Document:

EX-10.65 FifthAmendandRestatedRevolverLoanAgmt

Exhibit 10.65

FIFTH AMENDED AND RESTATED LOAN AGREEMENT
BETWEEN
U.S. BANK NATIONAL ASSOCIATION 
Sole Bookrunner, Left Lead Arranger, and Administrative Agent
FIFTH THIRD BANK 
Joint Lead Arranger and Co-Syndication Agent
COBANK, ACB 
Joint Lead Arranger and Co-Syndication Agent
JPMORGAN CHASE BANK, N.A. 
Co-Documentation Agent
BANK OF THE WEST 
Co-Documentation Agent
BANK OF TOKYO-MITSUBISHI UFJ, LTD. 
Co-Documentation Agent
BRANCH BANKING AND TRUST COMPANY 
Co-Documentation Agent
FARM CREDIT BANK OF TEXAS 
Co-Documentation Agent
THE BANK OF NOVA SCOTIA 
Co-Documentation Agent
WELLS FARGO BANK, N.A. 
Co-Documentation Agent
AND
THE ANDERSONS, INC.
$850,000,000 Line of Credit 
Dated as of March 4, 2014

TABLE OF CONTENTS
	
			
	1.    DEFINITIONS
	1
	

	 
	 

	1.1    GENERAL DEFINITIONS
	1
	

	1.2    INDEX TO OTHER DEFINITIONS
	17
	

	1.3    ACCOUNTING TERMS
	18
	

	1.4    OTHERS DEFINED IN NEW YORK UNIFORM COMMERCIAL CODE
	19
	

	 
	 

	2.    LOANS, LETTERS OF CREDIT AND FEES
	19
	

	 
	 

	2.1    LOANS AND LETTERS OF CREDIT
	19
	

	2.1.1    Swing Line
	19
	

	2.1.2    Line of Credit
	20
	

	2.1.3    Intentionally Omitted
	20
	

	2.1.4    Letters of Credit
	20
	

	2.1.5    Funds Transfers
	23
	

	2.2    PAYMENT OF PRINCIPAL AND INTEREST; DEFAULT RATE
	24
	

	2.3    PREPAYMENTS; TERMINATION OF THE COMMITMENTS
	26
	

	2.4    PURPOSE
	28
	

	2.5    LOAN AND LETTER OF CREDIT FEES
	28
	

	2.6    BORROWER’S LOAN ACCOUNT
	29
	

	2.7    STATEMENTS
	29
	

	2.8    TERMINATION OF AGREEMENT
	30
	

	 
	 

	3.    INTENTIONALLY OMITTED
	30
	

	 
	 

	4.    CONDITIONS TO ADVANCES
	30
	

	 
	 

	4.1    COMPLIANCE
	30
	

	4.2    DOCUMENTATION
	30
	

	4.3    ACQUISITION AMOUNTS
	30
	

	 
	 

	5.    GUARANTIES
	31
	

	 
	 

	6.    REPRESENTATIONS AND WARRANTIES
	31
	

	 
	 

	6.1    LITIGATION AND PROCEEDINGS
	31
	

	6.2    OTHER AGREEMENTS
	31
	

	6.3    LICENSES, PATENTS, COPYRIGHTS, TRADEMARKS AND TRADE NAMES
	31
	

	6.4    ENCUMBRANCES
	31
	

	6.5    LOCATION OF ASSETS; CHIEF EXECUTIVE OFFICE
	31
	

	6.6    TAX LIABILITIES
	32
	

	6.7    INDEBTEDNESS
	32
	

	6.8    AFFILIATES
	32
	

	6.9    ENVIRONMENTAL MATTERS
	32
	

i

	
			
	6.10    EXISTENCE
	33
	

	6.11    AUTHORITY
	33
	

	6.12    BINDING EFFECT
	33
	

	6.13    CORRECTNESS OF FINANCIAL STATEMENTS
	33
	

	6.14    EMPLOYEE CONTROVERSIES
	33
	

	6.15    COMPLIANCE WITH LAWS AND REGULATIONS
	34
	

	6.16    ACCOUNT WARRANTIES
	34
	

	6.17    INVENTORY WARRANTIES
	34
	

	6.18    SOLVENCY
	34
	

	6.19    PENSION REFORM ACT
	34
	

	6.20    MARGIN SECURITY
	34
	

	6.21    INVESTMENT COMPANY ACT NOT APPLICABLE
	35
	

	6.22    FULL DISCLOSURE
	35
	

	6.23    INTELLECTUAL PROPERTY
	35
	

	6.24    SURVIVAL OF WARRANTIES
	35
	

	6.25    NO MATERIAL ADVERSE EFFECT; NO DEFAULT OR MATURED DEFAULT
	35
	

	6.26    OFAC; ANTI-TERRORISM LAWS
	35
	

	 
	 

	7.    AFFIRMATIVE COVENANTS
	36
	

	 
	 

	7.1    FINANCIAL AND OTHER INFORMATION
	36
	

	7.2    CONDUCT OF BUSINESS
	37
	

	7.3    INSURANCE
	37
	

	7.4    FINANCIAL COVENANTS AND RATIOS
	37
	

	7.5    BENEFIT PLANS
	38
	

	7.6    NOTICE OF SUIT, ADVERSE CHANGE IN BUSINESS OR DEFAULT
	38
	

	7.7    USE OF PROCEEDS
	38
	

	7.8    BOOKS AND RECORDS
	38
	

	7.9    OFAC; PATRIOT ACT COMPLIANCE
	38
	

	 
	 

	8.    NEGATIVE COVENANTS
	39
	

	 
	 

	8.1    ENCUMBRANCES
	39
	

	8.2    CONSOLIDATIONS, MERGERS OR ACQUISITIONS
	39
	

	8.3    SECURED INDEBTEDNESS
	39
	

	8.4    GUARANTEES AND OTHER CONTINGENT OBLIGATIONS
	40
	

	8.5    DISPOSITION OF PROPERTY
	40
	

	8.6    DISTRIBUTIONS IN RESPECT OF EQUITY
	40
	

	8.7    LOANS TO AND TRANSACTIONS WITH AFFILIATES
	41
	

	8.8    DEPOSITS, INVESTMENTS, ADVANCES OR LOANS
	41
	

	 
	 

	9.    DEFAULT AND RIGHTS AND REMEDIES; THE AGENT
	41
	

	 
	 

	9.1    LIABILITIES
	41
	

ii

	
			
	9.2    RIGHTS AND REMEDIES; WAIVER OF RIGHTS UNDER FARM CREDIT ACT
	41
	

	9.3    WAIVER OF DEMAND
	42
	

	9.4    WAIVER OF NOTICE
	42
	

	9.5    AUTHORIZATION AND ACTION
	42
	

	9.6    AGENT’S RELIANCE, ETC
	43
	

	9.7    NOTICES OF DEFAULTS
	43
	

	9.8    THE AGENT AS A LENDER, AFFILIATES
	43
	

	9.9    NON-RELIANCE ON AGENT AND OTHER LENDERS
	44
	

	9.10    INDEMNIFICATION
	44
	

	9.11    SUCCESSOR AGENT
	45
	

	9.12    VERIFICATION OF BORROWING NOTICES
	45
	

	 
	 

	10.    MISCELLANEOUS
	45
	

	 
	 

	10.1    TIMING OF PAYMENTS
	45
	

	10.2    ATTORNEYS’ FEES AND COSTS
	45
	

	10.3    EXPENDITURES BY THE AGENT
	46
	

	10.4    THE AGENT’S COSTS AND EXPENSES AS ADDITIONAL LIABILITIES
	46
	

	10.5    CLAIMS AND TAXES
	47
	

	10.6    CUSTODY AND PRESERVATION OF COLLATERAL
	47
	

	10.7    INSPECTION
	47
	

	10.8    EXAMINATION OF BANKING RECORDS
	47
	

	10.9    GOVERNMENTAL REPORTS
	48
	

	10.10    RELIANCE BY THE AGENT, THE ISSUER AND THE LENDERS
	48
	

	10.11    PARTIES
	48
	

	10.12    APPLICABLE LAW; SEVERABILITY
	48
	

	10.13    SUBMISSION TO JURISDICTION; WAIVER OF BOND AND TRIAL BY JURY
	48
	

	10.14    APPLICATION OF PAYMENTS; WAIVER
	49
	

	10.15    MARSHALING; PAYMENTS SET ASIDE
	49
	

	10.16    SECTION TITLES
	50
	

	10.17    CONTINUING EFFECT
	50
	

	10.18    NO WAIVER
	50
	

	10.19    NOTICES
	50
	

	10.20    REGULATORY CHANGES
	51
	

	10.21    LIBOR RATE LOANS
	52
	

	10.22    TAXES
	52
	

	10.23    ASSIGNMENTS AND PARTICIPATION
	56
	

	10.24    MAXIMUM INTEREST
	58
	

	10.25    ADDITIONAL ADVANCES
	59
	

	10.26    LOAN AGREEMENT CONTROLS
	59
	

iii

	
			
	10.27    OBLIGATIONS SEVERAL
	59
	

	10.28    PRO RATA TREATMENT
	59
	

	10.29    CONFIDENTIALITY
	60
	

	10.30    INDEPENDENCE OF COVENANTS
	60
	

	10.31    AMENDMENTS AND WAIVERS
	60
	

	10.32    REPLACEMENT OF A LENDER
	62
	

	10.33    REPRESENTATIONS BY THE LENDERS
	62
	

	10.34    COUNTERPARTS AND FACSIMILE SIGNATURES
	62
	

	10.35    SET-OFF
	63
	

	10.36    PATRIOT ACT INFORMATION
	63
	

	10.37    NO ADVISORY OR FIDUCIARY RESPONSIBILITY
	63
	

	10.38    BINDING EFFECT
	64
	

	10.39    FINAL AGREEMENT
	64
	

	10.40    AMENDMENT AND RESTATEMENT.
	64
	

SCHEDULES
Schedule A        Commitments
Schedule B        Form of Assignment and Acceptance

EXHIBITS 
Exhibit 1A        Excluded Consolidated Subsidiaries  
Exhibit 2A        Form of Note 
Exhibit 4A        List of Closing Documents 
Exhibit 5A        Form of Guaranty 
Exhibit 6A        Disclosure Schedule 
Exhibit 7A-2        Form of Compliance Certificate

iv

FIFTH AMENDED AND RESTATED LOAN AGREEMENT 

THIS FIFTH AMENDED AND RESTATED LOAN AGREEMENT (as amended, modified, supplemented, renewed or restated from time to time, this “Agreement”) is made as of March 4, 2014, by and between THE ANDERSONS, INC., an Ohio corporation (“Borrower”), the financial institutions listed on the signature pages hereof and each other financial institution that may hereafter become a party hereto in accordance with the provisions hereof (collectively the “Lenders” and individually a “Lender”, but in any event excluding all Departing Lenders) and U.S. BANK NATIONAL ASSOCIATION, a national banking association (“U.S. Bank”), in its capacity as Agent for the Lenders and for the Issuer (in such capacity, the “Agent”).
RECITAL
Borrower, U.S. Bank and certain Lenders, are parties to the Fourth Amended and Restated Loan Agreement dated as of December 7, 2011, (as amended, modified, supplemented, renewed or restated from time to time, the “Existing Agreement” or “Existing Credit Agreement”) whereby U.S. Bank (as the agent and a lender), and the other lenders, agreed to make loans, advances, extensions of credit and/or other financial accommodations to or for the benefit of Borrower.  Borrower has requested that the Existing Agreement be amended and restated pursuant hereto.
NOW, THEREFORE, in consideration of the foregoing and of the terms and conditions contained in this Agreement, and of any loans or extensions of credit or other financial accommodations at any time made to or for the benefit of Borrower by the Agent and the Lenders, Borrower, the Agent and the Lenders agree that the Existing Agreement shall be amended and restated to read as follows:
1.DEFINITIONS.
1.1    General Definitions.  When used herein, the following capitalized terms shall have the meanings indicated, whether used in the singular or the plural:
“Accounts” shall mean all present and future rights of Borrower and its consolidated subsidiaries to payment for Inventory or other Goods sold or leased or for services rendered, which rights are not evidenced by Instruments or Chattel Paper, regardless of whether such rights have been earned by performance and any other “accounts” (as defined in the Code).
“Acquisition” means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which the Borrower or any of its consolidated subsidiaries (i) acquires any going business or all or substantially all of the assets of any firm, corporation or limited liability company, or division thereof, whether through purchase of assets, merger or otherwise or (ii) 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 securities of a corporation which have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) or a majority (by percentage or voting power) of the outstanding ownership interests of a partnership or limited liability company.

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“Adjusted Monthly LIBOR Rate” shall mean with respect to each day, the rate determined by dividing the Monthly LIBOR Rate in effect on such day by 1.00 minus the LIBOR Reserve Percentage.
“Affiliate” shall mean any Person other than Borrower and its consolidated subsidiaries:  (a) that directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, Borrower or its consolidated subsidiaries; (b) that directly or beneficially owns or holds twenty-five percent (25%) or more of any class of the voting equity interest of Borrower or its consolidated subsidiaries; (c) twenty-five percent (25%) or more of the voting equity interest of which is owned directly or beneficially or held by Borrower or its consolidated subsidiaries; or (d) that is a director, officer, agent or employee of Borrower or its consolidated subsidiaries.
“Agent” has the meaning set forth in the introduction and shall include any successor to the Agent that has been appointed in accordance with Section 9.11.
“Agent’s Letter” shall mean the letter agreement between Borrower and the Agent dated March 4, 2014.
“Applicable Margin” shall mean, with respect to Swing Line Advances, Line of Credit Advances which are Daily Reset LIBOR Rate Loans, Base Rate Loans or LIBOR Rate Loans, Non-Use Fees for the Line of Credit Loan Commitments and Standby LC Fees, the rates per annum as set forth in the tables and paragraph below, for the then applicable Financial Performance Level:
Swing Line Advances, Line of Credit Advances, Non-Use Fees:
	
				
	Financial Performance Level
	Base Rate
	Daily Reset LIBOR Rate & LIBOR Rate
	Non-Use Fees

	Level 1
	1.250%
	2.250%
	0.250%

	Level 2
	0.750%
	1.750%
	0.200%

	Level 3
	0.500%
	1.500%
	0.175%

	Level 4
	0.375%
	1.375%
	0.150%

Letter of Credit Fees:
	
		
	Financial Performance Level
	Standby LC Fees

	Level 1
	2.250%

	Level 2
	1.750%

	Level 3
	1.500%

	Level 4
	1.375%

The Financial Performance Level shall be Level 3 as of the Closing Date.  The Agent will review Borrower’s financial performance as of each fiscal quarter end, beginning with fiscal quarter end March 31, 2014, after its receipt of Borrower’s financial statements and Compliance Certificate as of the end of such fiscal quarter, and will confirm Borrower’s determination as to whether Borrower’s Financial Performance Level based on such fiscal quarter end is Level 1, Level 2, Level 3 or Level 

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4.  As so confirmed by the Agent, Borrower’s Financial Performance Level will determine the Applicable Margin effective for Swing Line Advances, Line of Credit Advances, the Non-Use Fees for the Line of Credit Loan Commitments and Standby LC Fees for the three month period beginning on the first Business Day of the third month following the end of such fiscal quarter if the Agent receives such quarter end financial statements prior to the last five (5) Business Days of the second month following the end of such fiscal quarter.  If the Agent receives such quarter end financial statements during or after the last five (5) Business Days of the second month following the end of such fiscal quarter (but prior to the end of the third month following the end of such fiscal quarter), any reduction in the Applicable Margin will be delayed until the tenth day of the month following the month in which the Agent receives such quarter end financial statements, but any increase in the Applicable Margin will be effective as of the first Business Day of the third month following the end of such fiscal quarter.  If the Agent does not receive such quarter end statements prior to the end of the third month following the end of such fiscal quarter, Borrower’s Financial Performance Level shall be deemed to be Level 1 beginning with the tenth day of the fourth month following the end of such fiscal quarter and shall remain at Level 1 until the 15th Business Day after such financial statements are received by the Agent and a determination by the Agent that a different Financial Performance Level shall apply during the remainder of the three month period.
“Approved Fund” shall mean any Fund that is administered or managed by (a) a Lender, (b) an affiliate of a Lender or (c) an entity or an affiliate of an entity that administers or manages a Lender.
“Available Amount” shall mean, at any time, an amount equal to (i) the Line of Credit Loan Commitments minus (ii) the sum of (A) the aggregate principal amount of the Line of Credit Loan Liabilities, and (B) the aggregate amount of the LC Obligations.
“Bank Products” shall mean any of the following services or facilities extended to Borrower and its consolidated subsidiaries by the Agent, any Lender or any of their affiliates:  (a) credit cards or purchase cards; (b) cash management, including controlled disbursement services, automatic clearing house transfer of funds and overdrafts; and (c) facilities and services extended under Rate Protection Agreements.
“Bank Products Agreements” shall mean all documents and agreements relating to Bank Products.
“Bank Products Obligations” shall mean, with respect to any Person, all obligations and liabilities of such Person under any Bank Products Agreements.
“Base Rate” shall mean the greatest of (a) the Prime Rate, (b) the Federal Funds Rate plus one half of one percent (0.5%), and (c) the Adjusted Monthly LIBOR Rate in effect and reset each Business Day plus one percent (1.00%).
“Base Rate Loan” shall mean any Loan that bears interest at the Base Rate plus the Applicable Margin.

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“Borrower and its consolidated subsidiaries” shall mean Borrower and its consolidated subsidiaries except Excluded Consolidated Subsidiaries, except as that term is used in Section 6.13 of this Agreement, Correctness of Financial Statements, Section 6.18 of this Agreement, Solvency, Section 6.26 of this Agreement, OFAC; Anti-Terrorism Laws, Subsections (a) and (b) of Section 7.1 of this Agreement, Financial and Other Information, Section 7.8 of this Agreement, Books and Records, and Section 7.9, OFAC; PATRIOT Act Compliance, in which cases “Borrower and its consolidated subsidiaries” shall mean Borrower and its consolidated subsidiaries including Excluded Consolidated Subsidiaries.
“Borrower or any consolidated subsidiary of Borrower” shall mean Borrower or any consolidated subsidiary of Borrower except an Excluded Consolidated Subsidiary.
“Business Day” shall mean any day of the year on which commercial banks in New York, New York are not required or authorized to close, provided, in addition however, that when used in the definition of LIBOR Rate or Interest Period, or when otherwise used in connection with a rate determination, borrowing or payment in respect of a LIBOR Rate Loan, the term “Business Day” shall exclude any day on which banks in London, England are not open for dealings in deposits of Dollars in the London interbank market.
“Capitalization” shall mean, on any date, the Borrower’s Tangible Net Worth plus  Recourse Long Term Debt plus the aggregate of U.S. Dollars and investments permitted under clauses (a), (b) and (c) of Section 8.8 (net of all outstanding checks or other debits) in excess of $25,000,000 not owned by Excluded Consolidated Subsidiaries.
“Change of Control” shall mean, (a) as to Borrower, (i) the voting stock of Borrower shall cease to be publicly traded, or (ii) more than 40% of the voting stock of Borrower is owned or controlled, directly or indirectly by one Person or an affiliated group of Persons, and (b) as to any consolidated subsidiary of Borrower, existing as such on the date of this Agreement, the voting stock or voting or controlling equity interest of such consolidated subsidiary shall cease to be wholly owned by Borrower, except as the result of a merger or asset consolidation with another consolidated subsidiary of Borrower except an Excluded Consolidated Subsidiary.
“Closing Date” shall mean the date of this Agreement.
“Commitment” shall mean, as to any Lender, such Lender’s Line of Credit Loan Commitment, the Agent’s commitment to make Swing Line Advances under the Line of Credit and the Agent’s commitment to cause the Issuance of Letters under the Line of Credit, and “Commitments” shall mean collectively, such Commitments for all the Lenders and the Agent.
“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. §1 et seq.), as amended from time to time, and any successor statute.
“Daily Reset LIBOR Rate” shall mean the one-month LIBOR rate quoted by the Agent from Reuters Screen LIBOR01 Page or any successor thereto or substitute therefor, which shall be that one-month LIBOR rate in effect and reset each Business Day; provided, that if no such source is available to the Agent, the one-month LIBOR Rate for the relevant Interest Period shall instead 

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be the rate determined by the Agent to be the rate at which U.S. Bank or one of its Affiliate banks offers to place deposits in Dollars with first-class banks in the interbank market at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such one-month period, in the approximate amount of U.S. Bank’s relevant Loan and having a maturity equal to such one-month period.
“Daily Reset LIBOR Rate Loan” shall mean any Loan that bears interest at the Daily Reset LIBOR Rate plus the Applicable Margin.
“Default” shall mean the occurrence or existence of:  (a) an event which, through the passage of time or the service of notice or both, would (assuming no action is taken by Borrower or any other Person to cure the same) mature into a Matured Default; or (b) an event which requires neither the passage of time nor the service of notice to mature into a Matured Default.
“Default Period” shall mean the period of time commencing at the beginning of the first Business Day after the delivery of a “Notice of Default” to the Agent in accordance with Section 9.7 and continuing until the Default or Matured Default described therein is cured or waived, as the case may be, in accordance with the terms of this Agreement.
“Defaulting Lender” shall mean any Lender, as determined by the Agent, that has (a) defaulted on any obligation under this Agreement (including but not limited to its obligation to fund Advances, Loans, Funds Transfers (or purchases of participations in respect thereof, as applicable), reimbursements of drawings under Letters or reimbursement of expenses or amounts due with respect to indemnity claims, in each case within two (2) Business Days of the date when due and in Immediately Available Funds, (b) notified Borrower, the Agent, Issuer or any Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations (i) under this Agreement or (ii) under other agreements in which it is obligated to extend credit unless, in the case of this clause (ii), such obligation is the subject of a good faith dispute, (c) failed, within three Business Days after request by the Agent, to confirm that it will comply with the terms of this Agreement, or (d) (i) become or is insolvent or has a parent company that has become or is insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or custodian, appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment; provided, that a Lender shall not become a Defaulting Lender solely as the result of (x) the acquisition or maintenance of an ownership interest in such Lender or a Person controlling such Lender or (y) the exercise of control over a Lender or a Person controlling such Lender, in each case, by a governmental authority or an instrumentality thereof.  The Agent shall give prompt written notice to Borrower, the Lenders and Issuer of any determination that a Lender is a Defaulting Lender.  Notwithstanding the cure or 

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remediation of the events causing a Defaulting Lender to become a Defaulting Lender, a Defaulting Lender shall remain a Defaulting Lender until such time, if any, as the Agent in its sole and absolute discretion determines that such Defaulting Lender is no longer a Defaulting Lender and the Agent gives written notice of such determination to Borrower, the Lenders and Issuer; provided however, in the event that the only basis upon which a Defaulting Lender has been determined to be a Defaulting Lender is the failure to timely provide the required confirmation in accordance with item c.  above, then promptly upon receipt of such confirmation the Agent shall determine that such Defaulting Lender is no longer a Defaulting Lender and give written notice of such determination to Borrower, the Lenders and Issuer.  The terms of this Agreement that specify a different treatment of a Defaulting Lender, shall become effective on the date of the written notice from the Agent that a Defaulting Lender has become a Defaulting Lender, and shall cease to be effective on the date of the written notice from the Agent that a Defaulting Lender is no longer a Defaulting Lender.  For example, but not by way of limitation, a non-use fee or a letter of credit fee shall cease to accrue in favor of a Defaulting Lender on the date of such notice that a Defaulting Lender has become a Defaulting Lender, and such accrual shall recommence on the date of such notice that a Defaulting Lender is no longer a Defaulting Lender, respectively.
“Departing Lender” means each lender under the Existing Credit Agreement that executes and delivers to the Agent a Departing Lender Signature Page.
“Departing Lender Signature Page” means each signature page to this Agreement on which it is indicated that the Departing Lender executing the same shall cease to be a party to the Existing Credit Agreement on the Closing Date.
“Direct Pay Letter of Credit” shall mean any direct pay letter of credit Issued for the account of Borrower under this Agreement or the Existing Agreement.
“Dollars” and “$” shall mean lawful currency of the United States of America.
“EBITDA” shall mean, during any period of determination, the net income of any Person, before provision for income taxes, interest expense (including without limitation, implicit interest expense on capitalized leases), depreciation expense, amortization expense and other non-cash expenses or charges, excluding (to the extent included):  (a) non-operating gains (including without limitation, extraordinary or nonrecurring gains, gains from discontinuance of operations and gains arising from the sale of assets other than Inventory) during the applicable period; and (b) similar non-operating losses during such period.
“Eligible Assignee” shall mean (i) (A) a Lender other than a Defaulting Lender or a Lender that would become a Defaulting Lender as a result of becoming an Assignee of a Defaulting Lender, or (B) an affiliate of such Lender; (ii) an Approved Fund; (iii) a commercial bank organized under the laws of the United States, or any state thereof, or a commercial lender organized under the laws of the United States and, in each case, having total assets in excess of $3,000,000,000, calculated in accordance with the accounting principles prescribed by the regulatory authority applicable to such bank or lender in its jurisdiction of organization; (iv) a commercial bank organized under the laws of any other country that is a member of the Organization for Economic Cooperation and Development (“OECD”), or a political subdivision of any such country, and having total assets in 

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excess of $3,000,000,000, calculated in accordance with the accounting principles  prescribed by the regulatory authority applicable to such bank in its jurisdiction of organization, so long as such bank is acting through a branch or agency located in the country in which it is organized or another country that is described in this clause (iv); (v) the central bank of any country that is a member of the OECD; or (vi) any other business lending organization approved as an Eligible Assignee by the Agent (and, provided that no Default or Matured Default has occurred and is continuing, approved by Borrower, such approval not to be unreasonably withheld), provided, however, that none of Borrower, an Affiliate or a Guarantor shall qualify as an Eligible Assignee.
“Excluded Consolidated Subsidiaries” shall mean, collectively, at the time, if any, that any such entities are or have been deemed a direct or indirect consolidated subsidiary of Borrower for any prior or current reportable period, the entities listed on Exhibit 1A (each an “Excluded Consolidated Subsidiary”); provided, however, that no subsidiary shall constitute an Excluded Consolidated Subsidiary if the Borrower or any subsidiary (other than an Excluded Consolidated Subsidiary) has guaranteed the Indebtedness of the applicable Excluded Consolidated Subsidiary, is primarily or secondarily liable for such Indebtedness, has provided credit support for such Indebtedness or is otherwise obligated to pay all or any part of such Indebtedness.
“Excluded Swap Obligation” means, with respect to any Guarantor, any obligation arising under a Swap Contract if, and only 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 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), including by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guarantee of such guarantor or the grant of such security interest becomes effective with respect to such obligation.  If an obligation under a Swap Contract arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal.
“Excluded Taxes” shall mean, in the case of each Lender, the Issuer, and the Agent, (i) Taxes imposed on its overall net income, franchise Taxes, and branch profits Taxes imposed on it, by the respective jurisdiction under the laws of which such Lender, the Issuer or the Agent is incorporated or is organized or in which its principal executive office is located, (ii) in the case of a Non-U.S. Lender, any withholding tax that is imposed on amounts payable to such Non-U.S. Lender pursuant to the laws in effect at the time such Non-U.S. Lender becomes a party to this Agreement, except in each case to the extent that, pursuant to Section 10.22(a), amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto, or is attributable to the Non-U.S. Lender’s failure to comply with Section 10.22(f), and (iii) any U.S. federal withholding taxes imposed by FATCA.
“Farm Credit System Institution” means any farm credit bank, any Federal land bank association, any production credit association, the banks for cooperatives, and such other institutions as may be subject to regulation by the Farm Credit Administration, including, without limitation, 

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any federally-chartered Farm Credit System lending institution organized under the Farm Credit Act of 1971, as the same may be amended or supplemented from time to time.
“Farm Products” shall mean all personal property owned by Borrower and its consolidated subsidiaries used or for use in farming or livestock operations, including without limitation, seed and harvested or un-harvested crops of all types and descriptions, whether annual or perennial and including trees, vines and the crops growing thereon, native grass, grain, feed, feed additives, feed ingredients, feed supplements, fertilizer, hay, silage, supplies (including without limitation, chemicals, veterinary supplies and related Goods), livestock of all types and descriptions (including without limitation, the offspring of such livestock and livestock in gestation) and any other “farm products” (as defined in the Code).
“FATCA” shall mean Sections 1471 through 1474 of the IRC, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), and any current or future regulations or official interpretations thereof.
“Federal Funds Rate” shall mean, for any day, the rate of interest per annum (rounded upward, if necessary, to the nearest whole multiple of 1/100th of 1%) equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on such day, or if no such rate is so published on such day, on the most recent day preceding such day on which such rate is so published.
“Financial Performance Level” shall mean the applicable level of Borrower’s financial performance determined in accordance with the table set forth below at the end of each fiscal quarter.
	
		
	Financial Performance Level
	Recourse Long Term Debt to Capitalization Ratio

	Level 1
	Greater than 60%

	Level 2
	Less than or equal to 60% but greater than 45%

	Level 3
	Less than or equal to 45% but greater than 30%

	Level 4
	Less than or equal to 30%

“Financing Agreements” shall mean all agreements, instruments and documents, including without limitation, this Agreement and all notes, letter of credit applications, guarantees, consents, assignments, contracts, notices and all other written matter at any time executed by or on behalf of Borrower and delivered to the Agent for the benefit of the Lenders in relation to this Agreement, together with all amendments and all agreements and documents referred to therein or contemplated thereby and all Bank Products Agreements.
“Fund” shall mean any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

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“GAAP” shall mean generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, or in such other statements by such other entity as may be in general use by significant segments of the accounting profession, which are applicable to the circumstances as of the date of determination.
“Governmental Authority” shall mean any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including without limitation, any arbitration panel, any court, any commission, any agency or any instrumentality of the foregoing.
“Governmental Requirement” shall mean any law, statute, code, ordinance, order, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, authorization or other directive or requirement of any federal, state, county, municipal, parish, provincial or other Governmental Authority or any department, commission, board, court, agency or any other instrumentality of any of them (including any of the foregoing that relate to environmental standards or controls and occupational safety and health standards or controls).
  “Hedged Activity” shall mean those types of gross margin hedged activities including but not limited to weather, currency, interest rates or Inventory that are hedged against price fluctuation using recognized methods of hedging, including but not limited to futures contracts or off exchange swap contracts placed through a recognized commodities broker or swap dealer adjusted to include all current and non-current commodity derivative assets and liabilities recorded on the Borrower’s balance sheet in accordance with GAAP.
 “Highest Lawful Rate” shall mean, with respect to each Lender, the maximum non-usurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged, or received with respect to the Swing Line, the Line of Credit (and the Line of Credit Notes), or on other amounts, if any, payable to such Lender pursuant to this Agreement or any other Financing Agreement, under laws applicable to such Lender which are in effect from time to time, or, to the extent allowed by law, under such applicable laws which may hereafter be in effect and which allow a higher maximum non-usurious interest rate than applicable laws now allow.
“Immediately Available Funds” shall mean funds with good value on the day and in the city in which payment is received.
“Indebtedness” with respect to any Person means, at any time, without duplication, (a) (i) its liabilities for borrowed money and (ii) its redemption obligations in respect of preferred stock which is or upon the occurrence of certain events may be mandatorily redeemable by the holders thereof at any time prior to the payment in full of the Liabilities; (b) its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property); (c) (i) all liabilities appearing on its balance sheet in accordance with GAAP in respect of capital leases and (ii) all liabilities which would appear on its balance sheet in accordance with GAAP in respect of synthetic leases assuming such synthetic leases were accounted for as capital leases; (d) all liabilities for borrowed money secured by any 

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lien or security interest with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities); (e) all its liabilities in respect of letters of credit or instruments serving a similar function issued or accepted for its account by banks and other financial institutions (whether or not representing obligations for borrowed money); and (f) any guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (e) hereof.  Indebtedness of any Person shall include all obligations of such Person of the character described in clauses (a) through (f) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP.
“Indemnified Taxes” shall mean Taxes imposed on or with respect to any payment made by or on account of any obligation of any Borrower or Guarantor, respectively, under any Financing Agreement, other than Excluded Taxes and Other Taxes.
“Interest Period” shall mean:  with respect to LIBOR Rate Loans, the period of time for which the LIBOR Rate shall be in effect as to any LIBOR Rate Loan and which shall be a seven day or one, two, three or six month period of time, commencing with the borrowing date of the LIBOR Rate Loan or the expiration date of the immediately preceding Interest Period, as the case may be, applicable to and ending on the effective date of any rate change or rate continuation made as provided in Section 2.2 as Borrower may specify in the notice of borrowing delivered pursuant to Section 2.2 or the notice of interest conversion delivered pursuant to Section 2.2; provided however, that (i) any Interest Period which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) no Interest Period shall extend beyond the Maturity Date; and (iii) there shall be no more than five (5) seven day Interest Periods and no more than twenty (20) Interest Periods (of all types) for LIBOR Rate Loans at any one time in the aggregate under this Agreement.
“Inventory” shall mean any and all Goods which shall at any time constitute “inventory” (as defined in the Code) or Farm Products owned by Borrower and its consolidated subsidiaries, wherever located (including without limitation, Goods in transit and Goods in the possession of third parties, and rail cars owned by the Borrower and its consolidated subsidiaries), or which from time to time are held for sale, lease or consumption in Borrower’s business, furnished under any contract of service or held as raw materials, work in process, finished inventory or supplies (including without limitation, packaging and/or shipping materials).  
“IRC” shall mean the Internal Revenue Code of 1986, as amended, as at any time in effect, together with all regulations and rulings thereof or thereunder issued by the Internal Revenue Service.
“Issue”, “Issued”, “Issues” and “Issuance” shall mean, as the context requires, with respect to a Letter, the issuance, extension or other amendment of a Letter pursuant to this Agreement.
“Issuer” shall mean, with respect to a Letter, any party that Issues such Letter pursuant to this Agreement or that has Issued a Letter under the Existing Agreement.

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“LC Obligations” shall mean, at any time, an amount equal to the aggregate undrawn and unexpired amount of the outstanding Letters, together with the aggregate amount of any unpaid reimbursement obligations with respect to any Letters.
“Letter” or “Letters” shall mean a Standby Letter of Credit Issued for the account of Borrower pursuant to Section 2.1.4 or under the Existing Agreement, or all of such letters of credit, respectively.
“Liabilities” shall mean any and all liabilities, obligations and indebtedness of Borrower and its consolidated subsidiaries to the Agent, any Lender or Issuer, or to any affiliate of the Agent or a Lender on account of Bank Products Obligations,  of any and every kind and nature, at any time owing, arising, due or payable and howsoever evidenced, created, incurred, acquired or owing, whether primary, secondary, direct, contingent, fixed or otherwise (including without limitation LC Obligations, Bank Products Obligations, fees, charges and obligations of performance) and whether arising or existing under this Agreement or any of the other Financing Agreements or by operation of law.  For avoidance of doubt the parties agree that Liabilities does not include (x) Excluded Swap Obligations and (y) obligations under Swap Contracts that are basis swaps related to commodities, commodity swaps, commodity options and forward commodity contracts, together with any related transactions, and the related confirmations, which are subject to the terms and conditions of, or governed by, a form of master agreement published by the International Swaps and Derivatives Association, Inc.
“LIBOR Rate” shall mean, with respect to each day during each Interest Period applicable to a LIBOR Rate Advance, the seven day or one, two, three or six month interest settlement rate for deposits in Dollars quoted by the Agent from Reuters Screen LIBOR01 Page or any successor thereto, or if unavailable, such LIBOR rate quoted by the Agent from a reasonably equivalent alternative source as determined by the Agent, with the understanding that if no such source is available to the Agent, the LIBOR Rate for the relevant Interest Period shall instead be the rate determined by the Agent to be the rate at which U.S. Bank or one of its Affiliate banks offers to place deposits in Dollars with first-class banks in the interbank market, in each case at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period, in the approximate amount of U.S. Bank’s relevant Loan and having a maturity equal to such Interest Period, (which in any case shall be the LIBOR rate in effect two (2) Business Days prior to the LIBOR Rate Loan), divided by the remainder of 1.00 minus the LIBOR Reserve Percentage.
“LIBOR Rate Loan” shall mean any Loan that bears interest at the LIBOR Rate plus the Applicable Margin.
“LIBOR Reserve Percentage” shall mean the maximum effective percentage in effect on any day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including, without limitation, supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding.
“Limited Recourse Debt” shall mean, for any date of determination, Indebtedness of Borrower or any consolidated subsidiary of Borrower that is borrowed, raised or incurred with 

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respect to the financing of its Transportation Assets in respect of which recourse of the limited recourse financiers is limited to such Transportation Assets. 
“Line of Credit Loan Commitment” shall mean as to any Lender, such Lender’s Pro Rata Percentage of $850,000,000, as set forth opposite such Lender’s name under the heading “Line of Credit Loan Commitments” on Schedule A, subject to Assignment and Acceptance in accordance with Section 10.23, and as such amount may be reduced or terminated from time to time pursuant to Sections 2.3(c), 2.8 or 9.1 and as such amount may be increased from time to time pursuant to Section 10.31(b); and “Line of Credit Loan Commitments” shall mean collectively, the Line of Credit Loan Commitments for all the Lenders.
“Line of Credit Loan Liabilities” shall mean all of the Liabilities (including without limitation the principal and interest owing under the Swing Line) other than:  (a) the LC Obligations; and (b) Bank Products Obligations.
“Margin / Swap Accounts” shall mean, collectively, all Commodity Accounts and all Commodity Contracts and (to the extent not included in Commodity Accounts or Commodity Contracts) all Swap Contracts and cash forward contracts maintained by Borrower and its consolidated subsidiaries with respect to Hedged Activity.
“Material Subsidiary” shall mean, at the fiscal quarter end with respect to which, pursuant to Section 7.1, financial statements have been, or are required to have been, delivered by Borrower, as reflected in such financial statements, a direct or indirect consolidated subsidiary of Borrower (a) the EBITDA of which accounted for more than 5% of EBITDA of Borrower and its consolidated subsidiaries, or (b) has assets which represent more than 5% of the consolidated gross assets of Borrower and its consolidated subsidiaries.  Notwithstanding the foregoing, in the event Lansing Trade Group, LLC or any successor entity thereto, becomes a direct or indirect consolidated subsidiary of Borrower, then Lansing Trade Group, LLC or any successor entity thereto shall be a Material Subsidiary.
“Material Subsidiaries” shall mean, at the fiscal quarter end with respect to which, pursuant to Section 7.1, financial statements have been, or are required to have been, delivered by Borrower, as reflected in such financial statements, the direct or indirect consolidated subsidiaries of Borrower (a) the aggregate EBITDA of which accounted for more than 5% of the aggregate EBITDA of Borrower and its consolidated subsidiaries, or (b) has in the aggregate assets which represent more than 5% of the consolidated gross assets of Borrower and its consolidated subsidiaries.
“Matured Default” shall mean the occurrence or existence of any one or more of the following events:  (a) Borrower fails to pay any principal pursuant to any of the Financing Agreements (other than the Bank Products Agreements) on the day such principal becomes due or is declared due or Borrower fails to pay any interest pursuant to any of the Financing Agreements on or before five (5) days after such interest becomes due or is declared due; (b) Borrower fails to pay any of the Liabilities (other than principal and interest) on or before ten (10) days after such Liabilities become due or are declared due; (c) a Change of Control shall occur; (d) Borrower or any consolidated subsidiary of Borrower fails or neglects to perform, keep or observe any of the covenants, conditions, promises or agreements contained in this Agreement or in any of the other 

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Financing Agreements (other than those covenants, conditions, promises and agreements referred to or covered in (a), (b), and (c) above), and, with respect to covenants, conditions, promises and agreements other than those set forth in Section 7.2(a) (with respect to maintenance of existence), Section 7.4 and Article 8, for which there is no grace period provided hereby, such failure or neglect continues for more than thirty (30) days after such failure or neglect first occurs; (e) the Available Amount, as calculated in accordance with the definition thereof, result in a negative amount; (f) any warranty or representation at any time made by or on behalf of Borrower in connection with this Agreement or any of the other Financing Agreements is untrue or incorrect in any material respect, or any schedule, certificate, statement, report, financial data, notice, or writing furnished at any time by or on behalf of Borrower to the Agent or any other Lender is untrue or incorrect in any material respect on the date as of which the facts set forth therein are stated or certified; (g) a judgment in excess of $20,000,000 is rendered against Borrower or any Guarantor of any of the Liabilities and such judgment remains unsatisfied or un-discharged and in effect for sixty (60) consecutive days without a stay of enforcement or execution, provided, however, that this clause (g) shall not apply to any judgment for which Borrower is fully insured (through insurance policies and/or self insurance reserves); (h) all or any material part of the assets of Borrower or any Guarantor of any of the Liabilities come within the possession of any receiver, trustee, custodian or assignee for the benefit of creditors; (i) a proceeding under any bankruptcy, reorganization, arrangement of debt, insolvency, readjustment of debt or receivership law or statute is filed against Borrower or any Guarantor of any of the Liabilities and such proceeding is not dismissed within thirty (30) days of the date of its filing, or a proceeding under any bankruptcy, reorganization, arrangement of debt, insolvency, readjustment of debt or receivership law or statute is filed by Borrower or any Guarantor of any of the Liabilities, or Borrower or any Guarantor of any of the Liabilities makes an assignment for the benefit of creditors; (j) Borrower or any Guarantor of any of the Liabilities voluntarily or involuntarily dissolves or is dissolved, terminates or is terminated; (k) Borrower or any consolidated subsidiary of Borrower is enjoined, restrained, or in any way prevented by the order of any court or any administrative or regulatory agency or by the termination or expiration of any permit or license, from conducting all or any material part of its business affairs; (l) Borrower or any Guarantor of any of the Liabilities fails to make any payment due or otherwise defaults on any other obligation for borrowed money (including, without limitation, any breach of representation, warranty or covenant governing such obligation) and the effect of such failure or default is to cause or permit the holder of such obligation or a trustee to cause such obligation to become due prior to its date of maturity; or (m) any Guarantor of any of the Liabilities asserts the invalidity of their guaranty, purports to terminate their guaranty or purports to limit the application thereof to then existing Liabilities.
“Maturity Date” shall mean, as applicable, the earlier of:  (a) March 4, 2019; and (b) in all cases, the earlier date of termination in whole of the Commitments pursuant to Sections 2.3(c), 2.8 or 9.1.
“Monthly LIBOR Rate” shall mean, with respect to any date of determination, the average offered rate for deposits in United States dollars for delivery of such deposits on a one-month basis, which appears on Reuters Screen LIBOR01 Page (or any successor thereto) as of 11:00 A.M., London time (or such other time as of which such rate appears), or the rate for such deposits determined by the Agent at such time based on such other published service of general application 

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as shall be selected by the Agent for such purpose; provided, that if no such source is available to the Agent, the one-month LIBOR Rate for the relevant Interest Period shall instead be the rate determined by the Agent to be the rate at which U.S. Bank or one of its Affiliate banks offers to place deposits in Dollars with first-class banks in the interbank market at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of such one-month period, in the approximate amount of U.S. Bank’s relevant Loan and having a maturity equal to such one-month period.
“Non-U.S. Lender” shall mean a Lender that is not a United States person as defined in Section 7701(a)(30) of the IRC.
“Note” or “Notes” shall mean any one of the Line of Credit Notes or all of the Line of Credit Notes, respectively.
“OFAC” shall mean the U.S. Department of Treasury’s Office of Foreign Assets Control, and any successor thereto.
“Other Taxes” shall mean 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 Financing Agreement.
“PATRIOT ACT” shall mean USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001), as amended from time to time, and any successor statute.
“Permitted Acquisition” shall mean any Acquisition made by the Borrower or any of its consolidated subsidiaries, provided that, (a) as of the date of the consummation of such Acquisition, no Default or Matured Default shall have occurred and be continuing or would result from such Acquisition, (b) such Acquisition is consummated on a non-hostile basis pursuant to a negotiated acquisition agreement that has been (if required by the governing documents of the seller or entity to be acquired) approved by the board of directors or other applicable governing body of the seller or entity to be acquired, and no material challenge to such Acquisition (excluding the exercise of appraisal rights) shall be pending or threatened by any shareholder or director of the seller or entity to be acquired, (c) the business to be acquired in such Acquisition is in the same line of business as the Borrower’s or is a line of business that is similar, ancillary or complementary thereto or is a reasonable extension thereof, (d) as of the date of the consummation of such Acquisition, all material approvals required in connection therewith shall have been obtained, and (e) with respect to any Acquisition where the aggregate consideration (including, without limitation, any assumption of Indebtedness) in respect thereof equals or exceeds $25,000,000, the Borrower shall have furnished to the Agent a certificate demonstrating in reasonable detail pro forma compliance with the financial covenants contained in Section 7.4 for such period, in each case, calculated as if such Acquisition, including the consideration therefor, had been consummated on the first day of such period.
“Person” shall mean any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, institution, entity, party or government (whether national, federal, state, provincial, county, city, municipal or 

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otherwise, including without limitation, any instrumentality, division, agency, body or department thereof), including without limitation, Affiliates.
“Prime Rate” shall mean the prime rate announced by the Agent from time to time, which is a base rate that the Agent from time to time establishes and which serves as the basis upon which effective rates of interest are calculated for those loans which make reference thereto.  The Prime Rate is not necessarily the lowest rate offered by the Agent.  With respect to Base Rate Loans, each change in the rate of interest hereunder shall become effective on the date each Prime Rate change is announced by the Agent or with each change in the Federal Funds Rate, as the case may be.
“Property” shall mean those premises owned or operated by Borrower and its consolidated subsidiaries.
“Pro Rata Percentage” shall mean with respect to each Lender, as applicable, (a) with respect to the Line of Credit, the Swingline and the Letters, such Lender’s Pro Rata Percentage of the Line of Credit Loan Commitments as set forth in Schedule A (or any replacement thereof by proper amendment thereto), and (b) with respect to matters not specifically related to the Line of Credit, the Swingline and the Issuance of Letters the weighted average (weighted based on the proportionate amounts of the total Line of Credit Loan Commitments and the total Line of Credit Loan Commitments) of such Lender’s Pro Rata Percentage of the Line of Credit Loan Commitments as set forth in Schedule A (or any replacement thereof by proper amendment thereto), in each case, as adjusted from time to time in accordance with Section 10.23, and in each case such percentages shall be applicable even in the event that the commitments of the Lenders to make Advances have been suspended or terminated in accordance with the terms of this Agreement.
 “Rate Protection Agreement” means, collectively, any Swap Contract designed to protect against fluctuations in interest rates or currency exchange rates entered into by Borrower under which the counterparty to such agreement is (or at the time such Rate Protection Agreement was entered into, was) a Lender or an affiliate of a Lender.  For avoidance of doubt the parties agree that Swap Contracts that are basis swaps related to commodities, commodity swaps, commodity options and forward commodity contracts, together with any related transactions, and the related confirmations, which are subject to the terms and conditions of, or governed by, a form of master agreement published by the International Swaps and Derivatives Association, Inc. shall not be Rate Protection Agreements.  
“Recourse Debt” shall mean, for any date of determination any Indebtedness, other than Limited Recourse Debt, of any Person including the Borrower and its consolidated subsidiaries, (a) that is secured by any assets of Borrower or any consolidated subsidiary of Borrower, or (b) that Borrower or any consolidated subsidiary of Borrower is obligated to repay by reason of a guaranty, by acting as a primary or secondary obligor or otherwise.  For the avoidance of doubt, any financing of Transportation Assets where recourse for such financing extends beyond the applicable Transportation Assets shall constitute Recourse Debt.
“Recourse Long Term Debt” shall mean Recourse Debt of any Person, including Borrower and its consolidated subsidiaries, that is  classified as non-current per GAAP, including the current portion thereof, if any.  In addition, any Loan or Letter proceeds used to consummate a Permitted 

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Acquisition, a capital expenditure or a purchase of fixed assets shall constitute Recourse Long Term Debt; provided, however, that no Loan or Letter proceeds used to consummate an Acquisition of Accounts, Inventory or other current assets shall constitute “Recourse Long Term Debt” unless designated as such by the Borrower in a written notice to the Agent.
“Recourse Long Term Debt to Capitalization Ratio” shall mean, as of any date, the ratio of Recourse Long Term Debt to Capitalization.  
“Required Lenders” shall mean, at any time Lenders other than any Defaulting Lender holding in the aggregate more than fifty percent (50%) of the aggregate amount of all of the Lenders’ Commitments, excluding the Commitment of any Defaulting Lender, which percentage shall be applicable even in the event that the commitments of the Lenders to make Advances have been suspended or terminated in accordance with the terms of this Agreement.
“Sanctioned Country” shall mean a country subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices.enforcement/ofac/sanctions/index.html (or the appropriate successor thereto), or as otherwise published from time to time, or any similar list maintained by the U.S. Department of State, the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom as published from time to time by any of the foregoing.
“Sanctioned Person” shall mean (i) a Person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices.enforcement/ofac/sdn/index.html (or the appropriate successor thereto), or otherwise published from time to time, or a Person named on a similar list determined by the U.S. Department of State, the United Nations Security Council, the European Union or any EU member state or (ii) (A) an agency of the government of a Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or (C) a Person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC or any similar Governmental Authority.
“Standby Letter of Credit” shall mean any standby letter of credit, which shall be deemed to include any Direct Pay Letter of Credit Issued for the account of Borrower under this Agreement or the Existing Agreement.
“Subordinated Debt” shall mean the consolidated, subordinated, unsecured debt of Borrower that is subordinated to the Liabilities in accordance with a subordination agreement or subordination agreements, in form and substance acceptable to the Required Lenders.
“swap” shall mean any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.
“Swap Contract” shall mean (a) any and all interest rate swap transactions, basis swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward foreign exchange transactions, cap transactions, floor transactions, currency options, spot contracts or any other similar transactions 

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or any of the foregoing (including, but without limitation, any options to enter into any of the foregoing), and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement.
“Swing Line Limit” shall mean $80,000,000; provided, however, once during any calendar year such amount may be increased by the Borrower to $100,000,000 so long as (i) no Default or Matured Default is then outstanding or would result therefrom, (ii) the Agent and Swing Line Lender receive at least seven (7) days prior written notice of such increase, (iii) such increase shall only be in effect for thirty consecutive calendar days, and (iv) at the end of such 30-day period, the Borrower shall make all prepayments necessary to cause the then outstanding principal amount of Swing Line Loans to equal or be less than $80,000,000.  
“Tangible Net Worth” shall mean, for any date of determination, Borrower and its consolidated subsidiaries (a) net worth, minus (b) the book value of intangible assets, plus (c) the book amount of deferred income, minus (d) without duplication, Recourse Debt.
“Taxes” shall mean any and all present or future taxes, duties, levies, imposts, deductions, fees, assessments, charges or withholdings, and any and all liabilities with respect to the foregoing, including interest, additions to tax and penalties applicable thereto.
“Transportation Assets” shall mean various types of transportation assets including but not limited to locomotives, railcars, maintenance of way equipment, barges, trucking equipment and farm equipment and any leases or lease receivables or accounts or notes receivable related to such assets.
 “Type” shall mean, with respect to any Loan, whether such Loan is a Daily Reset LIBOR Rate Loan, a Base Rate Loan or a LIBOR Rate Loan.
“Working Capital” shall mean, as of any date of determination, for the Borrower and its consolidated subsidiaries, the excess of current assets over current liabilities, determined in accordance with GAAP. For purposes of determining the current liabilities of the Borrower and its consolidated subsidiaries, the aggregate principal amount of all outstanding Loans and Letters hereunder (other than Loans and Letters used to finance Permitted Acquisitions, capital expenditures or purchases of fixed assets), together with all interest, fees and expenses in respect thereof shall constitute current liabilities.
1.2    Index to Other Definitions.  When used herein, the following capitalized terms shall have the meanings given in the indicated portions of this Agreement:

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	Term
	Location

	Advance, Advances
	Section 2.1.5

	Agreement
	Introduction

	Application
	Section 2.1.4

	Assignee
	Section 10.23

	Assignment and Acceptance
	Section 10.23

	Beneficiary
	Section 2.1.4

	Benefit Plans
	Section 6.19

	Borrower
	Introduction

	Change
	Section 10.20

	Code
	Section 1.4

	Compliance Certificate
	Section 7.1

	Default Rate
	Section 2.2(d)

	Environmental Laws
	Section 6.9

	ERISA
	Section 6.19

	Excess
	Section 10.24

	Existing Agreement
	Recital

	Funds Transfer
	Section 2.1.5

	Guarantor
	Section 5.2

	ISP98
	Section 2.1.4

	Lenders
	Introduction

	Line of Credit
	Section 2.1.2

	Line of Credit Advances
	Section 2.1.2

	Line of Credit Notes
	Section 2.1.2

	Loan Account
	Section 2.6

	Loan, Loans
	Section 2.1.5

	Non-Use Fees
	Section 2.5(c)

	Purchasing Lender
	Section 2.1.5

	Replacement Candidate
	Section 10.32

	Restricted Payments
	Section 8.6

	Risk-Based Capital Guidelines
	Section 10.20

	Securities Act
	Section 10.33

	Selling Lender
	Section 2.1.5

	Standby LC Fee
	Section 2.5(d)

	Swing Line
	Section 2.1.1

	Swing Line Advances
	Section 2.1.1

	UCP
	Section 2.1.4

1.3    Accounting Terms.  Except as provided to the contrary herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with GAAP in a manner consistent with that used in preparing the financial statements referred to in Section 7.1; provided, however that, notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all 

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computations of amounts and ratios referred to herein shall be made without giving effect to (i) any election under Accounting Standards Codification Section 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 the Borrower or any of its consolidated subsidiaries at ”fair value”, as defined therein, or (ii) any treatment of Indebtedness in respect of convertible debt instruments under Financial Accounting Standards Codification Subtopic 470-20 (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.  If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth herein or in any agreement, document or instrument delivered in connection herewith, and the Borrower, the Agent or the Required Lenders shall so request, the Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders), provided that, until so amended, such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and the Borrower shall provide to the Agent and the Lenders reconciliation statements showing the difference in such calculation, together with the delivery of monthly, quarterly and annual financing statements required hereunder.
1.4    Others Defined in New York Uniform Commercial Code.  All other terms contained in this Agreement (which are not specifically defined in this Agreement) shall have the meanings set forth in the Uniform Commercial Code of New York (“Code”) to the extent the same are used or defined therein, specifically including, but not limited to the following:  Chattel Paper, Commercial Tort Claims, Commodity Accounts, Commodity Contracts, Electronic Chattel Paper, Goods, Instruments, Investment Property, Letter of Credit Rights, General Intangibles, Payment Intangibles, Securities Accounts and Tangible Chattel Paper.
2.    LOANS, LETTERS OF CREDIT AND FEES.
2.1    Loans and Letters of Credit.  Subject to all of the terms and conditions contained in this Agreement, the Agent and the Lenders severally and not jointly agree to make the following extensions of credit to or for the benefit of Borrower:
2.1.1    Swing Line.  The Agent may, but shall not be obligated, to make advances (“Swing Line Advances”) to Borrower from time to time on any one or more Business Days from and after the date of this Agreement, upon Borrower’s written (including facsimile) notice or oral notice followed by written (including facsimile) confirmation, given by Borrower to the Agent not later than 1:00 p.m. (local time in Denver, Colorado) on the Business Day of any proposed Advance, through and including the Maturity Date, in amounts up to the lesser of:  (a) the Swing Line Limit minus the outstanding Swing Line Advances; or (b) the Available Amount (“Swing Line”).  The Swing Line Advances shall be repayable in accordance with the terms of this Agreement (as further evidenced by Borrower’s Line of Credit Note to the Agent).  The Agent, upon the written approval of the Required Lenders, may, but shall not be obligated, to make Swing Line Advances to Borrower in excess of the dollar amount stated above (but not in excess of the Available Amount), and any such Swing Line Advances shall also be governed by the terms hereof.  Swing Line Advances shall 

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be made, if at all, only in the sole and absolute discretion of the Agent, and in any event shall not be made if any Lender is a Defaulting Lender.
2.1.2    Line of Credit.  Each Lender severally agrees to make advances (“Line of Credit Advances”) to Borrower from time to time on any one or more Business Days from and after the date of this Agreement (through the Agent as set forth in Section 2.1.5 or Section 2.2(f)), upon Borrower’s written (including facsimile) notice or oral notice followed by written (including facsimile) confirmation, given by Borrower to the Agent not later than 10:00 am (local time in Denver, Colorado) on the second Business Day prior to the date of any proposed LIBOR Rate Loan or upon Borrower’s written (including facsimile) notice or oral notice followed by written (including facsimile) confirmation, given by Borrower to the Agent not later than 10:00 am (local time in Denver, Colorado) on the Business Day of the date of any proposed Base Rate Loan, up to an aggregate principal amount not exceeding each such Lender’s Pro Rata Percentage of the Available Amount on such Business Day through the Maturity Date, in aggregate amounts up to the Available Amount (“Line of Credit”).  The Line of Credit Advances shall be repayable in accordance with the terms of this Agreement (as further evidenced by Borrower’s promissory notes to each of the Lenders (“Line of Credit Notes”), the form of which is attached as Exhibit 2A).  Notwithstanding the foregoing or anything to the contrary set forth herein, no more than $400,000,000 of the Line of Credit Loan Commitment shall be available for capital expenditures and purchases of fixed assets (in each case to the extent not prohibited hereunder) and Permitted Acquisitions; provided, however, that unless designated as being subject hereto in a written notice from the Borrower to the Agent, no Acquisition of Accounts, Inventory or other current assets shall be subject to this $400,000,000 limitation.
2.1.3    Intentionally Omitted.  
2.1.4    Letters of Credit.
(a)    The Agent further agrees to Issue or cause to be Issued by a Lender that agrees, in each case, to be the Issuer, Letters for Borrower’s account for any purpose acceptable to the Agent in its reasonable discretion (the Agent or such Lender thereby becoming an Issuer), with an expiration date not later than the earlier of (a) one year after the date of Issuance, or (b) the fifth day prior to the Maturity Date, in amounts up to the lesser of:  (y) Ninety Million Dollars ($90,000,000) minus the then outstanding LC Obligations; or (z) the Available Amount, for the benefit of one or more beneficiaries to be named by Borrower (the “Beneficiary”, whether one or more), in form and substance acceptable to the Agent.  Letters which provide for an automatic extension of the expiration date may not automatically extend for more than one year at each extension and shall, in the sole discretion of the Agent, not be allowed to automatically extend to a date later than the fifth day prior to the Maturity Date; provided, however, that a Letter may mature up to one year after the Maturity Date if such Letter is cash collateralized no later than 5 days prior to the Maturity Date on terms and conditions acceptable to the Agent and the applicable Issuer in an amount equal to the undrawn face amount thereof.  In order to effect the Issuance of each Letter, Borrower shall deliver to the Agent a letter of credit application (the “Application”) not later than 11:00 a.m. (Denver, Colorado time), five (5) Business Days prior to the proposed date of Issuance of the Letter.  The Application shall be duly executed by a responsible officer of Borrower, shall be irrevocable and shall (i) specify 

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the day on which such Letter is to be Issued (which shall be a Business Day), and (ii) be accompanied by a certificate executed by a responsible officer setting forth calculations evidencing availability for the Letter and stating that all conditions precedent to such Issuance have been satisfied.  Each Letter shall (i) provide for the payment of drafts presented for honor thereunder by the Beneficiary in accordance with the terms thereof, when such drafts are accompanied by the documents described in the Letter, if any, and (ii) to the extent not inconsistent with the express terms hereof or the applicable Application, be subject, as applicable, to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 600 or the International Standby Practices (ISP 98–International Chamber Of Commerce Publication Number 590) (in each case, together with any subsequent revisions thereof approved by a Congress of the International Chamber of Commerce and adhered to by Issuer, the “UCP” and the “ISP98”, respectively), and shall, as to matters not governed by the UCP or the ISP98, be governed by, and construed and interpreted in accordance with, the laws of the State in which Issuer resides.  In the event the terms of any Application or any related reimbursement agreement or other related agreement are inconsistent with the terms of this Section 2.1.4, then the terms of this Section 2.1.4 shall be controlling and shall govern over any the terms of any such Application or any related reimbursement agreement or other related agreement.
(b)    Upon the Issuance date of each Letter, the Issuer shall be deemed, without further action by any party hereto, to have sold to each other Lender with a Line of Credit Loan Commitment, and each other Lender with a Line of Credit Loan Commitment shall be deemed, without further action by any party hereto, to have purchased from the Issuer, a participation, to the extent of such Lender’s respective Pro Rata Percentage, in such Letter, the obligations thereunder and in the reimbursement obligations of Borrower due in respect of drawings made under such Letter.  If requested by the relevant Issuer, the Agent, the other Lenders will execute any other documents reasonably requested by such Issuer to evidence the purchase of such participation.
(c)    If Issuer has received documents purporting to draw under a Letter that Issuer believes conform to the requirements of the Letter, or if Issuer has decided that it will comply with Borrower’s written or oral request of authorization to pay a drawing on any Letter that Issuer does not believe conforms to the requirements of the Letter, Issuer or the Agent will notify Borrower of that fact.  An amount equal to the amount of such drawing shall be paid by Borrower to the Agent for the account of the Issuer on the date such drawing is made.  The obligation of Borrower to repay the Agent for the account of the Issuer or the Agent and the Lenders for any Advance under the Swing Line or the Line of Credit made to fund such reimbursement, shall be absolute, unconditional and irrevocable, shall continue for so long as any LC Obligation is outstanding notwithstanding any termination of this Agreement, and shall be paid strictly in accordance with the terms of this Agreement, notwithstanding any of the following:
(i)    Any lack of validity or enforceability of any Letter or LC Obligation;
(ii)    The existence of any claim, setoff, defense or other right which Borrower may have or claim at any time against any Beneficiary, transferee or holder of any Letter (or any Person for whom any such Beneficiary, transferee or holder may be acting), Issuer 

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or any other Person, whether in connection with a Letter, this Agreement, the transactions contemplated hereby, or any unrelated transaction; or
(iii)    Any statement or any other document presented under any Letter proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatever so long as such statement or document appeared to comply with the terms of the Letter.
(d)    None of Issuer, the Lenders or any of the officers, directors employees, agents or affiliates of any of them shall be liable or responsible for, and the obligations of Borrower to Issuer and the Lenders shall not be impaired by:
(i)    The use that may be made of any Letter or for any acts or omissions of any Beneficiary, transferee or holder thereof in connection therewith;
(ii)    The validity, sufficiency or genuineness of documents, or of any endorsements thereon, even if such documents or endorsements should in fact prove to be in any or all respects invalid, insufficient, fraudulent or forged so long as such statement or document appeared to comply with the terms of the Letter;
(iii)    The acceptance by Issuer of documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary; or
(iv)    Any other action of Issuer in making or failing to make payment under any Letter if in good faith and in conformity with applicable U.S. or foreign laws, regulations or customs.
(e)    Notwithstanding the foregoing, Borrower shall have a claim against Issuer and the Agent, and Issuer and/or the Agent shall be liable to Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential, damages suffered by Borrower which Borrower proves were caused by Issuer’s or the Agent’s willful misconduct or gross negligence in determining whether documents presented under any Letter comply with the terms thereof.
(f)    In the event any Lender is a Defaulting Lender, Borrower shall, at the option of the Agent or Issuer, in their sole and absolute discretion, deposit with the Agent, for the ratable benefit of the Lenders and Issuer, cash collateral in an amount equal to such Defaulting Lender’s Pro Rata Percentage of LC Obligations relating to any outstanding or requested Letter, which cash collateral shall be used, if necessary, to cover such Defaulting Lender’s obligation with respect to any drawing under a Letter that is not reimbursed by Borrower.  If any Letter is Issued and outstanding on the Maturity Date, Borrower shall deposit with the Agent, for the ratable benefit of the Lenders and the Issuer:  (i) cash collateral, or (ii) a backup letter of credit issued to the Agent and acceptable to the Lenders, in either case, in an amount equal to the LC Obligations relating to such Letter.  In each case, such cash collateral shall be held by the Agent in one or more Deposit Accounts which may be interest bearing or non-interest bearing Deposit Accounts.  Such cash collateral shall be released, or such backup letter of credit shall be terminated, if at all, only when such Letter has terminated, 

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or in the case of cash collateral deposited with respect to a Defaulting Lender, at such time, if any, that such Defaulting Lender is either no longer a Defaulting Lender, or no longer a Lender.
2.1.5    Funds Transfers.
(a)    The Swing Line Advances and the Line of Credit Advances (collectively “Advances” and individually, an “Advance”) shall also sometimes collectively be referred to in each case as a “Loan” and collectively the “Loans”.  It is anticipated that on each Business Day Borrower may wish to borrow and repay Loans under the Line of Credit. To the extent possible, these Loans will be made by the Agent under the Swing Line.  To minimize the number of transfers of funds to and from the Lenders resulting from such borrowings and repayments, the Agent may fund daily Loans under the Line of Credit for the accounts of the Lenders and apply daily repayments of Loans under the Line of Credit to the accounts of the Lenders, other than according to the Lenders’ Pro Rata Percentages (i.e., without receiving from the other Lenders their Pro Rata Percentage of a Loan under the Line of Credit on the date of disbursement thereof or without paying the other Lenders their Pro Rata Percentage of a repayment of a Loan under the Line of Credit on the date of payment thereof), provided however, that no such Loan shall be made and no repayment of such a Loan shall be applied other than according to the Lenders’ Pro Rata Percentages, if:  (i) at the time of such Loan or repayment the Agent has actual knowledge of a Matured Default, or (ii) after giving effect to such requested Loan or after applying the repayment, the absolute value of the amount that would have to be reallocated to make the Loans under the Line of Credit held according to the Lenders’ Pro Rata Percentages, would exceed the Swing Line Limit; or (iii) after giving effect to such requested Loan, the Agent would hold at the end of any Business Day, Loans under the Swing Line and the Line of Credit exceeding its Line of Credit Loan Commitment plus the Swing Line Limit.
(b)    On any Business Day in the discretion of the Agent, if the outstanding Loans are not held, or will not be held by reason of a request for an Advance, according to the Lenders’ Pro Rata Percentages under the Line of Credit, by reason of Swing Line Advance (or a request therefore) or otherwise, the Agent shall give notice to the Lenders not later 12:00 noon (local time in Denver, Colorado) of the amount of funds to be transferred from the Agent to the Lenders, or from the Lenders to the Agent, or from one Lender to another, as the case may be (each such transfer, an “Funds Transfer”) required (giving effect to anticipated Swing Line Advances and to anticipated payments to be applied under the Swing Line) to cause the respective Loans to be held by the Lenders according to their respective Pro Rata Percentages and subject to each Lender’s maximum Line of Credit Loan Commitment.  On the Business Day of such notice the necessary Funds Transfers shall be made in Immediately Available Funds not later than 2:00 p.m. (local time in Denver, Colorado).
(c)    Except as provided in Section 2.1.5(d), any Funds Transfer by the Lenders to the Agent shall be deemed to constitute Loans by such Lenders to Borrower and repayments by Borrower of Loans held by the Agent, and any Funds Transfer by the Agent to the Lenders shall be deemed to constitute Loans by the Agent to Borrower and repayments of Loans held by the Lenders.
(d)    In the event that on the date on which any Funds Transfer is required to be made pursuant to Section 2.1.5(b), a Matured Default of the type described in clause (i) of the definition thereof shall have occurred and be continuing, any Funds Transfer by the Lenders to the Agent, and 

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any Funds Transfer by the Agent to the Lenders shall be deemed to constitute a purchase by the Lenders or the Agent, as the case may be, of a direct interest, in the amount of such Funds Transfer, in outstanding Loans of the Lenders to Borrower, to the end that each of the Lenders shall have an interest therein equal to their respective Pro Rata Percentages as of the date of occurrence of such Matured Default.
(e)    At any time after any Lender (a “Selling Lender”) has received any Funds Transfer that constitutes a purchase by any other Lender (a “Purchasing Lender”) of a direct interest in such Selling Lender’s Loans pursuant to Section 2.1.5(d), if such Selling Lender receives any payment on account of its Loans such Selling Lender will distribute to such Purchasing Lender its proportionate share of such payment (appropriately adjusted in the case of interest payments, to reflect the period of time during which such Purchasing Lender’s direct interest was outstanding and funded); provided however, that in the event that such payment received by such Selling Lender is required to be returned, such Purchasing Lender will return to such Selling Lender any portion thereof previously distributed to it by such Selling Lender.
(f)    Provided that no Lender (other than the Agent, when making Swing Line Advances) shall be required to make Loans or Funds Transfers that would cause its outstanding Loans to exceed its Commitments, each Lender’s obligation to make Funds Transfers pursuant to Section 2.1.5(b) shall be absolute and unconditional and shall not be affected by any circumstance, including without limitation, (i) any set-off, counterclaim, recoupment, defense or other right which such Lender or any other Person may have against the Agent or any other Person for any reason whatsoever; (ii) the occurrence or continuance of a Default or a Matured Default or the termination of the Commitments; (iii) any adverse change in the condition (financial or otherwise) of Borrower or any other Person; (iv) any breach of this Agreement by Borrower or any other Lender, including without limitation, any other Lender’s failure to make any Funds Transfer; or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.  In the event that any Lender (whether or not it has been previously determined by the Agent to be a Defaulting Lender) fails to fund Advances, Loans, Funds Transfers (or purchases of participations in respect thereof, as applicable), or reimbursements of drawings under Letters, in each case when due under this Agreement and in Immediately Available Funds, then, at the option of the Agent, in its sole and absolute discretion, all or any part of such unfunded obligations shall be reallocated among the non-Defaulting Lenders in accordance with their respective Pro Rata Percentages of their respective Line of Credit Loan Commitment (without taking into account the Line of Credit Loan Commitment of any such Defaulting Lender), provided however, such reallocated funding obligation shall not, in any event, result in any Lender being required to have Loans, reimbursement obligations with respect to drawings under Letters and Funds Transfer obligations in respect of Swing Line Loans, outstanding in an aggregate amount in excess of the maximum dollar amount of its respective Line of Credit Loan Commitment.
2.2    Payment of Principal and Interest; Default Rate.  The principal amount outstanding under the Swing Line and the Line of Credit shall be due and payable on the Maturity Date.  Loans under the Swing Line shall be Daily Reset LIBOR Rate Loans or Base Rate Loans, as selected by the Borrower; provided, that notwithstanding anything to the contrary set forth herein, the Applicable Margin for any Swing Line Loan shall be such amount as agreed to by the Borrower 

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and the Swing Line Lender until such time as a Matured Default is outstanding, at which time the Applicable Margin as set forth herein shall be used.  Loans under the Line of Credit may, at the option of Borrower, be Base Rate Loans or LIBOR Rate Loans.  Each request for LIBOR Rate Loans shall be in a minimum amount of $1,000,000 and an integral multiple of $1,000,000 and shall be subject to the restrictions set forth in the definition of Interest Period and the other restrictions set forth in this Section 2.2.  Borrower shall pay interest on the unpaid principal amount of each Loan made by each Lender from the date of such Loan until such principal amount shall be paid in full, at the times and at the rates per annum set forth below:
(a)    Except as provided in Subsection (d) of this Section, during such periods as such Loan is a Daily Reset LIBOR Rate Loan, a rate per annum equal to the lesser of (i) the sum of the Daily Reset LIBOR Rate in effect from time to time plus the Applicable Margin and (ii) the Highest Lawful Rate, payable monthly in arrears on the first day of each month commencing April 1, 2014, and on the Maturity Date, which interest may, at the discretion of the Agent, be paid by an Agent initiated Advance pursuant to Section 2.1 or by a debit to a deposit account at U.S. Bank initiated by the Agent per any preauthorization provided by Borrower to the Agent, without prior demand by the Agent.
(b)    Except as provided in Subsection (d) of this Section, during such periods as such Loan is a Base Rate Loan, a rate per annum equal to the lesser of (i) the sum of the Base Rate in effect from time to time plus the Applicable Margin and (ii) the Highest Lawful Rate, payable monthly in arrears on the first day of each month commencing April 1, 2014, and on the Maturity Date, which interest may, at the discretion of the Agent, be paid by an Agent initiated Advance pursuant to Section 2.1 or by a debit to a deposit account at U.S. Bank initiated by the Agent per any preauthorization provided by Borrower to the Agent, without prior demand by the Agent.
(c)    Except as provided in Subsection (d) of this Section, during such periods as such Loan is a LIBOR Rate Loan, a rate per annum during each day of each Interest Period for such Loan equal to the lesser of (i) the sum of the LIBOR Rate for such Interest Period for such Loan plus the Applicable Margin and (ii) the Highest Lawful Rate, payable in arrears on the last day of the Interest Period in respect of such LIBOR Rate Loan, and, if the Interest Period with respect to such LIBOR Rate Loan exceeds three months, the day which is three months after the making of such LIBOR Rate Loan, which interest may, at the discretion of the Agent, be paid by an Agent initiated Advance pursuant to Section 2.1 or by a debit to a deposit account at U.S. Bank initiated by the Agent per any preauthorization provided by Borrower to the Agent, without prior demand by the Agent.
(d)    After the occurrence of a Matured Default and for so long as such Matured Default is continuing, the Agent shall (upon the direction of the Required Lenders) notify Borrower that any and all amounts due hereunder or under any other Financing Agreement, whether for principal, interest (to the extent permitted by applicable law), fees, expenses or otherwise, shall bear interest, from the date of such notice by the Agent and for so long as such Matured Default continues, payable on demand, at a rate per annum (the “Default Rate”) equal to the lesser of (i)(A) with respect to a Daily Reset LIBOR Rate Loan, the sum of two percent (2.0%) per annum plus the Daily Reset LIBOR Rate in effect from time to time plus the Applicable Margin (as set forth herein); (B) with 

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respect to a Base Rate Loan, the sum of two percent (2.0%) per annum plus the Base Rate in effect from time to time plus the Applicable Margin; or (C) with respect to a LIBOR Rate Loan, the sum of two percent (2.0%) per annum plus the LIBOR Rate then in effect for such LIBOR Rate Loan plus the Applicable Margin; or (ii) the Highest Lawful Rate.
(e)    All computations of interest pursuant to this Section 2.2 shall be made by the Agent with respect to all Loans on the basis of a year of 360 days, unless the foregoing would result in a rate exceeding the Highest Lawful Rate, in which case such computations shall be based on a year of 365 or 366 days, as the case may be.  Interest with respect to all Loans, whether based on a year of 360, 365 or 366 days, shall be charged for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable.  Each determination by the Agent of an interest rate shall be conclusive and binding for all purposes, absent manifest error.
(f)    Subject to the other restrictions set forth in this Agreement, Borrower may on any Business Day, upon Borrower’s written (including facsimile) notice or oral notice followed by written (including facsimile) confirmation, given by Borrower to the Agent not later than 10:00 am (local time in Denver, Colorado) on the second Business Day prior to the date of any proposed interest conversion or rollover, (a) convert Loans of one Type into Loans of another Type, or (b) continue or rollover existing LIBOR Rate Loans; provided however, (i) with respect to any conversion into or rollover of a LIBOR Rate Loan, no Default or Matured Default shall have occurred and be continuing, and (ii) any continuation or rollover of LIBOR Rate Loans for the same or a different Interest Period or into Base Rate Loans, shall be made on, and only on, the last day of an Interest Period for such LIBOR Rate Loans.  Each such notice of interest conversion shall specify therein the requested (x) date of such conversion, (y) the Loans to be converted and whether such Loans constitute LIBOR Rate Loans, and (z) if such interest conversion is into Loans constituting LIBOR Rate Loans, the duration of the Interest Period for each such Loan.  The Agent shall promptly deliver a copy thereof to each Lender.  Each such notice shall be irrevocable and binding on Borrower.  If Borrower shall fail to give a notice of interest conversion with respect to any LIBOR Rate Loan as set forth above, such Loan shall automatically convert to a Base Rate Loan on the last day of the Interest Period with respect thereto.  The provisions of this Section 2.2(f) shall also apply to initial Advances made as LIBOR Rate Loans.
2.3    Prepayments; Termination of the Commitments.
(a)    Borrower may at any time prepay the outstanding principal amount of any Loan, in either case in whole or in part, in accordance with this Section 2.3.  With respect to any prepayment, Borrower shall give prior written notice of any such prepayment to the Agent, which notice shall state the proposed date of such prepayment (which shall be a Business Day), the Loans to be prepaid and the aggregate amount of the prepayment, and which notice shall be delivered to the Agent not later than 12:00 noon (local time in Denver, Colorado):  (a) with respect to any Loan which is a Daily Reset LIBOR Rate Loan or a Base Rate Loan, on the date of the proposed prepayment, and (b) with respect to any Loan which is a LIBOR Rate Loan, two (2) Business Days prior to the date of the proposed prepayment.  All prepayments of Daily Reset LIBOR Rate Loans or Base Rate Loans shall be without premium.  All prepayments of LIBOR Rate Loans shall be made together 

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with accrued and unpaid interest (if any) to the date of such prepayment on the principal amount prepaid without premium thereon, provided however, that losses, costs or expenses incurred by any Lender as described in Section 2.3(b) shall be payable with respect to each such prepayment.  All notices of prepayment shall be irrevocable and the payment amount specified in each such notice shall be due and payable on the prepayment date described in such notice, together with, in the case of LIBOR Rate Loans, accrued and unpaid interest (if any) on the principal amount prepaid and any amounts due under Section 2.3(b).  Borrower shall have no optional right to prepay the principal amount of any LIBOR Rate Loan other than as provided in this Section 2.3.
(b)    Borrower will indemnify each Lender against, and reimburse each Lender on demand for, any loss, cost or expense incurred or sustained by such Lender (including without limitation, any loss or expense incurred by reason of the liquidation or redeployment of deposits or other funds acquired by such Lender to fund or maintain any LIBOR Rate Loan and/or loss of net yield) as a result of (a) any payment, conversion, rollover, or prepayment of all or a portion of any LIBOR Rate Loan on a day other than the last day of an Interest Period for such LIBOR Rate Loan,  (b) any payment, conversion, rollover or prepayment (whether required hereunder or otherwise) of such Lender’s Loan made after the delivery of a notice of borrowing delivered pursuant to Section 2.2 (whether oral or written) but before the proposed date for such LIBOR Rate Loan if such payment or prepayment prevents the proposed borrowing from becoming fully effective, (c) after receipt by the Agent of a notice of borrowing delivered pursuant to Section 2.2, the failure of any Loan to be made or effected by such Lender due to any condition precedent to a borrowing not being satisfied or due to any other action or inaction of Borrower or (d) any rescission of a notice of borrowing delivered pursuant to Section 2.2 or a notice of interest conversion delivered pursuant to Section 2.2.  Any Lender demanding payment under this Section 2.3 shall deliver to Borrower and the Agent a statement reasonably setting forth the amount and manner of determining such loss, cost or expense, which statement shall be conclusive and binding for all purposes, absent manifest error.  Compensation owing to a Lender as a result of any such loss, cost or expense resulting from a payment, prepayment, conversion or rollover of a LIBOR Rate Loan shall include without limitation, an amount equal to the sum of (i) the amount of the net yield that, but for such event, such Lender would have earned for the remainder of the applicable Interest Period plus (ii) any expense incurred by such Lender.  Notwithstanding any provision herein to the contrary, each Lender shall be entitled to fund and maintain its funding of all of any part of the LIBOR Rate Loans in any manner it elects; it being understood, however, that all determinations hereunder shall be made as if the Lender had actually funded and maintained each LIBOR Rate Loan during the Interest Period for such Loan through the purchase of deposits having a term corresponding to such Interest Period and bearing an interest rate equal to the LIBOR Rate for such Interest Period (whether or not the Lender shall have granted any participations in such Loans).
(c)    Borrower shall have the right, upon at least five Business Days’ written notice to the Lenders, to terminate the Line of Credit Loan Commitments, (i) in whole (subject to the last sentence of this Section 2.3(c)) or (ii) in part, in a minimum amount of $5,000,000 and an integral multiple of $1,000,000; provided, however, that any such termination shall be accompanied, (i) in the case of a termination in whole, by payment of the Line of Credit Loan Liabilities in full and the return or cash coverage of any Letter then outstanding, or (ii) in the case of a partial termination, payment of the Line of Credit Loan Liabilities to the extent necessary to cause the Available Amount to be 

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not less than zero.  Any partial reduction of the Line of Credit Loan Commitments pursuant to this Section 2.3(c) shall result in a reduction pro-rata of the Line of Credit Loan Commitments of each of the Lenders.  
2.4    Purpose.  The purpose of the Line of Credit is to provide funds for (i) general working capital and corporate purposes, (ii) capital expenditures, (iii) Permitted Acquisitions, and (iv) the refinancing of certain Indebtedness, in each case for the Borrower and its consolidated subsidiaries.
2.5    Loan and Letter of Credit Fees.
(g)    Agent’s Fees.  Borrower agrees to pay to the Agent, in respect of its administrative duties hereunder:  a one time syndication and arrangement fee on the Closing Date; an annual agent’s fee on the Closing Date and on each anniversary date to the Maturity Date; and one time fronting fees from time to time in respect of the initial Issuance of Letters, all in amounts as set forth in the Agent’s Letter.  Each of the Agent’s fees shall be fully earned on the date they become payable and if not paid timely by Borrower, at the option of the Agent, shall be paid by Advances pursuant to Section 2.1, without prior demand by the Agent.  No Persons other than the Agent shall have any interest in any such Agent’s fees.
(h)    Initial Fees.  Borrower agrees to pay to the Agent for distribution to the Lenders, including the Agent the one time fees set forth in the Agent’s Letter.  Each of these fees shall be fully earned and if not paid timely by Borrower, at the option of the Agent, shall be paid by Advances pursuant to Section 2.1, without prior demand by the Agent.
(i)    Quarterly Non-Use Fees.  Borrower agrees to pay to the Agent for distribution to the Lenders other than any Defaulting Lender (based on their respective pro rata average principal amounts outstanding under the Swing Line and the Line of Credit or their respective Pro Rata Percentages if, in any case, said average principal amounts outstanding are zero) quarterly non-use fees (“Non-Use Fees”) through the Maturity Date, calculated using the then applicable rates per annum set forth in the definition of Applicable Margin, and applied to the daily average Available Amount; provided, however, that outstanding Swing Line Loans shall not constitute usage of the Commitments (other than U.S. Bank’s or any successor Swing Line Lender’s Commitments) for purposes of determining Non-Use Fees.  The quarterly Non-Use Fees shall be due and payable in arrears with respect to the prior quarter on the first day of each January, April, July and October hereafter through the Maturity Date.  Pro-rated Non-Use Fees shall be due and payable on the first day of the quarter following the Closing Date and on the Maturity Date.  Pro-rated Non-Use Fees shall be due and payable to the Lenders on the Closing Date based on the Commitments and outstanding amounts under the Existing Agreement.  The quarterly Non-Use Fees shall be fully earned as they accrue and if not paid timely by Borrower, at the option of the Agent, shall be paid by Advances pursuant to Section 2.1, without prior demand by the Agent.
(j)    Letter of Credit Fees.  Borrower agrees to pay to the Agent, for distribution to the Lenders (based on their respective Pro Rata Percentages), quarterly fees (“Standby LC Fees”), payable in arrears with respect to the prior quarter on the first day of each January, April, July and October, in respect of each Letter that is a Standby Letter of Credit Issued hereunder, calculated using the then applicable rates per annum set forth in the definition of Applicable Margin, and 

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applied to daily average face amounts of all such Letters outstanding during such quarter, respectively.  Pro-rated Standby LC Fees shall be due and payable on the first day of the quarter following the Closing Date, on the Maturity Date and, with respect to a Letter that terminates, on the date such Letter terminates.  Pro-rated Standby LC Fees shall be due and payable to the Lenders on the Closing Date based on the Letters outstanding under the Existing Agreement.  Borrower shall also pay to the Agent for the account of the Issuer Issuing any Letter, the normal and customary processing fees charged by such Issuer in connection with the Issuance of or drawings under each such Letter.  Standby LC Fees and related processing fees shall be fully earned as they accrue and if not paid timely by Borrower, at the option of the Agent, shall be paid by Advances pursuant to Section 2.1, without prior demand by the Agent.
(k)    Calculation of Fees.  The fees payable under this Section 2.5 which are based on an annual percentage rate shall be calculated by the Agent on the basis of a 360-day year, for the actual days (including the first day but excluding the last day) occurring in the period for which such fee is payable.  Each determination by the Agent of fees payable under this Section 2.5 shall be conclusive and binding for all purposes, absent manifest error.
(l)    Fees Not Interest.  The fees described in this Agreement represent compensation for services rendered and to be rendered separate and apart from the lending of money or the provision of credit and do not constitute compensation for the use, detention, or forbearance of money, and the obligation of Borrower to pay each fee described herein shall be in addition to, and not in lieu of, the obligation of Borrower to pay interest, other fees described in this Agreement, and expenses otherwise described in this Agreement.  Fees shall be payable when due in Dollars and in Immediately Available Funds.  All fees shall be non-refundable.
2.6    Borrower’s Loan Account.  The Agent shall maintain a loan account (“Loan Account”) on its books in which shall be recorded:  (a) all Line of Credit Advances made by the Agent to Borrower pursuant to this Agreement; (b) all receipts and disbursements from and to the other Lenders; (c) all payments made by Borrower; and (d) all other appropriate debits and credits as provided in this Agreement, including without limitation, all receipts of fees, charges, expenses and interest.  All entries in Borrower’s Loan Account shall be made in accordance with the Agent’s customary accounting practices as in effect from time to time.  Borrower promises to pay the amount reflected as owing by and under its Loan Account and all other obligations hereunder as such amounts become due or are declared due pursuant to the terms of this Agreement.
2.7    Statements.  All Advances to Borrower, and all other debits and credits provided for in this Agreement, shall be evidenced by entries made by the Agent in its internal data control systems showing the date, amount and reason for each such debit or credit.  Until such time as the Agent shall have rendered to Borrower and the Lenders written statements of account, the balance in Borrower’s Loan Account, as set forth on the Agent’s most recent printout, shall be rebuttable presumptive evidence of the amounts due and owing the Lenders by Borrower and, as the case may be, by the Lenders to each other.  On or about the last day of each calendar month, the Agent shall mail to Borrower a statement setting forth the balance of Borrower’s Loan Account, including without limitation, principal, interest, expenses and fees.  Each such statement shall be subject to subsequent adjustment by the Agent but shall, absent manifest errors or omissions, be presumed 

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correct and binding upon Borrower and shall constitute an account stated unless, within sixty (60) days after receipt of any statement from the Agent, Borrower or a Lender shall deliver to the Agent written objection specifying the error or errors, if any, contained in such statement.
2.8    Termination of Agreement.  Subject to and in accordance with Section 9.1, the Agent shall have the right, without notice to Borrower, to terminate the Commitments immediately upon a Matured Default.  In addition, the Commitments shall be deemed immediately terminated and all of the Liabilities shall be immediately due and payable, without notice to Borrower, on the Maturity Date.  In the event the Commitments are terminated, the remainder of this Agreement shall remain in full force and effect until the payment in full of the Liabilities and the termination of any Letters.  Notwithstanding the foregoing, in the event that a proceeding under any bankruptcy, reorganization, arrangement of debt, insolvency, readjustment of debt or receivership law or statute is filed by or against Borrower or any Guarantor of the Liabilities, or Borrower or any Guarantor of the Liabilities makes an assignment for the benefit of creditors, the Commitments shall be deemed to be terminated immediately, and all the Liabilities shall be due and payable, without presentment, demand, protest or further notice (including without limitation, notice of intent to accelerate and notice of acceleration) of any kind, all of which are expressly waived by Borrower, provided, however, that in the event a proceeding against Borrower or any Guarantor of the Liabilities is dismissed within sixty (60) days of the date of its filing then the Commitments shall be deemed to be reinstated as of the date the order of dismissal becomes final and the Agent is given notice thereof, and provided, however, the automatic reimbursement of the Issuer by the Lenders as provided for in this Agreement shall continue with respect to any post-petition drawings under any Letters.  This Agreement shall terminate when the Commitments have terminated, any Letters Issued hereunder have terminated and the Liabilities have been indefeasibly paid in full.
3.    INTENTIONALLY OMITTED.
4.    CONDITIONS TO ADVANCES.
Notwithstanding any other provisions to the contrary contained in this Agreement, the making of Advances or the Issuance of Letters provided for in this Agreement shall be conditioned upon the following:
4.1    Compliance.  All representations and warranties contained in this Agreement shall be true on and as of the date of the making of each Advance and issuance of each Letter as if such representations and warranties had been made on and as of such date, and no Default or Matured Default shall have occurred and be continuing or shall exist.
4.2    Documentation.  Prior to the initial Advance under this Agreement, Borrower shall have executed and/or delivered to the Agent all of the documents listed on the List of Closing Documents attached as Exhibit 4A.
4.3    Acquisition Amounts.  No more than $400,000,000 in the aggregate of Loan or Letter proceeds shall have been used (giving effect to any requested Advance or Letter) to consummate Permitted Acquisitions, capital expenditures or purchases of fixed assets; provided, however, that unless designated as being subject hereto in a written notice from the Borrower to 

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the Agent, no Acquisition of Accounts, Inventory or other current assets shall be subject to this $400,000,000 limitation.
5.    GUARANTIES.  Borrower agrees to obtain, for the ratable benefit of the Lenders, the guaranty or guaranties of any wholly owned consolidated subsidiary of Borrower, other than an Excluded Consolidated Subsidiary, that is a Material Subsidiary, the form of which is attached as Exhibit 5A (collectively “Guarantor”).  As of the date of this Agreement, Borrower certifies that no consolidated subsidiary is or is required to become a Guarantor.  The parties hereto agree that the guaranty documents delivered in connection with the Existing Credit Agreement are terminated and of no further force and effect as of the date hereof. 
6.    REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants to the Lenders that:
6.1    Litigation and Proceedings.  Except as set forth on Part 1 of Exhibit 6A and except for judgments and pending or, to the best of Borrower’s knowledge, threatened litigation, contested claims and governmental proceedings which are not, in the aggregate, material to Borrower’s financial condition, results of operations or business, no judgments are outstanding against Borrower and its consolidated subsidiaries, nor is there pending or threatened any litigation, contested claim, or governmental proceeding by, against or with respect to Borrower and its consolidated subsidiaries.
6.2    Other Agreements.  Except as set forth on part 2 of Exhibit 6A, Borrower and its consolidated subsidiaries are not in default under any contract, lease or commitment to which Borrower or its consolidated subsidiaries are a party or by which Borrower and its consolidated subsidiaries are bound, except those which are not, in the aggregate, material to Borrower’s and its consolidated subsidiaries financial condition, results of operations or business.  Borrower knows of no dispute, except as set forth on part 2 of Exhibit 6A, relating to any contract, lease, or commitment of Borrower and its consolidated subsidiaries, except those which are not, in the aggregate, material to Borrower’s financial condition, results of operations or business.
6.3    Licenses, Patents, Copyrights, Trademarks and Trade Names.  There is no action, proceeding, claim or complaint pending or threatened to be brought against Borrower or its consolidated subsidiaries by any Person which might jeopardize any of Borrower’s or its consolidated subsidiaries interest in any licenses, patents, copyrights, trademarks, trade names or applications except those which are not, in the aggregate, material to Borrower’s financial condition, results of operations or business.
6.4    Encumbrances.  Except as permitted under Section 8.1, all of the property of Borrower and its consolidated subsidiaries is free and clear of all security interests, liens, claims and encumbrances.  Part 3 of Exhibit 6A sets forth all Limited Recourse Debt and Recourse Debt secured by liens that is outstanding as of the Closing Date.
6.5    Location of Assets; Chief Executive Office.  The chief executive office of Borrower is located at 480 West Dussel Drive, Maumee, OH 43537.  As of the execution of this Agreement, the books and records of Borrower are located at the chief executive office of Borrower.  If Borrower 

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shall intend to make any change in any of such locations, Borrower shall notify the Agent at least 30 days prior to such change.
6.6    Tax Liabilities.  Borrower and its consolidated subsidiaries have filed all federal, state and local tax reports and returns required by any law or regulation to be filed by Borrower and its consolidated subsidiaries and they have either duly paid all taxes, duties and charges indicated to be due on the basis of such returns and reports or has made adequate provision for the payment thereof, and the assessment of any material amount of additional taxes in excess of those paid and reported is not reasonably expected.  The reserves for taxes reflected on Borrower’s consolidated balance sheet are adequate in amount for the payment of all liabilities for all taxes (whether or not disputed) of Borrower and its consolidated subsidiaries accrued through the date of such balance sheet.  There are no material unresolved questions or claims concerning any tax liability of Borrower and its consolidated subsidiaries, except as described on part 4 of Exhibit 6A.
6.7    Indebtedness.  Except as contemplated by this Agreement, as disclosed on part 5 of Exhibit 6A and as disclosed on the financial statements identified in Section 6.13, Borrower has no other indebtedness, contingent obligations or liabilities, outstanding bonds, letters of credit or acceptances to any other Person or loan commitments from any other Person, other than accounts payable incurred in the ordinary course of business.
6.8    Affiliates.  Borrower and its consolidated subsidiaries have no Affiliates, other than their directors, officers, agents and employees and those Persons disclosed on part 6 of Exhibit 6A as updated from time to time by Borrower, and the legal relationship of Borrower and its consolidated subsidiaries to each such Affiliate is accurately and completely described thereon.
6.9    Environmental Matters.  Except as disclosed on part 7 of Exhibit 6A, (a) Borrower and its consolidated subsidiaries have not received any notice to the effect, or have any knowledge, that the Property or its operations are not in compliance with any of the requirements of applicable federal, state and local environmental, health and safety statutes and regulations (“Environmental Laws”) or are the subject of any federal or state investigation evaluating whether any remedial action is needed to respond to a release of any toxic or hazardous waste or substance into the environment, which noncompliance or remedial action could have a material adverse effect on the business, operations, Property, assets or conditions (financial or otherwise) of Borrower and its consolidated subsidiaries; (b) there have been no releases of hazardous materials at, on or under the Property that, singly or in the aggregate could have a material adverse effect on the business, operations, Property, assets or conditions (financial or otherwise) of Borrower and its consolidated subsidiaries; (c) there are no underground storage tanks, active or abandoned, including without limitation petroleum storage tanks, on or under the Property that, singly or in the aggregate could have a material adverse effect on the business, operations, Property, assets or conditions (financial or otherwise) of Borrower and its consolidated subsidiaries; (d) Borrower and its consolidated subsidiaries have not directly transported or directly arranged for the transportation of any hazardous material to any location which is listed or proposed for listing on the National Priorities List pursuant to CERCLA or on any similar state list or which is the subject of federal, state or local enforcement actions or other investigations which may lead to material claims against Borrower and its consolidated subsidiaries for any remedial work, damage to natural resources or personal injury, 

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including without limitation, claims under CERCLA; and (e) no conditions exist at, on or under the Property which, with the giving of notice, would rise to any material liability under any Environmental Laws.
6.10    Existence.  Borrower is a corporation duly organized and in good standing under the laws of the State of Ohio and Borrower and its consolidated subsidiaries are duly qualified to do business and are in good standing in all states where such qualification is necessary, except for those jurisdictions in which the failure so to qualify would not, in the aggregate, have a material adverse effect on Borrower’s financial condition, results of operations or business.
6.11    Authority.  The execution and delivery by Borrower of this Agreement and all of the other Financing Agreements and the performance of Borrower’s obligations hereunder and thereunder:  (a) are within Borrower’s powers; (b) are duly authorized by Borrower’s board of directors; (c) are not in contravention of the terms of Borrower’s articles or certificate of incorporation or code of regulations; (d) are not in contravention of any law or laws, or of the terms of any indenture, agreement or undertaking to which Borrower is a party or by which Borrower or any of Borrower’s property is bound; (e) do not require any consent, registration or approval of any Governmental Authority or of any other Person, except such consents or approvals as have been obtained; (f) do not contravene any contractual restriction or Governmental Requirement binding upon Borrower; and (g) will not, except as contemplated or permitted by this Agreement, result in the imposition of any lien, charge, security interest or encumbrance upon any property of Borrower under any existing indenture, mortgage, deed of trust, loan or credit agreement or other material agreement or instrument to which Borrower is a party or by which Borrower or any of Borrower’s property may be bound or affected.  Borrower shall deliver to the Agent, upon the Agent’s request therefor, a written opinion of counsel as to the matters described in the foregoing clauses (a) through (g).
6.12    Binding Effect.  This Agreement and all of the other Financing Agreements set forth the legal, valid and binding obligations of Borrower and the Guarantors of the Liabilities, respectively, and are enforceable against Borrower and the Guarantors of the Liabilities, respectively, in accordance with their respective terms.
6.13    Correctness of Financial Statements.  The consolidated financial statements delivered from time to time by Borrower to the Lenders present fairly the financial condition of Borrower and its consolidated subsidiaries, and have been prepared in accordance with GAAP consistently applied.  Since the date of the most recent financial statements delivered to the Lenders, there has been no materially adverse change in the condition or operation of Borrower and its consolidated subsidiaries.
6.14    Employee Controversies.  Except as set forth on Part 1 of Exhibit 6A, there are no controversies pending or, to the best of Borrower’s knowledge, threatened between Borrower and its consolidated subsidiaries or any of their employees, other than employee grievances arising in the ordinary course of business or which are not, in the aggregate, material to Borrower’s financial condition, results of operations or business.

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6.15    Compliance with Laws and Regulations.  Borrower and its consolidated subsidiaries are in compliance with all Governmental Requirements relating to the business operations and the assets of Borrower and its consolidated subsidiaries, except for Governmental Requirements, the violation of which would not have a material adverse effect on Borrower’s financial condition, results of operations or business.
6.16    Account Warranties.  Except as disclosed to the Agent from time to time in writing, all Accounts which are reflected on Borrower’s financial statements delivered to the Agent pursuant to Section 7.1 are genuine, in all respects what they purport to be, have not been reduced to any judgment, are evidenced by not more than one executed original agreement, contract or document, and represent undisputed, bona fide transactions completed in accordance with the terms and conditions of any related document; the Accounts have not been pledged, sold or assigned to any Person; and except as disclosed to the Agent from time to time in writing, Borrower has no knowledge of any fact or circumstance which would impair the validity or collectibility of any of the Accounts that in the aggregate are material in amount.
6.17    Inventory Warranties.  Except as disclosed to the Agent from time to time in writing, all Inventory reflected on Borrower’s financial statements delivered to the Agent pursuant to Section 7.1 shall be of good and merchantable quality, free from any defects which might affect the market value of such Inventory.
6.18    Solvency.  Borrower and its consolidated subsidiaries are solvent, able to pay their debts generally as such debts mature, and have capital sufficient to carry on their business and all businesses in which they are about to engage.  The saleable value of the total consolidated assets of Borrower and its consolidated subsidiaries at a fair valuation, and at a present fair saleable value, is greater than the amount of total consolidated obligations of Borrower and its consolidated subsidiaries to all Persons (taking into account, as applicable, rights of contribution, subrogation and indemnity with regard to obligations shared with others).  Borrower and its consolidated subsidiaries will not be rendered insolvent by the execution or delivery of this Agreement or of any of the other Financing Agreements or by the transactions contemplated hereunder or thereunder.
6.19    Pension Reform Act.  No events, including without limitation, any “reportable event” or “prohibited transactions,” as those terms are defined in the Employee Retirement Income Security Act of 1974 as the same may be amended from time to time (“ERISA”), have occurred in connection with any type of plan, arrangement, association or fund covered by ERISA in which any personnel of Borrower or an Affiliate which is under common control with Borrower (within the meaning of applicable provisions of the IRC) participate (“Benefit Plans”).  The Benefit Plans are otherwise in compliance with all applicable provisions of ERISA and the IRC and meet the minimum funding standards of ERISA and the IRC.
6.20    Margin Security.  Borrower does not own any margin security and none of the loans advanced hereunder shall be used for the purpose of purchasing or carrying any margin securities or for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase any margin securities or for any other purpose not permitted by Regulations T, U or X of the Board of Governors of the Federal Reserve System.

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6.21    Investment Company Act Not Applicable.  Borrower is not an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.
6.22    Full Disclosure.  All factual information taken as a whole in the materials furnished by or on behalf of Borrower to the Agent or any Lender for purposes of or in connection with the transactions contemplated under this Agreement and the other Financing Agreements, does not contain any untrue statement of a material fact or omit to state any material fact necessary to keep the statements contained therein from being misleading as of the date of this Agreement, and thereafter as supplemented by information provided to the Agent or the Lenders in writing pursuant to this Agreement.  The financial projections and other financial information furnished to the Agent and the Lenders by Borrower and to be delivered under this Agreement, were prepared in good faith on the basis of information and assumptions that Borrower believed to be reasonable as of the date of such information.
6.23    Intellectual Property.  Borrower and its consolidated subsidiaries own or possess (or will be licensed or otherwise have the full right to use) all intellectual property that is necessary for the operation of their business, without any known conflict with the rights of others.  No product of Borrower and its consolidated subsidiaries infringes upon any intellectual property owned by any other Person and no claim or litigation is pending or (to the knowledge of Borrower) threatened against or affecting such Person, contesting its right to sell or to use any product or material, in any case which could have a material adverse effect on the business, operations, Property, assets or conditions (financial or otherwise) of Borrower and its consolidated subsidiaries.
6.24    Survival of Warranties.  All representations and warranties contained in this Agreement or any of the other Financing Agreements shall survive the execution and delivery of this Agreement and shall be true from the date of this Agreement until the Liabilities shall be paid in full and the Lenders shall cease to be committed to make Loans or Issue Letters under this Agreement.
6.25    No Material Adverse Effect; No Default or Matured Default.  Since December 31, 2012, there has not occurred a material adverse effect on the business, operations, Property, assets or condition (financial other otherwise) of the Borrower and its consolidated subsidiaries.  No Default or Matured Default has occurred and is continuing.
6.26    OFAC; Anti-Terrorism Laws.  
(a)    Neither the Borrower nor any subsidiary (whether a consolidated subsidiary or an Excluded Consolidated Subsidiary) (i) is a Sanctioned Person, (ii) has assets in Sanctioned Countries, or (iii) derives any operating income from investments in, or transactions with, Sanctioned Persons or Sanctioned Countries.  No part of the proceeds of any Loan or extension of credit hereunder will be used directly or indirectly to fund any operations in, finance any investments or activities in or make any payments to, a Sanctioned Person or a Sanctioned Country.
(b)    Neither the making of the Loans hereunder nor the use of the proceeds thereof will violate the PATRIOT Act, the Trading with the Enemy Act, as amended, or any of the foreign assets 

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control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto or successor statute thereto.  The Borrower and all of its subsidiaries are in compliance in all material respects with the PATRIOT Act.
7.    AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that so long as any Liabilities remain outstanding, and (even if there shall be no Liabilities outstanding) so long as the Lenders remain committed to make Loans or Issue Letters under this Agreement:
7.1    Financial and Other Information.  Except as otherwise expressly provided for in this Agreement, Borrower shall keep proper books of record and account in which full and true entries will be made of all dealings and transactions of or in relation to the business and affairs of Borrower and its consolidated subsidiaries, in accordance with GAAP consistently applied, and Borrower shall cause to be furnished to the Agent (with copies to the other Lenders) from time to time and in a form acceptable to the Agent:
(a)    (a) as soon as practicable and in any event within ninety (90) days after the end of each fiscal year of Borrower, (i) copies of all SEC 10(K) filings of Borrower, together with the below-defined Compliance Certificate for such fiscal year, and (ii) if at the end of such fiscal year, any of the entities listed in Exhibit 1A that have become Excluded Consolidated Subsidiaries, is a Material Subsidiary, or are in the aggregate Material Subsidiaries, (A) audited consolidated statements of income, retained earnings and cash flow of Borrower and its consolidated subsidiaries for each year, and a consolidated balance sheet of Borrower and its consolidated subsidiaries for such year, setting forth in each case, in comparative form, corresponding figures as of the end of the preceding fiscal year, all in reasonable detail and satisfactory in scope to the Agent and certified to Borrower by such independent public accountants as are selected by Borrower and satisfactory to the Agent, whose opinion shall be unqualified and otherwise in scope and substance satisfactory to the Agent; and (B) supplemental information provided by the same independent public accountants as in the foregoing including consolidating statements of income, retained earnings, and cash flow and a consolidating balance sheet showing the accounting of the Borrower and its consolidated subsidiaries and the Excluded Consolidated Subsidiaries separately and including a schedule of eliminations all in reasonable detail and satisfactory in scope to the Agent;
(b)    as soon as practicable and in any event within forty five (45) days after the end of each quarterly accounting period in each fiscal year of Borrower:  (i) (A) copies of all SEC 10(Q) filings of Borrower, and (B) a compliance certificate of the chief financial officer of Borrower in substantially the form attached as Exhibit 7A-2 (“Compliance Certificate”), accompanied by supporting information satisfactory in scope and detail to the Agent; and (ii) if, at or prior to the end of the fiscal quarter preceding the end of such fiscal quarter, any of the entities listed in Exhibit 1A that have become Excluded Consolidated Subsidiaries, was and continues to be individually a Material Subsidiary, or, were and continue to be in the aggregate, Material Subsidiaries, (A) consolidated statements of income and retained earnings of Borrower and its consolidated subsidiaries for such quarterly period and for the period from the beginning of the then current fiscal year to the end of such quarterly period, and a consolidated balance sheet of Borrower and its 

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consolidated subsidiaries as of the end of such quarterly period, setting forth in each case, in comparative form, figures for the corresponding periods in the preceding fiscal year, all in reasonable detail and certified as accurate by the chief financial officer of Borrower, subject to changes resulting from normal year-end adjustments; and (B) supplemental information including consolidating statements of income and retained earnings, and a consolidating balance sheet showing the accounting of the Borrower and its consolidated subsidiaries and the Excluded Consolidated Subsidiaries separately and including a schedule of eliminations all in reasonable detail and certified as accurate by the chief financial officer of Borrower, subject to changes resulting from normal year-end adjustments and satisfactory in scope to the Agent;
(c)    together with all financial reporting provided pursuant to Section 7.1(a) and (b), the Borrower shall certify to the Agent and the Lenders the outstanding amount of the Liabilities which were used to consummate Permitted Acquisitions, capital expenditures and purchases of fixed assets (with the aggregate principal amount thereof at no time exceeding $400,000,000); provided, that such certification also shall indicate if any Acquisition of Accounts, Inventory or other current assets has been designated  by the Borrower as being subject to the foregoing $400,000,000 limitation; and
(d)    such other information (including, without limitation, budgets and forecasts) as the Agent may from time to time reasonably request.
7.2    Conduct of Business.  Borrower and its consolidated subsidiaries shall:  (a) maintain their existence and maintain in full force and effect all licenses, bonds, franchises, leases, patents, contracts and other rights necessary to the conduct of their business; (b) continue in, and limit their operations to, the same general line of business as that presently conducted by them; (c) comply with all Governmental Requirements, except for such Governmental Requirements the violation of which would not, in the aggregate, have a material adverse effect on Borrower’s financial condition, results of operations or business; (d) keep and conduct their business separate and apart from the business of Affiliates; and (e) otherwise do all things necessary to make the Representations and Warranties set forth in Section 6 of this Agreement true and correct at all times.
7.3    Insurance.  Borrower and its consolidated subsidiaries shall maintain, at their expense, such liability and property insurance (including as applicable commercial general liability insurance, products liability insurance and workman’s compensation insurance) with financially sound and reputable insurance companies as is ordinarily maintained by other companies of similar size in similar businesses.
7.4    Financial Covenants and Ratios.  Borrower shall maintain at all times Working Capital in an amount equal to or in excess of $150,000,000.  Borrower shall maintain at all times a Recourse Long Term Debt to Capitalization Ratio less than or equal to 0.70 to 1.00.  Notwithstanding the foregoing or anything to the contrary set forth herein, assets and liabilities (under GAAP) of Excluded Consolidated Subsidiaries shall not be included in any determination under this Section 7.4; provided, that liabilities of Excluded Consolidated Subsidiaries or any other Person in which the Borrower or any consolidated subsidiary owns an equity interest and, in compliance with GAAP, accounts for such equity interest using the equity method, shall be included 

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if the Borrower or any consolidated subsidiary has guaranteed such liabilities, provided credit support for such liabilities or is otherwise obligated to repay such liabilities.
7.5    Benefit Plans.  Borrower and its consolidated subsidiaries shall:  (a) keep in full force and effect any and all Benefit Plans which are presently in existence or may, from time to time, come into existence under ERISA, unless such Benefit Plans can be terminated without material liability to Borrower and its consolidated subsidiaries in connection with such termination (as distinguished from any continuing funding obligation); (b) make contributions to all Benefit Plans in a timely manner and in an amount sufficient to comply with the requirements of ERISA; (c) comply with all requirements of ERISA which relate to such Benefit Plans; and (d) notify the Agent immediately upon receipt by Borrower and its consolidated subsidiaries of any notice of the institution of any proceeding or other action relating to any Benefit Plans that would reasonably be expected to have a material adverse effect on Borrower or its financial condition.
7.6    Notice of Suit, Adverse Change in Business or Default.  Borrower shall, as soon as possible, and in any event within five (5) Business Days after Borrower learns of the following, give written notice to the Agent of:  (a) any proceeding being instituted or threatened to be instituted by or against Borrower or its consolidated subsidiaries in any federal, state, local or foreign court or before any commission or other regulatory body (federal, state, local or foreign) for which claimed damages exceed $20,000,000; (b) any material adverse change in the business, assets or condition, financial or otherwise, of Borrower and its consolidated subsidiaries; and (c) the occurrence of any Default or Matured Default.
7.7    Use of Proceeds.  Borrower and its consolidated subsidiaries shall use Advances only for the purposes stated in Section 2.4 and for no other purpose.
7.8    Books and Records.  Borrower and its consolidated subsidiaries shall maintain proper books of record and account in accordance with GAAP consistently applied in which true, full and correct entries will be made of all their respective dealings and business affairs.  If any changes in accounting principles are hereafter required or permitted by GAAP and are adopted by Borrower and its consolidated subsidiaries with the concurrence of its independent certified public accountants and such changes in GAAP result in a change in the method of calculation or the interpretation of any of the financial covenants, standards or terms found in Section 7.4 or any other provision of this Agreement, Borrower and the Required Lenders agree to amend any such affected terms and provisions so as to reflect such changes in GAAP with the result that the criteria for evaluating Borrower’s financial condition shall be the same after such changes in GAAP as if such changes in GAAP had not been made.
7.9    OFAC; PATRIOT Act Compliance.  The Borrower shall, and shall cause each subsidiary (whether a consolidated subsidiary or an Excluded Consolidated Subsidiary) to, (i) refrain from doing business in a Sanctioned Country or with a Sanctioned Person in violation of the economic sanctions of the United States administered by OFAC, and (ii) provide, to the extent commercially reasonable, such information and take such actions as are reasonably requested by the Agent or any Lender in order to assist the Agent and the Lenders in maintaining compliance with the PATRIOT Act. 

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8.    NEGATIVE COVENANTS.
Borrower covenants and agrees that so long as any Liabilities remain outstanding, and (even if there shall be no Liabilities outstanding) so long as the Lenders remain committed to make Loans or Issue Letters under this Agreement (unless the Agent, with the written approval of the Required Lenders, shall give the Agent’s prior written consent):
8.1    Encumbrances. Borrower and its consolidated subsidiaries shall not create, incur, assume or suffer to exist any security interest, mortgage, pledge, lien, capitalized lease, levy, assessment, attachment, seizure, writ, distress warrant, or other encumbrance of any nature whatsoever on or with regard to any of their assets other than: 
 (a) liens securing the payment of taxes, either not yet due or the validity of which is being contested in good faith by appropriate proceedings, and as to which Borrower shall, if appropriate under GAAP, have set aside on Borrower’s books and records adequate reserves;
(b) liens securing deposits under workmen’s compensation, unemployment insurance, social security and other similar laws, or securing the performance of bids, tenders, contracts (other than for the repayment of borrowed money) or leases, or securing indemnity, performance or other similar bonds for the performance of bids, tenders, contracts (other than for the repayment of borrowed money) or leases, or securing statutory obligations or surety or appeal bonds, or securing indemnity, performance or other similar bonds in the ordinary course of Borrower’s business, which are not past due;
(c) liens securing the interests of the broker or other counter party with respect to any Margin / Swap Account; 
(d)  liens upon Transportation Assets securing Limited Recourse Debt; and
(e) liens securing Recourse Debt permitted under Section 8.3.
8.2    Consolidations, Mergers or Acquisitions.  Borrower and its consolidated subsidiaries shall not enter into or execute any agreement to recapitalize or consolidate with, merge with, or otherwise enter into an Acquisition except:  (a) Borrower may acquire the assets of its consolidated subsidiaries or merge with its consolidated subsidiaries, provided that Borrower is the survivor of any such merger; (b) Borrower may acquire Accounts and/or Inventory in the ordinary course of business, and (c) Permitted Acquisitions.
8.3    Secured Indebtedness.  So long as (x) no Default or Matured Default is then outstanding or would result therefrom, and (y) the Borrower will be in pro forma compliance with Section 7.4 immediately before and after the incurrence thereof, the Borrower and its consolidated subsidiaries may directly or indirectly create, issue, incur or assume Recourse Debt secured by Liens on all or any portion of their assets only so long as the aggregate principal amount of all such Indebtedness at no time exceeds 25% of Capitalization.

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8.4    Guarantees and Other Contingent Obligations.  Borrower and its consolidated subsidiaries shall not guarantee, endorse or otherwise in any way become or be responsible for obligations of any other Person, whether by agreement to purchase the Indebtedness of such Person or through the purchase of Goods, supplies or services, or maintenance of working capital or other balance sheet covenants or conditions, or by way of stock purchase, capital contribution, advance or loan for the purpose of paying or discharging any indebtedness or obligation of such Person or otherwise, except:  (a) for endorsements of negotiable Instruments for collection in the ordinary course of business; (b) that they may indemnify their officers, directors and managers to the extent permitted under the laws of the State in which they are organized and may indemnify (in the customary manner) underwriters and any selling shareholders in connection with any public offering of Borrower’s securities; (c) so long as (i) no Default or Matured Default is then outstanding or would result therefrom, (ii) the Borrower and its consolidated subsidiaries are in pro forma compliance with Section 7.4 after giving effect to the applicable guarantee, and (iii) such guarantee is at all times unsecured, the Borrower may guaranty the Indebtedness of its consolidated subsidiaries and a consolidated subsidiary may guaranty the Indebtedness of the Borrower or any other consolidated subsidiary, or (d) as permitted under Section 8.3.
8.5    Disposition of Property.  Borrower and its consolidated subsidiaries shall not sell, lease, transfer or otherwise dispose of any of their properties, assets or rights in excess of the aggregate amount of $25,000,000 in book value in any fiscal year of Borrower, except:  (a) Inventory may be sold by Borrower and its consolidated subsidiaries in the ordinary course of Borrower’s business; (b) Borrower and its consolidated subsidiaries may sell, transfer or dispose of their equity investments in Excluded Consolidated Subsidiaries, with any such sale, transfer or disposal to a non-Affiliate being consummated for fair market value on an arm’s-length basis; or (c) Borrower and its consolidated subsidiaries may dispose of obsolete or worn out property in the ordinary course of business (which in any event shall be deemed to include the sale or other disposition of unneeded railcars in the ordinary course of the business of Borrower and its consolidated subsidiaries).
8.6    Distributions in Respect of Equity.  Borrower and its consolidated subsidiaries shall not directly or indirectly redeem any of Borrower’s shares of capital stock or declare any dividends in any year on any class of Borrower’s capital stock or make any other Restricted Payment, except that (a) Borrower may, provided that no Default or Matured Default has occurred and is continuing or would result thereby, declare and pay dividends that are not in excess of the aggregate of fifty percent (50%) of a rolling average of positive pretax income with respect to the current and prior fiscal year of Borrower, and (b) a consolidated subsidiary of Borrower may make a Restricted Payment to Borrower and its consolidated subsidiaries.  “Restricted Payment” shall mean, with respect to Borrower and its consolidated subsidiaries, (a) any direct or indirect dividend or distribution (whether in cash, securities or other property), or any direct or indirect payment of any kind or character (whether in cash, securities or other property) in consideration for or otherwise in connection with any retirement, purchase, redemption or other acquisition of any equity interest of Borrower and its consolidated subsidiaries, or any options, warrants or rights to purchase or acquire any such equity interest of Borrower and its consolidated subsidiaries, or (b) principal or interest payments (in cash, property or otherwise) on, or redemptions of, subordinated debt of Borrower and its consolidated subsidiaries; provided that the term “Restricted Payment” shall not 

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include any dividend or distribution payable solely in equity interests of Borrower and its consolidated subsidiaries or warrants, options or other rights to purchase such equity interests.
8.7    Loans to and Transactions with Affiliates.  Except for (a) advances for travel and expenses to their officers, directors, managers, general partners or employees in the ordinary course of their business, and (b) as permitted by Section 8.8, Borrower and its consolidated subsidiaries shall not make advances or loans in or to any Affiliates.  All transactions with Affiliates shall be bona fide arms length transactions that are no less favorable to Borrower and its consolidated subsidiaries than would be a similar transaction with a non-affiliated third person.
8.8    Deposits, Investments, Advances or Loans.  Borrower and its consolidated subsidiaries shall not make or permit to exist deposits, investments, advances or loans (other than deposits, investments, advances or loans existing on the date of the execution of this Agreement and disclosed to the Agent in writing on or prior to such date) in or to Affiliates or any other Person, except:  (a) investments in short term direct obligations of the United States Government (b) investment grade corporate and state and local government securities (Rated BBB- or better by Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business or rated BAA3 or better by Moody’s Investors Service, Inc.); (c) certificates of deposit or demand deposit accounts issued by or maintained with a bank satisfactory to the Agent in the Agent’s reasonable determination; (d) unsecured advances or loans to officers, directors, employees, as and when permitted by Section 8.7; (e) unsecured advances or loans in or to any Affiliates that have executed and delivered a guaranty in the form of Exhibit 5A; (f) secured loans made by the Borrower to other Persons in the ordinary course of business not to exceed $100,000,000 in the aggregate in any fiscal year of Borrower; and (g) other unsecured loans to and/or investments in other Persons by the Borrower not to exceed $100,000,000 in the aggregate in any fiscal year of Borrower.
9.    DEFAULT AND RIGHTS AND REMEDIES; THE AGENT.
9.1    Liabilities.  Except as provided in Section 2.8 (regarding automatic termination of the Commitments and acceleration of the Liabilities in certain events) upon a Matured Default, the Agent may with the consent of the Required Lenders, and shall at the request of the Required Lenders, by notice to Borrower and the Lenders, (i) declare the Commitments to be terminated, whereupon such obligations and the Commitments of each Lender shall terminate, and (ii) declare all of the Liabilities to be due and payable, whereupon the Liabilities shall become and be due and payable, without presentment, demand, protest or further notice (including without limitation, notice of intent to accelerate and notice of acceleration) of any kind, all of which are expressly waived by Borrower.  Anything herein to the contrary notwithstanding, it is understood that no Lender shall have the right to individually enforce any Financing Agreement which is entered into with or for the Agent, such enforcement residing with the Agent as contemplated by the following Section 9.2 of this Agreement and by the applicable provisions of the other Financing Agreements.
9.2    Rights and Remedies; Waiver of Rights under Farm Credit Act.  Upon the occurrence and during the continuance of any Matured Default, the Agent may with the consent of the Required Lenders (subject to the provisions of the other Financing Agreements), and shall at the direction of the Required Lenders, proceed to protect and enforce the rights of the Lenders as set forth in this Section 9.2.  The Agent may proceed by suit in equity, by action at law or both, 

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whether for the specific performance of any covenant or agreement contained in this Agreement or in any other Financing Agreement or in aid of the exercise of any power granted in this Agreement or any other Financing Agreement, (i) to enforce the payment of the Liabilities, or (ii) to foreclose upon any liens, claims, security interests and/or encumbrances granted pursuant to this Agreement and other Financing Agreements in the manner set forth therein; it being intended that no remedy conferred herein or in any of the other Financing Agreements is to be exclusive of any other remedy, and each and every remedy contained herein or in any other Financing Agreement shall be cumulative and shall be in addition to every other remedy given hereunder and under the other Financing Agreements, or at any time existing at law or in equity or by statute or otherwise.  Agent shall have, in addition to any other rights and remedies contained in this Agreement or in any of the other Financing Agreements, all of the rights and remedies of a secured party under the Code or other applicable laws. The Borrower, having been represented by legal counsel in connection with this Agreement and, in particular, in connection with the waiver contained in this Section 9.2, does hereby voluntarily and knowingly waive, relinquish and agree not to assert at any time, any and all rights that the Borrower may have or be afforded under the sections of the Agricultural Credit Act of 1987 designated as 12 U.S.C. Sections 2199 through 2202e and the implementing Farm Credit Administration regulations as set forth in 12 C.F.R. Section 617.000 through 617.7630, including those provisions which afford the Borrower certain rights, and/or impose on any lender to the Borrower certain duties, with respect to the collection of any amounts, or which require the Agent or any Lender to disclose to the Borrower the nature of any such rights or duties.  This waiver is given by the Borrower pursuant to the provisions of 12 C.F.R. Section 617.7010(c) to include the Agent and the Lenders to fund and extend to the Borrower the credit facilities described herein and to induce those Lenders which are Farm Credit System Institutions to agree to provide such credit facilities commensurate with their Commitments as they may exist from time to time.
9.3    Waiver of Demand.  Borrower expressly waives demand, presentment, protest, and notice of nonpayment, notice of intent to accelerate and notice of acceleration.  Borrower also waives the benefit of all valuation, appraisal and exemption laws.
9.4    Waiver of Notice.  Upon the occurrence and during the continuance of any Matured Default, Borrower waives, to the fullest extent permitted by applicable law, all rights to notice and hearing of any kind prior to the exercise by the Agent of the Agent’s rights.
9.5    Authorization and Action.  Each Lender appoints the Agent as its Agent under, and irrevocably authorizes the Agent (subject to Section 9.11) to take such action on its behalf and to exercise such powers under any Financing Agreement as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto.  Without limitation of the foregoing, each Lender expressly authorizes the Agent to execute, deliver, and perform its obligations under each of the Financing Agreements to which the Agent is a party, and to exercise all rights, powers, and remedies that the Agent may have thereunder.  As to any matters not expressly provided for by this Agreement, the Agent shall not be required to exercise any discretion or take any action, but shall be required to act, or to refrain from acting (and shall be fully protected in so acting or refraining from acting), upon the instructions of the Required Lenders, and such instructions shall be binding upon all the Lenders and all holders of any Note; provided however, that the Agent shall not be required to take any action which exposes the Agent to personal liability or which is 

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contrary to this Agreement or applicable law.  The Agent agrees to give to each Lender prompt notice of each notice given to it by Borrower pursuant to the terms of any Financing Agreement.
9.6    Agent’s Reliance, Etc.  Neither the Agent nor any of its directors, officers, agents or employees shall be liable to any Lender for any action taken or omitted to be taken by it or them under or in connection with any Financing Agreement, except for its or their own gross negligence or willful misconduct.  Without limiting the generality of the foregoing, the Agent:  (a) may treat the original or any successor Lender or holder of any Note as the Lender or the holder thereof until it receives notice from the Lender or the payee of such Note concerning the assignment of such Lenders interests or of such Note; (b) may employ and consult with legal counsel (including counsel for Borrower), independent public accountants, and other experts selected by it and shall not be liable to any Lender for any action taken, or omitted to be taken, in good faith by it or them in accordance with the advice of such counsel, accountants, or experts received in such consultations and shall not be liable for any negligence or misconduct of any such counsel, accountants or other experts; (c) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any opinions, certifications, statements, warranties or representations made in or in connection with any Financing Agreement; (d) shall not have any duty to any Lender to ascertain or to inquire as to the performance or observance of any of the terms, covenants, or conditions of any Financing Agreement or any other instrument or document furnished pursuant thereto or to satisfy itself that all conditions to and requirements for any Loan have been met or that Borrower is entitled to any Loan or to inspect the property (including the books and records) of Borrower; (e) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of any Financing Agreement or any other instrument or document furnished pursuant thereto; and (f) shall incur no liability under or in respect of this Agreement by acting upon any notice, consent, certificate, or other instrument or writing (which may be by telegram, cable, telex, or otherwise) believed by it to be genuine and signed or sent by the proper party or parties.
9.7    Notices of Defaults.  The Agent shall not be deemed to have knowledge of the occurrence of a Default or a Matured Default unless the Agent has received written notice from a Lender or Borrower specifying such Default or Matured Default and stating that such notice is a “Notice of Default”.  In the event that the Agent obtains such knowledge of the occurrence of a Default or a Matured Default, the Agent shall within three (3) Business Days thereafter, give notice thereof to the Lenders.  The Agent shall (subject to Sections 9.1 and 9.2) take such action with respect to such Default or Matured Default as may be directed by the Required Lenders; provided that, unless and until the Agent shall have received the directions referred to in Sections 9.1 and 9.2, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Matured Default as it shall deem advisable and in the best interest of the Lenders.
9.8    The Agent as a Lender, Affiliates.  With respect to its Commitment, any Loan made by it, and the Note issued to it, the Agent shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the Agent; and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated, include the Agent in its individual capacity.  The Agent and its affiliates may accept deposits from, lend money to, act as trustee under 

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indentures of, and generally engage in any kind of business with, Borrower, any of its respective Affiliates and any Person who may do business with or own securities of Borrower or any such Affiliate, all as if the Agent were not the Agent and without any duty to account therefor to the Lenders.
9.9    Non-Reliance on Agent and Other Lenders.  Each Lender agrees that it has, independently and without reliance on the Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis of Borrower and its decision to enter into the transactions contemplated by the Financing Agreements and that it will, independently and without reliance upon the Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under any Financing Agreement.  The Agent shall not be required to keep itself informed as to the performance or observance by Borrower or any other Person of any Financing Agreement or to inspect the properties or books of Borrower.  Except for notices, reports, and other documents and information expressly required to be furnished to the Lenders by the Agent hereunder, the Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the affairs, financial condition or business of Borrower (or any Affiliates) which may come into the possession of the Agent or any of its affiliates.  Notwithstanding the foregoing, the Agent will, upon the request of any Lender, provide to such Lender, at such Lender’s expense, copies of any and all written information provided to the Agent by Borrower.
9.10    Indemnification.  Notwithstanding anything to the contrary herein contained, the Agent shall be fully justified in failing or refusing to take any action unless it shall first be indemnified to its satisfaction by the Lenders against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of its taking or continuing to take any action.  Each Lender agrees to indemnify the Agent (to the extent not reimbursed by Borrower), on a pro-rata basis according to such Lender’s Commitments, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of any Financing Agreement or any action taken or omitted by the Agent under any Financing Agreement; provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, or disbursements resulting from the gross negligence or willful misconduct of the Agent; and provided further, that it is the intention of each Lender to indemnify the Agent against the consequences of the Agent’s own ordinary or simple negligence, whether such negligence be sole, joint, concurrent, active or passive.  Without limiting the foregoing, each Lender agrees to reimburse the Agent promptly upon demand for its pro-rata share, according to such Lender’s Commitments of any out-of-pocket expenses (including attorneys’ fees) incurred by the Agent in connection with the preparation, administration, or enforcement of, or legal advice in respect of rights or responsibilities under, any Financing Agreement, to the extent that the Agent is not reimbursed for such expenses by Borrower.

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9.11    Successor Agent.  The Agent may resign at any time as Agent under the Financing Agreements by giving written notice thereof to the Lenders and Borrower and may be removed at any time with or without cause by the Required Lenders.  Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Agent with, provided that no Default or Matured Default has occurred and is continuing hereunder, the prior written consent of Borrower, such consent not to be unreasonably withheld.  If no successor Agent shall have been so appointed by the Required Lenders or shall have accepted such appointment within sixty (60) days after the retiring Agent’s giving of notice of resignation or the Required Lenders’ removal of the Agent, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent with, provided that no Default or Matured Default has occurred and is continuing hereunder, the prior written consent of Borrower, such consent not to be unreasonably withheld, which shall be a commercial bank or other financial institution organized under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $500,000,000.  Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under this Agreement.  After the retiring Agent’s resignation or removal as Agent, the provisions of Section 9.10 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.
9.12    Verification of Borrowing Notices.  The natural Person signing this Agreement on behalf of Borrower (or any one of them, if more than one), or any natural Person designated by them (or any one of them) shall be presumed to have the authority to request Advances or request the Issuance of Letters under this Agreement.  The Agent shall have no duty to verify the authenticity of the signature appearing on any notice of borrowing or request for the Issuance of a Letter, and with respect to any oral request for an Advance or request for the Issuance of a Letter, the Agent shall have no duty to verify the identity of any Person representing himself as one of the natural Persons authorized to make such request on behalf of Borrower.  Neither the Agent nor any Lender shall incur any liability to Borrower in acting upon any telephonic notice referred to above which the Agent or such Lender believes in good faith to have been given by a duly authorized Person authorized to borrow on behalf of Borrower or for otherwise acting in good faith.
10.    MISCELLANEOUS.
10.1    Timing of Payments.  For purposes of determining the outstanding balance of the Liabilities, including without limitation, the computations of interest which may from time to time be owing to the Agent or the Lenders, the receipt by the Agent of any check or any other item of payment, shall not be treated as a payment on account of the Liabilities until such check or other item of payment is actually received by the Agent and is paid to the Agent in cash or a cash equivalent.  Notwithstanding the terms of this Agreement or any other Financing Agreement, if the due date of any payment falls on a day that is not a Business Day, such payment may be made and shall not be considered late if made on the next succeeding Business Day.
10.2    Attorneys’ Fees and Costs.  If at any time the Agent employs counsel in connection with any matters contemplated by or arising out of this Agreement, whether:  (a) to commence, defend, or intervene in any litigation or to file a petition, complaint, answer, motion or other pleading; 

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(b) to take any other action in or with respect to any suit or proceeding (bankruptcy or otherwise); (c) to consult with officers of the Agent to advise the Agent or to draft documents for the Agent in connection with any of the foregoing or in connection with any release of the Agent’s claims or any proposed extension, amendment or refinancing of the Liabilities; or (d) to enforce any rights of the Agent to collect any of the Liabilities; then in any of such events, all of the reasonable attorneys’ fees arising from such services, and any  related expenses, costs and charges, including without limitation, all fees of all paralegals, legal assistants and other staff employed by such attorneys whether outside the Agent or in the Agent’s legal department, together, if not paid promptly by Borrower, with interest at the highest interest rate then payable by Borrower under this Agreement or any other Financing Agreement, shall constitute additional Liabilities, payable on demand.  In addition, if a Matured Default has occurred and is continuing, and thereafter any Lender employs counsel in connection with, arising out of, or any way related to, protecting, exercising or enforcing this Agreement or the other Financing Agreements or (x) to commence, defend or intervene in any litigation or to file a petition, complaint, answer, motion or other pleading; (y) to take any other action in or with respect to any suit or proceeding (bankruptcy or otherwise); or (z) to enforce any rights of such Lender to collect any of the Liabilities (including, without limitation, all workout and restructuring fees and expenses); then in any of such events, all of the reasonable attorneys’ fees arising from such services, and any expenses, costs and charges relating thereto, including without limitation, all fees of all paralegals, legal assistants and other staff employed by such attorneys whether outside the Lender or in the Lender’s legal department, together, if not paid promptly by Borrower, with interest at the highest interest rate then payable by Borrower under this Agreement or any other Financing Agreement, shall constitute additional Liabilities, payable on demand.  This Section 10.2 shall survive the termination of this Agreement.
10.3    Expenditures by the Agent.  In the event that Borrower shall fail to pay costs or expenses which Borrower is, under any of the terms hereof or of any of the other Financing Agreements, required to pay, the Agent may, in the Agent’s sole discretion and without obligation to do so, make expenditures for any or all of such purposes, and the amount so expended, together, if not paid promptly by Borrower, with interest at the highest interest rate then payable by Borrower under this Agreement or any other Financing Agreement, shall constitute additional Liabilities, payable on demand.
10.4    The Agent’s Costs and Expenses as Additional Liabilities.  Borrower shall reimburse the Agent for all expenses and fees paid or incurred in connection with the documentation, negotiation and closing of the Loans and other financial accommodations described in this Agreement (including without limitation, filing fees, recording fees, document or recording taxes, search fees, appraisal fees and expenses, and the fees and expenses of the Agent’s attorneys, paralegals, and legal assistants, whether outside the Agent or in the Agent’s legal department, and whether such expenses and fees are incurred prior to or after the Closing Date).  Borrower further agrees to reimburse the Agent for all expenses and fees paid or incurred in connection with the documentation of any renewal or extension of the Loans, any additional financial accommodations, or any other amendments to this Agreement.  All costs and expenses incurred by the Agent with respect to such negotiation and documentation, together, if not paid promptly by Borrower, with interest at the highest interest rate then payable by Borrower under this Agreement or any other Financing Agreement, shall constitute additional Liabilities, payable on demand.

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10.5    Claims and Taxes.  Borrower agrees to indemnify and hold the Agent and the Lenders and any of the officers, directors employees, agents or affiliates of any of them, harmless from and against any and all claims, demands, liabilities, losses, damages, penalties, costs, and expenses (including without limitation, reasonable attorneys’ fees) relating to or in any way arising out of the possession, use, operation or control of any assets of Borrower and its consolidated subsidiaries, or arising out of or related to this Agreement or the other Financing Agreements, which agreement to indemnify and hold the Agent and the Lenders harmless shall survive the termination of this Agreement.  Borrower and its consolidated subsidiaries shall pay or cause to be paid all taxes and other governmental charges assessed against Borrower and its consolidated subsidiaries, or payable by Borrower and its consolidated subsidiaries, at such times and in such manner as to prevent any penalty from accruing or any lien or charge from attaching to their property, provided, however, that they shall have the right to contest in good faith, by an appropriate proceeding promptly initiated and diligently conducted, the validity, amount or imposition of any such tax, and upon such good faith contest to delay or refuse payment thereof, if:  (a) Borrower establishes adequate reserves to cover such contested taxes; and (b) such contest does not have a material adverse effect on the financial condition of Borrower or the ability of Borrower to pay any of the Liabilities.
10.6    Custody and Preservation of Collateral.  The Agent shall be deemed to have exercised reasonable care in the custody and preservation of any collateral in the Agent’s possession if the Agent takes such action for that purpose as Borrower shall request in writing, but failure by the Agent to comply with any such request shall not of itself be deemed a failure to exercise reasonable care, and no failure by the Agent or any Lender to preserve or protect any right with respect to such collateral against prior parties, or to do any act with respect to the preservation of such collateral not so requested by Borrower, shall of itself be deemed a failure to exercise reasonable care in the custody or preservation of such collateral.
10.7    Inspection.  The Agent (by and through its officers and employees), or any Person designated by the Agent in writing (including officers and employees of the other Lenders), shall have the right from time to time, to call at Borrower’s place or places of business during reasonable business hours, and, without hindrance or delay, to:  (a) inspect, audit, check and make copies of and extracts from Borrower’s books, records, journals, orders, receipts and any correspondence and other data relating to the business of Borrower and its consolidated subsidiaries or to any transactions between the parties to this Agreement; (b) make such verification as the Agent may consider reasonable under the circumstances; and (c) review operating procedures, review maintenance of property and discuss the affairs, finances and business of Borrower and its consolidated subsidiaries with Borrower’s officers, employees or directors.
10.8    Examination of Banking Records.  Borrower consents to the examination by the Agent (by and through its officers and employees), or any Person designated by the Agent in writing (including officers and employees of the other Lenders), whether or not there shall have occurred a Default or a Matured Default, of any and all of banking records of Borrower and its consolidated subsidiaries, wherever they may be found, and directs any Person which may be in control or possession of such records (including without limitation, any bank, other financial institution, accountant or lawyer) to provide such records to the Agent and the Agent’s officers, employees and 

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agents, upon their request.  Such examination may be conducted by the Agent with or without notice to Borrower at the option of the Agent, any such notice being waived by Borrower.
10.9    Governmental Reports.  Borrower will furnish to the Agent, upon the reasonable request of the Agent, copies of the reports of examinations or inspections of Borrower and its consolidated subsidiaries by all Governmental Authorities, and if Borrower fails to furnish such copies to the Agent, Borrower authorizes all such Government Authorities to furnish to the Agent copies of their reports of examinations or inspections of Borrower and its consolidated subsidiaries.
10.10    Reliance by the Agent, the Issuer and the Lenders.  All covenants, agreements, representations and warranties made herein by Borrower shall, notwithstanding any investigation by the Agent or any of the Lenders, be deemed to be material to and to have been relied upon by the Agent, the Issuer and the Lenders.
10.11    Parties.  Whenever in this Agreement there is reference made to any of the parties, such reference shall be deemed to include, wherever applicable, a reference to the respective successors and assigns of Borrower, the Agent, the Lenders and the Issuer.  Borrower shall not assign any of it rights or delegate any of its duties under this Agreement or any of the other Financing Agreements without the prior written consent of the Lenders.
10.12    Applicable Law; Severability.  This Agreement shall be construed in all respects in accordance with, and governed by, the laws and decisions of the State of New York and the laws, regulations and decisions of the United States applicable to national banks.  Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Agreement.
10.13    SUBMISSION TO JURISDICTION; WAIVER OF BOND AND TRIAL BY JURY.  WITH RESPECT TO ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, CLAIMS, DEMANDS, DEBTS, DAMAGES, COSTS AND EXPENSES, WHATSOEVER, WHETHER BASED ON STATUTE, COMMON LAW, PRINCIPLES OF EQUITY OR OTHERWISE, ARISING OUT OF ANY MATTER, THING OR EVENT WHICH IS DIRECTLY OR INDIRECTLY RELATED TO THIS AGREEMENT, BORROWER CONSENTS TO THE JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT LOCATED WITHIN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK, NEW YORK AND WAIVES ANY OBJECTION WHICH BORROWER MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON BORROWER, AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY MAIL OR MESSENGER DIRECTED TO BORROWER AT THE ADDRESS SET FORTH IN SECTION 10.19.  SERVICE, SO MADE, SHALL BE DEEMED TO BE COMPLETE UPON THE EARLIER OF ACTUAL RECEIPT OR THREE (3) DAYS AFTER THE SAME SHALL HAVE BEEN POSTED.  AT THE OPTION OF THE AGENT, BORROWER WAIVES, TO THE EXTENT PERMITTED BY LAW, TRIAL BY JURY, AND WAIVES ANY BOND OR SURETY OR 

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SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF THE AGENT.
10.14    Application of Payments; Waiver.  Except as set forth below, payments made by Borrower under this Agreement shall generally be applied first to any costs or fees owing by Borrower to the Agent or any Lender, shall be applied second to any interest payments owing hereunder which are due and unpaid, shall be applied third to any outstanding principal owing hereunder, shall be applied fourth to the establishment of cash collateral accounts to support LC Obligations, shall be applied fifth to interest accrued but not yet due, and shall be applied sixth to any other unpaid Liabilities.  Notwithstanding any contrary provision contained in this Agreement or in any of the other Financing Agreements, Borrower irrevocably waives the right to direct the application of any and all payments at any time received by the Agent from Borrower, and Borrower irrevocably agrees that the Agent shall have the continuing exclusive right to apply and reapply any and all payments received at any time against the Liabilities, in such manner as the Agent may deem advisable (but in accordance with the order of application set forth above), notwithstanding any entry by the Agent upon any of the Agent’s books and records.  Provided, however, this Section 10.14 shall not apply to any transactions unrelated to this Agreement in which the Agent, a Lender, an Issuer or any of their affiliates may have accepted deposits from, lent money to, acted as trustee under indentures of, or generally engaged in business with Borrower, any Affiliates or any Person who may do business with or own securities of Borrower or any such Affiliate.  Notwithstanding the foregoing, other than during a Default Period, Bank Products Obligations may be paid, and all transfers, setoffs, adjustments, credits and debits may be made in the ordinary course of business in accordance with the terms of the related Bank Products Agreements.  Notwithstanding the foregoing or any provision to the contrary set forth in any Financing Agreement, during a Default Period, payments shall be applied first to Liabilities other than Bank Products Obligations on a pro rata basis, and shall be applied second to Bank Products Obligations on a pro rata basis.  Notwithstanding the terms of this Section 10.14, any other terms of this Agreement or any terms of any other Financing Agreement, the Agent shall first apply payments to any charge-backs, payments pursuant to any avoidance claims or any other loss, overdraft, or shortfall with respect to deposit accounts maintained with the Agent or any other Lender, to the extent that the funds that are the subject of such charge-backs, payments pursuant to any avoidance claims or any other loss, overdraft, or shortfall have been previously paid or applied by the Agent to the Liabilities other than Bank Products Obligations.  In the event that such payments are insufficient to cover such charge-backs, payments pursuant to any avoidance claims or any other loss, overdraft, or shortfall, then the Agent or any other Lender shall be indemnified for the resulting loss in the manner provided for in Section 9.10.  Immediately Available Funds held by the Agent that are payable to the Lenders in accordance with the terms of this Agreement (including, but not limited to, this Section 10.14, Section 2.1.5 and Section 10.1), shall be promptly remitted to the Lenders by the Agent in accordance with the written instructions given to the Agent by the Lenders, respectively.
10.15    Marshaling; Payments Set Aside.  The Agent and the Lenders shall be under no obligation to marshal any assets in favor of Borrower or against or in payment of any or all of the Liabilities.  To the extent that Borrower makes a payment or payments to the Agent or any Lender exercises a right of setoff, and such payment or payments or the proceeds of such setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or 

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required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.
10.16    Section Titles.  The section titles contained in this Agreement shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties.
10.17    Continuing Effect.  This Agreement and all of the other Financing Agreements shall continue in full force and effect so long as any Liabilities shall be owed to the Agent and/or any of the Lenders and (even if there shall be no Liabilities outstanding) so long as the Agent and/or any of the Lenders remains committed to make Loans or Issue Letters under this Agreement.
10.18    No Waiver.  The Agent’s or the Required Lenders’ failure, at any time or times hereafter, to require strict performance by Borrower of any provision of this Agreement or the other Financing Agreements shall not waive, affect or diminish any right of the Agent or the Required Lenders thereafter to demand strict compliance and performance therewith.  Any suspension or waiver by the Agent or the Required Lenders of any Default or Matured Default under this Agreement or any of the other Financing Agreements, shall not suspend, waive or affect any other Default or Matured Default under this Agreement or any of the other Financing Agreements, whether the same is prior or subsequent thereto and whether of the same or of a different kind or character.  None of the undertakings, agreements, warranties, covenants and representations of Borrower contained in this Agreement or any of the other Financing Agreements and no Default or Matured Default under this Agreement or any of the other Financing Agreements, shall be deemed to have been suspended or waived by the Agent or the Required Lenders unless such suspension or waiver is in writing signed by an officer of the Agent or each of the Required Lenders (as applicable) and is directed to Borrower specifying such suspension or waiver.
10.19    Notices.  Except as otherwise expressly provided herein, any notice required or desired to be served, given or delivered pursuant to this Agreement shall be in writing, and shall be sent by manual delivery, facsimile transmission, overnight courier or United States mail (postage prepaid) addressed to the party to be notified as follows:
(a)    If to the Agent at:
U.S. Bank National Association 
Food Industries, DN-CO-T7CS 
950 Seventeenth Street, 7th Floor 
Denver, Colorado 80202 
Attn:  Brian Moeller, Senior Vice President
with a copy to:
Sidley Austin LLP 
One South Dearborn Street 

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Chicago, Illinois  60603 
Attn:  Mark R. Kirsons
(b)    If to Borrower at:
The Andersons, Inc. 
480 West Dussel Drive 
Maumee, OH 43537 
Attn:  Nicholas C. Conrad, V.P. Finance & Treasurer
with a copy to:
The Andersons, Inc. 
480 West Dussel Drive 
Maumee, OH 43537 
Attn:  Assistant General Counsel / Elizabeth Hall 
or, as to each party, addressed to such other address as shall be designated by such party in a written notice to the other parties.  All such notices shall be deemed given on the date of delivery if manually delivered, on the date of sending if sent by facsimile transmission, on the first Business Day after the date of sending if sent by overnight courier, or three (3) days after the date of mailing if mailed.
10.20    Regulatory Changes.  In the event any Governmental Authority (i) subjects the Lenders or any of them or any of their respective lending offices to any new or additional charge, fee, withholding, duty or tax of any kind with respect to any Loans, Letters, LC Obligations or other Liabilities hereunder, (ii) changes the method or basis of taxation of such Loans, Letters, LC Obligations or other Liabilities, except for changes in the rate of tax on the overall net income of such Lender or its lending office imposed by the jurisdiction in which such Lender’s principal executive office or lending office is located, or (iii) makes a Change in the reserve or deposit requirements applicable to such Loans, Letters, LC Obligations or other Liabilities (including, without limitation, the imposition, modification or deemed application of any reserve, special deposit or similar requirement (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System, but excluding with respect to any LIBOR Rate Loans any such requirement included in an applicable LIBOR Rate) against assets of, deposits with or for the account of any Lender, or its lending office, and including without limitation, the issuance of a request or directive regarding capital adequacy or liquidity (whether or not having the force of law) that has the effect of reducing the rate of return on such Lender’s capital as a consequence of its obligations under this Agreement to a level below that which such Lender could have achieved but for such adoption, Change or compliance (taking into consideration such Lender’s policies with respect to capital adequacy or liquidity)), then in any such event, Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such costs or lost income resulting thereby as reasonably determined by such Lender.  Without limiting the generality of the foregoing, the term “Change” shall include (i) any change after the date of this Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of or change in any other law, governmental or quasi-governmental rule, regulation, policy, guideline, interpretation, or directive (whether or not having the force of law) or in the interpretation, promulgation, implementation or administration thereof 

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after the date of this Agreement which affects the amount of capital or liquidity required or expected to be maintained by any Lender or any corporation controlling any Lender.  Notwithstanding the foregoing, for purposes of this Agreement, all requests, rules, guidelines or directives in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act shall be deemed to be a Change regardless of the date enacted, adopted or issued and all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Regulations and Supervisory Practices (or any successor or similar authority) or the United States or foreign financial regulatory authorities shall be deemed to be a Change regardless of the date adopted, issued, promulgated or implemented.  “Risk-Based Capital Guidelines” means (i) the risk-based capital guidelines in effect in the United States on the date of this Agreement, including transition rules, and (ii) the corresponding capital regulations promulgated by regulatory authorities outside the United States including transition rules, and any amendments to such regulations adopted prior to the date of this Agreement.
10.21    LIBOR Rate Loans.  Without limiting the generality of Section 10.20, anything in this Agreement to the contrary notwithstanding, if any Lender shall notify the Agent that:  (i) the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or that any central bank or other Governmental Authority asserts that it is unlawful to fund or maintain LIBOR Rate Loans (whether or not such assertion carries the force of law), (ii) deposits in U.S. Dollars (in the applicable amounts) are not being offered to it in the applicable markets for any requested Interest Period, (iii) by reason of circumstances affecting the applicable markets adequate and reasonable means do not exist for ascertaining the applicable LIBOR Rate; (iv) that the applicable LIBOR Rate will not adequately and fairly reflect the cost to such Lender of funding their LIBOR Rate Loans for such Interest Period or (v) that the making or funding of LIBOR Rate Loans is impracticable for such Lender, the obligation of such Lender to make, rollover or to convert Loans into LIBOR Rate Loans shall be suspended until such Lender shall notify the Agent and Borrower that the circumstances causing such suspension no longer exist, and the existing LIBOR Rate Loans of such Lender shall automatically convert, on and as of the date of such notification, into Base Rate Loans; provided that each Lender represents and warrants to Borrower that as of the later of (i) the Closing Date or (ii) the date on which it shall have executed an Assignment and Acceptance pursuant to Section 10.23, it has no actual knowledge that any of the circumstances set forth above exist.  With respect to the Base Rate Loans as referred to in this Section 10.21, the Base Rate applicable thereto shall be determined without reference to the Adjusted Monthly LIBOR Rate.
10.22    Taxes.  Without limiting the generality of Section 10.20:
(c)    Any and all payments by or on account of any obligation of Borrower or Guarantor, respectively, under any Financing Agreement shall be made without deduction or withholding for any Taxes, except as required by applicable law.  If any applicable law requires the deduction or withholding of any Tax from any such payment, then Borrower or Guarantor, respectively, 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 or Other Tax, then the sum payable by Borrower or Guarantor, respectively, 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 10.22) 

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the applicable Lender, the Issuer or the Agent receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(d)    Borrower or Guarantor, respectively, shall timely pay to the relevant governmental authority in accordance with applicable law or at the option of the Agent timely reimburse it for the payment of, any Other Taxes.
(e)    Borrower or Guarantor, respectively, shall indemnify the Lender, the Issuer or the Agent, within fifteen (15) days after demand therefor, for the full amount of any Indemnified Taxes and Other Taxes (including Indemnified Taxes and Other Taxes imposed or asserted on or attributable to amounts payable under this Section 10.22) payable or paid by such Lender, the Issuer or the Agent or required to be withheld or deducted from a payment to such Lender, the Issuer or the Agent and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes and Other 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 the Borrower by a Lender or Issuer (with a copy to the Agent), or by the Agent on its own behalf or on behalf of a Lender or Issuer, shall be conclusive absent manifest error.
(f)    Each Lender shall severally indemnify the Agent, within fifteen (15) days after demand therefor, for (i) any Indemnified Taxes and Other Taxes attributable to such Lender (but only to the extent that Borrower or Guarantor, respectively, has not already indemnified the Agent for such Indemnified Taxes and Other Taxes and without limiting the obligation of Borrower or Guarantor, respectively, to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 5f.103-1(c) of the United States Treasury Regulations relating to the maintenance of a participant register, and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Agent in connection with any Financing Agreement, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant governmental authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Agent to set off and apply any and all amounts at any time owing to such Lender under any Financing Agreement or otherwise payable by the Agent to the Lender from any other source against any amount due to the Agent under this paragraph (d).
(g)    As soon as practicable after any payment of Taxes by Borrower or Guarantor, respectively, to a governmental authority pursuant to this Section 10.22, Borrower or Guarantor, respectively, shall deliver to the Agent the original or a certified copy of a receipt issued by such governmental authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Agent.
(h)      Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Financing Agreement shall deliver to the Borrower and the Agent, at the time or times reasonably requested by the Borrower or the Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if reasonably requested by the Borrower or the Agent, shall deliver such other 

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documentation prescribed by applicable law or reasonably requested by the Borrower or the Agent as will enable the Borrower or the Agent to determine whether or not such 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 10.22(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
(i)    Without limiting the generality of the foregoing,
(A)    any Lender that is a United States person for U.S. federal income Tax purposes shall deliver to the Borrower and the Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding Tax; 
(B)    any Non-U.S. Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Non-U.S. Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Agent), whichever of the following is applicable:
(i)    in the case of a Non-U.S. 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 Financing Agreement, executed originals of IRS Form W-8BEN 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 Financing Agreement, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such Tax treaty;
(ii)    executed originals of IRS Form W-8ECI;
(iii)    in the case of a Non-U.S. Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate to the effect that such Non-U.S. Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (y) executed originals of IRS Form W-8BEN; or
(iv)    to the extent a Non-U.S. Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, 

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IRS Form W-8BEN, IRS Form W-8IMY or IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable.
(C)    any Non-U.S. Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Non-U.S. Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Agent), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Agent to determine the withholding or deduction required to be made; and
(D)    if a payment made to a Lender under any Financing Agreement 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 Borrower and the Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Agent 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 Borrower or the Agent as may be necessary for the Borrower and the Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(ii)    Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall promptly upon obtaining knowledge of such occurrence, update such form or certification or notify the Borrower and the Agent in writing of its legal inability to do so.
(i)    If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 10.22 (including by the payment of additional amounts pursuant to this Section 10.22), 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 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant governmental authority with respect to such refund).  Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant governmental authority) in the event that such indemnified party is required to repay such refund to such governmental authority.  Notwithstanding anything to the contrary in this paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid.  

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This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(j)    Each party’s obligations under this Section 10.22 shall survive the resignation or replacement of the Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Financing Agreement.
(k)    For purposes of Section 10.22(d) and (f), the term “Lender” includes the Issuer.
10.23    Assignments and Participation.
(a)    After the Closing Date (and, (Y) provided that no Default or Matured Default has occurred and is continuing, subject to the prior written consent of Borrower, such consent not to be unreasonably withheld (with the understanding that the Borrower shall be deemed to have consented to any assignment that it has not rejected in writing within five (5) Business Days after having received notice thereof from the Agent), and (Z) if the Eligible Assignee is not a Lender, an affiliate of a Lender or an Approved Fund, subject to the prior written consent of the Agent and each Issuer, such consent not to be unreasonably withheld) each Lender may assign to an Eligible Assignee (the “Assignee”) all or a portion of its rights and obligations under this Agreement (including without limitation, all or a portion of its Commitments and the Notes held by it); provided however, that (i) each such assignment shall be of a constant, and not a varying, percentage of all of the assigning Lender’s rights and obligations under this Agreement, (ii) except in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and/or the Loans at the time owing to it, the total amount of the Commitment or Commitments (based on the original Commitment or Commitments without giving effect to any repayments or prepayments) so assigned to an Assignee or to an Assignee and its Affiliates taken as a whole shall equal or exceed $5,000,000, (iii) except in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and/or the Loans at the time owing to it, the remaining Commitment or Commitments (based on the original Commitment or Commitments without giving effect to any repayments or prepayments) held by the assigning Lender and its affiliates after giving effect to any such assignment shall equal or exceed $5,000,000, (iv) the assignment shall not cause Borrower to incur any additional liability or expense and (v) the parties to each such assignment shall execute and deliver to the Agent for its acceptance an Assignment and Acceptance in substantially the form attached as Schedule B (“Assignment and Acceptance”), together with any Note or Notes subject to such assignment and a processing and recordation fee of $5,000.  Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be the date on which such Assignment and Acceptance is accepted by the Agent, (vi) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Lender under the Financing Agreements and (vii) the Lender assignor thereunder shall be deemed to have relinquished its rights and to be released from its obligations under the Financing Agreements, to the extent (and only to the extent) that its rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance 

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(and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under the Financing Agreements, such Lender shall cease to be a party thereto).
(b)    By executing and delivering an Assignment and Acceptance, the Lender assignor thereunder and the Assignee thereunder confirm to and agree with each other and the other parties hereto as follows:  (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Financing Agreements or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Financing Agreements or any other instrument or document furnished pursuant thereto; (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borrower or the performance or observance by Borrower of any of its obligations under the Financing Agreements or any other instrument or document furnished pursuant hereto; (iii) such Assignee confirms that it has received a copy of the Financing Agreements, together with copies of the financial statements referred to in Section 7.1 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such Assignee will, independently and without reliance upon the Agent, such assigning Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such Assignee appoints and authorizes the Agent to take such action as the Agent on its behalf and to exercise such powers under the Financing Agreements as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto; and (vi) such Assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Financing Agreements are required to be performed by it as a Lender.
(c)    The Agent shall maintain at its address referred to in Section 10.19 a copy of each Assignment and Acceptance delivered to and accepted by it.
(d)    Upon its receipt of an Assignment and Acceptance executed by an assigning Lender, together with any Note or Notes subject to such assignment, the Agent shall, if such Assignment and Acceptance has been completed (and consented to as applicable) in accordance herewith, (i) accept such Assignment and Acceptance and (ii) give prompt notice thereof to Borrower.  Within five (5) Business Days after its receipt of such notice, Borrower, at its own expense, shall execute and deliver to the Agent in exchange for the surrendered Note or Notes, a new Note or new Notes to the order of such Assignee in an amount equal to the Commitment or Commitments assumed by it pursuant to such Assignment and Acceptance and, if the assigning Lender has retained a Commitment or Commitments, a portion of which has been assigned, a new Note or New Notes to the order of the assigning Lender in an amount equal to the Commitment or Commitments retained by it hereunder.  Such new Note or Notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Note or Notes, shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of Exhibit 2A.  Upon receipt by the Agent of such new Note or Notes conforming to the requirements set forth in the preceding sentences, the Agent shall return to Borrower such surrendered Note or Notes, marked 

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to show that such surrendered Note or Notes has (have) been replaced, renewed and extended by such new Note or Notes.
(e)    Each Lender may sell participations to one or more banks or other entities (other than the Borrower, an Affiliate or a Guarantor) in or to all or a portion of its rights and obligations under this Agreement (including without limitation, all or a portion of its Commitments and any Note held by it); provided however, that (i) such Lender’s obligations under this Agreement (including without limitation, its Commitments to Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender shall remain the holder of any such Note for all purposes of this Agreement, (iv) the sale of the participation will not cause Borrower to incur any additional liability, (v) the Borrower and the Agent shall be notified of such participation contemporaneously with the effectiveness thereof, and (vi) Borrower, the Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, provided that no participant shall be entitled to recover under the above-described provisions an amount in excess of the proportionate share which such participant holds of the original aggregate principal amount hereunder to which the selling Lender would otherwise be entitled.
(f)    Any Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 10.23, disclose to the assignee or participant or proposed assignee or participant, any information relating to Borrower furnished to such Lender by or on behalf of Borrower; provided that, prior to any such disclosure, the assignee or participant or proposed assignee or participant shall agree in writing to preserve the confidentiality of any confidential information relating to Borrower received by it from such Lender.
(g)    Any Lender may assign and pledge all or any of the instruments held by it as collateral security; provided that any payment made by Borrower for the benefit of such assigning and/or pledging Lender in accordance with the terms of the Financing Agreements shall satisfy Borrower’s obligations under the Financing Agreements in respect thereof to the extent of such payment.  No such assignment and/or pledge shall release the assigning and/or pledging Lender from its obligations hereunder.
10.24    Maximum Interest.  No agreements, conditions, provisions or stipulations contained in this Agreement or in any of the other Financing Agreements, or any Default or Matured Default, or any exercise by the Agent of the right to accelerate the payment of the maturity of principal and interest, or to exercise any option whatsoever, contained in this Agreement or any of the other Financing Agreements, or the arising of any contingency whatsoever, shall entitle the Agent to collect, in any event, interest exceeding the maximum authorized by law, and in no event shall Borrower be obligated to pay interest exceeding such rate, and all agreements, conditions or stipulations, if any, which may in any event or contingency whatsoever operate to bind, obligate or compel Borrower to pay a rate of interest exceeding the maximum allowed by law, shall be without binding force or effect, at law or in equity, to the extent only of the excess of interest over such maximum interest allowed by law.  In the event any interest is charged in excess of the maximum allowed by law (“Excess”), Borrower acknowledges and stipulates that any such charge shall be the result of an accidental and bona fide error, and such Excess shall be, first, if a Matured Default 

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has occurred and is continuing, applied to reduce the principal of any Liabilities due, and, second, returned to Borrower, it being the intention of the parties not to enter at any time into a usurious or otherwise illegal relationship.  Borrower and the Agent both recognize that, with fluctuations of index rates and applicable margins, such an unintentional result could inadvertently occur.  By the execution of this Agreement, Borrower covenants that:  (a) the credit or return of any Excess shall constitute the acceptance by Borrower of such Excess; and (b) Borrower shall not seek or pursue any other remedy, legal or equitable, against the Agent based, in whole or in part, upon the charging or receiving of any interest in excess of the maximum authorized by law.  For the purpose of determining whether or not any Excess has been contracted for, charged or received by the Agent, all interest at any time contracted for, charged or received by the Agent in connection with the Liabilities shall be amortized, prorated, allocated and spread in equal parts during the entire term of this Agreement.  Notwithstanding the foregoing, if for any period of time interest on any of Borrower’s obligations is calculated at the Highest Lawful Rate rather than the rate otherwise applicable under this Agreement, and thereafter such applicable rate becomes less than the Highest Lawful Rate, the rate of interest payable on the Borrower’s obligations shall remain at the Highest Lawful Rate until the Lenders have received the amount of interest which such Lenders would have received during such period on the Borrower’s obligations had the rate of interest not been limited to the Highest Lawful Rate during such period.
10.25    Additional Advances.  All fees, charges, expenses, costs, expenditures, obligations, liabilities, losses, penalties and damages incurred or suffered by the Agent and for which Borrower is bound to indemnify or reimburse the Agent under this Agreement (other than those which may be paid without demand therefor, by the Agent initiated Advances pursuant to Section 2.1 or by a debit to a deposit account at U.S. Bank initiated by the Agent per any preauthorization provided by Borrower to the Agent) may, at the option of the Agent or any Lender, be paid by Agent-initiated Advances pursuant to Section 2.1 or by a debit to a deposit account at U.S. Bank initiated by the Agent per any preauthorization provided by Borrower to the Agent if such amounts remain unpaid for a period of ten (10) days after the Agent has made demand therefor.
10.26    Loan Agreement Controls.  If there are any conflicts or inconsistencies among this Agreement and any of the other Financing Agreements, the provisions of this Agreement shall prevail and control.
10.27    Obligations Several.  The obligations of each Lender under each Financing Agreement to which it is a party are several, and no Lender shall be responsible for any obligation or Commitment of any other Lender under any Financing Agreement to which it is a party.  Nothing contained in any Financing Agreement to which it is a party, and no action taken by any Lender pursuant thereto, shall be deemed to constitute the Lenders to be a partnership, an association, a joint venture, or any other kind of entity.
10.28    Pro Rata Treatment.  All Loans under, and all payments and other amounts received in connection with, this Agreement (including, without limitation, amounts received as a result of the exercise by any Lender of any right of set-off), shall be effectively shared by the Lenders ratably in accordance with the respective Pro Rata Percentages of the Lenders.  If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or 

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otherwise) on account of the principal of, or interest on, or fees in respect of, any amount due to such Lender under this Agreement (other than pursuant to Section 2.3(b), 2.5(a), 10.20, 10.21 or 10.22, the normal and customary processing fees charged by an Issuer in connection with the Issuance of or drawings under a Letter, or with respect to Bank Products Obligations as provided by Section 10.14) in excess of its Pro Rata Percentage of payments on account of similar amounts due to all the Lenders, such Lender shall purchase from the other Lenders such participation in such amounts due to them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender’s ratable share (according to the proportion of (a) the amount of such Lender’s required repayment to (b) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.  Disproportionate payments of interest shall be shared by the purchase of separate participation in unpaid interest obligations, disproportionate payments of fees shall be shared by the purchase of separate participation in unpaid fee obligations, and disproportionate payments of principal shall be shared by the purchase of separate participation in unpaid principal obligations.  Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 10.28 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of Borrower in the amount of such participation.  Notwithstanding the foregoing, a Lender may receive and retain an amount in excess of its Pro Rata Percentage to the extent, but only to the extent, that such excess results from such Lender’s Highest Lawful Rate exceeding another Lender’s Highest Lawful Rate.
10.29    Confidentiality.  Each of the Agent and the Lenders agrees that it will use its best efforts to keep confidential, in accordance with its customary procedures for handling confidential information and in accordance with safe and sound banking practices any proprietary information of Borrower, designated in writing by Borrower, as being proprietary and confidential; provided that the Agent or any Lender may disclose any such information (a) to enable it to comply with any Governmental Requirement applicable to it or with respect to insurance and reinsurance, (b) in connection with the defense of any litigation or other proceeding brought against it arising out of the transactions contemplated by this Agreement and the other Financing Agreements, (c) in connection with the supervision and enforcement of the rights and remedies of the Agent and Lenders under any Financing Agreement and (d) as set forth in Section 10.23.  
10.30    Independence of Covenants.  All covenants under this Agreement and the other Financing Agreements shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise within the limitations of, another covenant shall not avoid the occurrence of a Default or a Matured Default if such action is taken or condition exists.
10.31    Amendments and Waivers.  

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(a)    Except as provided in the following Subsections 10.31(b), (c) and (d), any term, covenant, agreement or condition of this Agreement or the other Financing Agreements may be amended only by a written amendment executed by Borrower, the Required Lenders and, if the rights or duties of the Agent or Issuer are affected thereby, the Agent and such Issuer, respectively, or compliance therewith only may be waived (either generally or in a particular instance and either retroactively or prospectively), if Borrower shall have obtained the consent in writing of the Required Lenders and, if the rights or duties of the Agent are affected thereby, the Agent, provided however, (i) no such amendment or waiver shall, without the consent of each Lender directly affected thereby, (A) extend the final maturity of any Loan, or extend the expiry date of any Letter, to a date after the Maturity Date, or change the amount or postpone the date of payment of any scheduled payment or required payment of principal of the Loans or LC Obligations or reduce the rate or extend the time of payment of interest on the Loans, or reduce the amount of principal thereof, or modify any of the provisions with respect to the payment or prepayment thereof, (B) give to any Loan any preference over any other Loans, or (C) reduce, or extend the payment due date of, the fees required under Section 2.5, (ii) that without the consent in writing of all Lenders, no such amendment or waiver shall (A) amend the definition of Required Lenders, (B) alter, modify or amend the provisions of this Subsection 10.31(a), of Subsections 10.31(c) and (d) or of Section 10.28, (C) alter, modify or amend the provisions of Sections 9.1 or 9.2 of this Agreement, (D) alter, modify or amend any Lender’s right hereunder to consent to any action, make any request or give any notice, or (E) release all or substantially all of the Guarantors of any of the Liabilities, and (iii) the definition of Excluded Consolidated Subsidiaries (including the amendment of Exhibit 1A) may be amended solely with the prior written consent of the Borrower and the Agent, with the understanding that (A) a Guarantor may become an Excluded Consolidated Subsidiary (including the addition of a Guarantor to Exhibit 1A) only with the written consent of the Borrower and the Required Lenders, and (B) if, after giving effect to the proposed addition of a Person to be included in the definition of Excluded Consolidated Subsidiary (including the addition of such Person to Exhibit 1A), the aggregate book value of the assets of the Persons included within such definition, excluding the book value of the assets of Lansing Trade Group, LLC or any successor entity thereto, exceeds 20% of the book value of the consolidated assets of the Borrower and its consolidated subsidiaries, then the addition of such Person to said definition may be made only with the written approval of the Borrower and the Required Lenders.
(b)    Prior to the Maturity Date and provided that a Default or a Matured Default has not occurred and is continuing, this Agreement may be amended from time to time to increase the total amount of the Line of Credit Loan Commitments, or may enter into one or more tranches of term loans that are pari passu with the Loans hereunder by an amount not exceeding $350,000,000 in the aggregate, by one or more written amendments executed by Borrower, the Agent and one or more Lenders, that agree to provide the increase in Commitments or new term loans (together with new Notes and other Financing Agreements as may be reasonably required by the Agent).  Subject to the following Section 10.31(c), any such increase shall be allocated to new or existing Lenders at the discretion of the Agent and Borrower.
(c)    Without the consent in writing of the affected Lender, no amendment or waiver shall increase the amount of any Commitment of such Lender (but the amount of any Commitment of such Lender may be decreased without the consent of such Lender).

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(d)    Any amendment or waiver made in accordance with this Section 10.31 shall apply equally to all Lenders and all the holders of the Notes and/or LC Obligations and shall be binding upon them, upon each future holder of any Note or LC Obligation and upon Borrower, whether or not such Note or Letter shall have been marked to indicate such amendment or waiver.  No such amendment or waiver shall extend to or affect any obligation not expressly amended or waived.
10.32    Replacement of a Lender.  If a Lender (other than the Agent as a Lender) becomes a Replacement Candidate (as defined below), Borrower shall have the right to require such Lender to assign to another lender or other institution selected by Borrower and reasonably satisfactory to the Agent (which may be one or more of the Lenders) the Commitments and the Notes held by such Lender pursuant to the terms of an appropriately completed Assignment and Acceptance in accordance with Section 10.23; provided, that neither the Agent nor any Lender shall have any obligation to Borrower to find any such lender or other institution and in order for Borrower to replace a Lender, Borrower must require such replacement within three (3) months of the date the Lender became a Replacement Candidate.  Each Lender (other than the Agent as a Lender) agrees to its replacement at the option of Borrower pursuant to this Section 10.32; provided, that the assignee selected by Borrower shall purchase such Lender’s interest in the Loans owed to such Lender for cash in an aggregate amount equal to the aggregate unpaid principal thereof, all unpaid interest accrued thereon, all unpaid fees accrued for the account of such Lender and all other amounts then owing to such Lender hereunder or under any other Financing Agreement.  A Lender will become a “Replacement Candidate” if (i) it has made a demand under Sections 10.20, 10.21 or 10.22, (ii) it declines to approve an amendment or waiver that is approved by the Required Lenders, or (iii) is a Defaulting Lender.  The rights of Borrower, the Agent and the other Lenders under this Section 10.32 shall be in addition to any other rights or remedies Borrower, the Agent and the other Lenders may have under this Agreement, at law or in equity (including but not limited to the right of setoff with respect to the Liabilities owed to a Defaulting Lender).
10.33    Representations by the Lenders.  Each Lender represents that it is the present intention of such Lender, as of the date of its acquisition of the Notes, to acquire the Notes for its account or for the account of its affiliates, and not with a view to the distribution or sale thereof that would be in violation of any applicable laws, and, subject to any applicable laws, the disposition of such Lender’s property shall at all times be within its control.  The Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be transferred, sold or otherwise disposed of except (a) in a registered offering under the Securities Act; (b) pursuant to an exemption from the registration provisions of the Securities Act; or (c) if the Securities Act shall not apply to the Notes or the transactions contemplated by the Financing Agreements.  Nothing in this Section 10.33 shall affect the characterization of the Loans and the transactions contemplated hereunder as commercial lending transactions.
10.34    Counterparts and Facsimile Signatures.  This Agreement, any other Financing Agreement and any subsequent amendment to any of them may be executed in several counterparts, each of which shall be construed together as one original.  Facsimile signatures on this Agreement, any other Financing Agreement and any subsequent amendment to any of them shall be considered as original signatures.

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10.35    Set-off.  In the event that a Matured Default has occurred and is continuing, Borrower gives and confirms to each Lender a right of set-off of all moneys, securities and other property of Borrower (whether special, general or limited) and the proceeds thereof, at any time delivered to remain with or in transit in any manner to such Lender, its correspondent or its agents from or for Borrower, whether for safekeeping, custody, pledge, transmission, collection or otherwise or coming into possession of such Lender in any way, and also, any balance of any deposit accounts and credits of Borrower with, and any and all claims of security for the payment of the Liabilities owed by Borrower to such Lender, contracted with or acquired by the Lender, whether such liabilities and obligations be joint, several, absolute, contingent, secured, unsecured, matured or unmatured, and Borrower authorizes such Lender at any time or times, without prior notice, to apply such money, securities, other property, proceeds, balances, credits of claims, or any part of the foregoing, to such liabilities in such amounts as it may select, whether such Liabilities be contingent, unmatured or otherwise, and whether any collateral security therefor is deemed adequate or not.  The rights described herein shall be in addition to any collateral security described in any separate agreement executed by Borrower.
10.36    PATRIOT Act Information.  Borrower represents to the Agent and the Lenders that to the best knowledge of Borrower, Borrower is in compliance with the (i) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (ii) the PATRIOT Act.  Borrower represents to the Agent and the Lenders that:  (a) no part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any official or employee of any Governmental Authority, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended; and (b) Borrower is not engaged in or has engaged in any course of conduct that could reasonably be expected to subject any of its properties to any lien, seizure or other forfeiture under any criminal law, racketeer influenced and corrupt organizations law, civil or criminal, or other similar laws.  Each Lender hereby notifies Borrower that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies Borrower, which information includes the name and address of Borrower and other information that will allow each Lender to identify Borrower in accordance with the PATRIOT Act.  Borrower shall provide such information and take such actions as are reasonably requested by any Lender in order to assist such Lender in maintaining compliance with the PATRIOT Act.
10.37    No Advisory or Fiduciary Responsibility.  In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other agreement, document or instrument delivered in connection herewith), the Borrower acknowledges and agrees that (i) (A) the arranging and other services regarding this Agreement provided by the Lenders are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Lenders, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other agreements, 

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documents or instruments delivered in connection herewith; (ii) (A) each of the Lenders is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) no Lender has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other agreements, documents, or instruments delivered in connection herewith; and (iii) each of the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and no Lender has any obligation to disclose any of such interests to the Borrower or its Affiliates.  To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against each of the Lenders with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.
10.38    Binding Effect.  This Agreement and all of the other Financing Agreements set forth the legal, valid and binding obligations of Borrower, the Agent and the Lenders and are enforceable against Borrower in accordance with their respective terms.  Should more than one Person be a Borrower under this Agreement or any Note, the obligations of each such Person shall be joint and several.  The Lenders may settle, release, compromise, collect or otherwise liquidate the obligations of any Borrower, any Guarantor of such obligations, and any security or collateral for such obligations or for any such guaranty, in any manner, without affecting or impairing the obligations of any Borrower.  
10.39    FINAL AGREEMENT.  THIS WRITTEN AGREEMENT AND THE OTHER FINANCING AGREEMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
10.40    Amendment and Restatement.  The parties to this Agreement agree that, upon (i) the execution and delivery by each of the parties hereto of this Agreement and (ii) satisfaction of the conditions set forth in Article 4, the terms and provisions of the Existing Credit Agreement shall be and hereby are amended, superseded and restated in their entirety by the terms and provisions of this Agreement.  This Agreement is not intended to and shall not constitute a novation.  All Loans made and Liabilities incurred under the Existing Credit Agreement which are outstanding on the Closing Date shall continue as Loans and Liabilities under (and, as of the Closing Date, shall be governed by the terms of) this Agreement and the agreements, documents and instruments delivered together herewith.  Without limiting the foregoing, upon the effectiveness hereof:  (a) all references to the “Agent”, the “Agreement” and the agreements, documents and instruments delivered together therewith (each as defined in or contemplated by the Existing Credit Agreement) shall be deemed to refer to the Agent, this Agreement and the agreements, documents and instruments delivered together herewith, (b) the Letters which remain outstanding on the Closing Date shall continue as Letters under (and, as of the Closing Date, shall be governed by the terms of) this Agreement, (c) all obligations constituting “Liabilities” with any Lender or any affiliate of any Lender which are outstanding on the Closing Date shall continue as Liabilities under this Agreement and the agreements, documents and instruments delivered together herewith, (d) the “Commitments” (as 

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defined in the Existing Credit Agreement) shall be allocated between, and redesignated as, Commitments hereunder, in each case pursuant to the allocations set forth on the Schedule A, (e) the Agent shall make such other reallocations, sales, assignments or other relevant actions in respect of each Lender’s credit exposure under the Existing Credit Agreement as are necessary in order that each such Lender’s applicable Liabilities in respect of Loans and reflect such Lender’s Pro Rata Percentage of the applicable outstanding aggregate of such Loans and Letters on the Closing Date, (f) the “Loans” of each Departing Lender under the Existing Credit Agreement shall be repaid in full (accompanied by any accrued and unpaid interest and fees thereon), each Departing Lender’s “Commitment” under the Existing Credit Agreement shall be terminated and each Departing Lender shall not be a Lender hereunder and (g) each Borrower hereby agrees to compensate each Lender (including each Departing Lender) for any and all losses, costs and expenses incurred by such Lender in connection with the sale and assignment of any LIBOR Rate Loans (including the “LIBOR Rate Loans” under the Existing Credit Agreement) and such reallocation described above, in each case on the terms and in the manner set forth in this Agreement.
[Signature Pages Follow]

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IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year first above written.
THE ANDERSONS, INC. 
 
 
By /s/ Nicholas C. Conrad     
    Nicholas C. Conrad 
    Vice President, Finance & Treasurer 

Signature Page to
The Andersons Credit Agreement

	
	
	U.S. BANK NATIONAL ASSOCIATION

	By  /s/ James D. Pegues                                                           

	Name James D. Pegues                                                            

	Title Vice President                                                                  

Signature Page to
The Andersons Credit Agreement

	
	
	FIFTH THIRD BANK

	

By  /s/ Jim Esinduy                                                    

	     Name: Jim Esinduy

	     Title: Vice President

	
	
	COBANK, ACB

	
By  /s/ Alan V. Schuler                                                            

	     Name: Alan V. Schuler

	     Title: Vice President

	
	
	JPMORGAN CHASE BANK, N.A.

	
By  /s/ Michael P. Schweickert                                               

	     Name: Michael P. Schweickert

	     Title: Authorized Signer

	
	
	BANK OF THE WEST

	
By  /s/ Charles Greenway                                                      

	     Name: Charles Greenway

	     Title: Vice President

	
	
	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.

	
By  /s/ Andrew Oram                                                             

	     Name: Andrew Oram

	     Title: Managing Director

	
	
	BRANCH BANKING AND TRUST COMPANY

	
By  /s/ Michael L. Laurie                                                        

	     Name: Michael L. Laurie

	     Title: Senior Vice President

	
	
	FARM CREDIT BANK OF TEXAS

	
By  /s/ Luis M. H. Requejo                                                     

	     Name: Luis M. H. Requejo

	     Title: Director Capital Markets

Signature Page to
The Andersons Credit Agreement

	
	
	THE BANK OF NOVA SCOTIA

	
By  /s/ Laura Gimena                                                              

	     Name: Laura Gimena

	     Title: Director

	
	
	WELLS FARGO BANK, N.A.

	
By  /s/ John M. Pastore                                                            

	     Name: John M. Pastore

	     Title: Vice President

	
	
	COOPERATIVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH

	
By  /s/ Peter Duncan                                                                

	     Name: Peter Duncan

	     Title: Managing Director

	
By  /s/ Peter Glawe                                                                   

	     Name: Peter Glawe

	     Title: Executive Director

	
	
	AGFIRST FARM CREDIT BANK

	
By  /s/ Neda K. Beal                                                               

	     Name: Neda K. Beal

	     Title: Vice President

	
	
	THE HUNTINGTON NATIONAL BANK

	
By  /s/ Cheryl B. Holm                                                            

	     Name: Cheryl B. Holm

	     Title: Sr. Vice President

	
	
	PNC BANK, NATIONAL ASSOCIATION

	
By  /s/ Richard C. Hampson                                                     

	     Name: Richard C. Hampson

	     Title: Senior Vice President

	
	
	FARM CREDIT SERVICES OF AMERICA, PCA

	
By  /s/ Bruce Dean                                                                    

	     Name: Bruce Dean

	     Title: Vice President

 
Signature Page to
The Andersons Credit Agreement

	
	
	BANK OF AMERICA, N.A.

	
By  /s/ John L. Kolleng                                                           

	     Name: John L. Kolleng

	     Title: Vice President

	
	
	1st CREDIT SERVICES, PCA

	
By  /s/ Dale A. Richardson                                                      

	     Name: Dale A. Richardson

	     Title: Vice President, Capital Markets Group

	
	
	COMERICA BANK

	
By  /s/ Matthew A. Rybinski                                                   

	     Name: Matthew A. Rybinski

	     Title: Vice President

	
	
	AGSTAR FINANCIAL SERVICES, PCA

	
By  /s/ Troy Mostaert                                                             

	     Name: Troy Mostaert

	     Title: VP Capital Markets

	
	
	BMO HARRIS BANK

	
By  /s/ Manuel Diaz                                                                 

	     Name: Manuel Diaz

	     Title: Director

	
	
	RBS CITIZENS, N.A.

	
By  /s/ Jeffrey P. Huening                                                         

	     Name: Jeffrey P. Huening

	     Title: Vice President

	
	
	GREENSTONE FARM CREDIT SERVICES, ACA/FLCA

	
By  /s/ Curtis Flammini                                                            

	     Name: Curtis Flammini

	     Title: Vice President

	
	
	FARM CREDIT MID-AMERICA, PCA

	
By  /s/ Ralph M. Bowman                                                        

	     Name: Ralph M. Bowman

	     Title: Vice President Capital Markets

 
Signature Page to
The Andersons Credit Agreement

	
	
	SUMITOMO MITSUI BANKING CORPORATION

	
By  /s/ Shuji Yabe                                                                      

	     Name: Shuji Yabe

	     Title: Managing Director

	
	
	BOKF, N.A., d/b/a Bank of Oklahoma

	
By  /s/ J. Anderson                                                                    

	     Name: J. Anderson

	     Title: Vice President

	
	
	FIRST MIDWEST BANK

	
By  /s/ David W. Nelson                                                           

	     Name: David W. Nelson

	     Title: Senior Vice President

	
	
	BADGERLAND FINANCIALS, FLCA

	
By  /s/ Kenneth H. Rue                                                            

	     Name: Kenneth H. Rue

	     Title: VP, Capital Markets

	
	
	AGCOUNTRY FARM CREDIT SERVICES, PCA

	
By  /s/ James F. Baltezore                                                        

	     Name: James F. Baltezore

	     Title: Vice President

	
	
	AGCHOICE FARM CREDIT, ACA

	
By  /s/ Joshua L. Larock                                                           

	     Name: Joshua L. Larock

	     Title: Vice President

	
	
	CHANG HWA COMMERCIAL BANK, LTD., NEW YORK BRANCH

	
By  /s/ Eric Y.S. Tsai                                                                

	     Name: Eric Y.S. Tsai

	     Title: V.P. & G.M.

 
Signature Page to
The Andersons Credit Agreement

	
	
	The undersigned Departing Lender hereby acknowledges and agrees that, from and after the Closing Date, it is no longer a party to the Existing Credit Agreement or any of the agreements, documents or instruments executed in connection therewith and will not be a party to this Agreement.

	THE PRIVATE BANK AND TRUST COMPANY, as a Departing lender

	
By  /s/ Chris O'Hara                                                                 

	     Name: Chris O'Hara

	     Title: Managing Director

 
Signature Page to
The Andersons Credit Agreement

Schedule A to Fifth Amended and Restated Loan Agreement 
Lenders’ Commitments
	
				
	Line of Credit Loan Commitments
	 

	Name of Lender
	Pro Rata Percentage
	Maximum $ Amount

	U.S. Bank National Association
	11.7646
	%
	$100,000,000

	Fifth Third Bank
	8.5294
	%
	$72,500,000

	CoBank, ACB
	8.5294
	%
	$72,500,000

	JPMorgan Chase Bank, N.A.
	4.4118
	%
	$37,500,000

	Bank of the West
	4.4118
	%
	$37,500,000

	Bank of Tokyo-Mitsubishi UFJ, Ltd.
	4.4118
	%
	$37,500,000

	Branch Banking and Trust Company
	4.4118
	%
	$37,500,000

	Farm Credit Bank of Texas
	4.4118
	%
	$37,500,000

	The Bank of Nova Scotia
	4.4118
	%
	$37,500,000

	Wells Fargo Bank, N.A.
	4.4118
	%
	$37,500,000

	Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”, New York Branch
	3.5294
	%
	$30,000,000

	AgFirst Farm Credit Bank
	2.6470
	%
	$22,500,000

	The Huntington National Bank
	2.6470
	%
	$22,500,000

	PNC Bank, National Association
	2.6470
	%
	$22,500,000

	Farm Credit Services of America, PCA
	2.6470
	%
	$22,500,000

	Bank of America, N.A.
	2.6470
	%
	$22,500,000

	First Farm Credit Services, PCA
	2.0589
	%
	$17,500,000

	Comerica Bank
	2.0589
	%
	$17,500,000

	AgStar Financial Services, PCA
	1.7647
	%
	$15,000,000

	BMO Harris Bank
	1.7647
	%
	$15,000,000

	RBS Citizens, N.A.
	1.7647
	%
	$15,000,000

	Greenstone Farm Credit Services, ACA/FLCA
	1.7647
	%
	$15,000,000

	Farm Credit Mid-America, PCA
	1.7647
	%
	$15,000,000

	Sumitomo Mitsui Banking Corporation
	1.7647
	%
	$15,000,000

	BOKF, N.A., d/b/a Bank of Oklahoma
	1.7647
	%
	$15,000,000

	First Midwest Bank
	1.7647
	%
	$15,000,000

	Badgerland Financial, FLCA
	1.7647
	%
	$15,000,000

	AgCountry Farm Credit Services, PCA
	1.7647
	%
	$15,000,000

	AgChoice Farm Credit, ACA
	0.8824
	%
	$7,500,000

	Chang Hwa Commercial Bank, Ltd., New York Branch
	0.8824
	%
	$7,500,000

	TOTAL:
	 
	$850,000,000

Schedule A 
Page 1

Schedule B to 
Fifth Amended and Restated Loan Agreement
Form of Assignment and Acceptance
Dated: [Insert Date]

Reference is made to that certain Fifth Amended and Restated Loan Agreement dated as of March 4, 2014 (as modified, amended, extended or renewed from time to time, the "Loan Agreement") by and among THE ANDERSONS, INC., an Ohio corporation (the "Borrower"), the Lenders (as defined in the Loan Agreement) and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as agent for the Lenders (the "Agent"). Terms defined in the Loan Agreement and not defined herein are used herein with the same meaning.

NOW, THEREFORE, [Insert Name of Lender Making Assignment] (the "Assignor") and [Insert Name of Lender Receiving Assignment] (the "Assignee") agree as follows:

1.    The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor [Insert % Amount]% of the Line of Credit Loan Commitments (out of the [Insert % Amount]% which Assignor holds) together with all of the Assignor's related rights and obligations under the Loan Agreement as of the Effective Date (as defined below).

2.    The Assignor: (a) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (b) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with any Financing Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of any Financing Agreement or any other instrument or document furnished pursuant thereto; (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under any Financing Agreement or any other instrument or document furnished pursuant thereto[; and (d) attaches the Line of Credit Note payable to the Assignor and requests that the Agent exchange such Line of Credit Note for new Line of Credit Notes as follows: a Line of Credit Note dated [Insert Date] in the principal amount of $[Insert $ Amount], payable to the order of the Assignee and a Line of Credit Note dated [Insert Date] in the principal amount of $[Insert $ Amount], payable to the order of the Assignor.] [and (d) has delivered and endorsed the Notes held by the Assignor to the Assignee, payable to the order of the Assignee].

3.    The Assignee: (a) confirms that it has received copies of the Financing Agreements, together with copies of the most recent financial statements referred to in Section 7.1 of the Loan Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (b) agrees that it will, 

Schedule B 
Page 1

independently and without reliance upon the Agent, the Assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Agreement; (c) appoints and authorizes the Agent to take such action on the Assignee’s behalf and to exercise such powers under the Financing Agreements as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (d) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Loan Agreement and the other Financing Agreements are required to be performed by the Assignee as a Lender; (e) (if such Assignee is a bank or financial institution organized outside the United States) agrees that it will deliver to the Agent and the Borrower the forms prescribed by the Internal Revenue Service of the United States (including without limitation, Form W-8 BEN, Form W-8 ECI, or Form W-8 IMY) certifying such Assignee's exemption from United States withholding taxes with respect to all payments to be made to such Assignee under its Notes and under any other Financing Agreement; and (f) specifies as its address for notices the office set forth beneath its name on the signature pages hereof.

 4.    The effective date for this Assignment and Acceptance shall be [Agent inserts date of its acceptance] (the "Effective Date"). Following the execution of this Assignment and Acceptance, it will be delivered to the Agent for acceptance and recording by the Agent.

5.    Upon such acceptance and recording, as of the Effective Date: (a) the Assignee shall be a party to the Loan Agreement and, to the extent provided in this Assignment and Acceptance, shall have the rights and obligations of a Lender thereunder and under the other Financing Agreements; and (b) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Loan Agreement and the other Financing Agreements and in the event that the Assignor has assigned to the Assignee hereunder all of its rights and obligations under the Loan Agreement and the other Financing Agreements, the Assignor shall cease to be a party to the Loan Agreement and such other Financing Agreements.

6.    Upon such acceptance and recording, from and after the Effective Date, the Agent shall make all payments under the Loan Agreement in respect of the interest assigned hereby (including without limitation, all payments of principal, interest and commitment fees with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under the Loan Agreement for periods prior to the Effective Date directly between themselves.

7.    This Assignment and Acceptance shall be governed by, and construed in accordance with, the laws of the State of New York.

Schedule B 
Page 2

IN WITNESS WHEREOF, the parties hereto, by their respective officers thereunto duly authorized, have executed this Assignment and Acceptance effective as of the day first written above.

[NAME OF ASSIGNOR]

By: ___________________________
Title: _________________________

[NAME OF ASSIGNEE]

By: ___________________________
Title: __________________________

Address for Notices:

_______________________________
_______________________________

Schedule B 
Page 3

Accepted this: [Insert Date].

U.S. BANK NATIONAL ASSOCIATION
950 Seventeenth Street, 7th Floor
Denver, Colorado 80202
Telephone: (303) 585-4906
Facsimile: (303) 585-4732

By: ____________________________
Its:____________________________

Consent of Borrower (If Required):

THE ANDERSONS, INC.

By                     
Its                     

Schedule B 
Page 4

Exhibit 1A to 
Fifth Amended and Restated Loan Agreement
Excluded Consolidated Subsidiaries
Iowa Northern Railway Co.  
Citizens LLC  
Zephyr-Rocket LLC  
Lansing Trade Group, LLC  
The Andersons Denison Ethanol LLC  
The Andersons Clymers Ethanol LLC  
The Andersons Ethanol Investment LLC  
The Andersons Marathon Ethanol LLC  
The Andersons Albion Ethanol LLC  
Project Navy Limited Partnership  
0975355 B.C. Unlimited Liability Company  
0975384 B.C. Unlimited Liability Company  
Thompsons Limited  
Lux JV Treasury Holding Company S.a.r.l.   
Navy Holdings, LLC  
WGT (US) Ltd.  
Thompsons USA Limited 

Exhibit 1A 
Page 1

Exhibit 2A to 
Fifth Amended and Restated Loan Agreement
Form Line of Credit Note
LINE OF CREDIT NOTE

$[Insert]                                    [DATE]

FOR VALUE RECEIVED, the undersigned THE ANDERSONS, INC., an Ohio corporation (hereinafter referred to as "Borrower"), promises to pay to the order of [Insert] (hereinafter referred to as "Lender"), at such place as U.S. Bank National Association, as agent for the Lender, may designate, in lawful money of the United States of America and in immediately available funds, the principal sum of [Insert] Dollars ($[Insert]) or so much thereof as may be advanced and be outstanding, together with interest on any and all principal amounts outstanding calculated in accordance with the provisions set forth below.  This Note is issued under that certain Fifth Amended and Restated Loan Agreement, dated as of March 4, 2014 (as the same may be amended, replaced, restated and/or supplemented from time to time, the "Loan Agreement") between Borrower, U.S. Bank National Association, a national banking association, as agent (the "Agent"), Lender and the other lenders identified therein.

Capitalized terms used and not defined herein shall have the meanings given to such terms in the Loan Agreement.

The outstanding Loans hereunder shall be maintained as Base Rate Loans, LIBOR Rate Loans or a combination thereof, as more fully provided in the Loan Agreement.  The Borrower shall have the right to make prepayments of principal only in accordance with the Loan Agreement.

Borrower shall pay interest on the unpaid principal amount of each Loan made by the Lender from the date of such Loan until such principal amount shall be paid in full, at the times and at the rates per annum set forth in the Loan Agreement.

The unpaid balance of this obligation at any time shall be the total amounts advanced hereunder by the Lender, together with accrued and unpaid interest, less the amount of payments made hereon by or for the Borrower, which balance may be endorsed hereon from time to time by the Lender.

In addition to the repayment requirements imposed upon the Borrower under the Loan Agreement, together with the agreements referred to therein, the principal and interest owing under this Note shall be due and payable in full on the Maturity Date, without presentment, demand, protest or further notice (including without limitation, notice of intent to accelerate and notice of 

Exhibit 2A

acceleration) of any kind, all of which are expressly waived by the Borrower.  Time is of the essence hereof.

Interim payments made by Borrower pursuant to and in accordance with the Loan Agreement shall be applied as provided therein.

Should any Matured Default occur, then all sums of principal and interest outstanding hereunder may be declared immediately due and payable in accordance with the Loan Agreement, without presentment, demand or notice of dishonor, all of which are expressly waived, and the Lender shall have no obligation to make any further Loans pursuant to the Loan Agreement.

This Note shall be construed in accordance with the laws of the State of New York. 

THE ANDERSONS, INC.

By                     
Its                     

Exhibit 2A

Exhibit 4A to 
Fifth Amended and Restated Loan Agreement
List of Closing Documents
		
	1.
	This Fifth Amended and Restated Loan Agreement

		
	2.
	Notes

		
	3.
	Secretary’s Certificate as to Directors’ Resolutions for the Borrower

		
	4.
	Certificates of Good Standing, Articles of Incorporation, and Code of Regulations for the Borrower

		
	5.
	Opinion of Legal Counsel

		
	6.
	No Default or Matured Default/Representations and Warranties True and Correct Certificate.

Exhibit 4A 
Page 1

Exhibit 5A to 
Fifth Amended and Restated Loan Agreement
Form of Guaranty
Attached

Exhibit 5A 
Page 1

Exhibit 6A to 
Fifth Amended and Restated Loan Agreement
Disclosure Schedule
Part 1:        Judgments, Litigation, Claims and Proceedings
None.

Part 2:        Defaults and Disputes
None.

Part 3:        Closing Date Limited Recourse Debt and Recourse Debt Secured by Liens
See attached list.

Part 4:        Tax Liability Claims
None.

Part 5:        Other Indebtedness
Included in Part 3.

Part 6:        Affiliates
See attached list.

Part 7:        Environmental Matters
No active matters.  We are complying with other landowners in a U.S. E.P.A.
investigation regarding the Maumee River.

Exhibit 6A 
Page 1

Affiliates

The Andersons Albion Ethanol LLC, an Ohio limited liability company.

The Andersons Clymers Ethanol LLC, an Ohio limited liability company.

The Andersons Marathon Ethanol LLC, a Delaware limited liability company.

The Andersons Ethanol Investment LLC, an Ohio limited liability company.

The Andersons Denison Ethanol LLC, a Delaware limited liability company.

Lansing Trade Group, LLC, a Delaware limited liability company.

Iowa Northern Railway Company, an Iowa company.

Zephyr-Rocket, LLC, an Iowa limited liability company.

Thompsons Limited, an Ontario corporation, formed by a second post-acquisition amalgamation.

Thompsons USA Limited, a Delaware corporation.

Project Navy Limited Partnership, an Ontario, Canada limited partnership.

0975355 B.C. Unlimited Liability Company, a British Columbia, Canada unlimited liability company.

0975384 B.C. Unlimited Liability Company, a British Columbia, Canada unlimited liability company.

Navy Holdings, LLC, a Delaware limited liability company.

Lux JV Treasury Holding Company SARL, a Luxembourg private limited liability company.

Exhibit 6A 
Page 2

Exhibit 7A-2 to 
Fifth Amended and Restated Loan Agreement
Compliance Certificate
Pursuant to Section 7.1 of the Fifth Amended and Restated Loan Agreement, dated as of March 4, 2014 (as amended, replaced, restated or supplemented from time to time, the “Loan Agreement”) by and between The Andersons, Inc., an Ohio corporation ("Borrower"), the financial institutions party to the Loan Agreement (collectively the "Lenders") and U.S. Bank National Association in its capacity as the Agent (the "Agent"), the undersigned certifies to the Agent and the Lenders as follows:

		
	1.
	The financial statements of Borrower, attached hereto, for the period ending ________________________________ (the “Financial Statements”), have been prepared in accordance with the requirements of Section 7.1 of the Loan Agreement and have been delivered on or before the date they are due.

		
	2.
	The representations and warranties contained in Section 6 of the Loan Agreement are true and correct as of the date hereof as though made on this date.

		
	3.
	Borrower is in compliance with all of the affirmative and negative covenants set forth in Section 7 and 8 of the Loan Agreement as of the date hereof.

		
	4.
	Specifically, as of the date of the Financial Statements:

		
	a.
	Borrower's “Working Capital” (as described in the Loan Agreement) is required to be equal to or greater than $150,000,000; Borrower's actual Working Capital as so described is $_______________.

In Compliance:    Yes         No     

		
	b.
	Borrower's “Recourse Long Term Debt to Capitalization Ratio” (as described in the Loan Agreement) is required to be less than or equal to 0.70 to 1.00. Borrower's actual Recourse Long Term Debt to Capitalization Ratio as so described is ____________.

In Compliance:    Yes         No     

		
	c.
	The rate at which interest and fees accrue under the Loan Agreement is determined in accordance with a Financial Performance Level, as defined therein, which, in turn, is determined by the Borrower’s Recourse Long Term Debt to Capitalization Ratio.  As of _______________ (the most recent fiscal quarter end), Borrower’s Recourse 

Exhibit 7A-2 
Page 1

Long Term Debt to Capitalization Ratio was ______ and the Financial Performance Level was ______.

		
	5.
	Loan and Letter proceeds at any time outstanding equal to a maximum of $[_________] have been used to consummate Permitted Acquisitions, capital expenditures and purchases of fixed assets; provided, that no Acquisition of Accounts, Inventory or other current assets shall be subject to this $400,000,000 limitation, other than the following Acquisitions: [Borrower to insert list if applicable].

		
	6.
	All adjustments and calculations related to the amounts set forth above are attached hereto.

Dated: _____________________, 20___        

THE ANDERSONS, INC.

                    
By                     
Its                     

Exhibit 7A-2 
Page 2svb2ndamdmt.htm

  

  

  

Exhibit 10.1

 

SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

THIS SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of May 5, 2014 (the “2014 Effective Date”) between (a) SILICON VALLEY BANK, a California corporation with a loan production office located at 3353 Peachtree Road, NE, North Tower, Suite M-10, Atlanta, Georgia 30326 (“Bank”), and (b) NUMEREX CORP., a Pennsylvania corporation (“Numerex”), CELLEMETRY LLC, a Delaware limited liability company (“Cellemetry”), CELLEMETRY SERVICES, LLC, a Georgia limited liability company (“Services”), NUMEREX GOVERNMENT SERVICES LLC, a Georgia limited liability company (‘Government Services”), NUMEREX SOLUTIONS, LLC, a Delaware limited liability company (“Solutions”), ORBIT ONE COMMUNICATIONS, LLC, a Georgia limited liability company (“Orbit”), UBLIP, INC., a Georgia corporation (“uBlip”), and UPLINK SECURITY, LLC, a Georgia limited liability company (“Uplink”) (hereinafter, Numerex, Cellemetry, Services, Government Services, Solutions, Orbit, uBlip, and Uplink are jointly and severally, individually and collectively, referred to as “Borrower”), provides the terms on which Bank shall lend to Borrower and Borrower shall repay Bank.  This Agreement amends and restates in its entirety that certain Amended and Restated Loan and Security Agreement dated as of April 25, 2011, between Borrower and Bank, as amended by a certain First Loan Modification Agreement, dated as of September 12, 2012, between Borrower and Bank, and as further amended by a certain Second Loan Modification Agreement, dated as of September 24, 2013, between Borrower and Bank (as amended, the “Prior Loan Agreement”).  The parties agree as follows:

 

WHEREAS, each Borrower has requested that Bank establish the loan arrangement as set forth herein; and

 

WHEREAS, each Borrower requests that as a convenience to that Borrower, such loans as may be made hereunder shall be directed to Numerex which will, in turn, distribute the proceeds thereof to the respective Borrower;

 

NOW THEREFORE, as an additional inducement for Bank to establish the loan arrangement and to direct such loans as may be made hereunder to Numerex as described above, each Borrower covenants and agrees as follows:

 

1 ACCOUNTING AND OTHER TERMS

 

Accounting terms not defined in this Agreement shall be construed following GAAP.  Calculations and determinations must be made following GAAP. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in Section 13.  All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein.

 

1.1 Designation of Agent.  Each Borrower hereby designates Numerex as the agent of that Borrower to discharge the duties and responsibilities of such Borrower as provided herein.

 

1.2 Operation of Borrowing.  Except as otherwise provided in this Section, all Credit Extensions hereunder shall be re­quested solely by Numerex as agent for each Borrower.  Each Borrower shall be directly indebted to Bank for each Credit Extension distributed to Numerex, together with all accrued interest thereon, as if that amount had been ad­vanced directly by Bank to such Borrower­­. Bank shall have no responsibility to inquire as to the distribution of Credit Extensions made by Bank through Numerex as described herein.

 

1.3 Continuation of Authority of Agent.  The authority of Numerex to request loans on behalf of, and to bind, the Borrowers, shall continue unless and until Bank actually receives written notice of the termina­tion of such authority.

 

2 LOAN AND TERMS OF PAYMENT

 

2.1 Promise to Pay.  Borrower hereby unconditionally promises to pay Bank the outstanding principal amount of all Credit Extensions and accrued and unpaid interest thereon as and when due in accordance with this Agreement.

 

2.1.1 Revolving Advances.

 

(a) Availability.  Subject to the terms and conditions of this Agreement, Bank shall make Advances not exceeding the Availability Amount.  Amounts borrowed under the Revolving Line may be repaid and, prior to the Revolving Line Maturity Date, reborrowed, subject to the applicable terms and conditions precedent herein.

 

(b) Termination; Repayment.  The Revolving Line terminates on the Revolving Line Maturity Date, when the principal amount of all Advances, the unpaid interest thereon, and all other Obligations relating to the Revolving Line shall be immediately due and payable.

 

2.1.2 2014 Term Loan.

 

(a) Availability.  Subject to the terms and conditions of this Agreement, Bank agrees to make one (1) advance (the “2014 Term Loan Advance”) available to Borrower on the 2014 Effective Date in an amount not to exceed Twenty-Five Million Dollars ($25,000,000.00), provided that the proceeds of the 2014 Term Loan Advance shall be used to finance the Omnilink Acquisition.  After repayment, the 2014 Term Loan Advance may not be reborrowed.

 

(b)  Repayment. Borrower shall repay the principal amount of the 2014 Term Loan Advance in  consecutive quarterly installments of principal on the last calendar day of each quarter for the applicable quarter as follows: (i) for the quarter ending on June 30, 2014 and for each quarter thereafter through and including the fiscal quarter ending on March 31, 2015, a principal payment equal to one-fourth (1/4) of ten percent (10.0%) of the original principal amount of the 2014 Term Loan Advance for each quarter, (ii) for the quarter ending on June 30, 2015 and for each quarter thereafter through and including the quarter ending on March 31, 2017, a principal payment equal to one-fourth (1/4) of fifteen percent (15.0%) of the original principal amount of the 2014 Term Loan Advance for each quarter, and (iii) for the quarter ending June 30, 2017 and for each quarter thereafter through and including the quarter ending March 31, 2019, a principal payment equal to one-fourth (1/4) of twenty percent (20.0%) of the original principal amount of the 2014 Term Loan Advance for each quarter.   Any remaining outstanding principal amount of the 2014 Term Loan Advance and any accrued and unpaid interest thereon and all other outstanding Obligations with respect to the 2014 Term Loan Advance are due and payable in full on the 2014 Term Loan Maturity Date. Once repaid, the 2014 Term Loan Advance may not be reborrowed

 

(c) Mandatory Prepayment Upon an Acceleration. If the 2014 Term Loan Advance is accelerated following the occurrence of an Event of Default, Borrower shall immediately pay to Bank an amount equal to the sum of: (i) all outstanding principal plus accrued and unpaid interest, (ii) the Prepayment Premium, plus (iii) all other sums, if any, that shall have become due and payable, including interest at the Default Rate with respect to any past due amounts.

 

(d) Permitted Prepayment of Term Loan Advances.

 

(i) Prior to the first (1st) anniversary of the 2014 Effective Date, upon at least three (3) Business Days prior written notice to Bank, Borrower shall have the option to prepay, (1) up to Twelve Million Five Hundred Thousand ($12,500,000) of the 2014 Term Loan Advance without any penalty or premium (including the Prepayment Premium), provided (A) Borrower pays, on the date of such prepayment (x) all accrued and unpaid interest with respect to the amount of the 2014 Term Loan Advance being prepaid plus (y) all other sums, if any, that shall have become due and payable with respect to the amount of the 2014 Term Loan Advance being prepaid, including interest at the Default Rate with respect to any past due amounts, and (B) such prepayment is not made in connection with a refinance of all or any portion of the 2014 Term Loan Advance, or the occurrence of a Liquidity Event and (2) thereafter, the remaining amount of the 2014 Term Loan Advance, as reduced by any amounts prepaid or repaid pursuant to this Agreement (including Section 2.1.2(b), Section 2.1.2(d)(i)(1) or Section 2.2), provided Borrower pays, on the date of such prepayment (A) all outstanding principal plus accrued and unpaid interest with respect to the amount of the 2014 Term Loan Advance being prepaid, (B) the Prepayment Premium, plus (C) all other sums, if any, that shall have become due and payable with respect to the amount of the 2014 Term Loan Advance being prepaid, including interest at the Default Rate with respect to any past due amounts.

 

(ii) On or after the first (1st) anniversary of the 2014 Effective Date, upon at least three (3) Business Days prior written notice to Bank, Borrower shall have the option to prepay all, or a portion of, the 2014 Term Loan Advance advanced by Bank under this Agreement without any penalty or premium, including any Prepayment Premium, provided Borrower pays, on the date of such prepayment (A) all accrued and unpaid interest with respect to the amount of the 2014 Term Loan Advance being prepaid plus (B) all other sums, if any, that shall have become due and payable with respect to the amount of the 2014 Term Loan Advance being prepaid, including interest at the Default Rate with respect to any past due amounts.

 

2.2 Excess Cash Flow Recapture Payments.   If, for any fiscal year of Borrower, there shall be Excess Cash Flow, the Borrower shall, on the relevant Excess Cash Flow Application Date, apply: (i) fifty percent (50.0%) of such Excess Cash Flow toward the prepayment of the 2014 Term Loan Advance, if the Leverage Ratio as of the last day of such fiscal year is equal to or greater than 2.50 to 1.0, (ii) twenty-five percent (25.0%) of such Excess Cash Flow toward the prepayment of the 2014 Term Loan Advance, if the Leverage Ratio as of the last day of such fiscal year is less than 2.50:1.0 but equal to or greater than 1.50 to 1.0, and (iii) zero percent (0.00%) of such Excess Cash Flow toward the prepayment of the 2014 Term Loan Advance, if the Leverage Ratio as of the last day of such fiscal year is less than 1.50 to 1.0.  Each such prepayment shall be made on a date (each an “Excess Cash Flow Application Date”) occurring no later than the earlier of (i) the date on which the financial statements of Borrower referred to in Section 6.2(c) for the fiscal year with respect to which such prepayment is made, are required to be delivered to the Bank, or (ii) April 15th of such year.  Any such payment shall be applied to the principal balance of the 2014 Term Loan Advance in the inverse order of maturity.  For the avoidance of doubt, any prepayment made on an Excess Cash Flow Application Date in accordance with this Section 2.2 shall not be subject to the Prepayment Premium, any amounts due under Section 3.6(c), Section 3.7(a), or any other penalties, premiums, fees or expenses.  For the avoidance of doubt, any prepayment of the 2014 Term Loan Advance pursuant to this Section 2.2 shall not be considered a prepayment of the 2014 Term Loan Advance pursuant to Section 2.1.2(d).

 

2.3 General Provisions Relating to the Credit Extensions.  Each Credit Extension shall, at Borrower’s option in accordance with the terms of this Agreement, be either in the form of a Prime Rate Credit Extension or a LIBOR Credit Extension; provided that in no event shall Borrower maintain at any time LIBOR Credit Extension having more than two (2) different Interest Periods.  Borrower shall pay interest accrued on the Credit Extensions at the rates and in the manner set forth in Section 2.4.

 

2.4 Payment of Interest on the Credit Extensions.

 

(a) Computation of Interest.  Interest on the Credit Extensions and all fees payable hereunder shall be computed on the basis of a 360-day year and the actual number of days elapsed in the period during which such interest accrues.  In computing interest on any Credit Extension, the date of the making of such Credit Extension shall be included and the date of payment shall be excluded; provided, however, that if any Credit Extension is repaid on the same day on which it is made, such day shall be included in computing interest on such Credit Extension. 

 

(b) Credit Extensions.  Each Credit Extension shall bear interest on the outstanding principal amount thereof from the date when made, continued or converted until paid in full at (i) a floating rate per annum equal to the Prime Rate plus the Prime Rate Margin for such Credit Extensions, or (ii) the LIBOR Rate plus the LIBOR Rate Margin for such Credit Extensions, as the case may be.  On and after the expiration of any Interest Period applicable to any LIBOR Credit Extension outstanding on the date of occurrence of an Event of Default or acceleration of the Obligations, the Effective Amount of such LIBOR Credit Extension shall, during the continuance of such Event of Default or after acceleration, bear interest at a rate per annum equal to the Prime Rate plus five percent (5.0%).  Pursuant to the terms hereof, interest on each Credit Extension shall be paid in arrears on each Interest Payment Date.  Interest shall also be paid on the date of any prepayment of any Credit Extension pursuant to this Agreement for the portion of any Credit Extension so prepaid and upon payment (including prepayment) in full thereof.  All accrued but unpaid interest on the Credit Extensions shall be due and payable on the Revolving Line Maturity Date and the 2014 Term Loan Maturity Date.

 

(c) Default Interest.  Except as otherwise provided in Section 2.4(b), upon the occurrence and during the continuation of an Event of Default, Obligations shall bear interest five percent (5.00%) above the rate effective immediately before the Event of Default (the “Default Rate”).  Payment or acceptance of the increased interest provided in this Section 2.4(c) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Bank.

 

(d) Prime Rate Credit Extensions.  Each change in the interest rate of the Prime Rate Credit Extensions based on changes in the Prime Rate shall be effective on the effective date of such change and to the extent of such change.  Bank shall use its best efforts to give Borrower prompt notice of any such change in the Prime Rate; provided, however, that any failure by Bank to provide Borrower with notice hereunder shall not affect Bank’s right to make changes in the interest rate of the Prime Rate Credit Extensions based on changes in the Prime Rate.

 

(e) LIBOR Credit Extensions.  The interest rate applicable to each LIBOR Credit Extension shall be determined in accordance with Section 3.6(a) hereunder.  Subject to Sections 3.6 and 3.7, such rate shall apply during the entire Interest Period applicable to such LIBOR Credit Extension, and interest calculated thereon shall be payable on the Interest Payment Date applicable to such LIBOR Credit Extension.

 

(f) Debit of Accounts.  Bank (i) shall debit Borrower’s Designated Deposit Account for principal and interest payments when due, and (ii) may debit Borrower’s Designated Deposit Account (x) upon notice for any other amounts (less than One Hundred Thousand Dollars ($100,000)) Borrower owes Bank when due, or (y) upon prior written notice for any other amounts (in excess of One Hundred Thousand Dollars ($100,000)) Borrower owes Bank when due.  These debits shall not constitute a set-off.

 

(g) Interest Payment Date.  Unless otherwise provided, interest is payable on the Interest Payment Date.

 

2.5 Fees.  Borrower shall pay to Bank:

 

(a) Commitment Fee.  A fully earned, non-refundable commitment fee of One Hundred Fifty Thousand Dollars ($150,000.00) shall be earned and payable on the 2014 Effective Date;

 

(b) Unused Revolving Line Facility Fee.  A fee (the “Unused Revolving Line Facility Fee”), payable quarterly, in arrears, on a calendar year basis, in an amount equal to the Unused Revolving Line Facility Fee Amount, calculated by Bank in accordance with the terms of this Agreement;

 

(c) Prepayment Premium.  The Prepayment Premium, if and when due hereunder;

 

(d) Early Termination Fee.  The Revolving Line may be terminated prior to the Revolving Line Maturity Date as follows: (i) by Borrower, effective three (3) Business Days after written notice of termination is given to Bank; or (ii) by Bank at any time after the occurrence and during the continuance of an Event of Default, under Sections 8.4 or 8.5 hereof without notice, effective immediately (subject to the applicable cure period, if any).  If the Revolving Line is terminated prior to the first (1st) anniversary of the 2014 Effective Date: (A) by Bank in accordance with clause (ii) in the foregoing sentence, or (B) by Borrower for any reason, Borrower shall pay to Bank all outstanding Obligations under the Agreement with respect to the Revolving Line, as well as a non-refundable early termination fee in the amount of Fifty Thousand Dollars ($50,000.00) (the “Early Termination Fee”).  The Early Termination Fee shall be due and payable on the effective date of such termination and thereafter shall bear interest at a rate equal to the highest rate applicable to any of the Obligations; and

 

(e) Bank Expenses.  All Bank Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation of this Agreement) incurred through and after the 2014 Effective Date, when due.

 

(f) Good Faith Deposit.  Borrower has paid to Bank a good faith deposit of Fifty Thousand Dollars ($50,000.00) (the “Good Faith Deposit”) to initiate Bank’s due diligence review process, which Good Faith Deposit will be applied to the Bank Expenses on the 2014 Effective Date.

 

2.6 Payments; Application of Payments.

 

(a) All payments (including prepayments) to be made by Borrower under any Loan Document shall be made in immediately available funds in U.S. Dollars, without setoff or counterclaim, before 12:00 p.m. Eastern time on the date when due.  Payments of principal and/or interest received after 12:00 p.m. Eastern time are considered received at the opening of business on the next Business Day.  When a payment is due on a day that is not a Business Day, the payment shall be due the next Business Day, and additional fees or interest, as applicable, shall continue to accrue until paid.

 

(b)           Bank shall apply the whole or any part of collected funds against the Revolving Line or, if no principal or interest is then owing under the Revolving Line, credit such collected funds to a depository account of Borrower with Bank (or an account maintained by an Affiliate of Bank).  The order and method of  application of funds with respect to principal, interest and fees owed with respect to the Revolving Line shall be made in the sole discretion of Bank.  Borrower shall have no right to specify the order of payment with respect to the Revolving Line.  Borrower shall designate the depository account to which funds shall otherwise be credited.

2.7.           Prior Loan Agreement.  Bank and Borrower hereby acknowledge and agree that there are no outstanding obligations due to Bank by Borrower with respect to the Prior Agreement, except as set forth on Schedule 2.7 attached hereto, which outstanding obligations shall be paid in full on the 2014 Effective Date.

3 CONDITIONS OF LOANS

 

3.1 Conditions Precedent to Initial Credit Extension.  Bank’s obligation to make the initial Credit Extension is subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, such documents, and evidence of completion of such other matters, as Bank may reasonably deem necessary or appropriate, including, without limitation:

 

(a) duly executed original signatures to the Loan Documents;

 

(b) duly executed original signatures to the Control Agreement;

 

(c) Borrower’s Operating Documents and a good standing certificate of Borrower certified by the Secretary of State of the State of Pennsylvania as of a date no earlier than thirty (30) days prior to the 2014 Effective Date;

 

(d) Secretary’s Certificate with completed Borrowing Resolutions for Borrower;

 

(e) certified copies, dated as of a recent date, of financing statement searches, as Bank shall request, accompanied by written evidence (including any UCC termination statements) that the Liens indicated in any such financing statements either constitute Permitted Liens or have been or, in connection with the initial Credit Extension, will be terminated or released;

 

(f) duly executed Omnilink Purchase Agreement, together with (i) evidence that the Liens securing Indebtedness owed by Omnilink Systems, Inc. to Partners for Growth III, L.P. will be terminated and (ii) the documents and/or filings evidencing the perfection of such Liens, including without limitation any financing statements and/or control agreements, have or will, concurrently with the Omnilink Acquisition, be terminated;

 

(g) the Perfection Certificate of Borrower, together with the duly executed original signature thereto;

 

(h) a legal opinion (authority only) of Borrower’s counsel dated as of the 2014 Effective Date together with the duly executed original signature thereto; and

 

(i) payment of the fees and Bank Expenses then due as specified in Section 2.5 hereof.

 

3.2 Conditions Precedent to all Credit Extensions.  Bank’s obligations to make each Credit Extension, including the initial Credit Extension, is subject to the following conditions precedent:

 

(a) timely receipt of a Notice of Borrowing;

 

(b) the representations and warranties in this Agreement shall be true, accurate, and complete in all material respects on the date of the Notice of Borrowing and on the Funding Date of each Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no Event of Default shall have occurred and be continuing or result from the Credit Extension.  Each Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties in this Agreement remain true, accurate, and complete in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and

 

(c) in Bank’s reasonable discretion, there has not been any material impairment in the general affairs, management, results of operation, financial condition or the prospect of repayment of the Obligations.

 

3.3 Covenant to Deliver.  Borrower agrees to deliver to Bank each item required to be delivered to Bank under this Agreement as a condition precedent to any Credit Extension.  Borrower expressly agrees that a Credit Extension made prior to the receipt by Bank of any such item shall not constitute a waiver by Bank of Borrower’s obligation to deliver such item, and the making of any Credit Extension in the absence of a required item shall be in Bank’s sole discretion.

 

 

3.4 Procedure for the Borrowing of Credit Extensions.

 

 

(a)           Subject to the prior satisfaction of all other applicable conditions to the making of a Credit Extension set forth in this Agreement, each Credit Extension shall be made upon Borrower’s irrevocable written notice delivered to Bank in the form of a Notice of Borrowing, each executed by a Responsible Officer of Borrower or his or her designee or without instructions if the Credit Extensions are necessary to meet Obligations which have become due.  Such Notice of Borrowing must be received by Bank prior to 12:00 p.m. Eastern time, (i) at least three (3) Business Days prior to the requested Funding Date, in the case of LIBOR Credit Extensions, and (ii) at least one (1) Business Day prior to the requested Funding Date, in the case of the 2014 Term Loan Advance and Prime Rate Credit Extensions, specifying:

 

(1)           the amount of the Credit Extension, which, if a LIBOR Credit Extension is requested, shall be in an aggregate minimum principal amount of $1,000,000;

 

(2)           the requested Funding Date;

 

(3)           whether the Credit Extension is to be comprised of LIBOR Credit Extensions or Prime Rate Credit Extensions; and

 

(4)           the duration of the Interest Period applicable to any such LIBOR Credit Extensions included in such notice; provided that if the Notice of Borrowing shall fail to specify the duration of the Interest Period for any Credit Extension comprised of LIBOR Credit Extensions, such Interest Period shall be one (1) month.

 

 

                      (b)           The proceeds of all such Credit Extensions will then be made available to Borrower on the Funding Date by Bank by transfer to the Designated Deposit Account and, subsequently, by wire transfer to such other account as Borrower may instruct in the Notice of Borrowing.  No Credit Extensions shall be deemed made to Borrower, and no interest shall accrue on any such Credit Extension, until the related funds have been deposited in the Designated Deposit Account.

 

 

3.5 Conversion and Continuation Elections.

 

 

(a)           So long as (i) no Event of Default or Default exists; (ii) Borrower shall not have sent any notice of termination of this Agreement; and (iii) Borrower shall have complied with such customary procedures as Bank has established from time to time for Borrower’s requests for LIBOR Credit Extensions, Borrower may, upon irrevocable written notice to Bank:

 

 

(1)           elect to convert on any Business Day, Prime Rate Credit Extensions in an amount equal to One Million Dollars ($1,000,000.00) into LIBOR Credit Extensions;

 

(2)           elect to continue on any Interest Payment Date any LIBOR Credit Extensions maturing on such Interest Payment Date (or any part thereof in an amount equal to One Million Dollars ($1,000,000.00); provided, that if the aggregate amount of LIBOR Credit Extensions shall have been reduced, by payment, prepayment, or conversion of part thereof, to be less than One Million Dollars ($1,000,000.00), such LIBOR Credit Extensions shall automatically convert into Prime Rate Credit Extensions, and on and after such date the right of Borrower to continue such Credit Extensions as, and convert such Credit Extensions into, LIBOR Credit Extensions shall terminate; or

 

(3)           elect to convert on any Interest Payment Date any LIBOR Credit Extensions maturing on such Interest Payment Date (or any part thereof in an amount equal to One Million Dollars ($1,000,000.00) into Prime Rate Credit Extensions.

 

                      (b)           Borrower shall deliver a Notice of Conversion/Continuation in accordance with Section 10 to be received by Bank prior to 12:00 p.m. Eastern time at least (i) three (3) Business Days in advance of the Conversion Date or Continuation Date, if any Credit Extensions are to be converted into or continued as LIBOR Credit Extensions; and (ii) one (1) Business Day in advance of the Conversion Date, if any Credit Extensions are to be converted into Prime Rate Credit Extensions, in each case specifying the:

 

(1) proposed Conversion Date or Continuation Date;

 

(2) aggregate amount of the Credit Extensions to be converted or continued which, if any Credit Extensions are to be converted into or continued as LIBOR Credit Extensions, shall be in an aggregate minimum principal amount of One Million Dollars ($1,000,000.00);

 

(3) nature of the proposed conversion or continuation; and

 

(4) duration of the requested Interest Period.

 

                      (c)           If upon the expiration of any Interest Period applicable to any LIBOR Credit Extensions, Borrower shall have failed to timely select a new Interest Period to be applicable to such LIBOR Credit Extensions, Borrower shall be deemed to have elected to convert such LIBOR Credit Extensions into Prime Rate Credit Extensions.

 

                      (d)           Any LIBOR Credit Extensions shall, at Bank’s option, convert into Prime Rate Credit Extensions in the event that (i) an Event of Default or Default shall exist, or (ii) the aggregate principal amount of the Prime Rate Credit Extensions which have been previously converted to LIBOR Credit Extensions, or the aggregate principal amount of existing LIBOR Credit Extensions continued, as the case may be, at the beginning of an Interest Period shall at any time during such Interest Period exceed the Revolving Line.

 

 

                      (e)           Notwithstanding anything to the contrary contained herein, Bank shall not be required to purchase United States Dollar deposits in the London interbank market or other applicable LIBOR market to fund any LIBOR Credit Extensions, but the provisions hereof shall be deemed to apply as if Bank had purchased such deposits to fund the LIBOR Credit Extensions.

 

 

3.6 Special Provisions Governing LIBOR Credit Extensions.

 

Notwithstanding any other provision of this Agreement to the contrary, the following provisions shall govern with respect to LIBOR Credit Extensions as to the matters covered:

 

(a) Determination of Applicable Interest Rate.  As soon as practicable on each Interest Rate Determination Date, Bank shall determine (which determination shall, absent manifest error in calculation, be final, conclusive and binding upon all parties) the interest rate that shall apply to the LIBOR Credit Extensions for which an interest rate is then being determined for the applicable Interest Period and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to Borrower.

 

(b) Inability to Determine Applicable Interest Rate.  In the event that Bank shall have determined (which determination shall be final and conclusive and binding upon all parties hereto), on any Interest Rate Determination Date with respect to any LIBOR Credit Extension, that by reason of circumstances affecting the London interbank market adequate and fair means do not exist for ascertaining the interest rate applicable to such Credit Extension on the basis provided for in the definition of LIBOR, Bank shall on such date give notice (by facsimile or by telephone confirmed in writing) to Borrower of such determination, whereupon (i) no Credit Extensions may be made as, or converted to, LIBOR Credit Extensions until such time as Bank notifies Borrower that the circumstances giving rise to such notice no longer exist, and (ii) any Notice of Borrowing or Notice of Conversion/Continuation given by Borrower with respect to Credit Extensions in respect of which such determination was made shall be deemed to be rescinded by Borrower.

 

(c) Compensation for Breakage or Non-Commencement of Interest Periods.  Borrower shall compensate Bank, upon written request by Bank (which request shall set forth the manner and method of computing such compensation), for all reasonable losses, expenses and liabilities, if any (including any interest paid by Bank to lenders of funds borrowed by it to make or carry its LIBOR Credit Extensions and any loss, expense or liability incurred by Bank in connection with the liquidation or re-employment of such funds) such that Bank may incur: (i) if for any reason (other than a default by Bank or due to any failure of Bank to fund LIBOR Credit Extensions due to impracticability or illegality under Sections 3.7(d) and 3.7(e)) a borrowing or a conversion to or continuation of any LIBOR Credit Extension does not occur on a date specified in a Notice of Borrowing or a Notice of Conversion/Continuation, as the case may be, or (ii) if any principal payment or any conversion of any of its LIBOR Credit Extensions occurs on a date prior to the last day of an Interest Period applicable to that Credit Extension.

 

(d) Assumptions Concerning Funding of LIBOR Credit Extensions.  Calculation of all amounts payable to Bank under this Section 3.6 and under Section 3.4 shall be made as though Bank had actually funded each of its relevant LIBOR Credit Extensions through the purchase of a Eurodollar deposit bearing interest at the rate obtained pursuant to the definition of LIBOR Rate in an amount equal to the amount of such LIBOR Credit Extension and having a maturity comparable to the relevant Interest Period; provided, however, that Bank may fund each of its LIBOR Credit Extensions in any manner it sees fit and the foregoing assumptions shall be utilized only for the purposes of calculating amounts payable under this Section 3.6 and under Section 3.4.

 

 

                      (e)           LIBOR Credit Extensions After Default.  After the occurrence and during the continuance of an Event of Default, (i) Borrower may not elect to have a Credit Extension be made or continued as, or converted to, a LIBOR Credit Extension after the expiration of any Interest Period then in effect for such Credit Extension and (ii) subject to the provisions of Section 3.6(c), any Notice of Conversion/Continuation given by Borrower with respect to a requested conversion/continuation that has not yet occurred shall be deemed to be rescinded by Borrower and be deemed a request to convert or continue Credit Extensions referred to therein as Prime Rate Credit Extensions.

 

 

3.7 Additional Requirements/Provisions Regarding LIBOR Credit Extensions.

 

(a)           If for any reason (including voluntary or mandatory prepayment or acceleration), Bank receives all or part of the principal amount of a LIBOR Credit Extension prior to the last day of the Interest Period for such Credit Extension, Borrower shall, immediately on demand by Bank, pay Bank the amount (if any) by which (i) the additional interest which would have been payable on the amount so received had it not been received until the last day of such Interest Period exceeds (ii) the interest which would have been recoverable by Bank by placing the amount so received on deposit in the certificate of deposit markets, the offshore currency markets, or United States Treasury investment products, as the case may be, for a period starting on the date on which it was so received and ending on the last day of such Interest Period at the interest rate determined by Bank in its reasonable discretion.  Bank’s determination as to such amount shall be conclusive absent manifest error.

 

(b)           Borrower shall pay Bank, upon demand by Bank, from time to time such amounts as Bank may determine to be necessary to compensate it for any costs incurred by Bank that Bank determines are attributable to its making or maintaining of any amount receivable by Bank hereunder in respect of any Credit Extensions relating thereto (such increases in costs and reductions in amounts receivable being herein called “Additional Costs”), in each case resulting from any Regulatory Change which:

 

(i)           changes the basis of taxation of any amounts payable to Bank under this Agreement in respect of any Credit Extensions (other than changes which affect taxes measured by or imposed on the overall net income of Bank by the jurisdiction in which Bank has its principal office);

 

(ii)           imposes or modifies any reserve, special deposit or similar requirements relating to any extensions of credit or other assets of, or any deposits with, or other liabilities of Bank (including any Credit Extensions or any deposits referred to in the definition of LIBOR); or

 

(iii)           imposes any other condition affecting this Agreement (or any of such extensions of credit or liabilities).

 

Bank will notify Borrower of any event occurring after the 2014 Effective Date which will entitle Bank to compensation pursuant to this Section 3.7 as promptly as practicable after it obtains knowledge thereof and determines to request such compensation.  Bank will furnish Borrower with a statement setting forth the basis and amount of each request by Bank for compensation under this Section 3.7.  Determinations and allocations by Bank for purposes of this Section 3.7 of the effect of any Regulatory Change on its costs of maintaining its obligations to make Credit Extensions, of making or maintaining Credit Extensions, or on amounts receivable by it in respect of Credit Extensions, and of the additional amounts required to compensate Bank in respect of any Additional Costs, shall be conclusive, absent manifest error.

 

(c) If Bank shall determine that the adoption or implementation of any applicable law, rule, regulation, or treaty regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank, or comparable agency charged with the interpretation or administration thereof, or compliance by Bank (or its applicable lending office) with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank, or comparable agency, has or would have the effect of reducing the rate of return on capital of Bank or any person or entity controlling Bank (a “Parent”) as a consequence of its obligations hereunder to a level below that which Bank (or its Parent) could have achieved but for such adoption, change, or compliance (taking into consideration policies with respect to capital adequacy) by an amount deemed by Bank to be material, then from time to time, within fifteen (15) days after demand by Bank, Borrower shall pay to Bank such additional amount or amounts as will compensate Bank for such reduction, provided that Bank shall use reasonable efforts (subject to overall policy considerations of Bank) to designate another lending office for any Credit Extensions affected by such event, provided further that such designation is made on such terms such that Bank and its lending office suffer no economic, legal or regulatory disadvantage.  A statement of Bank claiming compensation under this Section 3.7(c) and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive absent manifest error.

 

(d) If, at any time, Bank, in its sole and absolute discretion, determines that (i) the amount of LIBOR Credit Extensions for periods equal to the corresponding Interest Periods are not available to Bank in the offshore currency interbank markets, or (ii) LIBOR does not accurately reflect the cost to Bank of lending the LIBOR Credit Extensions, then Bank shall promptly give notice thereof to Borrower.  Upon the giving of such notice, Bank’s obligation to make the LIBOR Credit Extensions shall terminate; provided, however, Credit Extensions shall not terminate if Bank and Borrower agree in writing to a different interest rate applicable to LIBOR Credit Extensions.

 

 

(e)           If it shall become unlawful for Bank to continue to fund or maintain any LIBOR Credit Extensions, or to perform its obligations hereunder, upon demand by Bank, Borrower shall prepay the Credit Extensions in full with accrued interest thereon and all other amounts payable by Borrower hereunder (including, without limitation, any amount payable in connection with such prepayment pursuant to Section 3.7(a)).  Notwithstanding the foregoing, to the extent a determination by Bank as described above relates to a LIBOR Credit Extensions then being requested by Borrower pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation, Borrower shall have the option, subject to the provisions of Section 3.6(c), to (i) rescind such Notice of Borrowing or Notice of Conversion/Continuation by giving notice (by facsimile or by telephone confirmed in writing) to Bank of such rescission on the date on which Bank gives notice of its determination as described above, or (ii) modify such Notice of Borrowing or Notice of Conversion/Continuation to obtain a Prime Rate Credit Extension or to have outstanding Credit Extensions converted into or continued as Prime Rate Credit Extensions by giving notice (by facsimile or by telephone confirmed in writing) to Bank of such modification on the date on which Bank gives notice of its determination as described above.

 

4 CREATION OF SECURITY INTEREST

 

4.1 Grant of Security Interest.  Borrower hereby grants Bank, to secure the payment and performance in full of all of the Obligations, a continuing security interest in, and pledges to Bank, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof.

 

4.2 Priority of Security Interest.  Borrower represents, warrants, and covenants that the security interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral (subject only to Permitted Liens that may have superior priority to Bank’s Lien under this Agreement).  If Borrower shall acquire a commercial tort claim, Borrower shall promptly notify Bank in a writing signed by Borrower of the general details thereof and grant to Bank in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Bank.

 

Borrower acknowledges that it previously has entered, and/or may in the future enter, into Bank Services Agreements with Bank.  Regardless of the terms of any Bank Services Agreement, Borrower agrees that any amounts Borrower owes Bank thereunder shall be deemed to be Obligations hereunder and that it is the intent of Borrower and Bank to have all such Obligations secured by the first priority perfected security interest in the Collateral granted herein (subject only to Permitted Liens that expressly have superior priority to Bank’s Lien in this Agreement).

 

If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity obligations) are satisfied in full, and at such time, Bank shall, at Borrower’s sole cost and expense, terminate its security interest in the Collateral and all rights therein shall revert to Borrower.  In the event (a) all Obligations (other than inchoate indemnity obligations), except for Bank Services, are satisfied in full, and (b) this Agreement is terminated, Bank shall terminate the security interest granted herein upon Borrower providing cash collateral acceptable to Bank in its good faith business judgment consistent with Bank’s then current practice for Bank Services, if any.  In the event such Bank Services consist of outstanding Letters of Credit, Borrower shall provide to Bank cash collateral in an amount equal to (i) one hundred percent (100.0%) of the face amount of all such Letters of Credit denominated in Dollars and (ii) one hundred five percent (105.0%) of the Dollar Equivalent of the face amount of all such Letters of Credit denominated in a Foreign Currency plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good faith business judgment), to secure all of the Obligations relating  to such  Letters of Credit.

 

4.3 Authorization to File Financing Statements.  Borrower hereby authorizes Bank to file financing statements, without notice to Borrower, with all appropriate jurisdictions to perfect or protect Bank’s interest or rights hereunder, including a notice that any disposition of the Collateral, by either Borrower or any other Person, shall be deemed to violate the rights of Bank under the Code.   Such financing statements may indicate the Collateral as “all assets of the Debtor” or words of similar effect, or as being of an equal or lesser scope, or with greater detail all in Bank’s discretion.

 

5 REPRESENTATIONS AND WARRANTIES

 

Borrower represents and warrants as follows:

 

5.1 Due Organization, Authorization; Power and Authority.  Borrower and each of its Subsidiaries are duly existing and in good standing as a Registered Organization in their jurisdiction of formation and are qualified and licensed to do business and are in good standing in any jurisdiction in which the conduct of its business or its ownership of property requires that it be qualified except where the failure to do so could not reasonably be expected to have a material adverse effect on Borrower’s business.  In connection with this Agreement, Borrower has delivered to Bank a completed certificate signed by Borrower, entitled “Perfection Certificate”.  Borrower represents and warrants to Bank that (a) Borrower’s exact legal name is as indicated on the Perfection Certificate and on the signature page hereof; (b) Borrower is an organization of the type and is organized in the jurisdiction set forth in the Perfection Certificate; (c) the Perfection Certificate accurately sets forth Borrower’s organizational identification number or accurately states that Borrower has none; (d) the Perfection Certificate accurately sets forth Borrower’s place of business, or, if more than one, its chief executive office as well as Borrower’s mailing address (if different than its chief executive office); (e) Borrower (and each of its predecessors) has not, in the past five (5) years, changed its jurisdiction of formation, organizational structure or type, or any organizational number assigned by its jurisdiction; and (f) all other information set forth on the Perfection Certificate pertaining to Borrower and each of its Subsidiaries is accurate and complete (it being understood and agreed that Borrower may from time to time update certain information in the Perfection Certificate after the 2014 Effective Date to the extent permitted by one or more specific provisions in this Agreement).  If Borrower is not now a Registered Organization but later becomes one, Borrower shall promptly notify Bank of such occurrence and provide Bank with Borrower’s organizational identification number.

 

The execution, delivery and performance by Borrower of the Loan Documents to which it is a party have been duly authorized, and do not (i) conflict with any of Borrower’s organizational documents, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or any of its Subsidiaries or any of their property or assets may be bound or affected, (iv) require any action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already been obtained and are in full force and effect) or (v) constitute an event of default under any material agreement by which Borrower is bound.  Borrower is not in default under any agreement to which it is a party or by which it is bound in which the default could reasonably be expected to have a material adverse effect on Borrower’s business.

 

5.2 Collateral.  Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens.  Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein.  The Accounts are bona fide, existing obligations of the Account Debtors.

 

The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate.  None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2.

 

All Inventory is in all material respects of good and marketable quality, free from material defect, except for obsolete, damaged, defective or slow-moving items that have been written off or written down to fair market value or for which adequate reserves have been established.

 

Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software and other non-customized mass market licenses that are commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate.  Each Patent which it owns or purports to own and which is material to Borrower’s business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business has been judged invalid or unenforceable, in whole or in part.  To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not reasonably be expected to have a material adverse effect on Borrower’s business.

 

Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.

 

5.3 Intentionally Omitted.

 

5.4 Litigation.  Except as set forth on the Perfection Certificate, there are no actions or proceedings pending or, to the knowledge of the Responsible Officers, threatened in writing by or against Borrower or any of its Subsidiaries involving more than, individually or in the aggregate, Five Hundred Thousand Dollars ($500,000).

 

5.5 Financial Statements; Financial Condition.  All consolidated financial statements for Borrower and any of its Subsidiaries delivered to Bank fairly present in all material respects Borrower’s consolidated financial condition and Borrower’s consolidated results of operations.  There has not been any material deterioration in Borrower’s consolidated financial condition since the date of the most recent financial statements submitted to Bank.

 

5.6 Solvency.  The fair salable value of Borrower’s assets (including goodwill minus disposition costs) exceeds the fair value of its liabilities; Borrower is not left with unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay its debts (including trade debts) as they mature.

 

5.7 Regulatory Compliance.  Borrower is not an “investment company” or a company “controlled” by an “investment company” under the Investment Company Act of 1940, as amended.  Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of Governors).  Borrower has complied in all material respects with the Federal Fair Labor Standards Act.  Neither Borrower nor any of its Subsidiaries is a “holding company” or an “affiliate” of a “holding company” or a “subsidiary company” of a “holding company” as each term is defined and used in the Public Utility Holding Company Act of 2005.  Borrower has not violated any laws, ordinances or rules, the violation of which could reasonably be expected to have a material adverse effect on its business.  None of Borrower’s or any of its Subsidiaries’ properties or assets has been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than legally.  Borrower and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Government Authorities that are necessary to continue their respective businesses as currently conducted.

 

5.8 Subsidiaries; Investments.  Borrower does not own any stock, partnership interest or other equity securities except for Permitted Investments.

 

5.9 Tax Returns and Payments; Pension Contributions.  Borrower has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower.  Borrower may defer payment of any contested taxes, provided that Borrower (a) in good faith contests its obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies Bank in writing of the commencement of, and any material development in, the proceedings, (c) posts bonds or takes any other steps required to prevent the governmental authority levying such contested taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted Lien”.  Borrower is unaware of any claims or adjustments proposed for any of Borrower's prior tax years which could result in additional taxes becoming due and payable by Borrower.  Borrower has paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and Borrower has not withdrawn from participation in, and has not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.

 

5.10 Use of Proceeds.  Borrower shall use the proceeds of the Credit Extensions (i) to finance the Omnilink Acquisition, (ii) as working capital and (iii) to fund its general business requirements and not for personal, family, household or agricultural purposes.

 

5.11 Full Disclosure.  No written representation, warranty or other statement of Borrower in any certificate or written statement given to Bank, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given to Bank, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading (it being recognized by Bank that the projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).

 

5.12           Definition of “Knowledge.”  For purposes of the Loan Documents, whenever a representation or warranty is made to Borrower’s knowledge or awareness, to the “best of” Borrower’s knowledge, or with a similar qualification, knowledge or awareness means the actual knowledge, after reasonable investigation, of the Responsible Officers.

 

5.13           Dormant Subsidiaries.  Borrower represents and warrants that DCX Systems Australia PTY LTD, a wholly-owned subsidiary of Borrower, is dormant and has no business operations, and shall remain dormant and shall continue not to have business operations during the term of this Agreement.  If this Subsidiary has more than One Hundred Thousand Dollars ($100,000) in assets or conducts business at any time, Borrower shall cause such Subsidiary to provide to Bank a joinder to the Loan Agreement to cause such Subsidiary to become a co-borrower hereunder, together with such appropriate financing statements and/or Control Agreements, all in form and substance satisfactory to Bank (including being sufficient to grant Bank a first priority Lien (subject to Permitted Liens) in and to the assets of such Subsidiary), (b) provide to Bank appropriate certificates and powers and financing statements, pledging all of the direct or beneficial ownership interest in such Subsidiary, in form and substance satisfactory to Bank, and (c) provide to Bank all other documentation in form and substance satisfactory to Bank, including one or more opinions of counsel satisfactory to Bank, which in its opinion is appropriate with respect to the execution and delivery of the applicable documentation referred to above.  Any document, agreement, or instrument executed or issued pursuant to this Section 5.13 shall be a Loan Document.

 

6 AFFIRMATIVE COVENANTS

 

Borrower shall do all of the following:

 

6.1 Government Compliance.  Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on Borrower’s business or operations.  Borrower shall comply, and have each Subsidiary comply, with all laws, ordinances and regulations to which it is subject, noncompliance with which could have a material adverse effect on Borrower’s business.

 

6.2 Financial Statements, Reports, Certificates.  Deliver to Bank:

 

(a) Quarterly Financial Statements.  As soon as available, but no later than forty-five (45) days after the last day of each quarter (other than the final fiscal quarter of each fiscal year), a company prepared consolidated balance sheet and income statement covering Borrower’s consolidated operations for such quarter certified by a Responsible Officer and in a form acceptable to Bank (the “Quarterly Financial Statements”);

 

(b) Compliance Certificate.  (i) Together with the Quarterly Financial Statements, and (ii) together with the Annual Audited Financial Statements, a duly completed Compliance Certificate signed by a Responsible Officer, certifying that as of the end of such quarter, Borrower was in full compliance with all of the terms and conditions of this Agreement, and setting forth calculations showing compliance with the financial covenants set forth in this Agreement and such other information as Bank shall reasonably requests.

 

(c) Annual Audited Financial Statements.  As soon as available, but no later than ninety (90) days after the last day of Borrower’s fiscal year, audited consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion on the financial statements from an independent certified public accounting firm reasonably acceptable to Bank, it being agreed that each of Grant Thornton LLP, Deloitte Touche Tohmatsu Limited, PricewaterhouseCoopers LLP, Ernst & Young LLP or KPMG LLP is acceptable to Bank (“Annual Audited Financial Statements”).

 

(d) Operating Budget.  As soon as available, but no later than forty-five (45) days after the last day of Borrower’s fiscal year, and within five (5) days following any material updates or changes thereto, Board-approved operating budget as to the then current fiscal year, in a form presentation reasonably acceptable to Bank.

 

(e) Legal Action Notice.  A prompt report of any legal actions pending or threatened in writing against Borrower or any of its Subsidiaries that could result in damages or costs to Borrower or any of its Subsidiaries of, individually or in the aggregate, Five Hundred Thousand Dollars ($500,000) or more;

 

(f) Intellectual Property Notice.  Prompt written notice of (i) any material change in the composition of the Intellectual Property, (ii) the registration of any copyright, including any subsequent ownership right of Borrower in or to any registered copyright, patent or trademark not shown in the IP Security Agreement, and (iii) Borrower’s knowledge of an event that could reasonably be expected to materially and adversely affect the value of the Intellectual Property; and

 

(g) Other Financial Information.  Within thirty (30) days following Bank’s written request therefor, Borrower’s budgets, sales projections, and operating plan.

 

6.3 Inventory; Returns.  Keep all Inventory in good and marketable condition, free from material defects, excluding obsolete, damaged, defective or slow-moving items that have been written off or written down to fair market value or for which adequate reserves have been established.   Returns and allowances between Borrower and its Account Debtors shall follow Borrower’s customary practices as they exist at the 2014 Effective Date.  Borrower must promptly notify Bank of all returns, recoveries, disputes and claims that involve more than Two Hundred Thousand Dollars ($200,000).

 

6.4 Taxes; Pensions.  Timely file, and require each of its Subsidiaries to timely file, all required tax returns and reports and timely pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower and each of its Subsidiaries, except for deferred payment of any taxes contested pursuant to the terms of Section 5.9 hereof, and shall deliver to Bank, on demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms.

 

6.5 Insurance.  Keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s industry and location and as Bank may reasonably request.  Insurance policies shall be in a form, with companies, and in amounts that are reasonably satisfactory to Bank.  All property policies shall have a lender’s loss payable endorsement showing Bank as lender loss payee and waive subrogation against Bank and shall provide that the insurer must give Bank at least twenty (20) days notice before canceling, amending, or declining to renew its policy.  All liability policies shall show, or have endorsements showing, Bank as an additional insured, and all such policies (or the loss payable and additional insured endorsements) shall provide that the insurer shall give Bank at least twenty (20) days notice before canceling, amending, or declining to renew its policy.  At Bank’s request, Borrower shall deliver certified copies of policies and evidence of all premium payments.  Proceeds payable under any policy shall, at Bank’s option, be payable to Bank on account of the Obligations.   If Borrower fails to obtain insurance as required under this Section 6.5 or to pay any amount or furnish any required proof of payment to third persons and Bank, Bank may make all or part of such payment or obtain such insurance policies required in this Section 6.5, and take any action under the policies Bank deems prudent.

 

6.6 Operating Accounts.

 

(a) Borrower shall establish and thereafter maintain all and all of its Subsidiaries’ operating, depository, and securities accounts with Bank and Bank’s Affiliates, which accounts shall represent at least seventy-five percent (75.0%) of the dollar value of Borrower’s and such Subsidiaries’ cash at all financial institutions (excluding cash collateral securing up to one hundred percent (100%) of letters of credit and cash held as a deposit pursuant to a lease for rental property). 

 

(b) Provide Bank five (5) days prior written notice before establishing any Collateral Account at or with any bank or financial institution other than Bank or Bank’s Affiliates.  For each Collateral Account that Borrower at any time maintains, Borrower shall use commercially reasonable efforts to cause the applicable bank or financial institution (other than Bank) at or with which any Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Bank’s Lien in such Collateral Account in accordance with the terms hereunder which Control Agreement may not be terminated without the prior written consent of Bank.  If Borrower fails to deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to Bank within thirty (30) days (or such later date as may be agreed to by Bank in writing, in its sole discretion) of establishing such Collateral Account, Borrower shall immediately close the Collateral Account and transfer the funds of such Collateral Account (and any funds subsequently deposited in such account) to an account of Borrower maintained with SVB.  The provisions of the previous sentence shall not apply to (i) deposit accounts securing up to one hundred percent (100%) of letters of credit and cash held as a deposit pursuant to a lease for rental property, and (ii) deposit accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower’s employees and identified to Bank by Borrower as such.

 

6.7 Financial Covenants.  Maintain at all times, to be tested as set forth below, on a consolidated basis with respect to Borrower and its Subsidiaries:

 

(a) Liquidity.  Commencing with the calendar quarter ending June 30, 2014, and as of the last day of each calendar quarter thereafter, Borrower’s consolidated unrestricted cash and Cash Equivalents maintained with Bank, plus the Availability Amount, in an amount of at least Five Million Dollars ($5,000,000.00).

 

(b) Leverage Ratio.  (i) Commencing with the calendar quarter ending June 30, 2014, and as of the last day of each calendar quarter thereafter, through and including the calendar quarter ending March 31, 2015, a Leverage Ratio of not more than 3.0:1.0, (ii) commencing with the calendar quarter ending June 30, 2015, and as of the last day of each calendar quarter thereafter, through and including the calendar quarter ending March 31, 2016, a Leverage Ratio of not more than 2.75:1.0, and (iii) commencing with the calendar quarter ending June 30, 2016, and as of the last day of each calendar quarter thereafter, a Leverage Ratio of not more than 2.25:1.0, in each case to be tested as of the last day of each calendar quarter.

 

(c) Fixed Charge Coverage Ratio.  Commencing with the calendar quarter ending June 30, 2014, and as of the last day of each calendar quarter thereafter, a ratio of (i) Adjusted EBITDA, less unfunded capital expenditures, less capitalized software development costs, and less cash taxes, each for the consecutive four (4) quarters ending on the date of determination, to (ii) Fixed Charges, of at least: (x) for each calendar quarter through and including the calendar quarter ending March 31, 2015, 1.10 to 1.0, and (y) for the calendar quarter ending June 30, 2015, and for each calendar quarter thereafter, 1.25:1.0, in each case to be tested as of the last day of each calendar quarter.

 

 

6.8 Protection and Registration of Intellectual Property Rights.

 

(a) (i) Protect, defend and maintain the validity and enforceability of Borrower’s Intellectual Property that is material to its business; (ii) promptly advise Bank in writing of material infringements of its Intellectual Property; and (iii) not allow any Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Bank’s written consent.

 

(b) If Borrower (i) obtains any Patent, registered Trademark, registered Copyright, registered mask work, or any pending application for any of the foregoing, whether as owner, licensee or otherwise, or (ii) applies for any Patent or the registration of any Trademark, then Borrower shall immediately provide written notice thereof to Bank and shall execute such intellectual property security agreements and other documents and take such other actions as Bank shall reasonably request in its good faith business judgment to perfect and maintain a first priority perfected security interest in favor of Bank in such property.  If Borrower decides to register any Copyrights or mask works in the United States Copyright Office, Borrower shall: (x) provide Bank with at least fifteen (15) days prior written notice of Borrower’s intent to register such Copyrights or mask works together with a copy of the application it intends to file with the United States Copyright Office (excluding exhibits thereto); (y) execute an intellectual property security agreement and such other documents and take such other actions as Bank may reasonably request in its good faith business judgment to perfect and maintain a first priority perfected security interest in favor of Bank in the Copyrights or mask works intended to be registered with the United States Copyright Office; and (z) record such intellectual property security agreement with the United States Copyright Office contemporaneously with filing the Copyright or mask work application(s) with the United States Copyright Office.  Borrower shall promptly provide to Bank copies of all applications that it files for Patents or for the registration of Trademarks, Copyrights or mask works, together with evidence of the recording of the intellectual property security agreement necessary for Bank to perfect and maintain a first priority perfected security interest in such property.

 

(c) Provide written notice to Bank within ten (10) days of entering or becoming bound by any Restricted License (other than over-the-counter software and other non-customized mass market licenses that are commercially available to the public).  Borrower shall take such steps as Bank reasonably requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (i) any Restricted License to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such Restricted License, whether now existing or entered into in the future, and (ii) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

 

6.9 Litigation Cooperation.  From the date hereof and continuing through the termination of this Agreement (upon reasonable prior notice and during reasonable business hours unless an Event of Default has occurred and is continuing) make available to Bank, without expense to Bank, Borrower and its officers, employees and agents and Borrower's books and records, to the extent that Bank may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by or against Bank with respect to any Collateral or relating to Borrower.

 

6.10 Further Assurances.  Execute any further instruments and take further action as Bank reasonably requests to perfect or continue Bank’s Lien in the Collateral or to effect the purposes of this Agreement.

 

6.11           Lockbox.  Direct each Account Debtor of Borrower and its Subsidiaries (and each depository institution where proceeds of Accounts are on deposit) to remit payments with respect to the Accounts to a lockbox account established with Bank or to wire transfer payments to a cash collateral account that Bank controls (collectively, the “Lockbox”).  Notwithstanding the foregoing, in connection with any acquisition (permitted pursuant to the terms of Section 7.3 hereof) Borrower shall direct each Account Debtor of such newly acquired entity to remit payments with respect to the Accounts to the Lockbox within sixty (60) days (or such later date as may be agreed to by Bank in writing, in its sole discretion) after the consummation of such acquisition.

 

6.12           Joinder Agreement.  Cause Omnilink Systems, Inc. to provide to Bank a joinder to this Agreement to cause Omnilink Systems, Inc. to become a co-borrower hereunder, together with such appropriate financing statements and/or Control Agreements, all in form and substance satisfactory to Bank (including being sufficient to grant Bank a first priority Lien (subject to Permitted Liens) in and to the assets of Omnilink Systems, Inc.) within sixty (60) days, or such later date as may be agreed to by Bank, following the consummation of the transactions contemplated by the Omnilink Purchase Agreement.

 

6.13           Liquidity Following the Omnilink Acquisition. Deliver to Bank, immediately following the consummation of the Omnilink Acquisition, evidence satisfactory to Bank, in its sole discretion, that Borrower’s consolidated unrestricted cash and Cash Equivalents maintained with Bank, plus the Availability Amount, is in an amount of at least Seven Million Dollars ($7,000,000.00).

 

6.14           Post-Closing Deliverables.   Use commercially reasonable efforts to deliver to Bank, within sixty (60) days after the 2014 Effective Date (or such later date as may be agreed to by Bank in writing, in its sole discretion): (i) evidence satisfactory to Bank that the insurance policies required by Section 6.5 hereof are in full force and effect, together with appropriate evidence showing lender loss payable and/or additional insured clauses or endorsements in favor of Bank, (ii) landlord’s consent for each of the following leased locations: (x) 3330 Cumberland Blvd, Suite 700, Atlanta, Georgia 30339, (y) 375 Riverside Pkway, 1st Floor, Lithia Springs, Georgia 30122, and (z) 2820 E. College Ave., State College, Pennsylvania 16801, and (iii) bailee’s waiver from Saddle Creek Logistics Services in favor of Bank.

 

7 NEGATIVE COVENANTS

 

Borrower shall not do any of the following without Bank’s prior written consent:

 

7.1 Dispositions.  Convey, sell, lease, transfer, assign, or otherwise dispose of (collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of worn-out or obsolete Equipment; (c) in connection with Permitted Liens and Permitted Investments; (d) of non-exclusive and exclusive licenses for the use of the property of Borrower or its Subsidiaries in the ordinary course of business; and (e) of property not material to Borrower’s business in an aggregate amount not to exceed (i) Two Hundred Fifty Thousand Dollars ($250,000) in any fiscal year of Borrower, and (ii) Five Hundred Thousand Dollars ($500,000) in the aggregate.

 

7.2 Changes in Business, Management, Ownership, or Business Locations.  (a) Engage in or permit any of its Subsidiaries to engage in any business other than the businesses currently engaged in by Borrower and such Subsidiary, as applicable, or reasonably related thereto; (b) liquidate or dissolve; or (c) (i) if any Key Person ceases to hold such office with Borrower and replacements satisfactory to Borrower’s board of directors are not made within ninety (90) days after such Key Person’s departure from Borrower; or; or (ii) enter into any transaction or series of related transactions in which the stockholders of Borrower who were not stockholders immediately prior to the first such transaction own more than forty percent (40%) of the voting stock of Borrower immediately after giving effect to such transaction or related series of such transactions (other than by the sale of Borrower’s equity securities in a public offering or to venture capital investors so long as Borrower identifies to Bank the venture capital investors prior to the closing of the transaction and provides to Bank a description of the material terms of the transaction).

 

 

Borrower shall not, without at least thirty (30) days prior written notice to Bank: (1) add any new offices or business locations, including warehouses (unless such new offices or business locations contain less than Two Hundred Fifty Thousand Dollars ($250,000) in Borrower’s assets or property) or deliver any portion of the Collateral valued, individually or in the aggregate, in excess of Two Hundred Fifty Thousand Dollars ($250,000) to a bailee at a location other than to a bailee and at a location already disclosed in the Perfection Certificate, (2) change its jurisdiction of organization, (3) change its organizational structure or type, (4) change its legal name, or (5) change any organizational number (if any) assigned by its jurisdiction of organization.  If Borrower intends to deliver any portion of the Collateral valued, individually or in the aggregate, in excess of Two Hundred Fifty Thousand Dollars ($250,000) to a bailee, and Bank and such bailee are not already parties to a bailee agreement governing both the Collateral and the location to which Borrower intends to deliver the Collateral, then Borrower will first receive the written consent of Bank, and such bailee shall execute and deliver a bailee agreement in form and substance satisfactory to Bank in its reasonable discretion.

 

7.3 Mergers or Acquisitions.  Without the prior written consent of Bank, which consent shall not be unreasonably withheld or delayed, Borrower shall not merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person, except for Permitted Acquisitions and the Omnilink Acquisition.  A Subsidiary may merge or consolidate into another Subsidiary or into Borrower.

 

7.4 Indebtedness.  Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness.

 

7.5 Encumbrance.  Create, incur, allow, or suffer any Lien on any of its property, or assign or convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, permit any Collateral not to be subject to the first priority security interest granted herein.

 

7.6 Maintenance of Collateral Accounts.  Maintain any Collateral Account except pursuant to the terms of Section 6.6(b) hereof.

 

7.7 Distributions; Investments.  (a) Pay any dividends or make any distribution or payment on or in respect of shares of its capital stock, or redeem, retire or repurchase any shares of its capital stock (or any securities or instruments convertible into or exercisable for, or other rights to acquire, directly or indirectly, shares of its capital stock) from the holders thereof, other than shares of its capital stock received or retained by, or returned, surrendered or forfeited to, Borrower as payment for other shares of its capital stock sold and issued by Borrower, including, but not limited to, the cashless exercise of stock purchase warrants and options granted by Borrower, or (b) directly or indirectly make any Investment other than Permitted Investments, or permit any of its Subsidiaries to do so.

 

7.8 Transactions with Affiliates.  Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower, except for transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person.

 

7.9 Subordinated Debt.  (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which would increase the amount thereof or adversely affect the subordination thereof to Obligations owed to Bank.

 

7.10 Compliance.  Become an “investment company” or a company controlled by an “investment company”, under the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Credit Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a material adverse effect on Borrower’s business, or permit any of its Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.

 

8 EVENTS OF DEFAULT

 

Any one of the following shall constitute an event of default (an “Event of Default”) under this Agreement:

 

8.1 Payment Default.  Borrower fails to (a) make any payment of principal or interest on any Credit Extension within three (3) Business Days of its due date, or (b) pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day cure period shall not apply to payments due on the 2014 Term Loan Maturity Date and/or the Revolving Line Maturity Date).  During the cure period, the failure to make or pay any payment specified under clause (a) or (b) hereunder is not an Event of Default (but no Credit Extension will be made during the cure period);

 

8.2 Covenant Default.

 

(a) Borrower fails or neglects to perform any obligation in Sections 6.2, 6.4, 6.5, 6.6, 6.7, 6.8(c), 6.9, 6.12, or 6.13, or violates any covenant in Section 7; or; or

 

(b) Borrower fails or neglects to perform, keep, or observe any other term, provision, condition, covenant or agreement contained in this Agreement or any Loan Documents, and as to any default (other than those specified in this Section 8) under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure the default within ten (10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by Borrower be cured within such ten (10) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such reasonable time period the failure to cure the default shall not be deemed an Event of Default (but no Credit Extensions shall be made during such cure period).  Cure periods provided under this section shall not apply to financial covenants or any other covenants set forth in clause (a) above;

 

8.3 Material Adverse Change.  A Material Adverse Change occurs;

 

8.4 Attachment; Levy; Restraint on Business.

 

(a) (i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or of any entity under the control of Borrower (including a Subsidiary) on deposit or otherwise maintained with Bank or any Bank Affiliate, or (ii) a notice of lien or levy is filed against any of Borrower’s assets by any government agency, and the same under subclauses (i) and (ii) hereof are not, within ten (10) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise); provided, however, no Credit Extensions shall be made during any ten (10) day cure period; or

 

(b) (i) any material portion of Borrower’s assets is attached, seized, levied on, or comes into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower from conducting any material part of its business;

 

8.5 Insolvency (a) Borrower is unable to pay its debts (including trade debts) as they become due or otherwise becomes insolvent; (b) Borrower begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower and not dismissed or stayed within forty-five (45) days (but no Credit Extensions shall be made while of any of the conditions described in clause (a) exist and/or until any Insolvency Proceeding is dismissed);

 

8.6 Other Agreements.  There is, under any agreement to which Borrower is a party with a third party or parties, (a) any default resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount individually or in the aggregate in excess of Five Hundred Thousand Dollars ($500,000); or (b) any default by Borrower, the result of which could have a material adverse effect on Borrower’s business;

 

8.7 Judgments.  One or more final judgments, orders, or decrees for the payment of money in an amount, individually or in the aggregate, of at least Five Hundred Thousand Dollars ($500,000) (not covered by independent third-party insurance as to which liability has been accepted by such insurance carrier) shall be rendered against Borrower and the same are not, within thirty (30) days after the entry thereof, discharged or execution thereof stayed or bonded pending appeal, or such judgments are not discharged prior to the expiration of any such stay (provided that no Credit Extensions will be made prior to the discharge, stay, or bonding of such judgment, order, or decree);

 

8.8 Misrepresentations.  Borrower or any Person acting for Borrower makes any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Bank or to induce Bank to enter this Agreement or any Loan Document, and such representation, warranty, or other statement is incorrect in any material respect when made; or

 

8.9 Subordinated Debt.  Any document, instrument, or agreement evidencing any Subordinated Debt shall for any reason be revoked or invalidated or otherwise cease to be in full force and effect, any Person shall be in breach thereof or contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder, or, except as otherwise provided herein, the Obligations shall for any reason be subordinated or shall not have the priority contemplated by this Agreement.

 

9 BANK’S RIGHTS AND REMEDIES

 

9.1 Rights and Remedies.  While an Event of Default occurs and continues Bank may, without notice or demand, do any or all of the following:

 

(a) declare all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs, all Obligations are immediately due and payable without any action by Bank);

 

(b) stop advancing money or extending credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Bank and terminate the Revolving Line;

 

(c) demand that Borrower (i) deposit cash with Bank in an amount equal to 100% (if the Letter of Credit is denominated in U.S. Dollars) or 105% (if the Letter of Credit is denominated in Foreign Currency) of the Dollar Equivalent of the aggregate face amount of all Letters of Credit remaining undrawn (plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good faith business judgment)), to secure all of the Obligations relating to such Letters of Credit, as collateral security for the repayment of any future drawings under such Letters of Credit, and Borrower shall forthwith deposit and pay such amounts, and (ii) pay in advance all letter of credit fees scheduled to be paid or payable over the remaining term of any Letters of Credit;

 

(d) terminate any FX Forward Contracts;

 

(e) settle or adjust disputes and claims directly with Account Debtors for amounts on terms and in any order that Bank considers advisable, notify any Person owing Borrower money of Bank’s security interest in such funds, and verify the amount of such account;

 

(f) make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest in the Collateral.  Borrower shall assemble the Collateral if Bank requests and make it available as Bank designates.  Bank may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred. Borrower grants Bank a license to enter and occupy any of its premises, without charge, to exercise any of Bank’s rights or remedies;

 

(g) apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any amount held by Bank owing to or for the credit or the account of Borrower;

 

(h) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the Collateral.  Bank is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower’s labels, Patents, Copyrights, mask works, rights of use of any name, trade secrets, trade names, Trademarks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Bank’s exercise of its rights under this Section, Borrower’s rights under all licenses and all franchise agreements inure to Bank’s benefit;

 

(i) place a “hold” on any account maintained with Bank and/or deliver a notice of exclusive control, any entitlement order, or other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral;

 

(j) demand and receive possession of Borrower’s Books; and

 

(k) exercise all rights and remedies available to Bank under the Loan Documents or at law or equity, including all remedies provided under the Code (including disposal of the Collateral pursuant to the terms thereof).

 

9.2 Power of Attorney.  Borrower hereby irrevocably appoints Bank as its lawful attorney-in-fact, exercisable upon the occurrence and during the continuance of an Event of Default, to:  (a) endorse Borrower’s name on any checks or other forms of payment or security; (b) sign Borrower’s name on any invoice or bill of lading for any Account or drafts against Account Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account Debtors, for amounts and on terms Bank determines reasonable; (d) make, settle, and adjust all claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of Bank or a third party as the Code permits.  Borrower hereby appoints Bank as its lawful attorney-in-fact to sign Borrower’s name on any documents necessary to perfect or continue the perfection of Bank’s security interest in the Collateral regardless of whether an Event of Default has occurred until all Obligations (other than inchoate indemnity obligations) have been satisfied in full and Bank is under no further obligation to make Credit Extensions hereunder.  Bank’s foregoing appointment as Borrower’s attorney in fact, and all of Bank’s rights and powers, coupled with an interest, are irrevocable until all Obligations (other than inchoate indemnity obligations) have been fully repaid and performed and Bank’s obligation to provide Credit Extensions terminates.

 

9.3 Protective Payments.  If Borrower fails to obtain the insurance called for by Section 6.5 or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to pay under this Agreement or any other Loan Document, Bank may obtain such insurance or make such payment, and all amounts so paid by Bank are Bank Expenses and immediately due and payable, bearing interest at the then highest rate applicable to the Obligations, and secured by the Collateral.  Bank will make reasonable efforts to provide Borrower with notice of Bank obtaining such insurance at the time it is obtained or within a reasonable time thereafter.  No payments by Bank are deemed an agreement to make similar payments in the future or Bank’s waiver of any Event of Default.

 

9.4 Application of Payments and Proceeds Upon Default.  If an Event of Default has occurred and is continuing, Bank may apply any funds in its possession, whether from Borrower account balances, payments, proceeds realized as the result of any collection of Accounts or other disposition of the Collateral, or otherwise, to the Obligations in such order as Bank shall determine in its sole discretion.  Any surplus shall be paid to Borrower or other Persons legally entitled thereto; Borrower shall remain liable to Bank for any deficiency.  If Bank, in its good faith business judgment, directly or indirectly enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral, Bank shall have the option, exercisable at any time, of either reducing the Obligations by the principal amount of the purchase price or deferring the reduction of the Obligations until the actual receipt by Bank of cash therefor.

 

9.5 Bank’s Liability for Collateral.  So long as Bank complies with reasonable banking practices regarding the safekeeping of the Collateral in the possession or under the control of Bank, Bank shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person.  Borrower bears all risk of loss, damage or destruction of the Collateral.

 

9.6 No Waiver; Remedies Cumulative.  Bank’s failure, at any time or times, to require strict performance by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Bank thereafter to demand strict performance and compliance herewith or therewith.  No waiver hereunder shall be effective unless signed by the party granting the waiver and then is only effective for the specific instance and purpose for which it is given.  Bank’s rights and remedies under this Agreement and the other Loan Documents are cumulative.  Bank has all rights and remedies provided under the Code, by law, or in equity.  Bank’s exercise of one right or remedy is not an election and shall not preclude Bank from exercising any other remedy under this Agreement or other remedy available at law or in equity, and Bank’s waiver of any Event of Default is not a continuing waiver.  Bank’s delay in exercising any remedy is not a waiver, election, or acquiescence.

 

9.7 Demand Waiver.  Borrower waives demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Bank on which Borrower is liable, except when any such notice, demand or any other of the foregoing actions are specifically provided for in this Agreement.

 

9.8 Borrower Liability.  Each Borrower hereunder shall be jointly and severally obligated to repay all Credit Extensions made hereunder, regardless of which Borrower actually receives said Credit Extension, as if each Borrower hereunder directly received all Credit Extensions.  Each Borrower waives (a) any suretyship defenses available to it under the Code or any other applicable law, and (b) any right to require Bank to: (i) proceed against any Borrower or any other person; (ii) proceed against or exhaust any security; or (iii) pursue any other remedy.  Bank may exercise or not exercise any right or remedy it has against any Borrower or any security it holds (including the right to foreclose by judicial or non-judicial sale) without affecting any Borrower’s liability.  Notwithstanding any other provision of this Agreement or other related document, each Borrower irrevocably waives all rights that it may have at law or in equity (including, without limitation, any law subrogating Borrower to the rights of Bank under this Agreement) to benefit from, or to participate in, any security for the Obligations as a result of any payment made by Borrower with respect to the Obligations in connection with this Agreement or otherwise.  If any payment is made to a Borrower in contravention of this Section, such Borrower shall hold such payment in trust for Bank and such payment shall be promptly delivered to Bank for application to the Obligations, whether matured or unmatured.

 

9.9 Ratification of Pledge Agreement. Borrower hereby (i) ratifies, confirms and reaffirms, all the terms and condition of the Pledge Agreement, (ii) acknowledges, confirms and agrees that “Loan Agreement” as defined therein includes this Agreement, and (iii) acknowledges, confirms and agrees that the Pledge Agreement shall secured Borrower’s Obligations to Bank pursuant to this Agreement.

 

10 NOTICES

 

All notices, consents, requests, approvals, demands, or other communication by any party to this Agreement or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by electronic mail or facsimile transmission; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated below.  Bank or Borrower may change its mailing or electronic mail address or facsimile number by giving the other party written notice thereof in accordance with the terms of this Section 10.

 

If to Borrower:                                

Numerex Corp. (as Agent for all  Borrowers)                             

3330 Cumberland Blvd SE, Suite 700

Atlanta, Georgia 30339

          Attn:  Contracts Administration

         Fax:  (770) 639-5951

 

 

If to Bank:  

Silicon Valley Bank

        275 Grove Street, Suite 2-200

        Newton, Massachusetts  02466

        Attn:  Jack Gaziano

        Fax:   (617) 969-5973

        Email:  JGaziano@svb.com

 

with a copy to:                                

     Riemer & Braunstein LLP

        Three Center Plaza

            Boston, Massachusetts  02108

             Attn:  David A. Ephraim, Esquire

             Fax:    (617) 880-3455

             Email:    DEphraim@riemerlaw.com

 

11 CHOICE OF LAW, VENUE, JURY TRIAL WAIVER

 

New York law governs the Loan Documents without regard to principles of conflicts of law.  Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in New York, New York; provided, however, that nothing in this Agreement shall be deemed to operate to preclude Bank from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other court order in favor of Bank.  Borrower expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and Borrower hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court.  Borrower hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to Borrower at the address set forth in Section 10 of this Agreement and that service so made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid.

 

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.  EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

 

12 GENERAL PROVISIONS

 

12.1 Successors and Assigns.  This Agreement binds and is for the benefit of the successors and permitted assigns of each party.  Borrower may not assign this Agreement or any rights or obligations under it without Bank’s prior written consent (which may be granted or withheld in Bank’s discretion).  Bank has the right, without the consent of or notice to Borrower, to sell, transfer, assign, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights, and benefits under this Agreement and the other Loan Documents.  Notwithstanding the foregoing, prior to the occurrence of an Event of Default, Bank shall not assign any interest in the Loan Documents to an operating company which is a direct competitor of Borrower.

 

12.2 Indemnification.  Borrower agrees to indemnify, defend and hold Bank and its directors, officers, employees, agents, attorneys, or any other Person affiliated with or representing Bank (each, an “Indemnified Person”) harmless against:  (a) all obligations, demands, claims, and liabilities (collectively, “Claims”) claimed or asserted by any other party in connection with the transactions contemplated by the Loan Documents; and (b) all losses or expenses (including Bank Expenses) in any way suffered, incurred, or paid by such Indemnified Person as a result of, following from, consequential to, or arising from transactions between Bank and Borrower contemplated by the Loan Documents (including reasonable attorneys’ fees and expenses), except for Claims and/or losses directly caused by such Indemnified Person’s gross negligence or willful misconduct.

 

12.3 Time of Essence.  Time is of the essence for the performance of all Obligations in this Agreement.

 

12.4 Severability of Provisions.  Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision.

 

12.5 Correction of Loan Documents.  Bank may correct patent errors and fill in any blanks in the Loan Documents consistent with the agreement of the parties so long as Bank provides Borrower with written notice of such correction and allows Borrower at least ten (10) days to object to such correction.  In the event of such objection, such correction shall not be made except by an amendment signed by both Bank and Borrower.

 

12.6 Amendments in Writing; Waiver; Integration.  No purported amendment or modification of any Loan Document, or waiver, discharge or termination of any obligation under any Loan Document, shall be enforceable or admissible unless, and only to the extent, expressly set forth in a writing signed by the party against which enforcement or admission is sought.  Without limiting the generality of the foregoing, no oral promise or statement, nor any action, inaction, delay, failure to require performance or course of conduct shall operate as, or evidence, an amendment, supplement or waiver or have any other effect on any Loan Document.  Any waiver granted shall be limited to the specific circumstance expressly described in it, and shall not apply to any subsequent or other circumstance, whether similar or dissimilar, or give rise to, or evidence, any obligation or commitment to grant any further waiver.  The Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements, including the Prior Loan Agreement.  All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of the Loan Documents merge into the Loan Documents.

 

12.7 Counterparts.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Agreement.

 

12.8 Survival.  All covenants, representations and warranties made in this Agreement continue in full force until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement) have been paid in full and satisfied.  The obligation of Borrower in Section 12.2 to indemnify Bank shall survive until the statute of limitations with respect to such claim or cause of action shall have run. Without limiting the foregoing, except as otherwise provided in Section 4.2, the grant of security interest by Borrower in Section 4.1 shall survive until the termination of all Bank Services Agreements.

 

12.9 Confidentiality.  In handling any confidential information, Bank shall exercise the same degree of care that it exercises for its own proprietary information, but disclosure of information may be made: (a) to Bank’s Subsidiaries or Affiliates (such Subsidiaries and Affiliates, together with Bank, collectively, “Bank Entities”); (b) to prospective transferees or purchasers of any interest in the Credit Extensions (provided, however, that any prospective transferee or purchaser shall have entered into an agreement containing provisions substantially the same as those in this Section); (c) as required by law, regulation, subpoena, or other order; (d) to Bank’s regulators or as otherwise required in connection with Bank’s examination or audit; (e) as Bank considers appropriate in exercising remedies under the Loan Documents; and (f) to third-party service providers of Bank so long as such service providers have executed a confidentiality agreement with Bank with terms no less restrictive than those contained herein.  Confidential information does not include information that is either: (i) in the public domain or in Bank’s possession when disclosed to Bank, or becomes part of the public domain after disclosure to Bank (in each case, through no fault of Bank); or (ii) disclosed to Bank by a third party if Bank does not know that the third party is prohibited from disclosing the information.

 

12.10 Right of Set Off.   Borrower hereby grants to Bank, a lien, security interest and right of set off as security for all Obligations to Bank, whether now existing or hereafter arising upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of Bank or any entity under the control of Bank (including a Bank subsidiary) or in transit to any of them.  At any time after the occurrence and during the continuance of an Event of Default, without demand or notice, Bank may set off the same or any part thereof and apply the same to any liability or obligation of Borrower even though unmatured and regardless of the adequacy of any other collateral securing the Obligations.  ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

 

12.11 Electronic Execution of Documents.  The words “execution,” “signed,” “signature” and words of like import in any Loan Document shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity and enforceability as a manually executed signature or the use of a paper-based recordkeeping systems, as the case may be, to the extent and as provided for in any applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act.

 

12.12 Captions.  The headings used in this Agreement are for convenience only and shall not affect the interpretation of this Agreement.

 

12.13 Construction of Agreement.  The parties mutually acknowledge that they and their attorneys have participated in the preparation and negotiation of this Agreement.  In cases of uncertainty this Agreement shall be construed without regard to which of the parties caused the uncertainty to exist.

 

12.14 Relationship.  The relationship of the parties to this Agreement is determined solely by the provisions of this Agreement.  The parties do not intend to create any agency, partnership, joint venture, trust, fiduciary or other relationship with duties or incidents different from those of parties to an arm’s-length contract.

 

12.15 Third Parties.  Nothing in this Agreement, whether express or implied, is intended to: (a) confer any benefits, rights or remedies under or by reason of this Agreement on any persons other than the express parties to it and their respective permitted successors and assigns; (b) relieve or discharge the obligation or liability of any person not an express party to this Agreement; or (c) give any person not an express party to this Agreement any right of subrogation or action against any party to this Agreement.

 

13 DEFINITIONS

 

13.1 Definitions.  As used in the Loan Documents, the word “shall” is mandatory, the word “may” is permissive, the word “or” is not exclusive, the words “includes” and “including” are not limiting, the singular includes the plural, and numbers denoting amounts that are set off in brackets are negative.  As used in this Agreement, the following capitalized terms have the following meanings:

 

“2014Effective Date” is defined in the preamble hereof.

 

“2014 Term Loan Advance” is defined in Section 2.1.2.

 

“2014 Term Loan Maturity Date” is May 5, 2019.

 

“Account” is any “account” as defined in the Code with such additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other sums owing to Borrower.

 

“Account Debtor” is any “account debtor” as defined in the Code with such additions to such term as may hereafter be made.

 

 

 “Additional Costs” is defined in Section 3.7(b).

 

“Adjusted EBITDA” is Borrower’s EBITDA, plus, without duplication, (a) reasonable cash and non-cash restructuring charges in an aggregate amount not exceeding One Million Dollars ($1,000,000.00) with respect to any twelve (12) month period, resulting from severance, relocation, transition and integration charges, plus, without duplication, (b) reasonable synergy costs that Borrower has taken steps to realize in connection with mergers and acquisitions in an aggregate amount not to exceed One Million Dollars ($1,000,000.00) with respect to any twelve (12) month period, plus without duplication, (c) other one-time or non-cash expenses as approved by Bank in writing on a case by case basis in its sole and absolute discretion and one-time transactional costs resulting from the Omnilink Acquisition.

 

“Advance” or “Advances” means an advance (or advances) under the Revolving Line.

 

“Affiliate” is, with respect to any Person, each other Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members.

 

“Agreement” is defined in the preamble hereof.

 

“Annual Audited Financial Statements” is defined in Section 6.2(c).

 

“Availability Amount” is the Revolving Line, minus the outstanding principal balance of any Advances.

 

“Bank” is defined in the preamble hereof.

 

“Bank Entities” is defined in Section 12.9.

 

“Bank Expenses” are all audit fees and expenses, costs, and expenses (including reasonable attorneys’ fees and expenses) for preparing, amending, negotiating, administering, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred with respect to Borrower.

 

“Bank Services” are any products, credit services and/or financial accommodations previously, now, or hereafter provided to Borrower or any of its Subsidiaries by Bank or any Bank Affiliate, including, without limitation, any letters of credit, cash management services (including, without limitation, merchant services, direct deposit of payroll, business credit cards, and check cashing services), interest rate swap arrangements, and foreign exchange services as any such products or services may be identified in Bank’s various agreements related thereto (each, a “Bank Services Agreement”).

 

“Board” means Borrower’s board of directors.

 

 “Borrower” is defined in the preamble hereof.

 

“Borrower’s Books” are all Borrower’s books and records including ledgers, federal and state tax returns, records regarding Borrower’s assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information.

 

 

“Borrowing Resolutions” are, with respect to any Person, those resolutions adopted by such Person’s Board of Directors and delivered by such Person to Bank approving the Loan Documents to which such Person is a party and the transactions contemplated thereby, together with a certificate executed by its Secretary on behalf of such Person certifying that (a) such Person has the authority to execute, deliver, and perform its obligations under each of the Loan Documents to which it is a party, (b) that attached as Exhibit A to such certificate is a true, correct, and complete copy of the resolutions then in full force and effect authorizing and ratifying the execution, delivery, and performance by such Person of the Loan Documents to which it is a party, (c) the name(s) of the Person(s) authorized to execute the Loan Documents on behalf of such Person, together with a sample of the true signature(s) of such Person(s), and (d) that Bank may conclusively rely on such certificate unless and until such Person shall have delivered to Bank a further certificate canceling or amending such prior certificate.

 

 “Business Day” is any day other than a Saturday, Sunday or other day on which banking institutions in the State of California are authorized or required by law or other governmental action to close, except that if any determination of a “Business Day” shall relate to a LIBOR Credit Extension, the term “Business Day” shall also mean a day on which dealings are carried on in the London interbank market.

 

“Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc.; and (c) Bank’s certificates of deposit issued maturing no more than one (1) year after issue.

 

“Claims” is defined in Section 12.2.

 

 

“Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of New York; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.

 

“Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A.

 

“Collateral Account” is any Deposit Account, Securities Account, or Commodity Account.

 

 “Commodity Account” is any “commodity account” as defined in the Code with such additions to such term as may hereafter be made.

 

“Compliance Certificate” is that certain certificate in the form attached hereto as Exhibit B.

 

“Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation, in each case, directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary course of business.  The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement.

 

“Continuation Date” means any date on which Borrower elects to continue a LIBOR Credit Extension into another Interest Period.

 

“Control Agreement” is any control agreement entered into among the depository institution at which Borrower maintains a Deposit Account or the securities intermediary or commodity intermediary at which Borrower maintains a Securities Account or a Commodity Account, Borrower, and Bank pursuant to which Bank obtains control (within the meaning of the Code) over such Deposit Account, Securities Account, or Commodity Account.

 

 

“Conversion Date” means any date on which Borrower elects to convert a Prime Rate Credit Extension to a LIBOR Credit Extension or a LIBOR Credit Extension to a Prime Rate Credit Extension.

 

“Copyrights” are any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret.

 

“Credit Extension” is any Advance, 2014 Term Loan Advance, or any other extension of credit by Bank for Borrower’s benefit.

 

 “Default Rate” is defined in Section 2.4(c).

 

 “Deposit Account” is any “deposit account” as defined in the Code with such additions to such term as may hereafter be made.

 

“Designated Deposit Account” is Borrower’s deposit account, account number 3300723671, maintained with Bank.

 

“Dollars,” “dollars” or use of the sign “$” means only lawful money of the United States and not any other currency, regardless of whether that currency uses the “$” sign to denote its currency or may be readily converted into lawful money of the United States.

 

“Dollar Equivalent” is, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount denominated in a Foreign Currency, the equivalent amount therefor in Dollars as determined by Bank at such time on the basis of the then-prevailing rate of exchange in San Francisco, California, for sales of the Foreign Currency for transfer to the country issuing such Foreign Currency.

 

 “EBITDA” shall mean (a) Net Income, plus (b) Interest Expense, plus (c) to the extent deducted in the calculation of Net Income, depreciation expense and amortization expense, plus (d) income tax expense, plus (e) non-cash stock compensation expense.

 

 

“Effective Amount” means with respect to any Credit Extension on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowing and prepayments or repayments thereof occurring on such date.

 

 “Equipment” is all “equipment” as defined in the Code with such additions to such term as may hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing.

 

 “ERISA” is the Employee Retirement Income Security Act of 1974, and its regulations.

 

“Event of Default” is defined in Section 8.

 

“Excess Cash Flow”:  for any fiscal year of Borrower, the excess, if any, of EBITDA for such fiscal year minus (i) provisions for current taxes based on income of Borrower and payable in cash with respect to such period, minus (ii) the aggregate amount actually paid by Borrower in cash during such fiscal year on account of capital expenditures, minus (iii) the aggregate amount actually paid by Borrower on account of capitalized software costs, minus (iv) all prepayments of Advances during such fiscal year.

 

“Excess Cash Flow Application Date”:  as defined in Section 2.2.

 

“Exchange Act” is the Securities Exchange Act of 1934, as amended.

 

“Fixed Charges” is (a) with respect to the last day of the calendar quarter ending June 30, 2014, the amount that is equal to four (4) times the sum of (i) Interest Expense, plus (ii) scheduled payments of principal and lease payments, on all Indebtedness of Borrower and its Subsidiaries, including without limitation, in each case, with respect to capital leases and seller notes, for the calendar quarter ending on such date of determination, (b) with respect to the last day of the calendar quarter ending September 30, 2014, the amount that is equal to two (2) times the sum of (i) Interest Expense, plus (ii) scheduled payments of principal and lease payments, on all Indebtedness of Borrower and its Subsidiaries, including without limitation, in each case, with respect to capital leases and seller notes, for the two (2) consecutive calendar quarters ending on such date of determination, (c) with respect to the last day of the calendar quarter ending December 31, 2014, the amount that is equal to one and three-tenths of one (1.3) times the sum of (i) Interest Expense, plus (ii) scheduled payments of principal and lease payments, on all Indebtedness of Borrower and its Subsidiaries, including without limitation, in each case, with respect to capital leases and seller notes, for the three (3) consecutive calendar quarters ending on such date of determination, and (d) with respect to the last day of the calendar quarter ending March 31, 2015, and with respect to the last day of each calendar quarter thereafter, the amount that is equal to the sum of (i) Interest Expense, plus (ii) scheduled payments of principal and lease payments, on all Indebtedness of Borrower and its Subsidiaries, including without limitation, in each case, with respect to capital leases and seller notes, for the consecutive four (4) quarters ending on the date of determination.

 

“Foreign Currency” means lawful money of a country other than the United States.

 

“Funding Date” is any date on which a Credit Extension is made to or for the account of Borrower which shall be a Business Day.

 

“FX Forward Contract” is any foreign exchange contract by and between Borrower and Bank under which Borrower commits to purchase from or sell to Bank a specific amount of Foreign Currency on a specified date.

 

“GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the date of determination.

 

“General Intangibles” is all “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation, all Intellectual Property, claims, income and other tax refunds, security and other deposits, payment intangibles, contract rights, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind.

 

“Good Faith Deposit” is defined in Section 2.5(f).

 

 “Governmental Approval” is any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.

“Governmental Authority” is any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization.

 

 “Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations, and (d) Contingent Obligations.

 

“Indemnified Person” is defined in Section 12.2.

 

“Insolvency Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.

 

“Intellectual Property” means all of Borrower’s right, title, and interest in and to the following:

(a) its Copyrights, Trademarks and Patents;

 

(b) any and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions, know-how, operating manuals;

 

(c) any and all source code;

 

(d) any and all design rights which may be available to a Borrower;

 

(e) any and all claims for damages by way of past, present and future infringement of any of the foregoing, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above; and

 

(f) all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.

 

“Interest Expense” means for any fiscal period, interest expense (whether cash or non-cash) determined in accordance with GAAP for the relevant period ending on such date, including, in any event, interest expense with respect to any Credit Extension and other Indebtedness of Borrower and its Subsidiaries, including, without limitation or duplication, all commissions, discounts, or related amortization and other fees and charges with respect to letters of credit and bankers’ acceptance financing and the net costs associated with interest rate swap, cap, and similar arrangements, and the interest portion of any deferred payment obligation (including leases of all types).

 

“Interest Payment Date” means, with respect to any LIBOR Credit Extension, the last day of each Interest Period applicable to such LIBOR Credit Extension and, with respect to Prime Rate Credit Extensions, the last  calendar day of each quarter (or, if the last day of the quarter does not fall on a Business Day, then on the first Business Day following such date), and each date a Prime Rate Credit Extension is converted into a LIBOR Credit Extension to the extent of the amount converted to a LIBOR Credit Extension.

 

“Interest Period” means, as to any LIBOR Credit Extension, the period commencing on the date of such LIBOR Credit Extension, or on the conversion/continuation date on which the LIBOR Credit Extension is converted into or continued as a LIBOR Credit Extension, and ending on the date that is one (1), two (2), three (3), or six (6) months thereafter, in each case as Borrower may elect in the applicable Notice of Borrowing or Notice of Conversion/Continuation; provided, however, that (a) no Interest Period with respect to any LIBOR Credit Extension shall end later than the Revolving Line Maturity Date or the 2014 Term Loan Maturity Date, as applicable, (b) the last day of an Interest Period shall be determined in accordance with the practices of the LIBOR interbank market as from time to time in effect, (c) if any Interest Period would otherwise end on a day that is not a Business Day, that Interest Period shall be extended to the following Business Day unless, in the case of a LIBOR Credit Extension, the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the preceding Business Day, (d) any Interest Period pertaining to a LIBOR Credit Extension that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period, and (e) interest shall accrue from and include the first Business Day of an Interest Period but exclude the last Business Day of such Interest Period.

 

 

“Interest Rate Determination Date” means each date for calculating the LIBOR for purposes of determining the interest rate in respect of an Interest Period.  The Interest Rate Determination Date shall be the second Business Day prior to the first day of the related Interest Period for a LIBOR Credit Extension.

 

“Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation such inventory as is temporarily out of Borrower’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above.

 

“Investment” is any beneficial ownership interest in any Person (including stock, partnership interest or other securities), and any loan, advance or capital contribution to any Person.

 

“Key Person” is Borrower’s Chief Executive Officer (who is, as of the 2014 Effective Date, Stratton J. Nicolaides) and Chief Financial Officer (who is, as of the 2014 Effective Date, Richard Flynt).

 

 “Letter of Credit” is a standby or commercial letter of credit issued by Bank upon request of Borrower based upon an application, guarantee, indemnity, or similar agreement.

 

“Leverage Ratio” means as at the last day of any period, the ratio of (a) the aggregate principal amount of all Indebtedness of Borrower (including without limitation, the aggregate principal and interest payments due or to become due under capital leases and seller notes), determined on a consolidated basis in accordance with GAAP to (b) Adjusted EBITDA measured on a trailing twelve (12) month period.

 

“LIBOR” means, for any Interest Rate Determination Date with respect to an Interest Period for any Credit Extension to be made, continued as or converted into a LIBOR Credit Extension, the rate of interest per annum determined by Bank to be the per annum rate of interest at which deposits in United States Dollars are offered to Bank in the London interbank market (rounded upward, if necessary, to the nearest 1/100th of one percent (0.01%)) in which Bank customarily participates at 11:00 a.m. (local time in such interbank market) two (2) Business Days prior to the first day of such Interest Period for a period approximately equal to such Interest Period and in an amount approximately equal to the amount of such Credit Extension.

 

“LIBOR Credit Extension” means a Credit Extension that bears interest based at the LIBOR Rate plus the LIBOR Rate Margin.

 

“LIBOR Rate” means, for each Interest Period in respect of LIBOR Credit Extensions comprising part of the same Credit Extensions, an interest rate per annum (rounded upward to the nearest 1/16th of one percent (0.0625%)) equal to LIBOR for such Interest Period divided by one (1) minus the Reserve Requirement for such Interest Period.

 

“LIBOR Rate Margin” is defined based upon the Borrower's Leverage Ratio for the subject month, as follows:

 

 

	
Performance Pricing

	  	  
	
Leverage Ratio < 1.00

	
LIBOR Rate plus 2.25%

	
Leverage Ratio > 1.00 but less than 2.00

	
LIBOR Rate plus 2.75%

	
Leverage Ratio > 2.00

	
LIBOR Rate plus 3.25%

 

LIBOR Credit Extensions will accrue interest a rate per annum equal to the then-applicable LIBOR Rate, plus 3.25%, until receipt by Bank of the initial financial reporting package required to be delivered pursuant to the terms of this Agreement and confirmation by Bank that Borrower is in compliance with this Agreement.

 

 “Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security interest or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property.

 

“Liquidity Event” means any of the following: (a) a sale or other disposition by Borrower of all or substantially all of its assets; (b) a merger or consolidation of Borrower into or with another person or entity, where the holders of Borrower’s outstanding voting equity securities as of immediately prior to such merger or consolidation hold less than a majority of the issued and outstanding voting equity securities of the successor or surviving person or entity as of immediately following the consummation of such merger or consolidation; or (c) any sale, in a single transaction or series of related transactions, by the holders of Borrower’s outstanding voting equity securities, to one or more buyers, of such securities, where such holders do not, as of immediately following the consummation of such transaction(s), continue to hold at least a majority of Borrower’s issued and outstanding voting equity securities.

 

 “Loan Documents” are, collectively, this Agreement, the Perfection Certificate, the Pledge Agreement, any Bank Services Agreement, any note, or notes or guaranties executed by Borrower or any Guarantor, and any other present or future agreement between Borrower any Guarantor and/or for the benefit of Bank, all as amended, restated, or otherwise modified.

 

“Lockbox” is defined in Section 6.11.

 

“Material Adverse Change” is (a) a material impairment in the perfection or priority of Bank’s Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower; or (c) a material impairment of the prospect of repayment of any portion of the Obligations.

 

“Net Income” means, as calculated on a consolidated basis for Borrower and its Subsidiaries for any period as at any date of determination, the net profit (or loss), after provision for taxes, of Borrower and its Subsidiaries for such period taken as a single accounting period.

 

“Notice of Borrowing” means a notice given by Borrower to Bank in accordance with Section 3.2(a), substantially in the form of Exhibit C, with appropriate insertions.

 

 

“Notice of Conversion/Continuation” means a notice given by Borrower to Bank in accordance with Section 3.5, substantially in the form of Exhibit D, with appropriate insertions.

 

“Obligations” are Borrower’s obligations to pay when due any debts, principal, interest, Bank Expenses, Prepayment Premium, Unused Revolving Line Facility Fee, Early Termination Fee, and other amounts Borrower owes Bank now or later, whether under this Agreement, the Loan Documents, or otherwise, and including interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Bank, and to perform Borrower’s duties under the Loan Documents.

 

“Omnilink Acquisition” means the acquisition by Borrower of Omnilink Systems, Inc. pursuant to the Omnilink Purchase Agreement.

 

“Omnilink Purchase Agreement” is that certain Merger Agreement dated as of April 28, 2014 by and among Numerex, Numerex Merger Corporation, Omnilink Systems, Inc. and Fortis Advisors LLC.

 

 “Operating Documents” are, for any Person, such Person’s formation documents, as certified with the Secretary of State of such Person’s state of formation on a date that is no earlier than 30 days prior to the 2014 Effective Date, and, (a) if such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto.

 

 “Patents” means all patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same.

 

 “Payment Date” is the first calendar day of each month.

 

“Parent” is defined in Section 3.7(c).

 

 “Perfection Certificate” is defined in Section 5.1.

 

“Permitted Acquisitions” means any merger, acquisition, consolidation with or purchase of another Person by the Borrower (“Transactions”) where (a) no Event of Default has occurred and is continuing or would exist after giving effect to the Transactions on a pro forma basis; (b) Borrower provides Bank with evidence that Borrower will be in pro forma compliance with the financial covenants both before and after giving effect to the proposed Transaction; (c) Borrower is the surviving legal entity; (d) all assets acquired in connection with such Transactions shall be subject to a first priority Lien in the favor of Bank (subject only to Permitted Liens that are permitted to have superior priority to Bank’s Lien under this Agreement) upon the consummation of the Transactions; (e) in the event such Transaction results in the target company continuing to operate as a separate legal entity, Borrower  shall cause such target company to provide to Bank a joinder to the Loan Agreement to cause such target company to become a co-borrower hereunder, together with such appropriate financing statements and/or Control Agreements, all in form and substance satisfactory to Bank (including being sufficient to grant Bank a first priority Lien (subject to Permitted Liens) in and to the assets of such target company); (f) Borrower provides Bank with evidence that after giving effect to the Transaction on a pro forma basis that its Leverage Ratio shall be twenty-five (25) basis points less than the Leverage Ratio financial covenant set forth in Section 6.7(b) required at the time of such Transaction; and (g) such merger, acquisition, consolidation with or purchase is non-hostile in nature.

 

“Permitted Indebtedness” is:

 

(a)           Borrower’s Indebtedness to Bank under this Agreement and the other Loan Documents;

 

(b)           Indebtedness existing on the 2014 Effective Date and shown on the Perfection Certificate;

 

(c)           Subordinated Debt;

 

(d)           unsecured Indebtedness to trade creditors incurred in the ordinary course of business;

 

(e)           Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of business;

 

(f)           Indebtedness secured by Liens permitted under clauses (a) and (c) of the definition of “Permitted Liens” hereunder; and

 

(g)           extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (f) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be.

 

“Permitted Investments” are:

 

(a)           Investments (including, without limitation, Subsidiaries) existing on the 2014 Effective Date and shown on the Perfection Certificate; and

 

(b)           Investments consisting of Cash Equivalents.

 

“Permitted Liens” are:

 

(a)           Liens existing on the 2014 Effective Date and shown on the Perfection Certificate or arising under this Agreement and the other Loan Documents;

 

(b)           Liens for taxes, fees, assessments or other government charges or levies, either (i) not due and payable or (ii) being contested in good faith and for which Borrower maintains adequate reserves on its Books, provided that no notice of any such Lien has been filed or recorded under the Internal Revenue Code of 1986, as amended, and the Treasury Regulations adopted thereunder;

 

(c)           purchase money Liens or capital leases (i) on Equipment (other than Financed Equipment) acquired or held by Borrower incurred for financing the acquisition of the Equipment securing no more than Nine Hundred Thousand Dollars ($900,000) in the aggregate amount outstanding, or (ii) existing on Equipment (other than Financed Equipment) when acquired, if the Lien is confined to the property and improvements and the proceeds of the Equipment;

 

(d)           Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through (c), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness may not increase;

 

(g)           leases or subleases of real property granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), and leases, subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), if the leases, subleases, licenses and sublicenses do not prohibit granting Bank a security interest therein; and

 

(h)           non-exclusive and exclusive licenses of Intellectual Property granted to third parties in the ordinary course of business.

 

“Person” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.

 

“Pledge Agreement” is that certain Securities Pledge Agreement by Numerex in favor of Bank, dated as of April 25, 2011.

 

“Prepayment Premium” is an amount equal to one percent (1.0%) of the principal amount of the 2014 Term Loan Advance being repaid by Borrower pursuant to Section 2.1.2(d)(i).

 

“Prime Rate” is the “prime rate” announced from time to time in the Wall Street Journal print edition, even if it is not the lowest or best available rate.

 

“Prime Rate Credit Extension” is a Credit Extension that bears interest based at the Prime Rate.

 

“Prime Rate Margin” is defined based upon the Borrower's Leverage Ratio for the subject month, as follows:

 

	
Performance Pricing

	  	  
	
Leverage Ratio  < 1.00

	
Prime Rate plus 1.25%

	
Leverage Ratio > 1.00 but less than 2.00

	
Prime Rate plus 1.75%

	
Leverage Ratio > 2.00

	
Prime Rate plus 2.25%

 

Prime Rate Credit Extensions will accrue interest a floating rate per annum equal to the Prime Rate plus 2.25%, until receipt by Bank of the initial financial reporting package required to be delivered pursuant to the terms of this Agreement and confirmation by Bank that Borrower is in compliance with this Agreement

 

“Prior Loan Agreement” is defined in the preamble hereof.

 

“Quarterly Financial Statements” is defined in Section 6.2(a) hereof.

 

 “Registered Organization” is any “registered organization” as defined in the Code with such additions to such term as may hereafter be made.

 

“Regulatory Change” means, with respect to Bank, any change on or after the date of this Agreement in United States federal, state, or foreign laws or regulations, including Regulation D, or the adoption or making on or after such date of any interpretations, directives, or requests applying to a class of lenders including Bank, of or under any United States federal or state, or any foreign laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof

 

“Requirement of Law” is as to any Person, the organizational or governing documents of such Person, and any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

 

 “Reserve Requirement” means, for any Interest Period, the average maximum rate at which reserves (including any marginal, supplemental, or emergency reserves) are required to be maintained during such Interest Period under Regulation D against “Eurocurrency liabilities” (as such term is used in Regulation D) by member banks of the Federal Reserve System.  Without limiting the effect of the foregoing, the Reserve Requirement shall reflect any other reserves required to be maintained by Bank by reason of any Regulatory Change against (a) any category of liabilities which includes deposits by reference to which the LIBOR Rate is to be determined as provided in the definition of LIBOR or (b) any category of extensions of credit or other assets which include Credit Extensions.

 

“Responsible Officer” is any of the Chief Executive Officer, President, Chief Financial Officer and Controller of Borrower.

 

“Restricted License” is any material license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with Bank’s right to sell any Collateral.

 

“Revolving Line” is an Advance or Advances in an amount equal to Five Million Dollars ($5,000,000).

 

“Revolving Line Maturity Date” is May 5, 2019.

 

“SEC” shall mean the Securities and Exchange Commission, any successor thereto, and any analogous Governmental Authority.

 

“Securities Account” is any “securities account” as defined in the Code with such additions to such term as may hereafter be made.

 

“Subordinated Debt” is indebtedness incurred by Borrower subordinated to all of Borrower’s now or hereafter indebtedness to Bank (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Bank entered into between Bank and the other creditor), on terms acceptable to Bank.

 

“Subsidiary” is, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.  Unless the context otherwise requires, each reference to a Subsidiary herein shall be a reference to a Subsidiary of Borrower.

 

 “Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks.

 

 “Transfer” is defined in Section 7.1.

 

“United States Dollars” is the lawful currency of the United States of America.

 

“Unused Revolving Line Facility Fee” is defined in Section 2.5(b).

 

“Unused Revolving Line Facility Fee Amount” is a certain percent per annum of the average daily unused portion with respect to the applicable quarter of the Revolving Line, based upon the Borrower's Leverage Ratio for the subject quarter, as follows:

 

	
Unused Revolving Line Percent Per Annum

	  	  
	
Leverage Ratio  < 1.00

	
0.25%

	
Leverage Ratio > 1.00 but less than 2.00

	
0.30%

	
Leverage Ratio > 2.00

	
0.35%

 

 

 

 

[Signature page follows.]

 

--

  

  

  

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the 2014 Effective Date.

 

BORROWER:

 

NUMEREX CORP.

 

By: __________________________________

 

Name:_______________________________

 

Title:________________________________

 

CELLEMETRY, LLC

 

By: _________________________________

 

Name:_______________________________

 

Title:________________________________

 

NUMEREX GOVERNMENT SERVICES, LLC

 

By: _________________________________

 

Name:_______________________________

 

Title:________________________________

 

NUMEREX SOLUTIONS, LLC

 

By: ________________________________

 

Name:_______________________________

 

Title:________________________________

 

ORBIT ONE COMMUNICATIONS, LLC

 

By: ________________________________

 

Name:_______________________________

 

Title:________________________________

 

UBLIP, INC.

 

By: ________________________________

 

Name:_______________________________

 

Title:________________________________

 

 

 

UPLINK SECURITY, LLC

 

By: _________________________________

 

Name:_______________________________

 

Title:________________________________

 

CELLEMETRY SERVICES, LLC

 

By: _________________________________

 

Name:_______________________________

 

Title:________________________________

 

BANK:

 

SILICON VALLEY BANK

 

By: _________________________________

 

Name:_______________________________

 

Title:________________________________

 

 

 

  

  

  

EXHIBIT A – COLLATERAL DESCRIPTION

The Collateral consists of all of Borrower’s right, title and interest in and to the following personal property:

 

All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles, commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and

 

all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.

 

  

  

  

 

 

 

EXHIBIT B

COMPLIANCE CERTIFICATE

TO:           SILICON VALLEY BANK                                                                                                     Date:

FROM:     NUMEREX CORP.

The undersigned authorized officer of Numerex Corp. (“Borrower”) certifies that under the terms and conditions of the Second Amended and Restated Loan and Security Agreement among Borrower and certain subsidiaries of Borrower, and Bank dated as of ______, 2014 (the “Agreement”):

 

 (1) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below; (2) there are no Events of Default; (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement; and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank.

Attached are the required documents supporting the certification.  The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes.  The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered.  Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.

 

	
Please indicate compliance status by circling Yes/No under “Complies” column.

	  
	
Reporting Covenant

	
Required

	
Complies

	  	  	  
	
Quarterly financial statements with

Compliance Certificate

	
Quarterly within 45 days

	
Yes   No

	
Annual financial statement (CPA Audited)

	
FYE within 90 days

	
Yes   No

	
Board approved Operating Budget

	
FYE within 45 days

	
Yes   No

	
10-Q, 10-K and 8-K

	
Within 5 days after filing with SEC

	
Yes   No

	
The following Intellectual Property was registered (or a registration application submitted) after the 2014 Effective Date (if no registrations, state “None”)

___________________________________________________________________________________________

___________________________________________________________________________________________

 

	  

	
Financial Covenant

	
Required

	
Actual

	
Complies

	  	  	  	  
	  	  	  	  
	
Leverage Ratio (Quarterly)

	
*

	
_____:1.0

	
Yes   No

	
Minimum Fixed Charge Coverage Ratio (Quarterly)

	
**

	
_____:1.0

	
Yes   No

	
Liquidity (Quarterly)

	
$5,000,000

	
$______

	
Yes  No

	
Performance Pricing

	  
	  	
LIBOR Advance

	
Primate Rate Advance

	
Applies

	
Leverage Ratio < 1.00

	
LIBOR plus 2.25%

	
Prime plus 1.25%

	
Yes   No

	
Leverage Ratio > 1.00 but less than 2.00

	
LIBOR plus 2.75%

	
Prime plus         1.75%

	
Yes  No

	
Leverage Ratio > 2.00

	
LIBOR plus 3.25%

	
Prime plus         2.25%

	
Yes  No

*As set forth in Section 6.7(b) of the Agreement.

**As set forth in Section 6.7(c) of the Agreement.

The following financial covenant analyses and information set forth in Schedule 1 attached hereto are true and accurate as of the date of this Certificate.

The following are the exceptions with respect to the certification above:  (If no exceptions exist, state “No exceptions to note.”)

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

	
NUMEREX CORP., as agent

 

 

By:                                                       

Name:                                                       

Title:                                                       

 

 

	
BANK USE ONLY

 

Received by: _____________________

authorized signer

Date:                    _________________________

 

Verified: ________________________

authorized signer

Date:                    _________________________

 

Compliance Status:                                         Yes     No

  

  

  

Schedule 1 to Compliance Certificate

Financial Covenants of Borrower

In the event of a conflict between this Schedule and the Loan Agreement, the terms of the Loan Agreement shall govern.

Dated:           ____________________

I.           Liquidity (Section 6.7(a)):

 

Required:                      $5,000,000 (Quarterly commencing 6/30/14)

 

Actual:

 

 

	
A.

	
Consolidated unrestricted cash and Cash Equivalents maintained with Bank

	
$           

 

	
B.

	
Availability Amount

	
$           

 

	
C.

	
Liquidity (line A plus line B)

	  

Is line C equal to or greater than $5,000,000?

  No, not in compliance                                                                                       Yes, in compliance

 

II.           Leverage Ratio (Section 6.7(b)):

	
  

	
Required:

	
(i) Commencing with the calendar quarter ending June 30, 2014, and as of the last day of each calendar quarter thereafter, through and including the calendar quarter ending March 31, 2015, a Leverage Ratio of not more than 3.0:1.0, (ii) commencing with the calendar quarter ending June 30, 2015, and as of the last day of each calendar quarter thereafter, through and including the calendar quarter ending March 31, 2016, a Leverage Ratio of not more than 2.75:1.0, and (iii) commencing with the calendar quarter ending June 30, 2016, and as of the last day of each calendar quarter thereafter, a Leverage Ratio of not more than 2.25:1.0, in each case to be tested as of the last day of each calendar quarter.

Actual:

	
A.

	
The aggregate principal amount of all Indebtedness of Borrower (including without limitation, the aggregate principal and interest payments due or to become due under capital leases and seller notes), determined on a consolidated basis in accordance with GAAP

	
$           

 

	
B.

	
Adjusted EBITDA, measured on a trailing twelve (12) month period

	
$           

 

	
C.

	
Leverage Ratio (line A divided by line B)

	  

Is line C equal to or less than the amount applicable above?

  No, not in compliance                                                                                       Yes, in compliance

III.           Fixed Charge Coverage Ratio (Section 6.7(c))

	
  

	
Required:

	
Commencing with the calendar quarter ending June 30, 2014, and as of the last day of each calendar quarter thereafter, a ratio of (i) Adjusted EBITDA, less unfunded capital expenditures, less capitalized software development costs, less cash dividends, and less cash taxes, each for the consecutive four (4) quarters ending on the date of determination, to (ii) Fixed Charges, of at least: (x) for each calendar quarter through and including the calendar quarter ending March 31, 2015, 1.10 to 1.0, and (y) for the calendar quarter ending June 30, 2015, and for each calendar quarter thereafter, 1.25:1.0, in each case to be tested as of the last day of each calendar quarter

Actual:

	
A.

	
Adjusted EBITDA, less (i) unfunded capital expenditures, capitalized software development costs, and cash taxes

	
$           

 

	
B.

	
(a) With respect to the last day of the calendar quarter ending June 30, 2014, the amount that is equal to four (4) times the sum of (i) Interest Expense, plus (ii) scheduled payments of principal and lease payments, on all Indebtedness of the Borrower and its Subsidiaries, including without limitation, in each case, with respect to capital leases and seller notes, for the calendar quarter ending on such date of determination, (b) with respect to the last day of the calendar quarter ending September 30, 2014, the amount that is equal to two (2) times the sum of (i) Interest Expense, plus (ii) scheduled payments of principal and lease payments, on all Indebtedness of the Borrower and its Subsidiaries, including without limitation, in each case, with respect to capital leases and seller notes, for the two (2) consecutive calendar quarters ending on such date of determination, (c) with respect to the last day of the calendar quarter ending December 31, 2014, the amount that is equal to one and three-tenths of one (1.3) times the sum of (i) Interest Expense, plus (ii) scheduled payments of principal and lease payments, on all Indebtedness of the Borrower and its Subsidiaries, including without limitation, in each case, with respect to capital leases and seller notes, for the three (3) consecutive calendar quarters ending on such date of determination, and (d) with respect to the last day of the calendar quarter ending March 31, 2015, and with respect to the last day of each calendar quarter thereafter, the amount that is equal to the sum of (i) Interest Expense, plus (ii) scheduled payments of principal and lease payments, on all Indebtedness of the Borrower and its Subsidiaries, including without limitation, in each case, with respect to capital leases and seller notes, for the consecutive four (4) quarters ending on the date of determination

	
$           

 

	
C.

	
Fixed Charges Coverage Ratio (line A divided by line B)

	  

Is line C equal to or greater than the amount applicable above?

  No, not in compliance                                                                                       Yes, in compliance

  

  

  

EXHIBIT C

FORM OF NOTICE OF BORROWING

 

NUMEREX CORP.

                                                                                                Date:  ______________

 

	
To:

	
Silicon Valley Bank

3003 Tasman Drive

Santa Clara, CA  95054

Attention:  Corporate Services Department

 

	
Re:

	
Second Amended and Restated Loan and Security Agreement dated as of ________ ___, 2014 (as amended, modified, supplemented or restated from time to time, the “Loan Agreement”), by and among Numerex Corp. and certain other subsidiaries thereof (collectively, the “Borrower”) and Silicon Valley Bank (the “Bank”)

 

Ladies and Gentlemen:

 

           The undersigned refers to the Loan Agreement, the terms defined therein and used herein as so defined, and hereby gives you notice irrevocably, pursuant to Section 3.4(a) of the Loan Agreement, of the borrowing of a Credit Extension.

 

1. The Funding Date, which shall be a Business Day, of the requested borrowing is _______________.

 

2. The aggregate amount of the requested borrowing is $_____________.

 

3. The requested Credit Extension shall consist of $___________ of Prime Rate Credit Extensions and $______ of LIBOR Credit Extensions.

 

4. The duration of the Interest Period for the LIBOR Credit Extensions included in the requested Credit Extension shall be __________ months.

 

The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the proposed Credit Extension before and after giving effect thereto, and to the application of the proceeds therefrom, as applicable:

 

(a)           all representations and warranties of Borrower contained in the Loan Agreement are true, accurate and complete in all material respects as of the date hereof; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date;

 

(b)           no Event of Default has occurred and is continuing, or would result from such proposed Credit Extension; and

 

(c)           the requested Credit Extension will not cause the aggregate principal amount of the outstanding Credit Extensions to exceed, as of the designated Funding Date, the Revolving Line.

 

 

  

  

  

Borrower                                                                           NUMEREX CORP.

 

By:                                                                  

 

Name:  

 

Title:                                                                  

 

For internal Bank use only

 

	
LIBOR Pricing Date

	
LIBOR

	
LIBOR Variance

	
Maturity Date

	  	  	
____%

	  

 

  

  

  

EXHIBIT D

 

FORM OF NOTICE OF CONVERSION/CONTINUATION

 

NUMEREX CORP.

 

                                                                                                Date:                    

 

	
To:

	
Silicon Valley Bank

3003 Tasman Drive

Santa Clara, CA  95054

Attention:

 

	
Re:

	
Second Amended and Restated Loan and Security Agreement dated as of ________ ___, 2014 (as amended, modified, supplemented or restated from time to time, the “Loan Agreement”), by and among Numerex Corp. and certain other subsidiaries thereof (collectively, the “Borrower”) and Silicon Valley Bank (the “Bank”)

 

Ladies and Gentlemen:

 

           The undersigned refers to the Loan Agreement, the terms defined therein being used herein as therein defined, and hereby gives you notice irrevocably, pursuant to Section 3.5 of the Loan Agreement, of the [conversion] [continuation] of the Credit Extensions specified herein, that:

 

1.           The date of the [conversion] [continuation] is                                            , 20___.

 

2.           The aggregate amount of the proposed Credit Extensions to be [converted] is

 

$                             or [continued] is $                                  .

 

3.           The Credit Extensions are to be [converted into] [continued as] [LIBOR] [Prime Rate] Credit Extensions.

 

4.           The duration of the Interest Period for the LIBOR Credit Extensions included in the [conversion] [continuation] shall be            months.

 

The undersigned, on behalf of Borrower, hereby certifies that the following statements are true on the date hereof, and will be true on the date of the proposed [conversion] [continuation], before and after giving effect thereto and to the application of the proceeds therefrom:

 

(a)           all representations and warranties of Borrower stated in the Loan Agreement are true, accurate and complete in all material respects as of the date hereof; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and

 

(b)           no Event of Default has occurred and is continuing, or would result from such proposed [conversion] [continuation].

 

[Signature page follows.]

 

  

  

  

Borrower                                                                           NUMEREX CORP.

 

By:                                                                  

 

Name:  

 

Title:                                                                  

 

 

 

For internal Bank use only

 

	
LIBOR Pricing Date

	
LIBOR

	
LIBOR Variance

	
Maturity Date

	  	  	
____%

	  

  

  

  

SCHEDULE 2.7

OUSTANDING OBLIGATIONS UNDER THE PRIOR AGREEMENT

Total Amount Owing:  $1,119.45

1671448.7

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