Document:

ex101jpmenergyrecovery-c

EXECUTION VERSION  743955026  CREDIT AGREEMENT  dated as of  December 22, 2021  among  ENERGY RECOVERY, INC.  as a Borrower,  the other Loan Parties from time to time party hereto,  and  JPMORGAN CHASE BANK, N.A.,  as Lender  

 

Table of Contents  i  743955026  ARTICLE I DEFINITIONS ........................................................................................................................ 1 SECTION 1.01. Defined Terms ......................................................................................... 1 SECTION 1.02. Classification of Loans and Borrowings ................................................ 24 SECTION 1.03. Terms Generally .................................................................................... 25 SECTION 1.04. Accounting Terms; GAAP..................................................................... 25 SECTION 1.05. Interest Rates; LIBOR Notification ....................................................... 26 SECTION 1.06. Pro Forma Adjustments for Acquisitions and Dispositions ................... 26 SECTION 1.07. Status of Obligations .............................................................................. 27 SECTION 1.08. Letters of Credit ..................................................................................... 27 SECTION 1.09. Divisions ................................................................................................ 27 ARTICLE II THE CREDITS ..................................................................................................................... 27 SECTION 2.01. Commitments ......................................................................................... 27 SECTION 2.02. Loans and Borrowings. .......................................................................... 28 SECTION 2.03. Requests for Borrowings ....................................................................... 28 SECTION 2.04. Letters of Credit. .................................................................................... 29 SECTION 2.05. Funding of Borrowings. ......................................................................... 32 SECTION 2.06. Interest Elections. .................................................................................. 32 SECTION 2.07. Termination and Reduction of Commitments........................................ 33 SECTION 2.08. Repayment and Amortization of Loans; Evidence of Debt. .................. 34 SECTION 2.09. Prepayment of Loans. ............................................................................ 34 SECTION 2.10. Fees. ....................................................................................................... 35 SECTION 2.11. Interest. .................................................................................................. 35 SECTION 2.12. Alternate Rate of Interest; Illegality ...................................................... 36 SECTION 2.13. Increased Costs ...................................................................................... 37 SECTION 2.14. Break Funding Payments ....................................................................... 38 SECTION 2.15. Withholding of Taxes; Gross-Up. .......................................................... 39 SECTION 2.16. Payments Generally; Allocation of Proceeds. ....................................... 41 SECTION 2.17. Returned Payments ................................................................................ 43 ARTICLE III REPRESENTATIONS AND WARRANTIES ................................................................... 43 SECTION 3.01. Organization; Powers ............................................................................. 43 SECTION 3.02. Authorization; Enforceability ................................................................ 43 SECTION 3.03. Governmental Approvals; No Conflicts ................................................ 43 SECTION 3.04. Financial Condition; No Material Adverse Change. .............................. 43 SECTION 3.05. Properties, etc. ....................................................................................... 44 SECTION 3.06. Litigation and Environmental Matters. .................................................. 44 SECTION 3.07. Compliance with Laws and Agreements; No Default ........................... 44 SECTION 3.08. Investment Company Status .................................................................. 45 SECTION 3.09. Taxes ...................................................................................................... 45 SECTION 3.10. ERISA .................................................................................................... 45 SECTION 3.11. Disclosure .............................................................................................. 45 SECTION 3.12. Material Agreements.............................................................................. 45 SECTION 3.13. Solvency ................................................................................................ 45 SECTION 3.14. Insurance ................................................................................................ 46 SECTION 3.15. Capitalization and Subsidiaries .............................................................. 46 SECTION 3.16. Security Interest in Collateral ................................................................ 46 SECTION 3.17. Employment Matters ............................................................................. 46 SECTION 3.18. Margin Regulations ............................................................................... 46 SECTION 3.19. Use of Proceeds ..................................................................................... 46 

 

ii  743955026  SECTION 3.20. Anti-Corruption Laws and Sanctions .................................................... 46 SECTION 3.21. Plan Assets; Prohibited Transactions ..................................................... 47 ARTICLE IV CONDITIONS .................................................................................................................... 47 SECTION 4.01. Effective Date ........................................................................................ 47 SECTION 4.02. Each Credit Event .................................................................................. 49 ARTICLE V AFFIRMATIVE COVENANTS .......................................................................................... 50 SECTION 5.01. Financial Statements and Other Information ......................................... 50 SECTION 5.02. Notices of Material Events .................................................................... 52 SECTION 5.03. Existence; Conduct of Business ............................................................. 52 SECTION 5.04. Payment of Taxes .................................................................................. 53 SECTION 5.05. Maintenance of Properties ..................................................................... 53 SECTION 5.06. Books and Records; Inspection Rights .................................................. 53 SECTION 5.07. Compliance with Laws .......................................................................... 53 SECTION 5.08. Use of Proceeds. .................................................................................... 53 SECTION 5.09. Accuracy of Information ........................................................................ 54 SECTION 5.10. Insurance ................................................................................................ 54 SECTION 5.11. Casualty and Condemnation .................................................................. 54 SECTION 5.12. Depository Banks ................................................................................... 54 SECTION 5.13. Additional Collateral; Further Assurances............................................. 54 SECTION 5.14. Post-Closing Covenants. ........................................................................ 55 ARTICLE VI NEGATIVE COVENANTS ............................................................................................... 56 SECTION 6.01. Indebtedness .......................................................................................... 56 SECTION 6.02. Liens ...................................................................................................... 58 SECTION 6.03. Fundamental Changes. ........................................................................... 59 SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions ............... 59 SECTION 6.05. Asset Sales ............................................................................................. 61 SECTION 6.06. Sale and Leaseback Transactions .......................................................... 62 SECTION 6.07. Swap Agreements .................................................................................. 62 SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness. ..................... 62 SECTION 6.09. Transactions with Affiliates ................................................................... 63 SECTION 6.10. Restrictive Agreements .......................................................................... 64 SECTION 6.11. Amendment of Material Documents ...................................................... 64 SECTION 6.12. Financial Covenants ............................................................................... 64 ARTICLE VII EVENTS OF DEFAULT ................................................................................................... 65 SECTION 7.01. Events of Default ................................................................................... 65 ARTICLE VIII MISCELLANEOUS......................................................................................................... 68 SECTION 8.01. Notices. .................................................................................................. 68 SECTION 8.02. Waivers; Amendments. .......................................................................... 69 SECTION 8.03. Expenses; Limitation of Liability; Indemnity. ....................................... 70 SECTION 8.04. Successors and Assigns. ........................................................................ 72 SECTION 8.05. Survival .................................................................................................. 73 SECTION 8.06. Counterparts; Integration; Effectiveness; Electronic Execution ............ 73 SECTION 8.07. Severability ............................................................................................ 75 SECTION 8.08. Right of Setoff ....................................................................................... 75 SECTION 8.09. Governing Law; Jurisdiction; Consent to Service of Process. ............... 75 SECTION 8.10. WAIVER OF JURY TRIAL.................................................................. 76 

 

iii  743955026  SECTION 8.11. Headings ................................................................................................ 76 SECTION 8.12. Confidentiality ....................................................................................... 76 SECTION 8.13. Nonreliance; Violation of Law .............................................................. 77 SECTION 8.14. USA PATRIOT Act ............................................................................... 77 SECTION 8.15. Disclosure .............................................................................................. 77 SECTION 8.16. Interest Rate Limitation ......................................................................... 77 SECTION 8.17. No Fiduciary Duty, etc........................................................................... 77 SECTION 8.18. Marketing Consent ................................................................................. 78 ARTICLE IX LOAN GUARANTY .......................................................................................................... 78 SECTION 9.01. Guaranty ................................................................................................ 78 SECTION 9.02. Guaranty of Payment ............................................................................. 78 SECTION 9.03. No Discharge or Diminishment of Loan Guaranty ................................ 79 SECTION 9.04. Defenses Waived ................................................................................... 79 SECTION 9.05. Rights of Subrogation ............................................................................ 80 SECTION 9.06. Reinstatement; Stay of Acceleration ...................................................... 80 SECTION 9.07. Information ............................................................................................ 80 SECTION 9.08. Termination ............................................................................................ 80 SECTION 9.09. Taxes ...................................................................................................... 80 SECTION 9.10. Maximum Liability ................................................................................ 80 SECTION 9.11. Contribution. .......................................................................................... 81 SECTION 9.12. Liability Cumulative .............................................................................. 81 SECTION 9.13. Keepwell ................................................................................................ 82 ARTICLE X THE BORROWER REPRESENTATIVE. .......................................................................... 82 SECTION 10.01. Appointment; Nature of Relationship .................................................... 82 SECTION 10.02. Powers.................................................................................................... 82 SECTION 10.03. Employment of Agents .......................................................................... 82 SECTION 10.04. Notices ................................................................................................... 82 SECTION 10.05. Successor Borrower Representative ...................................................... 82 SECTION 10.06. Execution of Loan Documents; Borrowing Base Certificate ................ 83 SECTION 10.07. Reporting ............................................................................................... 83 

 

iv  743955026  SCHEDULES:    Schedule 3.05 – Properties etc.  Schedule 3.06 – Litigation and Environmental Matters  Schedule 3.14 – Insurance  Schedule 3.15 – Capitalization and Subsidiaries  Schedule 6.01 – Existing Indebtedness  Schedule 6.02 – Existing Liens  Schedule 6.04 – Existing Investments  Schedule 6.10 – Existing Restrictions  EXHIBITS:  Exhibit A-1 Borrowing Request  Exhibit A-2 Interest Election Request  Exhibit B Compliance Certificate  Exhibit C Joinder Agreement  

 

1  743955026  CREDIT AGREEMENT dated as of December 22, 2021 (as it may be amended, restated, amended  and restated, supplemented or otherwise or modified from time to time, this “Agreement”), among  ENERGY RECOVERY, INC., a Delaware corporation, as the Company (and together with any other  Person that becomes a Borrower hereunder from time to time, each individually, a “Borrower”, and  collectively, jointly and severally, the “Borrowers”), the other Loan Parties from time to time party hereto,  and JPMORGAN CHASE BANK, N.A., as Lender.  The parties hereto agree as follows:   ARTICLE I Definitions  SECTION 1.01.Defined Terms.  As used in this Agreement, the following terms have the meanings  specified below:  “Account” has the meaning assigned to such term in the Security Agreement.  “Account Debtor” means any Person obligated on an Account.  “Acquisition” means any transaction, or any series of related transactions, consummated on or after  the Effective Date, by which any Loan Party (a) acquires any going business or all or substantially all of  the assets of any Person, whether through purchase of assets, merger or otherwise or (b) directly or  indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a  majority (in number of votes) of the Equity Interests of a Person which has ordinary voting power for the  election of directors or other similar management personnel of a Person (other than Equity Interests having  such power only by reason of the happening of a contingency) or a majority of the outstanding Equity  Interests of a Person.  “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period or  for any CBFR Borrowing, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of  1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.  “Adjusted One Month LIBOR Rate” means, for any day, an interest rate per annum equal to the  sum of (i) 2.50% per annum plus (ii) the Adjusted LIBO Rate for a one-month interest period on such day  (or if such day is not a Business Day, the immediately preceding Business Day); provided that, for the  avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the LIBO Screen Rate at  approximately 11:00 a.m. London time on such day; provided, further, that, if the LIBO Screen Rate at such  time shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.   “Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly  through one or more intermediaries, Controls or is Controlled by or is under common Control with the  specified Person.  “Alternate Rate” means any alternate rate of interest established pursuant to Section 2.12(c).  “Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to any  Borrower or any of its Subsidiaries from time to time concerning or relating to bribery or corruption.  “Applicable Rate” means, for any day, with respect to any Loan, or with respect to the commitment  fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption  

 

2  743955026  “CBFR Spread”, “Eurodollar Spread” or “Commitment Fee Rate”, as the case may be, based upon the  Company’s Total Leverage Ratio as of the most recent determination date, provided that until the delivery  to the Lender, pursuant to Section 5.01, of the Company’s consolidated financial information for the fiscal  quarter of the Company’s ending December 31, 2021, the “Applicable Rate” shall be the applicable rates  per annum set forth below in Category 2:  Total Leverage  Ratio  CBFR Spread Eurodollar Spread  Commitment Fee  Rate  Category 1  > 1.50 to 1.00 0.50% 1.50% 0.20%  Category 2   1.50 to 1.00 0.25% 1.25% 0.20%  For purposes of the foregoing, (a) the Applicable Rate shall be determined as of the end of each fiscal  quarter of the Company, based upon the Company’s annual or quarterly consolidated financial statements  delivered pursuant to Section 5.01 and (b) each change in the Applicable Rate resulting from a change in  the Total Leverage Ratio shall be effective during the period commencing on and including the date of  delivery to the Lender of such consolidated financial statements indicating such change and ending on the  date immediately preceding the effective date of the next such change, provided that at the option of the  Lender, and upon written notice thereof, if the Borrowers fail to deliver the annual or quarterly consolidated  financial statements required to be delivered by it pursuant to Section 5.01, the Total Leverage Ratio shall  be deemed to be in Category 1 during the period from the expiration of the time for delivery thereof until  such consolidated financial statements are delivered.  If at any time the Lender reasonably determines that the financial statements upon which the Applicable  Rate was determined were incorrect (whether based on a restatement, fraud or otherwise), or any ratio or  compliance information in a compliance certificate or other certification (x) was incorrectly calculated, (y)  relied on incorrect information or (z) was not accurate, true or correct, and such inaccuracy, if corrected,  would have led to the application of a higher Applicable Rate, the Borrowers shall be required to  retroactively pay any additional amount that the Borrowers would have been required to pay if such  financial statements, compliance certificate or other information had been accurate and/or computed  correctly at the time they were delivered.  “Approved Fund” has the meaning assigned to such term in Section 8.04(b).  “Availability” means, at any time, an amount equal to (a) the Revolving Commitment minus (b)  the Revolving Exposure.  “Availability Period” means the period from and including the Effective Date to but excluding the  earlier of the Revolving Credit Maturity Date and the date of termination of the Revolving Commitment.  “Banking Services” means each and any of the following bank services provided to any Loan Party  or any Subsidiary by the Lender or any of its Affiliates: (a) credit cards for commercial customers  (including, without limitation, “commercial credit cards” and purchasing cards), (b) stored value cards, (c)  merchant processing services, and (d) treasury management services (including, without limitation,  controlled disbursement, automated clearinghouse transactions, return items, any direct debit scheme or  arrangement, overdrafts and interstate depository network services and cash pooling services).  

 

3  743955026  “Banking Services Obligations” means any and all obligations of the Loan Parties or their  Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or  acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in  connection with Banking Services.  “Bankruptcy Event” means, with respect to any Person, when such Person becomes the subject of  a voluntary or involuntary bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee,  administrator, custodian, assignee for the benefit of creditors or similar Person charged with the  reorganization or liquidation of its business appointed for it, or, in the good faith determination of the  Lender, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in,  any such proceeding or appointment or has had any order for relief in such proceeding entered in respect  thereof, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the  acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality  thereof, unless such ownership interest results in or provides such Person with immunity from the  jurisdiction of courts within the U.S. or from the enforcement of judgments or writs of attachment on its  assets or permits such Person (or such Governmental Authority or instrumentality) to reject, repudiate,  disavow or disaffirm any contracts or agreements made by such Person.  “Benchmark Replacement Adjustment” means, with respect to any replacement pursuant to Section  2.12(c) of the LIBO Rate with Term SOFR or Daily Simple SOFR (such rate, an “Unadjusted SOFR Based  Rate”), as applicable, for any applicable interest period and available tenor, the first of the following  alternatives that can be determined by Lender: (1) the spread adjustment, or method for calculating or  determining such spread adjustment (which may be a positive or negative value or zero) when such  Unadjusted SOFR Based Rate is first set for such interest period that has been selected or recommended by  the Relevant Governmental Body for the replacement of the LIBO Rate with the applicable Unadjusted  SOFR Based Rate for the applicable corresponding tenor; provided that such spread adjustment is displayed  on a screen or other information service that publishes such Benchmark Replacement Adjustment from  time to time as selected by Lender in its reasonable discretion; and (2) the spread adjustment (which may  be a positive or negative value or zero) when such rate replacement is first set for such interest period that  would apply to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective  upon an index cessation event with respect to the LIBO Rate for the applicable corresponding tenor.  “Beneficial Ownership Certification” means a certification regarding beneficial ownership as  required by the Beneficial Ownership Regulation.  “Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.  “Borrowers” has the meaning given to such term in the preamble hereto.  “Borrower Representative” has the meaning assigned to such term in Section 10.01.   “Borrowing” means Revolving Loans of the same Type, made, converted or continued on the same  date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect, converted or  continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in  effect.  “Borrowing Request” means a request by the Borrower Representative for a Borrowing in  accordance with Section 2.03, which shall be substantially in the form of Exhibit A-1 hereto or any other  form approved by the Lender.  

 

4  743955026  “Burdensome Restrictions” means any consensual encumbrance or restriction of the type described  in clause (a) or (b) of Section 6.10.  “Business Day” means any day that is not a Saturday, Sunday or other day on which commercial  banks in New York City are authorized or required by law to remain closed; provided that, when used in  connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks  are not open for general business in London.  “Capital Expenditures” means, without duplication, any expenditure or commitment to expend  money for any purchase or other acquisition of any asset which would be classified as a fixed or capital  asset on a consolidated balance sheet of the Company and its Subsidiaries prepared in accordance with  GAAP. “Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other  amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or  a combination thereof, which obligations are required to be classified and accounted for as capital leases or  financing leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall  be the capitalized amount thereof determined in accordance with GAAP.  “CB Floating Rate” means the Prime Rate; provided that the CB Floating Rate shall never be less  than the Adjusted One Month LIBOR Rate on such day (or if such day is not a Business Day, the  immediately preceding Business Day).  Any change in the CB Floating Rate due to a change in the Prime  Rate or the Adjusted One Month LIBOR Rate shall be effective from and including the effective date of  such change in the Prime Rate or the Adjusted One Month LIBOR Rate, respectively.  “CBFR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the  Loans comprising such Borrowing, bear interest at a rate determined by reference to the CB Floating Rate.  “Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or  of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules  of the SEC thereunder as in effect on the date hereof) of Equity Interests representing more than 35% of  the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the  Company, (b) occupation at any time of a majority of the seats (other than vacant seats) on the board of  directors of the Company by Persons who were not (i) directors of the Company on the date of this  Agreement, nominated or appointed; or (ii) appointed by directors so nominated or appointed or (c) the  Company shall cease to own, directly or indirectly, 100% of the outstanding voting Equity Interests of each  other Borrower and each Guarantor on a fully diluted basis, other than pursuant to transactions otherwise  permitted under this Agreement.  “Change in Law” means the occurrence after the date of this Agreement of any of the following:  (a) the adoption of or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule,  regulation or treaty or in the administration, interpretation, implementation or application thereof by any  Governmental Authority or (c) compliance by the Lender (or, for purposes of Section 2.13(b), by any  lending office of the Lender or by the Lender’s holding company, if any) with any request, guideline,  requirement or directive (whether or not having the force of law) of any Governmental Authority made or  issued after the date of this Agreement; provided that, notwithstanding anything herein to the contrary, (x)  the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines,  requirements or directives thereunder or issued in connection therewith or in the implementation thereof,  and (y) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International  Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the  

 

5  743955026  U.S. or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be  a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.  “Charges” has the meaning assigned to such term in Section 8.16.  “Class”, when used in reference to (a) any Loan or Borrowing, refers to whether such Loan, or the  Loans comprising such Borrowing, are Revolving Loans, and (b) any Commitment, refers to whether such  Commitment is a Revolving Commitment.  “Code” means the Internal Revenue Code of 1986, as amended from time to time.  “Collateral” means any and all property owned, leased or operated by a Person covered by the  Collateral Documents and any and all other property of any Loan Party, now existing or hereafter acquired,  that may at any time be, become or be intended to be, subject to a security interest or Lien in favor of the  Lender, on behalf of the Secured Parties, to secure the Secured Obligations.  “Collateral Access Agreement” has the meaning assigned to such term in the Security Agreement.  “Collateral Documents” means, collectively, the Security Agreement, the Mortgages and any other  agreements, instruments and documents executed in connection with this Agreement that are intended to  create, perfect or evidence Liens to secure the Secured Obligations, including, without limitation, all other  security agreements, pledge agreements, mortgages, deeds of trust, loan agreements, notes, guarantees,  subordination agreements, pledges, powers of attorney, consents, assignments, contracts, fee letters,  notices, leases, financing statements, now or hereafter executed by any Loan Party and delivered to the  Lender.   “Commercial LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of  all outstanding commercial Letters of Credit plus (b) the aggregate amount of all LC Disbursements relating  to commercial Letters of Credit that have not yet been reimbursed by or on behalf of the Borrowers.    “Commitment” means, the Revolving Commitment.    “Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as  amended from time to time, and any successor statute.  “Company” has the meaning specified in the preamble.   “Compliance Certificate” means a certificate of a Financial Officer in substantially the form of  Exhibit C.  “Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by  net income (however denominated) or that are franchise Taxes or branch profits Taxes.  “Contingent Acquisition Consideration” means any earn-out obligation or similar deferred or  contingent obligation of any Borrower or any of its Subsidiaries incurred or created in connection with an  Acquisition or other Investment (but excluding, for the avoidance of doubt, any purchase price adjustments  or similar obligations).   “Control” means the possession, directly or indirectly, of the power to direct or cause the direction  of the management or policies of a Person, whether through the ability to exercise voting power, by contract  or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.  

 

6  743955026  “Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which may  include a lookback) being established by Lender in accordance with the conventions for this rate selected  or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for business  loans; provided that if Lender decides that any such convention is not administratively feasible for Lender,  then Lender may establish another convention in its reasonable discretion.  “Default” means any event or condition which constitutes an Event of Default or which upon notice,  lapse of time or both would, unless cured or waived, become an Event of Default.  “Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (in one  transaction or in a series of transactions and whether effected pursuant to a Division or otherwise) of any  property by any Person (including any sale and leaseback transaction and any issuance of Equity Interests  by a Subsidiary of such Person), including any sale, assignment, transfer or other disposal, with or without  recourse, of any notes or accounts receivable or any rights and claims associated therewith.  “Dividing Person” has the meaning assigned to it in the definition of “Division.”  “Division” means the division of the assets, liabilities and/or obligations of a Person (the “Dividing  Person”) among two or more Persons (whether pursuant to a “plan of division” or similar arrangement),  which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may  not survive.  “Division Successor” means any Person that, upon the consummation of a Division of a Dividing  Person, holds all or any portion of the assets, liabilities and/or obligations previously held by such Dividing  Person immediately prior to the consummation of such Division.  A Dividing Person which retains any of  its assets, liabilities and/or obligations after a Division shall be deemed a Division Successor upon the  occurrence of such Division.  “Document” has the meaning assigned to such term in the Security Agreement.  “Dollars”, “dollars” or “$” refers to lawful money of the U.S.  “EBITDA” means, for any period, Net Income for such period plus (a) without duplication and to  the extent deducted in determining Net Income for such period, the sum of (i) Interest Expense for such  period, (ii) income and franchise tax expense for such period, (iii) all amounts attributable to depreciation  and amortization expense for such period, (iv) any extraordinary charges for such period, (v) any other non- cash charges for such period (including non-cash stock and equity compensation expense, but excluding  any non-cash charge in respect of an item that was included in Net Income in a prior period and any non- cash charge that relates to the write-down or write-off of inventory), (vi) with respect to the preparation,  execution, delivery of this Agreement and the other Loan Documents, costs, reasonable fees to Persons,  charges or expenses incurred in connection therewith prior to the Effective Date in an aggregate amount  not to exceed $200,000, (vii) accruals, fees, payments and documented transaction costs and expenses  incurred by the Loan Parties in connection with any investment, Restricted Payment, Disposition, “earn- out” or similar payment, seller note, or other Indebtedness or equity issuance or any refinancing transactions  or amendment, waiver or other modification of any debt or equity instrument or document (including,  without limitation, the Loan Documents and any operating or similar agreement), regulatory filings or other  regulatory related issue, in each case, incurred for such period solely to the extent attributable to any  relevant transaction not prohibited by this Agreement (regardless of whether consummated); provided that  the aggregate amount added back to EBITDA pursuant to this clause (vii) and clauses (viii) and (xii) below  for any period shall not exceed 20% of EBITDA (calculated after giving effect to such add backs), (viii)  severance and other costs of employee or officer terminations, restructuring, integration or similar charges  

 

7  743955026  in respect of systems (including software and “IT systems”), restructurings, closing of operations,  headcount reductions or other similar actions (including relocation costs), business process optimizations,  integration costs, signing costs, retention or completion bonuses, employee replacement costs, transition  costs, costs related to opening or pre-opening, closure and/or consolidation of facilities; provided that the  aggregate amount added back to EBITDA pursuant to this clause (viii) and clause (vii) above and clause  (xii) below for any period shall not exceed 20% of EBITDA (calculated after giving effect to such add  backs), (ix) proceeds of business interruption insurance received during such period or reasonably expected  to be received within 365 days after the end of such period, (x) charges, losses or expenses to the extent  indemnified or insured or reimbursed by an unaffiliated third party to the extent such indemnification,  insurance or reimbursement is actually received for such period, or is reasonably expected to be so paid or  reimbursed within 365 days after the end of such period, (xi) directors fees and expense reimbursements  and indemnification payments paid to directors and (xii) fees, costs and expenses incurred in connection  with litigation, legal disputes, settlement of claims, and other related costs; provided that the aggregate  amount added back to EBITDA pursuant to this clause (xii) and clauses (vii) and (viii) above for any period  shall not exceed 20% of EBITDA (calculated after giving effect to such add backs), minus (b) without  duplication and to the extent included in Net Income, (i) any cash payments made during such period in  respect of non-cash charges described in clause (a)(v) taken in a prior period, (ii) any extraordinary gains  and any non-cash items of income for such period and (iii)(A) any proceeds of business interruption  insurance not received or expenses not reimbursed by third parties within the 365 day period set forth in  clause (a)(ix) or (x) of this definition and (B) any proceeds of business interruption insurance which are  received or reimbursements which are made by third parties within the 365 day period set forth in clause  (a)(ix) or (x) to the extent added back to Net Income in any prior period, all calculated for the Company  and its Subsidiaries on a consolidated basis in accordance with GAAP.   For the avoidance of doubt, EBITDA for any period, (x) shall include, without duplication, the  EBITDA of any Person, property, business or asset acquired or formed by the Borrower or any Loan Party  during such period, to the extent (A) such Person becomes a Loan Party, (B) such property, business or  asset is owned by a Loan Party and (C) such Person, property or asset is not subsequently sold, transferred,  abandoned or otherwise disposed by the Borrower or such Loan Party, and (y) shall exclude the EBITDA  of any Person property, business or asset sold, transferred, abandoned or otherwise disposed by the  Borrower or such Loan Party during such period to the extent (A) that such Person sold, transferred,  abandoned or otherwise disposed was a Loan Party and (B) such property, business or asset that was sold,  transferred, abandoned or otherwise disposed was owned by a Loan Party.  “ECP” means an “eligible contract participant” as defined in Section 1(a)(18) of the Commodity  Exchange Act or any regulations promulgated thereunder and the applicable rules issued by the Commodity  Futures Trading Commission and/or the SEC.   “Effective Date” means the date on which the conditions specified in Section 4.01 are satisfied (or  waived in accordance with Section 8.02).  “Electronic Signature” means an electronic sound, symbol, or process attached to, or associated  with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such  contract or record.  “Electronic System” means any electronic system, including e-mail, e-fax, web portal access for  the Borrower and any other Internet or extranet-based site, whether such electronic system is owned,  operated or hosted by the Lender and any of its respective Related Parties or any other Person, providing  for access to data protected by passcodes or other security system.  

 

8  743955026  “Environmental Laws” means all applicable laws, rules, regulations, codes, ordinances, orders,  decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any  Governmental Authority, relating in any way to the (i) environment, (ii) preservation or reclamation of  natural resources, (iii) the management, Release or threatened Release of any Hazardous Material or (iv)  health and safety matters.  “Environmental Liability” means any liability, contingent or otherwise (including any liability for  damages, costs of environmental remediation, fines, penalties or indemnities), of a Borrower or any  Subsidiary directly or indirectly resulting from or based upon (a) any violation of any Environmental Law,  (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials,  (c) any exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous  Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to  which liability is assumed or imposed with respect to any of the foregoing.  “Equipment” has the meaning assigned to such term in the Security Agreement.  “Equity Interests” means shares of capital stock, partnership interests, membership interests in a  limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and  any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing,  but excluding any debt securities convertible into any of the foregoing.  “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to  time, and the rules and regulations promulgated thereunder.  “ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with a  Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or Section 4001(14) of  ERISA or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single  employer under Section 414 of the Code.  “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the  regulations issued thereunder, with respect to a Plan (other than an event for which the 30-day notice period  is waived); (b) the failure to satisfy the “minimum funding standard” (as defined in Section 412 of the Code  or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or  Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to  any Plan; (d) the incurrence by any Borrower or any ERISA Affiliate of any liability under Title IV of  ERISA with respect to the termination of any Plan; (e) the receipt by any Borrower or any ERISA Affiliate  from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans  or to appoint a trustee to administer any Plan; (f) the incurrence by any Borrower or any ERISA Affiliate  of any liability with respect to the withdrawal or partial withdrawal of any Borrower or any ERISA Affiliate  from any Plan or Multiemployer Plan; or (g) the receipt by any Borrower or any ERISA Affiliate of any  notice, or the receipt by any Multiemployer Plan from any Borrower or any ERISA Affiliate of any notice,  concerning the imposition upon any Borrower or any ERISA Affiliate of Withdrawal Liability or a  determination that a Multiemployer Plan is, or is expected to be, insolvent or in critical status, within the  meaning of Title IV of ERISA.  “Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or  the Loans comprising such Borrowing, bear interest at a rate determined by reference to the Adjusted LIBO  Rate.  “Event of Default” has the meaning assigned to such term in Section 7.01.  

 

9  743955026  “Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to  the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a  security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the  Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission  (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any  reason to constitute an ECP at the time the Guarantee of such Guarantor or the grant of such security interest  becomes or would become effective with respect to such Swap Obligation.  If a Swap Obligation arises  under a master agreement governing more than one swap, such exclusion shall apply only to the portion of  such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or  becomes illegal.  “Excluded Taxes” means any of the following Taxes imposed on or with respect to the Lender or  required to be withheld or deducted from a payment to the Lender: (a) Taxes imposed on or measured by  net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as  a result of the Lender being organized under the laws of, or having its principal office or its applicable  lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii)  that are Other Connection Taxes, (b) U.S. federal withholding Taxes imposed on amounts payable to or for  the account of the Lender with respect to an applicable interest in a Loan, Letter of Credit or Commitment  pursuant to a law in effect on the date on which (i) the Lender acquires such interest in the Loan, Letter of  Credit or Commitment or (ii) the Lender changes its lending office, except in each case to the extent that,  pursuant to Section 2.15, amounts with respect to such Taxes were payable either to the Lender’s assignor  immediately before the Lender acquired the applicable interest in such Loan, Letter of Credit or  Commitment or to the Lender immediately before it changed its lending office, (c) Taxes attributable to the  Lender’s failure to comply with Section 2.15(e) and (d) any  withholding Taxes imposed under FATCA.  “FATCA” means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any  amended or successor version that is substantively comparable and not materially more onerous to comply  with), any current or future regulations or official interpretations thereof and any agreement entered into  pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices  adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental  Authorities and implementing such Sections of the Code.  “FCA” has the meaning assigned to such term in Section 1.05.  “Federal Funds Effective Rate” means, for any day, the rate calculated by the NYFRB based on  such day’s federal funds transactions by depositary institutions, as determined in such manner as shall be  set forth on the Federal Reserve Bank of New York’s Website from time to time, and published on the next  succeeding Business Day by the NYFRB as the effective federal funds rate, provided that, if the Federal  Funds Effective Rate as so determined would be less than zero, such rate shall be deemed to be zero for the  purposes of this Agreement.  “Federal Reserve Bank of New York’s Website” means the website of the NYFRB at  http://www.newyorkfed.org, or any successor source.  “Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the  United States of America.  “Financial Officer” means the chief financial officer, principal accounting officer, treasurer or  controller of a Borrower.    “Fixtures” has the meaning assigned to such term in the Security Agreement.  

 

10  743955026  “Foreign Lender” means a Lender that is not a U.S. Person.  “Funding Account” has the meaning assigned to such term in Section 4.01(h).  “GAAP” means generally accepted accounting principles in the U.S.  “Governmental Authority” means the government of the U.S., any other nation or any political  subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body,  court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or  administrative powers or functions of or pertaining to government.  “Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise,  of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other  obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and  including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply  funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance  or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property,  securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the  payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition  or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other  obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support  such Indebtedness or obligation; provided that the term Guarantee shall not include endorsements for  collection or deposit in the ordinary course of business or customary and reasonable indemnity obligations  in effect on the date hereof or entered into in connection with any acquisition or disposition of assets  permitted under this Agreement (other than such obligations with respect to Indebtedness). The amount of  any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the  Indebtedness in respect of which such Guarantee is made or, if not stated or determinable, the maximum  reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder)  as determined by such Person in good faith.   “Guaranteed Obligations” has the meaning assigned to such term in Section 9.01.  “Guarantors” means all Loan Guarantors, and the term “Guarantor” means each or any one of them  individually.  “Hazardous Materials” means: (a) any substance, material, or waste that is included within the  definitions of “hazardous substances,” “hazardous materials,” “hazardous waste,” “toxic substances,”  “toxic materials,” “toxic waste,” or words of similar import in any Environmental Law; (b) those substances  listed as hazardous substances by the United States Department of Transportation (or any successor agency)  (49 C.F.R. 172.101 and amendments thereto) or by the Environmental Protection Agency (or any successor  agency) (40 C.F.R. Part 302 and amendments thereto); and (c) any substance, material, or waste that is  petroleum, petroleum-related, or a petroleum by-product, asbestos or asbestos-containing material,  polychlorinated biphenyls, flammable, explosive, radioactive, freon gas, radon, or a pesticide, herbicide, or  any other agricultural chemical.  “Immaterial Subsidiary” shall mean any Subsidiary or group of Subsidiaries of any Loan Party (a)  whose business and operations represent, individually and in the aggregate, not more than five percent (5%)  of EBITDA of the consolidated Loan Parties or (b) which holds, individually and in the aggregate, not more  than five percent (5%) of the total assets of the consolidated Loan Parties, in each case, as of the most recent  financial statements delivered to the Lender under the Loan Documents.  

 

11  743955026  “Impacted Interest Period” has the meaning assigned to such term in the definition of “LIBO Rate.”  “Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for  borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person  evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which  interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title  retention agreements relating to property acquired by such Person, (e) all obligations of such Person in  respect of the deferred purchase price of property or services (excluding current accounts payable incurred  in the ordinary course of business) to the extent such obligation (or portion thereof) is fully and finally  determined in accordance with the terms of the agreement applicable thereto, (f) all Indebtedness of others  secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to  be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness  secured thereby has been assumed (provided that the amount of such Indebtedness shall be deemed equal  to the lesser of (x) the fair market value of such property or (y) the outstanding principal amount of such  Indebtedness), (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease  Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party  in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such  Person in respect of bankers’ acceptances, (k) any Contingent Acquisition Consideration obligations (which  for all purposes of this Agreement, other than the definition of Total Indebtedness, shall be valued at the  maximum potential amount payable with respect to each such Contingent Acquisition Consideration, and  with respect to the definition of Total Indebtedness, shall be included if they (1) have been or are required  to be recorded as liabilities on a balance sheet of such Person in accordance with GAAP and (2) are then  due and payable in accordance with the documents governing any such obligations), (l) any other Off- Balance Sheet Liability and (m) obligations, whether absolute or contingent and howsoever and whensoever  created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and  substitutions therefor), under (i) any and all Swap Agreements, and (ii) any and all cancellations, buy backs,  reversals, terminations or assignments of any Swap Agreement transaction.  The Indebtedness of any Person  shall include the Indebtedness of any other entity (including any partnership in which such Person is a  general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest  in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that  such Person is not liable therefor, in which case, such Indebtedness shall be limited to the amount of such  Person’s liability with respect thereto; provided that, Indebtedness shall not include (x) guarantees of real  estate leases in the ordinary course of business, accrued expenses, deferred rent, deferred taxes and deferred  compensation and customary obligations under employment arrangements or (y) any Operating Lease.  “Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to  any payment made by or on account of any obligation of any Loan Party under any Loan Document and  (b) to the extent not otherwise described in the foregoing clause (a), Other Taxes.  “Indemnitee” has the meaning assigned to such term in Section 8.03(c).  “Information” has the meaning assigned to such term in Section 8.12.  “Interest Election Request” means a request by the Borrower Representative to convert or continue  a Revolving Borrowing in accordance with Section 2.06, which shall be substantially in the form of Exhibit  A-2 hereto or any other form approved by the Lender.  “Interest Payment Date” means:   (a) with respect to any CBFR Loan, the first Business Day of each fiscal quarter and the  Revolving Credit Maturity Date, and  

 

12  743955026  (b) with respect to any Eurodollar Loan, the last day of each Interest Period applicable to the  Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period  of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at  intervals of three months’ duration after the first day of such Interest Period and the Revolving Credit  Maturity Date. “Interest Period” means, with respect to any Eurodollar Borrowing, the period commencing on the  date of such Eurodollar Borrowing and ending on the numerically corresponding day in the calendar month  that is one, three or six months thereafter, as the Borrower Representative may elect; provided that (i) if  any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended  to the next succeeding Business Day unless such next succeeding Business Day would fall in the next  calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii)  any Interest Period that commences on the last Business Day of a calendar month (or on a day for which  there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on  the last Business Day of the last calendar month of such Interest Period.  For purposes hereof, the date of a  Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective  date of the most recent conversion or continuation of such Borrowing.  “Interest Expense” means, with reference to any period, total interest expense (including that  attributable to Capital Lease Obligations) of the Company and its Subsidiaries for such period with respect  to all outstanding Indebtedness of the Company and its Subsidiaries (including all commissions, discounts  and other fees and charges owed with respect to letters of credit and bankers’ acceptances and net costs  under Swap Agreements in respect of interest rates, to the extent such net costs are allocable to such period  in accordance with GAAP), calculated for the Company and its Subsidiaries on a consolidated basis for  such period in accordance with GAAP.  “Interim Rate” means (a) the greater of (x) Prime Rate and (y) 2.50%, plus (b) the Applicable Rate  with respect to the “CBFR Spread” specified within such Applicable Rate definition.  “Interpolated Rate” means, at any time, for any Interest Period, the rate per annum (rounded to the  same number of decimal places as the LIBO Screen Rate) determined by the Lender (which determination  shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating  on a linear basis between: (a) the LIBO Screen Rate for the longest period (for which the LIBO Screen Rate  is available) that is shorter than the Impacted Interest Period and (b) the LIBO Screen Rate for the shortest  period (for which the LIBO Screen Rate is available) that exceeds the Impacted Interest Period, in each  case, at such time; provided that, if any Interpolated Rate shall be less than zero, such rate shall be deemed  to be zero for purposes of this Agreement.  “Inventory” has the meaning assigned to such term in the Security Agreement.  “IRS” means the United States Internal Revenue Service.  “ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and  Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or  any successor definitional booklet for interest rate derivatives published from time to time by the  International Swaps and Derivatives Association, Inc. or such successor thereto.  “Joinder Agreement” means a Joinder Agreement in substantially the form of Exhibit D.  “LC Collateral Account” has the meaning assigned to such term in Section 2.04(h).  

 

13  743955026  “LC Disbursement” means any payment made by the Lender pursuant to a Letter of Credit.  “LC Exposure” means, at any time, the sum of the Commercial LC Exposure and the Standby LC  Exposure at such time.    “Lender” means JPMorgan Chase Bank, N.A., its successors and assigns.   “Lender Related Person” has the meaning assigned to it in Section 8.03(b).  “Letters of Credit” means the letters of credit issued pursuant to this Agreement, and the term  “Letter of Credit” means any one of them or each of them singularly, as the context may require.  “Letter of Credit Agreement” has the meaning assigned to it in Section 2.04(b).  “Liabilities” mean all claims (including intraparty claims), actions, suits, judgments, damages,  losses, liability, obligations, responsibilities, fines, penalties, sanctions, costs, fees, Taxes, commissions,  charges, disbursements and expenses (including those incurred upon any appeal or in connection with the  preparation for and/or response to any subpoena or request for document production relating thereto), in  each case of any kind or nature (including interest accrued thereon or as a result thereto and fees, charges  and disbursements of financial, legal and other advisors and consultants), whether joint or several, whether  or not indirect, contingent, consequential, actual, punitive, treble or otherwise.    “LIBO Rate” means, with respect to any Eurodollar Borrowing for any applicable Interest Period  or for any CBFR Borrowing, the LIBO Screen Rate at approximately 11:00 a.m., London time, two (2)  Business Days prior to the commencement of such Interest Period; provided that, if the LIBO Screen Rate  shall not be available at such time for such Interest Period (an “Impacted Interest Period”), then the LIBO  Rate shall be the Interpolated Rate.  “LIBO Screen Rate” means, for any day and time, with respect to any Eurodollar Borrowing for  any Interest Period or for any CBFR Borrowing, the London interbank offered rate as administered by ICE  Benchmark Administration (or any other Person that takes over the administration of such rate for Dollars)  for a period equal in length to such Interest Period as displayed on such day and time on pages LIBOR01  or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a  Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the  appropriate page of such other information service that publishes such rate from time to time as selected by  the Lender in its reasonable discretion); provided that, if the LIBO Screen Rate as so determined would be  less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.  “LIBOR” has the meaning assigned to such term in Section 1.05.  “LIBOR Cessation Event” means the occurrence of one or more of the following events with  respect to the LIBO Rate:   (1) a public statement or publication of information by or on behalf of the administrator of the  LIBO Rate announcing that such administrator has ceased or will cease to provide the LIBO Rate for all  available interest periods, permanently or indefinitely, with no successor administrator having been  appointed to provide such LIBO Rate at such time;   (2) a public statement or publication of information by the regulatory supervisor for the  administrator of the LIBO Rate, the Federal Reserve Board, the NYFRB, an insolvency official with  jurisdiction over the administrator for the LIBO Rate, a resolution authority with jurisdiction over the  

 

14  743955026  administrator for the LIBO Rate or a court or an entity with similar insolvency or resolution authority over  the administrator for the LIBO Rate, in each case which states that the administrator of the LIBO Rate has  ceased or will cease to provide the LIBO Rate for all available interest periods permanently or indefinitely,  with no successor administrator having been appointed to provide such LIBO Rate at such time; and/or   (3) a public statement or publication of information by the regulatory supervisor for the  administrator of the LIBO Screen Rate announcing that the LIBO Screen Rate for all available interest  periods is no longer representative.  “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge,  hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor  or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing  lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in  the case of securities, any purchase option, call or similar right of a third party with respect to such  securities.  “Loan Documents” means, collectively, this Agreement, each promissory note issued pursuant to  this Agreement, each Letter of Credit Agreement, each Collateral Document, the Loan Guaranty, each  Compliance Certificate, each other certification delivered in connection with this Agreement, and each  other agreement, instrument, document and certificate executed and delivered to, or in favor of, the Lender  in connection with this Agreement or the transactions contemplated hereby and including each other pledge,  power of attorney, consent, assignment, contract, notice, letter of credit agreement and letter of credit  application whether heretofore, now or hereafter executed by or on behalf of any Loan Party, or any  employee of any Loan Party, and delivered to the Lender in connection with this Agreement or the  transactions contemplated hereby.  Any reference in this Agreement or any other Loan Document to a Loan  Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements,  amendments and restatements supplements or other modifications thereto, and shall refer to this Agreement  or such Loan Document as the same may be in effect at any and all times such reference becomes operative. “Loan Guarantor” means each Loan Party.  “Loan Guaranty” means Article IX of this Agreement. “Loan Parties” means, collectively, the Borrowers, the Borrowers’ domestic Subsidiaries and any  other Person who becomes a party to this Agreement pursuant to a Joinder Agreement and their respective  successors and assigns, and the term “Loan Party” shall mean any one of them or all of them individually,  as the context may require.   “Loans” means the loans and advances made by the Lender pursuant to this Agreement.  “Margin Stock” means margin stock within the meaning of Regulations T, U and X, as applicable.  “Material Adverse Effect” means a material adverse effect on (a) the business, assets, results of  operations or financial condition of the Company and its Subsidiaries, taken as a whole, (b) the ability of  any Loan Party, taken as a whole, to perform the Obligations, (c) a material portion of the Collateral, or the  Lender’s Liens (on behalf of itself and the other Secured Parties) on the Collateral or the priority of such  Liens unless caused by any action or inaction of the Lender or any Secured Party, or (d) the rights of or  benefits available to the Lender under any of the Loan Documents, taken as a whole.  “Material Indebtedness” means Indebtedness (other than the Loans and Letters of Credit), or  obligations in respect of one or more Swap Agreements, of any one or more of the Loan Parties in an  

 

15  743955026  aggregate principal amount exceeding $5,000,000.  For purposes of determining Material Indebtedness, the  “principal amount of the obligations” of the Loan Parties in respect of any Swap Agreement at any time  shall be the maximum aggregate amount (giving effect to any netting agreements) that such Loan Party  would be required to pay if such Swap Agreement were terminated at such time.   “Maximum Rate” has the meaning assigned to such term in Section 8.16.  “Moody’s” means Moody’s Investors Service, Inc.  “Mortgage” means any mortgage, deed of trust or other agreement which conveys or evidences a  Lien in favor of the Lender, on real property of a Loan Party, including any amendment, restatement,  modification or supplement thereto.  “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA to  which any Borrower or any ERISA Affiliate contributes, is obligated to contribute, or has any liability.  “Net Income” means, for any period, the consolidated net income (or loss) determined for the  Company and its Subsidiaries, on a consolidated basis in accordance with GAAP; provided that there shall  be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or  is merged into or consolidated with any Borrower or any Subsidiary, and (b) the income (or deficit) of any  Person (other than a Subsidiary) in which any Borrower or any Subsidiary has an ownership interest, except  to the extent that any such income is actually received by such Borrower or such Subsidiary in the form of  dividends or similar distributions and (c) the undistributed earnings of any Subsidiary, to the extent that the  declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted  by the terms of any contractual obligation (other than under any Loan Document) or Requirement of Law  applicable to such Subsidiary.  “Net Proceeds” means, with respect to any event, (a) the cash proceeds received in respect of such  event including (i) any cash received in respect of any non-cash proceeds (including any cash payments  received by way of deferred payment of principal pursuant to a note or installment receivable or purchase  price adjustment receivable or otherwise, but excluding any interest payments), but only as and when  received, (ii) in the case of a casualty, insurance proceeds and (iii) in the case of a condemnation or similar  event, condemnation awards and similar payments, minus (b) the sum of (i) all costs, commissions,  premiums and reasonable fees and out-of-pocket expenses paid to third parties (other than Affiliates) in  connection with such event, (ii) in the case of Disposition of an asset (including pursuant to a sale and  leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments  required to be made as a result of such event to repay Indebtedness (other than Loans) secured by such asset  or otherwise subject to mandatory prepayment as a result of such event and (iii) the amount of all taxes paid  (or reasonably estimated to be payable) and the amount of any reserves established to fund contingent  liabilities reasonably estimated to be payable, in each case during the year that such event occurred or the  next succeeding year and that are directly attributable to such event (as determined reasonably and in good  faith by a Financial Officer of the Borrower Representative).  “NYFRB” means the Federal Reserve Bank of New York.  “NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on  such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a  Business Day, for the immediately preceding Business Day); provided that if none of such rates are  published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds  transaction quoted at 11:00 a.m. on such day received by the Lender from a federal funds broker of  

 

16  743955026  recognized standing selected by it; provided, further, that if any of the aforesaid rates as so determined  would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.  “Obligated Party” has the meaning assigned to such term in Section 9.02.  “Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all LC  Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations  and indebtedness (including interest and fees accruing during the pendency of any bankruptcy, insolvency,  receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding),  obligations and liabilities of any of the Loan Parties to the Lender or any indemnified party, individually or  collectively, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute  or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract,  operation of law or otherwise, arising or incurred under this Agreement or any of the other Loan Documents  or in respect of any of the Loans made or reimbursement or other obligations incurred or any of the Letters  of Credit or other instruments at any time evidencing any thereof.  “Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or liability of such  Person with respect to accounts or notes receivable sold by such Person, (b) any indebtedness, liability or  obligation under any so-called “synthetic lease” transaction entered into by such Person, or (c) any  indebtedness, liability or obligation arising with respect to any other transaction which is the functional  equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheet  of such Person (other than operating leases).  “Other Connection Taxes” means, with respect to the Lender, Taxes imposed as a result of a present  or former connection between the Lender and the jurisdiction imposing such Taxes (other than a connection  arising from the Lender having executed, delivered, become a party to, performed its obligations under,  received payments under, received or perfected a security interest under, engaged in any other transaction  pursuant to, or enforced, any Loan Document), or sold or assigned an interest in any Loan, Letter of Credit,  or any Loan Document.  “Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing  or similar Taxes that arise from any payment made under, from the execution, delivery, performance,  enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with  respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with  respect to an assignment.  “Overnight Bank Funding Rate” means, for any day, the rate comprised of both overnight federal  funds and overnight Eurodollar borrowings by U.S.-managed banking offices of depository institutions (as  such composite rate shall be determined by the NYFRB as set forth on the Federal Reserve Bank of New  York’s Website from time to time) and published on the next succeeding Business Day by the NYFRB as  an overnight bank funding rate. “Paid in Full” or “Payment in Full” means, (i) the payment in full in cash of all outstanding Loans  and LC Disbursements, together with accrued and unpaid interest thereon, (ii) the termination, expiration,  or cancellation and return of all outstanding Letters of Credit (or alternatively, with respect to each such  Letter of Credit, the furnishing to the Lender of a cash deposit, or at the discretion of the Lender a back up  standby letter of credit reasonably satisfactory to the Lender, in an amount equal to 103% of the LC  Exposure as of the date of such payment), (iii) the payment in full in cash of the accrued and unpaid fees,  (iv) the payment in full in cash of all reimbursable expenses and other Secured Obligations (other than  Unliquidated Obligations for which no claim has been made and other obligations expressly stated to  survive such payment and termination of this Agreement), together with accrued and unpaid interest  

 

17  743955026  thereon, (v) the termination of all Commitments, and (vi) the termination of the Swap Agreement  Obligations and the Banking Services Obligations or entering into other arrangements reasonably  satisfactory to the Secured Parties counterparties thereto.  “Participant” has the meaning assigned to such term in Section 8.04(c).  “Participant Register” has the meaning assigned to such term in Section 8.04(c).  “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and  any successor entity performing similar functions.  “Permitted Acquisition” means any Acquisition by any Loan Party in a transaction that satisfies  each of the following requirements:  (a) such Acquisition is not a hostile or contested acquisition;  (b) the business acquired in connection with such Acquisition is (i) located in the U.S.,  (ii) organized under applicable U.S. and state laws, and (iii) not engaged, directly or indirectly, in  any line of business other than the businesses in which the Loan Parties are engaged on the Effective  Date and any business operations or activities that are reasonably complementary, ancillary,  similar, related or incidental thereto or any business or activity that is a reasonable extension,  development or expansion thereof or ancillary thereto; provided that a Loan Party may acquire one  or more businesses outside of the U.S. or organized under non-U.S. laws so long as the total  consideration of all such acquisitions shall not exceed $10,000,000 in the aggregate;  (c) both immediately before and immediately after giving effect to such Acquisition  and the Loans (if any) requested to be made in connection therewith, each of the representations  and warranties in the Loan Documents is true and correct (except (i) any such representation or  warranty which relates to a specified prior date) and no Default exists or would immediately result  therefrom;  (d) as soon as available, but not less than five (5) Business Days prior to such  Acquisition, the Borrower Representative has provided the Lender (i) notice of such Acquisition,  (ii) a copy of all business and financial information reasonably requested by the Lender in writing  including pro forma financial statements, statements of cash flow, and Availability projections and  (iii) with respect to any Acquisition for which the total consideration (including maximum potential  total amount of all Contingent Acquisition Consideration and any Indebtedness assumed or  incurred) is $10,000,000 or greater, a quality of earnings report;  (e) if such Acquisition is an acquisition of the Equity Interests of a Person, such  Acquisition is structured so that the acquired Person shall become a wholly-owned Subsidiary of  the Company and, within thirty (30) days of the consummation of the Acquisition, become a Loan  Party hereunder;   (f) if such Acquisition is an acquisition of assets, such Acquisition is structured so that  a Borrower or another Loan Party shall acquire such assets;  (g) if such Acquisition is an acquisition of Equity Interests, such Acquisition will not  result in any violation of Regulation U;  

 

18  743955026  (h) if such Acquisition involves a merger or a consolidation involving a Borrower or  any other Loan Party, such Borrower or such Loan Party, as applicable, shall be the surviving entity;  (i) no Loan Party shall, as a result of or in connection with any such Acquisition,  assume or incur any direct or contingent liabilities (whether relating to environmental, tax,  litigation, or other matters) that would be reasonably likely to have a Material Adverse Effect;  (j) in connection with an Acquisition of the Equity Interests of any Person, all Liens  on property of such Person shall be terminated (except for Liens permitted pursuant to Section 6.02)  unless the Lender in its sole discretion consents otherwise, and in connection with an Acquisition  of the assets of any Person, all Liens on such assets shall be terminated;  (k) immediately before and immediately after giving effect to such Acquisition, (i) the  Total Leverage Ratio for the Loan Parties, on a pro forma basis, does not exceed the Total Leverage  Ratio permitted under Section 6.12(a) at such time less 0.50x, for the most recently completed four  fiscal quarter period for which financial statements have been delivered to the Lender under the  Loan Documents prior to such Acquisition and (ii) the Borrowers will be in compliance with each  of the other covenants contained in Section 6.12; and  (l) the Borrower Representative shall have delivered to the Lender the final executed  documentation relating to such Acquisition within five (5) Business Days following the  consummation thereof.  “Permitted Encumbrances” means:  (a) Liens imposed by law for Taxes that are not yet due or are being contested in  compliance with Section 5.04;  (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like  Liens imposed by law, arising in the ordinary course of business and securing obligations that are  not overdue by more than thirty (30) days or are being contested in compliance with Section 5.04;  (c) pledges and deposits made in the ordinary course of business in compliance with  workers’ compensation, unemployment insurance and other social security laws or regulations;  (d) deposits to secure the performance of bids, trade contracts, leases, statutory  obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in  each case in the ordinary course of business;  (e) judgment Liens in respect of judgments that do not constitute an Event of Default  under clause (k) of Section 7.01; and  (f) easements, zoning restrictions, rights-of-way and similar encumbrances on real  property imposed by law or arising in the ordinary course of business that do not secure any  monetary obligations and do not materially detract from the value of the affected property or  interfere with the ordinary conduct of business of any Borrower or any Subsidiary;  (g) pledges and deposits in the ordinary course of business securing the financing of  the insurance premiums under insurance policies, payable to insurance carriers that provide  insurance to the Loan Parties;  

 

19  743955026  (h) Liens encumbering customary initial deposits in respect of brokerage accounts  incurred in the ordinary course of business;  (i) ground leases in respect of real property on which facilities owned or leased by the  Borrower or any of its Subsidiaries are located;  (j) Liens in favor of customs and revenue authorities arising as a matter of law to  secure payment of customs duties in connection with the importation of goods;  (k) rights of set-off of a customary nature or bankers’ Liens on amounts on deposit,  whether arising by contract or law, incurred in the ordinary course of business; and   (l) Liens arising from precautionary Uniform Commercial Code financing statements  or similar filings made in respect of operating leases;  provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness  for borrowed money.  “Permitted Investments” means:  (a) direct obligations of, or obligations the principal of and interest on which are  unconditionally guaranteed by, the U.S. (or by any agency thereof to the extent such obligations  are backed by the full faith and credit of the U.S.), in each case maturing within one year from the  date of acquisition thereof;  (b) investments in commercial paper maturing within 270 days from the date of  acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from  S&P or from Moody’s;  (c) investments in certificates of deposit, bankers’ acceptances and time deposits  maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed  with, and money market deposit accounts issued or offered by, any domestic office of any  commercial bank organized under the laws of the U.S. or any state thereof which has a combined  capital and surplus and undivided profits of not less than $500,000,000;  (d) fully collateralized repurchase agreements with a term of not more than 30 days  for securities described in clause (a) above and entered into with a financial institution satisfying  the criteria described in clause (c) above;  (e) money market funds that (i) comply with the criteria set forth in Securities and  Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA  by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000; and   (f) other short term liquid investments reasonably acceptable to the Lender and  consistent with the Company’s Investment Policy Statement.   “Person” means any natural person, corporation, limited liability company, trust, joint venture,  association, company, partnership, Governmental Authority or other entity.  “Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the  provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of  

 

20  743955026  which any Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069  of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.  “Plan Asset Regulations” means 29 CFR § 2510.3-101 et seq., as modified by Section 3(42) of  ERISA, as amended from time to time.  “Prime Rate” means the rate of interest last quoted by The Wall Street Journal as the “Prime Rate”  in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate  published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest  Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted  therein (as determined by the Lender) or any similar release by the Federal Reserve Board (as determined  by the Lender).  Each change in the Prime Rate shall be effective from and including the date such change  is publicly announced or quoted as being effective.  “Proceeding” means any claims, litigation, investigation, action, suit, arbitration or administrative,  judicial or regulatory action or proceeding in any jurisdiction.  “Projections” has the meaning assigned to such term in Section 5.01(d).  “Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Loan Party that has  total assets exceeding $10,000,000 at the time the relevant Loan Guaranty or grant of the relevant security  interest becomes or would become effective with respect to such Swap Obligation or such other person as  constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations  promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such  time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.  “Real Property” means all real property that was, is now or may hereafter be owned, occupied or  otherwise controlled by any Loan Party pursuant to any contract of sale, lease or other conveyance of any  legal interest in any real property to any Loan Party.  “Refinance Indebtedness” has the meaning assigned to such term in Section 6.01(f).  “Regulation D” means Regulation D of the Federal Reserve Board, as in effect from time to time  and all official rulings and interpretations thereunder or thereof.  “Regulation T” means Regulation T of the Federal Reserve Board, as in effect from time to time  and all official rulings and interpretations thereunder or thereof.  “Regulation U” means Regulation U of the Federal Reserve Board, as in effect from time to time  and all official rulings and interpretations thereunder or thereof.  “Regulation X” means Regulation X of the Federal Reserve Board, as in effect from time to time  and all official rulings and interpretations thereunder or thereof.  “Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the  respective directors, officers, partners, members, trustees, employees, agents, administrators, managers,  representatives and advisors of such Person and such Person’s Affiliates.  “Release” means any releasing, spilling, leaking, pumping, pouring, emitting, emptying,  discharging, injecting, escaping, leaching, migrating, disposing, or dumping of any substance into the  environment.  

 

21  743955026  “Relevant Governmental Body” means the Federal Reserve Board or the NYFRB, or a committee  officially endorsed or convened by the Federal Reserve Board or the NYFRB, or any successor thereto.  “Report” means reports prepared by the Lender or another Person showing the results of appraisals,  field examinations or audits pertaining to a Borrower’s assets from information furnished by or on behalf  of such Borrower, after the Lender has exercised its rights of inspection pursuant to this Agreement.  “Requirement of Law” means, with respect to any Person, (a) the charter, articles or certificate of  organization or incorporation and bylaws or operating, management or partnership agreement, or other  organizational or governing documents of such Person and (b) any statute, law (including common law),  treaty, rule, regulation, code, ordinance, order, decree, writ, judgment, injunction or determination of any  arbitrator or court or other Governmental Authority (including Environmental Laws), in each case  applicable to or binding upon such Person or any of its property or to which such Person or any of its  property is subject.  “Responsible Officer” means the president, Financial Officer or other executive officer of the  Borrower.  “Restricted Payment” means any dividend or other distribution (whether in cash, securities or other  property) with respect to any Equity Interests in any Loan Party or any Subsidiary, or any payment (whether  in cash, securities or other property), including any sinking fund or similar deposit, on account of the  purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests or  any option, warrant or other right to acquire any such Equity Interests.  “Reuters” means, as applicable, Thomson Reuters Corp, Refinitiv, or any successor thereto.  “Revolving Commitment” means the commitment of the Lender to make Revolving Loans and  issue Letters of Credit hereunder, as such commitment may be reduced from time to time pursuant to  Section 2.07.  The initial amount of the Lender’s Revolving Commitment is $50,000,000.  “Revolving Credit Maturity Date” means December 21, 2026 (if the same is a Business Day, or if  not then the immediately next succeeding Business Day), or any earlier date on which the Revolving  Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof.   “Revolving Exposure” means, at any time, the sum of the aggregate outstanding principal amount  of the Lender’s Revolving Loans and its LC Exposure at such time.  “Revolving Loan” means a Loan made pursuant to Section 2.01(a).  “S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC  business.  “Sale and Leaseback Transaction” has the meaning assigned to such term in Section 6.06.    “Sanctioned Country” means, at any time, a country, region or territory which is the subject or  target of any Sanctions (at the time of this Agreement, Crimea, Cuba, Iran, North Korea and Syria).  “Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of  designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the  Treasury or the U.S. Department of State, (b) any Person operating, organized or resident in a Sanctioned  

 

22  743955026  Country, (c) any Person owned or controlled by any such Person or Persons described in the foregoing  clauses (a) or (b) or (d) any Person otherwise the subject of any Sanctions.  “Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered  or enforced from time to time by the U.S. government, including those administered by the Office of  Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State.  “SEC” means the Securities and Exchange Commission of the U.S.  “Secured Obligations” means all Obligations, together with all (i) Banking Services Obligations  and (ii) Swap Agreement Obligations owing to the Lender or its Affiliates; provided, however, that the  definition of “Secured Obligations” shall not create any guarantee by any Guarantor of (or grant of security  interest by any Guarantor to support, as applicable) any Excluded Swap Obligations of such Guarantor for  purposes of determining any obligations of any Guarantor.  “Secured Parties” means (a) the Lender, (b) each provider of Banking Services, to the extent the  Banking Services Obligations in respect thereof constitute Secured Obligations, (c) each counterparty to  any Swap Agreement, to the extent the obligations thereunder constitute Secured Obligations, (d) the  beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan Document,  and (e) the successors and assigns of each of the foregoing.  “Security Agreement” means that certain Pledge and Security Agreement (including any and all  supplements thereto), dated as of the date hereof, among the Loan Parties and the Lender, for the benefit of  the Secured Parties, and any other pledge or security agreement entered into, after the date of this  Agreement by any other Loan Party (as required by this Agreement or any other Loan Document) or any  other Person for the benefit of the Lender, on behalf of the Secured Parties, as the same may be amended,  restated, amended and restated, supplemented or otherwise modified from time to time.  “SOFR” means, with respect to any Business Day, a rate per annum equal to the secured overnight  financing rate for such Business Day published by the NYFRB (or a successor administrator of the secured  overnight financing rate) on its website on the immediately succeeding Business Day.  “Standby LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all  standby Letters of Credit outstanding at such time plus (b) the aggregate amount of all LC Disbursements  relating to standby Letters of Credit that have not yet been reimbursed by or on behalf of a Borrower at  such time.    “Statements” has the meaning assigned to such term in Section 2.16(d).   “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the  number one and the denominator of which is the number one minus the aggregate of the maximum reserve  percentage (including any marginal, special, emergency or supplemental reserves) established by the  Federal Reserve Board to which the Lender is subject with respect to the Adjusted LIBO Rate, for  eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D) or any other  reserve ratio or analogous requirement of any central banking or financial regulatory authority imposed in  respect of the maintenance of the Commitments or the funding of the Loans.  Such reserve percentages  shall include those imposed pursuant to Regulation D of the Federal Reserve Board.  Eurodollar Loans shall  be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit  of or credit for proration, exemptions or offsets that may be available from time to time to the Lender under  Regulation D of the Federal Reserve Board or any comparable regulation.  The Statutory Reserve Rate shall  be adjusted automatically on and as of the effective date of any change in any reserve percentage.  

 

23  743955026  “Subordinated Indebtedness” of a Person means any Indebtedness of such Person, the payment of  which is subordinated to payment of the Secured Obligations to the written satisfaction of the Lender.  “subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited  liability company, partnership, association or other entity, the accounts of which would be consolidated  with those of the parent in the parent’s consolidated financial statements if such financial statements were  prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability  company, partnership, association or other entity (a) of which securities or other ownership interests  representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of  a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or  held, or (b) that is, as of such date, otherwise Controlled, by the parent and/or by the parent and one or more  subsidiaries of the parent.  “Subsidiary” means any direct or indirect subsidiary of the Company, a Borrower or a Loan Party,  as applicable.  “Swap Agreement” means any agreement with respect to any swap, forward, spot, future, credit  default or derivative transaction or any option or similar agreement involving, or settled by reference to,  one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial  or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or  any combination of these transactions; provided that no phantom stock or similar plan providing for  payments only on account of services provided by current or former directors, officers, employees or  consultants of the Borrowers or their Subsidiaries shall be a Swap Agreement.  “Swap Agreement Obligations” means any and all obligations of the Loan Parties or their  Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or  acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a)  any Swap Agreement permitted hereunder with the Lender or an Affiliate of the Lender, and (b) any  cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction  permitted hereunder with the Lender or an Affiliate of the Lender.  “Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under  any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the  Commodity Exchange Act or any rules or regulations promulgated thereunder.  “Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, withholdings  (including backup withholding), value added taxes, or any other goods and services, use or sales taxes,  assessments, fees or other charges imposed by any Governmental Authority, including any interest,  additions to tax or penalties applicable thereto.  “Term SOFR” means, for the applicable corresponding tenor, the forward-looking term rate based  on SOFR that has been selected or recommended by the Relevant Governmental Body, as displayed on a  screen or other information service that publishes such rate from time to time as selected by and as of the  time determined by Lender in its reasonable discretion.  “Term SOFR Transition Conditions” means the occurrence of all of the following events (as  determined by Lender in its sole discretion): (i) a LIBOR Cessation Event has occurred, (ii) Term SOFR  has been recommended for use by the Relevant Governmental Body, and (iii) the administration of Term  SOFR is administratively feasible for Lender.  

 

24  743955026  “Total Indebtedness” means, at any date, the aggregate principal amount of all Indebtedness  determined for the Company and its Subsidiaries on a consolidated basis at such date.  “Total Leverage Ratio” means, on any date, the ratio of (a)(i) Total Indebtedness on such date  minus (ii) the aggregate amount of Unrestricted Cash as of such date, not to exceed $5,000,000 to (b)  EBITDA for the period of four consecutive fiscal quarters ended on or most recently prior to such date.  “Transactions” means the execution, delivery and performance by the Borrowers of this Agreement  and the other Loan Documents, the borrowing of Loans and other credit extensions, the use of the proceeds  thereof and the issuance of Letters of Credit hereunder.  “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on  such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO  Rate or the CB Floating Rate.  “UCC” means the Uniform Commercial Code as in effect from time to time in the State of New  York or in any other state, the laws of which are required to be applied in connection with the issue of  perfection of security interests.  “Unliquidated Obligations” means, at any time, any Secured Obligations (or portion thereof) that  are contingent in nature or unliquidated at such time, including any Secured Obligation that is: (i) an  obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it; (ii) any other  obligation (including any guarantee) that is contingent in nature at such time; or (iii) an obligation to provide  collateral to secure any of the foregoing types of obligations.  “Unrestricted Cash” means, as of any date of determination, that portion of the Company’s and its  Subsidiaries’ aggregate cash and Permitted Investments that is held by the Loan Parties on deposit with one  or more financial institutions and subject to a Lien in favor of the Lender and that is not encumbered by or  subject to any other Lien, setoff (other than ordinary course setoff rights of a depository bank arising under  a bank depository agreement for customary fees, charges and other account-related expenses due to such  depository bank thereunder), counterclaim, recoupment, defense or other right in favor of any Person.  “U.S.” means the United States of America.  “U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30)  of the Code.  “USA PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate  Tools Required to Intercept and Obstruct Terrorism Act of 2001.   “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial  withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of  ERISA.  SECTION 1.02.Classification of Loans and Borrowings.  For purposes of this Agreement, Loans  may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”)  or by Class and Type (e.g., a “Eurodollar Revolving Loan”).  Borrowings also may be classified and referred  to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and  Type (e.g., a “Eurodollar Revolving Borrowing”).  

 

25  743955026  SECTION 1.03.Terms Generally.  The definitions of terms herein shall apply equally to the  singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall  include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and  “including” shall be deemed to be followed by the phrase “without limitation”.  The word “law” shall be  construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and  interpretations thereunder having the force of law or with which affected Persons customarily comply) and  all judgments, orders and decrees of all Governmental Authorities.  The word “will” shall be construed to  have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any  definition of or reference to any agreement, instrument or other document herein shall be construed as  referring to such agreement, instrument or other document as from time to time amended, restated, amended  and restated, supplemented or otherwise modified (subject to any restrictions on such amendments,  restatements, supplements or modifications set forth herein), (b) any definition of or reference to any statute,  rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or  otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any  Person shall be construed to include such Person’s successors and assigns (subject to any restrictions on  assignments set forth herein) and, in the case of any Governmental Authority, any other Governmental  Authority that shall have succeeded to any or all functions thereof, (d) the words “herein”, “hereof” and  “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and  not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules  shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (f)  any reference in any definition to the phrase “at any time” or “for any period” shall refer to the same time  or period for all calculations or determinations within such definition, (g) the words “asset” and “property”  shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible  assets and properties, including cash, securities, accounts and contract rights, (h) whenever any provision  of any Loan Document refers to the knowledge, or analogous phrase, of any Person, such words are intended  to signify that such Person has actual knowledge or awareness of a particular fact or circumstance or that  such Person, if it had exercised reasonable diligence, would have known or been aware of such fact or  circumstance and (i) as used herein, “ordinary course of business” means the ordinary course of business  of any Person, as undertaken by such Person in accordance with past practices or reasonable extensions of  such past practices, as applicable, or otherwise undertaken by such Person in good faith and not for purposes  of evading any covenant or restriction in any Loan Document.  SECTION 1.04.Accounting Terms; GAAP.    (a) Except as otherwise expressly provided herein, all terms of an accounting or  financial nature shall be construed in accordance with GAAP, as in effect from time to time;  provided that, if after the date hereof  there occurs any change in GAAP or in the application thereof  on the operation of any provision hereof and the Borrower Representative notifies the Lender that  the Borrowers request an amendment to any provision hereof to eliminate the effect of such change  in GAAP or in the application thereof (or if the Lender notifies the Borrower Representative that  the Lender requests an amendment to any provision hereof for such purpose), regardless of whether  any such notice is given before or after such change in GAAP or in the application thereof, then  such provision shall be interpreted on the basis of GAAP as in effect and applied immediately  before such change shall have become effective until such notice shall have been withdrawn or  such provision amended in accordance herewith.  Notwithstanding any other provision contained  herein, all terms of an accounting or financial nature used herein shall be construed, and all  computations of amounts and ratios referred to herein shall be made (i) without giving effect to any  election under Financial Accounting Standards Board Accounting Standards Codification 825-10- 25 (or any other Accounting Standards Codification or Financial Accounting Standard having a  similar result or effect) to value any Indebtedness or other liabilities of any Loan Party, the  Company or any Subsidiary at “fair value”, as defined therein and (ii) without giving effect to any  

 

26  743955026  treatment of Indebtedness under Financial Accounting Standards Board Accounting Standards  Codification 470-20 or 2015-03 (or any other Accounting Standards Codification or Financial  Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced  or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the  full stated principal amount thereof.  (b) Notwithstanding anything to the contrary contained in Section 1.04(a) or in the  definition of “Capital Lease Obligations,” any change in accounting for leases pursuant to GAAP  resulting from the adoption of Financial Accounting Standards Board Accounting Standards  Update No. 2016-02, Leases (Topic 842) (“FAS 842”), to the extent such adoption would require  treating any lease (or similar arrangement conveying the right to use) as a capital lease where such  lease (or similar arrangement) would not have been required to be so treated under GAAP as in  effect on December 31, 2015, such lease shall not be considered a capital lease, and all calculations  and deliverables under this Agreement or any other Loan Document shall be made or delivered, as  applicable, in accordance therewith.  SECTION 1.05.Interest Rates; LIBOR Notification.  The interest rate on Eurodollar Loans is  determined by reference to the LIBO Rate, which is derived from the London interbank offered rate  (“LIBOR”).  LIBOR is intended to represent the rate at which contributing banks may obtain short-term  borrowings from each other in the London interbank market. LIBOR is currently the subject of regulatory  reform and regulators have signaled the need to use alternative benchmark reference rates for LIBOR.  On  March 5, 2021, the U.K. Financial Conduct Authority (“FCA”) publicly announced that: (a) immediately  after December 31, 2021, publication of the 1-week and 2-month U.S. Dollar LIBOR settings will  permanently cease; (b) immediately after June 30, 2023, publication of the overnight and 12-month U.S.  Dollar LIBOR settings will permanently cease; and (c) immediately after June 30, 2023, the 1-month, 3- month and 6-month U.S. Dollar LIBOR settings will cease to be provided or, subject to the FCA’s  consideration of the case, be provided on a synthetic basis and no longer be representative of the underlying  market and economic reality they are intended to measure and that representativeness will not be restored.  There is no assurance that dates announced by the FCA will not change or that the administrator  of LIBOR  and/or regulators will not take further action that could impact the availability, composition, or  characteristics of LIBOR or the currencies and/or tenors for which LIBOR is published, and each party to  this Agreement should  consult its own advisors to stay informed of any such developments. , Public and  private sector industry initiatives are currently underway to implement new or alternative reference rates to  be used in place of LIBOR.  In the event LIBOR is no longer available (or in certain other circumstances),  Section 2.12(c) of this Agreement provides a mechanism for determining an alternative rate of interest. The  Lender will inform the Borrower, pursuant to Section 2.12(c), of any change to the reference rate upon  which the interest rate of Eurodollar Loans is based. However, the Lender does not warrant or accept any  responsibility for, and shall not have any liability with respect to, the administration, submission,  performance, or any other matter related to LIBOR or other rates in the definition of “LIBO Rate” or with  respect to any alternative, successor or replacement reference rates including without limitation, whether  the composition or characteristics of any such alternative, successor or replacement reference rate will be  similar to, or produce the same value or economic equivalence as LIBOR and/or the  LIBO Rate or have  the same volume or liquidity as did LIBOR prior to its discontinuance or unavailability.  SECTION 1.06.Pro Forma Adjustments for Acquisitions and Dispositions.  To the extent the  Borrowers or any Subsidiary makes any acquisition permitted pursuant to Section 6.04 or Disposition  outside the ordinary course of business permitted by Section 6.05 during the period of four fiscal quarters  of the Company most recently ended, the Total Leverage Ratio shall be calculated after giving pro forma  effect thereto (including pro forma adjustments arising out of events which are directly attributable to the  acquisition or the Disposition, are factually supportable and are expected to have a continuing impact, in  each case as determined on a basis consistent with Article 11 of Regulation S-X of the Securities Act of  

 

27  743955026  1933, as amended, as interpreted by the SEC, and as certified by a Financial Officer), as if such acquisition  or such Disposition (and any related incurrence, repayment or assumption of Indebtedness) had occurred in  the first day of such four-quarter period which precedes or ends on the date of such transaction and for  which financial statements (i) have been delivered or (ii) are required to be delivered pursuant to Section  5.1(a) or (b).  SECTION 1.07.Status of Obligations.  In the event that any Borrower or any other Loan Party shall  at any time issue or have outstanding any Subordinated Indebtedness, such Borrower shall take or cause  such other Loan Party to take all such actions as shall be necessary to cause the Secured Obligations to  constitute senior indebtedness (however denominated) in respect of such Subordinated Indebtedness and to  enable the Lender to have and exercise any payment blockage or other remedies available or potentially  available to holders of senior indebtedness under the terms of such Subordinated Indebtedness.  Without  limiting the foregoing, the Secured Obligations are hereby designated as “senior indebtedness” and as  “designated senior indebtedness” and words of similar import under and in respect of any indenture or other  agreement or instrument under which such Subordinated Indebtedness is outstanding and are further given  all such other designations as shall be required under the terms of any such Subordinated Indebtedness in  order that the Lender may have and exercise any payment blockage or other remedies available or  potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness.  SECTION 1.08.Letters of Credit.  Unless otherwise specified herein, the amount of a Letter of  Credit at any time shall be deemed to be the amount of such Letter of Credit available to be drawn at such  time; provided that with respect to any Letter of Credit that, by its terms or the terms of any Letter of Credit  Agreement related thereto, provides for one or more automatic increases in the available amount thereof,  the amount of such Letter of Credit shall be deemed to be the maximum amount of such Letter of Credit  after giving effect to all such increases, whether or not such maximum amount is available to be drawn at  such time.  For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired  by its terms but any amount may still be drawn thereunder by reason of the operation of Article 29(a) of the  Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce Publication  No. 600 (or such later version thereof as may be in effect at the applicable time) or Rule 3.13 or Rule 3.14  of the International Standby Practices, International Chamber of Commerce Publication No. 590 (or such  later version thereof as may be in effect at the applicable time) or similar terms of the Letter of Credit itself,  or if compliant documents have been presented but not yet honored, such Letter of Credit shall be deemed  to be “outstanding” and “undrawn” in the amount so remaining available to be paid, and the obligations of  the Borrowers shall remain in full force and effect until the Lender shall have no further obligations to make  any payments or disbursements under any circumstances with respect to any Letter of Credit.   SECTION 1.09.Divisions.  For all purposes under the Loan Documents, in connection with any  Division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s  laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or  liability of a different Person, then it shall be deemed to have been transferred from the original Person to  the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed  to have been organized and acquired on the first date of its existence by the holders of its Equity Interests  at such time.  ARTICLE II The Credits  SECTION 2.01.Commitments.  Subject to the terms and conditions set forth herein, the Lender  agrees to make Revolving Loans in dollars to the Borrowers from time to time during the Availability  Period in an aggregate principal amount that will not result in the Revolving Exposure exceeding the  

 

28  743955026  Revolving Commitment.  Within the foregoing limits and subject to the terms and conditions set forth  herein, the Borrowers may borrow, prepay and reborrow Revolving Loans.  SECTION 2.02.Loans and Borrowings.  (a) Each Loan shall be made as part of a Borrowing consisting of Loans of the same  Class and Type.   (b) Subject to Section 2.12, each Revolving Borrowing shall be comprised entirely of  CBFR Loans or Eurodollar Loans as the Borrower Representative may request in accordance  herewith; provided that all Revolving Borrowings made on the Effective Date must be made as  CBFR Borrowings but may be converted into Eurodollar Borrowings in accordance with Section  2.06.  The Lender at its option may make any Eurodollar Loan by causing any domestic or foreign  branch or Affiliate of the Lender to make such Loan (and in the case of an Affiliate, the provisions  of Sections 2.12, 2.13, 2.14 and 2.15 shall apply to such Affiliate to the same extent as to the  Lender); provided that any exercise of such option shall not affect the obligation of the Borrowers  to repay such Loan in accordance with the terms of this Agreement.  (c) At the commencement of each Interest Period for any Eurodollar Borrowing, such  Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and not less  than $500,000.  CBFR Revolving Borrowings may be in any amount.  Borrowings of more than  one Type and Class may be outstanding at the same time; provided that there shall not at any time  be more than a total of 6 Eurodollar Borrowings outstanding.   (d) Notwithstanding any other provision of this Agreement, the Borrowers shall not  be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period  requested with respect thereto would end after the Revolving Credit Maturity Date.  SECTION 2.03.Requests for Borrowings.  To request a Borrowing, the Borrower Representative  shall notify the Lender of such request either in writing (delivered by hand or fax) by delivering a Borrowing  Request signed by a Responsible Officer of the Borrower Representative or through Electronic System, if  arrangements for doing so have been approved by the Lender, (a) in the case of a Eurodollar Borrowing,  not later than noon, New York time, three (3) Business Days before the date of the proposed Borrowing or  (b) in the case of a CBFR Borrowing, not later than noon, New York time, on the date of the proposed  Borrowing; provided that any such notice of a CBFR Revolving Borrowing to finance the reimbursement  of an LC Disbursement as contemplated by Section 2.04(d) may be given not later than 9:00 a.m., New  York time, on the date of the proposed Borrowing.  Each such Borrowing Request shall be irrevocable.   Each such Borrowing Request shall specify the following information in compliance with Section 2.02:  (a) (i) the Class of Borrowing, the aggregate amount of the requested Borrowing, and  a breakdown of the separate wires comprising such Borrowing and (ii) the name of the applicable  Borrower(s);  (b) the date of such Borrowing, which shall be a Business Day;  (c) whether such Borrowing is to be a CBFR Borrowing or a Eurodollar Borrowing;  and  (d) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable  thereto, which shall be a period contemplated by the definition of the term “Interest Period.”  

 

29  743955026  If no election as to the Type of Revolving Borrowing is specified, then the requested Revolving Borrowing  shall be a CBFR Borrowing.  If no Interest Period is specified with respect to any requested Eurodollar  Revolving Borrowing, then the applicable Borrower(s) shall be deemed to have selected an Interest Period  of one month’s duration.  SECTION 2.04.Letters of Credit.  (a) General.  Subject to the terms and conditions set forth herein, the Borrower  Representative, on behalf of a Borrower, may request the issuance of Letters of Credit denominated  in dollars as the applicant thereof for the support of the obligations of any Borrower or any  Subsidiary thereof, in a form reasonably acceptable to the Lender, at any time and from time to  time during the Availability Period. The Lender may, in its discretion, arrange for one or more  Letters of Credit to be issued by Affiliates of the Lender, in which case the term “Lender” as used  in relation to Letters of Credit shall include such Affiliate with respect to the Letters of Credit  issued by such Affiliate.  (b) Notice of Issuance, Amendment, Extension; Certain Conditions.  To request the  issuance of a Letter of Credit (or the amendment or extension of an outstanding Letter of Credit),  the Borrower Representative shall hand deliver or fax (or transmit through Electronic System, if  arrangements for doing so have been approved by the Lender) to the Lender (reasonably in advance  of the requested date of issuance, amendment or extension, but in any event no less than three (3)  Business Days) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of  Credit to be amended, renewed or extended, and specifying the date of issuance, amendment or  extension (which shall be a Business Day), the date on which such Letter of Credit is to expire  (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the  name and address of the beneficiary thereof, and such other information as shall be necessary to  prepare, amend, renew or extend such Letter of Credit.   In addition, as a condition to any such  Letter of Credit issuance, the applicable Borrower shall have entered into a continuing agreement  (or other letter of credit agreement) for the issuance of letters of credit and/or shall submit a letter  of credit application, in each case, as reasonably required by the Lender and using Lender’s  standard form (each, a “Letter of Credit Agreement”). In the event of any inconsistency between  the terms and conditions of this Agreement and the terms and conditions of any Letter of Credit  Agreement, the terms and conditions of this Agreement shall control.   A Letter of Credit shall be  issued, amended, renewed or extended only if (and upon issuance, amendment or extension of each  Letter of Credit the Borrowers shall be deemed to represent and warrant that), after giving effect to  such issuance, amendment or extension (i) the LC Exposure shall not exceed $25,000,000 and (ii)  the Revolving Exposure shall not exceed the Revolving Commitment.  The Lender shall not be under any obligation to issue any Letter of Credit if: any order, judgment  or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain  the Lender from issuing such Letter of Credit, or any Requirement of Law relating to the Lender  or any request or directive (whether or not having the force of law) from any Governmental  Authority with jurisdiction over the Lender shall prohibit, or request that the Lender refrain from,  the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon  the Lender with respect to such Letter of Credit any restriction, reserve or capital requirement (for  which the Lender is not otherwise compensated hereunder) not in effect on the Effective Date, or  shall impose upon the Lender any unreimbursed loss, cost or expense which was not applicable on  the Effective Date and which the Lender in good faith deems material to it, or (ii) the issuance of  such Letter of Credit would violate one or more policies of the Lender applicable to letters of credit  generally.  

 

30  743955026  (c) Expiration Date.  Each Letter of Credit shall expire (or be subject to  termination or non-extension by notice from the Lender to the beneficiary thereof) at or  prior to the close of business on the earlier of (i) the date one year after the date of the  issuance of such Letter of Credit (or, in the case of any extension of the expiration date  thereof, including, without limitation, any automatic extension provision, one year after  such extension) and (ii) the date that is five Business Days prior to the Revolving Credit  Maturity Date.  (d) Reimbursement.  If the Lender shall make any LC Disbursement in respect of a  Letter of Credit, the Borrowers shall reimburse such LC Disbursement by paying to the Lender an  amount equal to such LC Disbursement not later than 11:00 a.m., New York time, on (i) the  Business Day that the Borrower Representative receives notice of such LC Disbursement, if such  notice is received prior to 9:00 a.m., New York time, on the day of receipt, or (ii) the Business Day  immediately following the day that the Borrower Representative receives such notice, if such notice  is received after 9:00 a.m., New York time on the day of receipt; provided that the Borrowers may,  subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or  2.05 that such payment be financed with a CBFR Revolving Borrowing in an equivalent amount  and, to the extent so financed, the Borrowers’ obligation to make such payment shall be discharged  and replaced by the resulting CBFR Revolving Borrowing.  (e) Obligations Absolute.  The Borrowers’ joint and several obligation to reimburse  LC Disbursements as provided in paragraph (d) of this Section shall be absolute, unconditional and  irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under  any and all circumstances whatsoever and irrespective of any (i) lack of validity or enforceability  of any Letter of Credit, any Letter of Credit Agreement or this Agreement, or any term or provision  therein or herein, (ii) draft or other document presented under a Letter of Credit proving to be  forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in  any respect, (iii) payment by the Lender under a Letter of Credit against presentation of a draft or  other document that does not comply with the terms of such Letter of Credit, or (iv) other event or  circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the  provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff  against, the Borrowers’ obligations hereunder.  Neither the Lender nor any of its Related Parties,  shall have any liability or responsibility by reason of or in connection with the issuance or transfer  of any Letter of Credit, any payment or failure to make any payment thereunder (irrespective of  any of the circumstances referred to in the preceding sentence), or any error, omission, interruption,  loss or delay in transmission or delivery of any draft, notice or other communication under or  relating to any Letter of Credit (including any document required to make a drawing thereunder),  any error in interpretation of technical terms, any error in translation or any consequence arising  from causes beyond the control of the Lender; provided that the foregoing shall not be construed  to excuse the Lender from liability to the Borrowers to the extent of any direct damages (as opposed  to special, indirect, consequential or punitive damages, claims in respect of which are hereby  waived by the Borrowers to the extent permitted by applicable law) suffered by any Borrower that  are caused by the Lender’s failure to exercise care when determining whether drafts and other  documents presented under a Letter of Credit comply with the terms thereof.  The parties hereto  expressly agree that, in the absence of gross negligence or willful misconduct on the part of the  Lender (as finally determined by a court of competent jurisdiction), the Lender shall be deemed to  have exercised care in each such determination.  In furtherance of the foregoing and without  limiting the generality thereof, the parties agree that, with respect to documents presented which  appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Lender  may, in its sole discretion, either accept and make payment upon such documents without  

 

31  743955026  responsibility for further investigation, regardless of any notice or information to the contrary, or  refuse to accept and make payment upon such documents if such documents are not in strict  compliance with the terms of such Letter of Credit.   (f) Disbursement Procedures.  The Lender shall, within the time allowed by applicable  law or the specific terms of the Letter of Credit following its receipt thereof, examine all documents  purporting to represent a demand for payment under such Letter of Credit.  The Lender shall  promptly after such examination notify the Borrower Representative by telephone (confirmed by  fax or through Electronic Systems) of such demand for payment and if the Lender has made or will  make an LC Disbursement thereunder; provided that any failure to give or delay in giving such  notice shall not relieve the Borrowers of their obligation to reimburse the Lender with respect to  any such LC Disbursement.  (g) Interim Interest.  If the Lender shall make any LC Disbursement, then, unless the  Borrowers shall reimburse such LC Disbursement in full on the date such LC Disbursement is  made, the unpaid amount thereof shall bear interest, for each day from and including the date such  LC Disbursement is made to but excluding the date that the Borrowers reimburse such LC  Disbursement, at the rate per annum then applicable to CBFR Revolving Loans and such interest  shall be due and payable on the date when such reimbursement is due; provided that, if the  Borrowers fail to reimburse such LC Disbursement when due pursuant to paragraph (d) of this  Section, then Section 2.11(c) shall apply.  Interest accrued pursuant to this paragraph shall be for  the account of the Lender.    (h) Cash Collateralization.  If any Default shall occur and be continuing, on the  Business Day that the Borrower Representative receives written notice from the Lender demanding  the deposit of cash collateral pursuant to this paragraph, the Borrowers shall deposit in an account  with the Lender, in the name and for the benefit of the Lender (the “LC Collateral Account”), an  amount in cash equal to 103% of the amount of the LC Exposure as of such date plus accrued and  unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become  effective immediately, and such deposit shall become immediately due and payable, without  demand or other notice of any kind, upon the occurrence of any Event of Default with respect to  any Borrower described in clause (h) or (i) of Section 7.01.  The Borrowers also shall deposit cash  collateral in accordance with this paragraph as and to the extent required by Section 2.09(b). Each  such deposit shall be held by the Lender as collateral for the payment and performance of the  Secured Obligations. In addition, and without limiting the foregoing or paragraph (c) of this  Section, if any LC Exposure remains outstanding after the expiration date specified in said  paragraph (c), the Borrowers shall immediately deposit in the LC Collateral Account an amount in  cash equal to 103% of such LC Exposure as of such date plus any accrued and unpaid interest  thereon.  The Lender shall have exclusive dominion and control, including the exclusive right of  withdrawal, over the LC Collateral Account and the Borrowers hereby grant the Lender a security  interest in the LC Collateral Account and all moneys or other assets on deposit therein or credited  thereto.  Other than any interest earned on the investment of such deposits, which investments shall  be made at the option and sole discretion of the Lender and at the Borrowers’ risk and expense,  such deposits shall not bear interest.  Interest or profits, if any, on such investments shall accumulate  in such account.  Moneys in such account shall be applied by the Lender for LC Disbursements for  which it has not been reimbursed, together with related fees, costs, and customary processing  charges, and, to the extent not so applied, shall be held for the satisfaction of the reimbursement  obligations of the Borrowers for the LC Exposure at such time or, if the maturity of the Loans has  been accelerated, be applied to satisfy other Secured Obligations.  If the Borrowers are required to  provide an amount of cash collateral hereunder as a result of the occurrence of a Default, such  amount (to the extent not applied as aforesaid) shall be returned to the Borrowers within three (3)  

 

32  743955026  Business Days after all such Defaults have been cured or waived as confirmed in writing by the  Lender.  (i) Letters of Credit Issued for Account of Subsidiaries.  Notwithstanding that a Letter  of Credit issued or outstanding hereunder supports any obligations of, or is for the account of, a  Subsidiary, or states that a Subsidiary is the “account party,” “applicant,” “customer,” “instructing  party,” or the like of or for such Letter of Credit, and without derogating from any rights of the  Lender (whether arising by contract, at law, in equity or otherwise) against such Subsidiary in  respect of such Letter of Credit, the Borrowers (i) shall reimburse, indemnify and compensate the  Lender  hereunder for such Letter of Credit (including to reimburse any and all drawings  thereunder) as if such Letter of Credit had been issued solely for the account of such Borrower and  (ii) irrevocably waives any and all defenses that might otherwise be available to it as a guarantor  or surety of any or all of the obligations of such Subsidiary in respect of such Letter of Credit.  Each  Borrower hereby acknowledges that the issuance of such Letters of Credit for its Subsidiaries inures  to the benefit of such Borrower, and that such Borrower’s business derives substantial benefits from  the businesses of such Subsidiaries.  SECTION 2.05.Funding of Borrowings.  (a) The Lender shall make each Loan to be made by it hereunder on the proposed date  thereof available to the Borrowers by promptly crediting the amounts in immediately available  funds, to the Funding Account(s); provided that CBFR Revolving Loans made to finance the  reimbursement of an LC Disbursement as provided in Section 2.04(d) shall be remitted to the  Lender.  SECTION 2.06.Interest Elections.  (a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing  Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified  in such Borrowing Request.  Thereafter, the Borrower Representative may elect to convert such  Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar  Borrowing, may elect Interest Periods therefor, all as provided in this Section.  The Borrower  Representative may elect different options with respect to different portions of the affected  Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.    (b) To make an election pursuant to this Section, the Borrower Representative shall  notify the Lender of such election either in writing (delivered by hand or fax) by delivering an  Interest Election Request signed by a Responsible Officer of the Borrower Representative or  through Electronic System, if arrangements for doing so have been approved by the Lender, by the  time that a Borrowing Request would be required under Section 2.03 if the Borrowers were  requesting a Borrowing of the Type resulting from such election to be made on the effective date  of such election.  Each such Interest Election Request shall be irrevocable.  (c) Each telephonic and written Interest Election Request (including requests  submitted through Electronic System) shall specify the following information in compliance with  Section 2.02:  (i) the name of the applicable Borrower and the Borrowing to which such  Interest Election Request applies and, if different options are being elected with respect to  different portions thereof, the portions thereof to be allocated to each resulting Borrowing  

 

33  743955026  (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall  be specified for each resulting Borrowing);  (ii) the effective date of the election made pursuant to such Interest Election  Request, which shall be a Business Day;  (iii) whether the resulting Borrowing is to be a CBFR Borrowing or a  Eurodollar Borrowing; and   (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period  to be applicable thereto after giving effect to such election, which shall be a period  contemplated by the definition of the term “Interest Period”.  If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest  Period, then the Borrowers shall be deemed to have selected an Interest Period of one month’s duration.  (d) If the Borrower Representative fails to deliver a timely Interest Election Request  with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto,  then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such  Borrowing shall be converted to a CBFR Borrowing.  Notwithstanding any contrary provision  hereof, if a Default has occurred and is continuing and the Lender so notifies the Borrower  Representative, then, so long as a Default is continuing (i) no outstanding Borrowing may be  converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar  Borrowing shall be converted to a CBFR Borrowing at the end of the Interest Period applicable  thereto.  SECTION 2.07.Termination and Reduction of Commitments.  (a) Unless previously terminated, the Revolving Commitment shall terminate on the  Revolving Credit Maturity Date.  (b) The Borrowers may at any time terminate the Revolving Commitment upon the  Payment in Full of the Secured Obligations.  (c) The Borrowers may from time to time reduce the Revolving Commitment;  provided that (i) each reduction of the Revolving Commitment shall be in an amount that is an  integral multiple of $100,000 and not less than $500,000 and (ii) the Borrowers shall not terminate  or reduce the Revolving Commitment if, after giving effect to any concurrent prepayment of the  Revolving Loans in accordance with Section 2.09, the Revolving Exposure would exceed the  Revolving Commitment.   (d) The Borrower Representative shall notify the Lender of any election to terminate  or reduce the Revolving Commitment under paragraph (b) or (c) of this Section at least three (3)  Business Days prior to the effective date of such termination or reduction, specifying such election  and the effective date thereof.  Each notice delivered by the Borrower Representative pursuant to  this Section shall be irrevocable; provided that a notice of termination of the Revolving  Commitment delivered by the Borrower Representative may state that such notice is conditioned  upon the effectiveness of other credit facilities, in which case such notice may be revoked by the  Borrower (by notice to the Lender on or prior to the specified effective date) if such condition is  not satisfied.  Any termination or reduction of the Revolving Commitment shall be permanent.  

 

34  743955026  SECTION 2.08.Repayment and Amortization of Loans; Evidence of Debt.  (a) The Borrowers hereby unconditionally promise to pay the Lender the then unpaid  principal amount of each Revolving Loan on the Revolving Credit Maturity Date.  (b) The Lender shall maintain in accordance with its usual practice an account or  accounts evidencing the Indebtedness of the Borrowers to the Lender resulting from each Loan  made by the Lender, including the amounts of principal and interest payable and paid to the Lender  from time to time hereunder.  (c) The Lender shall maintain accounts in which it shall record (i) the amount of each  Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, if any,  (ii) the amount of any principal or interest due and payable or to become due and payable from the  Borrowers to the Lender hereunder and (iii) the amount of any sum received by the Lender  hereunder.  (d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of  this Section shall be prima facie evidence of the existence and amounts of the obligations recorded  therein; provided that the failure of the Lender to maintain such accounts or any error therein shall  not in any manner affect the obligation of the Borrowers to repay the Loans in accordance with the  terms of this Agreement.  (e) The Lender may request that Loans made by it be evidenced by a promissory note.   In such event, the Borrowers shall prepare, execute and deliver to the Lender a promissory note  payable to the Lender (or, if requested by the Lender, to the Lender and its registered assigns) and  in a form approved by the Lender.  Thereafter, the Loans evidenced by such promissory note and  interest thereon shall at all times (including after assignment pursuant to Section 8.04) be  represented by one or more promissory notes in such form.  SECTION 2.09.Prepayment of Loans.  (a) The Borrowers shall have the right at any time and from time to time to prepay any  Borrowing in whole or in part, subject to prior notice in accordance with paragraph (c) of this  Section and, if applicable, payment of any break funding expenses under Section 2.14, if applicable.  (b) In the event and on such occasion that the Revolving Exposure exceeds the  Revolving Commitment, the Borrowers shall prepay the Revolving Loans and/or LC Exposure (or,  if no such Borrowings are outstanding, deposit cash collateral in the LC Collateral Account in an  aggregate amount equal to such excess, in accordance with Section 2.04(h)).  (c) The Borrower Representative shall notify the Lender by telephone (confirmed by  fax) or through Electronic System, if arrangements for doing so have been approved by the Lender,  of any prepayment under this Section:  (i) in the case of prepayment of a Eurodollar Borrowing,  not later than 10:00 a.m., New York time, three (3) Business Days before the date of prepayment  or (ii) in the case of prepayment of a CBFR Borrowing, not later than 10:00 a.m., New York time,  on the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment  date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that if  a notice of prepayment is given in connection with a conditional notice of termination of the  Revolving Commitment as contemplated by Section 2.07, then such notice of prepayment may be  revoked if such notice of termination is revoked in accordance with Section 2.07.  Each partial  prepayment of any Revolving Borrowing shall be in an amount that would be permitted in the case  

 

35  743955026  of an advance of a Borrowing of the same Type as provided in Section 2.02, except as necessary to  apply fully the required amount of a mandatory prepayment.  Each prepayment of a Borrowing  shall be applied ratably to the Loans included in the prepaid Borrowing.  Prepayments shall be  accompanied by (i) accrued interest to the extent required by Section 2.11 and (ii) break funding  payments pursuant to Section 2.14, if applicable.  SECTION 2.10.Fees.  (a) The Borrowers agree to pay to the Lender a commitment fee, which shall accrue  at the Applicable Rate on the daily amount of the undrawn portion of the Revolving Commitment  of the Lender during the period from and including the Effective Date to but excluding the date on  which the Lender’s Revolving Commitment terminates; it being understood that the LC Exposure  shall be included in the drawn portion of the Revolving Commitment for purposes of calculating  the commitment fee.  Accrued commitment fees shall be payable in arrears on the last day of March,  June, September and December of each year and on the date on which the Revolving Commitment  terminates, commencing on the first such date to occur after the date hereof.  All commitment fees  shall be computed on the basis of a year of 360 days and shall be payable for the actual number of  days elapsed (including the first day but excluding the last day).  (b) The Borrowers agree to pay (i) to the Lender a letter of credit fee with respect to  each outstanding Letter of Credit, which shall accrue on the daily maximum amount then available  to be drawn under such Letter of Credit at the same Applicable Rate used to determine the interest  rate applicable to Eurodollar Revolving Loans, during the period from and including the Effective  Date to but excluding the later of the date on which the Lender’s Revolving Commitment terminates  and the date on which the Lender ceases to have any LC Exposure, and (ii) the Lender’s standard  fees and commissions with respect to the issuance, amendment, or extension of any Letter of Credit  and other processing fees, and other standard costs and charges, of the Lender relating to Letters of  Credit as from time to time in effect.  Letter of credit fees accrued through and including the last  day of March, June, September and December of each year shall be payable on the third Business  Day following such last day, commencing on the first such date to occur after the Effective Date;  provided that all such fees shall be payable on the date on which the Revolving Commitment  terminates and any such fees accruing after the date on which the Revolving Commitment  terminates shall be payable on demand.  Any other fees payable to the Lender pursuant to this  paragraph shall be payable within ten (10) days after demand.  All letter of credit fees shall be  computed on the basis of a year of 360 days and shall be payable for the actual number of days  elapsed (including the first day but excluding the last day).  (c) All fees payable hereunder shall be paid on the dates due, in immediately available  funds, to the Lender.  Fees paid shall not be refundable under any circumstances.  SECTION 2.11.Interest.  (a) The Loans comprising each CBFR Borrowing shall bear interest at the CB Floating  Rate plus the Applicable Rate.  (b) The Loans comprising each Eurodollar Borrowing shall bear interest at the  Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.  (c) Notwithstanding the foregoing, during the occurrence and continuance of an Event  of Default, the Lender may, at its option, by written  notice to the Borrower Representative, declare  that (i) all Loans shall bear interest at 2% plus the rate otherwise applicable to such Loans as  

 

36  743955026  provided in the preceding paragraphs of this Section or (ii) in the case of any other amount  outstanding hereunder, such amount shall accrue at 2% plus the rate applicable to such fee or other  obligation as provided hereunder.   (d) Accrued interest on each Loan (for CBFR Loans, accrued through the last day of  the prior calendar month) shall be payable in arrears on each Interest Payment Date for such Loan  and, in the case of Revolving Loans, upon termination of the Revolving Commitment; provided  that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii)  in the event of any repayment or prepayment of any Loan (other than a prepayment of a CBFR  Revolving Loan prior to the end of the Availability Period), accrued interest on the principal  amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in  the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period  therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.  (e) All interest hereunder shall be computed on the basis of a year of 360 days, except  that interest computed by reference to the CB Floating Rate shall be computed on the basis of a  year of 365 days (or 366 days in a leap year), and, in each case, shall be payable for the actual  number of days elapsed (including the first day but excluding the last day).  The applicable CB  Floating Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Lender, and such  determination shall be conclusive absent manifest error.  SECTION 2.12.Alternate Rate of Interest; Illegality.   (a) Subject to clause (c) of this Section 2.12, if prior to the commencement of any  Interest Period for a Eurodollar Borrowing:   (i) (i) the Lender determines (which determination shall be conclusive and  binding absent manifest error) that adequate and reasonable means do not exist for  ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable (including, without  limitation, by means of an Interpolated Rate or because the LIBO Screen Rate is not  available or published on a current basis) for such Interest Period; or  (ii) the Lender determines the Adjusted LIBO Rate or the LIBO Rate, as  applicable, for such Interest Period will not adequately and fairly reflect the cost to the  Lender of making or maintaining its Loans (or Loan) included in such Borrowing for such  Interest Period;  then the Lender shall give notice thereof to the Borrower by telephone, fax or through an Electronic System  as provided in Section 8.01 as promptly as practicable thereafter and, until the Lender notifies the Borrower  that the circumstances giving rise to such notice no longer exist, (A) any Interest Election Request that  requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing  shall be ineffective and any such Eurodollar Borrowing shall be repaid or converted into a CBFR Borrowing  on the last day of the then current Interest Period applicable thereto, and (B) if any Borrowing Request  requests a Eurodollar Borrowing, such Borrowing shall be made as a CBFR Borrowing.  (b) If the Lender determines that any Requirement of Law has made it unlawful, or if  any Governmental Authority has asserted that it is unlawful, for the Lender or its applicable lending  office to make, maintain, fund or continue any Eurodollar Borrowing, or any Governmental  Authority has imposed material restrictions on the authority of the Lender to purchase or sell, or to  take deposits of, dollars in the London interbank market, then, on notice thereof by the Lender to  the Borrower Representative, any obligations of the Lender to make, maintain, fund or continue  

 

37  743955026  Eurodollar Loans or to convert CBFR Borrowings to Eurodollar Borrowings will be suspended  until the Lender notifies the Borrower Representative that the circumstances giving rise to such  determination no longer exist.  Upon receipt of such notice, the Borrower Representative will upon  demand from the Lender, either prepay or convert all Eurodollar Borrowings of the Lender to  CBFR Borrowings, either on the last day of the Interest Period therefor, if the Lender may lawfully  continue to maintain such Eurodollar Borrowings to such day, or immediately, if the Lender may  not lawfully continue to maintain such Loans.  Upon any such prepayment or conversion, the  Borrower Representative will also pay accrued interest on the amount so prepaid or converted.  (c) Notwithstanding anything to the contrary herein or in any other Loan Document,  if a LIBOR Cessation Event has occurred, then upon written notice by Lender to Borrower at such  time selected by Lender, but not later than the actual date of permanent cessation of the LIBO Rate,  the LIBO Rate shall be replaced, for all purposes hereunder and under any other Loan Document,  without any amendment to, or further action or consent of, any other party to this Agreement or  any other Loan Document, by (i) the sum of Term SOFR and the related Benchmark Replacement  Adjustment (such sum, the “Adjusted Term SOFR”) if the Term SOFR Transition Conditions are  satisfied at such time, or (ii) the sum of Daily Simple SOFR and the related Benchmark  Replacement Adjustment (such sum, the “Adjusted Daily Simple SOFR”) if the Term SOFR  Transition Conditions are not satisfied at such time; provided that if the Term SOFR Transition  Conditions are satisfied after the LIBO Rate is replaced by the Adjusted Daily Simple SOFR,  Lender may by at least ten (10) Business Days’ prior written notice to Borrower Representative,  replace such rate with the Adjusted Term SOFR.  In the event that either the Adjusted Term SOFR  or the Adjusted Daily Simple SOFR shall be less than zero, such rate will be deemed to be zero for  the purposes of this Agreement.  If a LIBOR Cessation Event shall have occurred and neither Term  SOFR nor Daily Simple SOFR is available, then upon written notice by Lender to Borrower  Representative until such rates are available, (x) the then outstanding Eurodollar Borrowings shall  accrue interest at the Interim Rate, unless Lender and Borrower Representative agree on a different  rate and (y) if any request for a Loan under Section 2.03 requests a Eurodollar Loan, such Loan  shall be made, instead, as an Interim Rate Loan or a rate offered by Lender in its sole discretion  and accepted by Borrower Representative.  For avoidance of doubt, if some interest periods for the  LIBO Rate become unavailable prior to a LIBOR Cessation Event, those interest periods will no  longer be available for selection by Borrowers.  (d) In connection with the implementation of a rate replacement described in clause  (c) above, Lender may from time to time, upon written notice to Borrower Representative, make  any technical, administrative or operational changes to this Agreement or any other Loan  Documents (including changes to the definition of “CB Floating Rate,” the definition of “Business  Day”, the timing and frequency of determining rates and making payments of interest, the timing  of prepayment or conversion notices, the length of lookback periods, the applicability of breakage  provisions and other technical, administrative or operational matters) that Lender decides in its  reasonable discretion may be appropriate to reflect the adoption and implementation of such rate  replacement and to permit the administration thereof by Lender.   SECTION 2.13.Increased Costs.  (a) If any Change in Law shall:  (i) impose, modify or deem applicable any reserve, special deposit, liquidity  or similar requirement (including any compulsory loan requirement, insurance charge or  other assessment) against assets of, deposits with or for the account of, or credit extended  by, the Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate);  or  

 

38  743955026  (ii) impose on the Lender or the London interbank market any other condition,  cost or expense (other than Taxes) affecting this Agreement or Loans made by the Lender  or any Letter of Credit; or  (iii) subject the Lender to any Taxes (other than (A) Indemnified Taxes, (B)  Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C)  Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or  other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;  and the result of any of the foregoing shall be to increase the cost to the Lender of making,  continuing, converting into or maintaining any Loan (or of maintaining its obligation to make any  such Loan) or to increase the cost to the Lender of issuing or maintaining any Letter of Credit or to  reduce the amount of any sum received or receivable by the Lender, hereunder (whether of  principal, interest or otherwise), then the Borrowers will pay to the Lender such additional amount  or amounts as will compensate the Lender for such additional costs incurred or reduction suffered.  (b) If the Lender determines (which determination shall be made in good faith (and  not on an arbitrary or capricious basis) that any Change in Law regarding capital or liquidity  requirements has or would have the effect of reducing the rate of return on the Lender’s capital or  on the capital of the Lender’s holding company as a consequence of this Agreement, the  Commitment of or the Loans made by Letters of Credit issued by the Lender, to a level below that  which the Lender or the Lender’s holding company could have achieved but for such Change in  Law (taking into consideration the Lender’s policies and the policies of the Lender’s holding  company with respect to capital adequacy and liquidity), then upon written request of the Lender,  from time to time the Borrowers will pay to the Lender such additional amount or amounts as will  compensate the Lender or the Lender’s holding company for any such reduction suffered.  (c) A certificate of the Lender setting forth the amount or amounts necessary to  compensate the Lender or its holding company, as the case may be, as specified in paragraph (a) or  (b) of this Section shall be delivered to the Borrower Representative and shall be conclusive absent  manifest error.  The Borrowers shall pay the Lender the amount shown as due on any such  certificate within ten (10) days after receipt thereof.  (d) Failure or delay on the part of the Lender to demand compensation pursuant to this  Section shall not constitute a waiver of the Lender’s right to demand such compensation; provided  that the Borrowers shall not be required to compensate the Lender pursuant to this Section for any  increased costs or reductions incurred more than 270 days prior to the date that the Lender notifies  the Borrower Representative of the Change in Law giving rise to such increased costs or reductions  and of the Lender’s intention to claim compensation therefor; provided further that, if the Change  in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period  referred to above shall be extended to include the period of retroactive effect thereof.  SECTION 2.14.Break Funding Payments.  In the event of (a) the payment of any principal of any  Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of  an Event of Default or as a result of any prepayment pursuant to Section 2.09), (b) the conversion of any  Eurodollar Loan other than on the last day of the Interest Period applicable thereto, or (c) the failure to  borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered  pursuant hereto (regardless of whether such notice may be revoked under Section 2.07(d) and is revoked in  accordance therewith), then, in any such event, the Borrowers shall compensate the Lender for the loss,  cost and expense attributable to such event.  In the case of a Eurodollar Loan, such loss, cost or expense to  the Lender shall be deemed to include an amount determined by the Lender to be the excess, if any, of (i)  

 

39  743955026  the amount of interest which would have accrued on the principal amount of such Eurodollar Loan had such  event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Eurodollar Loan,  for the period from the date of such event to the last day of the then current Interest Period therefor (or, in  the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period  for such Eurodollar Loan), over (ii) the amount of interest which would accrue on such principal amount  for such period at the interest rate which the Lender would bid were it to bid, at the commencement of such  period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market.   A certificate of the Lender setting forth any amount or amounts that the Lender is entitled to receive  pursuant to this Section shall be delivered to the Borrower Representative and shall be conclusive absent  manifest error.  The Borrowers shall pay the Lender the amount shown as due on any such certificate within  ten (10) days after receipt thereof.  SECTION 2.15.Withholding of Taxes; Gross-Up.  (a) Payments Free of Taxes.  Any and all payments by or on account of any obligation  of any Loan Party under any Loan Document shall be made without deduction or withholding for  any Taxes, except as required by applicable law.  If any applicable law (as determined in the good  faith discretion of an applicable withholding agent) requires the deduction or withholding of any  Tax from any such payment by a withholding agent, then the applicable withholding agent shall be  entitled to make such deduction or withholding and shall timely pay the full amount deducted or  withheld to the relevant Governmental Authority in accordance with applicable law and, if such  Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased  as necessary so that after such deduction or withholding has been made (including such deductions  and withholdings applicable to additional sums payable under this Section 2.15), the Lender  receives an amount equal to the sum it would have received had no such deduction or withholding  been made.  (b) Payment of Other Taxes by Loan Parties.  The Loan Parties shall timely pay to the  relevant Governmental Authority in accordance with applicable law, or at the option of the Lender  timely reimburse it for, Other Taxes.  (c) Evidence of Payment.  As soon as practicable after any payment of Taxes by any  Loan Party to a Governmental Authority pursuant to this Section 2.15, such Loan Party shall deliver  to the Lender the original or a certified copy of a receipt issued by such Governmental Authority  evidencing such payment, a copy of the return reporting such payment, or other evidence of such  payment reasonably satisfactory to the Lender.  (d) Indemnification by the Loan Parties.  The Loan Parties shall jointly and severally  indemnify the Lender, within ten (10) days after written demand therefor, for the full amount of  any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to  amounts payable under this Section) payable or paid by the Lender or required to be withheld or  deducted from a payment to the Lender and any reasonable expenses arising therefrom or with  respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or  asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment  or liability delivered to any Loan Party by the Lender, shall be conclusive absent manifest error.  (e) Status of the Lender.  (i) If the Lender is entitled to an exemption from or a reduction of withholding  Tax with respect to payments made under any Loan Document, the Lender shall deliver to  the Borrowers, at the time or times reasonably requested by the Borrowers, such properly  

 

40  743955026  completed and executed documentation reasonably requested by the Borrowers, as will  permit such payments to be made without withholding or at a reduced rate of withholding.   In addition, the Lender, if reasonably requested by the Borrowers, shall deliver such other  documentation prescribed by applicable law or reasonably requested by the Borrowers as  will enable the Borrowers to determine whether or not the Lender is subject to backup  withholding or information reporting requirements.  Notwithstanding anything to the  contrary in the preceding two sentences, the completion, execution and submission of such  documentation (other than such documentation set forth in Section 2.15(e)(ii)(A) and  Section 2.15(e)(ii)(B) below) shall not be required if in the Lender’s reasonable judgment  such completion, execution or submission would subject the Lender to any material  unreimbursed cost or expense or would materially prejudice the legal or commercial  position of the Lender.  (ii) Without limiting the generality of the foregoing,  (1) in the case of a Foreign Lender claiming the benefits of an income  tax treaty to which the United States is a party (x) with respect to payments of  interest under any Loan Document, executed copies of IRS Form W-8BEN-E  establishing an exemption from, or reduction of, U.S. federal withholding Tax  pursuant to the “interest” article of such tax treaty and (y) with respect to any other  applicable payments under any Loan Document, executed copies of IRS Form W- 8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding  Tax pursuant to the “business profits” or “other income” article of such treaty;  (2) executed copies of IRS Form W-8ECI;  (3) in the case of a Foreign Lender claiming the benefits of the  exemption for portfolio interest under Section 871(h) or Section 881(c) of the  Code, (x) a certificate to the effect that such Foreign Lender is not a “bank” within  the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of  any Loan Party within the meaning of Section 871(h)(3)(B) of the Code, or a  “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a  “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W- 8BEN-E; or  (4) to the extent a Foreign Lender is not the beneficial owner,  executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS  Form W-8BEN-E, IRS Form W-8BEN, a U.S. Tax Compliance Certificate, IRS  Form W-9 and/or other certification documents from each beneficial owner as  applicable; provided that if the Foreign Lender is a partnership and one or more  direct or indirect partners of such Foreign Lender are claiming the portfolio interest  exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate  on behalf of each such direct or indirect partner; and  (iii) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver  to the Borrowers (in such number of copies as shall be requested by the Borrowers) on or  about the date on which such Foreign Lender becomes a Lender under this Agreement (and  from time to time thereafter upon the reasonable request of the Borrowers), executed copies  of any other form prescribed by applicable law as a basis for claiming an exemption from  or a reduction in U.S. federal withholding tax duly completed together with such  

 

41  743955026  supplementary documentation as may be prescribed by applicable law to permit a Loan  Party or the Borrowers to determine the withholding or deduction required to be made.  (iv) Each Lender agrees that if any form or certification it previously delivered  expires or becomes obsolete or inaccurate in any respect, it shall promptly update such  form or certification or promptly notify the Borrowers in writing of its legal inability to do  so.    (f) Treatment of Certain Refunds.  If the Lender determines, in its sole discretion  exercised in good faith, that it has received a refund of any Taxes as to which it has been  indemnified pursuant to this Section 2.15 (including by the payment of additional amounts pursuant  to this Section 2.15), it shall pay to the indemnifying party an amount equal to such refund (but  only to the extent of indemnity payments made under this Section 2.15 with respect to the Taxes  giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of the Lender and  without interest (other than any interest paid by the relevant Governmental Authority with respect  to such refund).  Such indemnifying party, upon the request of the Lender, shall repay to the Lender  the amount paid to the Lender (plus any penalties, interest or other charges imposed by the relevant  Governmental Authority) in the event the Lender is required to repay such refund to such  Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (e), in no  event will the Lender be required to pay any amount to any indemnifying party pursuant to this  paragraph (e) the payment of which would place the Lender in a less favorable net after-Tax  position than the Lender would have been in if the Tax subject to indemnification and giving rise  to such refund had not been deducted, withheld or otherwise imposed and the indemnification  payments or additional amounts giving rise to such refund had never been paid.  This paragraph (e)  shall not be construed to require the Lender to make available its Tax returns (or any other  information relating to its Taxes that it deems confidential) to the indemnifying party or any other  Person.  (g) If a payment made to a Lender under any Loan Document would be subject to U.S.  federal withholding tax imposed by FATCA if such Lender were to fail to comply with the  applicable reporting requirements of FATCA (including those contained in Section 1471(b) or  1472(b) of the Code, as applicable), such Lender shall deliver to the Borrowers at the time or times  prescribed by law and at such time or times reasonably requested by the Borrowers such  documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i)  of the Code) and such additional documentation reasonably requested by the Borrowers as may be  necessary for the Borrowers to comply with their obligations under FATCA and to determine that  such Lender has complied with its obligations under FATCA or to determine the amount, if any, to  deduct and withhold from such payment.  Solely for purposes of this clause (g), “FATCA” shall  include any amendments made to FATCA after the date of this Agreement.  Any forms,  certifications or other documentation under this clause g shall be delivered by each Lender.  (h) Survival.  Each party’s obligations under this Section 2.15 shall survive the  resignation or replacement of the Lender or any assignment of rights by, or the replacement of, the  Lender, the termination of the Commitment and the repayment, satisfaction or discharge of all  obligations under any Loan Document (including the Payment in Full of the Secured Obligations).  (i) Defined Terms.  For purposes of this Section 2.15, the term “applicable law”  includes FATCA.  SECTION 2.16.Payments Generally; Allocation of Proceeds.  

 

42  743955026  (a) The Borrowers shall make each payment or prepayment required to be made by  them hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of  amounts payable under Sections 2.13, 2.14 or 2.15, or otherwise) prior to 2:00 p.m., New York  time, on the date when due or the date fixed for any prepayment hereunder, in immediately available  funds, without setoff, recoupment or counterclaim.  Any amounts received after such time on any  date may, in the discretion of the Lender, be deemed to have been received on the next succeeding  Business Day for purposes of calculating interest thereon.  All such payments shall be made to the  Lender at its offices at 10 South Dearborn, Chicago, Illinois 60603.  Unless otherwise provided for  herein, if any payment hereunder shall be due on a day that is not a Business Day, the date for  payment shall be extended to the next succeeding Business Day, and, in the case of any payment  accruing interest, interest thereon shall be payable for the period of such extension.  All payments  hereunder shall be made in dollars.  (b) All payments and any proceeds of Collateral received by the Lender (i) not  constituting either (A) a specific payment of principal, interest, fees or other sum payable under the  Loan Documents (which shall be applied as specified by the Borrowers), or (B) a mandatory  prepayment (which shall be applied in accordance with Section 2.09) or (ii) after an Event of  Default has occurred and is continuing and the Lender so elects, such funds shall be applied ratably  first, to pay any fees, indemnities, or expense reimbursements then due to the Lender from the  Borrowers, second, to pay interest then due and payable on the Loans ratably, third, to prepay  principal on the Loans and unreimbursed LC Disbursements, to pay an amount to the Lender equal  to one hundred three percent (103%) of the aggregate LC Exposure, to be held as cash collateral  for such Obligations, and to pay any amounts owing in respect of Swap Agreement Obligations  and Banking Services Obligations, ratably, fourth, to the payment of any other Secured Obligation  due to the Lender from the Borrowers or any other Loan Party. Notwithstanding anything to the  contrary contained in this Agreement, unless so directed by the Borrower Representative, or unless  a Default is in existence, the Lender shall not apply any payment which it receives to any Eurodollar  Loan of a Class, except (i) on the expiration date of the Interest Period applicable thereto, or (ii) in  the event, and only to the extent, that there are no outstanding CBFR Loans of the same Class and,  in any such event, the Borrowers shall pay the break funding payment required in accordance with  Section 2.14. The Lender shall have the continuing and exclusive right to apply and reverse and  reapply any and all such proceeds and payments to any portion of the Secured Obligations.   (c) At the election of the Lender, all payments of principal, interest, LC  Disbursements, fees, premiums, reimbursable expenses (including, without limitation, all  reimbursement for fees, costs and expenses pursuant to Section 8.03), and other sums payable under  the Loan Documents, may be paid from the proceeds of Borrowings made hereunder made  following a request by the Borrower Representative pursuant to Section 2.03.  The Borrowers  hereby irrevocably authorize the Lender to charge any deposit account of any Borrower maintained  with the Lender for each payment of principal, interest and fees as it becomes due hereunder or any  other amount due under the Loan Documents.  (d) The Lender may from time to time provide the Borrowers with account statements  or invoices with respect to any of the Secured Obligations (the “Statements”).  The Lender is under  no duty or obligation to provide Statements, which, if provided, will be solely for the Borrowers’  convenience.  Statements may contain estimates of the amounts owed during the relevant billing  period, whether of principal, interest, fees or other Secured Obligations.  If the Borrowers pay the  full amount indicated on a Statement on or before the due date indicated on such Statement, the  Borrowers shall not be in default of payment with respect to the billing period indicated on such  Statement; provided, that acceptance by the Lender of any payment that is less than the total amount  

 

43  743955026  actually due at that time (including but not limited to any past due amounts) shall not constitute a  waiver of the Lender’s right to receive payment in full at another time.   SECTION 2.17.Returned Payments.  If after receipt of any payment which is applied to the  payment of all or any part of the Obligations (including a payment effected through exercise of a right of  setoff), the Lender is for any reason compelled to surrender such payment or proceeds to any Person because  such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void  or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason  (including pursuant to any settlement entered into by the Lender in its discretion), then the Obligations or  part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in  full force as if such payment or proceeds had not been received by the Lender.  The provisions of this   Section 2.17 shall be and remain effective notwithstanding any contrary action which may have been taken  by the Lender in reliance upon such payment or application of proceeds.  The provisions of this Section  2.17 shall survive the termination of this Agreement.  ARTICLE III Representations and Warranties  Each Loan Party represents and warrants to the Lender that (and where applicable, agrees):  SECTION 3.01.Organization; Powers.  Each Loan Party and each Subsidiary is duly organized or  formed, validly existing and in good standing under the laws of the jurisdiction of its organization, has all  requisite power and authority to carry on its business as now conducted and, except where the failure to do  so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect,  is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is  required.  SECTION 3.02.Authorization; Enforceability.  The Transactions are within each Loan Party’s  corporate or other organizational powers and have been duly authorized by all necessary corporate or other  organizational actions and, if required, actions by equity holders.  Each Loan Document to which each Loan  Party is a party has been duly executed and delivered by such Loan Party and constitutes a legal, valid and  binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable  bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and  subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.  SECTION 3.03.Governmental Approvals; No Conflicts.  The Transactions (a) do not require any  consent or approval of, registration or filing with, or any other action by, any Governmental Authority,  except such as have been obtained or made and are in full force and effect and except for filings necessary  to perfect Liens created pursuant to the Loan Documents, (b) will not violate any Requirement of Law  applicable to any Loan Party or any Subsidiary, (c) will not violate or result in a default under any indenture,  agreement or other instrument binding upon any Loan Party or any Subsidiary or the assets of any Loan  Party or any Subsidiary, or give rise to a right thereunder to require any payment to be made by any Loan  Party or any Subsidiary, except for such violations or defaults that would not reasonably be expected to  have a Material Adverse Effect, and (d) will not result in the creation or imposition of, or other requirement  to create, any Lien on any asset of any Loan Party or any Subsidiary, except Liens permitted pursuant to  Section 6.02.  SECTION 3.04.Financial Condition; No Material Adverse Change.  

 

44  743955026  (a) The Company has heretofore furnished to the Lender the financial statements  required pursuant to Section 4.01(b).  Such financial statements present fairly, in all material  respects, the financial position and results of operations and cash flows of the Company and its  consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject  to normal year-end audit adjustments all of which, when taken as a whole, would not be materially  adverse and the absence of footnotes in the case of the statements referred to in Section 4.01(b)(ii).  (b) No event, change or condition has occurred that has had, or would reasonably be  expected to have, a Material Adverse Effect, since December 31, 2020.   SECTION 3.05.Properties, etc.  (a) As of the date of this Agreement, Schedule 3.05 sets forth the address of each  parcel of real property that is owned or leased by any Loan Party.  Each of such leases and subleases  is valid and enforceable in accordance with its terms and is in full force and effect, and no default  by any party to any such lease or sublease exists, other than such defaults that would not result in  a termination of such lease or sublease or would not reasonably be expected to have a Material  Adverse Effect.  Each of the Loan Parties and each Subsidiary has good and sufficient title to, or  valid leasehold interests in, all of its real and material personal property, free of all Liens other than  those permitted by Section 6.02.  (b) Each Loan Party and each Subsidiary owns, or is licensed to use, all trademarks,  tradenames, copyrights, patents and other intellectual property necessary and material to its  business as currently conducted, a correct and complete list of which, as of the date of this  Agreement, is set forth on Schedule 3.05, and the use thereof by each Loan Party and each  Subsidiary to the knowledge of such Loan Party or Subsidiary does not infringe in any material  respect upon the rights of any other Person.  SECTION 3.06.Litigation and Environmental Matters.  (a) Except as set forth on Schedule 3.06, there are no actions, suits or proceedings by  or before any arbitrator or Governmental Authority pending against or, to the knowledge of any  Loan Party, threatened against or affecting any Loan Party or any Subsidiary (i) as to which there  is a reasonable possibility of an adverse determination and that, if adversely determined, would  reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or  (ii) that involve any Loan Document or the Transactions.   (b) Except as set forth on Schedule 3.06 (i) no Loan Party or any Subsidiary has  received written notice of any material claim with respect to any Environmental Liability or has  actual knowledge of any basis for any material Environmental Liability and (ii) and except with  respect to any other matters that, individually or in the aggregate, would not reasonably be expected  to result in a Material Adverse Effect, no Loan Party or any Subsidiary (A) has failed to comply  with any Environmental Law or to obtain, maintain or comply with any permit, license or other  approval required under any Environmental Law or (B) has become subject to any Environmental  Liability.   SECTION 3.07.Compliance with Laws and Agreements; No Default.  Except where the failure to  do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse  Effect, each Loan Party and each Subsidiary is in compliance with (i) each Requirement of Law applicable  to it or its property and (ii) all indentures, agreements and other instruments binding upon it or its property.   No Default has occurred and is continuing.  

 

45  743955026  SECTION 3.08.Investment Company Status.  No Loan Party or any Subsidiary is an “investment  company” as defined in, or subject to regulation under, the Investment Company Act of 1940.  SECTION 3.09.Taxes.  Each Loan Party and each Subsidiary has timely filed or caused to be filed  all Tax returns and reports required to have been filed (after giving effect to any extensions granted with  respect thereto) and has paid or caused to be paid all federal and state income Taxes and other material Tax  required to have been paid by it, except Taxes that are being contested in good faith by appropriate  proceedings and for which such Loan Party or such Subsidiary, as applicable, has set aside on its books  adequate reserves.  No tax liens have been filed and no claims are being asserted with respect to any such  taxes.  SECTION 3.10.ERISA.  No ERISA Event has occurred or is reasonably expected to occur that,  when taken together with all other such ERISA Events for which liability is reasonably expected to occur,  would reasonably be expected to result in a Material Adverse Effect.  Except to the extent that the following  would not reasonably be expected to materially and adversely affect the Loan Parties, taken as a whole, the  present value of all accumulated benefit obligations under each Plan (based on the assumptions used for  purposes of Accounting Standards Codification 715) did not, as of the date of the most recent financial  statements reflecting such amounts, exceed the fair market value of the assets of such Plan.  SECTION 3.11.Disclosure.  (a) The Loan Parties have disclosed to the Lender all agreements,  instruments and corporate or other restrictions to which any Loan Party or any Subsidiary is subject, and  all other matters known to it, that, individually or in the aggregate, would reasonably be expected to result  in a Material Adverse Effect.  None of the reports, financial statements, certificates or other information  furnished by or on behalf of any Loan Party or any Subsidiary to the Lender in connection with the  negotiation of this Agreement or any other Loan Document (as modified or supplemented by other  information so furnished) contains any material misstatement of fact or omits to state any material fact  necessary to make the statements therein, in the light of the circumstances under which they were made,  not misleading; provided that, with respect to projected financial information, the Loan Parties represent  only that such information was prepared in good faith based upon assumptions believed to be reasonable at  the time delivered and, if such projected financial information was delivered prior to the Effective Date, as  of the Effective Date (it being understood that projections, by their nature, are inherently uncertain, no  assurances are being given that the results reflected in any projections will be achieved, and actual results  during the period or periods covered by any such projections may differ from the projected results in  material respects).  (b) As of the Effective Date, to the best knowledge of each Borrower, the information  included in the Beneficial Ownership Certification provided on or prior to the Effective Date to the  Lender in connection with this Agreement is true and correct in all respects.  SECTION 3.12.Material Agreements.  No Loan Party or any Subsidiary is in default in the  performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (i)  any material agreement to which it is a party or (ii) any agreement or instrument evidencing or governing  Indebtedness, in each case, that would reasonably be expected to have a Material Adverse Effect.  SECTION 3.13.Solvency.  Immediately after the consummation of the Transactions to occur on  the Effective Date, (i) the fair value of the assets of each Loan Party will exceed its debts and liabilities,  subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of each Loan Party  will be greater than the amount that will be required to pay the probable liability of its debts and other  liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and  matured; (iii) each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or  otherwise, as such debts and liabilities become absolute and matured; and (iv) no Loan Party will have  

 

46  743955026  unreasonably small capital with which to conduct the business in which it is engaged as such business is  now conducted and is proposed to be conducted after the Effective Date.  SECTION 3.14.Insurance.  Schedule 3.14 sets forth a description of all insurance maintained by or  on behalf of the Loan Parties and their Subsidiaries as of the Effective Date.  As of the Effective Date, all  premiums due and owing in respect of such insurance have been paid.  The Loan Parties believe that the  insurance maintained by or on behalf of the Loan Parties and their Subsidiaries is adequate and is customary  for companies engaged in the same or similar businesses operating in the same or similar locations.  SECTION 3.15.Capitalization and Subsidiaries.  Schedule 3.15 sets forth, as of the Effective Date,  (a) a correct and complete list of the name and relationship to the Company of each Subsidiary, (b) a true  and complete listing of each class of each of the Company’ authorized Equity Interests, of which all of such  issued Equity Interests are validly issued, outstanding, fully paid and non-assessable, and owned  beneficially and of record by the Persons identified on Schedule 3.15, and (c) the type of entity of the  Company and each Subsidiary.  All of the issued and outstanding Equity Interests owned by any Loan Party  have been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized  and issued and are fully paid and non-assessable.  SECTION 3.16.Security Interest in Collateral.  The provisions of this Agreement and the other  Loan Documents create legal and valid Liens on all the Collateral in favor of the Lender, for the benefit of  the Secured Parties, and such Liens constitute perfected and continuing Liens on the Collateral, securing  the Secured Obligations, enforceable against the applicable Loan Party and all third parties, and having  priority over all other Liens on the Collateral except in the case of (a) Permitted Encumbrances, to the extent  any such Permitted Encumbrances would have priority over the Liens in favor of the Lender pursuant to  any applicable law and (b) Liens perfected only by possession (including possession of any certificate of  title), to the extent the Lender has not obtained or does not maintain possession of such Collateral.  SECTION 3.17.Employment Matters.  As of the Effective Date, there are no strikes, lockouts or  slowdowns against any Loan Party or any Subsidiary pending or, to the knowledge of any Loan Party,  threatened that would reasonably be expected to result in a Material Adverse Effect.  The hours worked by  and payments made to employees of the Loan Parties and their Subsidiaries have not been in violation of  the Fair Labor Standards Act or any other applicable federal, state, local or foreign law dealing with such  matters that would reasonably be expected to have a Material Adverse Effect.  All material payments due  from any Loan Party or any Subsidiary, or for which any claim may be made against any Loan Party or any  Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been  paid or accrued as a liability on the books of such Loan Party or such Subsidiary.  SECTION 3.18.Margin Regulations.  No Loan Party is engaged and will not engage, principally  or as one of its important activities, in the business of purchasing or carrying Margin Stock, or extending  credit for the purpose of purchasing or carrying Margin Stock, and no part of the proceeds of any Borrowing  or Letter of Credit extension hereunder will be used to purchase or carry any Margin Stock.  Following the  application of the proceeds of each Borrowing or drawing under each Letter of Credit, not more than 25%  of the value of the assets (either of any Loan Party only or of the Loan Parties and their Subsidiaries on a  consolidated basis) will be Margin Stock.  SECTION 3.19.Use of Proceeds.  The proceeds of the Loans have been used and will be used,  whether directly or indirectly as set forth in Section 5.08.  SECTION 3.20.Anti-Corruption Laws and Sanctions.  Each Loan Party has implemented and  maintains in effect policies and procedures designed to ensure compliance by such Loan Party, its  Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and  

 

47  743955026  applicable Sanctions, and such Loan Party, its Subsidiaries and their respective officers and directors and,  to the knowledge of such Loan Party, its employees and agents, are in compliance with Anti-Corruption  Laws and applicable Sanctions in all material respects.  None of (a) any Loan Party, any Subsidiary, any of  their respective directors or officers or, to the knowledge of any such Loan Party or Subsidiary, employees  or (b) to the knowledge of any such Loan Party or Subsidiary, any agent of such Loan Party or any  Subsidiary that will act in any capacity in connection with or benefit from the credit facility established  hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use of proceeds, Transaction or other  transaction contemplated by this Agreement or the other Loan Documents will violate Anti-Corruption  Laws or applicable Sanctions.  SECTION 3.21.Plan Assets; Prohibited Transactions.  None of the Loan Parties or any of their  Subsidiaries is an entity deemed to hold “plan assets” (within the meaning of the Plan Asset Regulations),  and neither the execution, delivery nor performance of the transactions contemplated under this Agreement,  including the making of any Loan and the issuance of any Letter of Credit hereunder, will give rise to a  non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.  ARTICLE IV Conditions  SECTION 4.01.Effective Date.  The obligations of the Lender to make Loans and to issue Letters  of Credit hereunder shall not become effective until the date on which each of the following conditions is  satisfied (or waived in accordance with Section 8.02):  (a) Credit Agreement and Loan Documents.  The Lender (or its counsel) shall have  received (i) from each party hereto a counterpart of this Agreement signed on behalf of such party  (which, subject to Section 8.06(b), may include any Electronic Signatures transmitted by telecopy,  emailed pdf. or any other electronic means that reproduces an image of an actual executed signature  page) and (ii) duly executed copies of the Loan Documents and such other certificates, documents,  instruments and agreements as the Lender shall reasonably request in connection with the  transactions contemplated by this Agreement and the other Loan Documents, including a written  opinion of the Loan Parties’ counsel, addressed to the Lender all in form and substance reasonably  satisfactory to the Lender.  (b) Financial Statements and Projections.  The Lender shall have received (i) audited  consolidated financial statements of the Company for the 2020 fiscal year, (ii) unaudited interim  consolidated financial statements of the Company and its Subsidiaries for each fiscal quarter ended  after the date of the latest applicable financial statements delivered pursuant to clause (i) of this  paragraph as to which such financial statements are available, and such financial statements shall  not, in the reasonable judgment of the Lender, reflect any material adverse change in the  consolidated financial condition of the Company, as reflected in the audited, consolidated financial  statements described in clause (i) of this paragraph and (iii) reasonably satisfactory Projections  through 2026.   (c) Closing Certificates; Certified Certificate of Incorporation; Good Standing  Certificates.  The Lender shall have received (i) a certificate of each Loan Party, dated the Effective  Date and executed by its Secretary or Assistant Secretary or other officer of such Loan Party  sufficiently familiar with the books and records of such Loan Party, which shall (A) certify the  resolutions of its Board of Directors, members or other body authorizing the execution, delivery  and performance of the Loan Documents to which it is a party, (B) identify by name and title and  bear the signatures of the officers of such Loan Party authorized to sign the Loan Documents to  

 

48  743955026  which it is a party and, in the case of a Borrower, its Financial Officers, and (C) contain appropriate  attachments, including the charter, articles or certificate of organization or incorporation of each  Loan Party certified by the relevant authority of the jurisdiction of organization of such Loan Party  and a true and correct copy of its bylaws or operating, management or partnership agreement, or  other organizational or governing documents, and (ii) a good standing certificate for each Loan  Party from its jurisdiction of organization.  (d) No Default Certificate.  The Lender shall have received a certificate, signed by a  Financial Officer of each Borrower, dated as of the Effective Date (i) stating that immediately  before and after the effectiveness of this Agreement, Default has occurred and is continuing and  (ii) stating that the representations and warranties contained in the Loan Documents are true and  correct as of such date (it being understood and agreed that any representation or warranty which  by its terms is made as of a specified date shall be required to be true and correct only as of such  specified date).  (e) Fees.  The Lender shall have received all reasonable and documented out-of- pocket fees required to be paid, and all expenses required to be reimbursed for which invoices have  been presented (including the reasonable and documented out-of-pocket fees and expenses of legal  counsel), prior to the Effective Date.  All such amounts will be paid with proceeds of Loans made  on the Effective Date and will be reflected in the funding instructions given by the Borrower  Representative to the Lender on or before the Effective Date.  (f) Lien Searches.  The Lender shall have received the results of a recent lien search  in the jurisdiction of organization of each Loan Party and each jurisdiction where assets of the Loan  Parties are located, and such search shall reveal no Liens on any of the assets of the Loan Parties  except for liens permitted by Section 6.02 or discharged on or prior to the Effective Date pursuant  to a payoff letter or other documentation reasonably satisfactory to the Lender.  (g) Pay-Off Letter.  The Lender shall have received reasonably satisfactory pay-off  letters for all existing Indebtedness required to be repaid and which confirms that all Liens upon  any of the property of the Loan Parties constituting Collateral will be terminated concurrently with  such payment and all letters of credit issued or guaranteed as part of such Indebtedness shall have  been cash collateralized or supported by a Letter of Credit. (h) Funding Account.  The Lender shall have received a notice setting forth the deposit  account of the Borrowers (the “Funding Account”) to which the Lender is authorized by the  Borrowers to transfer the proceeds of any Borrowings requested or authorized pursuant to this  Agreement.  (i) Solvency.  The Lender shall have received a solvency certificate signed by a  Financial Officer of the Company dated the Effective Date in form and substance reasonably  satisfactory to the Lender.  (j) Pledged Equity Interests; Stock Powers; Pledged Notes.  The Lender shall have  received (i) the certificates representing the Equity Interests pledged pursuant to the Security  Agreement, together with an undated stock power for each such certificate executed in blank by a  duly authorized officer of the pledgor thereof and (ii) each promissory note (if any) pledged to the  Lender pursuant to the Security Agreement endorsed (without recourse) in blank (or accompanied  by an executed transfer form in blank) by the pledgor thereof.  

 

49  743955026  (k) Filings, Registrations and Recordings.  Each document (including any Uniform  Commercial Code financing statement) required by the Collateral Documents or under law or  reasonably requested by the Lender to be filed, registered or recorded in order to create in favor of  the Lender, for the benefit of the Secured Parties, a perfected Lien on the Collateral described  therein, prior and superior in right to any other Person (other than with respect to Liens expressly  permitted by Section 6.02), shall be in proper form for filing, registration or recordation.  (l) Insurance.  The Lender shall have received evidence of insurance coverage in  form, scope, and substance reasonably satisfactory to the Lender and otherwise in compliance with  the terms of Section 5.10 of this Agreement and Section 4.12 of the Security Agreement.  (m) Legal Due Diligence. The Lender and its counsel shall have completed all legal  due diligence, the results of which shall be reasonably satisfactory to Lender in its sole discretion.  (n) USA PATRIOT Act, Etc.  (i) The Lender shall have received, (x) all  documentation and other information regarding the Borrowers requested in connection with  applicable “know your customer” and anti-money laundering rules and regulations, including the  USA PATRIOT Act, to the extent requested in writing of the Borrowers at least ten (10) days prior  to the Effective Date, and (y) a properly completed and signed IRS Form W-8 or W-9, as applicable,  for each Loan Party, and (ii) the Lender shall have received, to the extent the Borrowers qualify as  a “legal entity customer” under the Beneficial Ownership Regulation, a Beneficial Ownership  Certification in relation to the Borrowers prior to the Effective Date, to the extent requested in  writing of the Borrowers at least five (5) days prior to the Effective Date.  (o) Other Documents.  The Lender shall have received such other documents as the  Lender or its counsel may have reasonably requested.  The Lender shall notify the Borrowers of the Effective Date, and such notice shall be conclusive and  binding.  Notwithstanding the foregoing, the obligations of the Lender to make Loans and to issue Letters  of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or  waived pursuant to Section 8.02) at or prior to 2:00 p.m., New York time, on December 22, 2021.  SECTION 4.02.Each Credit Event.  The obligation of the Lender to make a Loan on the occasion  of any Borrowing, and to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction  of the following conditions:  (a) The representations and warranties of the Loan Parties set forth in the Loan  Documents shall be true and correct in all material respects with the same effect as though made  on and as of the date of such Borrowing or the date of issuance, amendment or extension of such  Letter of Credit, as applicable (it being understood and agreed that any representation or warranty  which by its terms is made as of a specified date shall be required to be true and correct in all  material respects only as of such specified date, and that any representation or warranty which is  subject to any materiality qualifier shall be required to be true and correct in all respects).  (b) At the time of and immediately after giving effect to such Borrowing or the  issuance, amendment or extension of such Letter of Credit, as applicable, no Default shall have  occurred and be continuing.  (c) After giving effect to any Borrowing or the issuance, amendment or extension of  any Letter of Credit, Availability shall not be less than zero.   

 

50  743955026  (d) No event shall have occurred and no condition shall exist which has or could be  reasonably expected to have a Material Adverse Effect.  Each Borrowing and each issuance, amendment or extension of a Letter of Credit shall be deemed to  constitute a representation and warranty by the Borrowers on the date thereof as to the matters specified in  paragraphs (a), (b), (c) and (d) of this Section.  ARTICLE V Affirmative Covenants  Until all of the Secured Obligations shall have been Paid in Full, each Loan Party executing this  Agreement covenants and agrees, jointly and severally with all of the other Loan Parties, with the Lender  that:  SECTION 5.01.Financial Statements and Other Information.  The Borrowers will furnish to the  Lender:  (a) within one hundred twenty (120) days after the end of each fiscal year of the  Company, its audited consolidated balance sheet and related statements of operations,  stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in  comparative form the figures for the previous fiscal year, all reported on by independent public  accountants of recognized national standing (without a “going concern” or like qualification,  commentary or exception, and without any qualification or exception as to the scope of such audit)  to the effect that such consolidated financial statements present fairly in all material respects the  financial condition and results of operations of the Company and its consolidated Subsidiaries on  a consolidated basis in accordance with GAAP consistently applied;  (b) within forty-five (45) days after the end of each of the first three fiscal quarters of  the Company, its consolidated balance sheet and related statements of operations, stockholders’  equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of  such fiscal year, setting forth in each case in comparative form the figures for the corresponding  period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year,  all certified by a Financial Officer of the Borrower Representative as presenting fairly in all material  respects the financial condition and results of operations of the Company and its consolidated  Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to  normal year-end audit adjustments and the absence of footnotes;   (c) concurrently with any delivery of financial statements under clause (a) or  (b)  above, a certificate of a Financial Officer of the Borrower Representative in substantially the  form of Exhibit C (i) certifying, in the case of the financial statements delivered under clause  (b) above, as presenting fairly in all material respects the financial condition and results of  operations of the Company and its Subsidiaries on a consolidated basis in accordance with GAAP  consistently applied, subject to normal year-end audit adjustments and the absence of footnotes,  (ii) certifying as to whether a Default has occurred and is continuing and, if a Default has occurred  and is continuing, specifying the details thereof and any action taken or proposed to be taken with  respect thereto, (iii) setting forth reasonably detailed calculations demonstrating compliance with  Sections 6.12 and (iv) stating whether any change in GAAP or in the application thereof has  occurred since the date of the audited financial statements referred to in Section 3.04 and, if any  such change has occurred, specifying the effect of such change on the financial statements  accompanying such certificate;  

 

51  743955026  (d) as soon as available, but in any event no later than sixty (60) days following the  end of each fiscal year of the Company, a copy of the plan and forecast (including a projected  consolidated and consolidating balance sheet, income statement and cash flow statement) of the  Company for each month of the upcoming fiscal year (the “Projections”) in form reasonably  satisfactory to the Lender;   (e) promptly after the same become publicly available, copies of all periodic and other  reports, proxy statements and other materials filed by any Loan Party or any Subsidiary with the  SEC, or any Governmental Authority succeeding to any or all of the functions of the SEC, or with  any national securities exchange, or distributed by the Company to its shareholders generally, as  the case may be;   (f) promptly after receipt thereof by any Borrower or any Subsidiary, copies of each  notice or other correspondence received from the SEC (or comparable agency in any applicable  non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by  the SEC or such other agency regarding financial or other operational results of any Borrower or  any Subsidiary thereof;  (g) promptly following any written request therefor, copies of any detailed audit  reports, management letters or recommendations submitted to the board of directors (or the audit  committee of the board of directors) of any Borrower by independent accountants in connection  with the accounts or books of any Borrower or any Subsidiary, or any audit of any of them as the  Lender may reasonably request;  (h) promptly following any written request therefor, (x) such other information  regarding the operations, changes in ownership of Equity Interests, business affairs and financial  condition of any Loan Party or any Subsidiary, or compliance with the terms of this Agreement, as  the Lender may reasonably request in writing, the disclosure of which would not violate applicable  Law or breach any obligation binding on such Loan Party or such Subsidiary to keep such  information confidential, would not require the disclosure of information subject to legal privilege  or would disclose a trade secret (not related to financial matters) and (y) information and  documentation reasonably requested by the Lender for purposes of compliance with applicable  “know your customer” and anti-money laundering rules and regulations, including the USA  PATRIOT Act and the Beneficial Ownership Regulation; and  (i) promptly after any written request therefor by the Lender, copies of (i) any  documents described in Section 101(k)(1) of ERISA that the Company or any ERISA Affiliate may  request with respect to any Multiemployer Plan and (ii) any notices described in Section 101(l)(1)  of ERISA that the Company or any ERISA Affiliate may request with respect to any Multiemployer  Plan; provided that if the Company or any ERISA Affiliate has not requested such documents or  notices from the administrator or sponsor of the applicable Multiemployer Plan, the Company or  the applicable ERISA Affiliate shall promptly make a request for such documents and notices from  such administrator or sponsor and shall provide copies of such documents and notices promptly  after receipt thereof.    Documents required to be delivered pursuant to Section 5.01(a), (b) or (e) (to the extent any such documents  are included in materials otherwise filed with the SEC) may be delivered electronically and, if so delivered,  shall be deemed to have been delivered on the date (i) on which such materials are publicly available as  posted on the Electronic Data Gathering, Analysis and Retrieval system (EDGAR); or (ii) on which such  documents are posted on the Borrowers’ behalf on an Internet or intranet website, if any, to which the  Lender has access (whether a commercial, third-party website or whether made available by the Lender);  

 

52  743955026  provided that, the Borrower Representative shall notify the Lender (by facsimile or through Electronic  System) of the posting of any such documents and, upon written request by the Lender, provide to the  Lender through Electronic System electronic versions (i.e., soft copies) of such documents.  The Lender  shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to  above.  SECTION 5.02.Notices of Material Events.  The Borrowers will furnish to the Lender prompt (but  in any event within any time period that may be specified below) written notice of the following:  (a) the occurrence of any Default that is continuing;  (b) receipt of any notice of any investigation by a Governmental Authority or any  litigation or proceeding commenced or threatened against any Loan Party or any Subsidiary that (i)  seeks damages in excess of $2,000,000, (ii) seeks injunctive relief, (iii) is asserted or instituted  against any Plan, its fiduciaries or its assets, (iv) alleges criminal misconduct by any Loan Party or  any Subsidiary, (v) alleges the violation of, or seeks to impose remedies under, any Environmental  Law or related Requirement of Law, or seeks to impose Environmental Liability, (vi) contests any  tax, fee, assessment, or other governmental charge of any Loan Party or any Subsidiary in excess  of $2,000,000 or (vii) involves any product recall;    (c) any material change in accounting or financial reporting practices by any Loan  Party or any Subsidiary;  (d) the occurrence of any ERISA Event that, alone or together with any other ERISA  Events that have occurred, would reasonably be expected to result in liability of the Loan Parties  and their Subsidiaries in an aggregate amount exceeding $2,000,000;   (e) any other development that results in, or would reasonably be expected to result  in, a Material Adverse Effect; and  (f) any change in the information provided in the Beneficial Ownership Certification  delivered to such Lender that would result in a change to the list of beneficial owners identified in  such certification.  Each notice delivered under this Section (i) shall be in writing, (ii) shall contain a heading or a reference  line that reads “Notice under Section 5.02 of Energy Recovery, Inc. Credit Agreement dated December 22,  2021 and (iii) shall be accompanied by a statement of a Financial Officer or other executive officer of the  Borrower Representative setting forth the details of the event or development requiring such notice and any  action taken or proposed to be taken with respect thereto (provided, that the disclosure of which would not  violate applicable Law or breach any obligation binding on the applicable Loan Party or Subsidiary to keep  such information confidential or would not require the disclosure of information subject to a legal privilege  or would disclose a trade secret (not related to financial matters)).  SECTION 5.03.Existence; Conduct of Business.  Each Loan Party will, and will cause each  Subsidiary to, (a) do or cause to be done all things necessary to preserve, renew and keep in full force and  effect its legal existence and the rights, qualifications, licenses, permits, franchises, governmental  authorizations, intellectual property rights, licenses and permits material to the conduct of its business, and  maintain all requisite authority to conduct its business in each jurisdiction in which its business is  conducted; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or  dissolution permitted under Section 6.03; provided further, that the Loan Parties shall not be required to  preserve any such right or franchise, licenses and permits if no longer desirable in the conduct of the  

 

53  743955026  business of such Person and (b) carry on and conduct its business in substantially the same manner and in  substantially the same fields of enterprise as it is presently conducted.  SECTION 5.04.Payment of Taxes.  Each Loan Party will, and will cause each Subsidiary to, pay  or discharge all Taxes, before the same shall become delinquent or in default, except where (a) the validity  or amount thereof is being contested in good faith by appropriate proceedings, (b) such Loan Party or  Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and  (c) the failure to make payment pending such contest would not reasonably be expected to result in a  Material Adverse Effect; provided, however, that each Loan Party will, and will cause each Subsidiary to,  remit withholding taxes and other payroll taxes to appropriate Governmental Authorities as and when  claimed to be due, notwithstanding the foregoing exceptions.  SECTION 5.05.Maintenance of Properties.  Each Loan Party will, and will cause each Subsidiary  to, keep and maintain all property material to the conduct of its business in good working order and  condition, ordinary wear and tear, and Dispositions not prohibited by this Agreement, excepted.  SECTION 5.06.Books and Records; Inspection Rights.  Each Loan Party will, and will cause each  Subsidiary to, (a) keep proper books of record and account in which full, true and correct entries in all  material respects are made of all material dealings and transactions in relation to its business and activities,  and (b) permit any representatives designated by the Lender (including employees of the Lender or any  consultants, accountants, lawyers, agents and appraisers retained by the Lender), upon prior written notice  (which notice, if given during any period during which no Event of Default has occurred and is continuing,  shall be given at least three (3) Business Days’ prior notice), to (i) visit and inspect its properties, conduct  at the Loan Party’s premises field examinations of the Loan Party’s assets, liabilities, books and records,  including examining and making extracts from its books and records, environmental assessment reports  and Phase I or Phase II studies, and (ii) to discuss its affairs, finances and condition with its officers and  independent accountants (and hereby authorizes the Lender to contact its independent accountants directly),  all at such reasonable times and as often as reasonably requested; provided that if no Event of Default has  occurred and is continuing, the Borrower and the Loan Parties shall only be required to reimburse the  Lender for the costs of one such inspection per calendar year.  The Loan Parties acknowledge that the  Lender, after exercising its rights of inspection, may prepare certain Reports pertaining to the Loan Parties’  assets for internal use by the Lender. Notwithstanding the foregoing, nothing in this Section 5.06 shall  require any disclosure (i) which would violate applicable Law or breach any obligation binding on the  Borrower or such Subsidiary to keep such information confidential, (ii) would require the disclosure of  information subject to a legal privilege or (iii) would disclose a trade secret (not related to financial matters)  or proprietary information.  SECTION 5.07.Compliance with Laws.  Each Loan Party will, and will cause each Subsidiary to,  comply with each Requirement of Law applicable to it or its property (including, without limitation,  Environmental Laws), except where the failure to do so, individually or in the aggregate, would not  reasonably be expected to result in a Material Adverse Effect.  Each Loan Party will maintain in effect and  enforce policies and procedures designed to reasonably ensure compliance by such Loan Party, its  Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and  applicable Sanctions.  SECTION 5.08.Use of Proceeds.  (a) The proceeds of the Revolving Loans and the Letters of Credit will be used only  for working capital purposes and other general business purposes, in each case, of the Borrower.   No part of the proceeds of any Loan and no Letter of Credit will be used, whether directly or  

 

54  743955026  indirectly, for any purpose that entails a violation of any of the regulations of the Federal Reserve  Board, including Regulations T, U and X.   (b) The Borrowers will not request any Borrowing or Letter of Credit, and no  Borrower shall use, and each Borrower shall procure that its Subsidiaries and its or their respective  directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of  Credit (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or  giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws,  (b) for the purpose of funding, financing or facilitating any activities, business or transaction of or  with any Sanctioned Person, or in any Sanctioned Country, except to the extent permitted for a  Person required to comply with Sanctions, or (c) in any manner that would result in the violation  of any Sanctions applicable to any party hereto.  SECTION 5.09.Accuracy of Information.  The Loan Parties will ensure that any information,  including financial statements or other documents, furnished to the Lender in connection with this  Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver  hereunder or thereunder contains no material misstatement of fact or omits to state any material fact  necessary to make the statements therein, in the light of the circumstances under which they were made,  not misleading, and the furnishing of such information shall be deemed to be a representation and warranty  by the  Loan Parties on the date thereof as to the matters specified in this Section 5.09; provided that, with  respect to the Projections, the Borrowers will cause the Projections to be prepared in good faith based upon  assumptions believed to be reasonable at the time (it being understood that the Projections, by their nature,  are inherently uncertain, no assurances are being given that the results reflected in the Projections will be  achieved, and actual results during the period or periods covered by any such Projections may differ from  the projected results in material respects).  SECTION 5.10.Insurance.  Each Loan Party will, and will cause each Subsidiary to, maintain with  financially sound and reputable carriers having a financial strength rating of at least A- by A.M. Best  Company (a) insurance in such amounts (with no greater risk retention) and against such risks and such  other hazards, as is customarily maintained by companies of established repute engaged in the same or  similar businesses operating in the same or similar locations and (b) all insurance required pursuant to the  Collateral Documents.  The Borrowers will furnish to the Lender information in reasonable detail as to the  insurance so maintained.Casualty and Condemnation.  The Borrowers will furnish to the Lender prompt  written notice of any casualty or other insured damage to any material portion of the Collateral or the  commencement of any action or proceeding for the taking of any material portion of the Collateral or  interest therein under power of eminent domain or by condemnation or similar proceeding.  SECTION 5.12.Depository Banks.  On or prior to the date which is two hundred and seventy (270)  days following the Effective Date, the Borrowers and each Subsidiary thereof will establish and thereafter  maintain the Lender as its principal depository bank, including for the maintenance of operating,  administrative, cash management, collection activity, and other deposit accounts for the conduct of its  business.  SECTION 5.13.Additional Collateral; Further Assurances.  (a) Subject to any applicable Requirement of Law, each Loan Party will cause each of  its domestic Subsidiaries (other than any Immaterial Subsidiary) formed or acquired after the date  of this Agreement or any limited liability companies formed pursuant to any division to become a  Loan Party by executing a Joinder Agreement, within 30 days of such formation of acquisition. In  connection therewith, the Lender shall have received all documentation and other information  regarding such newly formed or acquired Subsidiaries as may be reasonably requested in writing  

 

55  743955026  by the Lender to comply with the applicable “know your customer” rules and regulations, including  the USA Patriot Act. Upon execution and delivery thereof, each such Person (i) shall automatically  become a Loan Guarantor hereunder and thereupon shall have all of the rights, benefits, duties, and  obligations in such capacity under the Loan Documents and (ii) will grant Liens to the Lender, for  the benefit of the Secured Parties, in any property of such Loan Party which constitutes Collateral,  including any parcel of real property located in the U.S. owned by any Loan Party.  (b) Each Loan Party will cause (i) 100% of the issued and outstanding Equity Interests  of each of its domestic Subsidiaries and (ii) 65% of the issued and outstanding Equity Interests  entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued  and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section  1.956-2(c)(2)) in each foreign Subsidiary directly owned by any Borrower or any domestic  Subsidiary to be subject at all times to a first priority, perfected Lien in favor of the Lender, for the  benefit of the Secured Parties, pursuant to the terms and conditions of the Loan Documents or other  security documents as the Lender shall reasonably request.  (c) Without limiting the foregoing, each Loan Party will, and will cause each  Subsidiary to, execute and deliver, or cause to be executed and delivered, to the Lender such  documents, agreements and instruments, and will take or cause to be taken such further actions  (including the filing and recording of financing statements, fixture filings, mortgages, deeds of trust  and other documents and such other actions or deliveries of the type required by Section 4.01, as  applicable), which may be required by any Requirement of Law or which the Lender may, from  time to time, may be reasonable request in writing by the Lender to carry out the terms and  conditions of this Agreement and the other Loan Documents and to ensure perfection and priority  of the Liens created or intended to be created by the Collateral Documents, all in form and substance   reasonably satisfactory to the Lender and all at the expense of the Loan Parties.  (d) If any material assets (including any real property or improvements thereto or any  interest therein) are acquired by any Loan Party after the Effective Date (other than assets  constituting Collateral under the Security Agreement that become subject to the Lien under the  Security Agreement upon acquisition thereof), the Borrower Representative will (i) notify the  Lender and, if requested by the Lender, cause such assets to be subjected to a Lien securing the  Secured Obligations and (ii)  take, and cause each applicable Loan Party to take, such actions as  shall be necessary or reasonably requested by the Lender to grant and perfect such Liens, including  actions described in paragraph (c) of this Section, all at the expense of the Loan Parties.  SECTION 5.14.Post-Closing Covenants.   (a) Within thirty (30) days after the Effective Date, the Lender shall have received  insurance endorsements in form, scope, and substance reasonably satisfactory to the Lender and  otherwise in compliance with the terms of Section 5.10 of this Agreement and Section 4.12 of the  Security Agreement.   (b) Within forty-five (45) days after the Effective Date (or such later date as may be  agreed to by the Lender in its sole discretion), the Borrower shall deliver to the Lender the  certificates representing the Equity Interests of the Subsidiaries of the Borrower pledged pursuant  to the Security Agreement, together with an undated stock power for each such certificate executed  in blank by a duly authorized officer of the pledgor thereof.  

 

56  743955026  (c) Within sixty (60) days after the Effective Date, the Lender shall have received a  Collateral Access Agreement for each leased property for which such an agreement is required to  be provided pursuant to Section 4.13 of the Security Agreement.  ARTICLE VI Negative Covenants  Until all of the Secured Obligations shall have been Paid in Full, each Loan Party executing  this Agreement covenants and agrees, jointly and severally with all of the other Loan Parties, with the  Lender that:  SECTION 6.01.Indebtedness.  No Loan Party will, nor will it permit any Subsidiary to, create,  incur, assume or suffer to exist any Indebtedness, except:  (a) the Secured Obligations;  (b) Indebtedness existing on the date hereof and set forth in Schedule 6.01 and any  extensions, renewals, refinancings and replacements of any such Indebtedness in accordance with  clause (f) hereof;  (c) Indebtedness of any Borrower to any Subsidiary and of any Subsidiary to any  Borrower or any other Subsidiary, provided that (i) Indebtedness of any Subsidiary that is not a  Loan Party to any Borrower or any other Loan Party shall be subject to Section 6.04 and (ii)  Indebtedness of any Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to  the Secured Obligations on terms reasonably satisfactory to the Lender;  (d) Guarantees by any Borrower of Indebtedness of any Subsidiary and by any  Subsidiary of Indebtedness of any Borrower or any other Subsidiary, provided that (i) the  Indebtedness so Guaranteed is permitted by this Section 6.01, (ii) Guarantees by any Borrower or  any other Loan Party of Indebtedness of any Subsidiary that is not a Loan Party shall be subject to  Section 6.04 and (iii) Guarantees permitted under this clause (d) shall be subordinated to the  Secured Obligations on the same terms as the Indebtedness so Guaranteed is subordinated to the  Secured Obligations;  (e) Indebtedness of any Borrower or any Subsidiary incurred to finance the  acquisition, construction or improvement of any fixed or capital assets (whether or not constituting  purchase money Indebtedness), including Capital Lease Obligations and any Indebtedness assumed  in connection with the acquisition of any such assets or secured by a Lien on any such assets prior  to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness in  accordance with clause (f) below; provided that (i) such Indebtedness is incurred prior to or within  90 days after such acquisition or the completion of such construction or improvement and (ii) the  aggregate principal amount of Indebtedness permitted by this clause (e) together with any  Refinance Indebtedness in respect thereof permitted by clause (f) below, shall not exceed  $7,500,000 at any time outstanding;    (f) Indebtedness which represents extensions, renewals, refinancing or replacements  (such Indebtedness being so extended, renewed, refinanced or replaced being referred to herein as  the “Refinance Indebtedness”) of any of the Indebtedness described in clauses (b) and (e) hereof  (such Indebtedness being referred to herein as the “Original Indebtedness”); provided that (i) such  Refinance Indebtedness does not increase the principal amount or interest rate of the Original  

 

57  743955026  Indebtedness, (ii) any Liens securing such Refinance Indebtedness are not extended to any  additional property of any Loan Party or any Subsidiary, (iii) no Loan Party or any Subsidiary that  is not originally obligated with respect to repayment of such Original Indebtedness is required to  become obligated with respect to such Refinance Indebtedness, (iv) such Refinance Indebtedness  does not result in a shortening of the average weighted maturity of such Original Indebtedness, (v)  the terms of such Refinance Indebtedness are not materially less favorable to the obligor thereunder  than the original terms of such Original Indebtedness and (vi) if such Original Indebtedness was  subordinated in right of payment to the Secured Obligations, then the terms and conditions of such  Refinance Indebtedness must include subordination terms and conditions that are at least as  favorable to the Lender as those that were applicable to such Original Indebtedness;   (g) Indebtedness owed to any Person providing workers’ compensation, health,  disability or other employee benefits or property, casualty or liability insurance, pursuant to  reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary  course of business;   (h) Indebtedness of any Loan Party in respect of performance bonds, bid bonds, appeal  bonds, surety bonds and similar obligations, in each case provided in the ordinary course of  business;  (i) Indebtedness arising from agreements of any Loan Party or any Subsidiary  providing for indemnification, adjustment of purchase price or similar obligations in each case  entered into in connection with any acquisition, other investment or Asset Sale permitted  hereunder;  (j) Swap Agreements and commodity hedging agreements, in each case, entered into  to protect against fluctuations in interest rates, foreign currency exchange rates or commodity prices  and not for speculative purposes;  (k) Indebtedness representing deferred compensation to officers, directors or  employees of any Loan Party (or any of its Subsidiaries) incurred in the ordinary course of business;   (l) Indebtedness in respect of import indemnities or similar instruments in each case  provided in the ordinary course of business;  (m) Indebtedness representing any Taxes to the extent such Taxes are being contested  by the Loan Parties in good faith by appropriate proceedings and adequate reserves are being  maintained by the applicable Person in accordance with GAAP;  (n) Indebtedness arising as a direct result of judgments, orders, awards or decrees  against Holdings or any of its Subsidiaries, in each case not constituting an Event of Default;   (o) Contingent Acquisition Consideration obligations incurred pursuant to a Permitted  Acquisition, provided that either (i) the aggregate amount thereof does not exceed $3,000,000 in  the aggregate (valued at the maximum potential amount payable with respect thereto) at any one  time outstanding or (ii) such obligations are subject to a subordination agreement or subordination  terms reasonably satisfactory to the Administrative Agent which will provide, among other things,  that such obligations are non-interest bearing and such earn-out obligations are subject to annual  financial performance targets;   

 

58  743955026  (p) Subordinated Indebtedness; as long as immediately before and immediately after  giving effect to the incurrence of such Subordinated Indebtedness (A) no Default has or will  occurred and be continuing and (B) the Total Leverage Ratio, on a pro forma basis, does not exceed  the Total Leverage Ratio permitted under Section 6.12 at such time less 0.50x, for the most recently  completed four fiscal quarter period for which financial statements have been delivered to the  Lender under the Loan Documents prior to the incurrence of such Subordinated Indebtedness; and   (q) other Indebtedness in an aggregate principal amount not exceeding $5,000,000 at  any time outstanding.  SECTION 6.02.Liens.  No Loan Party will, nor will it permit any Subsidiary to, create, incur,  assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign  or sell any income or revenues (including Accounts) or rights in respect of any thereof, except:  (a) Liens created pursuant to any Loan Document;  (b) Permitted Encumbrances;  (c) any Lien on any property or asset of any Borrower or any Subsidiary existing on  the date hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to any  other property or asset of such Borrower or Subsidiary or any other Borrower or Subsidiary and (ii)  such Lien shall secure only those obligations which it secures on the date hereof and extensions,  renewals and replacements thereof that do not increase the outstanding principal amount thereof;  (d) Liens on fixed or capital assets acquired, constructed or improved by any Borrower  or any Subsidiary; provided that (i) such Liens secure Indebtedness permitted by clause (e) of  Section 6.01, (ii) such Liens and the Indebtedness secured thereby are incurred prior to or within  90 days after such acquisition or the completion of such construction or improvement, (iii) the  Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such  fixed or capital assets and (iv) such Liens shall not apply to any other property or assets of any  Borrower or any Subsidiary;   (e) any Lien existing on any property or asset (other than Accounts and Inventory)  prior to the acquisition thereof by any Borrower or any Subsidiary or existing on any property or  asset (other than Accounts and Inventory) of any Person that becomes a Loan Party after the date  hereof prior to the time such Person becomes a Loan Party; provided that (i) such Lien is not created  in contemplation of or in connection with such acquisition or such Person becoming a Loan Party,  as the case may be, (ii) such Lien shall not apply to any other property or assets of the Loan Party  and (iii) such Lien shall secure only those obligations which it secures on the date of such  acquisition or the date such Person becomes a Loan Party, as the case may be, and extensions,  renewals and replacements thereof that do not increase the outstanding principal amount thereof;   (f) Liens of a collecting bank arising in the ordinary course of business under  Section 4-210 of the UCC in effect in the relevant jurisdiction covering only the items being  collected upon;   (g) Liens arising out of Sale and Leaseback Transactions permitted by Section 6.06;   (h) Liens granted by a Subsidiary that is not a Loan Party in favor of a Borrower or  another Loan Party in respect of Indebtedness owed by such Subsidiary; and  

 

59  743955026  (i) Liens securing obligations in an aggregate principal amount not to exceed  $3,000,000.  SECTION 6.03.Fundamental Changes.  (a) No Loan Party will, nor will it permit any Subsidiary to, merge into or consolidate  with any other Person, or permit any other Person to merge into or consolidate with it, or otherwise  Dispose of all or substantially all/any substantial part of its assets, or all or substantially all of the  stock of any of its Subsidiaries (in each case, whether now owned or hereafter acquired), or  liquidate, divide or dissolve, except that, if at the time thereof and immediately after giving effect  thereto no Event of Default shall have occurred and be continuing, (i) any Subsidiary of any  Borrower may merge into a Borrower in a transaction in which a Borrower is the surviving entity,  (ii) any Loan Party (other than any Borrower) may merge into any other Loan Party in a transaction  in which the surviving entity is a Loan Party and (iii) any Subsidiary that is not a Loan Party may  liquidate, divide or dissolve if the Borrowers determine in good faith that such liquidation, division  or dissolution is in the best interests of the Borrowers and is not materially disadvantageous to the  Lender; provided that any such merger involving a Person that is not a wholly owned Subsidiary  immediately prior to such merger shall not be permitted unless also permitted by Section 6.04.  (b) No Loan Party will, nor will it permit any Subsidiary to, consummate a Division  as the Dividing Person, without the prior written consent of the Lender. Without limiting the  foregoing, if any Loan Party that is a limited liability company consummates a Division (with or  without the prior consent of Lender as required above), each Division Successor shall be required  to comply with the obligations set forth in Section 5.14 and the other further assurances obligations  set forth in the Loan Documents and become a Loan Party under this Agreement and the other Loan  Documents.  (c) No Loan Party will, nor will it permit any Subsidiary to, engage in any business  other than businesses of the type conducted by the Borrowers and their Subsidiaries on the date  hereof and businesses reasonably related or ancillary thereto and reasonable extensions thereof.  (d) No Loan Party will, nor will it permit any Subsidiary to change its fiscal year or  any fiscal quarter from the basis in effect on the Effective Date.  (e) No Loan Party will change the accounting basis upon which its financial  statements are prepared.  (f) No Loan Party will change the tax filing elections it has made under the Code.  SECTION 6.04.Investments, Loans, Advances, Guarantees and Acquisitions.  No Loan Party will,  nor will it permit any Subsidiary to, form any subsidiary after the Effective Date, or purchase, hold or  acquire (including pursuant to any merger with any Person that was not a Loan Party and a wholly owned  Subsidiary prior to such merger) any Equity Interests, evidences of indebtedness or other securities  (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist  any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any  other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of  transactions) any assets of any other Person constituting a business unit (whether through purchase of assets,  merger or otherwise), except:  

 

60  743955026  (a) Permitted Investments, subject to control agreements (beginning on the date that  is one hundred eighty (180) days following the Effective Date) in favor of the Lender or otherwise  subject to a perfected security interest in favor of the Lender;  (b) investments in existence on the date hereof and described in Schedule 6.04 or any  extension, refinancing or renewal of such investments, so long as the aggregate amount of all  investments pursuant to this clause (b) is not increased at any time above the amount of such  investments existing on the date hereof;  (c) investments by the Borrowers and the Subsidiaries in Equity Interests in their  respective Subsidiaries, provided that (i) any such Equity Interests held by a Loan Party shall be  pledged pursuant to the Security Agreement (subject to the limitations applicable to Equity Interests  of a foreign Subsidiary referred to in Section 5.14) and (ii) the aggregate amount of investments by  Loan Parties in Subsidiaries that are not Loan Parties (together with outstanding intercompany  loans permitted under Section 6.04(d) and outstanding Guarantees permitted under Section 6.04(e))  shall not exceed $5,000,000 at any time outstanding (in each case determined without regard to any  write-downs or write-offs);  (d) loans or advances made by any Loan Party to any Subsidiary and made by any  Subsidiary to a Loan Party or any other Subsidiary, provided that (i) any such loans and advances  made by a Loan Party shall be evidenced by a promissory note pledged pursuant to the Security  Agreement and (ii) the amount of such loans and advances made by Loan Parties to Subsidiaries  that are not Loan Parties (together with outstanding investments permitted under Section 6.04(c)  and outstanding Guarantees permitted under Section 6.04(e)) shall not exceed $5,000,000 at any  time outstanding (in each case determined without regard to any write-downs or write-offs);   (e) Guarantees constituting Indebtedness permitted by Section 6.01, provided that the  aggregate principal amount of Indebtedness of Subsidiaries that are not Loan Parties that is  Guaranteed by any Loan Party (together with outstanding investments permitted under clause (ii)  to the proviso to Section 6.04(c) and outstanding intercompany loans permitted under clause (ii) to  the proviso to Section 6.04(d)) shall not exceed $5,000,000 at any time outstanding (in each case  determined without regard to any write-downs or write-offs);   (f) loans or advances made by a Loan Party to its employees on an arms-length basis  in the ordinary course of business consistent with past practices for travel and entertainment  expenses, relocation costs and similar purposes up to a maximum of $500,000 in the aggregate at  any one time outstanding;   (g) notes payable, or stock or other securities issued by Account Debtors to a Loan  Party pursuant to negotiated agreements with respect to settlement of such Account Debtor’s  Accounts in the ordinary course of business, consistent with past practices;   (h) investments in the form of Swap Agreements permitted by Section 6.07;   (i) investments of any Person existing at the time such Person becomes a Subsidiary  of a Borrower or consolidates or merges with a Borrower or any party’s Subsidiary (including in  connection with a permitted acquisition), so long as such investments were not made in  contemplation of such Person becoming a Subsidiary or of such merger;   (j) investments received in connection with the disposition of assets permitted by  Section 6.05;  

 

61  743955026  (k) investments constituting deposits described in clauses (c), (d) and (g) of the  definition of the term “Permitted Encumbrances”;  (l) accounts receivable arising and trade credit granted in the ordinary course of  business;  (m) investments made in the ordinary course of business consisting of negotiable  instruments held for collection in the ordinary course of business and lease, utility and other similar  deposits in the ordinary course of business;   (n) Permitted Acquisitions; and   (o) other investments in an aggregate amount not to exceed $2,000,000 at any time  outstanding.  SECTION 6.05.Asset Sales.  No Loan Party will, nor will it permit any Subsidiary to, Dispose of  any asset, including any Equity Interest owned by it, nor will any Borrower permit any Subsidiary to issue  any additional Equity Interest in such Subsidiary (other than to another Borrower or another Subsidiary in  compliance with Section 6.04), except:  (a) Dispositions of (i) Inventory in the ordinary course of business and (ii) used,  obsolete, worn out or surplus Equipment or property in the ordinary course of business including  the abandonment, lapse or other Disposition of intellectual property;  (b) Dispositions of assets to any Borrower or any Subsidiary, provided that any such  Dispositions involving a Subsidiary that is not a Loan Party shall be made in compliance with  Section 6.09;  (c) Dispositions of Accounts (excluding sales or dispositions in a factoring  arrangement) in connection with the compromise, settlement or collection thereof;   (d) Dispositions of Permitted Investments;   (e) Sale and Leaseback Transactions permitted by Section 6.06;   (f) Dispositions resulting from any casualty or other insured damage to, or any taking  under power of eminent domain or by condemnation or similar proceeding of, any property or asset  of any Borrower or any Subsidiary;   (g) leases, subleases, licenses or sublicenses of real or personal property (including  intellectual property) in the ordinary course of business and consistent with past practice;   (h) sales, transfers and other Dispositions of property to the extent that (i) such  property is exchanged for credit against the purchase price of similar replacement property, or (ii)  the proceeds of such disposition are promptly applied to the purchase price of such replacement  property;  (i) Dispositions constituting the grant of Liens permitted under Section 6.02;  (j) Dispositions of assets subject to a casualty or condemnation event; and  

 

62  743955026  (k) Dispositions of assets (other than Equity Interests in a Subsidiary unless all Equity  Interests in such Subsidiary are sold) that are not permitted by any other clause of this Section,  provided that the aggregate fair market value of all assets Disposed of in reliance upon this clause  (k) shall not exceed $5,000,000 during any fiscal year of the Company; provided that all leases and  Dispositions permitted under this clause (k) shall be made for fair value and for at least 75% cash  consideration.  SECTION 6.06.Sale and Leaseback Transactions.  No Loan Party will, nor will it permit any  Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any  property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and  thereafter rent or lease such property or other property that it intends to use for substantially the same  purpose or purposes as the property sold or transferred (a “Sale and Leaseback Transaction”), except for  any such sale of any fixed or capital assets by any Borrower or any Subsidiary that is made for cash  consideration in an amount not less than the fair value of such fixed or capital asset and is consummated  within 90 days after such Borrower or such Subsidiary acquires or completes the construction of such fixed  or capital asset.   SECTION 6.07.Swap Agreements.  No Loan Party will, nor will it permit any Subsidiary to, enter  into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which  any Borrower or any Subsidiary has actual exposure (other than those in respect of Equity Interests of any  Borrower or any Subsidiary), and (b) Swap Agreements entered into in order to effectively cap, collar or  exchange interest rates (from floating to fixed rates, from one floating rate to another floating rate or  otherwise) with respect to any interest-bearing liability or investment of any Borrower or any Subsidiary.  SECTION 6.08.Restricted Payments; Certain Payments of Indebtedness.  (a) No Loan Party will, nor will it permit any Subsidiary to, declare or make, or agree  to declare or make, directly or indirectly, any Restricted Payment, or incur any obligation  (contingent or otherwise) to do so, except:   (i) the Borrowers may declare and pay dividends with respect to its common  stock payable solely in additional shares of its common stock, and, with respect to its  preferred stock, payable solely in additional shares of such preferred stock or in shares of  its common stock;  (ii) Subsidiaries may declare and pay dividends ratably with respect to their  Equity Interests;  (iii) the Borrowers may make Restricted Payments, not exceeding $3,000,000  during any fiscal year of the Company, pursuant to and in accordance with stock option  plans or other benefit plans for management or employees of the Borrowers and their  Subsidiaries; and   (iv) the Borrowers may make other Restricted Payments as long as (A) no  Default has occurred and is continuing or would immediately result after giving effect to  such Restricted Payment and (B) immediately before and immediately after giving effect  to such Restricted Payment, the Total Leverage Ratio, on a pro forma basis, does not exceed  the Total Leverage Ratio permitted under Section 6.12 at such time less 0.50x, for the most  recently completed four fiscal quarter period for which financial statements have been  delivered to the Lender under the Loan Documents prior to such Restricted Payment.  

 

63  743955026  (b) No Loan Party will, nor will it permit any Subsidiary to, make or agree to pay or  make, directly or indirectly, any payment or other distribution (whether in cash, securities or other  property) of or in respect of principal of or interest on any Indebtedness, or any payment or other  distribution (whether in cash, securities or other property), including any sinking fund or similar  deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination  of any Indebtedness, except:  (i) payment of Indebtedness created under the Loan Documents;  (ii) payment of regularly scheduled interest and principal payments as and  when due in respect of any Indebtedness permitted under Section 6.01, other than payments  in respect of the Subordinated Indebtedness prohibited by the subordination provisions  thereof;  (iii) refinancings of Indebtedness to the extent permitted by Section 6.01;   (iv) payment of secured Indebtedness that becomes due as a result of the  voluntary sale or transfer of the property or assets securing such Indebtedness to the extent  such sale or transfer is permitted by the terms of Section 6.05;   (v) the Borrowers may make payments on subordinated Contingent  Acquisition Consideration as long as (A) no Default has occurred and is continuing or  would immediately result after giving effect to such payment and (B) immediately before  and immediately after giving effect to such payment, the Total Leverage Ratio, on a pro  forma basis, does not exceed the Total Leverage Ratio permitted under Section 6.12 at such  time less 0.50x, for the most recently completed four fiscal quarter period for which  financial statements have been delivered to the Lender under the Loan Documents prior to  such payment; and   (vi) payments of Indebtedness not to exceed $3,000,000 in the aggregate per  fiscal year.  SECTION 6.09.Transactions with Affiliates.  No Loan Party will, nor will it permit any Subsidiary  to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any  property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a)  transactions that (i) are in the ordinary course of business and (ii) are at prices and on terms and conditions  not less favorable to such Loan Party or such Subsidiary than could be obtained on an arm’s-length basis  from unrelated third parties, (b) transactions between or among the Loan Parties not involving any other  Affiliate, (c) any investment permitted by Sections 6.04(c) or 6.04(d), (d) any Indebtedness permitted under  Section 6.01(c), (e) any Restricted Payment permitted by Section 6.08, (f) loans or advances to employees  permitted under Section 6.04(f), (g) the payment of reasonable fees to directors of any Borrower or any  Subsidiary who are not employees of such Borrower or any Subsidiary, and compensation and employee  benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees  of the Borrowers or their Subsidiaries in the ordinary course of business, (h) any issuances of securities or  other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment  agreements, stock options and stock ownership plans approved by a Borrower’s board of directors, (i)  customary indemnities provided to, and reasonable and customary fees paid to, members of the board of  directors of any Loan Parties and (j) customary employment, compensation and severance arrangements  for officers and other employees of Loan Parties and their Subsidiaries entered into in the ordinary course  of business.   

 

64  743955026  SECTION 6.10.Restrictive Agreements.  No Loan Party will, nor will it permit any Subsidiary to,   directly or indirectly enter into, incur or permit to exist any agreement or other arrangement that prohibits,  restricts or imposes any condition upon (a) the ability of such Loan Party or any Subsidiary to create, incur  or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay  dividends or other distributions with respect to any Equity Interests or to make or repay loans or advances  to any Borrower or any other Subsidiary or to Guarantee Indebtedness of any Borrower or any other  Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by any  Requirement of Law or by any Loan Document, (ii) the foregoing shall not apply to restrictions and  conditions existing on the date hereof identified on Schedule 6.10 (but shall apply to any extension or  renewal of, or any amendment or modification expanding the scope of, any such restriction or condition),  (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating  to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the  Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not  apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by  this Agreement if such restrictions or conditions apply only to the property or assets securing such  Indebtedness, (v) clause (a) of the foregoing shall not apply to customary provisions in leases restricting  the assignment thereof, (vi) the foregoing shall not apply to customary provisions restricting assignment or  transfer of any agreement entered into in the ordinary course of business, and (vii) the foregoing shall not  apply to customary provisions in partnership agreements, limited liability company organizational  governance documents, asset sale and stock sale agreements and other similar agreements entered into in  the ordinary course of business that restrict the transfer of ownership interests in such partnership, limited  liability company or similar person.  SECTION 6.11.Amendment of Material Documents.  No Loan Party will, nor will it permit any  Subsidiary to, amend, modify or waive any of its rights under (a)  any agreement relating to any  Subordinated Indebtedness, or (b) its charter, articles or certificate of organization or incorporation and  bylaws or operating, management or partnership agreement, or other organizational or governing  documents, to the extent any such amendment, modification or waiver would be materially adverse to the  Lender. SECTION 6.12.Financial Covenants.   (a) Total Leverage Ratio.  The Borrowers will not permit the Total Leverage Ratio,  on the last day of any fiscal quarter (commencing with the fiscal quarter ending December 31,  2021), to be greater than 3.00 to 1.00.  (b) Capital Expenditures.  The Borrowers will not, nor will it permit any Subsidiary  to, incur or make any Capital Expenditures in an aggregate amount to exceed (x) $20,000,000  during the term of this Agreement plus (y) during any period set forth below, an additional amount  set forth opposite such period:  Fiscal Year ending:  Additional Capital Expenditures:  December 31, 2021 $6,000,000  December 31, 2022 $20,000,000  December 31, 2023 $8,000,000  December 31, 2024 $18,000,000  

 

65  743955026  Fiscal Year ending:  Additional Capital Expenditures:  December 31, 2025 $13,000,000  December 31, 2026 $10,000,000  The amount of any additional Capital Expenditures permitted to be made in respect of any fiscal  year shall be increased by the unused amount of the additional Capital Expenditures that were  permitted to be made during any preceding fiscal year pursuant to this Section 6.12(b).   ARTICLE VII Events of Default  SECTION 7.01. Events of Default.  If any of the following events (“Events of Default”) shall occur:    (a) the Borrowers shall fail to pay any principal of any Loan or any reimbursement  obligation in respect of any LC Disbursement when and as the same shall become due and payable,  whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;  (b) any Loan Party shall fail to pay any interest on any Loan or any fee or any other  amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement  or any other Loan Document, when and as the same shall become due and payable and such failure  shall continue unremedied for a period of three (3) Business Days;  (c) any representation or warranty made or deemed made by or on behalf of any Loan  Party or any Subsidiary in, or in connection with, this Agreement or any other Loan Document or  any amendment or modification hereof or thereof or waiver hereunder or thereunder, or in any  report, certificate, financial statement or other document furnished pursuant to or in connection  with this Agreement or any other Loan Document or any amendment or modification hereof or  thereof or waiver hereunder or thereunder, shall prove to have been materially incorrect when made  or deemed made;  (d) any Loan Party shall fail to observe or perform any covenant, condition or  agreement contained in Section 5.02(a), 5.03 (with respect to a Loan Party’s existence) or 5.08 or  in Article VI;  (e) any Loan Party shall fail to observe or perform any covenant, condition or agree- ment contained in this Agreement (other than those specified in clause (a), (b) or (d)) or in any  other Loan Document, and such failure shall continue unremedied for a period of (i) five (5) days  after the earlier of any Loan Party’s knowledge of such breach or notice thereof from the Lender if  such breach relates to terms or provisions of Section 5.01, 5.02 (other than Section 5.02(a)), 5.03  through 5.07, 5.10, 5.11 or 5.13 of this Agreement or (ii) fifteen (15) days after the earlier of any  Loan Party’s knowledge of such breach or notice thereof from the Lender if such breach relates to  terms or provisions of any other Section of this Agreement or of any other Loan Document;  (f) any Loan Party or any Subsidiary shall fail to make any payment (whether of  principal or interest and regardless of amount) in respect of any Material Indebtedness, when and  

 

66  743955026  as the same shall become due and payable (subject to any grace or cure periods set forth in the  terms of such Material Indebtedness);  (g) any event or condition occurs that results in any Material Indebtedness becoming  due prior to its scheduled maturity or that enables or permits (with or without the giving of notice,  the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent  on its or their behalf to cause any Material Indebtedness to become due, or to require the  prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity;  provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of  the voluntary sale or transfer of the property or assets securing such Indebtedness to the extent such  sale or transfer is permitted by the terms of Section 6.05;  (h) an involuntary proceeding shall be commenced or an involuntary petition shall be  filed seeking (i) liquidation, reorganization or other relief in respect of a Loan Party or any  Subsidiary (other than any Immaterial Subsidiary) or its debts, or of a substantial part of its assets,  under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or  hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator  or similar official for any Loan Party or any Subsidiary (other than any Immaterial Subsidiary) or  for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue  undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing  shall be entered;  (i) any Loan Party or any Subsidiary (other than any Immaterial Subsidiary) shall  (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or  other relief under any federal, state or foreign bankruptcy, insolvency, receivership or similar law  now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and  appropriate manner, any proceeding or petition described in clause (h) of this Section 7.01,  (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator,  conservator or similar official for such Loan Party or Subsidiary of any Loan Party or for a substan- tial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against  it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take  any action for the purpose of effecting any of the foregoing;  (j) any Loan Party or any Subsidiary (other than any Immaterial Subsidiary) shall  become unable, admit in writing its inability, or publicly declare its express intention not to, or fail  generally, to pay its debts as they become due;  (k) one or more final judgments for the payment of money in an aggregate amount in  excess of $2,000,000 shall be rendered against any Loan Party, any Subsidiary or any combination  thereof to the extent not covered by insurance or other indemnification and the same shall remain  undischarged for a period of thirty (30) consecutive days during which execution shall not be  effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon  any assets of any Loan Party or any Subsidiary to enforce any such judgment or any Loan Party or  any Subsidiary shall fail within thirty (30) days to discharge one or more non-monetary judgments  or orders which, individually or in the aggregate, would reasonably be expected to have a Material  Adverse Effect, which judgments or orders, in any such case, are not stayed on appeal or otherwise  being appropriately contested in good faith by proper proceedings diligently pursued;   (l) an ERISA Event shall have occurred that, in the opinion of the Lender, when taken  together with all other ERISA Events that have occurred, would reasonably be expected to result  in a Material Adverse Effect;  

 

67  743955026  (m) a Change in Control shall occur;  (n) the occurrence of any “default”, as defined in any Loan Document (other than this  Agreement), or the breach of any of the terms or provisions of any Loan Document (other than this  Agreement), which default or breach continues beyond any period of grace therein provided;  (o) other than pursuant to the terms of the Loan Documents, any Loan Guaranty shall  fail to remain (except as a result of any action or inaction by the Lender) in full force or effect or  any action shall be taken to discontinue or to assert the invalidity or unenforceability of the Loan  Guaranty, or any Guarantor shall fail to comply with any of the terms or provisions of the Loan  Guaranty to which it is a party, or any Guarantor shall deny that it has any further liability under  the Loan Guaranty to which it is a party, or shall give notice to such effect, including, but not  limited to notice of termination delivered pursuant to Section 9.08;  (p) except as permitted by the terms of any Collateral Document and to the extent  resulting from any action or inaction by the Lender, (i) any Collateral Document shall for any  reason fail to create a valid security interest in any Collateral purported to be covered thereby, or  (ii) any Lien securing any Secured Obligation shall cease to be a perfected, first priority Lien, in  each case, with respect to a material portion of the Collateral;  (q) any Collateral Document shall fail to remain in full force or effect or any action  shall be taken to discontinue or to assert the invalidity or unenforceability of any Collateral  Document;   (r) any material provision of any Loan Document for any reason (except as a result of  any action or inaction by the Lender) ceases to be valid, binding and enforceable in accordance  with its terms (or any Loan Party shall challenge the enforceability of any Loan Document or shall  assert in writing, or engage in any action or inaction that evidences its assertion, that any provision  of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable  in accordance with its terms); or   (s) any Loan Party is criminally indicted or convicted under any law that may  reasonably be expected to lead to a forfeiture of any property of such Loan Party having a fair  market value in excess of $1,000,000;   then, and in every such event (other than an event with respect to the Borrowers described in clause  (h) or (i) of this Section 7.01), and at any time thereafter during the continuance of such event, the  Lender may, by notice to the Borrower Representative, take either or both of the following actions,  at the same or different times:  (i) terminate the Commitment, whereupon the Commitment shall  terminate immediately, (ii) declare the Loans then outstanding to be due and payable in whole (or  in part, but ratably as among the Classes of Loans and the Loans of each Class at the time  outstanding, in which case any principal not so declared to be due and payable may thereafter be  declared to be due and payable), whereupon the principal of the Loans so declared to be due and  payable, together with accrued interest thereon and all fees (including, for the avoidance of doubt,  any break funding payment) and other obligations of the Borrowers accrued hereunder and under  any other Loan Document, shall become due and payable immediately, in each case without  presentment, demand, protest or other notice of any kind, all of which are hereby waived by the  Borrowers, and (iii) require cash collateral for the LC Exposure in accordance with Section 2.04(h)  hereof; and in the case of any event with respect to the Borrowers described in clause (h) or (i) of  this Section 7.01, the Commitment shall automatically terminate and the principal of the Loans  then outstanding, and cash collateral for the LC Exposure, together with accrued interest thereon  

 

68  743955026  and all fees (including, for the avoidance of doubt, any break funding payments) and other  obligations of the Borrowers accrued hereunder and under any other Loan Documents, shall  automatically become due and payable, in each case without presentment, demand, protest or other  notice of any kind, all of which are hereby waived by the Borrowers.  Upon the occurrence and  during the continuance of an Event of Default, the Lender may increase the rate of interest  applicable to the Loans and other Obligations as set forth in this Agreement and exercise any rights  and remedies provided to the Lender under the Loan Documents or at law or equity, including all  remedies provided under the UCC.  ARTICLE VIII Miscellaneous  SECTION 8.01.Notices.  (a) Except in the case of notices and other communications expressly permitted to be  given by telephone (and subject to paragraph (b) below), all notices and other communications  provided for herein shall be in writing and shall be delivered by hand or overnight courier service,  mailed by certified or registered mail or sent by fax, as follows:  (i) if to any Loan Party, to it in care of the Borrower Representative at:  Energy Recovery, Inc.  1717 Doolittle Drive  San Leandro, CA 94577  Attention: Harsha Tamatam   Email: htamatam@energyrecovery.com  with a copy to:  Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.  44 Montgomery Street, 36th Floor  San Francisco, CA 94104  Attn:  Andy Thorpe  Email: adthorpe@mintz.com  (ii) if to JPMorgan Chase Bank, N.A. at:  JPMorgan Chase Bank, N.A.  Middle Market Servicing  10 South Dearborn, Floor L2  Suite IL1-1145  Chicago, IL, 60603-2300  Attention: Bryson G. Kelly  Email: bryson.g.kelly@chase.com  With a copy to:  JPMorgan Chase Bank, N.A.  560 Mission St, Floor 04  San Francisco, CA, 94105-2907  Attention: Mark S. Dombrowski  

 

69  743955026  Email: mark.s.dombrowski@chase.com  And a copy to:   Mayer Brown LLP  71 S. Wacker Drive  Chicago, IL 60606  Attention: Christopher M. Chubb  Email:  CChubb@mayerbrown.com  All such notices and other communications (i) sent by hand or overnight courier service, or mailed  by certified or registered mail shall be deemed to have been given when received, (ii) sent by fax  shall be deemed to have been given when sent, provided that if not given during normal business  hours for the recipient, such notice or communication shall be deemed to have been given at the  opening of business on the next Business Day of the recipient, or (iii) delivered through Electronic  Systems, to the extent provided in paragraph (b) below shall be effective as provided in such  paragraph.  (b) Notices and other communications to the Lender or any Loan Party hereunder may  be delivered or furnished by using Electronic Systems pursuant to procedures approved by the  Lender; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise  stated or agreed by the Lender.  Each of the Lender and the Borrower Representative (on behalf of  the Loan Parties) may, in its discretion, agree to accept notices and other communications to it  hereunder by using Electronic Systems pursuant to procedures approved by it; provided that  approval of such procedures may be limited to particular notices or communications.  All such  notices and other communications (i) sent to an e-mail address shall be deemed received upon the  sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt  requested” function, as available, return e-mail or other written acknowledgement), provided that  if given outside of normal business hours of the recipient, such notice or communication shall be  deemed to have been given at the opening of business on the next Business Day for the recipient,  and (ii) posted to an Internet or intranet website shall be deemed received upon the deemed receipt  by the intended recipient, at its e-mail address as described in the foregoing clause (i), of  notification that such notice or communication is available and identifying the website address  therefor; provided that, for both clauses (i) and (ii) above, if such notice, e-mail or other  communication is not sent during the normal business hours of the recipient, such notice or  communication shall be deemed to have been sent at the opening of business on the next Business  Day of the recipient.  (c) Any party hereto may change its address, facsimile number or e-mail address for  notices and other communications hereunder by notice to the other parties hereto.  SECTION 8.02.Waivers; Amendments.  (a) No failure or delay by the Lender in exercising any right or power hereunder or  under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial  exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such  a right or power, preclude any other or further exercise thereof or the exercise of any other right or  power.  The rights and remedies of the Lender hereunder and under any other Loan Document are  cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No  waiver of any provision of any Loan Document or consent to any departure by any Loan Party  therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this  

 

70  743955026  Section, and then such waiver or consent shall be effective only in the specific instance and for the  purpose for which given.  Without limiting the generality of the foregoing, the making of a Loan  or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of  whether the Lender may have had notice or knowledge of such Default at the time.  (b) Subject to Section 2.12(c), neither this Agreement nor any other Loan Document  nor any provision hereof or thereof may be waived, amended or modified except (i) in the case of  this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrowers  and the Lender or (ii) in the case of any other Loan Document, pursuant to an agreement or  agreements in writing entered into by the Lender and the Loan Party or Loan Parties that are parties  thereto.  SECTION 8.03.Expenses; Limitation of Liability; Indemnity.  (a) Expenses.  The Loan Parties, jointly and severally, shall pay all (i) reasonable and  documented out-of-pocket expenses incurred by the Lender and its Affiliates, including the  reasonable and documented out-of-pocket fees, charges and disbursements of outside counsel for  the Lender (limited to one primary counsel and one local counsel in each reasonably necessary  jurisdiction), in connection with the credit facilities provided for herein, the preparation and  administration of the Loan Documents and any amendments, modifications or waivers of the provi- sions of the Loan Documents (whether or not the transactions contemplated hereby or thereby shall  be consummated), (ii) reasonable and documented out-of-pocket expenses incurred by the Lender  in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any  demand for payment thereunder and (iii) documented out-of-pocket expenses incurred by the  Lender, including the documented out-of-pocket fees, charges and disbursements of outside  counsel for the Lender (limited to one primary counsel, one local counsel in each reasonably  necessary jurisdiction and one conflict counsel, as necessary), in connection with the enforcement,  collection or protection of its rights in connection with the Loan Documents, including its rights  under this Section, or in connection with the Loans made or Letters of Credit issued hereunder,  including all such documented out-of-pocket expenses incurred during any workout, restructuring  or negotiations in respect of such Loans or Letters of Credit.  Expenses being reimbursed by the  Loan Parties under this Section include, without limiting the generality of the foregoing, fees, costs  and expenses incurred in connection with:  (i) appraisals and insurance reviews;  (ii) field examinations and the preparation of Reports based on the fees  charged by a third party retained by the Lender or the internally allocated fees for each  Person employed by the Lender with respect to each field examination;  (iii) background checks regarding senior management and/or key investors, as  deemed necessary or appropriate in the sole discretion of the Lender;  (iv) Taxes, fees and other charges for (i) lien and title searches and title  insurance and (ii) recording the Mortgages, filing financing statements and continuations,  and other actions to perfect, protect, and continue the Lender’s Liens;  (v) sums paid or incurred to take any action required of any Loan Party under  the Loan Documents that such Loan Party fails to pay or take; and  

 

71  743955026  (vi) forwarding loan proceeds, collecting checks and other items of payment,  and establishing and maintaining the accounts and lock boxes, and costs and expenses of  preserving and protecting the Collateral.  (b) Limitation of Liability. To the extent permitted by applicable law (i) neither any  Borrower nor any other Loan Party shall assert, and each Borrower and each Loan Party hereby  waives, any claim against the Lender and any Related Party of the Lender (each such Person being  called a “Lender Related Person”) for any Liabilities arising from the use by others of information  or other materials (including, without limitation, any personal data) obtained through  telecommunications, electronic or other information transmission systems (including the Internet),  and (ii) no party hereto shall assert, and each such party hereby waives, any Liabilities against any  other party hereto, on any theory of liability, for special, indirect, consequential or punitive  damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result  of, this Agreement, any other Loan Document, or any agreement or instrument contemplated  hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof;  provided that, nothing in this Section 8.03(b) shall relieve any Borrower or any other Loan Party  of any obligation it may have to indemnify an Indemnitee, as provided in Section 8.03(c), against  any special, indirect, consequential or punitive damages asserted against such Indemnitee by a third  party.  (c) Indemnity.  The Loan Parties, jointly and severally, shall indemnify the Lender,  and each Related Party of the Lender (each such Person being called an “Indemnitee”) against, and  hold each Indemnitee harmless from, any documented out-of-pocket Liabilities and related  expenses, including the documented out-of-pocket fees, charges and disbursements of any outside  counsel for any Indemnitee (limited to one primary counsel, one local counsel in each reasonably  necessary jurisdiction, in each case, for the Indemnitees, taken as a whole and one conflicts  counsel), incurred by or asserted against any Indemnitee arising out of, in connection with, or as a  result of (i) the execution or delivery of the Loan Documents or any agreement or instrument  contemplated thereby, the performance by the parties hereto of their respective obligations  thereunder or the consummation of the Transactions or any other transactions contemplated hereby,  (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the  Lender to honor a demand for payment under a Letter of Credit if the documents presented in  connection with such demand do not strictly comply with the terms of such Letter of Credit),  (iii) any actual or alleged presence or Release of Hazardous Materials on or from any property  owned or operated by a Loan Party or a Subsidiary, or any Environmental Liability related in any  way to a Loan Party or Subsidiary, (iv) the failure of a Loan Party to deliver to the Lender the  required receipts or other required documentary evidence with respect to a payment made by such  Loan Party for Taxes pursuant to Section 2.15, or (v) any actual or prospective Proceeding relating  to any of the foregoing, whether or not such Proceeding is brought by any Loan Party or their  respective equity holders, Affiliates, creditors or any other third Person and whether based on  contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto;  provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such  Liabilities or related expenses are (x) determined by a court of competent jurisdiction by final and  non-appealable judgment to have resulted from the gross negligence, bad faith or willful  misconduct of such Indemnitee or (y) result from a claim brought by any Loan Party against an  Indemnitee for breach in bad faith of such Indemnitee’s mutual obligations hereunder or under any  other Loan Document, if such Loan Party has obtained a final and nonappealable judgment in its  favor on such claim as determined by a court of competent jurisdiction. This Section 8.03(c) shall  not apply with respect to Taxes other than any Taxes that represent losses or damages arising from  any non-Tax claim.   

 

72  743955026  (d) Payments.  All amounts due under this Section shall be payable promptly after  written demand therefor.  SECTION 8.04.Successors and Assigns.  (a) The provisions of this Agreement shall be binding upon and inure to the benefit of  the parties hereto and their respective successors and assigns permitted hereby (including any  Affiliate of the Lender that issues any Letter of Credit), except that no Borrower may assign or  otherwise transfer any of its rights or obligations hereunder without the prior written consent of the  Lender (and any attempted assignment or transfer by a Borrower without such consent shall be null  and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any  Person (other than the parties hereto, their respective successors and assigns permitted hereby  (including any Affiliate of the Lender that issues any Letter of Credit), Participants (to the extent  provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the  Related Parties of the Lender) any legal or equitable right, remedy or claim under or by reason of  this Agreement.  (b) The Lender may assign to one or more assignees all or a portion of its rights and  obligations under this Agreement (including all or a portion of its Commitment, and the Loans at  the time owing to it) to one or more purchasers whether or not related to the Bank with the prior  written consent (such consent not to be unreasonably withheld) of the Borrower, provided that, the  Borrower shall be deemed to have consented to an assignment unless it shall have objected thereto  by written notice to the Lender within five (5) Business Days after having received notice thereof;  provided further that no consent of the Borrower shall be required for an assignment to an Affiliate  of the Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any  other assignee.  The Company shall maintain, or cause to be maintained at its principal office, a  copy of each assignment of all or a portion of the rights and obligations under this Agreement  (including all or any portion of any Commitment and/or the Loans) by the Lender or any assignee  delivered to and accepted by it and a register (the “Register”) for the recordation of the names and  addresses of each Lender and the Commitments of, and the principal amount of the Loans (and  stated interest thereon) owing to each Lender from time to time.  The entries in the Register shall  be conclusive and binding for all purposes, absent demonstrable error, and the Borrowers and the  Lenders shall treat each Person whose name is recorded in the Register as a Lender hereunder for  all purposes of this Agreement.  The Register shall be available for inspection by any Lender at any  reasonable time and from time to time upon reasonable prior notice.  This Section 8.04(b) shall be  construed so that the Loans and Commitments are at all times maintained in “registered form”  within the meaning of Sections 163(f), 871(h)(2), and 881(c)(2) of the Code.  For the purposes of this Section 9.04(b), “Approved Fund” means any Person (other than  a natural person) that is engaged in making, purchasing, holding or investing in bank loans and  other similar extensions of credit in the ordinary course of its business and that is administered or  managed by (a) the Lender, (b) an Affiliate of the Lender or (c) an entity or an Affiliate of an entity  that administers or manages the Lender.  (c) The Lender may, without the consent of, or notice to, the Borrowers, sell  participations to one or more banks or other entities (a “Participant”) in all or a portion of the  Lender’s rights and/or obligations under this Agreement (including all or a portion of its  Commitment and/or Letters of Credit and/or the Loans owing to it); provided that (i) the Lender’s  obligations under this Agreement shall remain unchanged; (ii) the Lender shall remain solely  responsible to the other parties hereto for the performance of such obligations; and (iii) the  Borrowers shall continue to deal solely and directly with the Lender in connection with the Lender’s  

 

73  743955026  rights and obligations under this Agreement.  Any agreement or instrument pursuant to which the  Lender sells such a participation shall provide that the Lender shall retain the sole right to enforce  this Agreement and to approve any amendment, modification or waiver of any provision of this  Agreement. Each Borrower agrees that each Participant shall be entitled to the benefits of  Sections 2.13, 2.14 and 2.15 (subject to the requirements and limitations therein) to the same extent  as if it were the Lender and had acquired its interest by assignment pursuant to paragraph (b) of  this Section; provided that such Participant shall not be entitled to receive any greater payment  under Section 2.13 or 2.15, with respect to any participation, than its participating Lender would  have been entitled to receive, except to the extent such entitlement to receive a greater payment  results from a Change in Law that occurs after the Participant acquired the applicable participation.  To the extent permitted by law, each Participant also shall be entitled to the benefits of  Section 8.08 as though it were the Lender.  If the Lender shall sell a participation, it shall, acting  solely for this purpose as a non-fiduciary agent of the Borrowers, maintain a register on which it  enters the name and address of each Participant and the principal amounts (and stated interest) of  each Participant’s interest in the Loans or other obligations under this Agreement or any other Loan  Document (the “Participant Register”); provided that the Lender shall have no obligation to disclose  all or any portion of the Participant Register (including the identity of any Participant or any  information relating to a Participant’s interest in any Commitment, Loans, Letters of Credit or its  other obligations under this Agreement or any other Loan Document) to any Person except to the  extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit  or other obligation is in registered form under Section 5f.103-1(c) of the U.S. Treasury Regulations.   The entries in the Participant Register shall be conclusive absent manifest error, and the Lender  shall treat each Person whose name is recorded in the Participant Register as the owner of such  participation for all purposes of this Agreement notwithstanding any notice to the contrary.   (d) The Lender may at any time pledge or assign a security interest in all or any portion  of its rights under this Agreement to secure obligations of the Lender, including without limitation  any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall  not apply to any such pledge or assignment of a security interest; provided that no such pledge or  assignment of a security interest shall release the Lender from any of its obligations hereunder or  substitute any such pledgee or assignee for the Lender as a party hereto.  SECTION 8.05.Survival.  All covenants, agreements, representations and warranties made by the  Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection  with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied  upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and  the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any  such other party or on its behalf and notwithstanding that the Lender may have had notice or knowledge of  any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall  continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee  or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is  outstanding and so long as the Commitment has not expired or terminated.  The provisions of Sections 2.13,  2.14, 2.15 and Section 8.03 shall survive and remain in full force and effect regardless of the consummation  of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the  Letters of Credit and the Commitment or the termination of this Agreement or any other Loan Document  or any provision hereof or thereof.  SECTION 8.06.Counterparts; Integration; Effectiveness; Electronic Execution.    

 

74  743955026  (a) This Agreement may be executed in counterparts (and by different parties hereto  on different counterparts), each of which shall constitute an original, but all of which when taken  together shall constitute a single contract.  This Agreement, the other Loan Documents and any  separate letter agreements with respect to fees payable to the Lender constitute the entire contract  among the parties relating to the subject matter hereof and supersede any and all previous  agreements and understandings, oral or written, relating to the subject matter hereof.  Except as  provided in Section 4.01, this Agreement shall become effective when it shall have been executed  by the Lender and when the Lender shall have received counterparts hereof which, when taken  together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon  and inure to the benefit of the parties hereto and their respective successors and assigns.  (b) Delivery of an executed counterpart of a signature page of (x) this Agreement, (y)  any other Loan Document and/or (z) any document, amendment, approval, consent, information,  notice (including, for the avoidance of doubt, any notice delivered pursuant to Section 8.01),  certificate, request, statement, disclosure or authorization related to this Agreement, any other Loan  Document and/or the transactions contemplated hereby and/or thereby (each an “Ancillary  Document”) that is an Electronic Signature transmitted by telecopy, emailed pdf. or any other  electronic means that reproduces an image of an actual executed signature page shall be effective  as delivery of a manually executed counterpart of this Agreement, such other Loan Document or  such Ancillary Document, as applicable.  The words “execution,” “signed,” “signature,” “delivery,”  and words of like import in or relating to this Agreement, any other Loan Document and/or any  Ancillary Document shall be deemed to include Electronic Signatures, deliveries or the keeping of  records in any electronic form (including deliveries by telecopy, emailed pdf. or any other  electronic means that reproduces an image of an actual executed signature page), each of which  shall be of the same legal effect, validity or enforceability as a manually executed signature,  physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be;  provided that nothing herein shall require the Lender to accept Electronic Signatures in any form  or format without its prior written consent and pursuant to procedures approved by it; provided,  further, without limiting the foregoing, (i) to the extent the Lender has agreed to accept any  Electronic Signature, the Lender shall be entitled to rely on such Electronic Signature purportedly  given by or on behalf of any Borrower or any other Loan Party without further verification thereof  and without any obligation to review the appearance or form of any such Electronic Signature and  (ii) upon the request of the Lender, any Electronic Signature  shall be promptly followed by a  manually executed counterpart.  Without limiting the generality of the foregoing, each Borrower  and each Loan Party hereby (A) agrees that, for all purposes, including without limitation, in  connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or  litigation among the Lender, the Borrowers and the Loan Parties, Electronic Signatures transmitted  by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual  executed signature page and/or any electronic images of this Agreement,  any other Loan Document  and/or any Ancillary Document shall have the same legal effect, validity and enforceability as any  paper original, (B) the Lender may, at its option, create one or more copies of this Agreement, any  other Loan Document and/or any Ancillary Document in the form of an imaged electronic record  in any format, which shall be deemed created in the ordinary course of such Person’s business, and  destroy the original paper document (and all such electronic records shall be considered an original  for all purposes and shall have the same legal effect, validity and enforceability as a paper record),  (C) waives any argument, defense or right to contest the legal effect, validity or enforceability of  this Agreement, any other Loan Document and/or any Ancillary Document based solely on the lack  of paper original copies of this Agreement, such other Loan Document and/or such Ancillary  Document, respectively, including with respect to any signature pages thereto and (D) waives any  claim against any Lender-Related Person for any Liabilities arising solely from the Lender’s  reliance on or use of Electronic Signatures and/or transmissions by telecopy, emailed pdf. or any  

 

75  743955026  other electronic means that reproduces an image of an actual executed signature page, including  any Liabilities arising as a result of the failure of any Borrower and/or any Loan Party to use any  available security measures in connection with the execution, delivery or transmission of any  Electronic Signature.  SECTION 8.07.Severability.  Any provision of any Loan Document held to be invalid, illegal or  unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity,  illegality or unenforceability without affecting the validity, legality and enforceability of the remaining  provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate  such provision in any other jurisdiction.  SECTION 8.08.Right of Setoff.  If an Event of Default shall have occurred and be continuing, the  Lender, and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent  permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional  or final) at any time held and other obligations at any time owing, by the Lender, or any Affiliate to or for  the credit or the account of any Loan Party against any and all of the Secured Obligations, irrespective of  whether or not the Lender shall have made any demand under this Agreement or any other Loan Document  and although such obligations of the Loan Parties may be contingent or unmatured or are owed to a branch  office or Affiliate of the Lender different from the branch office or Affiliate holding such deposit or  obligated on such indebtedness. The Lender shall notify the Borrower of such set-off or application,  provided that any failure to give or any delay in giving such notice shall not affect the validity of any such  set-off or application under this Section 8.08. The rights of the Lender under this Section are in addition to  other rights and remedies (including other rights of setoff) which the Lender may have.  SECTION 8.09.Governing Law; Jurisdiction; Consent to Service of Process.  (a) The Loan Documents (other than those containing a contrary express choice of law  provision) shall be governed by and construed in accordance with the internal laws of the State of  New York, but giving effect to federal laws applicable to national banks.  (b) Each of the parties hereto hereby irrevocably and unconditionally submits, for  itself and its property, to the nonexclusive jurisdiction of any U.S. federal or New York State court  sitting in New York, New York and any appellate court from any thereof, in any action or  proceeding arising out of or relating to any Loan Documents, the transactions relating hereto or  thereto, or for recognition or enforcement of any judgment, and each of the parties hereto hereby  irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding  may (and any such claims, cross-claims or third party claims brought against the Lender or any of  its Related Parties may only) be heard and determined in such state court or, to the extent permitted  by law, in such federal court.  Each of the parties hereto agrees that a final judgment in any such  action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the  judgment or in any other manner provided by law.  Nothing in this Agreement or any other Loan  Document shall affect any right that the Lender may otherwise have to bring any action or  proceeding relating to this Agreement or any other Loan Document against any Loan Party or its  properties in the courts of any jurisdiction.  (c) Each Loan Party hereby irrevocably and unconditionally waives, to the fullest  extent it may legally and effectively do so, any objection which it may now or hereafter have to the  laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any  other Loan Document in any court referred to in paragraph (b) of this Section.  Each of the parties  hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an  inconvenient forum to the maintenance of such action or proceeding in any such court.  

 

76  743955026  (d) Each party to this Agreement irrevocably consents to service of process in the  manner provided for notices in Section 8.01.  Nothing in this Agreement or any other Loan  Document will affect the right of any party to this Agreement to serve process in any other manner  permitted by law.  SECTION 8.10.WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO  THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A  TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF  OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE  TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON  CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT  NO REPRESENTATIVE OR OTHER AGENT (INCLUDING ANY ATTORNEY) OF ANY 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 AND THE OTHER PARTIES HERETO HAVE BEEN  INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL  WAIVERS AND CERTIFICATIONS IN THIS SECTION.  SECTION 8.11.Headings.  Article and Section headings and the Table of Contents used herein are  for convenience of reference only, are not part of this Agreement and shall not affect the construction of,  or be taken into consideration in interpreting, this Agreement.  SECTION 8.12.Confidentiality.  The Lender agrees to maintain the confidentiality of the  Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’  directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being  understood that the Persons to whom such disclosure is made will be informed of the confidential nature of  such Information and will be subject to customary confidentiality obligations of professional practice or  who agree to be bound by the terms of this paragraph (or language substantially similar to this paragraph)),  (b) to the extent requested by any Governmental Authority (including any self-regulatory authority, such  as the National Association of Insurance Commissioners), (c) to the extent required by any Requirement of  Law or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection  with the exercise of any remedies hereunder or under any other Loan Document or any suit, action or  proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder  or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this  Section, to (x) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its  rights or obligations under this Agreement or (y) any actual or prospective counterparty (or its advisors) to  any swap or derivative transaction relating to the Loan Parties and their obligations, (g) with the consent of  the Borrower Representative, (h) on a confidential basis to (1) any rating agency in connection with rating  the Company or its Subsidiaries or the credit facilities provided for herein or (2)  the CUSIP Service Bureau  or any similar agency in connection with the issuance and monitoring of identification numbers with respect  to the credit facilities provided for herein or (j) to the extent such Information (x) becomes publicly  available other than as a result of a breach of this Section or (y) becomes available to the Lender on a non- confidential basis from a source other than the Borrowers.  For the purposes of this Section, “Information”  means all information received from the Borrowers relating to the Borrowers or their business, other than  any such information that is available to the Lender on a non-confidential basis prior to disclosure by the  Borrowers; provided that, in the case of information received from the Borrowers after the date hereof, such  information is clearly identified at the time of delivery as confidential.  Any Person required to maintain  the confidentiality of Information as provided in this Section shall be considered to have complied with its  obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of  such Information as such Person would accord to its own confidential information.  

 

77  743955026  SECTION 8.13.Nonreliance; Violation of Law.  The Lender hereby represents that it is not relying  on or looking to any margin stock (as defined in Regulation U) for the repayment of the Borrowings  provided for herein.  Anything contained in this Agreement to the contrary notwithstanding, the Lender  shall not be obligated to extend credit to the Borrowers in violation of any Requirement of Law.  SECTION 8.14.USA PATRIOT Act.  The Lender is subject to the requirements of the USA  PATRIOT Act and hereby notifies each Loan Party that pursuant to the requirements of the USA PATRIOT  Act, it is required to obtain, verify and record information that identifies such Loan Party, which information  includes the name and address of such Loan Party and other information that will allow the Lender to  identify such Loan Party in accordance with the USA PATRIOT Act.  SECTION 8.15.Disclosure.  Each Loan Party, hereby acknowledges and agrees that the Lender  and/or its Affiliates from time to time may hold investments in, make other loans to or have other  relationships with, any of the Loan Parties and their respective Affiliates.   SECTION 8.16.Interest Rate Limitation.  Notwithstanding anything herein to the contrary, if at any  time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are  treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the  maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or  reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in  respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the  Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect  of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the  interest and Charges payable to the Lender in respect of other Loans or periods shall be increased (but not  above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the  NYFRB Rate to the date of repayment, shall have been received by the Lender.  SECTION 8.17.No Fiduciary Duty, etc.    (a) Each Borrower acknowledges and agrees, and acknowledges its Subsidiaries’  understanding, that the Lender will not have any obligations except those obligations expressly set  forth herein and in the other Loan Documents and the Lender is acting solely in the capacity of an  arm’s length contractual counterparty to the Borrowers with respect to the Loan Documents and  the transactions contemplated herein and therein and not as a financial advisor or a fiduciary to, or  an agent of, the Borrowers or any other person.  Each Borrower agrees that it will not assert any  claim against the Lender based on an alleged breach of fiduciary duty by the Lender in connection  with this Agreement and the transactions contemplated hereby.  Additionally, each Borrower  acknowledges and agrees that the Lender is not advising the Borrowers as to any legal, tax,  investment, accounting, regulatory or any other matters in any jurisdiction.  The Borrowers shall  consult with its own advisors concerning such matters and shall be responsible for making its own  independent investigation and appraisal of the transactions contemplated  herein or in the other  Loan Documents, and the Lender shall have no responsibility or liability to any Borrower with  respect thereto.  (b) Each Borrower further acknowledges and agrees, and acknowledges its  Subsidiaries’ understanding, that the Lender, together with its Affiliates, is a full service securities  or banking firm engaged in securities trading and brokerage activities as well as providing  investment banking and other financial services.  In the ordinary course of business, the Lender  may provide investment banking and other financial services to, and/or acquire, hold or sell, for its  own accounts and the accounts of customers, equity, debt and other securities and financial  instruments (including bank loans and other obligations) of, the Borrowers and other companies  

 

78  743955026  with which the Borrowers may have commercial or other relationships.  With respect to any  securities and/or financial instruments so held by the Lender or any of its customers, all rights in  respect of such securities and financial instruments, including any voting rights, will be exercised  by the holder of the rights, in its sole discretion.  (c) In addition, each Borrower acknowledges and agrees, and acknowledges its  Subsidiaries’ understanding, that the Lender and its Affiliates may be providing debt financing,  equity capital or other services (including financial advisory services) to other companies in respect  of which the Borrowers may have conflicting interests regarding the transactions described herein  and otherwise.  The Lender will not use confidential information obtained from any Borrower by  virtue of the transactions contemplated by the Loan Documents or its other relationships with the  Borrowers in connection with the performance by the Lender of services for other companies, and  the Lender will not furnish any such information to other companies.  Each Borrower also  acknowledges that the Lender has no obligation to use in connection with the transactions  contemplated by the Loan Documents, or to furnish to any Borrower, confidential information  obtained from other companies.  SECTION 8.18.Marketing Consent.  The Borrowers hereby authorize the Lender, at Lender’s sole  expense, and without any prior approval by or compensation to the Borrowers, to include the Borrowers’  name and logo in advertising, marketing, tombstones, case studies and training materials, posted on the  Internet (including social media), on the Lender’s Intranet, in pitchbooks and materials sent to prospective  and existing customers, in newspapers or journals and to give such other publicity to this agreement and  any related products and services, as Lender may from time to time determine in its sole discretion.  ARTICLE IX Loan Guaranty  SECTION 9.01.Guaranty.  Each Loan Guarantor (other than those that have delivered a separate  Guaranty) hereby agrees that it is jointly and severally liable for, and, as a primary obligor and not merely  as surety, absolutely and unconditionally and irrevocably guarantees to the Secured Parties, the prompt  payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter,  of the Secured Obligations and all reasonable and documented out-of-pocket costs and expenses, including,  without limitation, all court costs and documented out-of-pocket outside counsel fees (limited to one  primary counsel and one local counsel in each reasonably necessary jurisdiction) and reasonable and  documented out-of-pocket expenses paid or incurred by the Lender in endeavoring to collect all or any part  of the Secured Obligations from, or in prosecuting any action against, any Borrower, any Loan Guarantor  or any other guarantor of all or any part of the Secured Obligations (such costs and expenses, together with  the Secured Obligations, collectively the “Guaranteed Obligations”); provided, however, that the definition  of “Guaranteed Obligations” shall not create any guarantee by any Loan Guarantor of (or grant of security  interest by any Loan Guarantor to support, as applicable) any Excluded Swap Obligations of such Loan  Guarantor for purposes of determining any obligations of any Loan Guarantor).  Each Loan Guarantor  further agrees that the Guaranteed Obligations may be extended or renewed in whole or in part without  notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such  extension or renewal.  All terms of this Loan Guaranty apply to and may be enforced by or on behalf of any  domestic or foreign branch or Affiliate of the Lender that extended any portion of the Guaranteed  Obligations.  SECTION 9.02.Guaranty of Payment.  This Loan Guaranty is a guaranty of payment and not of  collection.  Each Loan Guarantor waives any right to require the Lender to sue any Borrower, any Loan  Guarantor, any other guarantor of, or any other Person obligated for, all or any part of the Guaranteed  

 

79  743955026  Obligations (each, an “Obligated Party”), or otherwise to enforce its payment against any collateral securing  all or any part of the Guaranteed Obligations.  SECTION 9.03.No Discharge or Diminishment of Loan Guaranty.    (a) Except as otherwise provided for herein, the obligations of each Loan Guarantor  hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment  or termination for any reason (other than the Payment in Full of the Guaranteed Obligations),  including:  (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration or  compromise of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change  in the corporate existence, structure or ownership of any Borrower or any other Obligated Party  liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or  other similar proceeding affecting any Obligated Party or their assets, or any resulting release or  discharge of any obligation of any Obligated Party; or (iv) the existence of any claim, setoff or  other rights which any Loan Guarantor may have at any time against any Obligated Party, the  Lender or any other Person, whether in connection herewith or in any unrelated transactions.  (b) The obligations of each Loan Guarantor hereunder are not subject to any defense  or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality  or unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of  applicable law or regulation purporting to prohibit payment by any Obligated Party, of the  Guaranteed Obligations or any part thereof.  (c) Further, the obligations of any Loan Guarantor hereunder are not discharged or  impaired or otherwise affected by: (i) the failure of the Lender to assert any claim or demand or to  enforce any remedy with respect to all or any part of the Guaranteed Obligations; (ii) any waiver  or modification of or supplement to any provision of any agreement relating to the Guaranteed  Obligations; (iii) any release, non-perfection or invalidity of any indirect or direct security for the  obligations of any Borrower for all or any part of the Guaranteed Obligations or any obligations of  any other Obligated Party liable for any of the Guaranteed Obligations; (iv) any action or failure to  act by the Lender with respect to any collateral securing any part of the Guaranteed Obligations; or  (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the  Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner  or to any extent vary the risk of such Loan Guarantor or that would otherwise operate as a discharge  of any Loan Guarantor as a matter of law or equity (other than the Payment in Full of the Guaranteed  Obligations).  SECTION 9.04.Defenses Waived.  To the fullest extent permitted by applicable law, each Loan  Guarantor hereby waives any defense based on or arising out of any defense of any Borrower or any Loan  Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause, or the  cessation from any cause of the liability of any Borrower, any Loan Guarantor or any other Obligated Party,  other than the Payment in Full of the Guaranteed Obligations.  Without limiting the generality of the  foregoing, each Loan Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and,  to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at  any time any action be taken by any Person against any Obligated Party or any other Person.  Each Loan  Guarantor confirms that it is not a surety under any state law and shall not raise any such law as a defense  to its obligations hereunder.  The Lender may, at its election, foreclose on any Collateral held by it by one  or more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure or  otherwise act or fail to act with respect to any collateral securing all or a part of the Guaranteed Obligations,  compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any  Obligated Party or exercise any other right or remedy available to it against any Obligated Party, without  

 

80  743955026  affecting or impairing in any way the liability of such Loan Guarantor under this Loan Guaranty, except to  the extent the Guaranteed Obligations have been Paid in Full.  To the fullest extent permitted by applicable  law, each Loan Guarantor waives any defense arising out of any such election even though that election  may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation  or other right or remedy of any Loan Guarantor against any Obligated Party or any security.  SECTION 9.05.Rights of Subrogation.  No Loan Guarantor will assert any right, claim or cause of  action, including, without limitation, a claim of subrogation, contribution or indemnification that it has  against any Obligated Party, or any collateral, until the Loan Parties and the Loan Guarantors have fully  performed all their obligations to the Lender.  SECTION 9.06.Reinstatement; Stay of Acceleration.  If at any time any payment of any portion of  the Guaranteed Obligations (including a payment effected through exercise of a right of setoff) is rescinded,  or must otherwise be restored or returned upon the insolvency, bankruptcy or reorganization of any  Borrower or otherwise (including pursuant to any settlement entered into by a Secured Party in its  discretion), each Loan Guarantor’s obligations under this Loan Guaranty with respect to that payment shall  be reinstated at such time as though the payment had not been made and whether or not the Lender is in  possession of this Loan Guaranty.  If acceleration of the time for payment of any of the Guaranteed  Obligations is stayed upon the insolvency, bankruptcy or reorganization of any Borrower, all such amounts  otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations  shall nonetheless be payable by the Loan Guarantors forthwith on demand by the Lender.  SECTION 9.07.Information.  Each Loan Guarantor assumes all responsibility for being and  keeping itself informed of the Borrowers’ financial condition and assets, and of all other circumstances  bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the  risks that each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that the Lender  shall not have any duty to advise any Loan Guarantor of information known to it regarding those  circumstances or risks.  SECTION 9.08.Termination.  The Lender may continue to make loans or extend credit to the  Borrowers based on this Loan Guaranty until five (5) days after it receives written notice of termination  from any Loan Guarantor.  Notwithstanding receipt of any such notice, each Loan Guarantor will continue  to be liable to the Lender for any Guaranteed Obligations created, assumed or committed to prior to the  fifth day after receipt of the notice, and all subsequent renewals, extensions, modifications and amendments  with respect to, or substitutions for, all or any part of such Guaranteed Obligations.  Nothing in this Section  9.08 shall be deemed to constitute a waiver of, or eliminate, limit, reduce or otherwise impair any rights or  remedies the Lender may have in respect of, any Default or Event of Default that shall exist under Section  7.01 hereof as a result of any such notice of termination.  SECTION 9.09.Taxes.  Each payment of the Guaranteed Obligations will be made by each Loan  Guarantor without withholding for any Taxes, unless such withholding is required by law.  If any Loan  Guarantor determines, in its sole discretion exercised in good faith, that it is so required to withhold Taxes,  then such Loan Guarantor may so withhold and shall timely pay the full amount of withheld Taxes to the  relevant Governmental Authority in accordance with applicable law.  If such Taxes are Indemnified Taxes,  then the amount payable by such Loan Guarantor shall be increased as necessary so that, net of such  withholding (including such withholding applicable to additional amounts payable under this Section), the  Lender receives the amount it would have received had no such withholding been made.  SECTION 9.10.Maximum Liability.  Notwithstanding any other provision of this Loan Guaranty,  the amount guaranteed by each Loan Guarantor hereunder shall be limited to the extent, if any, required so  that its obligations hereunder shall not be subject to avoidance under Section 548 of the Bankruptcy Code  

 

81  743955026  or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act,  Uniform Voidable Transactions Act or similar statute or common law.  In determining the limitations, if  any, on the amount of any Loan Guarantor’s obligations hereunder pursuant to the preceding sentence, it is  the intention of the parties hereto that any rights of subrogation, indemnification or contribution which such  Loan Guarantor may have under this Loan Guaranty, any other agreement or applicable law shall be taken  into account.  SECTION 9.11.Contribution.  (a) To the extent that any Loan Guarantor shall make a payment under this Loan  Guaranty (a “Guarantor Payment”) which, taking into account all other Guarantor Payments then  previously or concurrently made by any other Loan Guarantor, exceeds the amount which  otherwise would have been paid by or attributable to such Loan Guarantor if each Loan Guarantor  had paid the aggregate Guaranteed Obligations satisfied by such Guarantor Payment in the same  proportion as such Loan Guarantor’s “Allocable Amount” (as defined below) (as determined  immediately prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of each  of the Loan Guarantors as determined immediately prior to the making of such Guarantor Payment,  then, following payment in full in cash of the Guarantor Payment, the Payment in Full of the  Guaranteed Obligations and the termination of this Agreement, such Loan Guarantor shall be  entitled to receive contribution and indemnification payments from, and be reimbursed by, each  other Loan Guarantor for the amount of such excess, pro rata based upon their respective Allocable  Amounts in effect immediately prior to such Guarantor Payment.  (b) As of any date of determination, the “Allocable Amount” of any Loan Guarantor  shall be equal to the excess of the fair saleable value of the property of such Loan Guarantor over  the total liabilities of such Loan Guarantor (including the maximum amount reasonably expected  to become due in respect of contingent liabilities, calculated, without duplication, assuming each  other Loan Guarantor that is also liable for such contingent liability pays its ratable share thereof),  giving effect to all payments made by other Loan Guarantors as of such date in a manner to  maximize the amount of such contributions.  (c) This Section 9.11 is intended only to define the relative rights of the Loan  Guarantors, and nothing set forth in this Section 9.11 is intended to or shall impair the obligations  of the Loan Guarantors, jointly and severally, to pay any amounts as and when the same shall  become due and payable in accordance with the terms of this Loan Guaranty.  (d) The parties hereto acknowledge that the rights of contribution and indemnification  hereunder shall constitute assets of the Loan Guarantor or Loan Guarantors to which such  contribution and indemnification is owing.  (e) The rights of the indemnifying Loan Guarantors against other Loan Guarantors  under this Section 9.11 shall be exercisable upon the Payment in Full of the Guaranteed Obligations  and the termination of this Agreement.  SECTION 9.12.Liability Cumulative.  The liability of each Loan Party as a Loan Guarantor under  this Article IX is in addition to and shall be cumulative with all liabilities of each Loan Party to the Lender  under this Agreement and the other Loan Documents to which such Loan Party is a party or in respect of  any obligations or liabilities of the other Loan Parties, without any limitation as to amount, unless the  instrument or agreement evidencing or creating such other liability specifically provides to the contrary.  

 

82  743955026  SECTION 9.13.Keepwell.  Each Qualified ECP Guarantor hereby jointly and severally absolutely,  unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from  time to time by each other Loan Party to honor all of its obligations under this Guarantee in respect of a  Swap Obligation (provided, however, that each Qualified ECP Guarantor shall only be liable under this  Section 9.13 for the maximum amount of such liability that can be hereby incurred without rendering its  obligations under this Section 9.13 or otherwise under this Loan Guaranty voidable under applicable law  relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). Except as  otherwise provided herein, the obligations of each Qualified ECP Guarantor under this Section 9.13 shall  remain in full force and effect until the termination of all Swap Obligations.  Each Qualified ECP Guarantor  intends that this Section 9.13 constitute, and this Section 9.13 shall be deemed to constitute, a “keepwell,  support, or other agreement” for the benefit of each other Loan Party for all purposes of Section  1a(18)(A)(v)(II) of the Commodity Exchange Act.  ARTICLE X The Borrower Representative.  SECTION 10.01. Appointment; Nature of Relationship.  Energy Recovery, Inc. is hereby  appointed by each of the Borrowers as its contractual representative (herein referred to as the “Borrower  Representative” hereunder and under each other Loan Document, and each of the Borrowers irrevocably  authorizes the Borrower Representative to act as the contractual representative of such Borrower with the  rights and duties expressly set forth herein and in the other Loan Documents.  The Borrower Representative  agrees to act as such contractual representative upon the express conditions contained in this Article X.   Additionally, the Borrowers hereby appoint the Borrower Representative as their agent to receive all of the  proceeds of the Loans in the Funding Account(s), at which time the Borrower Representative shall promptly  disburse such Loans to the appropriate Borrower(s), provided that, in the case of a Revolving Loan, such  amount shall not exceed Availability.  The Lender, and its respective officers, directors, agents or  employees, shall not be liable to the Borrower Representative or any Borrower for any action taken or  omitted to be taken by the Borrower Representative or the Borrowers pursuant to this Section 10.01.  SECTION 10.02. Powers.  The Borrower Representative shall have and may exercise such  powers under the Loan Documents as are specifically delegated to the Borrower Representative by the  terms of each thereof, together with such powers as are reasonably incidental thereto.  The Borrower  Representative shall have no implied duties to the Borrowers, or any obligation to the Lender to take any  action thereunder except any action specifically provided by the Loan Documents to be taken by the  Borrower Representative.  SECTION 10.03. Employment of Agents.  The Borrower Representative may execute any  of its duties as the Borrower Representative hereunder and under any other Loan Document by or through  authorized officers.  SECTION 10.04. Notices.  Each Borrower shall immediately notify the Borrower  Representative of the occurrence of any Default or Event of Default hereunder, refer to this Agreement,  describe such Default or Event of Default, and state that such notice is a “notice of default”.   In the event  that the Borrower Representative receives such a notice, the Borrower Representative shall give prompt  notice thereof to the Lender.  Any notice provided to the Borrower Representative hereunder shall constitute  notice to each Borrower on the date received by the Borrower Representative.  SECTION 10.05. Successor Borrower Representative.  Upon the prior written consent of the  Lender, the Borrower Representative may resign at any time, such resignation to be effective upon the  appointment of a successor Borrower Representative.    

 

83  743955026  SECTION 10.06. Execution of Loan Documents; Borrowing Base Certificate.  The  Borrowers hereby empower and authorize the Borrower Representative, on behalf of the Borrowers, to  execute and deliver to the Lender the Loan Documents and all related agreements, certificates, documents,  or instruments as shall be necessary or appropriate to effect the purposes of the Loan Documents, including  the Compliance Certificates.  Each Borrower agrees that any action taken by the Borrower Representative  or the Borrowers in accordance with the terms of this Agreement or the other Loan Documents, and the  exercise by the Borrower Representative of its powers set forth therein or herein, together with such other  powers that are reasonably incidental thereto, shall be binding upon all of the Borrowers.  SECTION 10.07. Reporting.  Each Borrower hereby agrees that such Borrower shall furnish  promptly after each fiscal month to the Borrower Representative a copy of its Borrowing Base Certificate  and any other certificate or report required hereunder or requested by the Borrower Representative on which  the Borrower Representative shall rely to prepare the Compliance Certificates required pursuant to the  provisions of this Agreement.  [Signatures Immediately Follow]  

 

 

 

 

 

SCHEDULE 3.05  Properties etc.  Real Property (Leased):   1. 1717 Doolittle Drive and 2250 Williams Street, San Leandro, California 94577.   2. 2000 N. Chabot Court, Tracy, California 95376.   3. 25430 Clay Road, Katy, Texas 77493.  Patent Registrations and Applications:  Patent # App. No. Title Jurisdiction  Owner of   Record  ERI Reference  9,945,216 14/505,885  FRAC SYSTEM WITH HYDRAULIC ENERGY  TRANSFER SYSTEM  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:10  10,767,457 15/935,478  FRAC SYSTEM WITH HYDRAULIC ENERGY  TRANSFER SYSTEM  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:10-1  17/013,318  FRAC SYSTEM WITH HYDRAULIC ENERGY  TRANSFER SYSTEM  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:10-2  17/152,612  HYDRAULIC ENERGY TRANSFER SYSTEM WITH  FLUID MIXING REDUCTION  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:10-3  2014331601 2014331601  Isobaric pressure exchanger protection for hydraulic  fracturing fluid pumps  AUSTRALIA  ENERGY  RECOVERY,  INC.  ERI:10AU  2,932,691 2,932,691  Isobaric pressure exchanger protection for hydraulic  fracturing fluid pumps  CANADA  ENERGY  RECOVERY,  INC.  ERI:10CA  3052814 14787331.9  ISOBARIC PRESSURE EXCHANGER  PROTECTION FOR HYDRAULIC FRACTURING  FLUID PUMPS  SWITZERLAND  ENERGY  RECOVERY,  INC.  ERI:10CH  106103890 201480066042.3  ISOBARIC PRESSURE EXCHANGER  PROTECTION FOR HYDRAULIC FRACTURING  FLUID PUMPS  CHINA  ENERGY  RECOVERY,  INC.  ERI:10CN  3052814 14787331.9  ISOBARIC PRESSURE EXCHANGER  PROTECTION FOR HYDRAULIC FRACTURING  FLUID PUMPS  DENMARK  ENERGY  RECOVERY,  INC.  ERI:10DK  3052814 14787331.9  ISOBARIC PRESSURE EXCHANGER  PROTECTION FOR HYDRAULIC FRACTURING  FLUID PUMPS  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:10EP  3052814 14787331.9  ISOBARIC PRESSURE EXCHANGER  PROTECTION FOR HYDRAULIC FRACTURING  FLUID PUMPS  UNITED  KINGDOM  ENERGY  RECOVERY,  INC.  ERI:10GB  370550  MX/a/2016/00430 7  Isobaric pressure exchanger protection for hydraulic  fracturing fluid pumps  MEXICO  ENERGY  RECOVERY,  INC.  ERI:10MX  MX/a/2019/00967 2  Isobaric pressure exchanger protection for hydraulic  fracturing fluid pumps  MEXICO  ENERGY  RECOVERY,  INC.  ERI:10MX-1  3052814 14787331.9  ISOBARIC PRESSURE EXCHANGER  PROTECTION FOR HYDRAULIC FRACTURING  FLUID PUMPS  NORWAY ENERGY  RECOVERY,  INC.  ERI:10NO  

 

3052814 14787331.9  ISOBARIC PRESSURE EXCHANGER  PROTECTION FOR HYDRAULIC FRACTURING  FLUID PUMPS  POLAND  ENERGY  RECOVERY,  INC.  ERI:10PL  RU2642191C2 2016117063  Isobaric pressure exchanger protection for hydraulic  fracturing fluid pumps  RUSSIA  ENERGY  RECOVERY,  INC.  ERI:10RU  9,835,018 14/586,545  Rotary isobaric pressure exchanger system with  lubrication system  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:11  10,669,831 15/830,908  ROTARY ISOBARIC PRESSURE EXCHANGER  SYSTEM WITH LUBRICATION SYSTEM  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:11-1  373256  MX/a/2016/00856 0  ROTARY ISOBARIC PRESSURE EXCHANGER  SYSTEM WITH LUBRICATION  MEXICO  ENERGY  RECOVERY,  INC.  ERI:11MX  9,739,128 14/586,565  Rotary isobaric pressure exchanger system with flush  system  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:12  10,167,712 15/670,590  ROTARY ISOBARIC PRESSURE EXCHANGER  SYSTEM WITH FLUSH SYSTEM  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:12-1  10,167,710 14/684,118  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:13  2015243195 2015243195  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  AUSTRALIA  ENERGY  RECOVERY,  INC.  ERI:13AU  2,944,791 2,944,791  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  CANADA  ENERGY  RECOVERY,  INC.  ERI:13CA  ZL  201580029506.8  201580029506.8  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  CHINA  ENERGY  RECOVERY,  INC.  ERI:13CN  3129659 15719357.4  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  DENMARK  ENERGY  RECOVERY,  INC.  ERI:13D  602015066620.8 15719357.4  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  GERMANY  ENERGY  RECOVERY,  INC.  ERI:13DE  3129659 15719357.4  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:13EP  3129659 15719357.4  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  FRANCE  ENERGY  RECOVERY,  INC.  ERI:13FR  6420363 2016-561610  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  JAPAN  ENERGY  RECOVERY,  INC.  ERI:13JP  MX/a/2016/01332 0  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  MEXICO  ENERGY  RECOVERY,  INC.  ERI:13MX  9,695,795 13/450,794 Pressure Exchange Noise Reduction UNITED STATES ENERGY  RECOVERY,  INC.  ERI:15  2850285 13779074.7 Pressure Exchange Noise Reduction SWITZERLAND  ENERGY  RECOVERY,  INC.  ERI:15CH  ZL201380032337. 4  201380032337.4 Pressure Exchange Noise Reduction CHINA  ENERGY  RECOVERY,  INC.  ERI:15CN  2850285 13779074.7 Pressure Exchange Noise Reduction DENMARK  ENERGY  RECOVERY,  INC.  ERI:15DK  

 

2850285 13779074.7 Pressure Exchange Noise Reduction  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:15EP  2850285 13779074.7 Pressure Exchange Noise Reduction SPAIN  ENERGY  RECOVERY,  INC.  ERI:15ES  1772103 2014-7032474 Pressure Exchange Noise Reduction SOUTH KOREA  ENERGY  RECOVERY,  INC.  ERI:15KR  8,742,604 13/489,708  SYSTEMS AND METHODS FOR COMBINED  FLOW CONTROL AND ELECTRICITY  GENERATION  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:16  1211021/270 001679-2011  Efficient Methods for Operation with High Pressure  Liquids  PERU  ENERGY  RECOVERY,  INC.  ERI:17PE  8,075,281 12/407,649 ROTARY PRESSURE TRANSFER DEVICE UNITED STATES ENERGY  RECOVERY,  INC.  ERI:18  302/2009 Rotary Pressure Transfer Device  UNITED ARAB  EMR  ENERGY  RECOVERY,  INC.  ERI:18AE  38/2009 Rotary Pressure Transfer Device BAHRAIN  ENERGY  RECOVERY,  INC.  ERI:18BH  2076678 07843320.8 Rotary Pressure Transfer Device SWITZERLAND  ENERGY  RECOVERY,  INC.  ERI:18CH  ZL 20078003740 200780037402.7 Rotary Pressure Transfer Device CHINA  ENERGY  RECOVERY,  INC.  ERI:18CN  2076678 07843320.8 Rotary Pressure Transfer Device DENMARK  ENERGY  RECOVERY,  INC.  ERI:18DK  1211021/275 Rotary Pressure Transfer Device EGYPT  ENERGY  RECOVERY,  INC.  ERI:18EG  2076678 07843320.8 Rotary Pressure Transfer Device  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:18EP  2076678 07843320.8 Rotary Pressure Transfer Device SPAIN  ENERGY  RECOVERY,  INC.  ERI:18ES  2076678 07843320.8 Rotary Pressure Transfer Device FRANCE  ENERGY  RECOVERY,  INC.  ERI:18FR  2076678 07843320.8 Rotary Pressure Transfer Device  UNITED  KINGDOM  ENERGY  RECOVERY,  INC.  ERI:18GB  197798 197798 Rotary Pressure Transfer Device ISRAEL  ENERGY  RECOVERY,  INC.  ERI:18IL  306747  2326/CHENP/200 9  Rotary Pressure Transfer Device INDIA  ENERGY  RECOVERY,  INC.  ERI:18IN  1506718 2009-7009052 Rotary Pressure Transfer Device SOUTH KOREA  ENERGY  RECOVERY,  INC.  ERI:18KR  343320 20091581 Rotary Pressure Transfer Device NORWAY ENERGY  RECOVERY,  INC.  ERI:18NO  193872 201306788-9 Rotary Pressure Transfer Device SINGAPORE  ENERGY  RECOVERY,  INC.  ERI:18SG-1  

 

7,997,853 12/754,013 Rotary pressure transfer device with improved flow UNITED STATES ENERGY  RECOVERY,  INC.  ERI:20  413/2010 Rotary Pressure Transfer Device with Improved Flow  UNITED ARAB  EMR  ENERGY  RECOVERY,  INC.  ERI:20AE  N/A Rotary Pressure Transfer Device with Improved Flow AUSTRALIA  ENERGY  RECOVERY,  INC.  ERI:20AU  ZL 20088011107 200880111074.5 Rotary Pressure Transfer Device with Improved Flow CHINA  ENERGY  RECOVERY,  INC.  ERI:20CN  N/A Rotary Pressure Transfer Device with Improved Flow EGYPT  ENERGY  RECOVERY,  INC.  ERI:20EG  2383394 201090014 Rotary Pressure Transfer Device with Improved Flow SPAIN  ENERGY  RECOVERY,  INC.  ERI:20ES  204758 204758 Rotary Pressure Transfer Device with Improved Flow ISRAEL  ENERGY  RECOVERY,  INC.  ERI:20IL  323659  1825/CHENP/201 0  Rotary Pressure Transfer Device with Improved Flow INDIA  ENERGY  RECOVERY,  INC.  ERI:20IN  1501979 2010-7009751 Rotary Pressure Transfer Device with Improved Flow SOUTH KOREA  ENERGY  RECOVERY,  INC.  ERI:20KR  PA 52/2009 PA 52/2009 Rotary Pressure Transfer Device with Improved Flow KUWAIT  ENERGY  RECOVERY,  INC.  ERI:20KW  314567  MX/a/2010/00366 1  Rotary Pressure Transfer Device with Improved Flow MEXICO  ENERGY  RECOVERY,  INC.  ERI:20MX  3237 109300206 Rotary Pressure Transfer Device with Improved Flow SAUDI ARABIA  ENERGY  RECOVERY,  INC.  ERI:20SA  160101 201002113-7 Rotary Pressure Transfer Device with Improved Flow SINGAPORE  ENERGY  RECOVERY,  INC.  ERI:20SG  7,871,522 12/268,225 HYBRID RO/PRO SYSTEM UNITED STATES ENERGY  RECOVERY,  INC.  ERI:22  7,201,557 11/120,387 ROTARY PRESSURE EXCHANGER UNITED STATES ENERGY  RECOVERY,  INC.  ERI:23  RE42,432 12/237,275 ROTARY PRESSURE EXCHANGER UNITED STATES ENERGY  RECOVERY,  INC.  ERI:23-1  1719920 06008882.0 ROTARY PRESSURE EXCHANGER SWITZERLAND  ENERGY  RECOVERY,  INC.  ERI:23CH  1719920 06008882.0 ROTARY PRESSURE EXCHANGER GERMANY  ENERGY  RECOVERY,  INC.  ERI:23DE  1719920 06008882.0 ROTARY PRESSURE EXCHANGER DENMARK  ENERGY  RECOVERY,  INC.  ERI:23DK  1719920 06008882.0 ROTARY PRESSURE EXCHANGER  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:23EP  1719920 06008882.0 ROTARY PRESSURE EXCHANGER SPAIN  ENERGY  RECOVERY,  INC.  ERI:23ES  

 

1719920 06008882.0 ROTARY PRESSURE EXCHANGER FRANCE  ENERGY  RECOVERY,  INC.  ERI:23FR  1719920 06008882.0 ROTARY PRESSURE EXCHANGER  UNITED  KINGDOM  ENERGY  RECOVERY,  INC.  ERI:23GB  1719920 06008882.0 ROTARY PRESSURE EXCHANGER NETHERLANDS ENERGY  RECOVERY,  INC.  ERI:23NL  10,138,907 13/518,850 ROTARY ENERGY RECOVERY DEVICE UNITED STATES ENERGY  RECOVERY,  INC.  ERI:26  2516954 10840017.7 ROTARY ENERGY RECOVERY DEVICE SWITZERLAND  ENERGY  RECOVERY,  INC.  ERI:26CH  ZL201080062845 201080062845.3 ROTARY ENERGY RECOVERY DEVICE CHINA  ENERGY  RECOVERY,  INC.  ERI:26CN  602010063495.7 10840017.7 ROTARY ENERGY RECOVERY DEVICE GERMANY  ENERGY  RECOVERY,  INC.  ERI:26DE  2516954 10840017.7 ROTARY ENERGY RECOVERY DEVICE DENMARK  ENERGY  RECOVERY,  INC.  ERI:26DK  2516954 10840017.7 ROTARY ENERGY RECOVERY DEVICE  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:26EP  1813259 2012-7018907 ROTARY ENERGY RECOVERY DEVICE SOUTH KOREA  ENERGY  RECOVERY,  INC.  ERI:26KR  8,834,028 13/335,102  DEBRIS RESISTANT THRUST BEARING  ASSEMBLY FOR HIGH SPEED HYDRAULIC  CENTRIFUGAL TURBINES AND PUMPS  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:3  9,683,574 14/468,989  DEBRIS RESISTANT THRUST BEARING  ASSEMBLY FOR HIGH SPEED HYDRAULIC  CENTRIFUGAL TURBINES AND PUMPS  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:3-1  9,759,054 14/797,953  SYSTEM AND METHOD FOR UTILIZING  INTEGRATED PRESSURE EXCHANGE  MANIFOLD IN HYDRAULIC FRACTURING  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:35  2,956,574 2,956,574 SYSTEM AND METHOD FOR FLUID HANDLING CANADA  ENERGY  RECOVERY,  INC.  ERI:35CA  MX/a/2017/00133 5  SYSTEM AND METHOD FOR FLUID HANDLING MEXICO  ENERGY  RECOVERY,  INC.  ERI:35MX  11,047,398 14/818,219  SYSTEMS AND METHODS FOR REPAIRING  FLUID HANDLING EQUIPMENT  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:39  17/329,733  SYSTEMS AND METHODS FOR REPAIRING  FLUID HANDLING EQUIPMENT  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:39D  15753261.5  SYSTEMS AND METHODS FOR REPAIRING  FLUID HANDLING EQUIPMENT  DENMARK  ENERGY  RECOVERY,  INC.  ERI:39DK  15753261.5  SYSTEMS AND METHODS FOR REPAIRING  FLUID HANDLING EQUIPMENT  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:39EP  10,119,379 14/813,850  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:45  2015296085 2015296085  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  AUSTRALIA  ENERGY  RECOVERY,  INC.  ERI:45AU  

 

2,956,819 2,956,819  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  CANADA  ENERGY  RECOVERY,  INC.  ERI:45CA  107076172 201580051507.2  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  CHINA  ENERGY  RECOVERY,  INC.  ERI:45CN  3175122 15756707.4  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  DENMARK  ENERGY  RECOVERY,  INC.  ERI:45DK  3175122 15756707.4  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:45EP  MX/a/2017/00133 7  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  MEXICO  ENERGY  RECOVERY,  INC.  ERI:45MX  2655434 2017106274  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  RUSSIA  ENERGY  RECOVERY,  INC.  ERI:45RU  7593 517380807  PRESSURE EXCHANGE SYSTEM WITH MOTOR  SYSTEM  SAUDI ARABIA  ENERGY  RECOVERY,  INC.  ERI:45SA  9,945,210 14/819,229  PRESSURE EXCHANGER SYSTEM WITH  INTEGRAL PRESSURE BALANCING SYSTEM  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:48  10,323,485 15/914,144  PRESSURE EXCHANGER SYSTEM WITH  INTEGRAL PRESSURE BALANCING SYSTEM  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:48-1  9,604,889 14/074,530  ISOBARIC PRESSURE EXCHANGER IN AMINE  GAS PROCESSING  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:5  9,976,573 14/819,008  SYSTEM AND METHOD FOR IMPROVED DUCT  PRESSURE TRANSFER IN PRESSURE EXCHANGE  SYSTEM  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:53  10,422,352 15/972,931  SYSTEM AND METHOD FOR IMPROVED DUCT  PRESSURE TRANSFER IN PRESSURE EXCHANGE  SYSTEM  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:53-1  2,957,284 2,957,284  SYSTEM AND METHOD FOR IMPROVED DUCT  PRESSURE TRANSFER IN PRESSURE EXCHANGE  SYSTEM  CANADA  ENERGY  RECOVERY,  INC.  ERI:53CA  3177837 15753555.0  SYSTEM AND METHOD FOR IMPROVED DUCT  PRESSURE TRANSFER IN PRESSURE EXCHANGE  SYSTEM  SWITZERLAND  ENERGY  RECOVERY,  INC.  ERI:53CH  201580052343.5 201580052343.5  SYSTEM AND METHOD FOR IMPROVED DUCT  PRESSURE TRANSFER IN PRESSURE EXCHANGE  SYSTEM  CHINA  ENERGY  RECOVERY,  INC.  ERI:53CN  3177837 15753555.0  SYSTEM AND METHOD FOR IMPROVED DUCT  PRESSURE TRANSFER IN PRESSURE EXCHANGE  SYSTEM  DENMARK  ENERGY  RECOVERY,  INC.  ERI:53DK  3177837 15753555.0  SYSTEM AND METHOD FOR IMPROVED DUCT  PRESSURE TRANSFER IN PRESSURE EXCHANGE  SYSTEM  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:53EP  6564020 2017506773  SYSTEM AND METHOD FOR IMPROVED DUCT  PRESSURE TRANSFER IN PRESSURE EXCHANGE  SYSTEM  JAPAN  ENERGY  RECOVERY,  INC.  ERI:53JP  7631 517380837  SYSTEM AND METHOD FOR IMPROVED DUCT  PRESSURE TRANSFER IN PRESSURE EXCHANGE  SYSTEM  SAUDI ARABIA  ENERGY  RECOVERY,  INC.  ERI:53SA  2,890,743 2,890,743  ISOBARIC PRESSURE EXCHANGER IN AMINE  GAS PROCESSING  CANADA  ENERGY  RECOVERY,  INC.  ERI:5CA  ZL  201380069730.0  201380069730.0  ISOBARIC PRESSURE EXCHANGER IN AMINE  GAS PROCESSING  CHINA  ENERGY  RECOVERY,  INC.  ERI:5CN  

 

2916926 13852928.4  ISOBARIC PRESSURE EXCHANGER IN AMINE  GAS PROCESSING  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:5EP  2916926 13852928.4  ISOBARIC PRESSURE EXCHANGER IN AMINE  GAS PROCESSING  FRANCE  ENERGY  RECOVERY,  INC.  ERI:5FR  2916926 13852928.4  ISOBARIC PRESSURE EXCHANGER IN AMINE  GAS PROCESSING  UNITED  KINGDOM  ENERGY  RECOVERY,  INC.  ERI:5GB  363684  MX/a/2015/00570 3  ISOBARIC PRESSURE EXCHANGER IN AMINE  GAS PROCESSING  MEXICO  ENERGY  RECOVERY,  INC.  ERI:5MX  20150681  ISOBARIC PRESSURE EXCHANGER IN AMINE  GAS PROCESSING  NORWAY ENERGY  RECOVERY,  INC.  ERI:5NO  9,440,895 14/074,565  ISOBARIC PRESSURE EXCHANGER CONTROLS  IN AMINE GAS PROCESSING  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:6  3186518 15766960.7  SYSTEMS AND METHOD FOR PUMP  PROTECTION WITH A HYDRAULIC ENERGY  TRANSFER SYSTEM  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:60EP  10,359,075 14/943,318 System and method for hydrostatic bearings UNITED STATES ENERGY  RECOVERY,  INC.  ERI:61  3221592 15802300.2  SYSTEMS AND METHODS FOR AN AXIAL  HYDROSTATIC BEARING  SWITZERLAND  ENERGY  RECOVERY,  INC.  ERI:61CH  ZL201580073615. X  201580073615  SYSTEMS AND METHODS FOR AN AXIAL  HYDROSTATIC BEARING  CHINA  ENERGY  RECOVERY,  INC.  ERI:61CN  3221592 15802300.2  SYSTEMS AND METHODS FOR AN AXIAL  HYDROSTATIC BEARING  GERMANY  ENERGY  RECOVERY,  INC.  ERI:61DE  3221592 15802300.2  SYSTEMS AND METHODS FOR AN AXIAL  HYDROSTATIC BEARING  DENMARK  ENERGY  RECOVERY,  INC.  ERI:61DK  3221592 15802300.2  SYSTEMS AND METHODS FOR AN AXIAL  HYDROSTATIC BEARING  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:61EP  10,001,030 14/504,198  Systems and methods for lubricating bearings of  rotating equipment in gas processing systems  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:62  2,919,807 2,919,807  Method for operating rotating equipment with process  lubricated bearings in gas separation processes  CANADA  ENERGY  RECOVERY,  INC.  ERI:62CA  112014003576.9  Method for operating rotating equipment with process  lubricated bearings in gas separation processes  GERMANY  ENERGY  RECOVERY,  INC.  ERI:62DE  MX/a/2016/00128 6  Method for operating rotating equipment with process  lubricated bearings in gas separation processes  MEXICO  ENERGY  RECOVERY,  INC.  ERI:62MX  10,473,095 14/958,502  System for pump protection with a hydraulic  turbocharger  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:64  10,465,717 14/958,383  Systems and methods for a common manifold with  integrated hydraulic energy transfer systems  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:68  2015358411 2015358411  SYSTEMS AND METHODS FOR A COMMON  MANIFOLD WITH INTEGRATED HYDRUALIC  ENERGY TRANSFER SYSTEMS  AUSTRALIA  ENERGY  RECOVERY,  INC.  ERI:68AU  2,969,726 2,969,726  SYSTEMS AND METHODS FOR A COMMON  MANIFOLD WITH INTEGRATED HYDRUALIC  ENERGY TRANSFER SYSTEMS  CANADA  ENERGY  RECOVERY,  INC.  ERI:68CA  

 

ZL  201580075604.5  201580075604.5  SYSTEMS AND METHODS FOR A COMMON  MANIFOLD WITH INTEGRATED HYDRUALIC  ENERGY TRANSFER SYSTEMS  CHINA  ENERGY  RECOVERY,  INC.  ERI:68CN  3227529 15820682.1  SYSTEMS AND METHODS FOR A COMMON  MANIFOLD WITH INTEGRATED HYDRUALIC  ENERGY TRANSFER SYSTEMS  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:68EP  3227529 15820682.1  SYSTEMS AND METHODS FOR A COMMON  MANIFOLD WITH INTEGRATED HYDRUALIC  ENERGY TRANSFER SYSTEMS  FRANCE  ENERGY  RECOVERY,  INC.  ERI:68FR  3227529 15820682.1  SYSTEMS AND METHODS FOR A COMMON  MANIFOLD WITH INTEGRATED HYDRUALIC  ENERGY TRANSFER SYSTEMS  UNITED  KINGDOM  ENERGY  RECOVERY,  INC.  ERI:68GB  6640856 2017-529692  SYSTEMS AND METHODS FOR A COMMON  MANIFOLD WITH INTEGRATED HYDRUALIC  ENERGY TRANSFER SYSTEMS  JAPAN  ENERGY  RECOVERY,  INC.  ERI:68JP  MX/a/2017/00722 6  SYSTEMS AND METHODS FOR A COMMON  MANIFOLD WITH INTEGRATED HYDRUALIC  ENERGY TRANSFER SYSTEMS  MEXICO  ENERGY  RECOVERY,  INC.  ERI:68MX  3227529 15820682.1  SYSTEMS AND METHODS FOR A COMMON  MANIFOLD WITH INTEGRATED HYDRUALIC  ENERGY TRANSFER SYSTEMS  NETHERLANDS ENERGY  RECOVERY,  INC.  ERI:68NL  OM/P/2017/00161 SYSTEMS AND METHODS FOR A COMMON  MANIFOLD WITH INTEGRATED HYDRUALIC  ENERGY TRANSFER SYSTEMS  OMAN  ENERGY  RECOVERY,  INC.  ERI:68OM  2668629 2017123738  SYSTEMS AND METHODS FOR A COMMON  MANIFOLD WITH INTEGRATED HYDRUALIC  ENERGY TRANSFER SYSTEMS  RUSSIA  ENERGY  RECOVERY,  INC.  ERI:68RU  10,473,159 14/958,575 HYDRODYNAMIC BEARING FEATURES UNITED STATES ENERGY  RECOVERY,  INC.  ERI:69  2,890,731 2,890,731  ISOBARIC PRESSURE EXCHANGER CONTROLS  IN AMINE GAS PROCESSING  CANADA  ENERGY  RECOVERY,  INC.  ERI:6CA  2916927 13853731.1  ISOBARIC PRESSURE EXCHANGER CONTROLS  IN AMINE GAS PROCESSING  SWITZERLAND  ENERGY  RECOVERY,  INC.  ERI:6CH  ZL201380069731. 5  201380069731.5  ISOBARIC PRESSURE EXCHANGER CONTROLS  IN AMINE GAS PROCESSING  CHINA  ENERGY  RECOVERY,  INC.  ERI:6CN  2916927 13853731.1  ISOBARIC PRESSURE EXCHANGER CONTROLS  IN AMINE GAS PROCESSING  GERMANY  ENERGY  RECOVERY,  INC.  ERI:6DE  2916927 13853731.1  ISOBARIC PRESSURE EXCHANGER CONTROLS  IN AMINE GAS PROCESSING  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:6EP  2916927 13853731.1  ISOBARIC PRESSURE EXCHANGER CONTROLS  IN AMINE GAS PROCESSING  FRANCE  ENERGY  RECOVERY,  INC.  ERI:6FR  2916927 13853731.1  ISOBARIC PRESSURE EXCHANGER CONTROLS  IN AMINE GAS PROCESSING  UNITED  KINGDOM  ENERGY  RECOVERY,  INC.  ERI:6GB  1798387 2015-7015047  ISOBARIC PRESSURE EXCHANGER CONTROLS  IN AMINE GAS PROCESSING  SOUTH KOREA  ENERGY  RECOVERY,  INC.  ERI:6KR  358732  MX/a/2015/00570 2  ISOBARIC PRESSURE EXCHANGER CONTROLS  IN AMINE GAS PROCESSING  MEXICO  ENERGY  RECOVERY,  INC.  ERI:6MX  20150682  ISOBARIC PRESSURE EXCHANGER CONTROLS  IN AMINE GAS PROCESSING  NORWAY ENERGY  RECOVERY,  INC.  ERI:6NO  9,885,372 14/581,234  SYSTEM AND METHOD FOR A ROTOR  ADVANCING TOOL  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:7  

 

9,970,281 15/075,554  SYSTEM AND METHOD FOR OFFSHORE  (TOPSIDE OR SUBSEA) AND ONSHORE WATER  REINJECTION FOR SECONDARY RECOVERY  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:72  9,975,789 15/098,043  SYSTEM AND METHOD FOR OFFSHORE  (TOPSIDE OR SUBSEA) AND ONSHORE WATER  REINJECTION FOR SECONDARY RECOVERY  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:72-1  16713268.7  SYSTEM AND METHOD FOR OFFSHORE  (TOPSIDE OR SUBSEA) AND ONSHORE WATER  REINJECTION FOR SECONDARY RECOVERY  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:72EP  10,323,201 15/135,086 FLUID PROCESSING SYSTEM UNITED STATES ENERGY  RECOVERY,  INC.  ERI:73  3285910 16724148.8 FLUID PROCESSING SYSTEM SWITZERLAND  ENERGY  RECOVERY,  INC.  ERI:73CH  602016035759.3 16724148.8 FLUID PROCESSING SYSTEM GERMANY  ENERGY  RECOVERY,  INC.  ERI:73DE  3285910 16724148.8 FLUID PROCESSING SYSTEM  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:73EP  3285910 16724148.8 FLUID PROCESSING SYSTEM FRANCE  ENERGY  RECOVERY,  INC.  ERI:73FR  3285910 16724148.8 FLUID PROCESSING SYSTEM  UNITED  KINGDOM  ENERGY  RECOVERY,  INC.  ERI:73GB  502020000062977 16724148.8 FLUID PROCESSING SYSTEM ITALY  ENERGY  RECOVERY,  INC.  ERI:73IT  8000 517390209 FLUID PROCESSING SYSTEM SAUDI ARABIA  ENERGY  RECOVERY,  INC.  ERI:73SA  10,557,482 15/347,450  PRESSURE EXCHANGE SYSTEM WITH  HYDRAULIC DRIVE SYSTEM  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:74  9,920,774 15/240,755  Pressure exchange system with motor system and  pressure compensation system  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:75  6020160229664.1 16757493.8  Pressure Exchange System with Motor System and  Pressure Compensation System  GERMANY  ENERGY  RECOVERY,  INC.  ERI:75DE  3337983 16757493.8  Pressure Exchange System with Motor System and  Pressure Compensation System  DENMARK  ENERGY  RECOVERY,  INC.  ERI:75DK  3337983 16757493.8  Pressure Exchange System with Motor System and  Pressure Compensation System  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:75EP  3337983 16757493.8  Pressure Exchange System with Motor System and  Pressure Compensation System  FRANCE  ENERGY  RECOVERY,  INC.  ERI:75FR  3337983 16757493.8  Pressure Exchange System with Motor System and  Pressure Compensation System  UNITED  KINGDOM  ENERGY  RECOVERY,  INC.  ERI:75GB  3337983 16757493.8  Pressure Exchange System with Motor System and  Pressure Compensation System  NORWAY ENERGY  RECOVERY,  INC.  ERI:75NO  10,527,073 15/614,359 PRESSURE EXCHANGER AS CHOKE UNITED STATES ENERGY  RECOVERY,  INC.  ERI:77  10,072,675 15/492,788  SYSTEM FOR USING PRESSURE EXCHANGER IN  DUAL GRADIENT DRILLING APPLICATION  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:79  

 

BR  112018071596-4  SYSTEM FOR USING PRESSURE EXCHANGER IN  DUAL GRADIENT DRILLING APPLICATION  BRAZIL  ENERGY  RECOVERY,  INC.  ERI:79BR  17720981.4  SYSTEM FOR USING PRESSURE EXCHANGER IN  DUAL GRADIENT DRILLING APPLICATION  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:79EP  10,473,124 15/494,860  SYSTEM FOR INTEGRATING VALVES AND  FLOW MANIFOLD INTO HOUSING OF PRESSURE  EXCHANGER  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:82  3,022,289 3,022,289  SYSTEM FOR INTEGRATING VALVES AND  FLOW MANIFOLD INTO HOUSING OF PRESSURE  EXCHANGER  CANADA  ENERGY  RECOVERY,  INC.  ERI:82CA  10,995,773 15/722,996  SYSTEM FOR USING PRESSURE EXCHANGER IN  MUD PUMPING APPLICATION  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:86  3,039,256 3,039,256  SYSTEM FOR USING PRESSURE EXCHANGER IN  MUD PUMPING APPLICATION  CANADA  ENERGY  RECOVERY,  INC.  ERI:86CA  519401475  SYSTEM FOR USING PRESSURE EXCHANGER IN  MUD PUMPING APPLICATION  SAUDI ARABIA  ENERGY  RECOVERY,  INC.  ERI:86SA  10,550,857 15/613,502  HYDRAULIC ENERGY TRANSFER SYSTEM WITH  FILTERING SYSTEM  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:87  11,092,169 16/775,767  HYDRAULIC ENERGY TRANSFER SYSTEM WITH  FILTERING SYSTEM  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:87-1  201880049461.4  HYDRAULIC ENERGY TRANSFER SYSTEM WITH  FILTERING SYSTEM  CHINA  ENERGY  RECOVERY,  INC.  ERI:87CN  3635260 18733395.0  HYDRAULIC ENERGY TRANSFER SYSTEM WITH  FILTERING SYSTEM  GERMANY  ENERGY  RECOVERY,  INC.  ERI:87DE  3635260 18733395.0  HYDRAULIC ENERGY TRANSFER SYSTEM WITH  FILTERING SYSTEM  DENMARK  ENERGY  RECOVERY,  INC.  ERI:87DK  3635260 18733395.0  HYDRAULIC ENERGY TRANSFER SYSTEM WITH  FILTERING SYSTEM  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:87EP  21187216.3  HYDRAULIC ENERGY TRANSFER SYSTEM WITH  FILTERING SYSTEM  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:87EP-1  3635260 18733395.0  HYDRAULIC ENERGY TRANSFER SYSTEM WITH  FILTERING SYSTEM  ITALY  ENERGY  RECOVERY,  INC.  ERI:87IT  3635260 18733395.0  HYDRAULIC ENERGY TRANSFER SYSTEM WITH  FILTERING SYSTEM  SWEDEN  ENERGY  RECOVERY,  INC.  ERI:87SE  10,712,235 15/956,961  SYSTEM AND METHOD FOR MONITORING  OPERATING CONDITION IN A HYDRAULIC  TURBOCHARGER  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:88  18723278.0  SYSTEM AND METHOD FOR MONITORING  OPERATING CONDITION IN A HYDRAULIC  TURBOCHARGER  SWITZERLAND  ENERGY  RECOVERY,  INC.  ERI:88CH  18723278.0  SYSTEM AND METHOD FOR MONITORING  OPERATING CONDITION IN A HYDRAULIC  TURBOCHARGER  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:88EP  6882518 2019-557772  SYSTEM AND METHOD FOR MONITORING  OPERATING CONDITION IN A HYDRAULIC  TURBOCHARGER  JAPAN  ENERGY  RECOVERY,  INC.  ERI:88JP  519410366  SYSTEM AND METHOD FOR MONITORING  OPERATING CONDITION IN A HYDRAULIC  TURBOCHARGER  SAUDI ARABIA  ENERGY  RECOVERY,  INC.  ERI:88SA  

 

10,731,702 16/180,264  SYSTEM AND METHOD FOR HYBRID  HYDRODYNAMIC-HYDROSTATIC THRUST  BEARINGS  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:89  3,118,099  SYSTEM AND METHOD FOR HYBRID  HYDRODYNAMIC-HYDROSTATIC THRUST  BEARINGS  CANADA  ENERGY  RECOVERY,  INC.  ERI:89CA  201980073065.X  SYSTEM AND METHOD FOR HYBRID  HYDRODYNAMIC-HYDROSTATIC THRUST  BEARINGS  CHINA  ENERGY  RECOVERY,  INC.  ERI:89CN  19805477.7  SYSTEM AND METHOD FOR HYBRID  HYDRODYNAMIC-HYDROSTATIC THRUST  BEARINGS  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:89EP  2021-523831  SYSTEM AND METHOD FOR HYBRID  HYDRODYNAMIC-HYDROSTATIC THRUST  BEARINGS  JAPAN  ENERGY  RECOVERY,  INC.  ERI:89JP  9,764,272 14/525,081  SYSTEMS AND METHODS FOR UTILIZING  TURBINE SYSTEMS WITHIN GAS PROCESSING  SYSTEMS  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:9  11,073,169 16/452,236  Power Generation System With Rotary Liquid Piston  Compressor for Transcritical and Supercritical  Compression of Fluids  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:90  17/380,818  POWER GENERATION SYSTEM WITH ROTARY  LIQUID PISTON COMPRESSOR FOR  TRANSCRITICAL AND SUPERCRITICAL  COMPRESSION OF FLUIDS  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:90-1  19740201.9  POWER GENERATION SYSTEM WITH ROTARY  LIQUID PISTON COMPRESSOR FOR  COMPRESSION OF TRANSCRITICAL AND  SUPERCRITICAL FLUIDS  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:90EP  PCT/US19/39334  Power Generation System With Rotary Liquid Piston  Compressor for Compression of Transcritical and  Supercritical Fluids  WIPO  ENERGY  RECOVERY,  INC.  ERI:90PCT  63/219,767  REDUCED MIXING HYDRAULIC ENERGY  TRANSFER SYSTEM  UNITED STATES ERI:91PRO  16/926,328  REFRIGERATION SYSTEM WITH HIGH SPEED  ROTARY PRESSURE EXCHANGER  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:92  PA 2021 70359  REFRIGERATION SYSTEM WITH HIGH SPEED  ROTARY PRESSURE EXCHANGER  DENMARK  ENERGY  RECOVERY,  INC.  ERI:92DK  PCT/US21/40199  REFRIGERATION SYSTEM WITH HIGH SPEED  ROTARY PRESSURE EXCHANGER  WIPO  ENERGY  RECOVERY,  INC.  ERI:92PCT  16/926,368  LOW ENERGY CONSUMPTION REFRIGERATION  SYSTEM WITH A ROTARY PRESSURE  EXCHANGER REPLACING THE BULK FLOW  COMPRESSOR AND THE HIGH PRESSURE  EXPANSION VALVE  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:93  PA 2021 70360  LOW ENERGY CONSUMPTION REFRIGERATION  SYSTEM WITH A ROTARY PRESSURE  EXCHANGER REPLACING THE BULK FLOW  COMPRESSOR AND THE HIGH PRESSURE  EXPANSION VALVE  DENMARK  ENERGY  RECOVERY,  INC.  ERI:93DK  PCT/US21/40201  LOW ENERGY CONSUMPTION REFRIGERATION  SYSTEM WITH A ROTARY PRESSURE  EXCHANGER REPLACING THE BULK FLOW  COMPRESSOR AND THE HIGH PRESSURE  EXPANSION VALVE  WIPO  ENERGY  RECOVERY,  INC.  ERI:93PCT  17/190,379  MOTORIZED PRESSURE EXCHANGER WITH A  LOW-PRESSURE CENTERBORE  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:94  17/506,423 PRESSURE EXCHANGER INSERTS UNITED STATES ENERGY  RECOVERY,  INC.  ERI:95  

 

63/208,925  ARCHITECTURES AND CONTROL SYSTEMS FOR  TRANS-CRITICAL AND SUB-CRITICAL CO2  REFRIGERATION SYSTEMS INTEGRATED WITH  ROTARY GAS PRESSURE EXCHANGER FOR  HIGH ENERGY EFFICIENCY  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:96  63/220,423  PRESSURE EXCHANGER AS A LOW PRESSURE  SLURRY PUMP  UNITED STATES ENERGY  RECOVERY,  INC.  ERI:97PRO  517/2016  SYSTEMS AND METHODS FOR UTILIZING  TURBINE SYSTEMS WITHIN GAS PROCESSING  SYSTEMS  UNITED ARAB  EMR  ENERGY  RECOVERY,  INC.  ERI:9AE  2,929,094 2,929,094  SYSTEMS AND METHODS FOR UTILIZING  TURBINE SYSTEMS WITHIN GAS PROCESSING  SYSTEMS  CANADA  ENERGY  RECOVERY,  INC.  ERI:9CA  3062913 14795926.6  SYSTEMS AND METHODS FOR UTILIZING  TURBINE SYSTEMS WITHIN GAS PROCESSING  SYSTEMS  EUROPEAN  PATENT  CONVENT  ENERGY  RECOVERY,  INC.  ERI:9EP  3062913 14795926.6  SYSTEMS AND METHODS FOR UTILIZING  TURBINE SYSTEMS WITHIN GAS PROCESSING  SYSTEMS  FRANCE  ENERGY  RECOVERY,  INC.  ERI:9FR  3062913 14795926.6  SYSTEMS AND METHODS FOR UTILIZING  TURBINE SYSTEMS WITHIN GAS PROCESSING  SYSTEMS  UNITED  KINGDOM  ENERGY  RECOVERY,  INC.  ERI:9GB  6259110 2016-552201  SYSTEMS AND METHODS FOR UTILIZING  TURBINE SYSTEMS WITHIN GAS PROCESSING  SYSTEMS  JAPAN  ENERGY  RECOVERY,  INC.  ERI:9JP  1978752 2016-7014313  SYSTEMS AND METHODS FOR UTILIZING  TURBINE SYSTEMS WITHIN GAS PROCESSING  SYSTEMS  SOUTH KOREA  ENERGY  RECOVERY,  INC.  ERI:9KR  MX/a/2016/00558 1  SYSTEMS AND METHODS FOR UTILIZING  TURBINE SYSTEMS WITHIN GAS PROCESSING  SYSTEMS  MEXICO  ENERGY  RECOVERY,  INC.  ERI:9MX  QA/201604/00179 SYSTEMS AND METHODS FOR UTILIZING  TURBINE SYSTEMS WITHIN GAS PROCESSING  SYSTEMS  QATAR  ENERGY  RECOVERY,  INC.  ERI:9QA  2016120616 2016120616  SYSTEMS AND METHODS FOR UTILIZING  TURBINE SYSTEMS WITHIN GAS PROCESSING  SYSTEMS  RUSSIA  ENERGY  RECOVERY,  INC.  ERI:9RU  5757 516371034  SYSTEMS AND METHODS FOR UTILIZING  TURBINE SYSTEMS WITHIN GAS PROCESSING  SYSTEMS  SAUDI ARABIA  ENERGY  RECOVERY,  INC.  ERI:9SA  Trademark Registrations and Applications:  Serial No. Reg. No. Mark Jurisdiction Owner of Record  1240828 1240828 e Design Madrid System Energy Recovery, Inc.  1240828 1240828 Mexico Energy Recovery, Inc.  85/850,663 5,161,306 United States Energy Recovery, Inc.  923918 923918 ERI Antigua Energy Recovery, Inc.  923918 923918 ERI Australia Energy Recovery, Inc.  923918 923918 ERI Bahrain Energy Recovery, Inc.  923918 923918 ERI Belarus Energy Recovery, Inc.  923918 923918 ERI China Energy Recovery, Inc.  923918 923918 ERI Croatia Energy Recovery, Inc.  923918 923918 ERI Europe EUTM Energy Recovery, Inc.  923918 923918 ERI Japan Energy Recovery, Inc.  923918 923918 ERI Korea, North Energy Recovery, Inc.  923918 923918 ERI Liechtenstein Energy Recovery, Inc.  923918 923918 ERI Madrid System Energy Recovery, Inc.  923918 923918 ERI Morocco Energy Recovery, Inc.  923918 923918 ERI Norway Energy Recovery, Inc.  923918 923918 ERI Singapore Energy Recovery, Inc.  923918 923918 ERI South Korea Energy Recovery, Inc.  

 

923918 923918 ERI Switzerland Energy Recovery, Inc.  923918 923918 ERI Turkey Energy Recovery, Inc.  923918 UK008923918 ERI United Kingdom Energy Recovery, Inc.  78/467,304 3,075,798 ERI United States Energy Recovery, Inc.  77/278,196 3,503,984 United States Energy Recovery, Inc.  2008-92343 5265527 ERI PX Japan Energy Recovery, Inc.  40-2009-12047 40-0839732 ERI PX South Korea Energy Recovery, Inc.  1229171 1229171 ISOBOOST Madrid System Energy Recovery, Inc.  1229171 1229171 ISOBOOST Mexico Energy Recovery, Inc.  85/810,602 4,660,154 ISOBOOST United States Energy Recovery, Inc.  1229172 1229172 ISOGEN Madrid System Energy Recovery, Inc.  1229172 1229172 ISOGEN Mexico Energy Recovery, Inc.  85/810,611 4,804,436 ISOGEN United States Energy Recovery, Inc.  1231739 1231739 ISOPRO Madrid System Energy Recovery, Inc.  1231739 1231739 ISOPRO Mexico Energy Recovery, Inc.  78/781,267 3,349,881 MAKING DESALINATION AFFORDABLE United States Energy Recovery, Inc.  78/467,333 3,125,056 PRESSURE EXCHANGER United States Energy Recovery, Inc.  923919 923919 PX Antigua Energy Recovery, Inc.  923919 923919 PX Australia Energy Recovery, Inc.  923919 923919 PX Bahrain Energy Recovery, Inc.  923919 923919 PX Belarus Energy Recovery, Inc.  923919 923919 PX Croatia Energy Recovery, Inc.  923919 923919 PX Europe EUTM Energy Recovery, Inc.  923919 923919 PX Korea, North Energy Recovery, Inc.  923919 923919 PX Liechtenstein Energy Recovery, Inc.  923919 923919 PX Madrid System Energy Recovery, Inc.  923919 923919 PX Morocco Energy Recovery, Inc.  923919 923919 PX Norway Energy Recovery, Inc.  923919 923919 PX Singapore Energy Recovery, Inc.  923919 923919 PX Switzerland Energy Recovery, Inc.  923919 923919 PX Turkey Energy Recovery, Inc.  923919 UK008923919 PX United Kingdom Energy Recovery, Inc.  78/467,360 3,173,098 PX United States Energy Recovery, Inc.  90/905,098 N/A (Pending) PX G United States Energy Recovery, Inc.  90/734,113 N/A (Pending) PX G1300 United States Energy Recovery, Inc.  7013982 7013982 PX PRESSURE EXCHANGER China Energy Recovery, Inc.  78/467,363 3,156,183 PX PRESSURE EXCHANGER United States Energy Recovery, Inc.  97/001,697 N/A (Pending) PX PRIME United States Energy Recovery, Inc.  86/400,599 5,617,643 VorTeq United States Energy Recovery, Inc.  Copyrights:  None.  Unregistered Patents, Trademarks or Copyrights:  None.   Domain Names:  Domain Name Registrar  eergyrecovery.com Network Solutions enegyrecovery.com Network Solutions energy-recovery.com Network Solutions energyrcovery.com Network Solutions 

 

energyrec0very.com Network Solutions energyreccovery.com Network Solutions energyrecouery.com Network Solutions  energyrecoverry.com Network Solutions energyrecovery.cn Network Solutions energyrecovery.com Network Solutions energyrecovery.xyz Network Solutions energyrecoverymalta.com Network Solutions energyrecovvery.com Network Solutions energyrecuvery.com Network Solutions eneryrecovergy.com Network Solutions eneryrecovery.com Network Solutions enrgyrecovery.com Network Solutions isobarics.com Network Solutions isobarics.net Network Solutions isobarics.org Network Solutions osmopower.com Network Solutions osmoticpower.com Network Solutions osmoticpowerinc.com Network Solutions pumpengineering.com Network Solutions vorteq.biz Network Solutions vorteq.net Network Solutions vorteq.org Network Solutions vorteq.us Network Solutions vorteqsystem.com Network Solutions energyrecovery.mt www.nic.org.mt energyrecovery.com.mt www.nic.org.mt 

 

SCHEDULE 3.06  Litigation and Environmental Matters  None.  

 

SCHEDULE 3.14  Insurance  1. Commercial Package, Policy No. 35955634, Chubb/Federal Insurance Co.  2. Business Auto, Policy No. 73566957, Chubb/Federal Insurance Co.  3. Workers Compensation, Policy No. ENWC216144, Berkshire Hathaway Homestate  Insurance.   4. Umbrella Liability, Policy No. 79882330, Chubb/Federal Insurance Co.  5. Management Liability (Claims Made & Reported), Policy No. P00100036328002,  Argonaut Insurance Company.   6. Management Liability (Claims Made & Reported), Policy No. P00100029363302, Axis  Insurance Company.  7. Management Liability (Claims Made & Reported), Policy No. MLX42447581, Argonaut  Insurance Company.  8. Cyber Liability (Claims Made & Reported), Policy No. P00100002102404, Axis  Insurance Company.  9. Crime, Policy No. UC2404860321, Hiscox Insurance Co, Inc.  

 

SCHEDULE 3.15  Capitalization and Subsidiaries  Subsidiaries:   1. Energy Recovery Iberia, S.L. (Spain)  2. Energy Recovery Canada Corp. (Canada)  3. ERI Energy Recovery Ireland Limited (Ireland)  Capitalization:   Energy Recovery, Inc.’s common stock is listed on The Nasdaq Global Select Market under the  symbol “ERII.”, please see the Company’s Proxy Statement on Schedule 14A filed on April 26,  2021 for information regarding certain beneficial ownership of the Company.   

 

SCHEDULE 6.01  Existing Indebtedness  1. Supplier Agreement between the Company and Santander Factoring and Confirming  EFC, dated April 6, 2021, with an aggregate contract value of $7,900,000.00, and which  shall be terminated on or prior to September 30, 2022.  2.  Please reference the table below:  

 

SCHEDULE 6.02  Existing Liens  Secured Party Debtor Jurisdiction Filing Number  Santander Factoring and  Confirming EFC  Energy Recovery, Inc. DE SOS 2021 47387391 1 This lien will remain outstanding until September 30, 2022.  

 

SCHEDULE 6.04  Existing Investments  None. 

 

SCHEDULE 6.10  Existing Restrictions  None.  

 

EXHIBIT A-1    BORROWING REQUEST  ENERGY RECOVERY, INC.    JPMorgan Chase Bank, N.A.  Middle Market Servicing  10 South Dearborn, Floor L2  Suite IL1-1145  Chicago, IL, 60603-2300  Attention: Bryson G. Kelly  Email: bryson.g.kelly@chase.com    Date:     Ladies and Gentlemen:    This Borrowing Request is furnished pursuant to Section 2.03 of that certain Credit Agreement dated as of   December 22, 2021  (as amended, restated, supplemented or otherwise modified from time to time, the  “Credit Agreement”) by and between ENERGY RECOVERY, INC., a Delaware corporation, as the  Company (and together with any other Person that becomes a Borrower thereunder from time to time, each  individually, a “Borrower”, and collectively, jointly and severally, the “Borrowers”), the other Loan Parties  from time to time party thereto, and JPMORGAN CHASE BANK, N.A., as Lender.  Unless otherwise  defined herein, capitalized terms used in this Borrowing Request have the meanings ascribed thereto in the  Credit Agreement.  The Borrower Representative represents that, as of this date, the conditions precedent  set forth in Section [4.01 and] 4.02 are satisfied.     The Borrower Representative hereby notifies the Lender of its request for the following Borrowing:       1. Aggregate Amount of the [CBFR][Eurodollar] Borrowing:                 $_________________    2. Applicable Borrower: _______________    3. Borrowing Date of the [CBFR][Eurodollar] Borrowing (must be a Business  Day): ____________________    4. The Borrowing shall be a ___ CBFR Borrowing or ___ Eurodollar  Borrowing1    5. If a Eurodollar Borrowing, the duration of Interest Period 2:                     One Month __________                     Three Months_________                     Six Months__________                                                          1 If no election is made, then the requested Borrowing shall be an CBFR Borrowing  2 Shall be subject to the definition of “Interest Period.”  Cannot extend beyond the Maturity Date.  If an Interest Period is not  specified, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.  

 

  Exhibit A                                                                                ENERGY RECOVERY, INC., as the Borrower  Representative      By:_____________________________  Name:___________________________  Title:____________________________     

 

  Exhibit A    EXHIBIT A-2    INTEREST ELECTION REQUEST  ENERGY RECOVERY, INC.      JPMorgan Chase Bank, N.A.  Middle Market Servicing  10 South Dearborn, Floor L2  Suite IL1-1145  Chicago, IL, 60603-2300  Attention: Bryson G. Kelly  Email: bryson.g.kelly@chase.com    Date:    Ladies and Gentlemen:    This Interest Election Request is furnished pursuant to Section 2.06(c) of that certain Credit Agreement  dated as of December 22, 2021 (as amended, restated, supplemented or otherwise modified from time to  time, the “Credit Agreement”) by and between ENERGY RECOVERY, INC., a Delaware corporation, as  the Company (and together with any other Person that becomes a Borrower thereunder from time to time,  each individually, a “Borrower”, and collectively, jointly and severally, the “Borrowers”), the other Loan  Parties from time to time party thereto, and JPMORGAN CHASE BANK, N.A., as Lender. Unless  otherwise defined herein, capitalized terms used in this Interest Election Request have the meanings  ascribed thereto in the Credit Agreement.       The Borrower Representative is hereby requesting to convert or continue certain Borrowings as follows:    1. Borrowing to which this Interest Election Request applies:  ________________________________    2. Date of conversion/continuation (must be a Business Day): __________________, 20____    3. Amount of Borrowings being converted/continued:  $ _______________    4. Nature of conversion/continuation:   a. Conversion of CBFR Borrowings to Eurodollar Borrowings   b. Conversion of Eurodollar Borrowings to CBFR Borrowings   c. Continuation of Eurodollar Borrowings as such    5. If Borrowings are being continued as or converted to Eurodollar Borrowings, the duration of the new Interest  Period that commences on the conversion/continuation date:3    One Month  __________ Three Months __________ Six Months __________                                                             3 Shall be subject to the definition of “Interest Period.” Cannot extend beyond the Maturity Date.  If an Interest Period is not specified, then the  Borrower shall be deemed to have selected an Interest Period of one month’s duration.  

 

  Exhibit A    6. The undersigned officer of Borrower Representative certifies that, both before and after giving  effect to the request above, no Default or Event of Default has occurred and is continuing under  the Credit Agreement.  ENERGY RECOVERY, INC., as the Borrower  Representative      By:_____________________________  Name:___________________________  Title:____________________________       

 

      EXHIBIT B    COMPLIANCE CERTIFICATE  To: JPMorgan Chase Bank, N.A.   This Compliance Certificate (“Certificate”), for the period ended _______ __, 202_,  is  furnished pursuant to that certain CREDIT AGREEMENT, dated as of December 22, 2021 (as amended,  restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit  Agreement”), by and between ENERGY RECOVERY, INC., a Delaware corporation, as the Company  (and together with any other Person that becomes a Borrower thereunder from time to time, each  individually, a “Borrower”, and collectively, jointly and severally, the “Borrowers”), the other Loan Parties  from time to time party thereto, and JPMORGAN CHASE BANK, N.A., as Lender.  Capitalized terms  used but not otherwise defined herein shall have the meanings set forth in the Credit Agreement.  THE UNDERSIGNED HEREBY CERTIFIES THAT:  1. I am the                        of the Borrower Representative and I am authorized to deliver this  Certificate on behalf of the Borrowers and their Subsidiaries;  2. I have reviewed the terms of the Credit Agreement and I have made, or have caused to be  made under my supervision, a detailed review of the compliance of Borrowers and their Subsidiaries with  the Credit Agreement during the accounting period covered by the attached financial statements (the  “Relevant Period”);  3. The attached financial statements of the Company and its consolidated Subsidiaries for the  Relevant Period: (a) have been prepared in accordance with GAAP consistently applied, and (b) to the  extent that the attached are not the Company’s annual fiscal year end statements, are subject to normal year- end audit adjustments and the absence of footnotes;  4. The examinations described in paragraph 2 did not disclose and I have no knowledge of,  except as set forth below, (a) the existence of any condition or event which constitutes a Default or an Event  of Default under the Credit Agreement or any other Loan Document during or at the end of the Relevant  Period or as of the date of this Certificate or (b) any change in GAAP or in the application thereof that has  occurred since the date of the annual financial statements delivered to the Lender in connection with the  closing of the Agreement or subsequently delivered as required in the Credit Agreement;  5. I hereby certify that, except as set forth below, no Loan Party has changed (i) its name, (ii)  its chief executive office, (iii) its principal place of business, (iv) the type of entity it is or (v) its state of  incorporation or organization without having given Lender the notice required by Section 4.15 of the  Security Agreement;  6. The representations and warranties of the Loan Parties set forth in the Loan Documents are  true and correct as of the date hereof, except to the extent that any such representation or warranty  specifically refers to an earlier date, in which case it is true and correct as of such earlier date; and  

 

  Exhibit B    7. Schedule I attached hereto sets forth financial data and computations4 evidencing the  Borrowers’ compliance with certain covenants of the Agreement, all of which data and computations are  true, complete and correct.  Described below are the exceptions, if any, referred to in paragraph 4 hereof by listing, in  detail, the (i) nature of the condition or event, the period during which it has existed and the action which  the Borrowers have taken, are taking, or propose to take with respect to each such condition or event or  (ii) change in GAAP or the application thereof and the effect of such change on the attached financial  statements:                                                  The foregoing certifications, together with the computations set forth in Schedule I hereto  and the financial statements delivered with this Certificate in support hereof, are made and delivered this       day of               ,        .  ENERGY RECOVERY, INC.,  as Borrower Representative    By: _________________________________________   Name: _______________________________________   Title: ________________________________________                                                             4 Schedule I must include detailed calculation tables for all components of the financial covenant calculations.  

 

  Exhibit B    Schedule I to Compliance Certificate   Compliance as of _________, 202_ with  Provisions of Section 6.12 of the Agreement  6.12 Financial Covenants.     (a) Total Leverage Ratio.  The Borrowers will not permit the Total Leverage Ratio, on the last  day of any fiscal quarter (commencing with the fiscal quarter ending December 31, 2021), to be greater  than 3.00 to 1.00.       A) Total Indebtedness  $__________  B) EBITDA   1. Net Income $__________  2. Plus, without duplication to the extent deducted  in determining Net Income for such period, the  sum of    $__________  i. Interest Expense  $__________  ii. income and franchise tax expense for such  period  $__________  iii. all amounts attributable to depreciation and  amortization expense for such period  $__________  iv. any extraordinary charges for such period $__________  v. any other non-cash charges for such period  (including non-cash stock and equity  compensation expense, but excluding any  non-cash charge in respect of an item that was  included in Net Income in a prior period and  any non-cash charge that relates to the write- down or write-off of inventory)  $__________  vi. with respect to the preparation, execution,  delivery of this Agreement and the other Loan  Documents, costs, reasonable fees to Persons,  charges or expenses incurred in connection  therewith prior to the Effective Date in an  aggregate amount not to exceed $200,000    vii. accruals, fees, payments and documented  transaction costs and expenses incurred by the  Loan Parties in connection with any  investment, Restricted Payment, Disposition,  “earn-out” or similar payment, seller note, or  other Indebtedness or equity issuance or any    

 

  Exhibit B    refinancing transactions or amendment,  waiver or other modification of any debt or  equity instrument or document (including,  without limitation, the Loan Documents and  any operating or similar agreement),  regulatory filings or other regulatory related  issue, in each case, incurred for such period  solely to the extent attributable to any relevant  transaction not prohibited by this Agreement  (regardless of whether consummated);  provided that the aggregate amount added  back to EBITDA pursuant to this clause (vii)  and clauses (viii) and (xii) below for any  period shall not exceed 20% of EBITDA  (calculated after giving effect to such add  backs);  viii. severance and other costs of employee or  officer terminations, restructuring, integration  or similar charges in respect of systems  (including software and “IT systems”),  restructurings, closing of operations,  headcount reductions or other similar actions  (including relocation costs), business process  optimizations, integration costs, signing costs,  retention or completion bonuses, employee  replacement costs, transition costs, costs  related to opening or pre-opening, closure  and/or consolidation of facilities; provided  that the aggregate amount added back to  EBITDA pursuant to this clause (viii) and  clause (vii) above and clause (xii) below for  any period shall not exceed 20% of EBITDA  (calculated after giving effect to such add  backs);    ix. proceeds of business interruption insurance  received during such period or reasonably  expected to be received within 365 days after  the end of such period   $__________  x. charges, losses or expenses to the extent  indemnified or insured or reimbursed by an  unaffiliated third party to the extent such  indemnification, insurance or reimbursement  is actually received for such period, or is  reasonably expected to be so paid or  reimbursed within 365 days after the end of  such period  $__________  

 

  Exhibit B    xi. directors fees and expense reimbursements  and indemnification payments paid to  directors   $__________  xii. fees, costs and expenses incurred in  connection with litigation, legal disputes,  settlement of claims, and other related costs;  provided that the aggregate amount added  back to EBITDA pursuant to this clause (xii)  and clauses (vii) and (viii) above for any  period shall not exceed 20% of EBITDA  (calculated after giving effect to such add  backs)  $__________  3. Minus without duplication for such Period $__________  i. any cash payments made during such period  in respect of non-cash charges described in  clause (2)(v) taken in a prior period  $__________  ii. any extraordinary gains and any non-cash  items of income for such period  $__________  iii. (A) any proceeds of business interruption  insurance not received or expenses not  reimbursed by third parties within the 365 day  period set forth in clause (2)(ix) or (x) of this  section and (B) any proceeds of business  interruption insurance which are received or  reimbursements which are made by third  parties within the 365 day period set forth in  clause (2)(ix) or (x) to the extent added back  to Net Income in any prior period  $__________              C) Total = EBITDA $__________5  D) Aggregate amount of Unrestricted Cash, not to  exceed $5,000,000    E) A minus B divided by C = Total Leverage Ratio ____ to 1.00  F) In compliance? Yes / No                                                                  5 For the avoidance of doubt, EBITDA for any period, (x) shall include, without duplication, the EBITDA of any Person, property, business or  asset acquired or formed by the Borrower or any Loan Party during such period, to the extent (A) such Person becomes a Loan Party, (B) such  property, business or asset is owned by a Loan Party and (C) such Person, property or asset is not subsequently sold, transferred, abandoned or  otherwise disposed by the Borrower or such Loan Party, and (y) shall exclude the EBITDA of any Person property, business or asset sold,  transferred, abandoned or otherwise disposed by the Borrower or such Loan Party during such period to the extent (A) that such Person sold,  transferred, abandoned or otherwise disposed was a Loan Party and (B) such property, business or asset that was sold, transferred, abandoned or  otherwise disposed was owned by a Loan Party.  

 

  Exhibit B    (b) Capital Expenditures.  The Borrowers will not, nor will it permit any Subsidiary to, incur  or make any Capital Expenditures in an aggregate amount to exceed (x) $20,000,000 during the term of this  Agreement plus (y) during any period set forth below, an additional amount set forth opposite such period:    Fiscal Year ending:  Additional Capital Expenditures:   December 31, 2021 $6,000,000  December 31, 2022 $20,000,000  December 31, 2023 $8,000,000  December 31, 2024 $18,000,000  December 31, 2025 $13,000,000  December 31, 2026 $10,000,000    The amount of any additional Capital Expenditures permitted to be made in respect of any fiscal  year shall be increased by the unused amount of the additional Capital Expenditures that were permitted to  be made during any preceding fiscal year pursuant to this Section 6.12(b).    As of the Compliance Test Date shown above, the Capital Expenditures are $[___].    Compliance as of the Compliance Test Date shown above:      [__] Yes     [__] No                   

 

  Exhibit B    Schedule II to Compliance Certificate    Borrowers’ Applicable Rate Calculation          

 

  Exhibit C    EXHIBIT C    JOINDER AGREEMENT  THIS JOINDER AGREEMENT (this “Agreement”), dated as of ___________, 20___, is  entered into between ________________________________, a _________________ (“New Subsidiary”)  and JPMORGAN CHASE BANK, N.A. ( “Lender”) under that certain CREDIT AGREEMENT, dated as  of December 22, 2021 (as amended, restated, amended and restated, supplemented or otherwise modified  from time to time, the “Credit Agreement”), by and between ENERGY RECOVERY, INC., a Delaware  corporation, as the Company (and together with any other Person that becomes a Borrower thereunder from  time to time, each individually, a “Borrower”, and collectively, jointly and severally, the “Borrowers”), the  other Loan Parties from time to time party thereto, and Lender. All capitalized terms used herein and not  otherwise defined herein shall have the meanings set forth in the Credit Agreement.  New Subsidiary and Lender, hereby agree as follows:  1. New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this  Agreement, New Subsidiary will be deemed to be a Loan Party under the Credit Agreement and a “Loan  Guarantor” for all purposes of the Credit Agreement and shall have all of the obligations of a Loan Party  and a Loan Guarantor thereunder as if it had executed the Credit Agreement.  New Subsidiary hereby  ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions  contained in the Credit Agreement, including without limitation (a) all of the representations and warranties  of the Loan Parties set forth in Article III of the Credit Agreement, and (b) all of the covenants set forth in  Articles V and VI of the Credit Agreement and (c) all of the guaranty obligations set forth in Article IX of  the Credit Agreement.  Without limiting the generality of the foregoing terms of this paragraph 1, the New  Subsidiary, subject to the limitations set forth in Section 9.10 and 9.13 of the Credit Agreement, hereby  guarantees, jointly and severally with the other Loan Guarantors, to the Lender, as provided in Article IX  of the Credit Agreement, the prompt payment and performance of the Guaranteed Obligations in full when  due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in  accordance with the terms thereof and agrees that if any of the Guaranteed Obligations are not paid or  performed in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or  otherwise), New Subsidiary will, jointly and severally together with the other Loan Guarantors, promptly  pay and perform the same, without any demand or notice whatsoever, and that in the case of any extension  of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full  when due (whether at extended maturity, as a mandatory prepayment, by acceleration or otherwise) in  accordance with the terms of such extension or renewal.  2. If required, New Subsidiary is, simultaneously with the execution of this Agreement,  executing and delivering such Collateral Documents (and such other documents and instruments) as  requested by the Lender in accordance with the Credit Agreement.  3. The address of New Subsidiary for purposes of Section 8.01 of the Credit Agreement is as  follows:                                  4. New Subsidiary hereby waives acceptance by Lender of the guaranty by New Subsidiary  upon the execution of this Agreement by New Subsidiary.  

 

  Exhibit C    5. This Agreement may be executed in any number of counterparts, each of which when so  executed and delivered shall be an original, but all of which together shall constitute one and the same  instrument.  6. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES  HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN  ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  IN WITNESS WHEREOF, New Subsidiary has caused this Agreement to be duly executed  by its authorized officer, and Lender, has caused the same to be accepted by its authorized officer, as of the  day and year first above written.  [NEW SUBSIDIARY]      By: _________________________________________   Name: _______________________________________   Title: ________________________________________       Acknowledged and accepted:    JPMORGAN CHASE BANK, N.A.      By: _________________________________________   Name: _______________________________________   Title: ________________________________________Exhibit
4.2 

 

DESCRIPTION
OF SECURITIES

 

As
of March 31, 2021, Tech and Energy Transition Corporation (“we,” “our,” “us” or the “company”)
had the following three classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”): (i) its units, each consisting of one share of the company’s Class A common stock, par value $0.0001 per share (“Class
A common stock”) and one-third of one redeemable warrant, each whole warrant exercisable for one share of Class A common stock
at an exercise price of $11.50 (“redeemable warrant”), (ii) Class A common stock, and (iii) redeemable warrants. In
addition, this Description of Securities also references the company’s Class B common stock, par value $0.0001 per share (the “Class
B common stock” or “founder shares”), which are not registered pursuant to Section 12 of the Exchange Act but are convertible
into Class A common stock. The description of the Class B common stock is included to assist in the description of the Class A common
stock. Unless the context otherwise requires, references to our “sponsor” are to Tech and Energy Transition Sponsor LLC and
references to our “initial shareholders” are to our sponsor, Daniel R. Hesse and our independent directors, as they held
our founder shares prior to our initial public offering (our “IPO”).

 

Pursuant
to our amended and restated certificate of incorporation, we are authorized to issue 500,000,000 shares of Class A common stock,
$0.0001 par value and 50,000,000 shares of Class B common stock, and 5,000,000 shares of undesignated preferred stock, $0.0001 par
value. Because the below is only a summary, it may not contain all the information that is important to you.

 

Units

 

Each
unit consists of one share of Class A common stock and one-third of one redeemable warrant. Each whole warrant entitles the holder
thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as described below.
Pursuant to the warrant agreement that governs the warrants (the “warrant agreement”), a warrant holder may exercise its
warrants only for a whole number of shares of the company’s Class A common stock. This means only a whole warrant may be exercised
at any given time by a warrant holder.

 

Holders
will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their
brokers contact our transfer agent in order to separate the units into shares of Class A common stock and warrants. Additionally,
the units will automatically separate into their component parts and will not be traded after completion of our initial business combination.
No fractional warrants will be issued upon separation of the units and only whole warrants will trade.

 

Common
Stock

 

Common
stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders; provided that, prior
to our initial business combination, holders of our Class B common stock will have the right to elect all of our directors and remove
members of our board of directors for any reason. These provisions of our amended and restated certificate of incorporation may only
be amended if approved by holders of a majority of at least 90% of the outstanding shares of our common stock voting at a stockholder
meeting. On any other matter submitted to a vote of our stockholders, holders of our Class B common stock and holders of our Class A
common stock will vote together as a single class, except as required by applicable law or stock exchange rule. Unless specified in our
amended and restated certificate of incorporation or bylaws, or as required by applicable law or stock exchange rules, the affirmative
vote of holders of a majority of the outstanding shares of our common stock that are voted is required to approve any such matter voted
on by our stockholders, and, prior to our initial business combination, the affirmative vote of holders of a majority of the outstanding
shares of our Class B common stock is required to approve the election or removal of directors. Directors are elected for a term
of two years. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than
50% of the Class B common stock voted for the election of directors can elect all of the directors. Our stockholders are entitled
to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor.

 

Because
our amended and restated certificate of incorporation will authorize the issuance of up to 500,000,000 shares of Class A common
stock, if we were to enter into a business combination, we may (depending on the terms of such a business combination) be required to
increase the number of shares of common stock which we are authorized to issue at the same time as our stockholders vote on the business
combination to the extent we seek stockholder approval in connection with our initial business combination.

 

     

     

    

 

In
accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until one year after our first
fiscal year end following our listing on Nasdaq. Under Section 211(b) of the Delaware General Corporation Law (the “DGCL”),
we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws
unless such election is made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect
new directors prior to the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b)
of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation
of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery
in accordance with Section 211(c) of the DGCL.

 

We
will provide our public stockholders with the opportunity to redeem all or a portion of their shares upon the completion of our initial
business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, calculated
as of two business days prior to the consummation of our initial business combination, including interest (which interest shall be net
of taxes payable), divided by the number of then outstanding public shares, subject to the limitations described herein. The per share
amount we will distribute to public stockholders who properly redeem their public shares will not be reduced by the deferred underwriting
commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial owner must identify
itself in order to validly redeem its shares. Our sponsor and each of our officers and directors have entered into a letter agreement
with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares
held by them in connection with the completion of our initial business combination or certain amendments to our amended and restated
certificate of incorporation. Permitted transferees of our sponsor, officers or directors will be subject to the same obligations. Unlike
many blank check companies that hold stockholder votes and conduct proxy solicitations in conjunction with their initial business combinations
and provide for related redemptions of public shares for cash upon completion of such initial business combinations even when a vote
is not required by applicable law or stock exchange listing requirements, if a stockholder vote is not required by applicable law or
stock exchange listing requirements and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant
to our amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC, and
file tender offer documents with the SEC prior to completing our initial business combination. Our amended and restated certificate of
incorporation will require these tender offer documents to contain substantially the same financial and other information about the initial
business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, a stockholder approval
of the transaction is required by applicable law or stock exchange rules, or we decide to obtain stockholder approval for business or
other reasons, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to
the proxy rules and not pursuant to the tender offer rules. If we seek stockholder approval, we will complete our initial business combination
only if a majority of the outstanding shares of our common stock voted are voted in favor of the business combination. A quorum for such
meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing
a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. However, the
participation of our sponsor, officers, directors, advisors or any of their respective affiliates in privately-negotiated transactions,
if any, could result in the approval of our initial business combination even if a majority of our public stockholders vote, or indicate
their intention to vote, against such business combination. For purposes of seeking approval of the majority of our outstanding shares
of common stock, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. These quorum
and voting thresholds and agreements may make it more likely that we will consummate our initial business combination.

 

If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder,
together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect Excess Shares (more
than an aggregate of 15% of the shares sold in our IPO), without our prior consent. However, we would not be restricting our stockholders’
ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Our public stockholders’
inability to redeem Excess Shares will reduce their influence over our ability to complete our initial business combination and they
could suffer a material loss on their investment in us if they sell Excess Shares in open market transactions. Additionally, such stockholders
will not receive redemption distributions with respect to the Excess Shares if we complete the business combination. And, as a result,
such stockholders will continue to hold that number of shares exceeding 15% and, in order to dispose such shares would be required to
sell their stock in open market transactions, potentially at a loss.

 

    2

     

    

 

If
we seek stockholder approval in connection with our initial business combination, our sponsor and each of our officers and directors
have agreed (and their permitted transferees, as applicable, will agree) to vote any founder shares and any public shares held by them
in favor of our initial business combination. Additionally, each public stockholder may elect to redeem its public shares without voting,
and if they do vote, irrespective of whether they vote for or against the proposed transaction.

 

Pursuant
to our amended and restated certificate of incorporation, if we have not completed our initial business combination within 24 months
from the closing of our IPO, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably
possible but not more than ten business days thereafter, redeem the public shares, at a per per-share price, payable in cash, equal to
the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable, and less
up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will
completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions,
if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval
of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware
law to provide for claims of creditors and the requirements of other applicable law. Our sponsor and each of our officers and directors
have entered into a letter agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from
the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within 24 months
from the closing of our IPO or during any extended time that we have to consummate a business combination as a result of shareholder
vote to amend our certificate of incorporation (an “Extension Period”). However, if our sponsor or any of our officers, directors
or any of their respective affiliates then hold any public shares, they will be entitled to liquidating distributions from the trust
account with respect to such public shares if we fail to complete our initial business combination within the allotted time frame to
complete our initial business combination.

 

In
the event of a liquidation, dissolution or winding up of the company after a business combination, our stockholders at such time will
be entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision
is made for each class of stock, if any, having preference over the common stock. Our stockholders have no preemptive or other subscription
rights. There are no sinking fund provisions applicable to the common stock, except that we will provide our stockholders with the opportunity
to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, including
interest (which interest shall be net of taxes payable), upon the completion of our initial business combination, subject to the limitations
described herein.

 

Founder
Shares

 

The
founder shares are identical to the shares of common stock included in the units sold in our IPO, except that: (1) prior to our
initial business combination, only holders of the Class B common stock have the right to vote on the election of directors and holders
of a majority of the outstanding shares of our Class B common stock may remove members of our board of directors for any reason;
(2) our sponsor and each of our officers and directors have entered into a letter agreement with us, pursuant to which they have
agreed to waive: (a) their redemption rights with respect to any founder shares and any public shares held by them in connection
with the completion of our initial business combination, (b) their redemption rights with respect to any founder shares and public
shares held by them in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation
(A) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination
or to redeem 100% of our public shares if we have not consummated our initial business combination within 24 months from the closing
of our IPO or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination
activity; and (c) their rights to liquidating distributions from the trust account with respect to any founder shares held by them
if we fail to complete our initial business combination within 24 months from the closing of our IPO or during any Extension Period (although
they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete
our initial business combination within the prescribed time frame); (3) the founder shares are subject to certain transfer restrictions,
as described in more detail below; (4) the founder shares are automatically convertible into shares of our Class A common stock
at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment
pursuant to certain anti-dilution rights, as described herein; and (5) the holders of founder shares are entitled to registration
rights. If we submit our initial business combination to our public stockholders for a vote, our sponsor and each of our officers and
directors have agreed (and their permitted transferees, as applicable, will agree) to vote any founder shares and any public shares held
by them in favor of our initial business combination.

 

    3

     

    

 

The
shares of Class B common stock will automatically convert into shares of Class A common stock at the time of our initial business
combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment as provided herein. In the case that
additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts issued
in our IPO and related to the closing of our initial business combination, the ratio at which shares of Class B common stock shall
convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of our
Class B common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that
the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in
the aggregate, on an as-converted basis, 20% of the total number of all shares of common stock outstanding upon completion of our IPO
plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with our initial business
combination (net of the number of shares of Class A common stock redeemed in connection with our initial business combination),
excluding any shares or equity-linked securities issued, or to be issued, to any seller in our initial business combination.

 

With
certain limited exceptions, the founder shares are not transferable, assignable or salable (except to our officers and directors and
other persons or entities affiliated with our sponsor, each of whom will be subject to the same transfer restrictions) until the earlier
of (A) one year after the completion of our initial business combination, (B) subsequent to our initial business combination,
(x) the date on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results
in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property or
(y) if the last reported sale price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits,
stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing
at least 150 days after our initial business combination.

 

In
addition, at the time of our initial business combination, we expect our sponsor to agree to vesting or other terms relating to our founder
shares that it believes best align our sponsor’s objectives with that of our post-initial business combination stockholders. For
example, in connection with initial business combinations, sponsors of other blank check companies have, in the recent past, subjected
a certain number of their founder shares to vesting conditions based on the stock price of the blank check companies’ public stock,
which our sponsor may elect to pursue if they believe it will help effectuate a business combination, although our sponsor has no obligation
or other duty to do so.

 

Public
Stockholders Warrants

 

Each
whole warrant entitles the registered holder to purchase one share of our Class A common stock at a price of $11.50 per share, subject
to adjustment as discussed below, at any time commencing on the later of 12 months from the closing of our IPO and 30 days after
the completion of our initial business combination. A warrant holder may exercise its warrants only for a whole number of shares of Class A
common stock. This means only a whole warrant may be exercised at a given time by a warrant holder. No fractional warrants will be issued
upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least three units, you will not
be able to receive or trade a whole warrant. The warrants will expire five years after the completion of our initial business combination,
at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

 

We
will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation
to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of Class A
common issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of Class A common
stock is available, subject to our satisfying our obligations described below with respect to registration. No warrant will be exercisable
for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless
the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder,
or an exemption from registration is available. In the event that the conditions in the two immediately preceding sentences are not satisfied
with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value
and expire worthless. In no event will we be required to net cash settle any warrant. In the event that a registration statement is not
effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the
unit solely for the share of Class A common stock underlying such unit.

 

    4

     

    

 

We
have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination,
we will use our commercially reasonable efforts to file with the SEC, and within 60 business days following our initial business combination
to have declared effective, a registration statement covering the issuance of the shares of Class A common stock issuable upon exercise
of the warrants and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire
or are redeemed. Notwithstanding the above, if our Class A common stock is at the time of any exercise of a warrant not listed on
a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1)
of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless
basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to
file or maintain in effect a registration statement, but will use our commercially reasonable efforts to register or qualify the shares
under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the issuance of the
shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after
the closing of our initial business combination, warrant holders may, until such time as there is an effective registration statement
and during any period when we will have failed to maintain an effective registration statement, exercise warrants on a “cashless
basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. In such event, each holder would pay
the exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the lesser of (A) the
quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied
by the excess of the “fair market value” of our Class A common stock over the exercise price of the warrants by (y) the
fair market value and (B) 0.365 shares of Class A common stock per whole warrant. The “fair market value” as used in
this paragraph shall mean the average last reported sale price of the Class A common stock for the ten trading days ending on the
third trading day prior to the date on which the notice of exercise is received by the warrant agent. If that exemption, or another exemption,
is not available, holders will not be able to exercise their warrants on a cashless basis.

 

Redemption
of warrants when the price per share of Class A common stock equals or exceeds $18.00

 

Once the warrants become
exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):

 

		●	in
                                            whole and not in part;

 

		●	at
                                            a price of $0.01 per warrant;

 

		●	upon
                                            a minimum of 30 days’ prior written notice of redemption, or the 30-day redemption
                                            period, to each warrant holder; and

 

		●	if,
                                            and only if, the last reported sale price of the Class A common stock for any 20 trading
                                            days within a 30-trading day period ending three trading days before we send the notice of
                                            redemption to the warrant holders (which we refer to as the “Reference Value”)
                                            equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable
                                            upon exercise or the exercise price of a warrant as described under the heading “—
                                            Anti-Dilution Adjustments”).

 

We
will not redeem the warrants as described above unless a registration statement under the Securities Act covering the issuance of the
Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those Class A
common stock is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such
cashless exercise is exempt from registration under the Securities Act, including our (i) failure to have an effective registration
statement by the 60th business day after the closing of the initial business combination as described in the immediately following
paragraph or (ii) as a result of a notice of redemption described below under “Redemption of warrants when the price per share
of Class A common stock equals or exceeds $10.00”). If and when the warrants become redeemable by us, we may exercise our
redemption rights even if we are unable to register or qualify the underlying securities for sale under all applicable state securities
laws. As a result, we may redeem warrants even if the holders are otherwise unable to exercise their warrants.

 

    5

     

    

 

We
have established the $18.00 per share (as adjusted) redemption criteria discussed above to prevent a redemption call unless there is
at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a
notice of redemption of the warrants, each warrant holder will be entitled to exercise its warrant prior to the scheduled redemption
date. However, the price of the Class A common stock may fall below the $18.00 redemption trigger price (as adjusted for stock splits,
stock dividends, reorganizations, recapitalizations and the like) as well as the $11.50 warrant exercise price after the redemption notice
is issued.

 

Redemption
of warrants when the price per share of Class A common stock equals or exceeds $10.00.

 

Once
the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement
warrants):

 

		●	in
                                            whole and not in part;

 

		●	at
                                            a price of $0.10 per warrant upon a minimum of 30 days’ prior written notice of
                                            redemption provided that holders will be able to exercise their warrants prior to redemption
                                            and receive that number of shares of Class A common stock determined by reference to
                                            the table below, based on the redemption date and the “fair market value” of
                                            our Class A common stock (as defined below) except as otherwise described below;

 

		●	the
                                            Reference Value (as defined above under the heading “— Redemption of warrants
                                            when the price per share of Class A common stock equals or exceeds $18.00”) equals
                                            or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable
                                            upon exercise or the exercise price of a warrant as described under the heading “—
                                            Anti-Dilution Adjustments”); and

 

		●	if
                                            the Reference Value is less than $18.00 per share (as adjusted for adjustments to the number
                                            of shares issuable upon exercise or the exercise price of a warrant as described under the
                                            heading “— Anti-Dilution Adjustments”), the private placement warrants
                                            are also concurrently called for redemption on the same terms as the outstanding public warrants,
                                            as described above.

 

Beginning
on the date the notice of redemption is given until the warrants are redeemed or exercised, holders who elect to exercise their warrants
may only do so on a cashless basis. The numbers in the table below represent the number of shares of Class A common stock that a
warrant holder will receive upon such cashless exercise in connection with a redemption by us pursuant to this redemption feature, based
on the “fair market value” of our Class A common stock on the corresponding redemption date (assuming holders elect
to exercise their warrants and such warrants are not redeemed for $0.10 per warrant), determined for these purposes based on the volume-weighted
average price of our Class A common stock as reported during the ten trading days immediately following the date on which the notice
of redemption is sent to the holders of warrants, and the number of months that the corresponding redemption date precedes the expiration
date of the warrants, each as set forth in the table below. We will provide our warrant holders with the final fair market value no later
than one business day after the ten-trading day period described above ends. Pursuant to the warrant agreement, references above to Class A
common stock shall include a security other than Class A common stock into which the Class A common stock has been converted
or exchanged for in the event we are not the surviving company in our initial business combination. The numbers in the tables below will
not be adjusted solely as a result of us not being the surviving entity following our initial business combination.

 

The
share prices set forth in the column headings of the table below will be adjusted as of any date on which the number of shares issuable
upon exercise of a warrant or the exercise price of a warrant is adjusted as set forth under the heading “— Anti-Dilution
Adjustments” below. If the number of shares issuable upon exercise of a warrant is adjusted, the adjusted share prices in the column
headings will equal the share prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the exercise
price of the warrant after such adjustment and the denominator of which is the price of the warrant immediately prior to such adjustment.
In such an event, the number of shares in the table below shall be adjusted by multiplying such share amounts by a fraction, the numerator
of which is the number of shares deliverable upon exercise of a warrant immediately prior to such adjustment and the denominator of which
is the number of shares deliverable upon exercise of a warrant as so adjusted. If the exercise price of a warrant is adjusted, (a) in
the case of an adjustment pursuant to the fifth paragraph under the heading “— Anti-Dilution Adjustments” below, the
adjusted share prices in the column headings will equal the unadjusted share price multiplied by a fraction, the numerator of which is
the higher of the Market Value and the Newly Issued Price as set forth under the heading “— Anti-Dilution Adjustments”
and the denominator of which is $10.00 and (b) in the case of an adjustment pursuant to the second paragraph under the heading “—
Anti-Dilution Adjustments” below, the adjusted share prices in the column headings will equal the unadjusted share price less the
decrease in the exercise price of a warrant pursuant to such exercise price adjustment.

 

    6

     

    

 

 

	Redemption Date (period to 

expiration of warrants)	 	Fair Market Value of Class A Common Stock
	≤$10.00	 	$11.00	 	$12.00	 	$13.00	 	$14.00	 	$15.00	 	$16.00	 	$17.00	 	≥$18.00
	57 months	 	0.257	 	0.277	 	0.294	 	0.310	 	0.324	 	0.337	 	0.348	 	0.358	 	0.365
	54 months	 	0.252	 	0.272	 	0.291	 	0.307	 	0.322	 	0.335	 	0.347	 	0.357	 	0.365
	51 months	 	0.246	 	0.268	 	0.287	 	0.304	 	0.320	 	0.333	 	0.346	 	0.357	 	0.365
	48 months	 	0.241	 	0.263	 	0.283	 	0.301	 	0.317	 	0.332	 	0.344	 	0.356	 	0.365
	45 months	 	0.235	 	0.258	 	0.279	 	0.298	 	0.315	 	0.330	 	0.343	 	0.356	 	0.365
	42 months	 	0.228	 	0.252	 	0.274	 	0.294	 	0.312	 	0.328	 	0.342	 	0.355	 	0.364
	39 months	 	0.221	 	0.246	 	0.269	 	0.290	 	0.309	 	0.325	 	0.340	 	0.354	 	0.364
	36 months	 	0.213	 	0.239	 	0.263	 	0.285	 	0.305	 	0.323	 	0.339	 	0.353	 	0.364
	33 months	 	0.205	 	0.232	 	0.257	 	0.280	 	0.301	 	0.320	 	0.337	 	0.352	 	0.364
	30 months	 	0.196	 	0.224	 	0.250	 	0.274	 	0.297	 	0.316	 	0.335	 	0.351	 	0.364
	27 months	 	0.185	 	0.214	 	0.242	 	0.268	 	0.291	 	0.313	 	0.332	 	0.350	 	0.364
	24 months	 	0.173	 	0.204	 	0.233	 	0.260	 	0.285	 	0.308	 	0.329	 	0.348	 	0.364
	21 months	 	0.161	 	0.193	 	0.223	 	0.252	 	0.279	 	0.304	 	0.326	 	0.347	 	0.364
	18 months	 	0.146	 	0.179	 	0.211	 	0.242	 	0.271	 	0.298	 	0.322	 	0.345	 	0.363
	15 months	 	0.130	 	0.164	 	0.197	 	0.230	 	0.262	 	0.291	 	0.317	 	0.342	 	0.363
	12 months	 	0.111	 	0.146	 	0.181	 	0.216	 	0.250	 	0.282	 	0.312	 	0.339	 	0.363
	9 months	 	0.090	 	0.125	 	0.162	 	0.199	 	0.237	 	0.272	 	0.305	 	0.336	 	0.362
	6 months	 	0.065	 	0.099	 	0.137	 	0.178	 	0.219	 	0.259	 	0.296	 	0.331	 	0.362
	3 months	 	0.034	 	0.065	 	0.104	 	0.150	 	0.197	 	0.243	 	0.286	 	0.326	 	0.361
	0 months	 	— 	 	— 	 	0.042	 	0.115	 	0.179	 	0.233	 	0.281	 	0.323	 	0.361

 

The
exact fair market value and redemption date may not be set forth in the table above, in which case, if the fair market value is between
two values in the table or the redemption date is between two redemption dates in the table, the number of shares of Class A common
stock to be issued for each warrant exercised will be determined by a straight-line interpolation between the number of shares set forth
for the higher and lower fair market values and the earlier and later redemption dates, as applicable, based on a 365 or 366-day year,
as applicable. For example, if the average last reported sale price of our Class A common stock for the ten trading days immediately
following the date on which the notice of redemption is sent to the holders of the warrants is $11 per share, and at such time there
are 57 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature, exercise their
warrants for 0.277 shares of Class A common stock for each whole warrant. For an example where the exact fair market value and redemption
date are not as set forth in the table above, if the average last reported sale price of our Class A common stock for the ten trading
days immediately following the date on which the notice of redemption is sent to the holders of the warrants is $13.50 per share, and
at such time there are 38 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature,
exercise their warrants for 0.298 shares of Class A common stock for each whole warrant. In no event will the warrants be exercisable
on a cashless basis in connection with this redemption feature for more than 0.365 shares of Class A common stock per whole warrant
(subject to adjustment). Finally, as reflected in the table above, if the warrants are out of the money and about to expire, they cannot
be exercised on a cashless basis in connection with a redemption by us pursuant to this redemption feature, since they will not be exercisable
for any shares of Class A common stock.

 

    7

     

    

 

This
redemption feature differs from the typical warrant redemption features used in many other blank check offerings, which typically only
provide for a redemption of warrants for cash (other than the private placement warrants) when the trading price for the Class A
common stock exceeds $18.00 per share for a specified period of time. This redemption feature is structured to allow for all of the outstanding
warrants (other than the private placement warrants) to be redeemed when the Class A common stock is trading at or above $10.00
per share, which may be at a time when the trading price of our Class A common stock is below the exercise price of the warrants.
We have established this redemption feature to provide us with the flexibility to redeem the warrants without the warrants having to
reach the $18.00 per share threshold set forth above under “— Redemption of warrants when the price per share of Class A
common stock equals or exceeds $18.00.” Holders choosing to exercise their warrants in connection with a redemption pursuant to
this feature will, in effect, receive a number of shares for their warrants based on an option pricing model with a fixed volatility
input as of the date of the prospectus related to our IPO. This redemption right provides us an additional mechanism by which to redeem
all of the outstanding warrants, and therefore have certainty as to our capital structure as the warrants would no longer be outstanding
and would have been exercised or redeemed, and we will effectively be required to pay the redemption price to warrant holders if we choose
to exercise this redemption right and it will allow us to quickly proceed with a redemption of the warrants if we determine it is in
our best interest to do so. As such, we would redeem the warrants in this manner when we believe it is in our best interest to update
our capital structure to remove the warrants and pay the redemption price to the warrant holders.

 

As
stated above, we can redeem the warrants when the Class A common stock is trading at a price starting at $10.00, which is below
the exercise price of $11.50, because it will provide certainty with respect to our capital structure and cash position while providing
warrant holders with the opportunity to exercise their warrants on a cashless basis for the applicable number of shares of Class A
common stock. If we choose to redeem the warrants when the Class A common stock is trading at a price below the exercise price of
the warrants, this could result in the warrant holders receiving fewer shares of Class A common stock than they would have received
if they had chosen to wait to exercise their warrants for shares of Class A common stock if and when shares of Class A common
stock were trading at a price higher than the exercise price of $11.50 per share.

 

No
fractional shares of Class A common stock will be issued upon exercise. If, upon exercise, a holder would be entitled to receive
a fractional interest in a share, we will round down to the nearest whole number of shares of Class A common stock to be issued
to the holder. If, at the time of redemption, the warrants are exercisable for a security other than the shares of Class A common
stock pursuant to the warrant agreement (for instance, if we are not the surviving company in our initial business combination), the
warrants may be exercised for such security.

 

Redemption
Procedures and Cashless Exercise.

 

If we call the warrants for redemption as described above under
“— Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00,” our management
will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis” (such option, the
“Cashless Exercise Option”). In determining whether to require all holders to exercise their warrants on a “cashless
basis,” our management will consider, among other factors, our cash position, the number of warrants that are outstanding and the
dilutive effect on our stockholders of issuing the maximum number of shares of Class A common stock issuable upon the exercise of
our warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of Class A
common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying
the warrants, multiplied by the excess of the “fair market value” (defined below) over the exercise price of the warrants
by (y) the fair market value. The “fair market value” shall mean the average last reported sale price of the Class A
common stock for the ten trading days ending on the third trading day prior to the date on which the notice of redemption is sent to
the holders of warrants. If our management takes advantage of this Cashless Exercise Option, the notice of redemption will contain the
information necessary to calculate the number of shares of Class A common stock to be received upon exercise of the warrants, including
the “fair market value” in such case. Requiring a cashless exercise in this manner will reduce the number of shares to be
issued and thereby lessen the dilutive effect of a warrant redemption. We believe this Cashless Exercise Option feature is an attractive
option to us if we do not need the cash from the exercise of the warrants after our initial business combination. If we call our warrants
for redemption and our management does not take advantage of this Cashless Exercise Option, our sponsor and its permitted transferees
would still be entitled to exercise their private placement warrants for cash or on a cashless basis using the same formula described
above that other warrant holders would have been required to use had management taken advantage of this Cashless Exercise Option, as
described in more detail below.

 

    8

     

    

 

A
holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the
right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such person’s
affiliates), would beneficially own in excess of 9.8% (or such other amount as a holder may specify) of the shares of Class A common
stock outstanding immediately after giving effect to such exercise.

 

Anti-Dilution
Adjustments.

 

If the number of outstanding shares of Class A common stock is increased by a stock
dividend payable in shares of Class A common stock, or by a split-up of shares of Class A common stock or other similar event,
then, on the effective date of such stock dividend, split-up or similar event, the number of shares of Class A common stock issuable
on exercise of each warrant will be increased in proportion to such increase in the outstanding shares of Class A common stock.
A rights offering to holders of Class A common stock entitling holders to purchase shares of Class A common stock at a price
less than the fair market value will be deemed a stock dividend of a number of shares of Class A common stock equal to the product
of (1) the number of shares of Class A common stock actually sold in such rights offering (or issuable under any other equity
securities sold in such rights offering that are convertible into or exercisable for Class A common stock) multiplied by (2) one
minus the quotient of (x) the price per share of Class A common stock paid in such rights offering divided by (y) the
fair market value. For these purposes (1) if the rights offering is for securities convertible into or exercisable for Class A
common stock, in determining the price payable for Class A common stock, there will be taken into account any consideration received
for such rights, as well as any additional amount payable upon exercise or conversion and (2) fair market value means the volume
weighted average price of Class A common stock as reported during the ten trading day period ending on the trading day prior to
the first date on which the shares of Class A common stock trade on the applicable exchange or in the applicable market, regular
way, without the right to receive such rights.

 

In
addition, if we, at any time while the warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities
or other assets to the holders of Class A common stock on account of such shares of Class A common stock (or other shares of
our capital stock into which the warrants are convertible), other than (a) as described above, (b) certain ordinary cash dividends
(initially defined as up to $0.50 per share in a 365 day period), (c) to satisfy the redemption rights of the holders of Class A
common stock in connection with a proposed initial business combination, (d) to satisfy the redemption rights of the holders of
Class A common stock in connection with a stockholder vote to amend our amended and restated certificate of incorporation (I) to
modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem
100% of our Class A common stock if we do not complete our initial business combination within 24 months from the closing of our
IPO or (II) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity,
or (e) in connection with the redemption of our public shares upon our failure to complete our initial business combination, then
the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or
the fair market value of any securities or other assets paid on each share of Class A common stock in respect of such event.

 

If
the number of outstanding shares of our Class A common stock is decreased by a consolidation, combination, reverse stock split or
reclassification of shares of Class A common stock or other similar event, then, on the effective date of such consolidation, combination,
reverse stock split, reclassification or similar event, the number of shares of Class A common stock issuable on exercise of each
warrant will be decreased in proportion to such decrease in outstanding shares of Class A common stock.

 

Whenever
the number of shares of Class A common stock purchasable upon the exercise of the warrants is adjusted, as described above, the
warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction
(x) the numerator of which will be the number of shares of Class A common stock purchasable upon the exercise of the warrants
immediately prior to such adjustment, and (y) the denominator of which will be the number of shares of Class A common stock
so purchasable immediately thereafter.

 

In
addition, if (x) we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes
in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per share (with such issue
price or effective issue price to be determined in good faith by our board of directors and, (i) in the case of any such issuance
to our sponsor or any of their respective affiliates, without taking into account any founder shares held by our sponsor or such affiliates,
as applicable, prior to such issuance, and (ii) to the extent that such issuance is made to any of their respective affiliates,
without taking into account the transfer of founder shares or private placement warrants (including if such transfer is effectuated as
a surrender to us and subsequent reissuance by us) by our sponsor in connection with such issuance), (y) the aggregate gross proceeds
from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial
business combination on the date of the consummation of our initial business combination (net of redemptions), and (z) the Market
Value is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the
higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described above under “—
Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00” and “— Redemption
of warrants when the price per share of Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent)
to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described
above under “— Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00”
will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.

 

    9

     

    

 

In
case of any reclassification or reorganization of the outstanding shares of Class A common stock (other than those described above
or that solely affects the par value of such shares of Class A common stock), or in the case of any merger or consolidation of us
with or into another corporation (other than a merger or consolidation in which we are the continuing corporation and that does not result
in any reclassification or reorganization of our outstanding shares of Class A common stock), or in the case of any sale or conveyance
to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with
which we are dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the
terms and conditions specified in the warrants and in lieu of the shares of our Class A common stock immediately theretofore purchasable
and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property
(including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any
such sale or transfer, that the holder of the warrants would have received if such holder had exercised their warrants immediately prior
to such event. However, if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or
other assets receivable upon such merger or consolidation, then the kind and amount of securities, cash or other assets for which each
warrant will become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in
such merger or consolidation that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and
accepted by such holders (other than a tender, exchange or redemption offer made by the company in connection with redemption rights
held by stockholders of the company as provided for in the company’s amended and restated certificate of incorporation or as a
result of the redemption of shares of Class A common stock by the company if a proposed initial business combination is presented
to the stockholders of the company for approval) under circumstances in which, upon completion of such tender or exchange offer, the
maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such
maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange
Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3
under the Exchange Act) more than 50% of the outstanding shares of Class A common stock, the holder of a warrant will be entitled
to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder
if such warrant holder had exercised the warrant prior to the expiration of such tender or exchange offer, accepted such offer and all
of the Class A common stock held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustments
(from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in
the warrant agreement. Additionally, if less than 70% of the consideration receivable by the holders of Class A common stock in
such a transaction is payable in the form of Class A common stock in the successor entity that is listed for trading on a national
securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following
such event, and if the registered holder of the warrant properly exercises the warrant within thirty days following public disclosure
of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the per share consideration
minus Black-Scholes Warrant Value (as defined in the warrant agreement) of the warrant.

 

The
warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as
warrant agent, and us. You should review a copy of the warrant agreement for a description of the terms and conditions applicable to
the warrants. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure
any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding public
warrants to make any change that adversely affects the interests of the registered holders of public warrants.

 

    10

     

    

 

In
addition, if (x) we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes
in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per
share (with such issue price or effective issue price to be determined in good faith by our board of directors and, (i) in the case
of any such issuance to our sponsor or any of its affiliates, without taking into account any founder shares held by our sponsor or such
affiliates, as applicable, prior to such issuance, and (ii) to the extent that such issuance is made to our sponsor or any of its
affiliates, without taking into account the transfer of founder shares or private placement warrants (including if such transfer is effectuated
as a surrender to us and subsequent reissuance by us) by our sponsor in connection with such issuance) (the “Newly Issued Price”),
(y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon,
available for the funding of our initial business combination on the date of the consummation of our initial business combination (net
of redemptions), and (z) the volume weighted average trading price of our common stock during the 20 trading day period starting
on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”)
is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher
of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described below in “Redemption
of warrants when the price per share of Class A common stock equals or exceeds $18.00” and “Redemption of warrants when
the price per share of Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to
180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger described below in “Redemption
of warrants when the price per share of Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent)
to be equal to the higher of the Market Value and the Newly Issued Price.

 

The
warrant holders do not have the rights or privileges of holders of Class A common stock and any voting rights until they exercise
their warrants and receive shares of Class A common stock. After the issuance of shares of Class A common stock upon exercise
of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.

 

No
fractional warrants will be issued upon separation of the units and only whole warrants will trade.

 

Our
Transfer Agent and Warrant Agent

 

The
transfer agent for our common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company. We have
agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents
and each of its shareholders, directors, officers and employees against all liabilities, including judgments, costs and reasonable counsel
fees that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence,
willful misconduct or bad faith of the indemnified person or entity.

 

Our
Amended and Restated Certificate of Incorporation

 

Our
amended and restated certificate of incorporation will contain certain requirements and restrictions relating to our IPO that will apply
to us until the completion of our initial business combination. These provisions (other than amendments relating to the appointment or
removal of directors prior to our initial business combination, which require the approval of holders of a majority of at least 90% of
the outstanding shares of our common stock voting in a stockholder meeting) cannot be amended without the approval of the holders of
at least 65% of our outstanding common stock. Our initial stockholders may participate in any vote to amend our amended and restated
certificate of incorporation and will have the discretion to vote in any manner they choose. Unless specified in our amended and restated
certificate of incorporation or bylaws, or as required by applicable law or stock exchange rules, the affirmative vote of a majority
of the outstanding shares of our common stock that are voted is required to approve any such matter voted on by our stockholders, and,
prior to our initial business combination, the affirmative vote of holders of a majority of the outstanding shares of our Class B
common stock is required to approve the election or removal of directors. Specifically, our amended and restated certificate of incorporation
will provide, among other things, that:

 

		●	if
                                            we have not completed our initial business combination within 24 months from the closing
                                            of our IPO, we will: (1) cease all operations except for the purpose of winding up;
                                            (2) as promptly as reasonably possible but not more than ten business days thereafter,
                                            redeem the public shares, at a per per-share price, payable in cash, equal to the aggregate
                                            amount then on deposit in the trust account, including interest (which interest shall be
                                            net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), divided
                                            by the number of then outstanding public shares, which redemption will completely extinguish
                                            public stockholders’ rights as stockholders (including the right to receive further
                                            liquidating distributions, if any), subject to applicable law; and (3) as promptly as
                                            reasonably possible following such redemption, subject to the approval of our remaining stockholders
                                            and our board of directors, dissolve and liquidate, subject in each case to our obligations
                                            under Delaware law to provide for claims of creditors and the requirements of other applicable
                                            law;

 

    11

     

    

 

		●	prior
                                            to our initial business combination, we may not issue additional shares of capital stock
                                            that would entitle the holders thereof to: (1) receive funds from the trust account;
                                            or (2) vote pursuant to our amended and restated certificate of incorporation on any
                                            initial business combination;

 

		●	in
                                            the event we seek to complete our initial business combination with a company that is affiliated
                                            with Macquarie, our sponsor, officers or directors, we, or a committee of independent and
                                            disinterested directors, will obtain an opinion from an independent investment banking firm
                                            that is a member of FINRA or from an independent accounting firm that such a business combination
                                            is fair to our company from a financial point of view;

 

		●	if
                                            a stockholder vote on our initial business combination is not required by applicable law
                                            or stock exchange rules and we do not decide to hold a stockholder vote for business or other
                                            reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E
                                            of the Exchange Act, and will file tender offer documents with the SEC prior to completing
                                            our initial business combination which contain substantially the same financial and other
                                            information about our initial business combination and the redemption rights as is required
                                            under Regulation 14A of the Exchange Act;

 

		●	our
                                            initial business combination must be with one or more operating businesses or assets with
                                            a fair market value equal to at least 80% of the net assets held in the trust account (excluding
                                            the amount of any deferred underwriting commissions);

 

		●	if
                                            our stockholders approve an amendment to our amended and restated certificate of incorporation
                                            (A) to modify the substance or timing of our obligation to allow redemptions in connection
                                            with our initial business combination or to redeem 100% of our public shares if we do not
                                            complete our initial business combination within 24 months from the closing of our IPO or
                                            (B) with respect to any other provision relating to stockholders’ rights or pre-initial
                                            business combination activity, we will provide our public stockholders with the opportunity
                                            to redeem all or a portion of their shares of common stock upon such approval at a per-share
                                            price, payable in cash, equal to the aggregate amount then on deposit in the trust account,
                                            including interest (which interest shall be net of taxes payable), divided by the number
                                            of then outstanding public shares; and

 

		●	we
                                            will not effectuate our initial business combination solely with another blank check company
                                            or a similar company with nominal operations.

 

In
addition, our amended and restated certificate of incorporation will provide that under no circumstances will we redeem our public shares
in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions.

 

Certain
Anti-Takeover Provisions of Delaware Law and our Amended and Restated Certificate of

Incorporation
and Bylaws

 

We
will be subject to the provisions of Section 203 of the DGCL regulating corporate takeovers upon completion of our IPO. This statute
prevents certain Delaware corporations, under certain circumstances, from engaging in a “business combination” with:

 

		●	a
                                            stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested
                                            stockholder”);

 

		●	an
                                            affiliate of an interested stockholder; or

 

    12

     

    

 

		●	an
                                            associate of an interested stockholder, for three years following the date that the stockholder
                                            became an interested stockholder.

 

A
“business combination” includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203
do not apply if:

 

		●	our
                                            board of directors approves the transaction that made the stockholder an “interested
                                            stockholder,” prior to the date of the transaction;

 

		●	after
                                            the completion of the transaction that resulted in the stockholder becoming an interested
                                            stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time
                                            the transaction commenced, other than statutorily excluded shares of common stock; or

 

		●	on
                                            or subsequent to the date of the transaction, the business combination is approved by our
                                            board of directors and authorized at a meeting of our stockholders, and not by written consent,
                                            by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by
                                            the interested stockholder.

 

Our
authorized but unissued common stock and preferred stock are available for future issuances without stockholder approval (including a
specified future issuance) and could be utilized for a variety of corporate purposes, including future offerings to raise additional
capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred
stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger
or otherwise.

 

Exclusive
Forum For Certain Lawsuits

 

Our
amended and restated certificate of incorporation will provide that, unless we consent in writing to the selection of an alternative
forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum
for any (1) derivative action or proceeding brought on behalf of our company, (2) action asserting a claim of breach of a fiduciary
duty owed by any director, officer, employee or agent of our company to our company or our stockholders, or any claim for aiding and
abetting any such alleged breach, (3) action asserting a claim against our company or any director, officer or employee of our company
arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or our bylaws, or (4) action
asserting a claim against us or any director, officer or employee of our company governed by the internal affairs doctrine except for,
as to each of (1) through (4) above, any claim (A) as to which the Court of Chancery determines that there is an indispensable
party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction
of the Court of Chancery within ten days following such determination) or (B) which is vested in the exclusive jurisdiction of a
court or forum other than the Court of Chancery. Notwithstanding the foregoing, the provisions of this paragraph will not apply to suits
brought to enforce any liability or duty created by the Securities Act or the Exchange Act or otherwise arising under federal securities
laws, for which the federal district courts of the United States of America shall be the sole and exclusive forum. Although we believe
this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it
applies, the provision may have the effect of discouraging lawsuits against our directors, officers, other employees or stockholders.

 

Furthermore,
the enforceability of choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal
proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable.

 

Special
Meeting of Stockholders

 

Our
bylaws provide that special meetings of our stockholders may be called only by a majority vote of our board of directors, by our chief
executive officer or by our chairman, if any.

 

Advance
Notice Requirements for Stockholder Proposals and Director Nominations

 

Our
bylaws will provide for advance notice procedures with respect to stockholder proposals and the nomination of candidates for election
as directors, other than nominations made by or at the direction of our board of directors or a committee of our board of directors.
In order for any matter to be “properly brought” before a meeting, a stockholder will have to comply with advance notice
requirements and provide us with certain information. Generally, to be timely, a stockholder’s notice must be received at our principal
executive offices not less than 90 days nor more than 120 days prior to the first anniversary date of the immediately preceding
annual meeting of stockholders. Pursuant to Rule 14a-8 of the Exchange Act, proposals seeking inclusion in our annual proxy statement
must comply with the notice periods contained therein. Our bylaws will also specify requirements as to the form and content of a stockholder’s
notice. Our bylaws will allow the chairman of the meeting at a meeting of the stockholders to adopt rules and regulations for the conduct
of meetings which may have the effect of precluding the conduct of certain business at a meeting if the rules and regulations are not
followed. These provisions may also defer, delay or discourage a potential acquirer from conducting a solicitation of proxies to elect
the acquirer’s own slate of directors or otherwise attempting to influence or obtain control of us.

 

Listing
of Securities

 

Our
units, Class A common stock and warrants are listed on Nasdaq under the symbols “TETCU,” “TETC” and “TETCWS,”
respectively.

 

 

13

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