimburse Lender for the payment of all appraisal fees, recording and filing fees, taxes, brokerage fees and commissions, abstract fees, title insurance premiums and fees, Uniform Commercial Code search fees, escrow fees, attorneys’ fees and disbursements, and all other costs and expenses of every character incurred by Borrower or Lender in connection with the granting, administration, enforcement, and closing (including the preparation of the Loan Documents) of the transactions contemplated hereunder or under the other Loan Documents, or otherwise attributable or chargeable to Borrower as owner of the Collateral. Lender shall have the right to obtain from time to time, at Borrower’s cost and expense, appraisals of the Collateral, provided that so long as no Event of Default shall have occurred which continues, Borrower shall only be obligated to pay for the costs and expenses associated with one such appraisal during any twelve (12) month period.

(b)           Borrower shall pay or, on demand, reimburse Lender for the payment of any costs or expenses (hereinafter referred to collectively as “Collection Expenses”), including third-party appraisal fees and expenses, environmental engineers’ fees and expenses, the cost of environmental testing and preparation of environmental reports, architects’ fees and expenses, engineers’ fees and expenses, travel costs of Lender’s employees, agents, and representatives, and reasonable attorneys’ fees and expenses incurred or expended in connection with or incidental to (i) any default or Event of Default by Borrower hereunder or (ii) the exercise or enforcement by or on behalf of Lender of any of its rights or remedies or Borrower’s obligations under this Security Instrument or under the other Loan Documents, including the enforcement, compromise, or settlement of this Security Instrument or the Obligations or the defense, assertion of the rights and claims of Lender hereunder in respect thereof, by litigation or otherwise.

Section 4.3 Indemnity. Borrower agrees to indemnify and hold harmless  Lender from and against any and all losses, liabilities, suits, obligations, fines, damages, judgments, penalties, claims, charges, costs, and expenses (including attorneys’ fees and disbursements) which may be imposed on, incurred or paid by or asserted against Lender by reason or on account of, or in connection with, (i) any default or Event of Default by Borrower hereunder or under the other Loan Documents; (ii) Lender’s exercise of any of its rights and remedies, or the performance of any of its duties, hereunder or under the other Loan Documents to which Borrower is a party; (iii) the construction, reconstruction, restoration, or alteration of the Collateral or any part thereof; (iv) any negligence or willful misconduct of Borrower, any lessee of the Premises, or any of their respective agents, contractors, subcontractors, servants, employees, licensees, or invitees; (v) any accident, injury, death or damage to any person or property occurring in, on, or about the Premises or the Improvements, or any street, drive, sidewalk, curb, or passageway adjacent thereto; or (vi) any other transaction arising out of or in any way connected with the Collateral (or any part thereof) or the Loan Documents, provided, however, that any such indemnity provided herein above shall not apply to any such losses, claims, damages, liabilities or related expenses to the extent that they result solely from the gross negligence or willful misconduct of the Lender. Any amount payable to Lender under this Section shall be deemed a demand obligation, shall be part of the Obligations, shall bear interest at the Default Rate, and shall be secured by this Security Instrument.

 

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

 

ARTICLE V. 

 

UNIFORM COMMERCIAL CODE

 

 

This Security Instrument shall constitute a security agreement under Article 9 of the Uniform Commercial Code (the “Code”) in each applicable jurisdiction with respect to any and all fixtures and personal property included in the description of the Collateral, now owned or hereafter acquired by Borrower, which might otherwise be deemed “personal property” and all accessions thereto and the proceeds thereof (collectively, the “Personal Property”). Borrower has granted and does hereby grant Lender a security interest in the Personal Property subject to the Permitted Liens and in all additions and accessions thereto, renewals and replacements thereof and all substitutions therefor and proceeds thereof for the purpose of securing all Obligations now or hereafter secured by this Security Instrument. The following provisions relate to such security interest:

(a)           Borrower hereby irrevocably authorizes Lender at any time and from time to time to file in any filing office in any Code jurisdiction any initial financing statements and amendments thereto to perfect and preserve Lender’s interest in the Collateral in a manner consistent  with  the  term  as  defined,  in  this  Security  Instrument  and  including  information relating to whether Borrower is an organization, the type of organization and any organizational identification number issued to Borrower. Borrower agrees to provide any such information to Lender promptly upon request. Borrower also ratifies its authorization for Lender to have filed in any filing office in any Code jurisdiction any like initial financing statements or amendments thereto if filed prior to the date hereof. Borrower shall pay to Lender, from time to time, upon demand, any and all costs and expenses incurred by Lender in connection with the filing of any such initial financing statements and amendments, including attorneys’ fees and all disbursements. Such costs and expenses shall bear interest at the Default Rate from the date paid by Lender until the date repaid by Borrower, and such costs and expenses, together with such interest, shall be part of the Obligations and shall be secured by this Security Instrument.

(b)           Subject to the rights of the holders of any Permitted Liens, Borrower shall any time and from time to time take such steps as Lender may reasonably request for Lender to obtain “control” of any Personal Property for which control is a permitted or required method to perfect, or to insure priority of, the security interest in such Personal Property granted herein.

(c)           Upon the occurrence and during the continuance of an Event of Default, Lender shall have the rights and remedies of a secured party under the Code as well as all other rights and remedies available at law or in equity or under this Security Instrument.

(d)           Terms defined in the Code and not otherwise defined in this Security Instrument shall have the same meanings in this Paragraph as are set forth in the Code. In the event that a term is used in Article 9 of the Code and also in another Article, the term used in this Paragraph is that used in Article 9. The term “control,” as used in this Paragraph, has the meaning given in Section 9-104, 9-105, 9-106 or 9-107 of Article 9, as applicable.

(e)           It is intended by Borrower and Lender that this Security Instrument be effective as a financing statement filed in the real estate records of Worcester County, Massachusetts as a fixture filing covering the Personal Property. A description of the Premises which relates to the Personal Property is set forth in Exhibit B attached hereto.

 

(f)           The information in the subsections below this paragraph is provided in connection with the filing of this Security Instrument as a financing statement as referred to above, and the Borrower hereby represents and warrants such information to be true and complete as of the date of this Security Instrument.

(h)           The Borrower is the record owner of the real estate described in this Security Instrument. The name and mailing address of the record owner of the real estate described in this Security Instrument is set forth in the first paragraph of this Security Instrument.

(i)           For purposes of the Code, Borrower is the Debtor. The name, mailing address, type of organization and state of formation of the Debtor (Borrower) is set forth in the first paragraph of this Security Instrument. The Organizational Identification Number of the Borrower is in the State of Delaware is 3528957.

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

 

 

(j)           For purposes of the Uniform Commercial Code, the Lender is the Secured Party. The name and mailing address of the Secured Party (Lender) is:

Revere High Yield Fund, LP 

105 Rowayton Avenue

Rowayton, Connecticut 06853 

Attn:  Clark Briner

 

ARTICLE VI. DEFAULTS AND REMEDIES

 

Section 6.1                      Events of Default.  The term “Event of Default,” as used in this Security

Instrument, shall mean the occurrence of any of the following events:

(a)           if Borrower shall fail to pay when the same shall become due and payable any sum required to be paid under the Note, hereunder or under any other Loan Document, whether of principal, interest, premium, fees, or otherwise; or

(b)           if any representation made herein, in the Loan Agreement or in any other Loan Document (including any certificate delivered in connection with any of the foregoing), or otherwise made by or on behalf of Borrower or any Guarantor in connection with the transactions contemplated under the Loan Documents, shall be false or misleading in any material respect when made; or

(c)           the Collateral (or any part thereof), or any legal, beneficial, or equitable interest therein, shall be sold, transferred, or encumbered in any way in violation of this Security Instrument or any other Loan Document; or

(d)           if Borrower or any Guarantor shall fail to perform any other term, covenant or agreement contained in any of the other Loan Documents after any applicable grace period contained therein or any “Event of Default” as defined or described in the Note, the Loan Agreement or any of the other Loan Documents occurs and is then continuing; or

 

(e) if Borrower abandons the Premises or the Improvements; or

(f)           if Borrower shall fail at any time to obtain, provide, maintain, keep in force, or deliver to Lender the insurance policies required by this Security Instrument and such failure shall continue for two (2) days after written notice from Lender; or 

(g)           if any claim of priority (except a claim based upon a Permitted Lien) to this Security Instrument or any other document or instrument securing the Obligations by title, lien, or otherwise shall be upheld by any court of competent jurisdiction and such claim is not discharged,  satisfied,  vacated  or  bonded  within  twenty  (20)  days  after  entry,  or  shall  be consented to by Borrower; or

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

(h)           if Borrower or any Guarantor or any member or partner of Borrower or any Guarantor, or any maker, guarantor or surety of the Note shall make an assignment for the benefit of its creditors, or shall admit in writing its inability to pay its debts as they become due, or fail to pay its debts as they become due; or shall file a petition in bankruptcy, or shall be adjudicated a bankrupt or insolvent, or shall file a petition seeking any reorganization, dissolution, liquidation, arrangement, composition, readjustment or similar relief under any present or future bankruptcy or insolvency statute, law or regulation or shall file an answer admitting to or not contesting the material allegations of a petition filed against it in such proceedings, or shall not within sixty (60) days after the filing of such a petition have the same dismissed or vacated, or shall seek or consent to or acquiesce in the appointment of any trustee, receiver or liquidator of a material part of its properties, or shall not within sixty (60) days after the appointment of a trustee, receiver or liquidator of any material part of its properties without Lender's consent have such appointment vacated; or

 

(i)           if default shall be made in the performance or observance of any provision contained in this Security Instrument other than those referred in (a) through (i) above, beyond the applicable grace period therefor or, if no such grace period is applicable, if the default has not been remedied within thirty (30) days after the occurrence thereof; or

(j)           if any “Event of Default” as defined or described in any other Loan Document occurs and is then continuing.

 

Section 6.2 Remedies. Upon the occurrence and during the continuance of any one or more Events of Default, Lender may (but shall not be obligated to), by Lender itself otherwise, in addition to any rights or remedies available to it hereunder or under the other Loan Documents, take such action, personally or by its agents or attorneys, with or without entry and without notice, demand, presentment, or protest (each and all of which are hereby waived), as it deems necessary or advisable to protect and enforce Lender’s rights and remedies against Borrower and in and to the Collateral, including, without limitation, the following actions, each of which may be pursued concurrently or otherwise, at such time and in such order as Lender may determine, in its sole discretion, without impairing or otherwise affecting its rights or remedies:

 

(a)           declare the entire balance of the Obligations (including the entire principal balance thereof, all accrued and unpaid interest, and any premium and late charges thereon, and all other such sums secured hereby) to be immediately due and payable, and upon any such declaration the entire unpaid balance of the Obligations shall become and be immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by Borrower, anything in the Loan Documents to the contrary notwithstanding.

 

(b)           institute a proceeding or proceedings, judicial, or nonjudicial, by advertisement or otherwise, for the complete or partial foreclosure of this Security Instrument or the complete or partial sale of the Collateral under the power or sale or under any applicable provision of law. Lender may sell the Collateral, and all estate, right, title, interest, claim and demand of Borrower therein, and all rights of redemption thereof, at one or more sales, as an entirety or in parcels, with such elements of real and/or personal property, and at such time or place and upon such terms as it may deem expedient, or as may be required by applicable law, and in the event of a sale, by foreclosure or otherwise, of less than all of the Collateral, this Security Instrument shall continue as a lien and security interest on the remaining portion of the Collateral.

 

(c) Intentionally Omitted.

(d)           to the extent permitted under applicable law, Lender may elect to treat the fixtures included in the Collateral either as real property or as personal property, or both, and proceed to exercise such rights as apply thereto.

(e)           institute an action, suit, or proceeding in equity for the specific performance of any of the provisions contained in the Loan Documents.

(f)           apply for the appointment of a receiver, custodian, trustee, liquidator, or conservator of the Collateral, to be vested with the fullest powers permitted under applicable law, as a matter of right and without regard to or the necessity to disprove the adequacy of the security for the Obligations or the solvency of Borrower or any other person liable for the payment of the Obligations, and Borrower and each other person so liable waives or shall be deemed to have waived such necessity, and consents or shall be deemed to have consented to such appointment.

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

(g)           subject to the provisions and restrictions of any applicable law, enter upon the Premises and the Improvements, and exclude Borrower and its agents and servants wholly therefrom, without liability for trespass, damages, or otherwise, and take possession of all books, records, and accounts relating thereto and all other Collateral, and Borrower agrees to surrender possession of the Collateral and of such books, records, and accounts to Lender on demand after the happening of any Event of Default; and having and holding the same may use, operate, manage, preserve, control, and otherwise deal therewith and conduct the business thereof, either personally or by its superintendents, managers, agents, servants, attorneys or receivers, without interference from Borrower; and upon each such entry and from time to time thereafter may, at the expense of Borrower and the Collateral, without interference by Borrower and as Lender may deem advisable, (i) either by purchase, repair, or construction, maintain and restore the Collateral; (ii) insure or reinsure the same; (iii) make all necessary or proper repairs, renewals, replacements, alterations, additions, betterments, and improvements thereto and thereon; (iv) complete the construction of the Improvements and, in the course of such completion, may make such changes in the contemplated or completed Improvements as it may deem advisable; and (v) in every such case in connection with the foregoing have the right to exercise all rights and powers of Lender with respect to the Collateral, either in Borrower’s name or otherwise, including the right to make, terminate, cancel, enforce, or modify Leases, obtain and evict lessees and sublessees on such terms as Lender shall deem advisable, and to take any actions described in subsection (h) of this Section.

(h)           subject to the provisions and restrictions of any applicable law, Lender may, with or without entrance upon or taking possession of the Premises, collect, receive, sue for, and recover in its own name all Rents and cash collateral derived from the Premises, and after deducting therefrom all costs, expenses, and liabilities of every character incurred by Lender in collecting the same and in using, operating, managing, preserving, and controlling the Premises, and otherwise in exercising Lender’s rights under subsection (f) of this Section, including all amounts necessary to pay Impositions, insurance premiums, and other charges in connection with the Premises, as well as compensation for the services of Lender and its attorneys, agents, and employees, apply the remainder to the Obligations in the order and manner determined by Lender.

(i)           release any portion of the Collateral for such consideration as Lender may require without, as to the remainder of the Collateral, in any way impairing or affecting the lien or priority of this Security Instrument, or improving the position of any subordinate lienholder with respect thereto, except to the extent that the Obligations shall have been reduced by the actual monetary consideration, if any, received by Lender for such release, and may accept by assignment, pledge, or otherwise any other property in place thereof as Lender may require without being accountable for so doing to any other lienholder.

(j)           Lender may take all actions permitted under the Uniform Commercial Code of the jurisdiction in which the Collateral is located; or

(k)           Lender may take any other action, or pursue any other right or remedy, as Lender may have under applicable law, and Borrower does hereby agree that Lender may so act.

In the event that Lender shall exercise any of the rights or remedies set forth in subsections (g) and (h) of this Section, Lender shall not be deemed to have entered upon or taken possession of the Collateral except upon the exercise of its option to do so, evidenced by its demand and overt act for such purpose, nor shall it be deemed a beneficiary or mortgagee in possession by reason of such entry or taking possession. Lender shall not be liable to account for any action taken pursuant to any such exercise other than for rents actually received by such party, nor liable for any loss sustained by Borrower resulting from any failure to let any portion of the Collateral, or from any other act or omission of Lender except to the extent such loss is caused by the willful misconduct, negligence or bad faith of such party. Borrower hereby consents to, ratifies, and confirms the exercise by Lender of said rights and remedies, and appoints Lender as its attorney-in-fact, which appointment shall be deemed to be coupled with an interest and irrevocable, for such purposes.

 

Section 6.3 Expenses. In any proceeding, judicial or otherwise, to foreclose this Security Instrument or enforce any other remedy of Lender under the Loan Documents, there shall be allowed and included as an addition to and a part of the Obligations in the decree for sale or other judgment or decree all Collection Expenses and all other expenditures and expenses, including reasonable attorneys’ fees, which may be paid or incurred in connection with the exercise by Lender of any of its rights and remedies provided or referred to in Section 6.2, or any comparable provision of any other Loan Document, together with interest thereon at the rate specified in the Note, and the same shall be part of the Obligations and shall be secured by this Security Instrument.

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

Section 6.4                     Additional Provisions as to Remedies.

 

(a)           No right or remedy herein conferred upon or reserved to Lender is intended to be exclusive of any other right or remedy, and each and every such right or remedy shall be cumulative and continuing, shall be in addition to every other right or remedy given hereunder, or under the other Loan Documents or now or hereafter existing at law or in equity, and may be exercised from time to time and as often as may be deemed expedient by Lender.

(b)           No delay or omission by Lender to exercise any right or remedy hereunder upon any default or Event of Default shall impair such exercise, or be construed to be a waiver of any such default or Event of Default, or an acquiescence therein.

(c)           The failure, refusal, or waiver by Lender of its right to assert any right or remedy hereunder upon any default or Event of Default or other occurrence shall not be construed as waiving such right or remedy upon any other or subsequent default or Event of Default or other occurrence.

(d)           Lender shall not have any obligation to pursue any rights or remedies it may have under any other agreement prior to pursuing its rights or remedies hereunder or under the other Loan Documents.

(e)           No recovery of any judgment by Lender and no levy of an execution upon the Collateral (or any part thereof) or any other property of Borrower shall affect, in any manner or to any extent, the lien and security interest created by this Security Instrument upon and in the Collateral, or any liens, security interests, rights, powers, or remedies of Lender hereunder, and such liens, rights, powers, and remedies shall continue unimpaired as before.

(f)           Lender may resort to any security given by this Security Instrument or any other security now given or hereafter existing to secure the Obligations, in whole or in part, in such portions and in such order as Lender may deem advisable, and no such action shall be construed as a waiver of any of the liens, rights, or benefits granted hereunder.

(g)           Acceptance of any payment after the occurrence of any default or Event of Default  shall  not  be deemed a waiver or a  cure of such default or Event of Default, and acceptance of any payment less than any amount then due shall be deemed an acceptance on account only.

(h)           In the event that Lender shall have proceeded to enforce any right or remedy hereunder by foreclosure, sale, entry, or otherwise, and such proceeding shall be discontinued, abandoned, or determined adversely for any reason, then Borrower and Lender shall be restored to their former positions and rights hereunder with respect to the Collateral, subject to the lien and security interest hereof.

ARTICLE VII. 

 

ADDITIONAL PROVISIONS

 

Section 7.1     Sales or Participations.  Lender may from time to time sell or assign, in whole or in part, or grant participations in the Note, the other Loan Documents, and/or the obligations evidenced thereby. The holder of any such sale, assignment or participation, if the applicable agreement between Lender and such holder so provides, shall be entitled to all of the rights, obligations and benefits of Lender and deemed to hold and may exercise the rights of setoff or banker’s lien with respect to any and all obligations of such holder to the undersigned, in each case as fully as though the undersigned were directly indebted to such holder. Lender shall endeavor to give notice to the undersigned of such sale, assignment or participation; however, the failure to give such notice shall not affect any of Lender’s or such holder’s rights hereunder.

Section 7.2 Disclosure of Financial Information. Lender is hereby authorized to disclose any financial or other information about Borrower or any guarantors to any regulatory body or agency having jurisdiction over Lender or to any present, future or prospective participant or successor in interest in any loan or other financial accommodation made by Lender to Borrower, provided that, prior to receipt of any such information any participant or successor in interest shall agree in writing to treat such information in a confidential manner. The information provided may include, without limitation, amounts, terms, balances, payment history, return item history and any financial or other information about Borrower.

Section 7.3 Severability. If all or any portion of any provision of this Security Instrument or the other Loan Documents shall be held to be invalid, illegal, or unenforceable in any respect, then such invalidity, illegality, or unenforceability shall not affect any other provision hereof or thereof, and such provision shall be limited and construed in such jurisdiction as if such invalid, illegal, or unenforceable provision, or portion thereof, were not contained herein or therein.

Section 7.4 Notices. Any notice, demand, consent, approval, direction, agreement, or other communication (any “Notice”) required or permitted hereunder or under the other Loan Documents shall be in writing and shall be addressed as follows to the person entitled to receive the same:

 

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

 

	(a)    If to Borrower:
	  	  
	  	
Ranor, Inc.

	  	
1 Bella Drive

	  	
Westminster, Massachusetts 01473

	 	 
	 	
with a copy to:

	 	 
	  	
William A. Scari, Jr.

	 	Pepper Hamilton LLP 
	 	400 Berwyn Park
	  	
899 Cassatt Road

	  	
Berwyn, PA 19312-1183

	  	  
	(b)    If to Lender:
	  	  
	  	
Revere High Yield Fund, LP

	  	
105 Rowayton Avenue, Suite 100

	  	
Rowayton, Connecticut  06853

	 	 
	 	with a copy to:
	 	 
	  	
Mayo Crowe LLC

	 	
CityPlace II

	  	
185 Asylum Street

	  	
Hartford, Connecticut 06103

	 	Attn: William R.

Any Notice required to be made under this Security Instrument shall comply with the requirements of this Section. Each Notice shall be in writing and sent (a) by certified mail, return receipt requested, or (b) sent by an overnight carrier which provides for a return receipt. Each Notice shall be effective upon receipt. Rejection or other refusal by the addressee to accept or receipt the delivery, or the inability to deliver because of a changed address of which no Notice was given, shall be deemed to be the receipt of the notice sent. Any party shall have the right from time to time to change the address or individual’s attention to which Notices to it shall be sent by giving the other party at least ten (10) days’ prior notice thereof.

Section 7.5 Applicable Law. This Security Instrument shall be governed by and construed in accordance with the law of the Commonwealth of Massachusetts without regard to principles of conflict of laws.

Section 7.6 Sole Discretion of Lender. Except  as  otherwise  expressly  provided herein, whenever Lender’s judgment, consent, or approval is required hereunder for any matter, or Lender shall have an option or election hereunder, such judgment, the decision as to whether or not to consent to or approve the same, or the exercise of such option or election shall be in the sole discretion of Lender.

Section 7.7 Matters to be in Writing. This Security Instrument cannot be altered, amended, modified, terminated, or discharged except in a writing signed by the party against whom enforcement of such alteration, amendment, modification, termination, or discharge is sought. No waiver, release, or other forbearance by Lender will be effective against Lender unless it is in a writing signed by Lender, and then only to the extent expressly stated.

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

 

 

Section 7.8 Submission to Jurisdiction.  Without limiting the right of Lender to bring any action or proceeding against the undersigned or its property arising out of or relating to the Obligations (an “Action”) in the courts of other jurisdictions, Borrower hereby irrevocably submits to the jurisdiction of any state court or federal court sitting in the Commonwealth of Massachusetts, and Borrower hereby irrevocably agrees that any Action may be heard and determined in such state court or in such federal court. Borrower hereby irrevocably waives, to the fullest extent that it may effectively do so, the defense of an inconvenient forum to the maintenance of any Action in such jurisdiction. Borrower hereby irrevocably agrees that the summons and complaint or any other process in any Action in any jurisdiction may be served by mailing by certified mail to any of the addresses set forth herein or by hand-delivery to a person of suitable age and discretion at any such address. Such service will be complete on the date such process is so mailed or delivered, and Borrower will have thirty (30) days from such completion of service in which to respond in the manner provided by law. Borrower may also be served in any other manner permitted by law, in which event Borrower’s time to respond shall be as provided by law.

Section 7.9 Construction of Provisions. The following rules of construction shall be applicable for all purposes of this Security Instrument, and all documents or instruments supplemental hereto, unless the context otherwise requires:

 

(a)           All references herein to numbered Articles or Sections or to lettered Exhibits are references to the Articles and Sections hereof and the Exhibits annexed to this Security Instrument, unless expressly otherwise designated in context.

(b)           The terms “include,” “including,” and similar terms shall be construed as if followed by the phrase “without being limited to.”

 

(c)           The term “Collateral” and the term “Premises” shall be construed as if followed by the phrase “or any part thereof.”

(d)           The term “Obligations” shall be construed as if followed by the phrase “or any other sums secured hereby, or any part thereof.”

 

(e)           Words of masculine, feminine, or neuter gender shall mean and include the correlative words of the other genders, and words importing the singular number shall mean and include the plural number, and vice versa.

(f)           The term “person” shall include natural persons, firms, partnerships, corporations, and any other public and private legal entities.

(g)           All Article, Section, and Exhibit captions herein are used for convenience and reference only and in no way define, limit, or describe the scope or intent of, or in any way affect, this Security Instrument.

Section 7.10 Successors and Assigns. The provisions hereof shall be binding upon Borrower, and the heirs, devisees, representatives, successors, and assigns of Borrower, including successors in interest of Borrower in and to all or any part of the Collateral, and shall inure to the benefit of Lender and its heirs, successors, substitutes, and assigns. All references in this Security Instrument to Borrower or Lender shall be construed as including all of such other persons with respect to the person referred to. Where two or more persons have executed this Security Instrument, the obligations of such persons shall be joint and several, except to the extent the context clearly indicates otherwise.

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

 

 

Section 7.11 WAIVER OF TRIAL BY JURY AND CERTAIN DAMAGES. BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM FILED BY EITHER PARTY, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THIS SECURITY INSTRUMENT, THE LOAN DOCUMENTS, OR ANY ACTS OR OMISSIONS OF LENDER IN CONNECTION THEREWITH. FURTHER, BORROWER WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE, CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. BORROWER ACKNOWLEDGES AND AGREES THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS SECURITY INSTRUMENT AND THAT LENDER WOULD NOT EXTEND CREDIT TO BORROWER IF THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS SECURITY INSTRUMENT. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.

 

Section 7.12 CROSS DEFAULT AND CROSS COLLATERAL. In furtherance of prior provisions hereof, Borrower agrees and acknowledge that the occurrence of an Event of Default under the terms of this Security Instrument shall constitute an Event of Default under the Note, the Loan Agreement, and the other Loan Documents and under the documents evidencing any other loan now existing or hereafter made by Lender to Borrower which is secured by all or any portion of the Premises or other Collateral. The security interests, liens and other rights and interests in and relative to any of the Collateral now or hereafter granted to Lender by Borrower by or in any instrument or agreement, including but not limited to this Security Instrument and the other Loan Documents shall serve as security for any and all liabilities of Borrower to Lender, including but not limited to the liabilities described in this Security Instrument, the Note, the Loan Agreement, and the other Loan Documents and, for the repayment thereof, Lender may resort to any security held by it in such order and manner as it may elect.

Section 7.13 Principles of Construction. In the event of any inconsistencies between the terms and conditions of this Section 7 and the terms and conditions of this Security Instrument, the terms and conditions of this Section 7 shall control and be binding.

Section 7.14 Interest Rate. Notwithstanding anything in the Loan Documents to the contrary, in case the interest rate provided for in the Loan Documents at any time exceeds the maximum rate of interest allowed under applicable law, during such time the rate of interest provided for in the Loan Documents shall be reduced to the maximum rate allowed by such law, and the payments required hereunder shall be reduced accordingly.

Section 7.15 Maximum Interest. The provisions of this Security Instrument and of all agreements between Borrower and Lender, whether now existing or hereafter arising and whether written or oral, are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of demand or acceleration of the maturity of the Note or otherwise, shall the amount paid, or agreed to be paid to Lender for the use, forbearance or retention of the money loaned under the Note (“Interest”) exceed the maximum amount permissible under applicable law. If, from any circumstance whatsoever, performance or fulfillment of any provision hereof or of any agreement between Borrower and Lender shall, at the time performance or fulfillment of such provision shall be due, exceed the limit for Interest prescribed by law or otherwise transcend the limit of validity prescribed by applicable law, then, ipso facto, the obligation to be performed or fulfilled shall be reduced to such limit, and if, from any circumstance whatsoever, Lender shall ever receive anything of value deemed Interest by applicable law in excess of the maximum lawful amount, an amount equal to any excessive Interest shall be applied to the reduction of the principal balance owing under the Note in the inverse order of its maturity (whether or not then due) or, at the option of Lender, be paid over to Borrower, and not to the payment of Interest. All Interest (including any amounts or payments deemed to be Interest) paid or agreed to be paid to Lender shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full period until payment in full of the principal balance of the Note so that the Interest thereon for such full period will not exceed the maximum amount permitted by applicable law. This Section will control all agreements between Borrower and Lender.

 

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

 

 

Section 7.16 After-Acquired Property. All property acquired by Borrower after the date of this Security Instrument which by the terms of this Security Instrument shall be subject to the lien and the security interest created hereby, shall immediately upon the acquisition thereof by Borrower and without further mortgage, conveyance or assignment become subject to the lien and security interest created by this Security Instrument. Nevertheless, Borrower shall execute, acknowledge, deliver and record or file, as appropriate, all and every such further mortgages, security agreements, financing statements, assignments and assurances as Lender shall reasonably require for accomplishing the purposes of this Security Instrument.

Section 7.17 Indemnity; Expenses.  The Borrower will pay or reimburse the Lender for all reasonable attorneys’ fees, costs and expenses incurred by either of them in any suit, action, legal proceeding or dispute of any kind in which either of them is made a party or appears as party plaintiff or defendant, affecting the Obligations, this Security Instrument or the interest created herein, or the Collateral, or any appeal thereof, including, but not limited to, activities related to enforcement of the remedies of Lender, activities related to protection of Lender’s collateral, any foreclosure action or exercise of the power of sale, any condemnation action involving the Collateral or any action to protect the security hereof, any bankruptcy or other insolvency proceeding commenced by or against the Borrower, and any such amounts paid or incurred by Lender shall be added to the Obligations and shall be secured by this Security Instrument. The agreements of this subsection shall expressly survive in perpetuity satisfaction of this Security Instrument and repayment of the Obligations, any release, reconveyance, discharge of foreclosure of this Security Instrument, conveyance by deed in lieu of foreclosure, sale, and any subsequent transfer by Lender’s conveyance of the Collateral.

Section 7.18 Release of and Resort to Collateral. Lender may release, regardless of consideration and without the necessity for any notice to a consent by the holder of any subordinate lien on the Collateral, any part of the Collateral without, as to the remainder, in any way impairing, affecting, subordinating or releasing the lien or security interests created in or evidenced by the Loan Documents or their stature as a first and prior lien and security interest in and to the Collateral. For payment of the Obligations, Lender may resort to any other security in such order and manner as Lender may elect.

Section 7.19 Waiver of Redemption, Notice and Marshalling of Assets. To the fullest extent permitted by law, Borrower hereby irrevocably and unconditionally waives and releases (i) all benefit that might accrue to Borrower by virtue of any present or future statute of limitations or law or judicial decision exempting the Collateral from attachment, levy or sale on execution or providing for any appraisement, valuation, stay of execution, exemption from civil process, redemption or extension of time for payment, (ii) all notices of any Event of Default or of Lender’s election to exercise or its actual exercise of any right, remedy or recourse provided for under the Loan Documents, except as specifically required by the terms of this Security Instrument or the other Loan Documents, and (iii) any right to a marshalling of assets or a sale in inverse order of alienation.

 

Section 7.20 Discontinuance of Proceedings. If Lender shall  have  proceeded  to invoke any right, remedy or recourse permitted under the Loan Documents and shall thereafter elect to discontinue or abandon it for any reason, Lender shall have the unqualified right to do so and, in such an event, Borrower and Lender shall be restored to their former positions with respect to the Obligations, the Loan Documents, the Collateral and otherwise, and the rights, remedies, recourses and powers of Lender shall continue as if the right, remedy or recourse had never been invoked, but no such discontinuance or abandonment shall waive any Event of Default which may then exist or the right of Lender thereafter to exercise any right, remedy or recourse under the Loan Documents for such Event of Default.

Section 7.21 No Mortgagee in Possession. Neither the enforcement of any of the remedies under this Security Instrument nor any other remedies afforded to Lender under the Loan Documents, at law or in equity, shall cause Lender to be deemed or construed to be a mortgagee in possession of the Collateral, to obligate Lender to lease the Collateral or attempt to do so, or to take any action, incur any expense, or perform or discharge any obligation, duty or liability whatsoever under any of the Leases or otherwise.

Section 7.22 Massachusetts Statutory References. This Security Instrument is intended to constitute: (i) a mortgage deed under Massachusetts General Laws c. 183, §18, (ii) a security agreement and financing statement under the Uniform Commercial Code as enacted in the Commonwealth of Massachusetts, and (iii) a notice of assignment of rents or profits under Massachusetts General Laws C. 183 §4. This Security Instrument is also intended to operate and be construed as an absolute present assignment of the rents, issues and profits of the Premises, Lender hereby agreeing, as provided for in Massachusetts General Laws C. 183, §26, that Borrower is entitled to receive the rents, issues and profits of the Premises prior to an Event of Default and without entering upon or taking possession of the Premises.

Section 7.23 Statutory Condition. This Security Instrument is granted by Borrower WITH MORTGAGE COVENANTS, and upon the STATUTORY CONDITION, and upon the further condition that all covenants and agreements of, and conditions imposed upon, the Borrower contained herein and in the Note and the other obligations secured hereby shall be kept and fully performed, for any breach of which that is not cured within the applicable cure period following the giving of notice thereof if required, Lender shall have the STATUTORY POWER of sale.

 

 

 

  

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Exhibit D to Term Loan and Security Agreement

 

 

 

Section 7.24                      Security Agreement.

 

(a)           Insofar as any item of property included in the Collateral which is or might be deemed to be “personal property” is concerned, this Security Instrument is hereby made and declared to be a security agreement, granting a security interest in and to each and every item of Collateral in compliance with the provisions of the Uniform Commercial Code as enacted in the Commonwealth of Massachusetts. A financing statement or statements reciting this Security Instrument to be a security agreement, covering all of the Collateral, shall be executed by Borrower and Lender and appropriately filed.  Borrower further covenants and agrees that from time to time upon the request of Lender, Borrower shall (i) provide Lender with a precise inventory of the same, as and when acquired, (ii) execute and deliver to Lender, in form appropriate for recording and filing, a more comprehensive security agreement, and financing statements, on all such Collateral, (iii) provide to Lender such other assurances as may reasonably be required by Lender to establish Lender’s security interest in such Collateral subject to the Permitted Liens, and (iv) execute, deliver and cause to be recorded and filed from time to time and at Borrower’s sole cost and expense, continuances and such other instruments as will maintain Lender’s priority of security in the Collateral. The remedies for any violation of the covenants, terms and condition of the security agreement herein contained (which violation is not cured within the applicable cure period(s) provided herein) shall be (i) as prescribed herein, or (ii) as prescribed by general law, or (iii) as prescribed by the specific statutory consequences now or hereafter enacted and specified in said Uniform Commercial Code, all at Lender’s sole election. Borrower and Lender agree that the filing of such financing statement(s) in the records normally having to do with personal property shall never be construed as in any way derogating from or impairing this declaration and hereby stated intention of Borrower and Lender that everything used in connection with the product of income from the Collateral and/or adapted for use therein and/or which is described or reflected in this Security Instrument, is, and at all times and for all purposes and in all proceedings both legal or equitable shall be, regarded as part of the real estate irrespective of whether (i) any such item is physically attached to the Premises or the Improvements, (ii) serial numbers are used for the better identification of certain items capable of being thus identified in a recital contained herein, or (iii) any such financing statement(s) so filed at any time. Similarly, the mention in any such financing statement(s) of the rights in and to the proceeds of any hazard insurance policy, or any award in eminent domain proceedings for a taking or for the loss of value, or interest as lessor in any present or future lease or rights to income growing out of the use and/or occupancy of the Premises, whether pursuant to lease or otherwise, shall never be construed as in any way altering any of the rights of Lender as determined by this instrument or impugning the priority of Lender’s lien granted hereby or by any other recorded document, but such mention in such financing statement(s) is declared to be for the protection of Lender in the event any court shall at any time hold, with respect to any such matter, that notice of Lender’s priority of interest, to be effective against a particular class of persons, must be filed in the Uniform Commercial Code records. Borrower warrants that (i) Borrower’s (that is, “Debtor’s”) name, identity or organizational structure and residence or principal place of business are as set forth in Exhibit C attached hereto and by this reference made a party hereof; (ii) Borrower (that is, “Debtor”) has been using or operating under said name, identity or organizational structure without change for the time period set forth in Exhibit C attached hereto and by this reference made a part hereof; and (iii) the location of all Collateral constituting fixtures is upon the Premises. Borrower covenants and agrees that Borrower will furnish Lender with notice of any change in name, identity, organizational structure, residence or principal place of business within (30) days of the effective date of any such change and Borrower will promptly execute any financing statements or other instruments deemed necessary by Lender to prevent any filed financing statement from becoming misleading or losing its perfected status. The information contained in this Section is provided in order that this Security Instrument shall comply with the requirements of the Uniform Commercial Code, as enacted in the Commonwealth of Massachusetts, for instruments to be filed as financing statements. The names of the “Debtor” and the “Secured Party” and the identity of the organizational structure of each such party, are as set forth in Exhibit C attached hereto and by this reference made a part hereof; the mailing address of the “Secured Party” from which information concerning the security interest may be obtained, and the mailing address of “Debtor”, are as set forth in said  Exhibit C attached hereto; and a statement indicating the types, or describing the items, of Collateral is set forth in the Security Instrument.

(b)           Any sale or other disposition of the Collateral may be at public or private sale, to the extent such private sale is authorized under the provisions of the Uniform Commercial Code as enacted in the Commonwealth of Massachusetts, upon such terms and in such manner as Lender deems advisable. Lender may conduct any such sale or other disposition of the Collateral upon the Premises in which event Lender shall not be liable for any rent or charge for such use of the Premises. Lender may purchase the Collateral, or any portion of it, at any sale held under this Section. With respect to any Collateral to be sold pursuant to the Uniform Commercial Code, Lender shall give Borrower at least seven (7) days’ prior written notice of the date, time and place of any proposed public sale, or such additional notice as may be required under the laws of the Commonwealth of Massachusetts, and of the date after which any private sale or other disposition may be made. Lender may sell any of the Collateral as part of the real estate comprising the Collateral, or any portion or unit thereof, at the foreclosure sale or sales conducted pursuant hereto. If the provisions of the Uniformed Commercial Code are applicable to any part of the Collateral which is to be sold in combination with or as part of the real estate comprising the Collateral, or any part thereof, at one or more foreclosure sales, any notice required under such provisions shall be fully satisfied by the notice given in execution of the STATUTORY POWER OF SALE with respect to the real estate or any part thereof. In the event all or part of the Collateral is included at any foreclosure sale conducted pursuant hereto, a single total price for the Collateral, or such part thereof as is sold, may be accepted by Lender with no obligation to distinguish between the application of such proceeds among the property comprising the Collateral.

 

Section 7.25                      SEAL.  This Security Instrument is executed under “SEAL”.

 

NOW, THEREFORE, if Borrower shall pay all sums secured by this Security Instrument and fully comply with the conditions of this Security Instrument, then this Security Instrument shall be null and void, otherwise to remain in full force and effect.

 

 

[Remainder of this page intentionally left blank; signature page follows]

 

 

 

  

-26-

  

Exhibit D to Term Loan and Security Agreement

 

 

IN WITNESS WHEREOF, Borrower has duly executed and delivered this Security Instrument under seal the day first set forth above.

 

	  	
BORROWER:

	  	  
	
Signed, Sealed and Delivered in 

the presence of:

	
RANOR, INC.,

	 	
a Delaware corporation

	 	 
	                                                         	
By:                                             

	
Unofficial Witness

	
    Name:  Alexander Shen

	  	
    Title:           President

	  	  

 

	
THE COMMONWEALTH OF MASSACHUSETTS

	
§

	 	
§ ss.

	
COUNTY OF

	
§

	  	  

On this                     day of December, 2014, personally appeared Alexander Shen, President of RANOR, INC., signer and sealer of the foregoing instrument, and acknowledged the same to be his free act and deed in his capacity as such President, and the free act and deed of RANOR, INC., before me.

 

	  	
Name:

	  	
Commissioner of the Superior Court/ 

	 	Notary Public,
	  	
My Commission Expires:

	  	  

 

  [Signature Page to Mortgage Deed, Assignment of Leases and Rents, Security Agreement and Fixture Filing]

 

 

 

  

  

  

 

 

Exhibit D to Term Loan and Security Agreement

 

 

EXHIBIT A

 

LEGAL DESCRIPTION OF PREMISES

Exhibit A

 

  

  

  

 

 

Exhibit D to Term Loan and Security Agreement

 

EXHIBIT B

 

DESCRIPTION OF PERSONAL PROPERTY SECURITY

 

 

1.           All machinery, apparatus, goods, equipment, materials, fittings, fixtures, and chattels, and all appurtenances and additions thereto and betterments, renewals, substitutions, and replacements thereof, now owned or hereafter acquired by Borrower, wherever situate, and now or hereafter located on, attached to, contained in, or used or usable in connection with the real property described in Exhibit A attached hereto and incorporated herein (the “Premises”), and all improvements located thereon (the “Improvements”) or placed on any part thereof, though not attached thereto, including all screens, awnings, shades, blinds, curtains, draperies, carpets, rugs, furniture and furnishings, heating, electrical, lighting, plumbing, ventilating, air- conditioning, refrigerating, incinerating and/or compacting plants, systems, fixtures, elevators, hoists, stoves, ranges, vacuum and other cleaning systems, call systems, sprinkler systems and other fire prevention and extinguishing apparatus and materials, motors, machinery, pipes, ducts, conduits, dynamos, engines, compressors, generators, boilers, stokers, furnaces, pumps, tanks, appliances, equipment, fittings, and fixtures.

2.           All funds, accounts, deposits, instruments, documents, contract rights, general intangibles, notes, and chattel paper arising from or by virtue of any transaction related to the Premises, or the Improvements, described in this Exhibit B.

 

3.           All permits, licenses, franchises, certificates, and other rights and privileges now held or hereafter acquired by Borrower in connection with the Premises, the Improvements, or any of the personal property described in this Exhibit B.

 

4.           All right, title, and interest of Borrower in and to the name and style by which the Premises and/or the Improvements is known, including trademarks, copyrights, service marks, logos, designs and trade names relating thereto.

5.           All right, title, and interest of Borrower in, to, and under all plans, specifications, maps, surveys, reports, permits, licenses, architectural, engineering and construction contracts, service or maintenance contracts, management agreements, equipment leases, books of account, insurance policies, and other documents of whatever kind or character, relating to the use, construction upon, occupancy, leasing, sale, or operation of the Premises and/or the Improvements.

6.           All interests, estates, or other claims or demands, in law and in equity, which Borrower now has or may hereafter acquire in the Premises, or the Improvements, described in this Exhibit B.

 

7.           All right, title, and interest now owned or hereafter acquired by Borrower in and to all options to purchase or lease the Premises, or the Improvements, described in this Exhibit B, or any portion thereof or interest therein, and in and to any greater estate in the Premises, or the Improvements described in this Exhibit B.

 

8.           All of the estate, interest, right, title, other claim or demand, both in law and in equity, including claims or demands with respect to the proceeds of insurance relating thereto, which Borrower now has or may hereafter acquire in the Premises, the Improvements, or any portion thereof or interest therein, and any and all awards made for the taking by eminent domain, or by any proceeding or purchase in lieu thereof, of the whole or any part of such property, including without limitation, any award resulting from a change of any streets (whether as to grade, access, or otherwise) and any award for severance damages.

9.           All right, title, and interest of Borrower in and to all contracts, permits, certificates, licenses, approvals, utility deposits, utility capacity, and utility rights issued, granted, agreed upon, or otherwise provided by any governmental or private authority, person or entity relating to the ownership, development, construction, operation, maintenance, marketing, sale, or use of the Premises and/or the Improvements, including all of Borrower’s rights and privileges hereto or hereafter otherwise arising in connection with or pertaining to the Premises and/or the Improvements, including, without limiting the generality of the foregoing, all water and/or sewer capacity, all water, sewer and/or other utility deposits or prepaid fees, and/or all water and/or sewer and/or other utility tap rights or other utility rights, any right or privilege of Borrower under any loan commitment, lease, contract, Declaration of Covenants, Restrictions and Easements or like instrument, Developer’s Agreement, or other agreement with any third party pertaining to the ownership, development, construction, operation, maintenance, marketing, sale, or use of the Premises and/or the Improvements.

AND ALL PROCEEDS AND PRODUCTS OF THE FOREGOING PROPERTY DESCRIBED IN THIS EXHIBIT B.

 

A PORTION OF THE ABOVE DESCRIBED PROPERTY ARE OR ARE TO BE AFFIXED TO THE REAL PROPERTY DESCRIBED IN EXHIBIT A.

 

Exhibit B

 

  

  

  

 

Exhibit D to Term Loan and Security Agreement

 

 

EXHIBIT C

 

 

Debtor’s Name and Address:

 

RANOR, INC.

1 Bella Drive

Westminster, Massachusetts 01473 

 

Secured Party’s Name and address:

 

Revere High Yield Fund, LP

105 Rowayton Avenue, Suite 100

Rowayton, Connecticut  06853

 

 

 

 

 

 

Exhibit C

  

  

  

 

 

 

EXHIBIT E

 

 

  Utica Intercreditor and Subordination Agreement and Mortgagee’s Disclaimer and Consent

 

 

 

 

  

  

  

 

 

Exhibit E to Term Loan and Security Agreement

 

 

INTERCREDITOR AND SUBORDINATION AGREEMENT

 

THIS  INTERCREDITOR  AND  SUBORDINATION  AGREEMENT  (this “Agreement”) made as of this day of December, 2014, between and among UTICA

LEASECO, LLC, a Florida limited liability company (the “Senior Creditor”), REVERE HIGH YIELD FUND, LP, a Delaware limited partnership (the “Subordinated Creditor”), and RANOR, INC., a Delaware corporation (the “Debtor”) agree as follows:

 

BACKGROUND

A.           On or about May 28, 2014, the Senior Creditor extended a commercial loan to Debtor in the original principal amount of Four Million One Hundred Fifty Thousand Dollars ($4,150,000.00) pursuant to the terms of a Loan and Security Agreement and other loan documents executed and delivered by Debtor to and for the benefit of the Senior Creditor (including all extensions, modifications and renewals thereto and collectively referred to herein as the “Senior Debt Documents”). The loan made by the Senior Creditor to the Debtor is referred to herein as the “Senior Debt”.

B.           Subordinated Creditor has agreed to extend two commercial loans to Debtor in the aggregate amount of $2,250,000.00, which debt will be secured by, among other things, various security agreements in the Debtor’s personal property executed and delivered by Debtor to and for the benefit of the Subordinated Creditor (including all extensions, modifications and renewals thereto and referred to herein as the “Subordinated Debt Documentation”).

C.           As security for the Senior Debt, the Debtor granted to the Senior Creditor a security interest in certain personal property of Debtor set forth on Exhibit A attached hereto (the “Collateral”).

D.           The loans by Subordinated Creditor to the  Debtor (the “Revere Debt”) are secured by, among other things, a security interest in certain business assets of Debtor, which security interest will be perfected by the filing of a UCC-1 Financing Statement with the State of Delaware, and State of Massachusetts (collectively the “UCC Filings”) with respect to the Collateral.

E.           Subordinated Creditor, Senior Credit and Debtor wish to enter into this Intercreditor and Subordination Agreement for the purposes of setting forth the rights and obligations of the parties with respect to the Collateral.

NOW THEREFORE, the Senior Creditor, the Subordinated Creditor and Debtor agree as follows:

1.           The Subordinated Creditor acknowledges and agrees that its lien in the Collateral, and any proceeds thereof, evidenced by the Subordinated Debt Documentation is subordinate to the lien of the Senior Debt evidenced by the Senior Debt Documents. Upon the execution of this Agreement, Subordinated Creditor will file UCC-1 Financing Statements with the Secretary of State of Delaware and Massachusetts, at Debtor’s expense, evidencing the subordination of its lien against the Collateral to the lien of the Senior Creditor in the Collateral, and Senior Creditor recognizes Subordinated Creditor’s subordinate lien in the Collateral.

 

 

 

 

 

 

  

  

  

 

 

Exhibit E to Term Loan and Security Agreement

 

2. The Subordinated Creditor agrees that, so long as any Senior Debt remains outstanding:

 

a.           In the event Subordinated Creditor receives proceeds from the Collateral, Subordinated Creditor shall hold such proceeds in trust for the benefit of Senior Creditor, and shall pay such proceeds over to Senior Creditor upon the earlier to occur of (i) demand from Senior Creditor, or (ii) actual notice that the payment received represents proceeds of the Collateral; and

 

b.           Subordinated Creditor shall provide the Senior Creditor written notice of the occurrence of an event of default under the Subordinated Creditor Documents; however, Subordinated Creditor agrees that so long as the Senior Debt remains outstanding, the Subordinated Creditor shall not exercise for any reason, any right or remedy it maintains against the Collateral under the Subordinated Debt Documents for the collection of the Revere Debt.

3.           To the extent all or some of the Collateral is located on property that Subordinated Creditor has a mortgage upon (the “Mortgaged Property”), upon receiving notice of an event of default under the Senior Creditor Documents, Subordinated Creditor agrees that it will not interpose  any objection or hindrance to  Senior Creditor  entering upon  the Mortgaged Property for the purpose of taking possession of the Collateral pursuant to the terms of that certain Mortgagee Disclaimer and Consent Agreement executed by  Subordinated Creditor and Senior Creditor, a copy of which is attached hereto as Exhibit B (the “Mortgagee Waiver”). Nothing contained in this Agreement shall in any way affect Subordinated Creditor’s right to commence any action against the Mortgaged Property, including foreclosure or accepting a deed in lieu of foreclosure and following which to enforce all of its rights of ownership with respect to the Mortgaged Property, subject to the Senior Creditor’s right to occupancy as set forth in the Mortgagee Waiver.

4.           Upon the occurrence of an Event of Default as defined in the Senior Debt Documents and after prior written notice to the Subordinated Creditor, the Senior Creditor may exercise any right or remedy it maintains against the Debtor and/or the Collateral including, but not limited to, the commencement of any legal proceeding or other proceedings  for  the collection of the Senior Debt. In the event the Collateral is sold by Senior Creditor:

a.           Subordinated Creditor (i) will not assert any claim for marshaling of Debtor’s assets, (ii) consents to the collection or sale of the Collateral by Senior Creditor free and clear of Subordinating Creditor’s security interest or lien, and (iii) waives any claims contesting the commercial reasonableness of any sales of the Collateral that are not raised within ten (10) days of its receipt of written notice of the terms and conditions of any agreement or proposal for the disposition of the Collateral (provided that any such proposal subsequently is substantially embodied within an agreement).

b.           The Senior Creditor agrees that the proceeds of such sale in excess of the Senior Debt shall be held in trust for the benefit of Subordinated Creditor and Senior Creditor shall pay such proceeds over to Subordinated Creditor within five (5) business days from Senior Creditor’s receipt of written documentation that (i) Subordinated Creditor’s debt equals or exceeds such proceeds, and (ii) there has not been any tax lien filed by any governmental  authority  after  the  date  of  this  Agreement. In  the  event  that  Subordinated Creditor’s debt is less than such proceeds, then upon satisfaction of subparagraph (ii), Senior Creditor shall pay such proceeds to Subordinated Creditor only to the extent of Subordinated Creditors debt.

5.           Notice to Subordinated Creditor. The Senior Creditor shall promptly notify the Subordinated Creditor as provided herein of each of the following events:

a.           Any notice which the Senior Creditor may give to the Debtor regarding any breach of Senior Credit Documents, or any termination of the Debtor’s right to use, lease or possess the Collateral;

b.           Any legal action which the Senior Creditor may commence to collect on the Senior Debt;

c.           Any agreement or proposal for the Debtor to voluntarily convey to the Senior Creditor title to all or any portion of the Collateral; and

 

d. Any agreement or proposal for the disposition of the Collateral.

 

 

 

 

  

  

  

 

 

Exhibit E to Term Loan and Security Agreement

6.           No action which the Senior Creditor may take or refrain from taking with respect to the Senior Debt, or the Senior Debt Documents or the Collateral, including a waiver or release thereof, or any agreement or agreements in connection therewith, shall affect this Agreement or the obligations of the Subordinated Creditor provided for herein.

7.           The Senior Creditor understands and acknowledges that an Event of Default under the Senior Debt Documents constitutes a Default under the Subordinated Debt Documentation. The Subordinated Creditor understands and acknowledges that an Event of Default under the Subordinated Debt Documentation constitutes a Default under the Senior Debt Documents.

8.           This Agreement and its terms shall in no way be affected or impaired by, and Subordinating Creditor hereby irrevocably consents to, without notice: (a) additional credit being extended from Senior Creditor to Debtor during the term of this Agreement, provided the total outstanding principal obligations from Debtor to Senior Creditor shall not exceed Four Million One Hundred Fifty Thousand Dollars ($4,150,000.00) plus accrued interest, late charges, legal fees and costs and any protective advances made by Senior Creditor; (b) any amendment, alteration, extension, renewal, waiver, indulgence or other modification of the Senior Debt Documents; (c) any settlement or compromise in connection with the Senior Debt Documents or the Senior Debt; (d) any substitution, exchange, release or other disposition of all or any part of the Senior Debt Documents or the Senior Debt; (e) any failure, delay, neglect, act or omission by Senior Creditor to act in connection with the Senior Debt Documents or the Senior Debt; (f) any advances for the purpose of performing or curing any term or covenant contained in the Senior Debt Documents or with respect to the Senior Debt to which Debtor shall be or would otherwise be in default; and (g) any other matter similar to the foregoing. The obligations and agreements of Subordinated Creditor shall be unconditional, notwithstanding any defect in the genuineness, validity, regularity or enforceability of the Senior Debt or the Senior Debt Documents or any other circumstances unless specifically referred to herein, which might otherwise constitute a legal or equitable discharge or a defense to Subordinating Creditor. With regard to subsection (c), pursuant to any settlement or compromise in connection with the Senior Debt Documents under which Senior Creditor takes possession of the Collateral, Senior Creditor agrees to enter into an auction agreement providing for: (i) a guaranteed purchase price with a sharing of excess auction proceeds or (ii) a public (including internet) sale of the Collateral, in a commercially reasonable manner.

9.           No waiver shall be deemed to be made by Senior Creditor or Subordinated Creditor of any of their rights under this Agreement unless the same shall be in writing and then only with respect to the specific instance involved.

10.           The Subordinated Creditor shall not transfer, sell or otherwise dispose of any of the Revere Debt except to a transferee who agrees to become a party to this Agreement. Likewise, Senior Creditor shall not transfer sell or otherwise dispose of any of the Senior Debt except to a transferee who agrees to become a party to this Agreement.

11.           Any notices required to be sent pursuant to this Agreement to either the Senior Creditor or the Subordinated Creditor shall be sent by overnight courier, hand delivery, or certified mail, return requested to the following:

 

 

 

	
If to the Senior Creditor:

	Utica Leaseco, LLC 
	 	
44225 Utica Road

	 	Utica, Michigan 48317 
	 	
Attn. David K. Levy

	 	 
	If to the Subordinated Creditor: 	 Revere High Yield Fund, LP
	 	105 Rowayton Avenue, Suite 100
	 	Rowayton, CT 06853 Attn: Clark Briner
	 	 
	
With Copy to:

	
Mayo Crowe LLC CityPlace II

	 	
185 Asylum Street

	 	Hartford, CT 06103 Attn: Katherine F. Troy
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 

 

 

 

 

 

  

  

  

 

 

Exhibit E to Term Loan and Security Agreement

12.           The purpose of this Agreement is to define and memorialize the rights of the Senior Creditor and the Subordinated Creditor with respect to the collection and enforcement of the Senior Debt and the Revere Debt from the Collateral. This Agreement shall in no way impair or offset Debtor’s duty or obligation to repay the Senior Debt or the Revere Debt in its entirety in accordance with the terms and provisions of the Senior Debt Documents and the Subordinated Debt Documents.

13.           This Agreement shall be binding upon and inure to the benefit of the Senior Creditor and the Subordinated Creditor and their respective successors and assigns.

14.           This Agreement may not be amended, supplemented or modified except by an instrument in writing signed by the Senior Creditor and the Subordinated Creditor.

15.           All parties hereto have the authority to enter into this Agreement and the execution of this Agreement has been duly authorized.  This Agreement shall be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns. This Agreement shall be construed according to the Uniform Commercial Code.

16.           This Agreement sets forth the entire understanding of the Senior Creditor and the Subordinated Creditor and supersedes any and all prior agreements, representations, arrangements and understandings relating to the subject matter hereof.

17.           This Agreement may be executed in any number of counterparts by the different parties on separate counterparts, each of which when so executed and delivered shall be an original, but all of the counterparts shall together constitute one and the same instrument.

 

[Intentionally left blank]

 

 

 

 

  

  

  

 

 

Exhibit E to Term Loan and Security Agreement

 

Executed as a sealed document as of the day of December, 2014.

 

	 	“Senior Creditor”
	 	 
	 	UTICA LEASECO, LLC,
	 	a Florida limited liability company
	 	 
	 	 By:                                             
	 	 
	 	Its:
	 	 
	 	 “Subordinated Creditor”
	 	 
	 	REVERE HIGH YIELD FUND, LP,
	 	a Delaware limited partnership
	 	 
	 	By: Revere GP, LLC, its General Partner
	 	 
	 	
    By: Revere Capital, LLC, its sole member

	 	 
	 	By:                                                 
	 	 
	 	Its: Manager 

 

 

The undersigned Debtor acknowledges notice of the attached Intercreditor and Subordination Agreement and agrees to be bound by all of terms, provisions and conditions thereof.

 

 

	 	  

“Debtor”

	 	 RANOR, INC., a Delaware corporation
	 	 
	 	By:                                                 
	 	Name: Alexander Shen
	 	Title: President

 

 

 

 

  

  

  

 

 

Exhibit E to Term Loan and Security Agreement

 

 

MORTGAGEE’S DISCLAIMER AND CONSENT

 

To induce Utica Leaseco, LLC, a Florida limited liability company (the “Lender”), to continue to extend credit to or for the benefit of Ranor, Inc., a Delaware corporation (the “Borrower”), secured by certain machinery, vehicles, equipment and other personal property of the Borrower’s (collectively, “Collateral”), as more fully described on the attached Exhibit A, and for other good and valuable consideration, Revere High Yield Fund, LP, a Delaware limited partnership (the “Mortgagee”), hereby certifies and agrees for the benefit of the Lender, its participants, successors and assigns, as follows:

1.           Premises; Mortgage; Security Interest. The Mortgagee holds a mortgage lien on certain premises (the “Premises”) located in Worcester County, Massachusetts, and described in Exhibit B hereto, pursuant to a mortgage (the “Mortgage”), a true, correct and complete copy of which is attached hereto as Exhibit B. Mortgagee has a security interest in the Accounts and certain other collateral including the Collateral pursuant to a certain loan and security agreement (the “Agreement”) that is subordinated to the Lender’s security interest in the Collateral pursuant to the terms and conditions of that certain Intercreditor and Subordination Agreement dated December        , 2014 between Mortgagee and Lender.  The Mortgage and the Security Agreement are in full force and effect. The Mortgagee acknowledges that the Collateral does not consist of real estate fixtures secured by the Mortgage.

2.           Notices to Lender. The Mortgagee shall promptly notify the Lender as provided herein of each of the following events:

a.           Any notice which the Mortgagee may give to the Borrower regarding any breach of the Mortgage, or any termination of the Borrower’s rights to use, lease or possess the Premises;

 

b.           Any legal action which the Mortgagee may commence to foreclose the Borrower’s interests in the Premises or to appoint a receiver for the Premises; and

c.           Any agreement or proposal for the Borrower to voluntarily convey to the Mortgagee title to all or any portion of the Premises.

All notices to the Lender shall be deemed given when delivered to the Lender by overnight UPS, Federal Express or other national express or delivery service at 4425 Utica Road, Utica, Michigan 48317 with a copy via email on the same date to david.levy@uticaleaseco.com.

 

3.           Notice of Default; Right to Cure. The Mortgagee shall give notice to the Lender of any default(s) by the Borrower in its obligations under the Mortgage, and with respect to a monetary default only which is curable by the payment of money (a “Monetary Default”), the Mortgagee shall allow the Lender, at the Lender’s option and without obligation, a period of fifteen (15) days from the date the Lender receives notice of such Monetary Default(s) in which to cure or cause the Borrower to cure such Monetary Default(s). Any payments made by Lender to cure a Monetary Default shall not obligate Lender to cure any other Monetary Defaults of Borrower or cause this Agreement to be amended.

4.           Lender’s Right to Occupy Premises and Disposition of the Collateral. The Mortgagee hereby agrees that notwithstanding any default under the Mortgage by the Borrower, Lender has the right to enter into and remain in possession of the Premises for a period not to exceed ninety (90) days, commencing the day after Mortgagee provides Lender with written notice (i) via US mail at 44225 Utica Road, Utica, Michigan 48317; and (ii) via email at david.levy@uticaleaseco.com, that it has obtained possession of the Premises (through judicial foreclosure, foreclosure by advertisement, a deed in lieu of foreclosure or otherwise and the passing of the mortgagor’s period of redemption), for the purpose of reclaiming the Collateral, including detaching, selling (by entering into an auction agreement providing for: (x) a guaranteed purchase price with a sharing of excess auction proceeds or (y) a public (including internet) sale of the Collateral, in a commercially reasonable manner on the Premises), and removing the Collateral from the Premises (the “Occupation Period”).

a.           During the Occupation Period and until the Lender has ceased its occupation of the Premises, the Lender will pay the Mortgagee a fee of Fifty Three Thousand Five Hundred ($53,500.00) Dollars per month or portion thereof. Lender and Mortgagee acknowledge that said fee includes premiums for liability and casualty insurance with respect to the Collateral and the Premises, real estate taxes, utilities and all other charges payable by Lender for its occupancy of the Premises. Mortgagee shall also maintain insurance on the Collateral and Premises during the Occupation Period consistent with the Borrower’s insurance.

b.           No payments by the Lender to the Mortgagee provided for herein shall cure any defaults of the Borrower under the Mortgage or the Security Agreement, nor shall such payments reinstate the Borrower’s rights to use or occupy the Premises.

c.           Lender has no liability for any obligations that arose or arise under the Mortgage or the Security Agreement between the Mortgagee and Borrower; provided, that the Lender shall reimburse the Mortgagee for any physical damage to the Premises caused by Lender, its agents or invitees, its Auctioneer or agents or invitees of its Auctioneer during the Occupation Period.

d.           The Mortgagee acknowledges that the Lender shall not be liable for any diminution in value of the Premises during the Occupation Period.

 

 

 

 

 

  

  

  

 

 

Exhibit E to Term Loan and Security Agreement

5.           Notices. Any notice or communication required or permitted to be given by any provision of this Agreement will be deemed to have been given when delivered personally to the party designated to receive such notice or on the business day on which the same is delivered to such party by overnight UPS, Federal Express or other nationally recognized delivery service that provides delivery receipts, directed to the following addresses or to such other or additional addresses as any party might designate by written notice to the other party with a copy sent via email on the same date:

 

 

	To the Mortgagee: 	To the Lender:
	 	 
	
Revere High Yield Fund, LP

105 Rowayton Avenue, Suite 100

Rowayton, CT 06853 Attention: Clark Briner

Email address: cbriner@reverecapital.com

	
Utica Leaseco, LLC 44225 Utica Road

Utica, MI 48317 

Attention: David K. Levy

Email address: david.levy@uticaleaseco.com

 

 

6.           No Third Party Beneficiaries. It is the intention of the Lender and the Mortgagee that this agreement impose obligations and confer benefits only upon the Lender and the Mortgagee, and that it will not confer any rights, remedies or benefits upon the Borrower or any person other than the Lender and the Mortgagee, and their respective heirs, executors, successors and assigns.

7.           Counterparts. This Disclaimer and Consent may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. This Disclaimer and Consent may be transmitted  by  facsimile machine or by electronic mail in portable document format (“pdf’) and signatures appearing on faxed instruments and/or electronic mail instruments shall be treated as original signatures.

8.           Modification. No modification, rescission, waiver, release, or amendment of any provision of this Disclaimer and Consent shall be made, except by a written agreement signed by the Lender and the Mortgagee.

9.           Successors and Assigns. This Disclaimer and Consent binds the Mortgagee and its respective successors and assigns. The Mortgagee will notify any successor or assign of the terms of this Disclaimer and Consent.

10.           Jury Trial Waiver. THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED ON OR PERTAINING TO THIS DISCLAIMER AND CONSENT.

 

11.           Applicable Law. This Disclaimer and Consent shall be governed by and construed under the internal laws of the state where the Premises are located, without reference to principles of conflicts of laws, as the same may from time to time be in effect, including, without limitation, the Uniform Commercial Code as in effect in such state.

 

[Intentionally left blank]

 

 

 

 

  

  

  

 

 

Exhibit E to Term Loan and Security Agreement

 

 

IN WITNESS WHEREOF, this Disclaimer and Consent is signed on December, 2014.

 

 

	 	  

UTICA LEASECO, LLC, 

a Florida limited liability company

	 	 
	 	By:                                                   
	 	 
	 	  

Title:

	 	 
	 	 
	 	REVERE HIGH YIELD FUND, LP,
	 	a Delaware limited partnership
	 	By: Revere GP, LLC, its General Partner
	 	    By: Revere Capital, LLC, its sole member
	 	 
	 	
By:                                                  

	 	
Clark Briner

	 	 
	 	Title: Manager 

 

	
STATE OF MICHIGAN

	
)

	 	
)

	
COUNTY OF MACOMB

	
)

	 	 

 

Before me, a Notary Public in and for said County, on this                   day of December, 2014, personally appeared                             , of Utica Leaseco, LLC who executed the foregoing agreement on behald of said limited liability company

       

 

	 	                                                      
	 	Notary Public
	 	My Commission Expires:

 

	
STATE OF CONNECTICUT

	
)

	 	
) ss: Westport

	
COUNTY OF FAIRFIELD

	
)

	 	 

 

On this the                     day of December, 2014, before me, the undersigned officer, personally appearedwho acknowledged himself to be theof Revere Capital, LLC, the sole member of Revere GP, LLC, the General Partner of REVERE HIGH YIELD FUND, LP, and that he, in such capacity, being authorized so to do, executed the foregoing instrument for the purposes therein contained on behalf of such entity, as his and its free act and deed.

 

 

IN WITNESS WHEREOF, I hereunto set my hand.

 

	 	                                                                   
	 	
Commissioner of the Superior Court

	 	
Notary Public

	 	
My Commission Expires:

	 	 
	 	 

 

 

 

 

  

  

  

 

 

Exhibit E to Term Loan and Security Agreement

 

 

EXHIBIT A TO

MORTGAGEE’S DISCLAIMER AND CONSENT

 

[The Collateral described on the Schedule attached hereto]

 

 

 

 

  

  

  

 

 

Exhibit E to Term Loan and Security Agreement

 

EXHIBIT B TO

MORTGAGEE’S DISCLAIMER AND CONSENT

 

The Premises and equipment referred to in the referenced instrument are located in Worcester County, Massachusetts, and are described as follows:

 

 

 

 

  

  

  

 

 

Exhibit E to Term Loan and Security Agreement

 

EXHIBIT C

TO MORTGAGEE’S DISCLAIMER AND CONSENT

 

[Copy of Mortgage]

 

 

 

 

  

  

  

 

 

 

SCHEDULE P 

TO

TERM LOAN AND SECURITY AGREEMENT

 

Permitted Liens

 

	  	
Debtor

	
Secured Party

	
File Number

	
Filing Date

	
Jurisdiction

	
Collateral

	
1.

	
Ranor, Inc.

	
Standex International Corporation

	
Original 201307589100

 

Amendment 201308866930

 

Amendment 201308866390

 

Amendment 201411456170

 

Amendment 201411457410

 

Amendment 201412535180

 

Amendment 201412535720

 

Amendment 201412542070

 

Amendment 201412542250

 

Amendment 201413185850

 

Amendment 201413106370

 

Amendment 201413994850

 

Amendment 201413995000

 

Amendment 201414417240

	
10/25/2013

 

 

12/23/2013

 

 

12/23/2013

 

 

4/24/2014

 

 

4/24/2014

 

 

6/11/2014

 

 

6/11/2014

 

 

6/11/2014

 

 

6/11/2014

 

 

7/08/2014

 

 

7/08/2014

 

 

8/19/2014

 

 

8/19/2014

 

 

9/09/2014

	
MA Secretary of Commonwealth

	
Certain specified equipment

 

 

 

  

  

  

 

	  	
Debtor

	
Secured Party

	
File Number

	
Filing Date

	
Jurisdiction

	
Collateral

	  	  	  	
Amendment 201415840830

 

Amendment 2014158540920

	
11/12/2014

 

 

11/12/2014

	  	  
	
2.

	
Ranor, Inc.

	
Electric Boat Corporation

	
Original 201409278010

 

Amendment 201412177380

	
1/13/2014

 

 

5/27/2014

	
MA Secretary of Commonwealth

	
Personal Property related to specified purchase order

	
3.

	
Ranor, Inc.

	
Electric Boat Corporation

	
Original 201409278290

 

Amendment 201412177010

	
1/13/2014

 

 

5/27/2014

	
MA Secretary of Commonwealth

	
Personal Property related to specified purchase order

	
4.

	
Ranor, Inc.

	
Electric Boat Corporation

	
Original 201409278380

 

Amendment 201412176950

	
1/13/2014

 

 

5/27/2014

	
MA Secretary of Commonwealth

	
Personal Property related to specified purchase order

	
5.

	
Ranor, Inc.

	
Electric Boat Corporation

	
Original 201409278470

 

Amendment 201412176680

	
1/13/2014

 

 

5/27/2014

	
MA Secretary of Commonwealth

	
Personal Property related to specified purchase order

	
6.

	
Ranor, Inc.

	
Electric Boat Corporation

	
Original 201409278650

 

Amendment 20141276770

	
1/13/2014

 

 

5/27/2014

	
MA Secretary of Commonwealth

	
Personal Property related to specified purchase order

	
7.

	
Ranor, Inc.

	
Electronic Boat Corporation

	
Original 201416042530

	
11/20/2014

	
MA Secretary of Commonwealth

	
Certain specified equipment

	
8.

	
Ranor, Inc.

	
Utica Leaseco, LLC

	
Original 41551407

	
4/21/2014

	
DE SOS

	
Certain specified equipment

	
9.

	
Ranor, Inc.

	
Utica Leaseco, LLC

	
Original 201411369100

	
4/22/2014

	
MA Secretary of Commonwealth

	
Certain specified equipment

	
10.

	
Ranor, Inc.

	
Utica Leaseco, LLC

	
Original 2014042304966

	
4/22/2014

	
PA SOS

	
Certain specified equipment

	
11.

	
Techprecision Corporation

	
Utica Leaseco, LLC

	
Original 41551068

	
4/21/2014

	
DE SOS

	
Certain specified equipment

	
12.

	
Techprecision Corporation

	
Utica Leaseco, LLC

	
Original 2014042304942

	
4/22/2014

	
PA SOS

	
Certain specified equipment

 

 

 

  

  

  

 

SCHEDULE 5.05

 

 

Cash Covenant

 

	
Period Ending

	
Minimum Cash Level

	
12/31/2014

	
$750,000.00

	
1/31/2015

	
$400,000.00

	
2/28/2014

	
$425,000.00

	
3/31/2015

	
$500,000.00

	
4/30/2015

	
$820,000.00

	
5/31/2015

	
$765,000.00

	
6/30/2015

	
$775,000.00

	
7/31/2015

	
$690,000.00

	
8/31/2015

	
$700,000.00

	
9/30/2015

	
$510,000.00

	
10/31/2015

	
$450,000.00

	
11/30/2014

	
$560,000.00

 

 

 

 

 

  

  

  

 

 

SCHEDULE 5.08(a)

 

Location of Borrower Collateral

 

1 Bella Drive

Westminster, Massachusetts 01473

 

 

 

 

 

  

  

  

 

SCHEDULE 5.08(b)

 

Location of Chief Executive Offices

1 Bella Drive

Westminster, Massachusetts 01473

 

 

 

 

 

 

 

  

  

  

 

 

 

SCHEDULE 6.01(b) 

TO

TERM LOAN AND SECURITY AGREEMENT

Existing Indebtedness

 

Utica Loan

Capitalized Lease with Toshiba for copiers (balance owed on Closing Date approximately $41,730.32)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00238-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00238-of-00352.parquet"}]]